More annual reports from Chesser Resources Limited:
2023 ReportANNUAL REPORT
2022
C H E S S E R R E S O U R C E S . C O M . A U
Chesser Resources Limited | ABN 14 118 619 042
Annual Report | For the year ended 30 June 2022
Diamba Sud
Contents
OVERVIEW CHESSER
FY2022 HIGHLIGHTS
CHAIRMAN’S LETTER
EXPLORATION REVIEW
SUSTAINABILITY REVIEW
CHESSER VALUE STATEMENT
CORPORATE GOVERNANCE STATEMENT
DIRECTORS’ AND FINANCIAL REPORTS
SHAREHOLDER INFORMATION
CORPORATE DIRECTORY
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5
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8
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Forward looking statements
Statements relating to the estimated or expected future production, operating results, cash flows and costs and financial condition
of Chesser Resources Limited’s planned work at the Company’s projects and the expected results of such work are forward- looking
statements. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by
words such as the following: expects, plans, anticipates, forecasts, believes, intends, estimates, projects, assumes, potential and similar
expressions. Forward-looking statements also include reference to events or conditions that will, would, may, could or should occur.
Information concerning exploration results and mineral reserve and resource estimates may also be deemed to be forward-looking
statements, as it constitutes a prediction of what might be found to be present when and if a project is developed.
These forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable
at the time they are made, are inherently subject to a variety of risks and uncertainties which could cause actual events or results to differ
materially from those reflected in the forward-looking statements, including, without limitation: uncertainties related to raising sufficient
financing to fund the planned work in a timely manner and on acceptable terms; changes in planned work resulting from logistical, technical
or other factors; the possibility that results of work will not fulfil projections/ expectations and realize the perceived potential of the
Company’s projects; uncertainties involved in the interpretation of drilling results and other tests and the estimation of gold reserves and
resources; risk of accidents, equipment breakdowns and labour disputes or other unanticipated difficulties or interruptions; the possibility of
environmental issues at the Company’s projects; the possibility of cost overruns or unanticipated expenses in work programs; the need to
obtain permits and comply with environmental laws and regulations and other government requirements; fluctuations in the price of gold
and other risks and uncertainties.
2
Our Story
Chesser Resources is an ASX listed (ASX:CHZ) West African focused gold company with projects located
in Senegal.
Chesser has discovered two high-grade gold Projects at its flagship Diamba Sud project in eastern
Senegal. In November 2021, Chesser was proud to announce a robust Maiden Mineral Resource of
781koz @ 1.6g/t gold including ~~500koz @ 3.0g/t gold.
Diamba Sud is located in a highly prospective area that hosts many world class gold mines including the
neighbouring Loulo, Gounkoto and Fekola mines just over the border in Mali.
Barrick have defined an emerging highly prospective region within their Bambadji tenement in Senegal.
Their key discovery, Kabewest is located ~2km NE of Diamba Sud and along the same mineralised
structure that hosts Chesser’s Area A and D resources.
The Company currently holds 872km2 of highly prospective ground in this underexplored world-class
gold region. Chesser’s Board and Management offers significant technical and financial management
experience and a strong track record in discovery, development, operating and M&A in West African
gold.
Vision and Values Statement
Chesser aims to deliver long-term stakeholder value through discovery and development of gold
projects while operating in a safe and environmentally and socially responsible manner.
Chesser’s corporate values are integral to how we operate and to our success.
COMMITMENT
CHARACTER
COMMUNITY
We strive to achieve all
our goals
We do what we say and act
with integrity
We value all our employees,
contractors, shareholders,
host communities and
government
3
CHESSER RESOURCES
ANNUAL REPORT 2022
OVERVIEW CHESSER
Future Gold Mine
Development being
defined at Diamba Sud –
High Value Low Risk Gold
Project
Scoping Study over 781koz
Maiden Mineral Resource
estimate-defined technically
simple, economically robust
potential gold mine 1
Growing Mineral Resource
base targeting plus 1Moz in
2022/23 with new discovery
at Karakara and numerous
gold targets being tested on
the Diamba Sud tenement 2
Timeline to development of
1 – 2 years
Diamba Sud is within an
emerging gold belt of under-
explored highly prospective
Senegal Mali Shear Zone
(SMSZ) geological terrain,
being, actively explored by
Barrick
872km2 tenement position
over prospective geological
terrains in Senegal and is
adjacent to world class gold
mines of Loulo, Gounkoto
and Fekola
Experienced Board and
Management team with
extensive African operating
knowledge
1 Refer ASX announcement dated 15 March 2022. The Company is not aware of any new information or data that materially affects the production targets and financial forecasts derived from the
production targets in the referenced ASX announcement and confirms that all material assumptions and technical parameters underpinning those production targets and financial forecasts
continue to apply and have not materially changed.
2 Refer ASX announcement dated 16 November 2021 for details of the Mineral Resource Estimates for Area A and Area D. The Company is not aware of any new information or data that
materially affects the information included in the referenced ASX announcement and confirms that all material assumptions and technical parameters underpinning the estimates in the market
announcement continue to apply and have not materially changed.
4
FY2022 HIGHLIGHTS
FY2022 HIGHLIGHTS
Senegal’s next Gold Mine
being defined
Maiden Mineral Resource estimate over Area A and Area D of 781koz at 1.6g/t gold
Scoping Study defined technically simple high value potential gold project
• 7.5 year mine life producing
704koz gold
• NPV5% A$418M (US$301M) and
IRR 59% at US$1,800/oz gold
• Low strip ratio of 2:8:1
• US$159m capital with payback
• AISC US$820/oz
in 15 months
• First 2 years production
exceptional strong: 244koz
gold production, AISC
US$545/oz
• New discovery made at
Karakara – Maiden Mineral
Resource due in CY2022
• Targeting resource growth
to over 1 million ounces in
2022/23
• Environmental and Social
Impact Assessment studies
commenced
• Numerous gold targets being
tested on the Diamba Sud
tenement
• Definitive Feasibility Study
• Well supported A$12m equity
commenced
raise on back of Scoping Study
results and growth potential
Sustainability Highlights:
• Group Goals and Values advanced throughout organisation
• Community Engagement formalised and advanced
• Second annual Community Investment agreement
• Community programs including community garden, school infrastructure and all-weather village
access upgrade
• 87% Senegalese national employment - over 60 local community members employed during the year
• A$7m contributed to the Senegalese economy in FY22
• A$0.9m taxes paid in Senegal in FY22
5
CHESSER RESOURCES
ANNUAL REPORT 2022
CHAIRMAN’S
LETTER
and Bougouda in the south of the Project area.
Shallow, high-grade mineralisation at Karakara
has been defined over a strike of ~250 metres
and remains open in multiple directions. Karakara
is expected to provide a meaningful uplift to the
Diamba Sud resource inventory before the end
of 2022. After the end of the period in September
2022 we released a modest maiden Mineral
Resource for Bougouda of 52,000oz at a high-
grade of 4.7g/t.
The maiden 781,000oz resource formed the basis
of a Scoping Study (the “Study”) released in March
2022. The Study quantified the high-value nature
of the shallow, high-grade mineralisation at the
Project with a strong set of financial outcomes. This
included a post-tax NPV5% of A$419 million and an
IRR of 59% at a US$1,800/oz gold price. The Project
would produce 704,000 ounces over an initial 7.5
year mine life including 244,000 ounces in the first
two years. All-in Sustaining Costs were estimated at
US$820/oz over the life of the project and US$545/
oz in the first two years, driving a short payback
period of 1.5 years on the US$159 million capital
required, inclusive of a US$23 million contingency.
The results of the Study warranted a move
immediately into a Definitive Feasibility Study. This
includes the commencement of an Environmental
and Social Impact Assessment. The Project is
favourably located in an area with no competing
land use and flat topography with sparse
vegetation. We are working within a Sustainability
framework established in FY2021 and we continue
to work closely with our local communities to grow
supportive and co-operative relationships as the
Project advances.
Dear Shareholders,
I am pleased to present Chesser Resources
Limited’s (the “Company” or “Chesser”) 2022 Annual
Report. Our team has had another strong year in
demonstrating the development potential of our
Diamba Sud gold project in Senegal (“Diamba Sud”
or the “Project”).
Our exploration activities in the 12 months to 30
June 2022 were successful in making a number
of valuable advancements for the Project. In
November 2021 we delivered a maiden Mineral
Resource Estimate for the Project which formed
the basis of a Scoping Study later in the period.
The Mineral Resource covering Area A and D
totalled 15.2 million tonnes at a grade of 1.6 grams
per tonne gold for 781,000 contained gold ounces
at a 0.5g/t cut-off. Importantly, 69% of the resource
was in the JORC Indicated category. Within the
resource is a significant high-grade component of
692,000oz at 2.0g/t and 493,000oz at 3.0g/t. The
total Mineral Resource is constrained within two
open pits and we expect resources to grow, both
within the immediate Mineral Resource area and
the wider Diamba Sud tenement area.
This view was reinforced by the discoveries made
at Karakara, 1.2 kilometres southwest of Area D,
6
The Project is located in an existing mining region where larger gold
companies are having continued exploration success. Within a short
distance of our project is the Loulo, Gounkoto and Fekola mines and
Barrick is continuing to define mineralisation at the Bambadji joint
venture on the eastern border of Diamba Sud. This creates potential for
consolidation and future value creation opportunities within the region.
During the period Senegal’s standing as one of the most attractive
investment destinations for gold exploration and investment in West
Africa was maintained. Large resource companies continued to make
major investments in the country and run their operations within the
stable political and regulatory framework the country offers.
I extend my appreciation to my fellow Board members, our
management, our in-country team and our consultants for their
ongoing efforts and dedication during the past year.
I would also like to acknowledge the support of our shareholders
throughout the year. We will be working towards growing the Project’s
resource and completing our Definitive Feasibility Study while we also
test new targets in FY2023. I look forward to keeping you updated on
our progress..
Yours sincerely,
Mark Connelly
Chairman
CHAIRMAN’S LETTER
7
EXPLORATION
REVIEW
8
CHESSER RESOURCESANNUAL REPORT 2022 The Company’s exploration activities during the
year were primarily focused on advancing the
Diamba Sud Gold Project in eastern Senegal
(Figure 1).
A Maiden Mineral Resource of 781koz gold was
declared at Area A and Area D in November 2021
over which a Scoping Study, released in March
2022, defined a technically simple, low risk, high
value future mine development would be possible
at Diamba Sud.
Subsequent exploration activities defined a
new high-grade gold discovery at Karakara,
approximately 1km south of Area D, and identified
several high probability gold targets within the
Diamba Sud tenement, including Kassassoko,
Bougouda and Western Splay.
Drilling continues over these targets and at Areas
A and D, the results of which are expected to
significantly increase the resource inventory and
value of the Project.
Definitive Feasibility Studies (DFS), Environmental
and Social Impact Assessment (ESIA) and licensing
activities have commenced at Diamba Sud to
de-risk the project and position the Company to
develop a gold mine at Diamba Sud within the next
two years.
Two new exploration tenements, Bondala
and Morichou, were granted in February 2022,
significantly increasing the Company’s land position
in Senegal to 872km2 (Figure 1).
DIAMBA SUD SUMMARY
The Diamba Sud Project is located in eastern
Senegal in an emerging gold belt of under explored
highly prospective geological terrain.
Diamba Sud overlies the eastern portion of the
Kédougou-Kénieba inlier, the second most richly
endowed Paleoproterozoic belt of West Africa
(Figure 1). Mineralisation on the belt is generally
associated with the crustal scale Senegal Mali
Shear Zone (“SMSZ”).
The SMSZ hosts over 45 million ounces of gold,
including Barrick Gold’s 18 million ounce Loulo-
Gounkoto mining complex, located just 7-12km to
the east of Diamba Sud, and B2Gold’s 8 million
ounce Fekola gold mine, located ~40km to the
south southeast, both located in Mali.
Chesser’s exploration success has highlighted
the significant prospectivity of the area which
has precipitated a renewed focus with extensive
exploration activities currently being undertaken
on the Senegal side of the border and surrounding
the Diamba Sud tenement. Barrick has defined
extensive gold mineralisation over their adjacent
Bambadji tenement to the east including the
discovery of mineralisation at Kabewest, just 2km
from Area A (Figure 2). IAMGold is also actively
exploring south of Diamba Sud over their Faré
discovery.
The phase 6 resource definition drill program was
completed in October 2021 over Areas A and
D, the data from which was utilised to estimate
a maiden Mineral Resource in November 2021
totalling 781,000 ounces gold from 15.2 million
tonnes at a grade of 1.6 g/t gold. Importantly
the mineralisation has a number of key attributes
that would lead to future economic development
including a large near surface high-grade
component of 493,000 ounces gold at a grade of
3.0 g/t gold.
A Scoping Study was completed in March 2022
over the Area A and D maiden Mineral Resource
The study demonstrated a technically simple, low
risk, high value future gold mine would be possible
at Diamba Sud.
Key study highlights included:
Post-tax NPV5% A$419 million (US$301 million) and
IRR 59% at a US$1,800/oz gold price
• 15 month payback of the US$159 million capital
• 7.5-year Project life producing 704,000 oz gold at
an average AISC of US$820/oz
• First two years of gold production totals 244,000
oz at an average AISC of US$545/oz
• Significant Resource upside – targeting plus
1 million ounces in 2022/23
• Approval to commence DFS, ESIA and licensing
in preparation of a future mine development at
Diamba Sud
The 4,147m Phase 7 drill program, completed in
December 2021 targeted three prospective areas
(Karakara, Western Splay, Area F) at Diamba
Sud (Figure 2) and led to the discovery of new
shallow high-grade mineralisation at Karakara,
approximately 1km south of Area D. Best Karakara
results included:
9
EXPLORATION REVIEW • DSR323: 17m @ 9.6 g/t gold from 82m and 10m at 5.8 g/t gold from 117m
• DSR341: 9m @ 4.2 g/t gold from 63m and 12m @ 7.0 g/t gold from 92m
• DSR345: 3m @ 11.4 g/t gold from 58m, 8m @ 10.5 g/t gold from 64m and 15m @ 1.9g/t gold from 75m
Historical drilling and results from the Phase 7 drill program at Western Splay have defined variable
shallow mineralisation over at least a 300m strike. The Western Splay area has been subject to further
drilling during the Phase 8 drill program with results pending as at 30 June 2022. Best Phase 7 drill results
included:
• DSR331: 16m @ 1.9 g/t gold from 42m
• DSR330: 17m @ 1.4 g/t gold from 35m
• DSR333: 5m @ 4.4 g/t gold from 26m
A 20,000m drilling program commenced in February 2022 (Phase 8) targeting resource expansion at Areas
A and D, adding the new Karakara discovery into the resource inventory and to test a number of other
prospective targets on the Diamba Sud tenement.
Phase 8 drilling at Karakara has defined shallow high-grade mineralisation over a strike length of over
200m which remains open to the south. Numerous drill results were pending as at 30 June 2022. A maiden
Mineral Resource estimate over Karakara will be undertaken during 2022 and is expected to provide a
meaningful uplift to the Mineral Resource inventory and has been included into the DFS currently underway.
Best drill results included:
• DSD077: 51m @ 5.1 g/t gold from 31m
• DSR348: 5m @ 19.0 g/t gold from 99m
• DSDD074: 26.3m @ 3.5 g/t gold from 40m
• DSDD073: 12m @ 3.1 g/t gold from 23m
Fifteen rock chip samples from an active artisanal pit at Kassassoko (Figure 2) returned very significant
gold results, averaging 3.8 g/t gold, maximum result of 10.3 g/t gold. Kassassoko is located 2.5km south
of Karakara and mineralisation is hosted within granites. Two diamond drill holes have been drilled under
the pit with results outstanding at the time of this report, however it is likely that this area will develop into a
high priority target for future drilling.
At Bougouda, located approximately 14km south of the main Diamba Sud tenement, drilling has defined a
600m long mineralised quartz vein. Mineralisation was intersected on each drill traverse with the weighted
average intercept reported being 3.8m @ 4.2g/t gold. Further investigation and analysis to determine
if potential future economic extraction is possible will be undertaken over the prospect. Best intercepts
included:
• DSR388: 2m @ 40.8 g/t gold from 83m
• DSR392: 21m @ 3.3 g/t gold from 65m
• DSR398: 10m @ 5.3 g/t gold from 50m
The exploration success at Diamba Sud has been exceptional with most targets returning mineralisation.
However, there remains a significant number of geochemical anomalies with no or very little drilling as
exploration to date has targeted the near surface mineralisation expressed by the gold geochemistry. As
the understanding of this complex structural/lithological/mineralisation system evolves exploration should
also be able to more effectively target mineralisation at depth.
Planned exploration at Diamba Sud for the 2022-2023 year will be focused on delivering resource growth,
testing the exploration potential, delivering the DFS and progressing Diamba Sud towards a future
successful gold mine development.
10
CHESSER RESOURCESANNUAL REPORT 2022 The Company looks forward to keeping shareholders informed on its progress as we enter this exciting
period in the development of the Diamba Sud Gold Project.
Figure 1: Schematic regional geology of eastern Senegal, showing Chesser’s Project locations including the
Diamba Sud Project and its proximity to both the SMSZ and the major gold operations and projects.
11
EXPLORATION REVIEW Figure 2: Prospect locations Diamba Sud with drilling locations and auger
geochemical results.
12
CHESSER RESOURCESANNUAL REPORT 2022 ROBUST MAIDEN MINERAL RESOURCE - DIAMBA SUD
The key attributes of the maiden Mineral Resource are as follows:
• High-grade ounces: 493koz @ 3.0 g/t gold at a 1.5 g/t cut-off or 692koz @ 2.0 g/t gold at a 0.8 g/t cut-
off (Table 3)
• Shallow mineralisation: 95% of the ounces within 135m of the surface and 40% of the ounces occur
within the near surface oxide mineralisation (Figure 4)
• High confidence Resource: 69% of the ounces falling within the Indicated classification (Table 1)
• Robust Resources: 737koz falling within a US$1,500/oz gold price pit shell and 656koz falling within a
US$1,350/oz gold price pit shell (Table 4)
• Significant Resource growth potential: mineralisation open along strike and at depth plus numerous
prospective exploration targets on the tenement including the recent Karakara discovery
• Emerging highly prospective region: additional discoveries being made in the area including Barrick’s
Kabewest prospect
• Excellent metallurgical characteristics: testwork averaged 96% recoveries with no evidence of
deleterious elements, amenable to a simple cyanide leach process flow sheet
• Shallow open pit: Resources are constrained within two adjacent pits covering both Area A and Area D
with a significant soft oxide component and potentially low strip ratio (Figure 3)
• Excellent Project infrastructure: limited competing land use, close to national highway and water,
skilled national workforce, and supportive mining jurisdiction
• Low Discovery cost: US$11/oz
Figure 3: Diamba Sud Mineral Resource 3D image of Resources (blocks greater than 1.0 g/t gold)
13
EXPLORATION REVIEW The Resource was undertaken by Dr. John Arthur (CGeol, FGS) and includes all drilling up to and including
the 18 October 2021 (including 10,677m of diamond core and 28,159m of RC drilling) utilising an Ordinary
Kriging estimation methodology. The Resource has been reported in accordance with the JORC Code
(2012) and is effective as at 16 November 2021 and is shown in Table 1 and Table 2.
Table 1: Diamba Sud Mineral Resources
Resources Constrained within US$1,800/oz pit shell by Material Type and Classification – COG 0.5g/t
Indicated
Inferred
Total
Oxidation
Tonnes Grade Metal
Tonnes Grade
Metal
Tonnes Grade
Metal
Mt
g/t
Koz
Mt
g/t
Koz
Mt
g/t
Koz
Oxide
Fresh
Total
3.7
5.1
8.8
2.2
1.7
1.9
262
276
538
1.3
5.1
6.4
1.2
1.2
1.2
50
194
243
5.0
10.3
15.2
2.0
1.4
1.6
312
469
781
Table 2: Diamba Sud Mineral Resources by Area
Resources Constrained within US$1,800/oz pit shell by Area, Material Type and Classification
– COG 0.5g/t
Indicated
Inferred
Total
Area
Oxidation
Tonnes Grade Metal
Tonnes Grade Metal Tonnes Grade Metal
Mt
g/t
Koz
Mt
g/t
Koz
Mt
g/t
Koz
Oxide
Fresh
Total
Oxide
Fresh
Total
Area D
Area A
Total
3.1
0.3
3.4
0.6
4.8
5.5
8.8
2.4
1.4
2.3
1.4
1.7
1.7
1.9
234
14
247
29
262
291
538
1.2
3.6
4.8
0.1
1.5
1.6
6.4
1.3
1.2
1.2
0.9
1.1
1.1
1.2
47
139
185
3
55
58
4.2
3.9
8.2
0.7
6.3
7.1
243
15.2
2.1
1.2
1.6
1.3
1.6
1.5
1.6
280
152
432
32
317
349
781
Structurally the deposit is complex where intersections of structures and favourable lithologies result in the
deposition of significant high-grade gold mineralisation as demonstrated at Area A and Area D and recent
drill results at Barrick’s neighboring Kabewest prospect.
The mineralisation shares many similar characteristics to a number of the Tier 1 gold deposits on the
Senegal Mali Shear Zone (“SMSZ”) including Gounkoto (5.5Moz) and Fekola (7.6Moz).
Immediately there are opportunities to extend the 250m long high-grade shoot defined at Area A along
strike of the intersecting structures and there are numerous high-grade intercepts in the fresh at Area
D that may well develop into high-grade shoots. High-grade oxide intercepts on the southwest and
northwest edge of Area D, that were excluded from the optimisation also require additional drilling.
A specialist structural geology team from TECT Geological Consulting, South Africa, has undertaken a
full deposit scale and regional structural review and developed a 3D structural model of Areas A and D to
assist target generation for future resource expansion drilling.
14
CHESSER RESOURCESANNUAL REPORT 2022 Table 3: Diamba Sud Grade/Tonnage within US$1,800/oz pit shell
Grade Tonnage within US$1800/oz gold pit shell
COG
g/t gold
0
0.3
0.5
0.8
1
1.5
2
Tonnes
Mt
60.1
20.1
15.2
10.9
8.6
5.2
3.4
Grade
g/t gold
0.5
1.3
1.6
2.0
2.3
3.0
3.6
Metal
Indicated
Koz
933
842
781
692
628
493
393
%
65%
67%
69%
71%
73%
80%
84%
Table 4: Diamba Sud Mineral Resources within various US$/oz pit shells at COG 0.5 g/t gold
Pit
US$/oz
$1,350
$1,500
$1,800
$2,000
Resources within Pit Shells at COG 0.5 g/t gold
Tonnes
Grade
Metal
Indicated
Strip Ratio
Mt
11.2
13.7
15.2
16.0
g/t gold
1.8
1.7
1.6
1.6
Koz
656
737
781
802
%
75%
72%
69%
67%
t:t
2.7
2.9
3.0
3.0
Resource by RL: thousand ounces per 5m bench
5
25
35
10
15
30
20
40
45
50
'000oz per 5m bench
Koz per 5m bench
0
e
c
a
f
r
u
S
m
o
r
f
h
t
p
e
d
L
R
5
15
25
35
45
55
65
75
85
95
105
115
125
135
145
155
165
175
185
195
Figure 4: Diamba Sud Resource ounces per vertical metre within US$1,800/oz pit shell at 0.5 g/t gold COG
15
EXPLORATION REVIEW
Competent Person’s Declaration
The information in this report that relates to the Diamba Sud and Diamba Nord exploration results, and
Exploration Targets is based on information compiled by Mr. Andrew Grove, BEng (Geology), MAIG, who
is employed as Managing Director and Chief Executive Officer of Chesser Resources Ltd. Mr. Grove
has sufficient experience which is relevant to the style of mineralisation and type of deposits under
consideration and to the activity which 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’. Mr. Grove consents to the inclusion in the announcement of the matters based on his
information in the form and context that the information appears.
The information in this report that relates to the Area A and Area D Mineral Resources was first reported
in the announcement titled ‘Robust Maiden Mineral Resource – Diamba Sud’ released to the Australian
Securities Exchange (ASX) on 16 November 2021 (Original Announcement) and available to view at www.
chesserresources.com.au and for which a Competent Persons’ consent was obtained. The Competent
Person’s consent remains in place for subsequent releases by the Company of the same information
in the same form and context, until the consent is withdrawn or replaced by a subsequent report and
accompanying consent. The Company confirms that it is not aware of any new information or data that
materially affects the information included in the Original Announcement and, in the case of estimates of
Mineral Resources or Ore Reserves, that all material assumptions and technical parameters underpinning
the estimates in the Original Announcement continue to apply and have not materially changed. The
Company confirms that the form and context in which the Competent Person’s findings are presented
have not been materially modified from the Original Announcement.
The Information in this report that relates to Scoping Study was first reported in the announcement
titled ‘Chesser Scoping Study Confirms Robust, Low-Cost Gold Project’ released to the Australian
Securities Exchange (ASX) on 15 March 2022 (Original Announcement) and available to view at www.
chesserresources.com.au and for which a Competent Persons’ consent was obtained. The Competent
Person’s consent remains in place for subsequent releases by the Company of the same information
in the same form and context, until the consent is withdrawn or replaced by a subsequent report and
accompanying consent. The Company confirms that it is not aware of any new information or data that
materially affects the information included in the Original Announcement and, in the case of estimates of
Mineral Resources or Ore Reserves, that all material assumptions and technical parameters underpinning
the estimates in the Original Announcement continue to apply and have not materially changed. The
Company confirms that the form and context in which the Competent Person’s findings are presented
have not been materially modified from the Original Announcement.
16
CHESSER RESOURCESANNUAL REPORT 2022 SCOPING STUDY CONFIRMS ROBUST LOW-COST
GOLD PROJECT – DIAMBA SUD
STUDY HIGHLIGHTS
• Post-tax NPV5% A$419M (US$301M) and IRR 59% at a US$1,800/oz gold price
• Payback 1.25 years from commercial production
• 7.5 year Project life producing 704koz gold at an average AISC of US$820/oz
• First two years of gold production totals 244koz at an average AISC of US$545/oz
• Total project mining inventory of 14.7Mt at an average grade of 1.6 g/t gold (70% from Indicated
Resources) containing 750koz of gold at a strip ratio of 2.8
• Ore mined and processed in first two years of operations at an average grade of 2.0 g/t gold (83% from
Indicated Resources) containing 257koz of gold at a strip ratio of 1.9
• Pre-production capital cost of US$159M including US$23M contingency
•
Industry standard 2Mtpa CIL processing circuit with average gold recoveries of 94%
• Significant Resource upside – Areas A and D remain open and new discovery at Karakara with drilling
underway
• ESIA baseline activities have commenced
• Board approval to commence a Definitive Feasibility Study
• Diamba Sud represents a potential long life, technically simple, low risk and highly profitable mining
operation that will generate significant benefits to all stakeholders
The Scoping Study results clearly demonstrate the very significant potential value from a future mine
development at Diamba Sud. Importantly the study does not include any potential Mineral Resources from
the new discovery at Karakara or any further resource additions that might result from the Phase 8 20,000m
drilling program all of which would further significantly enhance the value of the Diamba Sud Gold Project.
The Scoping Study details the potential for an open pit mining operation and gold processing plant at
Chesser’s Diamba Sud Gold Project in Eastern Senegal.
The Scoping Study is based on the 781koz gold maiden Mineral Resource inventory covering Area A and
Area D, released to the market on the 16 November 2021, summarised above. Resources do not include
mineralisation from the new discovery at Karakara, located 1.2km from the Area D pit, Figure 2.
A standard 2Mtpa CIL SAG/Ball circuit gold processing plant was considered to be appropriate for the
Scoping Study. Tailings from the CIL will undergo cyanide detox and report to a tailings storage facility. Raw
water for processing will be sourced by seasonal pumping from the Falémé River, approximately 7km to the
east, to a water storage dam.
Mining from three open pits (Area D, Area A and Area D South) is assumed to be undertaken by a mining
contractor utilising standard truck and shovel open pit mining methods.
The project will include an on-site accommodation village housing part of the workforce, with the balance
residing in adjacent communities. Power is assumed to be generated on site.
The cash flow and economic analysis has been prepared on a 100% of project, constant first quarter calendar
2022 US dollar basis. Cost estimations are considered to be at a scoping study level of accuracy of +/-35%.
The Scoping Study demonstrated the technically simple and low risk nature of the Project and the very
significant potential economic value that would result from a future development at Diamba Sud. There
remains significant upside both in exploration to add to the Mineral Resource inventory and from future
Project optimisation studies. A summary of the initial physical and financial evaluation of the Project is
shown in Table 5.
17
EXPLORATION REVIEW Table 5: Scoping Study Results and Key Assumptions
DIAMBA SUD GOLD PROJECT SUMMARY SCOPING STUDY RESULTS
Physicals and Costs
Mining Physicals
Ore Tonnage
Grade
Contained Ounces
Plant Throughput
Mine Life
Strip Ratio
Process Recovery
Gold Production
Capital Costs
Initial Capital
Pre-production Mining
Sustaining and Closure
Total Capital Cost
Operating Costs
Mining
Mining
Processing
Maintenance
General & Administration
Transport, Insurance and Refining
Royalties & Statutory Costs
Total
Financials and Key Assumptions
Gold Price
Exchange Rates
Gold Sales Revenue
AISC
AISC - first two years
Project Net Cash Flow - Pre-tax
Project Net Cash Flow, pre tax
PVNCF5%
IRR
Payback Period, pre-tax
Project Net Cash Flow - Post-tax, all equity basis
Income Tax
Project Net Cash Flow,
PVNCF5%
IRR, post-tax
Payback Period
18
Mt
g/t Au
koz Au
Mtpa
Years
waste:ore
%
koz Au
US$M
US$M
US$M
US$M
US$/t total material
US$/t Ore mined
US$/t Ore processed
US$/t Ore processed
US$/t Ore processed
US$/t Ore processed
US$/t Ore processed
US$/t Ore processed
US$/oz
AUD:USD
XOF:USD
US$M
US$/oz Au
US$/oz Au
US$M
US$M
%
Months
US$M
US$M
US$M
%
Months
14.7
1.6
750
2.0
7.5
2.8
94
704
142
17
23
182
3.9
14.7
14.1
1.5
4.1
0.1
3.0
37.6
1,800
0.72
581
1,267
820
545
531
402
69
15
132
399
301
59
15
CHESSER RESOURCESANNUAL REPORT 2022 Figure 5: Diamba Sud Gold Project Layout
PRODUCTION PROJECTIONS
The production profile of the Diamba Sud Gold Project demonstrates annual production of up to 136koz
in year two, with an average production of 94koz per year over the current 7.5 year Project life. 70% of the
gold production is sourced from Indicated Resources and the remainder from Inferred Resources. During
the first two years of production which includes the payback period, gold production is sourced 83% from
Indicated Resources, mainly from the Area D pit.
Diamba Sud Gold Production
z
o
k
n
o
i
t
c
u
d
o
r
P
d
o
G
l
140
120
100
80
60
40
20
0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
l
d
o
G
t
/
g
e
d
a
r
G
d
e
e
F
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Indicated
Inferred
Grade g/t Au
Figure 6: Diamba Sud Annual Production Projection (koz gold)
19
EXPLORATION REVIEW
SENSITIVITY ANALYSIS
Sensitivity analysis shows the Project to be resilient to changes in both capital and operating costs. Like
most mining projects the economics are most sensitive to changes in revenue parameters such as the
commodity price.
Figure 7: Project NPV (post tax) Sensitivity Analysis (US$M)
CONCLUSION AND RECOMMENDATIONS
The Study indicates that the Diamba Sud Project is a low risk, technically simple and economically robust
Project which has significant potential to grow.
Given the low-risk nature of the Project the Board of Chesser approved commencement of a Definitive
Feasibility Study.
KARAKARA CONTINUES TO DELIVER HIGH-GRADE RESULTS
Karakara is located 1.2km southwest of Area D (Figure 2) over a geochemical anomaly coincident with the
interpreted trend of the Northern Arc structure. Drilling has defined shallow, high-grade mineralisation over
an initial 250m of strike.
An extensive drill program has been completed over Karakara to define the strike and depth extents of
mineralisation. A total of six DD holes for 1,405m and 30 RC holes for 3,773m (Figure 8) were reported
during FY2022.
Mineralisation appears to be predominantly associated with quartz-carbonate-hematite-albite-pyrite
alteration within hydrothermally altered sedimentary rocks, however mineralisation in the granites has also
been observed. The north-south trending, east dipping sedimentary sequence is bounded by granite to
the east and west and cut by dykes. The geometry of the mineralisation is complex but may be associated
with folding and an anticlinal structure observed in core and geophysics.
Results confirm the continuity of the main high-grade mineralised structure at Karakara (Figure 8).
20
CHESSER RESOURCESANNUAL REPORT 2022 Significant results included:
• DSD077: 7m @ 1.4 g/t Au from 7m, 2.5m @ 2.9 g/t Au from 15m and 51m @ 5.1 g/t Au from 31m
• DSR348: 6m@ 5.0 g/t Au from 66m and 5m @ 19.0 g/t Au from 99m
• DSDD074: 2.5m @ 12.2 g/t from 32.6m and 26.3m @ 3.5 g/t Au from 40.3m
• DSR341: 6m @ 3.5 g/t from 29m, 17m @ 1.1g/y from 39m, 9m @ 4.2 g/t Au from 63m 5m @ 3.0 g/t Au from
81m and 12m @ 7.0 g/t Au from 92m
• DSR345: 3m @ 11.4 g/t Au from 58m, 8m @ 10.5 g/t Au from 64m and 15m @ 1.9g/t Au from 75m
• DSDD073: 10m @ 1.7g/t Au from 8m, 12m @ 3.1 g/t Au from 23m and 3m @ 7.5 g/t from 112m and 2m @
33.9g/t Au from 173m
Drilling immediately north of the historical artisanal workings intersected numerous zones of strong quartz-
carbonate-hematite-albite-pyrite alteration in sedimentary conglomerates, however the assays did not
return many significant results. Drill coverage over the artisanal workings is still very sparse with additional
drilling required to fully test the area.
Follow up drilling has been completed to define the potential southeast trend of mineralisation intersected
east of the artisanal pit in DSDD070 and DSDD074 (Figure 8) and to close off mineralisation to the east in
preparation for a resource estimate, which will be completed in the December 2022 quarter.
Karakara is highly likely to add significantly to the Mineral Resource inventory at Diamba Sud. An initial
resource estimate for Karakara will be undertaken during CY2022.
Figure 8: Karakara plan view showing historical drilling and holes reported in FY2022 with selected significant
results3
3 Refer to ASX announcements 23 April 21, 22 Dec 21 and 9 May 22 for previously reported drilling results. The Company is not aware of any new information or data that materially affects the
information contained in those announcements.
21
EXPLORATION REVIEW
Figure 9: Karakara Section 1428400mN showing historical drilling, holes reported in this release, selected
significant results4 and interpreted geology.
4 Refer to ASX announcements 23 April 21 and 22 Dec 21 for previously reported drilling results. The Company is not aware of any new information or data that materially affects the information
contained in those announcements.
22
CHESSER RESOURCESANNUAL REPORT 2022 Figure 10: Karakara Section 1428375mN showing historical drilling, holes reported
in this release, selected significant results5 and interpreted geology.
Figure 11: Karakara Section 1428350mN showing historical drilling, holes reported
in this release, selected significant results6 and interpreted geology.
5 Refer to ASX announcements 23 April 21 and 22 Dec 21 for previously reported drilling results. The Company is not aware of any new information or data that materially affects the information
contained in those announcements.
6 Refer to ASX announcements 22 Dec 21 and 7 June 22 for previously reported drilling results. The Company is not aware of any new information or data that materially affects the information
contained in those announcements.
23
EXPLORATION REVIEW Figure 12: Karakara Section 1428200mN showing historical drilling, holes reported in this release, selected
significant results7 and interpreted geology.
7 Refer to ASX announcements 9 May 22 for previously reported drilling results. The Company is not aware of any new information or data that materially affects the information contained in those
announcements.
24
CHESSER RESOURCESANNUAL REPORT 2022 WESTERN SPLAY
Western Splay area is defined by a co-incident gold auger geochemical anomaly and a geophysical
feature approximately 5km to the southwest of the Area A.
Sixteen RC drill holes have previously been drilled over the area, reported 3 April 2017, 21 July 2020, 28
July 2020, and 23 April 2021. Historical drilling defined a 300m open ended mineralised structure trending
northwest-southeast. Results included:
• DSR145: 22m @ 2.1 g/t Au from 36m
• DSR150: 2m @ 19.8 g/t Au from 4m
• DSR152: 6m @ 1.8 g/t Au from 28m and 10m @ 1.1 g/t Au from 111m
Nine RC holes for 990m were drilled during the Phase 7 drill program over the northwest end of the
previous previously defined mineralised structure (Figure 13). Section line 1426375mN intersected the
mineralised structure in holes DSR330, DSR331 and DSR333. Mineralised intervals were associated with
pyrite mineralisation and albite-hematite-carbonate-quartz alteration within brecciated sedimentary
units.
The northwest-southeast mineralised trend has been confirmed from the drill results and structure remains
open along strike.
Results from the other drill traverses only returned narrow mineralised results, however drilling was located
south and off the mineralised trend.
The identified mineralised trend has been subject to further drilling during the Phase 8 drill program
(Figure 13) with results outstanding at the end of the FY2022.
Significant results included:
• DSR331: 16m @ 1.9 g/t Au from 42m
• DSR330: 17m @ 1.4 g/t Au from 35m
• DSR333: 5m @ 4.4 g/t Au from 26m and 2m @ 3.5 g/t Au from 117m
25
EXPLORATION REVIEW Figure 13: Plan view showing historical drilling and holes reported in FY2022 with selected significant results8
8 Refer to ASX announcements 3 April 2017, 21 July 2020, 28 July 2020, and 23 April 2021 for drilling results. The Company is not aware of any new information or data that materially affects the
information contained in those announcements.
26
CHESSER RESOURCESANNUAL REPORT 2022 KASSASSOKO PROSPECT
Fifteen rock chip samples were collected from within the Kassassoko artisanal workings which returned
very significant high-grade results (Figure 14) averaging 3.8 g/t Au, maximum result of 10.3 g/t Au and all but
two samples returned 1.0 g/t Au or greater.
Mineralisation appears to be hosted within an east-west sheared and stockworked granite with associated
pyrite alteration which has been exploited in one pit over a length of approximately 80m by the local
artisanal miners, however the area of artisanal workings is much more extensive.
Kassassoko is located 2.5km south of Karakara and may form the southeast extension of the Western
Splay structure (Figure 2).
The area has been actively exploited by the local artisanal miners over the past 6 months, however their
numbers have diminished as digging becomes difficult in the fresh rock which occurs at approximately
10-15m depth.
Initial drill testing has been completed and results were pending at 30 June 2022.
Kassassoko is unique as it is the first-time significant mineralisation has been identified in granite in the
area. Granite hosted deposits can develop to a significant scale and Kassassoko is now an additional
exploration target for Diamba Sud.
27
EXPLORATION REVIEW Figure 14: Kassassoko artisanal pit and rock chip sample locations and grades
BOUGOUDA – DIAMBA SUD SOUTH
Seven 100m spaced RC drill traverses, 13 RC holes for 1,274m, (Figure 16), were drilled at Bougouda in the
southern Diamba Sud (“DS2”) tenement block approximately 14km south of the main tenement area. (Figure 15).
At Bougouda, artisanal miners have been exploiting mineralised quartz veins in diorite over a length of
approximately 800m to a depth of approximately 10-15m via small shafts.
Mineralisation was intersected on each drill traverse (Figure 16), with the weighted average intercept
reported being 3.8m @ 4.2 g/t gold.
Better intercepts included:
• DSR388: 2m @ 40.8 g/t Au from 83m
• DSR392: 21m @ 3.3 g/t Au from 65m
• DSR398: 10m @ 5.3 g/t Au from 50m
• DSR399: 6m @ 3.7 g/t Au from 168m
• DSR396: 7m @ 3.1 g/t Au from 46m
28
CHESSER RESOURCESANNUAL REPORT 2022 True vein widths are approximately half the reported intercept widths.
Mineralisation is consistent over a significant length and the presence of the wider zones as intersected in
DSR392, 21m @ 3.3 g/t gold, is worthy of further investigation and analysis to determine if potential future
economic extraction is possible.
This new style of mineralisation is further evidence of the significant prospectivity of the area that is
evolving from the recent modern exploration efforts. In the past two years, six mineralised areas (Area A,
Area D, Karakara, Western Splay, Kassassoko and Bougouda) have been identified on the Diamba Sud
tenement alone as well as Kabewest and other prospects on Barrick’s adjacent tenements.
Figure 15: Diamba Sud tenement location plan showing location of DS2 Bougouda prospect
29
EXPLORATION REVIEW Figure 16: DS2 Bougouda plan view showing drilling reported in FY2022 with selected significant results
30
CHESSER RESOURCESANNUAL REPORT 2022 DIAMBA NORD
Exploration undertaken on Diamba Nord in December 2021 included:
• Mapping, rock chip (61 samples) and termite (756 samples) sampling of the southern section of
the Diamba Nord southern tenement block. Results were generally low level, however the isolated
anomalous results and areas of artisanal activity will be followed up when field activities commence on
the nearby Morichou tenement.
• 382 samples from the 2018 (400x50m) auger drilling program were not assayed at the time and were
submitted for analysis. Only isolated anomalous results were identified from the area of auger coverage
with no evidence of significant mineralised trends.
EXPLORATION TENEMENT APPLICATIONS
Morichou and Bondala license applications were granted in February 2022, significantly increasing the
Company’s ground holding in Senegal to 872km2 (Figure 1).
The Bondala license (total area of 207km2) increased the landholding adjacent to and around the Diamba
Sud gold project and is contiguous to the north of the Diamba Sud tenement covering an area of highly
prospective Falémé group rocks and surrounds the 0.5Moz Karakaene deposit immediately to the west of
Diamba Sud. The Bondala license also covers an area along strike of the 1Moz Makabingui mineralisation.
The Mourichou license (total area of 431km2) covers an extensive area of Mako series rocks and is located
near the Sabodala shear zone and close to Chesser’s Diamba Nord Project tenements.
Each tenement is valid for a period of 10 years with an initial term of four years and renewable for a further
two periods of three years each. There is a 25% relinquishment requirement at each renewal.
No exploration work was carried out over these areas during the period.
31
EXPLORATION REVIEW SUSTAINABILITY
REVIEW
32
CHESSER RESOURCESANNUAL REPORT 2022 This Sustainability review outlines Chesser’s
developing Sustainability management and
reporting framework as the Company grows and
advances its Diamba Sud gold project in eastern
Senegal. During the year the Company continued
to build on our strong community relationships,
commenced a detailed Environmental and Social
Impact Assessment (ESIA) including collection
of baseline environmental data, implemented a
groundwater depth monitoring program, installed
a weather station to collect weather data and
introduced environmental initiatives at BOYA camp
and in its exploration areas.
Chesser’s sustainability policies, procedures and
reporting is evolving with the aim of aligning with an
appropriate internationally recognised standard
within the next 18 months. In this report we
illustrate the start of this journey by aligning some
of our activities with five of the United Nations
Sustainable Development Goals (SDG) that are
providing immediate value to our local community.
Chesser aims to deliver long-term stakeholder
value through discovery and development of
gold projects while operating in a safe and
environmentally and socially responsible manner.
Chesser’s corporate values are integral to how we
operate and to our success.
Chesser’s Goals
Chesser’s Values
Generate value for all stakeholders through
excellence in exploration, discovery and
development.
Unlocking Senegal’s eastern gold province and
develop Senegal’s next gold mine.
Commitment
We strive to achieve all our goals.
Character
We do what we say and act with integrity.
Community
We value all our employees, contractors,
shareholders, host communities and
government.
Chesser’s Sustainability pillars:
People and Culture
Environment
Community
Corporate
Chesser is committed
to our people,
providing a safe work
environment, free
from discrimination
and to help each
individual reach their
full potential.
Chesser is committed
to minimising the
impacts to the
environment resulting
for our activities.
Chesser is committed
to developing a
transparent open
and trust-based
relationship with our
host communities and
to having a positive
sustainable impact by
partnering with them
through the journey.
Chesser commits to
undertake its business
ethically with integrity
and transparency,
respecting the laws
and cultures under
which we operate and
having in place quality
corporate governance
and risk management
standards.
33
SUSTAINABILITY REVIEW Chesser’s Sustainable Development Goals partnering with
our local Community
1. No Poverty
2. Zero Hunger
Community Garden
being developed
for future fruit and
vegetable market
garden in the village
Tree plantation
planted at BOYA
camp – 5 Guava, 5
Papaya, 3 Lemon, 5
Cinnamon Apple, 2
Orange, 7 Mango.
Plantation will
be expanded
for plant nursery
for rehabilitation
purposes
Provision of meals
to all workforce
Engaging local
company to provide
meals for workers
Preferential
employment policy
for local community
members for
exploration and
camp roles.
Preferential sourcing
of local supplies and
services, including
provision of meals
for workforce.
Built bridge to
provide safe and
easy access to and
from the village.
Built wall around
school to enable
development of
a safe education
environment
Community Garden
being developed
with lady’s group to
provide food and
additional income
for the community
15. Life on Land
ESIA Baseline
studies identified:
• 158 species of
flora and fauna
and
• 92 species of
mammal, reptile
and birds
Awareness of
degradation due to
over exploitation,
bushfires, artisanal
mining has enabled
planning for
rehabilitation of the
areas to begin Fruit
tree plantation at
BOYA camp.
Nursery to be
established for
rehabilitation
purposes.
6. Clean Water
and Sanitisation
8. Decent Work and
Economic Growth
Water bore
installation – solar
powered water bore,
increased holding
capacity of water
tanks and filtration
system maintained
during the year.
Awareness and
removal of stagnant
water around
camp, work sites
and village to
avoid mosquito
infestations
Using water from
Air-conditioning
units overflow to
water plants and
avoid mosquito
infestation.
Instigated a
community rubbish
clean-up program
and established
waste disposal sites
Commenced ground
water monitoring
and testing
Employment of
local community
for exploration and
camp roles.
Engaging local
company to provide
meals for workers
Providing
opportunities for the
local community to
work in the garden,
school etc around
the village
As Chesser
continues to grow,
our relationship with
our local community
at Gamba Gamba
gets stronger.
Socio-economic
surveys undertaken
in the villages
/ hamlets of
Gamba Gamba,
Kharakhena,
Lingueya,
Ousmaneya,
Kourdiakhouma
and Sontigna
Local content plan
to be developed as
part of ESIA
34
CHESSER RESOURCESANNUAL REPORT 2022 FY2021 Highlights:
86%
Senegalese national
employment
over 85
local community
members employed
during the year
$7m
contributed to
the Senegalese
economy
$930k
Government taxes
and charges paid in
Senegal
• No lost time injury recorded and no fatalities
• No environmental breaches
• ESIA commenced
• Social investment agreement renewed with local community of Gamba-Gamba
• Construction of bridge, community garden and school wall for local community
• Annual meeting of joint community consultation committee held
• Local business support and development
Chesser’s Vision and Values, Sustainability pillars and policies can be found on the
company website:
https://www.chesserresources.com.au/visions-and-values/
https://www.chesserresources.com.au/sustainability/
https://www.chesserresources.com.au/corporate-governance/
35
SUSTAINABILITY REVIEW People and Culture:
Chesser is committed to developing a work environment where individuals and the team can achieve their
full potential while operating safely and being free from discrimination.
Policy development and management systems developed during the previous year have continued to be
developed upon and improved.
86% of employees are Senegalese nationals. Chesser has a policy of preferencing local employment and
has employed over 60 local community members, predominantly as unskilled casual labour on a rotational
system so that a greater number benefit from our activities in the area. Only a small percentage of the
workforce (approximately 5%) are currently female, partly due to local cultural traditions, however efforts
are being undertaken to increase the female participation in the workforce as well as employing more
permanent and skilled employees from the local community.
Employee numbers by category Numbers
Male
Female Nationals
Locals
Expats
Board
Executive Management
Senior Management
Cadre
Labours/ Contractors
Casual
Total
% Total
5
4
2
7
27
55
100
5
4
1
5
25
55
95
0
0
1
2
2
0
5
0
0
2
2
20
0
24
100%
95%
5%
24%
0
0
0
0
7
55
62
62%
5
4
0
5
0
0
14
14%
During the year no lost time injury was recorded. No fatalities have ever been recorded. The Company
employs a full-time nurse on-site at Diamba Sud. Occupation Health and Safety (“OH&S”) systems have
been enhanced and a dedicated Health, Safety and Security manager was employed in January 2022.
First Aid training was carried out over three days on site and over two days in the main office in Dakar
during October 2021. The third day of training on site at Diamba Sud involved practical examples of
incidents that may happen in the field.
An external review of the company’s local medical evacuation and management plan was undertaken.
During the year the Company COVID-19 management policies which included testing, sanitary protocols,
and provision of vaccines remained in place.
36
CHESSER RESOURCESANNUAL REPORT 2022 Health and Safety Table: January to June 2022
Serial
Item
Quantity
01.
02.
03.
04.
05.
06.
07.
08.
09.
HSE Hazards Reported
HSE Incidents Reported
Workplace HSE Inspections
Action Points Raised
Action Points Closed out
Visitor Inductions Completed
HSE Training (Man-Hours)
HSE Meetings (Man-Hours)
HSE Non-Compliance
Medical Treatment Table: January to June 2022
Serial
Item
01.
02.
03.
04.
05.
06.
Consultations
Resident Malaria
Work-related Injuries
First Aid Injuries
Medical Treatment Injuries
Lost Time Injuries
3
5
22
9
0
0
2
6
1
Quantity
120
0
3
2
0
0
Environment:
No environmental incidents were recorded during the year.
A permanent Environment and Community manager was appointed during the year and has made
significant improvements to the environmental and social management programmes and policy
development.
Significant efforts have been made to ensure working environments were kept clean with clean up
campaigns arranged at all drill sites to pick up non-biodegradable waste. Where possible, the team has
also reduced the impact on the natural environment by minimising the amount of vegetation needed to be
cleared for drill pad preparation.
A community rubbish collection program was also undertaken and a waste disposal sites at Gamba
Gamba established.
37
SUSTAINABILITY REVIEW ESIA Baseline Studies
Baseline environmental and social studies for the ESIA commenced during the year undertaken by
specialised environmental consultants Earth Systems.
The dry season survey was completed and focused on preliminary baseline data for Terrestrial Biodiversity.
It included the following key findings:
Fauna: The study focused on large and medium-sized terrestrial fauna (mammals, reptiles and birds) and
found a total of 95 species highlighted in the table below.
Overview of the richness of the different classes at Diamba Sud Project Development Area
Classes
Mammals
Reptiles
Birds
Total
Number
Families
Species
10
2
39
51
11
2
78
95
All mammal species observed directly or indirectly are of only minor
concern (LC) according to the International Union for Conservation
of Nature (IUCN) Red List. However, according to the Senegalese
hunting code, Orycteropus afer (Aardvark) is fully protected, i.e. their
hunting and capture, including that of the young and the collection
of eggs, are formally forbidden. The following mammal species
are partially protected; Tragelaphus scriptus, Ourebia ourebi, Felis
silvestris, Mungos mungo, Mellivora capensis and Canis adustus.
Among the bird species observed, only the Savannah Boatman
(Terathopius ecaudatus) of the family Accipitridae is considered
threatened (EN) on the IUCN Red List.
Orycteropus afer (Aardvark)
38
CHESSER RESOURCESANNUAL REPORT 2022 Savannah Boatman
Flora: The characterisation of the reference
situation of the Diamba Sud project has identified
158 species. This flora is largely dominated
by species from the Fabaceae family (21.5%),
Malvaceae (10.1%), Combretaceae (7.6%), Poaceae
(6.3%), Anacardiaceae (4.4%) and Rubiaceae (4.4%).
These six families together represent more than
50% of the total species richness of the site.
Five species are represented in almost all the
sites and are said to be constant. These are the
following species: Anogeissus leiocarpa, Terminalia
macroptera, Diospyros mespiliformis, Pterocarpus
erinaceus and Sarcocephalus latifolius.
The flora degradation factors are natural and
anthropogenic. However, anthropogenic activities
are the main causes of biodiversity degradation
(overexploitation of biological resources, bush fires,
artisanal gold mining, etc.).
The results of the survey with local communities
showed that Pterocarpus erinaceus is the most
widely used species in the area. The wood of this
species, called Senegalese rosewood, is one of the
best woods in West Africa for cabinet making.
Senegalese Rosewood
Aquatic ecology: The study recorded 14 species of
fish and 68 species of aquatic macroinvertebrates
in the study area. The species richness remains
very low at all the sampled sites. This low species
richness could be due to the poor quality of the
water, which is linked to the high level of artisanal
gold mining activity in the study area. Indeed,
the high turbidity of the water combined with the
presence of dredging machines in the riverbed
would have negative impacts on the aquatic fauna.
The analysis of fish tissues shows the presence of
heavy metals with especially high concentrations of
mercury and zinc in the species Schilbe intermedius
and Petrocephalus bovei sampled at AQS4 and
AQS5. These concentrations are above the FAO/
WHO and Canadian (2016) standards for fish
consumption.
Fishing is for the most part considered a secondary
activity due to the scarcity of the resource but
especially due to the poor quality of the water.
39
SUSTAINABILITY REVIEW Community:
From a social perspective, we continuously
encourage stakeholder engagement by
maintaining an open and frequent dialogue. The
company continues to preferentially employ locals
and source local supplies and services. Community
infrastructure projects have been successful with
good feedback from our local communities.
Through the Gamba Gamba Village Community
Consultative Committee, Chesser has renewed
its commitment to support access to basic
community infrastructure and improved livelihoods
and to provide its community with a better living
conditions.
During the year a bridge over the entrance to the
village was completed and the wall surrounding the
school was built.
has appointed a manager for market gardening
activities and another for poultry farming activities.
Villagers from the only village within Diamba Nord,
Mousala, were met to introduce the field team and
talk about the further exploration activities the
company wants to carry out in the permit in the
near future
Socio-economic surveys have commenced in the
villages/hamlets of Gamba Gamba, Kharakhena,
Lingueya, Ousmaneya, Kourdiakhouma and
Sontigna as part of the ESIA studies.
Village meeting
Diamba Sud – BOYA Camp
During the year, the exploration team moved into
new camp facilities at BOYA Camp.
This camp includes air-conditioned rooms, ablution
block, core shed and workshop buildings
The fence and entrance gate was completed in
June this year. The Camp Manager oversees the
rubbish dump and recycling facilities.
All-weather access to the village
Chesser is keen to promote income-generating
activities for women and elderly men in the fields of
agriculture and animal breeding. A market garden
area is high on the priority list and landscaping
work and construction of a fence has begun.
The purchase of a three-headed motor mill for
processing millet, maize and groundnut crops has
been approved. This also includes the construction
of a building to contain the mill. The community
BOYA Exploration Camp and Area D
40
CHESSER RESOURCESANNUAL REPORT 2022
During the year Chesser contributed A$7m to the Senegalese economy including A$0.9m in local wages,
A$0.9m taxes and charges paid to the government and A$68k spent on community projects and
donations. These contributions will continue to increase as the Company continues developing at Diamba
Sud towards a future gold mine.
Senegal Expenditures in AUD
2018
2019
2020
2021
2022
Local wages and salaries
Government fees, taxes & charges
Capital purchases
Donations and gifts
Community water well
Clinic
Compensation payments
Political donations
All other Senegal expenditure
$
$
$
$
$
$
$
$
$
$
235,302 $
296,595 $
366,235 $
584,875 $
927,991
20,244 $
318,071 $
171,306 $
235,055 $
930,550
34,007 $
54,068 $
34,459 $
353,054 $
415,402
3,662 $
1,007 $
4,962 $
3,453 $
22,074
- $
- $
- $
- $
- $
- $
- $
- $
- $
- $
- $
- $
32,632 $
11,962 $
-
-
- $
- $
45,528
-
151,593 $
225,638 $
1,404,675 $ 3,503,478 $ 4,658,542
444,808 $
895,379 $
1,981,637 $ 4,724,509 $ 7,000,087
41
SUSTAINABILITY REVIEW Corporate:
The Board has continued to support the suite of charters and key corporate governance documents which
articulate the corporate governance policies and procedures adopted by Chesser.
These documents are available in the Corporate Governance section of the Company’s website,
https://www.chesserresources.com.au/corporate-governance/
A Corporate Governance Statement, current as at 16 September 2022, has been included in this Annual Report.
42
CHESSER RESOURCESANNUAL REPORT 2022 Chesser Value
statement
Commitment
We strive to achieve
all our goals.
Character
We do what we say and
act with integrity.
Community
We value all our employees,
contractors, shareholders,
host communities and
government.
CHESSER VALUE STATEMENT
43
CORPORATE
GOVERNANCE
STATEMENT
44
CHESSER RESOURCESANNUAL REPORT 2022 INTRODUCTION
The Board and management of Chesser
Resources Limited (Chesser or Company)
recognises that the Company’s employees,
shareholders, regulators, and other stakeholders
expect Chesser to conduct its operations
ethically and with integrity. Chesser is committed
to maintaining a high standard of corporate
governance which reflects Chesser’s values and
the expectations of its stakeholders.
The Board has adopted a suite of charters and key
corporate governance documents which articulate
the corporate governance policies and procedures
adopted by Chesser.
These documents are available in the Corporate
Governance section of the Company’s website,
www.chesserresources.com.au/corporate-
governance.
This Corporate Governance Statement
(Statement), which is current as at 16 September
2022 and has been approved by the Company’s
Board, explains how Chesser complies with the
ASX Corporate Governance Council’s ‘Corporate
Governance Principles and Recommendations
– 4th Edition’ published in February 2019 (ASX
Principles and Recommendations), in relation to the
year ended 30 June 2022.
In addition to the ASX Principles and
Recommendations, the Board has considered
a number of important factors in determining its
corporate governance policies and procedures,
including the:
• Relatively simple operations of the Company,
which currently only undertakes mineral
exploration and development activities.
• Cost versus benefit of additional corporate
governance requirements or processes.
• Size of the Board.
• Board’s experience in the resources sector.
• Organisational reporting structure, number of
reporting functions, operational divisions, and
employees.
• Relatively simple financial affairs with limited
complexity and quantum.
• Relatively small market capitalisation and
economic value of the entity; and
• Direct shareholder feedback.
45
CORPORATE GOVERNANCE STATEMENT CORPORATE GOVERNANCE STATEMENT
Recommendation
Explanation of Chesser’s compliance with the recommendation
Recommendation complied
with ?
1.1 Role of Board and
management
1.2
Information
regarding
election and re-
election of
director
candidates
1.3 Written
contracts of
appointment
Principle 1: Lay Solid Foundations For
Management And Oversight
The Board has established a clear distinction between the functions and
responsibilities reserved for the Board and those delegated to
management, which are set out in the Company’s Board Charter. A copy
of the Board Charter is available in the Corporate Governance section of
the Company’s website,
https://www.chesserresources.com.au/corporate-governance/
Chesser carefully considers the character, experience, education, and
skillset of potential candidates for appointment to the Board and
conducts appropriate background checks to verify the suitability of the
candidate, prior to their election. Based on the Company’s level of
knowledge of the potential candidate, these may include checks as to
the person’s character, experience, education, and bankruptcy history, but
may not include criminal record checks for potential candidates that are
well known to the Board. The Company has appropriate procedures in
place to ensure that material information relevant to a decision to elect
or re-elect a director, is disclosed in the relevant notice of meeting
provided to shareholders. Director profiles are also included on the
Company’s website and in the Directors’, Report included in the
Company’s Annual Report.
In addition to being set out in the Board Charter, the roles and
responsibilities of Directors are formalised in a letter of appointment
which each Director receives and commits to on their appointment. The
letters of appointment specify the term of appointment, time
commitment envisaged, expectations in relations to committee work or
any other special duties attaching to the position, reporting lines,
remuneration arrangements, disclosure obligations in relation to
personal interests, confidentiality obligations, insurance and indemnity
entitlements and details of the Company’s key governance policies.
Each Key Management Personnel (“KMP”) enters into a service contract
which sets out the material terms of employment, position description,
reporting lines, remuneration arrangements and termination rights and
entitlements. A summary of the employment contract for each KMP is
provided in the Remuneration Report included in the Annual Report.
Yes
No
Yes
1.4 Company Secretary The Company Secretary reports directly to the Board through the
Yes
Chairman on Board matters and all Directors have access to the Company
Secretary. In accordance with the Company’s Constitution, the
appointment or removal of the Company Secretary is a matter for
the Board as a whole.
Details of the Company Secretary’s experience and qualifications are
included on the Company’s website and in the Directors’ Report of the
Company’s Annual Report.
46
CHESSER RESOURCESANNUAL REPORT 2022
CORPORATE GOVERNANCE STATEMENT
Recommendation complied
with ?
No
No
Yes
Yes
Recommendation
Explanation of Chesser’s compliance with the recommendation
1.5 Diversity
1.6 Board reviews
1.7 Management
reviews
2.1 Nominations
committee
The Company has adopted a Diversity Policy but did not establish
measurable objectives for achieving gender diversity for the 2022
year. The Company’s Diversity Policy recognises that a diverse and
talented workforce is a competitive advantage and encourages a
culture that embraces diversity. However, the Board considers that the
Company is not currently of a size to set measurable objectives for
achieving gender diversity. The Board will review its position and may
develop measurable objectives when the Company’s operations
increase. At the date of this Statement, the Company has no female
directors or senior executives. At the date of this statement, females
represented 3% of the Company’s employees.
The Board has not conducted a formal performance evaluation. The
Company is a junior resources company, and the Board believes that a
formal performance evaluation is not required at this point in time as
no efficiencies or other benefits would be gained from a formal
performance evaluation. The Chairman is responsible for evaluating the
Board and informal discussions are undertaken during the year. As the
Company grows and develops, it will continue to consider the
efficiencies and merits of a more formal performance evaluation of
the Board, its committees, and individual Directors.
Each year the Board evaluates the performance of its KMP against Key
Performance Indicators (“KPIs”) as set by the Board. Details of the
process followed are set out in the Remuneration Report of the
Company’s Annual Report. For the 2022 year, the Board has
implemented a revised remuneration framework as described in the
Annual Report.
Principle 2: Structure the Board to be effective and add value
The Board has decided not to form a separate Nomination
Committee. The Board believes that no efficiencies or other benefits
would be gained by establishing a separate Nomination Committee.
The Board has adopted a Remuneration and Nomination
Committee Charter; however, the full Board performs the function of
the Remuneration and Nomination Committee. The Remuneration
and Nomination Committee Charter sets out the processes the
Board employs to address board succession issues and to ensure
that the board has the appropriate balance of skills, knowledge,
experience, independence, and diversity to enable it to discharge its
duties and responsibilities effectively. The Board regularly reviews
whether it has the appropriate balance of skills, knowledge, and
experience suitable for a Company in the junior resources sector.
The Remuneration and Nomination Committee Charter is available in
the Corporate Governance section of the Company’s website
.https://www.chesserresources.com.au/corporate-governance/.
47
CORPORATE GOVERNANCE STATEMENT
Recommendation
Explanation of Chesser’s compliance with the recommendation
2.2 Board skills matrix The Board seeks a mix of skills suitable for a junior resources company.
Recommendation complied
with ?
Yes
CORPORATE GOVERNANCE STATEMENT
A summary of the key board skills matrix is set out below. Further
details regarding the skills and experience of each Director are
included in the Directors’ Report in the Company’s Annual Report.
Director / Skills
Capital
Markets
Resources
Industry
Geology /
Mining
Accounting
/ Finance
Listed
Company
Mark Connelly
Robert Greenslade
Simon O’Loughlin
Simon Taylor
Andrew Grove
✓(cid:3)
✓(cid:3)
✓(cid:3)
✓(cid:3)
✓
✓(cid:3)
✓(cid:3)
✓(cid:3)
✓(cid:3)
✓
✓(cid:3)
✓(cid:3)
✓
✓(cid:3)
✓(cid:3)
✓
✓(cid:3)
✓(cid:3)
✓(cid:3)
✓(cid:3)
✓
2.3 Disclose
independence and
length of service
The Board has assessed the independence status of each Director as
at the date the Company is admitted to the Official List of the ASX and
has determined the following:
Yes
Name
Position
Independent
Length of service
Mark Connelly
Non-Executive Chairman
Robert Greenslade
Non-Executive Director
Simon O’Loughlin
Non-Executive Director
Simon Taylor
Non-Executive Director
Andrew Grove
Managing Director
Yes
Yes
Yes
Yes
No
Appointed 17 July 2020
Appointed 8 April 2020
Appointed 2 March 2006
Appointed 29 March 2007
Appointed 1 May 2021
Yes
Yes
No
2.4 Majority of
directors
independent
A majority of Directors of the Company are independent. as disclosed
against Recommendation 2.3.
2.5 Chair independent The Chairman, Mr Mark Connelly, is an Independent Non-Executive
Director. Further details regarding the current directors are included on
the Company’s website and are set out in the Directors’ Report of the
Company’s Annual Report.
2.6 Induction and
professional
development
The Board does not have a formal program for inducting new Directors
and providing appropriate professional development opportunities.
The Board has been structured such that its composition and size will
enable it to effectively discharge its responsibilities and duties. Each
Director has been appointed because they already possess the
relevant industry experience and specific expertise relevant to the
Company’s business and level of operations and given the activities of
the Company and their own experience do not require the Company,
given its size, to provide professional development opportunities.
However, each new Director receives and commits to a letter of
appointment which includes details of the Company’s key policies and
processes and continuing professional development is expected of all
Directors. Directors are also entitled to seek independent professional
advice at the expense of the Company (subject to approval) as may
be reasonably required to assist them to carry out their duties as a
director.
48
CHESSER RESOURCESANNUAL REPORT 2022
Recommendation
Explanation of Chesser’s compliance with the recommendation
Recommendation complied
with ?
CORPORATE GOVERNANCE STATEMENT
Yes
Yes
Yes
Yes
3.1 Values and 3.2
Code of Conduct
3.3 Whistleblower
Policy
3.4 Anti-Bribery and
Corruption Policy
4.1 Audit committee
Principle 3: Instill a culture of acting lawfully, ethically, and responsibly
The Company has established a corporate vision and corporate
values which can be viewed at
https://www.chesserresources.com.au/visions-and-values/, The
Board has established a Code of Conduct for its Directors,
executives and employees, a copy of which is available in the
Corporate Governance section of the Company’s website,
https://www.chesserresources.com.au/corporate-governance/
The Company has adopted a Whistleblower Policy intended to support
and protect persons who speak up about any unlawful, unethical or
irresponsible behaviour within the organisation, a copy of which is
available in the Corporate Governance section of the Company’s website,
https://www.chesserresources.com.au/corporate-governance/ The
Board are informed of material incidents reported under the Company’s
Whistleblower Policy.
The Company has adopted an Anti-Bribery and Corruption Policy
(ABCP) which links to the Code of Conduct by which the Company
expects its operations and business dealings to be managed. The
ABCP prohibits the giving of bribes or other improper payments and
specifies the controls around the giving of donations and the
acceptance of gifts or hospitality by officers of the Company. The ABCP
requires the Board to be informed of any material breaches of the
ABCP. The ABCP is available in the Corporate Governance section of
the Company’s website,
https://www.chesserresources.com.au/corporate-governance/
Principle 4: Safeguard the integrity of corporate reports
The Board has decided not to form a separate Audit Committee. The
Board believes that no efficiencies or other benefits would be gained
by establishing a separate Audit Committee. The Board has adopted an
Audit Committee Charter; however, the full Board performs the function
of the Audit Committee.
The Company:
(a) Has relatively simple operations and currently only undertakes
mineral exploration and development activities.
(b) Has relatively simple financial affairs with limited complexity and
quantum; and
(c) Has a relatively small market capitalisation and economic value.
As a result, the Board considers that it is more efficient and effective
for the corporate reporting process to not have an Audit Committee
at this stage. The Board will monitor this position as the Company’s
circumstances change. The full Board determines when to seek the
appointment or removal of the external auditor, and subject to any
statutory requirements, the full Board will also seek rotation of the
49
CORPORATE GOVERNANCE STATEMENT
Recommendation
Explanation of Chesser’s compliance with the recommendation
Recommendation complied
with ?
CORPORATE GOVERNANCE STATEMENT
4.2 CEO and CFO
certification of
financial
statements
4.3 Verifying the
Integrity of
Periodic Corporate
Reports
4.4 External auditor at
AGM
5.1 Disclosure and
Communications
Policy
audit partner on an as required basis. Further details on the integrity
measures implemented for the corporate reporting function are
provided in the Audit Committee Charter which is available in the
Corporate Governance section of the Company’s website at
https://www.chesserresources.com.au/corporate-governance/
In respect of the full year and half year financial reports, the Board
obtains a written declaration from the CEO (or equivalent) and CFO
(or equivalent) that, in their opinion, the financial records of the
Company have been properly maintained, the financial statements
comply with the appropriate accounting standards and give a true
and fair view of the financial position and performance of the entity,
and that the opinion is formed on the basis of a sound system of risk
management and internal control that is operating effectively in all
material respects in relation to financial reporting and material
business risks.
However, the Board does not receive declarations from the CEO (or
equivalent) and CFO (or equivalent) in respect of the quarterly cash
flow reports prepared and lodged in compliance with Appendix 5B
of the Listing Rules as these quarterly cash flow reports are
considered by the Board:
• not to be a financial report or interim financial report as
defined under Australian accounting standards; and / or
• not to be capable, as a standalone report, of giving a true
and fair view of the financial position and performance of
the Company, only its cash flows for the relevant reporting
period.
The Company has an effective system of internal control and multiple
review and approval stages which it applies to public documents that
are not reviewed or audited by its external auditor.
The Company has engaged a reputable and suitably qualified external
auditor to perform the external audit function. At least one senior
representative of the auditor attends the Annual General Meeting
(“AGM”) and is available to answer shareholder questions regarding
the audit.
Principle 5: Make timely and balanced disclosure
The Company has adopted a Continuous Disclosure Policy which sets out
the processes and practices that ensure its compliance with the
continuous disclosure requirements under applicable Listing Rules
and applicable corporation law (including the Corporations Act). A
copy of the Continuous Disclosure Policy
in the
is available
Corporate Governance section of the Company’s website,
https://www.chesserresources.com.au/corporate-governance/
Yes
Yes
Yes
50
CHESSER RESOURCESANNUAL REPORT 2022
Recommendation
Explanation of Chesser’s compliance with the recommendation
5.2 Material Market
Announcements
The Company ensures that Directors are provided with a copy of all
material market releases either prior to, or promptly after, lodgement.
Recommendation complied
with ?
Yes
CORPORATE GOVERNANCE STATEMENT
5.3 Investor or Analyst
Presentations
The Company ensures that any new substantive investor or analyst
presentation is released on the ASX Markets Announcements Platform
ahead of being presented, or made available to, investors or analysts.
6.1 Information on
website
6.2 Investor relations
programs
6.3 Facilitate
participation at
meetings of
security holders
Principle 6: Respect the rights of security holders
The Company keeps investors informed of its corporate governance,
financial performance, and prospects via its website. Investors can
access copies of all announcements to the ASX, notices of meetings,
annual reports and financial statements, investor presentations via the
‘Investors’ tab and can access general information regarding the
Company and the structure of its business under the ‘Projects’ tab on
the Company’s website, www.chesserresources.com.au.
The Company has an investor relations program that is commensurate
with the size of the Company and its level of operations. This program
involves actively engaging with interested brokers and investors and
meeting with interested brokers and investors upon request. The
Company responds to enquiries received from brokers and investors
from time to time. In addition, access to Directors and KMP is provided
at the Company’s Annual General Meeting of Shareholders, and
Shareholders are always given the opportunity to ask questions of
Directors and management, either during or after meetings. Any
presentations prepared by the Company are posted on the
Company’s website (www.chesserresources.com.au), which also
provides the opportunity for interested parties to join the mailing list
to receive regular updates from the Company. in the Corporate
Governance section of the Company’s website,
https://www.chesserresources.com.au/corporate-governance/
The Board encourages participation of Shareholders at its meetings
of shareholders and Shareholders are provided with all notices of
meeting prior to meetings, which are set at times and places to
promote maximum attendance by Shareholders. Shareholders are
always given the opportunity to ask questions of Directors and
management, either during or after meetings. In
addition, the Company's auditor is also made available for questions
at the Company’s Annual General Meeting of Shareholders (“AGM”).
6.4 Voting by Poll
The Company has adopted the process required by ASX Guidance Note
35 which stipulates that all Listing Rule resolutions be decided by poll.
The Company has extended the conduct of a poll to all resolutions
proposed at shareholder meetings.
6.5 Facilitate electronic
communications
The Company welcomes electronic communication
Shareholders
email
its
(info@chesserresources.com.au
publicised
via
from
its
address
The Company’s website (www.chesserresources.com.au) provides
Yes
Yes
Yes
Yes
Yes
Yes
51
CORPORATE GOVERNANCE STATEMENT
Recommendation
Explanation of Chesser’s compliance with the recommendation
Recommendation complied
with ?
CORPORATE GOVERNANCE STATEMENT
7.1 Risk committee
the opportunity for interested parties to join the mailing list to receive
regular electronic updates from the Company. The Company’s share
registry also engages with Shareholders electronically and makes
available a range of relevant forms on its website. Shareholders can
register with the share registry to access their personal information
and shareholdings via the internet.
Principle 7: Recognise and manage risk
The Board has decided not to form a separate Risk Committee. Due to
the size and development phase of the Company, the Board believes
that no efficiencies or other benefits would be gained by establishing
a separate Risk Committee. The Board as a whole is ultimately
responsible for identifying the principal risks of the Company’s
business and ensuring the implementation of appropriate systems to
manage those risks. For further details of the responsibilities of the
Board, the Chief Executive Officer, the Chief Financial Officer, and
other management in the evaluation and continual improvement of
the Company’s risk management and internal control processes, refer to
the Company’s Risk Management Policy, which is available in the
Corporate Governance section of the Company’s website,
https://www.chesserresources.com.au/corporate-governance/
Yes
7.2 Annual risk review On at least an annual basis, the Board reviews its material business
Yes
7.3 Internal audit
risks and how its material business risks are being managed. A
summary of the Company’s material business risks and how it
manages those risks is provided in the Directors’ Report included in
the Annual Report for the year ended 30 June 2022.
The Board has not established an internal audit function at this time.
The full Board oversees the effectiveness of risk management and
internal control processes. Refer to the Company’s Risk Management
Policy for responsibilities of the Board, the Chief Executive Officer, the
Chief Risk Officer, and other management in the evaluation and
continual improvement of the Company’s risk management and internal
control processes. A copy of the Risk Management Policy is available
in the Corporate Governance section of the Company’s website,
https://www.chesserresources.com.au/corporate-governance/
7.4 Sustainability risks The Company identifies and manages material exposures to
economic, environmental and social sustainability risks in a manner
consistent with its Risk Management Policy, which is available in the
Corporate Governance section of
the Company’s website,
https://www.chesserresources.com.au/corporate-governance/.
The material risks faced by the Company that could have an effect on
the Company’s future prospects, include: (a) availability of further
funding: (b) exploration and development risks; (c) fluctuations in
commodity prices: (d) sovereign risks: (e) Government regulations
risks; and (f) global financial conditions.
Yes
Yes
52
CHESSER RESOURCESANNUAL REPORT 2022
Recommendation
Explanation of Chesser’s compliance with the recommendation
Recommendation complied
with ?
CORPORATE GOVERNANCE STATEMENT
8.1 Remuneration
committee
8.2 Disclosure of
Executive and
Non- Executive
Director
remuneration
policy
8.3 Policy on hedging
equity incentive
schemes
Principle 8: Remunerate fairly and responsibly
The Board has decided not to form a separate Remuneration
Committee. The Board believes that no efficiencies or other benefits
would be gained by establishing a separate Remuneration Committee.
The Board has adopted a Remuneration and Nomination Committee
Charter; however, the Board as a whole performs the function of the
Remuneration and Nomination Committee. The Remuneration and
Nomination Committee Charter sets out the processes the Board
employs for setting the level and composition of remuneration for
directors and senior executives and ensuring that such remuneration
is appropriate and not excessive. The Remuneration and
Nomination Committee Charter is reviewed annually and is available
in the Corporate Governance section of the Company’s website
https://www.chesserresources.com.au/corporate-governance/.
The Company seeks to attract and retain high performing Directors and
Executives with appropriate skills, qualifications, and experience to
add value to the Company and fulfil the roles and responsibilities
required. It reviews requirements of additional capabilities at least
annually.
Executive remuneration is to reflect performance and, accordingly,
remuneration is structured with a fixed component and performance-based
remuneration component. Non-Executive Directors are
paid fixed fees for their services in accordance with the Company’s
Constitution. Fees paid are composite fee (covering all Board and
Committee responsibilities) and any contributions by the Company to
a fund for the purposes of superannuation benefits for a director. No
other retirement benefit schemes are in place in respect to Non-
Executive Directors. Further details regarding the remuneration of the
Executive and Non-Executive Directors are set out in the Remuneration
Report within the Annual Report.
The Company’s Directors and Executives must not enter any hedge
arrangements in relation to any performance rights or other equity
based awards they may be granted or otherwise entitled to under an
incentive scheme or plan, prior to exercising those rights or once
exercised, while the securities are subject to a transfer restriction.
Further details regarding the Company’s hedging policy are set out
in the Company’s Securities Trading Policy which is available in the
Corporate Governance
the Company’s website,
section of
https://www.chesserresources.com.au/corporate-governance/..
Yes
Yes
Yes
53
CORPORATE GOVERNANCE STATEMENT DIRECTORS’
AND FINANCIAL
REPORTS
54
CHESSER RESOURCESANNUAL REPORT 2022 Chesser Resources Limited
Financial Report for the year ended 30 June 2022
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 2022 (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
• Mr Andrew Grove, Managing Director
• Mr Simon O'Loughlin, Non-Executive Director
• Mr Simon Taylor, Non-Executive Director
• Mr Robert Greenslade, Non-Executive Director
Company secretary
Mr Stephen Kelly was the Company Secretary during the whole of the year under review and up to the date
of this report.
Mr 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 Calidus Resources Limited, Omnia Metals
Group Limited and BeMetals Corporation and a Non-Executive Director at Renegade Exploration 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, he has been Chairman of West African Resources Limited, Barton Gold Limited, Emmerson
PlcOklo Resources Limited and a Non-Executive Director of Tao Commodities Limited and Primero Group
Limited.
Mr Andrew Grove (Managing Director)
Mr. Grove has over 30 years technical, commercial, and financial experience in global resources including 14
years with Macquarie Bank’s Mining Finance and Risk Management Group. Mr Grove has significant
operational experience gained across all phases of resources projects such as the Sunrise Gold Dam project
in Western Australia and has substantial African gold mining experience including his previous role as Group
General Manager Business Development and Investor Relations at Perseus Mining Limited.
Mr Grove has a Bachelor of Engineering (Mineral Exploration and Mining Geology) and a master’s degree in
Mineral and Energy Economics.
Former directorships in last 3 years
Nil.
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DIRECTORS’ REPORT
Chesser Resources Limited
Financial Report for the year ended 30 June 2022
Directors’ report
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. Mr O’Loughlin is Non-Executive Chairman of Stellar Resources Limited and a Non-
Executive Director of 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, Bod Australia 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 a Non-Executive Director of Stellar Resources
Limited and Black Canyon Limited.
Former directorships in last 3 years
Oklo Resources Limited and Bod Australia Limited.
Mr Robert Greenslade (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
56
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CHESSER RESOURCESANNUAL REPORT 2022
Chesser Resources Limited
Financial Report for the year ended 30 June 2022
Directors’ report
Company Secretary
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 #
Number of rights
over Ordinary
Shares
Mr Mark Connelly
Mr Andrew Grove
Mr Simon O’Loughlin
Mr Simon Taylor
Mr Robert Greenslade
150,000
2,350,000
5,283,334
7,100,001
24,812,748
1,776,164
7,226,128
773,972
773,972
773,972
-
-
82,429
-
90,260
# 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 2022, and the numbers of meetings attended by each director were as follows:
Number of meetings held
Mr Mark Connelly
Mr Andrew Grove
Mr Simon O’Loughlin
Mr Simon Taylor
Mr Robert Greenslade
Board Meetings
6
Number of meetings
eligible to attend
6
6
6
6
6
Number of meetings
attended
6
6
6
6
6
The full Board fulfilled the roles of the Audit, Risk and Compliance Committee and the Remuneration and
Nominations Committee during the financial year.
PRINCIPAL ACTIVITIES
The principal activity undertaken by the Company during the year was the exploration for gold on its mineral
exploration licences in Senegal with a particular focus on its flagship Diamba Sud Project.
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DIRECTORS’ REPORT
Chesser Resources Limited
Financial Report for the year ended 30 June 2022
Directors’ report
REVIEW OF OPERATIONS
Exploration Activities
Diamba Sud Project
The Phase 6 resource definition drill program was completed in October 2021 over Areas A and D, the data
from which was utilised to calculate a maiden Mineral Resource in November 2021 totalling 781,000 ounces
gold from 15.2 million tonnes at a grade of 1.6 g/t gold. Importantly the mineralisation has a number of key
attributes that would lead to future economic development including a large near surface high-grade
component of 493,000 ounces gold at a grade of 3.0 g/t gold.
A Scoping Study was completed in March 2022 over the Area A and D maiden Mineral Resources that
demonstrated a technically simple, low risk; high value future gold mine development would be possible at
Diamba Sud. Key study highlights included:
•
•
•
•
•
•
Post-tax NPV5 A$419 million (US$301 million) and IRR 59% at a US$1,800/oz gold price
Payback 15 months of the US$159 million capital
7.5-year Project life producing 704,000 oz gold at an average AISC of US$820/oz
First two years of gold production totals 244,000 oz at an average AISC of US$545/oz
Significant Resource upside – targeting plus 1 million ounces in 2022
Approval to commence DFS, ESIA and licensing in preparation of a future mine development at Diamba
Sud
The 4,147m Phase 7 drill program completed in December 2021 targeted three prospective areas (Karakara,
Western Splay, Area F) at Diamba Sud and led to the discovery of new shallow high-grade mineralisation at
Karakara, approximately 1km south of Area D.
Historical drilling and results from the Phase 7 drill program at Western Splay have defined variable shallow
mineralisation over at least a 300m strike. The Western Splay area has been subject to further drilling during
the Phase 8 drill program with results outstanding at the time of this report.
A 20,000m drilling program commenced in February 2022 (Phase 8) targeting resource expansion at Areas A
and D, adding the new Karakara discovery into the resource inventory and to test a number of other
prospective targets on the Diamba Sud tenement.
Phase 8 drilling at Karakara has defined shallow high-grade mineralization over a strike length of over 200m
which remains open to the south. Numerous drill results remain outstanding at the time of this report. A
maiden Mineral Resource estimate over Karakara will be undertaken during 2022 and is expected to provide
a meaningful uplift to the Mineral Resource inventory and has been included into the DFS currently underway.
Fifteen rock chip samples from an active artisanal pit at Kassassoko returned very significant gold results,
averaging 3.8 g/t gold, maximum result of 10.3 g/t gold. Kassassoko is located 2.5km south of Karakara and
mineralisation is hosted within granites. Two diamond drill holes have been drilled under the pit with results
outstanding at the time of this report, however it is likely that this area will develop into a high priority target
for future drilling.
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CHESSER RESOURCESANNUAL REPORT 2022
Chesser Resources Limited
Financial Report for the year ended 30 June 2022
Directors’ report
At Bougouda, located approximately 14km south of the main Diamba Sud tenement, drilling has defined a
600m long mineralised quartz vein. Mineralisation was intersected on each drill traverse with the weighted
average intercept reported being 3.8m @ 4.2g/t gold. Further investigation and analysis to determine if
potential future economic extraction is possible will be undertaken over the prospect. Best intercepts
included:
Diamba Nord
Exploration undertaken on Diamba Nord during the reporting period included:
• Mapping, rock chip (61 samples) and termite (756 samples) sampling of the southern section of the
Diamba Nord southern tenement block. Results were generally low level; however the isolated
anomalous results and areas of artisanal activity will be followed up when field activities commence on
the nearby Morichou tenement.
• 382 samples from the 2018 400x50m auger drilling program were not assayed at the time and were
submitted for analysis. Only isolated anomalous results were identified from the area of auger coverage
with no evidence of significant mineralised trends
Morichou and Bondala tenements
Morichou and Bondala license applications were granted in February 2022, significantly increasing the
Company’s ground holding in Senegal to 872km2 (Figure 1).
The Bondala license (total area of 207km2) increased the landholding adjacent to and around the Diamba
Sud gold project and is contiguous to the north of the Diamba Sud tenement covering an area of highly
prospective Falémé group rocks and surrounds the 0.5Moz Karakaene deposit immediately to the west of
Diamba Sud. The Bondala license also covers an area along strike of the 1Moz Makabingui mineralization.
The Mourichou license (total area of 431km2) covers an extensive area of Mako series rocks and is located
near the Sabodala shear zone and close to Chesser’s Diamba Nord Project tenements.
Each tenement is valid for a period of 10 years with an initial term of 4 years and renewable for a further two
periods of 3 years each. There is a 25% relinquishment requirement at each renewal.
No exploration work was carried out over these areas during the period.
Further information regarding the Company’s Senegal projects and the exploration activities undertaken
during the financial year is provided in the Operations Review accompanying this Directors’ Report.
Corporate activities
During the year the following significant corporate events occurred:
• On 12 July 2021, 23,809,524 B Class Performance Shares expired without vesting.
• During the year the Company received $954,000 in cash proceeds from the exercise of 15,494,000
options with a further $150,520 in option exercise monies being received prior to 30 June 2021. The
Company also issued 1,888,889 shares pursuant to the exercise of 3,000,000 options via a cashless
exercise mechanism.
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DIRECTORS’ REPORT
Chesser Resources Limited
Financial Report for the year ended 30 June 2022
Directors’ report
• On 16 July 2021, 668,500 options expired without being exercised.
• On 3 November 2021 the Company issued 3,501,516 zero exercise price options (ZEPOs) and on 2
December 2021 issued 3,424,208 ZEPOs with an expiry date of 30 June 2026 to Directors and
Executives as Long Term Incentives under the Employee Incentive Plan.
• The Company raised a total of $12,100,000 pursuant to private placements in April 2022 in which
approximately 115 million shares were issued. In addition to the Placement, on 26 May 2022, the
Company issued a further 3,000,000 shares at the Placement price of $0.105 per share to Directors to
raise funds totaling $315,000.
Operating result
The Company reported a loss after tax for the year of $3,597,277 (2021: loss of $2,745,821). The significant
items affecting the loss after tax were:
• An increase in share-based payments expense to $1,561,371 (2021: $1,008,931) due to the
amortisation over the vesting period of Non-Executive Director Options and Incentive Options issued
to Directors and Management under the Employee Incentive Plan.
• An increase in key management personnel and employee remuneration expense to $1,227,394 (2021:
$859,112) commensurate with the increase in activity as the Diamba Sud project is progressed.
• An increase in administrative and other expenses reflecting increase in activity as the Diamba Sud
project is progressed.
• A decrease in depreciation to $2,821 reflecting the capitalisation of $186,277 as exploration and
evaluation expenditure in the current financial year.
• $203,519 in project related expenditure incurred by the parent entity that do not qualify for
capitalisation under the relevant accounting standards (2021: $Nil).
Significant changes in the reporting year
Other than the matters noted in this Directors’ Report there were no significant changes in the Company’s
operations in the reporting year.
Dividends
No dividends were paid or declared during the year and no recommendation is made as to payment of
dividends.
Impact of COVID-19
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 $16,206 cash boost grant from the Australian government in the prior year as part of
the Australian government’s economic response to the COVID-19 pandemic. No grants were received in the
current year.
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CHESSER RESOURCESANNUAL REPORT 2022
Chesser Resources Limited
Financial Report for the year ended 30 June 2022
Directors’ report
Events occurring after balance sheet date
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.
Likely developments and expected results of operations
The exploration success at Diamba Sud has been exceptional with most targets returning mineralisation.
However, there remains a significant number of geochemical anomalies with no or very little drilling and
exploration to date has only really targeted the near surface mineralisation expressed by the gold
geochemistry. As the understanding of this complex structural/lithological/mineralisation system evolves
exploration should also be able to more effectively target mineralisation at depth.
Planned exploration at Diamba Sud for the 2022-2023 year will be focused on delivering resource growth,
testing the exploration potential, delivering the DFS and moving the Diamba Sud Project towards a future
successful gold mine development at Diamba Sud.
Environmental Regulation
The Company was not subject to any significant environmental regulation under a law of the Commonwealth
of a State or Territory of Australia.
Auditor's independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act
2001 is attached to this report.
Shares under Option
Unissued ordinary shares of the Company under option at the date of this report are as follows:
Grant Date
Expiry Date
15/03/2019
31/12/2022
15/03/2019
31/12/2022
18/12/2019
30/11/2022
08/09/2020
30/11/2023
08/12/2020
07/12/2025
20/01/2021
19/08/2024
20/01/2021
19/08/2024
20/01/2021
19/08/2024
20/01/2021
07/12/2025
30/04/2021
031/1/2026
29/09/2021
30/06/2026
30/11/2021
30/06/2026
Exercise
price of
options
Number
Issued as
under
remuneration
options
in current or
prior period ?
$0.05
$0.05
$0.12
$0.08
$0.00
$0.24
$0.35
$0.45
$Nil
$Nil
$Nil
$Nil
Yes
Yes
No
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
500,000
1,000,000
2,000,000
2,000,000
6,400,000
200,000
200,000
200,000
4,400,000
5,000,000
3,501,516
3,424,208
28,825,724
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DIRECTORS’ REPORT
Chesser Resources Limited
Financial Report for the year ended 30 June 2022
Directors’ report
In addition, at the date of this report the Company had on issue 1,026,685 salary sacrifice rights with an
expiry of 7 December 2025 and an exercise price of $NIL.
No option holder has any right under the options to participate in any other share issue of the company or
any other entity.
Shares issued as a result of the exercise of options
The Company issued 10,994,000 fully paid ordinary shares at an issue price of $0.08, 4,500,000 fully paid
ordinary shares at an issue price of $0.05 and 1,888,889 fully paid ordinary shares pursuant to the exercise of
3,000,000 options via a cashless exercise mechanism during the financial year as a result of the exercise of
options.
Total funds received on the exercise of options during the year was $954,000 (2021: $1,168,832) excluding
$150,000 in option exercise proceeds received during the prior period for which the resulting shares were
issued during the current reporting period.
In the period from 1 July 2021 to the date of this report, the Company has received $Nil cash proceeds from
the exercise of Nil options.
Material business risks
Mineral exploration and development, is considered by its nature to be high-risk and is affected by risks and
uncertainties, some of which are beyond the Group’s reasonable control. The uncertainties arise from a range
of factors, including the nature of the mineral exploration industry and changing economic factors. The
business risks assessed as having the potential to have a material impact on the business, operating and/or
financial results and performance of the Group include:
Exploration Activity Risk
Mineral exploration activity, especially drilling, is considered by its nature to be high-risk and is affected by
numerous factors. Drilling operations can be affected by breakdowns, adverse weather conditions, site and
geographical conditions, operational risks, shortage or delays in the delivery of rigs and/or other equipment,
industrial disputes, government regulations, environmental issues and unanticipated costs. Hazards incident
to the exploration and development of mineral exploration properties such as unusual or unexpected
formations, pressures or other factors are inherent in drilling and may be encountered by Chesser. Exploration
may be unsuccessful and may prove to be more costly than expected or the proposed timing of exploration
may not be achieved.
To maximise the possibility of success in its exploration activities, Chesser seeks to employ technical staff of
the highest calibre and to engage proven contractors and service providers to plan and implement its
exploration and development programs.
Governmental and Regulatory Risk
Chesser’s current and future exploration, development and production activities are subject to various laws
and statutory regulations governing exploration, development, production, taxes, royalty payments, labour
standards and occupational health, mine safety, toxic substances, land use, water use, communications, land
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CHESSER RESOURCESANNUAL REPORT 2022
Chesser Resources Limited
Financial Report for the year ended 30 June 2022
Directors’ report
claims of local people and other matters, and to obtaining and maintaining the necessary titles,
authorisations, permits and licences.
No assurance can be given that new laws, rules and regulations will not be enacted or that existing laws, rules
and regulations will not be applied in a manner which could have an adverse effect on Chesser’s financial
position and results of operations, or on the success of its exploration and development projects.
Failure to comply with any applicable laws, regulations or permitting requirements may result in enforcement
actions against Blue, including orders issued by regulatory or judicial authorities causing operations to cease
or be curtailed, and may include corrective measures requiring capital expenditures, installation of additional
equipment, or remedial actions.
Continuous monitoring of legislative and regulatory changes and associated risks is undertaken and regular
engagement with regulators and governments supports the management of risks arising from these changes.
Native Title and Land Access Risk
In addition, Chesser requires access to traditional, private and public lands which its exploration licences
overlay. Exploration activities may be adversely impacted or delayed if Chesser is unable to negotiate access
or entry agreements to those lands, or if disputes arise in relation to negotiated land access and entry
agreements.
Chesser works closely with local communities, private and public landholders and other stakeholders to
develop positive working relationships with those parties and to ensure that they are kept informed of
Chesser’s proposed and actual activities.
Reserve and Resource Estimates Risk
Reserve and resource estimates are expressions of judgement based on knowledge, experience and industry
practice of independent experts. In addition, such estimates are necessarily imprecise and depend to a
significant extent on interpretations, which may prove inaccurate. The calculation of any possible quantities
of minerals in a prospect may be proved incorrect by future exploration, production, mapping and/or drilling
activity. Further, there is no guarantee that estimated reserves and resources can be profitably exploited.
Chesser engages highly reputable and independent international experts to review its resource estimates in
accordance with the 2012 JORC code.
Dependence upon key personnel
Chesser’s success depends in part on the core competencies of the Directors and management and the ability
of the Group to retain key personnel. Loss of key personnel could have an adverse impact on the Group’s
performance. Chesser has in place employment arrangements designed to secure and retain the services of
key personnel.
Health, safety and environment
The nature and complexity of Chesser’s operations pose risks in relation to the health and safety of employees
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DIRECTORS’ REPORT
Chesser Resources Limited
Financial Report for the year ended 30 June 2022
Directors’ report
and contractors, and a range of environmental risks exist when carrying out exploration activities.
Environmental incidents, and real or perceived threats to the environment or the amenity of local
communities, could result in a loss of Chesser’s licence to operate, leading to delays, disruption or the shut-
down of exploration and production activities. Chesser’s field activities are conducted pursuant to and
compliant with applicable legislation and regulations.
Chesser has developed detailed environmental, health and safety management plans to protect the safety
and well being of the environment and Chesser’s employees, contractors and communities.
Access to capital and liquidity
Chesser’s business and, in particular its exploration and development activities, relies on access to equity
financing. The ability to secure financing, or financing on acceptable terms, may be adversely affected by
volatility in the financial markets. These effects may be global or affecting a particular geographic region,
industry or economic sector.
A major focus of Chesser’s Board and management is on ongoing cash flow forecasting and management
of cash flows to ensure that the Group has sufficient funds to cover its planned activities and any ongoing
obligations.
Climate change risk
Chesser recognises that climate change is a global phenomenon and that global, country and state specific
policies in response to a changing climate may affect the Group through increased regulation and costs.
Chesser identifies climate change regulation as a strategic risk that ultimately may affect the Group’s future
operating and financial performance. The regulatory risks and perception of the speed of a changing climate
may have direct and indirect adverse impacts on the Group’s operations or customer markets, including
capital markets.
The Company remains alert to scenarios around domestic and global policy trends caused by a changing
climate, and how these might impact the Group’s activities.
Schedule of mining tenements
As at 30 June 2022, the Company had interests in the following tenements:
TENEMENT
Diamba Sud
Diamba Nord
Morichou
Bondala
LOCATION
Senegal
Senegal
Senegal
Senegal
EXPIRY DATE
9 June 2024
8 June 2024
14 February 2032
14 February 2032
INTEREST
100%
100%
100%
100%
64
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CHESSER RESOURCESANNUAL REPORT 2022
Chesser Resources Limited
Financial Report for the year ended 30 June 2022
Directors’ report
Remuneration Report (Audited)
a) Policy for determining the nature and amount of key management personnel remuneration
The Board of Chesser Resources Limited is responsible for determining and reviewing compensation
arrangements for the Non- Executive Directors and the Executive Director. The Board's remuneration policy
is to ensure that the remuneration package properly reflects the person's duties and responsibilities, with the
overall objective of ensuring maximum stakeholder benefit from the retention of a high -quality board and
executive team. Such officers are given the opportunity to receive their base emolument in a variety of forms.
It is intended that the manner of payment chosen will be optimal for the recipient without creating undue
cost to the Group. In accordance with best practice corporate governance, the structure of non-executive
director and executive remuneration is separate and distinct.
Non-Executive Director Remuneration
Objective
The Board seeks to set aggregate remuneration at a level which provides the Group with the ability to attract
and retain directors of a high calibre, whilst incurring a cost which is acceptable to shareholders.
Structure
Remuneration of non-executive directors is determined by the Board, within the maximum amount approved
by the shareholders from time to time (currently set at an aggregate of $400,000 per annum).
The amount of aggregate remuneration sought to be approved by shareholders and the manner in which it
is apportioned amongst directors is reviewed annually. The Board considers the fees paid to non-executive
directors of comparable companies when undertaking the annual review process.
Each non-executive director receives a fee for being a director of the Group. The Non-Executive Chairman
received an annual fee of $60,000 inclusive of statutory superannuation (2021: $40,000 plus statutory
superannuation). All other Non-Executive Directors receive an annual fee of $40,000 plus statutory
superannuation (2021: $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 2021
(2021: $Nil).
Non-executive directors may also be granted options from time to time. The options granted are considered
by the Board to be an effective means of appropriately compensating Directors whilst preserving the
Company’s cash reserves and providing an alignment between Director and shareholder interests.
Executive Director and Key Management Personnel Remuneration
Objective
The Group aims to reward executives with a level and mix of remuneration commensurate with their
position and responsibilities within the Group so as to:
• To attract and retain quality employees
• To motivate behaviours to align with corporate goals and values
• To develop highly motivated and results focused teams and individuals
• Promote open communication, collaborative and non-discriminatory work culture
• Success shared and valued across the business and with shareholders and stakeholders
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DIRECTORS’ REPORT
Chesser Resources Limited
Financial Report for the year ended 30 June 2022
Directors’ report
Structure
In determining the level and make-up of executive remuneration, the Board has had regard to market levels
of remuneration for comparable executive roles. It is the Board's policy that employment contracts are
entered into with all senior executives.
Executives are currently remunerated by a combination of cash base remuneration, a cash based short term
incentive plan and an equity based long term incentive plan.
Base remuneration
Base remuneration for executives comprises salary, superannuation and leave entitlements and is paid in
cash. Base remuneration is based on market levels of remuneration for comparable executive roles and the
particular skills and experience of the executive.
Variable Remuneration – Short Term Incentive Plan
In the current reporting period, the Company implemented a short term incentive plan (STIP) designed to
align individual and team behaviours with company goals and values.
Under the STIP, executives can receive up to 25% of their base remuneration paid as cash based on their
achievement of agreed KPI’s.
For the Managing Director the agreed KPI’s are based on the Group’s achievement of objectives relating to
workplace health and safety, compliance, exploration success and share price growth. In the current reporting
period, the Managing Director was assessed to have achieved eighty percent of the target STIP KPI’s (2021:
No STIP plan in operation).
For the Chief Financial Officer and Company Secretary, the agreed KPI’s are based on a weighting of 80% for
on the Group’s achievement of objectives relating to workplace health and safety, compliance, exploration
success and share price growth and twenty percent on the achievement of agreed personal KPI’s. In the
current reporting period, the Managing Director was assessed to have achieved eighty percent of the target
STIP KPI’s (2021: No STIP plan in operation).
The Company did not pay any cash incentives to Non-Executive Directors during the financial year (2021:
$Nil).
Variable Remuneration – Long Term Incentive Plan
Long Term Incentive program (LTIP) is designed to attract, retain and align senior management with
shareholders in the long term success of the business
Long term incentives granted to senior executives are delivered in the form of options in accordance with an
Employee Incentive 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.
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CHESSER RESOURCESANNUAL REPORT 2022
Chesser Resources Limited
Financial Report for the year ended 30 June 2022
Directors’ report
During the current reporting period all key management personnel, including Non-Executive Directors
received awards under the LTIP as follows:
• The awards were in the form of options with a zero exercise price and an expiry date of 30 June 2026
• The LTIP awards are subject to the following vesting conditions:
- 75% of the LTIP awards will vest based on the 90-day VWAP as at 30 June 2024 as a percentage
of the Grant Date VWAP which was deemed to be $0.146. The table below summarises the
vesting schedule for the VWAP Tranche:
- 25% of the incentive options to be issued to each Director and 875,380 of the incentive options
to be issued to employees and consultants will vest if the Group announces a positive Definitive
Feasibility Study on or before 30 June 2024.
b) Remuneration, Group performance and shareholder wealth
The development of remuneration policies and structures is considered in relation to the effect on Group
performance and shareholder wealth. They are designed by the Board to align Director and Executive
behaviour with improving Group performance and ultimately shareholder wealth. The Board considers that
the estimation of a maiden JORC resource for the Diamba Sud project is the performance measure most
relevant to generating shareholder value at the current stage of the Company’s development.
Executives are currently remunerated by a combination of cash base remuneration and options. The options
granted are considered by the Board to provide an alignment between the employees and shareholders
interests.
The table below shows for the current financial year and previous four financial years the total remuneration
cost of the key management personnel, earnings per ordinary share (EPS), dividends paid or declared, and
the closing price of ordinary shares on ASX at year end.
Financial Year
2022
2021
2020
2019
2018
Total
Remuneration
$
1,692,930
1,259,614
515,089
533,391
417,200
EPS
(Cents)
Dividends
(Cents)
Share Price
(Cents)
(0.73)
(0.65)
(0.40)
(0.95)
(0.49)
-
-
-
-
-
8.4
13.0
9.4
4.4
6.0
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.
67 | P a g e
67
DIRECTORS’ REPORT
Chesser Resources Limited
Financial Report for the year ended 30 June 2022
Directors’ report
Key management personnel
The following persons were key management personnel of the Group during the financial year (unless noted
otherwise the persons listed were key management personnel for the whole of the financial year):
Name
Position Held
Mark Connelly
Non-Executive Chairman
Simon O’Loughlin
Non-Executive Director
Simon Taylor
Non-Executive Director
Robert Greenslade
Non-Executive Director
Andrew Grove
Stephen Kelly
Managing Director and Chief Executive Officer
CFO and Company Secretary
The Company has entered into an employment agreement with Mr Andrew Grove pursuant to which he was
appointed the Company’s Chief Executive Officer effective 1 February 2021 and Managing Director effective
1 May 2021. The key terms of the agreement are:
• Mr Grove will be paid an annual salary of $325,000 per annum plus superannuation. In addition, Mr
Grove will be entitled to participate in incentive or bonus plans as may be introduced by the Company
from time to time.
• The Agreement may be terminated by either Mr Grove or the Company by providing six months’ notice
or payment in lieu of notice. The Company may terminate the agreement without notice in the event of
misconduct.
• After completing three month’s service, Mr Grove was issued 5,000,000 incentive options with a $nil
exercise price and an expiry date of 31 January 2026 and subject to the following vesting conditions:
-
-
-
1,666,667 options vest on announcing a JORC resource of 500,000 ounces Au at a grade not less
than 2 g/t
1,666,667 options vest on announcing a JORC resource of 750,000 ounces Au at a grade of not
less than 2g/t
1,666,666 options vest on announcing a JORC resource of 1,000,000 ounces Au at a grade of not
less than 2g/t
The Company has entered into a Consultancy Agreement with KCG Advisors Pty Ltd pursuant to which Mr
Stephen Kelly is 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 (2020: 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.
c) Details of remuneration
Compensation paid, payable or provided by the Group or on behalf of the Group, to key management
personnel is set out below. Key management personnel include all Directors of the Group and certain
68 | P a g e
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CHESSER RESOURCESANNUAL REPORT 2022
Chesser Resources Limited
Financial Report for the year ended 30 June 2022
Directors’ report
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.
Base fees and
remuneration
$
Super-
annuation
$
Short
Term
Incentive
Bonus
$
Share
Based
Payment^
$
Total
remuneration
$
Proportion of
remuneration
that is
performance
based#
%
54,795
40,000
40,000
40,000
5,480
4,000
4,000
-
138,518
-
54,266
-
54,381
-
53,922
-
198,793
98,266
98,381
93,922
7%
10%
11%
11%
174,795
13,480
-
301,087
489,362
9%
2022
Non-Executive Directors
Mr Mark Connelly
Mr Simon O’Loughlin
Mr Simon Taylor
Mr Robert Greenslade
Total Non-Executive
Directors
Executive Directors
Mr Andrew Grove@
348,427
21,710
52,975
442,024
865,136
Total Executive Directors
348,427
Other Key Management
Personnel
21,710
52,975
442,024
865,136
57%
57%
Mr Stephen Kelly
124,545
-
29,340
184,547
338,432
63%
Total Other Key
Management Personnel
Total Key Management
Personnel Compensation
124,545
-
29,340
184,547
338,432
63%
647,767
35,190
82,315
927,658
1,692,930
45%
^ Equity-settled share-based payments as per Corporations Regulation 2M.3.03(1) Item 11.
# Share based payments for Non-Executive Directors comprises a mix of incentives that a performance based
and non-performance based.
@Base fees and remuneration for Andrew Grove includes annual leave entitlements accrued during the period.
2021
Non-Executive Directors
Mr Mark Connellya
Mr Simon O’Loughlin
Mr Simon Taylor
Mr Robert Greenslade
Base fees and
remuneration
$
Super-
annuation
$
Share Based
Payments^
$
Total
remuneration
$
Proportion of
remuneration that
is performance
based#
%
54,795
35,000
40,000
34,525
5,205
3,800
3,800
-
100,416
43,512
39,125
42,149
160,416
82,312
82,925
76,674
-%
2%
3%
-%
Total Non-Executive Directors
164,320
12,805
225,202
402,327
1%
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69
DIRECTORS’ REPORT
Chesser Resources Limited
Financial Report for the year ended 30 June 2022
Directors’ report
2021
Executive Directors
Mr Andrew Groved
Mr Michael Brownb
Base fees and
remuneration
Super-
annuation
Share Based
Payments^
Total
remuneration
Proportion of
remuneration that
is performance
based#
135,417
192,500
9,046
-
109,048
137,539
253,511
330,039
Total Executive Directors
327,917
9,046
246,587
583,550
Other Key Management Personnel
Mr Stephen Kellyc
120,000
-
153,737
273,737
Total Other Key Management
Personnel
Total Key Management Personnel
Compensation
120,000
-
153,737
273,737
612,237
21,851
625,526
1,259,614
43%
42%
42%
56%
56%
32%
a Appointed 10 July 2020
b Resigned 1 February 2021
c Resigned as Executive Director 10 July 2020. Continued in office Company Secretary and Chief Financial
Officer for entire period
d Appointed Chief Executive Office 1 February 2021; appointed Managing Director 1 May 2021
^ Equity-settled share-based payments as per Corporations Regulation 2M.3.03(1) Item 11.
# Share based payments for Non-Executive Directors comprises a mix of incentives that a performance based
and non-performance based.
d) Share-based compensation
During the 2022 financial year the following options were issued to key management personnel:
• On 27 September 2021 the Company granted 657,535 zero exercise price options (ZEPOs) and on 30
November 2021 the Company granted 3,424,208 ZEPOs with an expiry date of 30 June 2026 to Directors
and Executives under the Employee Incentive Plan.
The terms and conditions of each grant of options affecting remuneration in the current or a future
reporting period are as follows:
Date of
grant
30
November
2020
Vesting date
Vest 8 December 2021
Vest 8 December 2022
Vest 8 December 2023
Fair value
per
option at
grant
date
Expiry
date
Exercise
price
7
December
2025
$Nil
$0.21
Number
granted
966,668
Vested
100%
966,668
Nil %
966,664
Nil %
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CHESSER RESOURCESANNUAL REPORT 2022
Chesser Resources Limited
Financial Report for the year ended 30 June 2022
Directors’ report
Date of
grant
30
November
2020^
30 April
2021
27
September
2021
Vesting date
(a) Subject to achieving
JORC Resource of
500,000 ounces Au,
average grade not
less than 2g/t
(b) Subject to achieving
JORC Resource of
750,000 ounces Au,
average grade not
less than 2g/t
(c) Subject to achieving
JORC Resource of
1,000,000 ounces Au,
average grade not
less than 2g/t
(a) Subject to achieving
JORC Resource of
500,000 ounces Au,
average grade not
less than 2g/t
(b) Subject to achieving
JORC Resource of
750,000 ounces Au,
average grade not
less than 2g/t
(c) Subject to achieving
JORC Resource of
1,000,000 ounces Au,
average grade not
less than 2g/t
(a) Subject to VWAP
vesting condition as
at 30 June 2024
(b) Subject to Definitive
Feasibility Study
vesting condition as
at 30 June 2024
Fair value
per
option at
grant
date
Expiry
date
Exercise
price
Number
granted
Vested
(a) 666,667
100%
7
December
2025
$Nil
$0.21
(b) 666,667
Nil%
(c) 666,666
Nil%
(a) 1,666,667
100%
31 January
2026
$Nil
$0.14
(b) 1,666,667
Nil%
(c) 1,666,666
Nil%
(a) $0.10
(a) 493,151
30 June
2026
$Nil
Nil %
(b) $0.135
(b) 164,384
71 | P a g e
71
DIRECTORS’ REPORT
Chesser Resources Limited
Financial Report for the year ended 30 June 2022
Directors’ report
Date of
grant
30
November
2021
Vesting date
(a) Subject to VWAP
vesting condition as
at 30 June 2024
(b) Subject to Definitive
Feasibility Study
vesting condition as
at 30 June 2024
Fair value
per
option at
grant
date
Expiry
date
Exercise
price
Number
granted
Vested
(a) $0.10
(a) 2,568,085
30 June
2026
$Nil
Nil %
(b) $0.135
(b) 856,123
^Excludes 4,000,000 options granted to the former Managing Director, Mike Brown who resigned on 1 February 2021
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.
In the event of termination (specified circumstances) only vested options are entitled to be exercised.
Unvested options are forfeited unless the Board exercises its discretion to allow the holder to retain the
options on terms determined by the Board.
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 Black Scholes 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, 5,500,000 (2021: 2,000,000) options previously issued as remuneration were
exercised. The fair value of those options at the time of exercise measured as the market value of the shares
acquired on exercise of the options was $742.500 (2021: $240,000)
e) Unlisted option holdings
The numbers of options over ordinary shares in the Company held during the financial year by each
director and each key management person of the Group, including their personally related parties, are set
out below:
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CHESSER RESOURCESANNUAL REPORT 2022
Chesser Resources Limited
Financial Report for the year ended 30 June 2022
Directors’ report
2022
Name
Balance at
start of
year
Granted as
compensation
Exercised
Held on
cessation as
key
management
personnel
Balance at
end of year
Vested and
exercisable
Unvested
Key Management Personnel of Chesser Resources Limited
-
M Connelly
-
A Grove
(1,250,000)
R Greenslade
S Taylor
(1,000,000)
S O’Loughlin
S Kelly
376,164
2,226,128
273,972
273,972
273,972
657,535
1,400,000
5,000,000
1,750,000
1,500,000
1,250,000
2,750,000
1,776,164
7,226,128
773,972
773,972
773,972
2,657,535
466,667
1,666,667
166,667
166,667
166,667
666,667
1,309,497
5,559,461
607,305
607,305
607,305
1,990,868
(750,000)
(750,000)
-
-
-
-
-
-
Total
13,650,000
4,081,743
(3,750,000)
-
13,981,743
3,300,002 10,681,741
2021
Name
Balance at
start of
year
Granted as
compensation
Exercised
Held on
cessation as
key
management
personnel
Balance at
end of year
Vested and
exercisable
Unvested
Key Management Personnel of Chesser Resources Limited
M Connelly a
-
A Grove b
-
R Greenslade
-
S Taylor
S O’Loughlin
M Brown c
S Kelly
1,400,000
5,000,000
500,000
500,000
500,000
4,000,000
2,000,000
-
-
1,250,000
1,800,000
1,350,000
3,000,000
1,350,000
-
-
-
-
-
(7,000,000)
-
1,400,000
5,000,000
1,750,000
1,500,000
1,250,000
-
2,750,000
-
-
1,250,000
1,000,000
750,000
-
750,000
1,400,000
5,000,000
500,000
500,000
500,000
-
2,000,000
(800,000)
(600,000)
-
(600,000)
8,750,000
Total
a Appointed 10 July 2020
b Appointed 1 May 2021
c Resigned 1 February 2021
13,900,000
(2,000,000)
(7,000,000)
13,650,000
3,750,000
9,900,000
f) Unlisted salary sacrifice rights
During the prior year, the Company issued 844,214 unlisted Salary Sacrifice Rights to directors and key
management personnel in lieu cash remuneration totaling $88,450 that was accrued in the 2020 and 2021
financial years. 712,714 unlisted Salary Sacrifice Rights related to remuneration accrued in the 2020 financial
year and 131,500 unlisted Salary Sacrifice Rights related to remuneration accrued in the 2021 financial year
The number of salary sacrifice rights 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:
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73
DIRECTORS’ REPORT
Chesser Resources Limited
Financial Report for the year ended 30 June 2022
Directors’ report
2022
R Greenslade
S O’Loughlin
S Kelly
Balance at
start of year
90,260
82,429
176,779
Granted as
compensation
-
-
-
349,468
-
Balance at the
end of the
year
Exercised
-
-
-
-
90,260
82,429
176,779
349,468
.
2021
R Greenslade
S O’Loughlin
M Brown a
S Kelly
Held on
cessation as
key
management
personnel
-
-
(494,746)
-
Balance at the
end of the
year
90,260
82,429
-
176,779
Granted as
compensation
90,260
82,429
494,746
176,779
844,214
(494,746)
349,468
Balance at
start of year
-
-
-
-
-
a Resigned 1 February 2021
g) Share holdings
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 (2021: nil).
2022
M Connelly
A Grove
R Greenslade
S Taylor
S O’Loughlin
S Kelly
Shares held
on cessation
as key
management
personnel
-
-
-
-
-
-
-
Acquired on
the exercise of
options
Other
acquisitions
during the
year
Balance at the
end of the
year
-
-
1,250,000
1,000,000
750,000
750,000
-
2,000,000^
-
1,000,000^
500,000#
-
150,000
2,350,000
24,812,748
7,100,001
5,283,334
3,095,000
3,750,000
3,500,000
42,791,083
Balance at
start of year
150,000
350,000
23,562,748
5,100,001
4,033,334
2,345,000
35,541,083
^ Participation in private placement
# On-market purchase
74
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CHESSER RESOURCESANNUAL REPORT 2022
Chesser Resources Limited
Financial Report for the year ended 30 June 2022
Directors’ report
2021
M Connelly a
A Grove b
R Greenslade
S Taylor
S O’Loughlin
M Brown c
S Kelly
Shares held
on cessation
as key
management
personnel
-
-
-
-
-
(1,458,333)
-
Acquired on
the exercise of
options
Other
acquisitions
during the
year^
Balance at the
end of the
year
-
-
-
800,000
600,000
-
600,000
150,000
350,000
-
-
-
-
-
150,000
350,000
23,562,748
5,100,001
4,033,334
-
2,345,000
Balance at
start of year
-
-
23,562,748
4,300,001
3,433,334
1,458,333
1,745,000
34,499,416
(1,458,333)
2,000,000
500,000
35,541,083
a Appointed 10 July 2020
b Appointed 1 May 2021
c Resigned 1 February 2021
^ Participation in private placement
h) Use of remuneration consultants
The Company did not engage any remuneration consultants in the financial year 2022.
In financial year 2021, BDO Reward Pty Limited was paid $ 20,500 (excluding GST) for assistance and advice
on remuneration structures for executive management and Non-Executive Directors. All reports and advice
related to the Managing Director and CEO’s remuneration was commissioned and received directly by the
Board of Directors. The Board is satisfied that the information provided was free from undue influence from
executive management. BDO Reward Pty Limited did not provide any other advice to the Company during
the financial year 2021.
Loans to key management personnel
i)
There were no loans to key management personnel at any time during the financial year (2021: nil)
j) Other transactions with key management personnel
Except as disclosed in this Remuneration Report and noted below, there were no transactions with key
management personnel during the financial year (2021: $12,000).
• During the year, the Company paid KCG Advisors Pty Ltd, a company related to Mr Stephen Kelly who
was a member of Key Management Personnel of the Company during the reporting period, a total of
$16,000 (2021: $12,000) for the provision of services including office rental for the Company’s
registered office, internet and communications services and software subscriptions. As at 30 June
2022 no amounts were owing to KCG Advisors Pty Ltd for these services (2021: $6,000).
k) Voting and comments made at the Company’s 2021 Annual General Meeting
The Company received more than 98% of “yes” votes on its remuneration report for the financial year ended
30 June 2021. The Company did not receive any specific feedback at the AGM or throughout the year on its
remuneration practices.
End of Remuneration Report
75 | P a g e
75
Chesser Resources Limited
Financial Report for the year ended 30 June 2022
Directors’ report
Insurance of officers
To the extent permitted by law, the Company has indemnified (fully insured) each director and the secretary
of the Company. The liabilities insured include costs and expenses that may be incurred in defending civil or
criminal proceedings (that may be brought) against the officers in their capacity as officers of the Company
or a related body, and any other payments arising from liabilities incurred by the officers in connection with
such proceedings, other than where such liabilities arise out of conduct involving a willful breach of duty by
the officers or the improper use by the officers of their position or of information to gain advantage for
themselves or someone else or to cause detriment to the Company. It is not possible to apportion the
premium between amounts relating to the insurance against legal costs and those relating to other liabilities
Proceedings on behalf of the Group
The Group is not aware that any person has applied to the court under section 237 of the Corporations Act
2001 for leave to bring proceedings on behalf of the Group, or to intervene in any proceedings in which the
Group is a party, for the purpose of taking responsibility on behalf of the Group for all or part of those
proceedings.
No proceedings have been brought or intervened in on behalf of the Group with leave of the court under
section 237 of the Corporations Act 2001.
Non-audit Services
The Group may decide to employ the auditor on assignments additional to their statutory audit duties where
the auditor’s expertise and experience with the Group and/or the Group are important. No non-audit
assignments were engaged with the auditor during the year (2021: 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 9 to the financial report.
Auditor's Independence Declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act
2001 is attached to this report.
Auditor
Pitcher Partners continues in office in accordance with section 327 of the Corporations Act 2001.
Rounding of amounts in accordance with ASIC Corporations (Rounding in Financial / Directors’
Reports) Instrument 2016/191
The amounts in the Directors’ report and in the financial report have been rounded to the nearest dollar. This
report is made in accordance with a resolution of directors.
Andrew Grove
Managing Director
Perth, 30 September 2022
76
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CHESSER RESOURCESANNUAL REPORT 2022 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 2022, 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.
v
PITCHER PARTNERS
JASON EVANS
Partner
Brisbane, Queensland
30 September 2022
77
DIRECTORS’ 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 2022,
the consolidated statement of comprehensive income, the consolidated statement of changes in equity and
the consolidated statement of cash flows for the year then ended, notes to the financial statements including
a summary of significant accounting policies, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act
2001, including:
(a)
(b)
giving a true and fair view of the Group’s financial position as at 30 June 2022 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
Standard) “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.
78
CHESSER RESOURCESANNUAL REPORT 2022 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 $19,945,577 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 2022 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 and evaluating the design and
implementation of the controls over how
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 2022, but does not include the financial
report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express
any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial report or our
knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
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.
79
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and
fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such
internal control as the directors determine is necessary to enable the preparation of the financial report that
gives a true and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations,
or has no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted
in accordance with the Australian Auditing Standards will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement
and maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to
the related disclosures in the financial report or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial report, including the disclosures,
and whether the financial report represents the underlying transactions and events in a manner that
achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are responsible
for the direction, supervision and performance of the Group audit. We remain solely responsible for our
audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify
during our audit.
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.
80
CHESSER RESOURCESANNUAL REPORT 2022 We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit matters.
We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about
the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be expected
to outweigh the public interest benefits of such communication.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included at pages 65 to 75 of the directors’ report for the year
ended 30 June 2022. In our opinion, the Remuneration Report of Chesser Resources Limited, for the year
ended 30 June 2022, 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 2022
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.
81
Chesser Resources Limited
Consolidated Income Statement
For the year ended 30 June 2022
Revenue and other income
Auditors’ remuneration
Depreciation expense
Project related expenses
Finance charges
General and administrative expenses
Key management personnel and employee
remuneration
Other expenses
Professional fees
Travel expenses
Notes
7
12
2022
$
1,896
(70,185)
(2,821)
(203,519)
(2,633)
(198,229)
(1,227,394)
(176,231)
(37,346)
(77,480)
2021
$
17,566
(63,242)
(116,986)
-
(6,343)
(139,457)
(859,112)
(196,359)
(86,825)
(18,237)
Share based payments expense
Share registry and exchange listing fees
Foreign exchange gains / (losses)
(1,561,371)
(1,008,931)
(104,694)
62,730
(148,248)
(119,647)
Loss before income tax expense from continuing
operations
(3,597,277)
(2,745,821)
Income tax expense
Loss for the year after tax
10
-
-
(3,597,277)
(2,745,821)
Loss attributable to Owners of Chesser Resources
Limited
(3,597,277)
(2,745,821)
Basic and diluted loss per share (cents per share)
17
(0.73)
(0.65)
The accompanying accounting policies and explanatory notes form an integral part of the financial
statements.
82
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CHESSER RESOURCESANNUAL REPORT 2022 Chesser Resources Limited
Consolidated statement of Comprehensive Income
For the year ended 30 June 2022
2022
$
2021
$
Loss for the year after tax
(3,597,277)
(2,745,821)
Other comprehensive income
Items that may be reclassified to profit or loss
Other comprehensive income for the year, net of
tax
-
-
-
-
Total comprehensive loss for the year
(3,597,277)
(2,745,821)
Comprehensive loss attributable to the owners of
Chesser Resources Limited
(3,597,277)
(2,745,821)
The accompanying accounting policies and explanatory notes form an integral part of the
financial statements.
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83
Chesser Resources Limited
Consolidated Statement of Financial Position
As at 30 June 2022
Current assets
Cash and cash equivalents
Trade and other receivables
Prepayments
Total current assets
Notes
21(a)
11
2022
$
2021
$
11,747,863
405,104
322,064
8,091,915
43,957
97,631
12,475,031
8,233,503
Non-current assets
Property, plant, and equipment
Exploration and evaluation expenditure
12
13
476,150
19,945,577
483,001
12,136,596
Total non-current assets
20,421,727
12,619,597
Total assets
32,896,758
20,853,100
Current liabilities
Trade and other payables
Provisions
Total current liabilities
Total liabilities
14
1,770,265
132,473
1,902,738
1,902,738
536,807
26,100
562,907
562,907
Net assets
30,994,020
20,290,193
Equity
Issued capital
Reserves
Accumulated losses
Total equity
15
16
40,962,600
5,028,433
(14,997,013)
28,222,867
3,467,062
(11,399,736)
30,994,020
20,290,193
The accompanying accounting policies and explanatory notes form an integral part of the
financial statements.
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CHESSER RESOURCESANNUAL REPORT 2022
Chesser Resources Limited
Consolidated Statement of Changes in Equity
For the year ended 30 June 2022
2022
Issued Capital
$
Reserves
$
Accumulated
Losses
$
Total
Equity
$
Balance as at 1 July 2021
Loss for the year
Other comprehensive income
Total comprehensive loss for
the year
Transactions with owners in
their capacity as owners:
Issue of equity securities
Costs of issuing equity securities
Share based payments
Total transactions with owners
in their capacity as owners
28,222,867
-
-
3,467,062
-
-
(11,399,736)
(3,597,277)
-
20,290,193
(3,597,277)
-
-
-
(3,597,277)
(3,597,277)
13,399,000
(659,267)
-
-
-
1,561,371
12,739,733
1,561,371
-
-
-
-
13,399,000
(659,267)
1,561,371
14,301,104
Balance as at 30 June 2022
40,962,600
5,028,433
(14,997,013)
30,994,020
2021
Balance as at 1 July 2020
Loss for the year
Other comprehensive income
Total comprehensive loss for
the year
Transactions with owners in
their capacity as owners:
Issue of equity securities
Costs of issuing equity securities
Share based payments
Total transactions with owners
in their capacity as owners
Issued Capital
$
Reserves
$
Accumulated
Losses
$
Total
Equity
$
14,244,737
-
-
2,098,173
-
-
(8,653,915)
(2,745,821)
-
7,688,995
(2,745,821)
-
-
-
(2,745,821)
(2,745,821)
15,168,832
(1,190,702)
-
-
-
1,368,889
13,978,130
1,368,889
-
-
-
-
15,168,832
(1,190,702)
1,368,889
15,347,019
Balance as at 30 June 2021
28,222,867
3,467,062
(11,399,736)
20,290,193
The accompanying accounting policies and explanatory notes form an integral part of the financial
statements.
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85
DIRECTORS’ REPORT
Chesser Resources Limited
Consolidated Statement of Cash Flows
For the year ended 30 June 2022
Cash flow from operating activities
Interest received
Other income
Interest paid
Payments to suppliers and employees
2022
$
2021
$
1,896
-
(2,633)
(2,110,570)
1,360
16,206
(6,343)
(1,616,962)
Net cash flows used in operating activities
21(b)
(2,111,308)
(1,605,739)
Cash flow from investing activities
Payments for property, plant, and equipment
(182,247)
(404,911)
Payments for exploration and evaluation expenditure
(6,805,788)
(5,419,041)
Net cash used in investing activities
(6,988,035)
(5,823,952)
Cash flow from financing activities
Proceeds from share issue
Costs of issuing equity securities
Net cash provided by financing activities
13,399,000
15,168,832
(659,267)
(906,702)
12,739,733
14,262,130
Reconciliation of cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Net increase in cash and cash equivalents
Foreign exchange difference on cash and cash
equivalents
Cash and cash equivalents at 30 June
8,091,915
3,640,391
1,278,609
6,832,439
15,557
21(a) 11,747,863
(19,133)
8,091,915
Non-cash financing and investing activities
21(c)
The accompanying accounting policies and explanatory notes form an integral part of the
financial statements
86
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CHESSER RESOURCESANNUAL REPORT 2022
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2022
1.
General information
Chesser Resources Limited (the Company) is a listed public company incorporated in Australia. The Company’s
principal place of business is Unit 12, 295 Rokeby Road, Subiaco WA 6008, and the address of its registered
office is Level 14, 167 Eagle Street, Brisbane City QLD 4000.
The entity's principal activity during the financial year was gold exploration in Senegal, West Africa.
2.
Application of new and revised Accounting Standards
Adoption of New and Revised Standards
a)
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.
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.
New accounting standards not yet adopted
b)
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.
Significant accounting policies
Statement of compliance
a)
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 statements were authorised for issue by the Directors on 30 September 2022.
Going concern
b)
The financial statements have been prepared on a going concern basis, which contemplates continuity of
normal business activities and the realisation of assets and settlement of liabilities in the normal course of
business.
The Group incurred a loss for the year ended 30 June 2022 of $3,597,277 (2021 loss: $2,745,821), net cash
outflows from operating activities of $1,907,788 (2021: $1,605,739 outflows) and net outflows from investing
activities of $7,191,554 (2021: $5,823,952 outflows).
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87
DIRECTORS’ REPORT
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2022
3. Significant accounting policies (continued)
Going concern (continued)
b)
During the year the consolidated entity was successful at raising capital and at 30 June 2022 had cash and cash
equivalents of $11,747,863 (30 June 2021: $8,091,915). As at 30 June 2022 the Group had net working capital
of $10,572,293 (2021: $7,670,596) and net assets of $30,994,020 (2021: $20,290,193).
The ability of the consolidated entity to continue as a going concern is principally dependent upon the Group
managing its cash reserves in order to balance the execution of its exploration and development strategy with
maintaining adequate working capital reserves.
Having carefully assessed the consolidated entity’s forecasts and its ability to effectively manage expenditures
and cash flows from operations, the Directors believe that the Group’s existing cash reserves are adequate to
fund the Group’s committed expenditures for at least 12 months from the date of this report and that there is
a reasonable basis to prepare the financial statements on a going concern basis.
Basis of preparation
c)
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 set out in these financial statements. 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.
88
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CHESSER RESOURCESANNUAL REPORT 2022
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2022
3. Significant accounting policies (continued)
Principles of consolidation
d)
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Chesser
Resources Limited ("Company" or "parent entity") as at 30 June 2022 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.
Foreign currency translation
e)
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 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 functional currency of each of the Group’s entities is Australian dollars.
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89
DIRECTORS’ REPORT
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2022
4.
Financial risk management
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 exploration and
development 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 Managing
Directors and 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
2022
$
11,747,863
405,104
12,152,967
1,770,265
1,770,265
2021
$
8,091,915
43,957
8,135,872
536,807
536,807
Foreign exchange risk
(i)
The Group is exposed to currency risks on expenditure and cash holdings that are denominated in a currency
other than the Company’s functional and presentation currency of Australian dollars. The currencies in which
transactions are primarily denominated are Australian dollars (AUD), United States dollar (USD), and the West
African Franc (CFA).
The following table sets out the Group’s exposure to the respective currencies at the reporting date.
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CHESSER RESOURCESANNUAL REPORT 2022
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2022
4. Financial risk management (continued)
a)
(i)
Market risk (continued)
Foreign exchange risk (continued)
Balances denominated in
AUD
USD
CFA
Other
TOTAL
30 June 2022
Cash and cash equivalents
10,908,579
285,123
554,161
Trade and other receivables
154,777
-
250,327
Total assets
11,063,356
285,123
804,488
- 11,747,863
-
405,104
- 12,152,967
Trade and other payables
(385,922)
(51,774)
(1,319,994)
(12,575)
(1,770,265)
Net exposure
10,677,434
233,349
(515,506)
(12,575) 10,382,702
AUD
USD
CFA
Other
TOTAL
30 June 2021
Cash and cash equivalents
Trade and other receivables
7,078,419
685,301
328,195
32,929
-
11,028
Total assets
7,111,348
685,301
339,223
Trade and other payables
(204,121)
(25,446}
(307,240)
Net exposure
6,907,227
659,855
31,983
-
-
-
-
-
8,091,915
43,957
8,135,872
(536,807)
7,599,065
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 – AUD/USD +10%
Profit / (loss) before tax and equity – AUD/USD -10%
Profit / (loss) before tax and equity – AUD/CFA +10%
Profit / (loss) before tax and equity – AUD/CFA -10%
2022
$
22,077
(22,077)
51,551
(51,551)
2021
$
65,986
(65,986)
3,198
(3,198)
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91
DIRECTORS’ REPORT
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2022
4. Financial risk management (continued)
Interest rate risk
a) Market risk (continued)
(ii)
The Group’s exposure to interest rate risk arises predominantly from cash and cash equivalents bearing
variable interest rates, as the Group intends to hold any fixed rate financial assets to maturity. At the end of
the reporting period the Group maintained the following variable rate accounts:
30 June 2022
30 June 2021
Weighted average
interest rate
%
Balance
$
Weighted
average interest
rate
%
Balance
$
Cash and cash
equivalents
0.05%
11,747,863
0.05%
8,091,915
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:
+1.0% (10bp)/ (2021:
+0.1%)
-0.05% (10bp)/ (2021: -
0.1%)
After-tax loss higher / (lower)
2021
$
2022
$
Equity higher / (lower)
2021
2022
$
$
117,480
8,092
117,480
8,092
(5,874)
(8,092)
(5,874)
(8,092)
Credit risk
a)
b)
Credit risk primarily arises from cash and cash equivalents and term deposits deposited with banks and
receivables. Cash and cash equivalents and term deposits are primarily placed with National Australia Bank
Limited. The Company has no past due or impaired financial assets in the period covered by these financial
statements. The carrying value of financial assets represents the maximum exposure to credit risk.
Liquidity risk
c)
Prudent liquidity risk management implies maintaining sufficient cash and cash equivalents in order to meet
the Group’s forecast requirements. The Group manages liquidity risk by continuously monitoring forecast and
actual cash flows and matching the maturity profiles of financial assets and liabilities. Surplus funds are
generally only invested in bank deposits. At reporting date, the Group did not have access to any undrawn
borrowing facilities.
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.
92
92 | P a g e
CHESSER RESOURCESANNUAL REPORT 2022
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2022
4. Financial risk management (continued)
c) Liquidity risk (continued)
30 June 2022
Less than 3
months
$
4 to less than
7 months
$
Total
contractual
cash flows
$
Carrying amount
$
Trade and other payables
1,770,265
-
1,770,265
1,770,265
30 June 2021
Less than 3
months
$
4 to less than
7 months
$
Total
contractual
cash flows
$
Carrying amount
$
Trade and other payables
536,807
-
536,807
536,807
Fair value estimation
d)
d)
The carrying amount of financial assets (net of any provision for impairment) and financial liabilities as
disclosed above is assumed to approximate their fair values primarily due to their short maturities. Estimates
and judgements are continually evaluated and are based on historical experience and other factors, including
expectations of future events that may have a financial impact on the entity and that are believed to be
reasonable under the circumstances.
5.
4.
Critical accounting estimates and judgements
When preparing the financial statements, management undertakes a number of judgements, estimates and
assumptions about recognition and measurement of assets, liabilities, income, and expenses. The actual
results may differ from the judgements, estimates and assumptions made by management, and will seldom
equal the estimated results. Information about significant judgements, estimates and assumptions that have
the most significant effect on recognition and measurement of assets, liabilities, income, and expense is
provided below.
Exploration and evaluation expenditure
As at 30 June 2022 the Group had capitalised exploration and evaluation expenditure of $19,945,577 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.
93 | P a g e
93
DIRECTORS’ REPORT
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2022
5. Critical accounting estimates and judgements (continued)
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 an option 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. Segment information
The Group has identified its operating segments based on the internal reports that were reviewed and used
by the Managing Director or the Chief Executive Officer (Chief Operating Decision Maker) in assessing
performance and determining the allocation of resources during the year.
The Group is managed primarily on a geographic basis, that is, the location of the respective areas of interest.
Operating segments are therefore determined on the same basis.
Accounting policy
The Chief Operating Decision Maker assesses the performance of the operating segments based on a
measure of gross expenditure that includes both expenditure that is capitalised in these financial statements
and expenditure that is expensed in the income statement in these financial statements. The measurement
of gross expenditure does not include the impairment of exploration expenditure or non-cash items such as
depreciation expense and share based payments expense. Interest revenue is allocated to the corporate
segment. Other items of revenue are not allocated to segments.
All operating segments are in the exploration and development phase and did not generate any revenue in
the current or prior year.
Assets, liabilities, and cash flows are not allocated to segments in the internal reports that are prepared for
the Chief Operating Decision Maker.
94
94 | P a g e
CHESSER RESOURCESANNUAL REPORT 2022
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2022
6. Segment information (continued)
Activity by segment
Senegal Projects
The Senegal Projects, which during the financial year 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 404kms2.
The projects are: Diamba Sud and Diamba Nord.
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 2022 and 2021, respectively.
(i)
Segment performance
Year 30 June 2022
Total segment revenue
Segment expenditure
Segment result
Diamba
Sud
Diamba
Nord
Other Corporate
Total
$
-
$
-
$
-
$
1,896
(7,727,340)
(7,727,340)
(63,357)
(18,284)
(2,097,711)
(63,357)
(18,284)
(2,095,815)
Reconciliation of segment result to Group loss before tax
• Capitalised expenditure
• Depreciation expense
• Share based payments expense
• Other income
Net loss before tax
$
1,896
(9,906,692)
(9,904,796)
7,808,981
(2,821)
(1,561,371)
62,730
(3,597,277)
Year 30 June 2021
Total segment revenue
Segment expenditure
Segment result
Diamba
Sud
$
Diamba
Nord
$
-
-
(5,488,641)
(51,337)
(5,488,641)
(51,337)
Other Corporate
Total
$
-
(-)
(-)
$
$
17,566
(1,517,823)
(1,500,257)
17,566
(7,057,801)
(7,040,235)
Reconciliation of segment result to Group loss before tax
• Capitalised expenditure
• Depreciation expense
• Share based payments expense
• Other expenses
Net loss before tax
5,539,977
(116,986)
(1,008,931)
(119,646)
(2,745,821)
95 | P a g e
95
DIRECTORS’ REPORT
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2022
6. Segment information (continued)
(i)
Segment assets
The following table shows assets by geographical segment.
30 June 2022
Segment assets
30 June 2021
Segment assets
7. Revenue and other income
Interest income
Government grants
Accounting policy
Senegal
$
Australia
$
Total
$
21,227,226
11,669,532
32,896,758
12,961,155
7,891,945
20,853,100
2022
$
1,896
-
1,896
2021
$
1,360
16,206
17,566
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.
Expenses
2022
$
2021
$
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
Superannuation contributions
49,609
34,446
24,878
15,296
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 $49,609 (2021: $24,878) 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.
96 | P a g e
96
CHESSER RESOURCESANNUAL REPORT 2022
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2022
9.
Remuneration of auditors
2022
$
2021
$
During the year the following fees were paid or payable for services provided by the auditor of the parent
entity and its related practices:
(i) Audit and assurance services
Audit and review of financial reports
Total auditors’ remuneration
10.
Income tax
(a) Income tax benefit
Current and deferred tax
(b) Deferred income tax/(revenue)
Deferred income tax/(revenue) included in tax expense comprises:
(Increase)/decrease in deferred tax assets
Increase/(decrease) in deferred tax liabilities
(c) Reconciliation of income tax expense to prima facie
income tax
70,185
70,185
63,242
63,242
-
-
-
(-)
-
-
-
-
(-)
-
Loss before income tax from continuing operations
Tax at the Australian tax rate of 30% (2021: 30%)
(3,597,277)
(1,079,048)
(2,745,821)
(823,746)
Tax effect of amounts which are not deductible/(taxable) in calculating taxable income:
Non-assessable income
Non-deductible expenses
Deductible capital raising costs
Deferred tax assets not recognised / (recognised)
Income tax benefit
(d) Deferred tax assets / liabilities comprise
Accruals
Provisions
Prepayments
Tax losses available for offset against future taxable
income
Net deferred tax assets
Deferred tax assets not recognised
(-)
526,904
(125,028)
(677,172)
677,172
-
103,357
39,742
(96,618)
5,040,286
5,086,767
(5,086,767)
-
(6,726)
302,679
(85,472)
(613,265)
613,265
-
101,760
7,830
(29,289)
4,341,858
4,422,159
(4,422,159)
-
97 | P a g e
97
DIRECTORS’ REPORT
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2022
10. Income tax (continued)
(e) Unrecognised deferred tax assets
Deferred tax assets have not been recognised in respect of the following items:
Temporary differences and tax losses at 30% (2021: 30%)
5,086,767
4,422,159
2022
$
2021
$
Tax losses do not expire under current tax legislation. Deferred tax assets have not been recognised in respect
of these items because it is not probable that future taxable profit will be available against which the Group
can utilise the benefits from the deferred tax assets. The benefit of the tax losses will only be available if the
Company, or a tax consolidated group of which it is a member, derives future assessable income of a nature
and of an amount sufficient to enable the benefit from the tax losses to be realised, has complied, and
continues to comply with conditions for deductibility imposed by current tax legislation and there are no
adverse changes to such legislation. The conditions for deductibility of the carried forward tax losses
(continuity of ownership test and continuity of business test) will need to be considered in light of any
changes that may occur in both the ownership of the Company and the nature of the Company’s business
activities.
Accounting policy
The income tax expense or revenue for the period is the tax payable on the current period’s taxable income
based on the national income tax rate adjusted by changes in deferred tax assets and liabilities attributable
to temporary differences and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at
the end of the reporting period in the countries where the Company’s subsidiaries and associates operate
and generate taxable income, Management periodically evaluates positions taken in tax returns with respect
to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where
appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between
the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements.
However, deferred tax liabilities are not recognised if they arise from initial recognition of an asset or liability
in a transaction other than a business combination that at the time of the transaction affects neither
accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have
been enacted or substantially enacted by the balance sheet date and are expected to apply when the related
deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is
probable that future taxable amounts will be available to utilise those temporary differences and losses.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amounts
and tax bases of investments in controlled entities where the parent entity is able to control the timing of
the reversal of the temporary differences and it is probable that the differences will not reverse in the
foreseeable future.
98
98 | P a g e
CHESSER RESOURCESANNUAL REPORT 2022
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2022
10.
Income tax (continued)
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.
11.
Trade and other receivables
Current
Other receivables
2022
$
2021
$
405,104
43,957
Other receivables represent the Company’s GST receivable, and deposits paid in advance of drilling and
assaying services. All receivables amounts are expected to be settled within three months.
Accounting Policy
Trade and other receivables are recognised initially at fair value and subsequently at the amount considered
recoverable. Trade and other receivables are generally due for settlement within 30 days 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.
Property, plant, and equipment
Field
Equipment
Motor
Vehicles
Office
Equipment
Total
Carrying amount at 1 July 2020
31,345
127,979
35,752
195,076
Additions
Depreciation
Carrying amount at 30 June 2021
Additions
Depreciation
Carrying amount at 30 June 2022
207,247
(27,985)
210,607
141,834
(64,367)
288,074
124,751
(57,855)
194,875
-
(86,082)
108,793
72,913
(31,146)
77,519
40,411
(38,647)
79,283
404,911
(116,986)
483,001
182,245
(189,096)
476,150
During the current period depreciation expense totalling $186,275 were capitalised as exploration and
evaluation expenditure (2021:$Nil).
99 | P a g e
99
DIRECTORS’ REPORT
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2022
12. Property, plant, and equipment (continued)
Accounting Policy
Property, plant, and equipment is stated at historical cost less depreciation. Historical cost includes
expenditure that is directly attributable to the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits associated with the item will flow to the Group and the
cost of the item can be measured reliably. All other repairs and maintenance are charged to the income
statement during the financial period in which they are incurred.
Depreciation of assets is calculated on the straight-line method to allocate their cost, net of their residual
values, over their estimated useful lives. The depreciation rates used for each class of depreciable asset are:
Classification
Field equipment
Motor vehicles
Office equipment
Useful lives
3 – 5 years
5 years
3 years
Depreciation Basis
Straight Line
Straight Line
Straight Line
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet
date.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying
amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are
included in profit or loss.
13.
Exploration and evaluation expenditure
2022
$
2021
$
At cost
19,945,577
12,136,596
Movements in exploration and evaluation expenditure during the year is summarized as follows:
Carrying amount at beginning of period
Exploration expenditure during the period
Carrying amount at end of period
12,136,596
7,808,981
19,945,577
6,596,618
5,539,978
12,136,596
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.
100 | P a g e
100
CHESSER RESOURCESANNUAL REPORT 2022
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2022
13.
Exploration and evaluation expenditure
Accounting Policy
Exploration and evaluation costs, including the costs of acquiring licences, are capitalised as exploration and
evaluation assets on an area of interest basis. Costs incurred before the consolidated entity has obtained the
legal rights to explore an area are recognised in profit or loss.
Exploration and evaluation assets are only recognised if the rights to the area of interest are current and
either:
•
the expenditures are expected to be recouped through successful development and exploitation of the
area of interest or by its sale; or
• activities in the area of interest have not at the reporting date reached a stage which permits a
reasonable assessment of the existence or otherwise of economically recoverable reserves, and active
and significant operations in, or in relation to, the area of interest are continuing.
Exploration and evaluation assets are assessed for impairment if sufficient data exists to determine technical
feasibility and commercial viability and facts and circumstances suggest that the carrying amount exceeds
the recoverable amount. For the purposes of impairment testing, exploration and evaluation assets are
allocated to cash-generating units to which the exploration activity relates. The cash generating unit shall not
be larger than the area of interest. Once the technical feasibility and commercial viability of an area of interest
are demonstrable, exploration and evaluation assets attributable to that area of interest are first tested for
impairment and then reclassified from exploration and evaluation expenditure to property and development
assets within property, plant, and equipment.
Restoration costs that are expected to be incurred are provided for as part of the cost of the exploration and
evaluation phases that give rise to the need for restoration. Accordingly, these costs will be recognised
gradually over the life of the project as the phases occur.
14.
Trade and other payables
Trade payables
Accruals
Total trade and other payables
2022
$
1,425,742
344,523
1,770,265
2021
$
197,608
339,199
536,807
Accounting Policy
Trade and other payables represent liabilities for goods and services provided to the Group prior to the end
of the financial year which are unpaid. The amounts are unsecured, non-interest bearing and are usually paid
within 30 days of recognition. Trade and other payables are presented as current liabilities unless payment
is not due within 12 months from the reporting date. They are recognised initially at their fair value and
subsequently measure at amortised cost using the effective interest method.
101 | P a g e
101
DIRECTORS’ REPORT
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2022
15.
Issued capital
2022
$
2021
$
Ordinary shares – fully paid
40,962,600
28,222,867
2.1
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the
Company in proportion to the number of and amounts paid on the shares held. On a show of hands every
holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and upon a
poll each share is entitled to one vote.
(a) Movements in ordinary shares
Opening Balance 30 June 2021
Shares issued on the exercise of $0.08 options expiring 16 July
2021
Shares issued on the exercise of $0.05 options expiring 31
December 2021 ^
Shares issued pursuant to exercise of options where funds were
received in the prior period^^
Repayment of loan for share issue to director in a prior period
Private Placement – April 2022
Director subscription – May 2022
Share issue costs
Closing Balance 30 June 2022
30 June 2022
No.
452,502,125
$
28,222,867
9,112,500
6,388,889
2.2
1,881,500
2.3
-
2.4
115,238,096
2.5
3,000,000
2.6
-
588,123,110
729,000
225,000
-
30,000
12,100,000
315,000
(659,267)
40,962,600
^ Included in the total number of shares issued are 1,888,889 shares issued on the exercise of 3 million options using a
cashless exercise mechanism.
^^ Funds were received prior to 30 June 2021 for 1,881,500 options with an exercise price of $0.08 per share. The shares
were issued on 2 July 2021.
Opening Balance 30 June 2020
Private Placement – July 2020 (Tranche 1)
Private Placement – July 2020 (Tranche 2)
Private Placement – December 2020
Director subscription – December 2020
Shares issued on the exercise of $0.08 options expiring 16 July
2021
Shares issued on the exercise of $0.10 options expiring 31
December 2020
Funds received on exercise of $0.08 options expiring 16 July
2021 for which shares were issued after the year end ^
Share issue costs
Closing Balance 30 June 2021
30 June 2021
No.
327,356,271
2.7
29,339,068
45,660,932 2.8
37,921,238 2.9
174,000
$
14,244,737
2,347,125
3,652,875
7,963,460
36,540
9,337,500
747,000
2,713,116
271,312
-
-
452,502,125
150,520
(1,190,702)
28,222,867
^Funds were received prior to 30 June 2021 for 1,881,500 options with an exercise price of $0.08 per share. The shares
were issued on 2 July 2021.
102 | P a g e
102
CHESSER RESOURCESANNUAL REPORT 2022
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2022
15. Issued capital (continued)
2.11
2.12 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.
103 | P a g e
103
DIRECTORS’ REPORT ,
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R
CHESSER RESOURCESANNUAL REPORT 2022
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2022
16.
Reserves
Share based payments reserve
Movements:
Share based payments reserve
Balance at 1 July 2021
Share based payments expense
Capital raising costs
Balance at 30 June 2022
Nature and purpose of reserves
2022
$
2021
$
5,028,433
5,028,433
3,467,062
3,467,062
3,467,062
1,561,371
-
5,028,433
2,098,173
1,079,492
289,397
3,467,062
Share based payments reserve
The Share based payment reserve is used to record the fair value of share-based payments made by the
Company.
Accounting Policy
Share-based compensation benefits are provided to directors and key management personnel 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. Volatility is based
on the historic volatility of the Company’s shares on the Australian Stock Exchange over a period
commensurate with the expected life of the awards.
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:
105 | P a g e
105
DIRECTORS’ REPORT
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2022
16.
Reserves (continued)
Options issued as remuneration to Directors, employees, and
consultants (ii), (iii), (v) and (vi)
Options issued to third-party vendors (i)
Salary Sacrifice Rights issued (iv)
30 June
2022
$
1,561,146
225
-
30 June
2021
$
975,559
289,397
103,933
Share-based payments expense for the financial year
1,561,371
1,368,889
(i) On 1 September 2020, the Company issued 2,000,000 options to brokers in consideration for services
provided to the Company in relation to capital raisings undertaken by the Company.
The value of the services received has been estimated by reference to the fair value of the options
granted as the fair value of the services received cannot be reliably estimated. The fair value of the
options at grant date has been determined using the Black Scholes valuation model, considering the
terms and conditions upon which the options were granted. The following assumptions were used:
Grant date
Expiry date
Exercise price
Expected volatility
Risk-free interest rate
Expected life of share options
(days)
Grant date share price
Fair value per option
1 September 2020
30 November 2023
$0.08
90%
0.27%
1,185
$0.19
$0.14
(ii) On 30 November 2020, shareholders approved the issue of 2,900,000 unlisted zero exercise price
options to Non-Executive Directors under the Employee Incentive Plan with an expiry date of 7
December 2025 subject to the following vesting conditions:
• 966,668 of the incentive options to be issued shall be exercisable at zero price each on or
before 7 December 2025, vesting on 8 December 2021
• 966,668 of the incentive options to be issued shall be exercisable at zero price each on or
before 7 December 2025, vesting on 8 December 2022.
• 966,664 of the incentive options to be issued shall be exercisable at zero price each on or
before 7 December 2025, vesting on 8 December 2023.
The fair value of the options at grant date has been estimated using the Black Scholes valuation
model, considering the terms and conditions upon which the options were granted. The following
assumptions were used:
106
106 | P a g e
CHESSER RESOURCESANNUAL REPORT 2022
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2022
16.
Reserves (continued)
Exercise price
Expected volatility
Risk-free interest rate
Expected life of share options
(days)
Grant date share price
Fair value per option
$0.00
96%
0.30%
1,833
$0.21
$0.21
(iii)
On 1 November 2020, the Company approved the grant of 600,000 unlisted options, in three
tranches of 200,000 options, to key management personnel under the Employee Incentive Plan
with an expiry date of 19 August 2024. The options were issued on 21 January 2021.
The fair value of the options at grant date has been estimated using the Black Scholes valuation
model, considering 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 date
Tranche A
$0.24
96%
0.13%
Tranche B
$0.35
96%
0.13%
Tranche C
$0.45
96%
0.13%
1,387
1,387
1,387
$0.23
$0.15
19 August 2021
$0.23
$0.13
19 August 2022
$0.23
$0.12
19 August 2023
(iv)
On 8 December 2020, the Company issued 1,026,685 unlisted Salary Sacrifice Rights to directors
and key management personnel in lieu of foregone cash remuneration during the June 2020 and
September 2020 quarters totaling $103,934. The Salary Sacrifice Rights were issued under the
Employee Incentive Plan with an exercise price of $Nil and an expiry date of 7 December 2025.
The number of rights issued was based on the volume weighted average price during the June 2020
and September 2020 quarters.
June 2020 quarter
September 2020 quarter
Volume weighted
average price
$0.085
$0.213
No. of Salary
Sacrifice Rights
895,185
131,500
1,026,685
Fair value
$75,958
$27,976
$103,934
107 | P a g e
107
DIRECTORS’ REPORT
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x
E
CHESSER RESOURCESANNUAL REPORT 2022
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2022
16. Reserves (continued)
(vi) On 27 September 2021 the Company granted to employees and consultants 3,501,516 unlisted
zero exercise price Incentive Options under the Employee Incentive Plan which were issued on 3
November 2021. On 30 November 2021 the Company granted to Directors 3,424,208 unlisted zero
exercise price incentive options under the Employee Incentive Plan which were issued on 2
December 2021.
The expiry date of the options is 30 June 2026 subject to the following vesting conditions.
• 2,568,085 of the incentive options issued to each Director and 2,626,136 of the incentive
options issued to employees and consultants will vest based on the 90-day VWAP as at 30
June 2024 as a percentage of the Grant Date VWAP which is deemed to be $0.146. The table
below summarises the vesting schedule for the VWAP Tranche:
• 856,126 of the incentive options to be issued to each Director and 875,380 of the incentive
options to be issued to employees and consultants will vest if the Group announces a positive
Definitive Feasibility Study on or before 30 June 2024.
The fair value of the options at grant date has been estimated as follows:
• The VWAP Tranche Options have been valued using a trinomial option valuation model; and
• The DFS Tranche Options have a non-market-based performance condition. Non-market
conditions are considered by adjusting the number of Options included in the measurement of
the transaction amount using a probability of vesting assumption so that, ultimately, the amount
recognised shall be based on the number of rights that eventually vest.
The following assumptions were used to value the options:
Exercise price
Expected volatility
Risk-free interest rate
Expected life of share options
(days)
Grant date share price
Fair value per option
Probability of achieving vesting
condition
Director options
VWAP
Tranche
$0.00
121%
1.31%
1,673
$0.14
$0.10
DFS
Tranche
$0.00
N/A
N/A
1,673
$0.14
$0.135
Employee options
DFS
VWAP
Tranche
Tranche
$0.00
$0.00
%
118%
%
0.78%
1,737
$0.14
$0.10
1,737
$0.14
$0.135
100%
100%
100%
100%
109 | P a g e
109
DIRECTORS’ REPORT
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2022
16.
Reserves (continued)
The following is a summary of movements in options on issue during the financial year.
Expiry
31 December 2021
30 November 2022
31 December 2022
30 November 2023
19 January 2024
19 January 2024
19 January 2024
7 December 2025
31 January 2026
30 June 2026
Exercise
Price
$0.05
$0.12
$0.05
$0.08
$0.24
$0.35
$0.45
-
-
-
1 July
2021
7,500,000
2,000,000
1,500,000
2,000,000
200,000
200,000
200,000
10,800,000
5,000,000
-
29,400,000
Issued
Exercised
Lapsed
-
-
-
-
-
-
-
-
-
6,925,724
6,925,724
(7,500,000)
-
-
-
-
-
-
-
-
(7,500,000)
-
-
-
-
-
-
-
-
-
-
30 June
2022
-
2,000,000
1,500,000
2,000,000
200,000
200,000
200,000
10,800,000
5,000,000
6,925,724
28,825,724
Weighted average exercise
price
$0.04
$-
$0.05
$-
$0.02
Expiry
31 December 2020
31 December 2021
30 November 2022
31 December 2022
30 November 2023
19 January 2024
19 January 2024
19 January 2024
7 December 2025
31 January 2026
Exercise
Price
$0.10
$0.05
$0.12
$0.05
$0.08
$0.24
$0.35
$0.45
-
-
Issued
1 July
2020
4,300,000
-
7,500,000
-
2,000,000
-
1,500,000
2,000,000
-
200,000
-
200,000
-
-
200,000
- 14,300,000
5,000,000
-
15,300,000 21,900,000
Lapsed
(1,586,884)
Exercised
(2,713,116)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(3,500,000)
-
-
-
(2,713,116) (5,086,884)
30 June
2021
-
7,500,000
2,000,000
1,500,000
2,000,000
200,000
200,000
200,000
10,800,000
5,000,000
29,400,000
Weighted average exercise
price
$0.07
$0.02
$0.10
$0.03
$0.04
The weighted average remaining term to expiry of issued options was 3.04 years at 30 June 2022 (2021:
2.98 years).
110
110 | P a g e
CHESSER RESOURCESANNUAL REPORT 2022
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2022
17.
Loss per share
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)
2022
$
(0.73)
(0.73)
2021
$
(0.65)
(0.65)
Loss attributable to Owners of Chesser Resources Limited
(3,597,277)
(2,745,821)
Weighted average number of ordinary shares used in the
calculation of basic and diluted loss per share
Shares
Shares
493,651,293
421,187,273
Options and other potential equity securities on issue at the end of the period have not been included in
the determination of diluted earnings per share as the Group has incurred a loss for the period and they
are therefore not dilutive in nature.
Accounting policy
Basic earnings per share is calculated as net profit attributable to members of the parent, adjusted to
exclude any costs of servicing equity (other than dividends), dividend by the weighted average number
of ordinary shares, adjusted for any bonus element. The diluted earnings per share is calculated as net
profit or loss attributable to members of the parent dividend by the weighted average number of ordinary
shares and dilutive potential ordinary shares, adjusted for any bonus element. The weighted average
number of shares was based on the consolidated weighted average number of shares in the reporting
period. The net profit or loss attributable to members of the parent is adjusted for:
• Costs of servicing equity (other than dividends) and preference share dividends;
• The after-tax effect if dividends and interest associated with dilutive potential ordinary shares that
have been recognised as expenses; and
• Other non-discretionary changes in revenue or expenses during the period that would result from
the dilution of potential ordinary shares.
18. Parent entity disclosures
The financial information for the parent entity Chesser Resources Limited has been prepared on the same
basis as the consolidated financial statements except as set out below.
Investments in subsidiaries, associates, and joint venture entities
Investments in subsidiaries, associates and joint venture entities are accounted for at cost in the financial
statements of the Company.
As at and throughout the financial year ending 30 June 2022 and 30 June 2021 the parent entity of the
111 | P a g e
111
DIRECTORS’ REPORT
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2022
Group was Chesser Resources Limited.
Parent entity disclosures (continued)
18.
a)
The individual financial statements for the parent entity show the following aggregations.
Summary financial information
Results
(Loss) for the year
Total comprehensive loss for the year
Financial Position
Current assets
Non-current assets
Current liabilities
Net Assets
Contributed equity
Share-based payments reserve
Accumulated losses
2022
$
(3,627,588)
(3,627,588)
11,637,246
19,806,931
31,444,177
2021
$
(2,584,744)
(2,584,744)
7,863,347
12,657,725
20,521,072
491,481
241,892
30,952,696
20,279,180
40,962,600
5,028,433
(15,038,337)
30,952,696
28,222,867
3,467,062
(11,410,749)
20,279,180
Guarantees entered into by the parent entity
b)
Chesser Resources Limited has not entered into any guarantees in the current or previous financial year, in
relation to the debt of its subsidiaries
Contingent liabilities of the parent entity
c)
The parent entity did not have any contingent liabilities as at 30 June 2022 or 30 June 2021.
Contractual commitments for capital expenditure
d)
The parent entity did not have any contractual commitments for capital expenditure as at 30 June 2022
(2021: $nil).
112
112 | P a g e
CHESSER RESOURCESANNUAL REPORT 2022
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2022
19.
Subsidiaries
The consolidated financial statements incorporate the assets, liabilities, and results of the following
subsidiaries in accordance with the accounting policy described in note 3(c).
Name of entity
Country of
incorporation
Class of
shares
Equity holding
Boya Gold Pty Ltd
Boya Minerals Pty Ltd
Boya Senegal SAU
Erin Mineral Resources Pty Ltd
Erin Minerals Pty Ltd
Erin Senegal SAU^^
Chesser Senegal SAU
Bondou SAU
Australia
Australia
Senegal
Australia
Australia
Senegal
Senegal
Senegal
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
^^ Erin Senegal SAU was dissolved during the reporting period.
20.
Related parties
The following amounts were paid to Key Management Personnel as remuneration:
2022
%
100
100
100
100
100
-
100
100
2021
%
100
100
100
100
100
100
100
100
Base fees and remuneration
Superannuation
Short term incentive bonus
Share based payments
2022
$
647,767
35,190
82,315
927,658
1,692,930
2021
$
612,237
21,851
-
625,526
1,259,614
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 a member of Key Management Personnel of the Company during the reporting period, a total of
$16,000 (2021: $12,000) for the provision of services including office rental for the Company’s
registered office, internet and communications services and software subscriptions. As at 30 June 2022
no amounts were owing to KCG Advisors Pty Ltd for these services (2021: $6,000).
There were no other transactions between the Group and other related parties in the current or prior
financial year.
113 | P a g e
113
DIRECTORS’ REPORT
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2022
21. Cash flow information
a) Cash and cash equivalents
Cash at bank and on hand
b) Reconciliation of cashflows from operating activities
Loss before tax
Depreciation and amortisation
Annual leave provision
Foreign exchange losses
Exploration costs
2022
$
2021
$
11,747,863
8,091,915
(3,597,277)
(2,745,821)
2,821
28,821
(15,559)
203,519
116,986
12,326
19,133
-
Share based payments expense
Change in operating assets and liabilities (net of disposals):
1,561,371
1,008,931
(Increase)/decrease in trade or other receivables
(Increase)/decrease in prepayments
Increase/(decrease) in trade and other payables
(113,267)
(224,432)
42,965
36,863
(45,762)
(8,395)
Net cash outflow from operating activities
(2,111,308)
(1,605,739)
c) Non-cash investing and financing activities
Issue of shares in settlement of capital raising costs
Issue of options in settlement of capital raising costs
-
-
-
289,397
Accounting policy
Cash and cash equivalents comprise cash at bank and on hand, demand deposits, and short-term, highly
liquid investments that are readily convertible to known amount of cash and which are subject to an
insignificant risk of changes in value. These also include bank overdrafts that form an integral part of the
Group’s cash management.
114
114 | P a g e
CHESSER RESOURCESANNUAL REPORT 2022
Chesser Resources Limited
Notes to the financial statements
For the year ended 30 June 2022
21. Commitments and contingent liabilities
(a)
Commitments
Commitments for minimum exploration expenditure required to retain tenure on the Group’s exploration
tenements are:
Within one year
Later than one year but less than five years
(b) Contingent liabilities
2022
$
723,141
7,631,373
8,354,514
2021
$
-
5,191,707
5,191,707
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 that expired on 12 July 2020 without vesting.
• 23,809,524 Class B performance shares that expired on 12 July 2021 without vesting.
22.
Events occurring after the reporting period
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.
115 | P a g e
115
DIRECTORS’ REPORT
CHESSER RESOURCES LTD
DIRECTORS’ DECLARATION
In the directors’ opinion:
(a) the attached financial statements and notes are in accordance with the Corporations Act 2001,
including:
(i)
(ii)
complying with Australian Accounting Standards and the Corporations Regulations 2001;
and
giving a true and fair view of the Group’s financial position as at 30 June 2022 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.
Andrew Grove
Managing Director
Perth 30 September 2022
116
116 | P a g e
CHESSER RESOURCESANNUAL REPORT 2022
117
DIRECTORS’ REPORT SHAREHOLDER
INFORMATION
118
CHESSER RESOURCESANNUAL REPORT 2022 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 16 September 2022.
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 2022.
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 is included at pages 44 to 53 of this
Annual Report.
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 31 August 2021,
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 16 September 2022 is as follows:
Range
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
Listed fully paid
ordinary shares
(ASX: CHZ)
Unlisted $0.12 options
expiring 30 November
2022
(ASX: CHZAQ)
Unlisted $0.08 options
expiring 30 November
2023
(ASX: CHZAQ)
114
224
213
716
549
1,816
-
-
-
-
1
1
-
-
-
-
1
1
There were 374 holders of less than a marketable parcel of shares as at 16 September 2022.
As at 16 September 2022, there were NIL equity securities which were subject to restrictions.
119
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 16 September 2022 was as follows:
Name
BNP PARIBAS NOMS PTY LTD
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