Cobre Limited Annual Report 2020

Plain-text annual report

(cid:38)(cid:40)(cid:51)(cid:3)(cid:560)(cid:566)(cid:560)(cid:3)(cid:566)(cid:527)(cid:550)(cid:3)(cid:521)(cid:560)(cid:558)Annual Report(cid:564)(cid:511)(cid:564)(cid:511) Corporate Directory Board of Directors (cid:55)(cid:73)(cid:75)(cid:77)(cid:87)(cid:88)(cid:73)(cid:86)(cid:73)(cid:72)(cid:3)(cid:52)(cid:509)(cid:71)(cid:73)(cid:3) Stock exchange listing Cobre Limited shares are listed on the Australian Securities Exchange (ASX code: CBE) Website www.cobre.com.au Corporate Governance Statement https://www.cobre.com.au/wp- content/uploads/2020/01/2.2.5- Corporate-Governance-Statement.pdf Mr Martin C Holland Executive Chairman and Managing Director Mr Andrew Sissian Finance Director Mr Michael Addison Non-Executive Director Mr Michael McNeilly Non-Executive Director Company Secretary Mr Justin Clyne Share Register Boardroom Pty Limited Level 12, 225 George Street Sydney NSW 2000 Telephone: +61 2 9290 9600 www.boardroomlimited.com.au Level 7, 151 Macquarie Street Sydney NSW 2000 Telephone: (02) 9048 8856 Email: info@cobre.com.au Principal place of business Level 7, 151 Macquarie Street Sydney NSW 2000 Telephone: (02) 9048 8856 Email: info@cobre.com.au Auditor Ernst & Young The EY Centre Level 34, 200 George Street Sydney NSW 2000 Solicitors Henry William Lawyers Level 29, 420 George Street Sydney NSW 2000 (cid:46)(cid:46)(cid:434)(cid:96)(cid:434)(cid:40)(cid:52)(cid:39)(cid:55)(cid:42)(cid:3)(cid:49)(cid:46)(cid:50)(cid:46)(cid:56)(cid:42)(cid:41) WWW.COBRE.COM.AU Contents Chairman’s Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1. Directors’ report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 2. Auditor’s independence declaration . . . . . . . . . . . . . . . . . . . . . . . . . . 18 3. Financial statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Statement of proﬁt or loss and other comprehensive income . . . . . . . 21 Statement of ﬁnancial position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Statement of changes in equity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Statement of cash ﬂows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 4. Notes to the ﬁnancial statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 5. Directors’ declaration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 6. Independent auditor’s report to the members of Cobre Limited. . . . . . 50 7. ASX additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 General information The ﬁnancial statements cover Cobre Limited as a consolidated entity consisting of Cobre Limited and the entities it controlled at the end of, or during, the year. The ﬁnancial statements are presented in Australian dollars, which is Cobre Limited’s functional and presentation currency. Cobre Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered ofﬁce and principal place of business is: Level 7, 151 Macquarie Street Sydney NSW 2000 A description of the nature of the consolidated entity’s operations and its principal activities are included in the directors’ report, which is not part of the ﬁnancial statements. The ﬁnancial statements were authorised for issue, in accordance with a resolution of directors, on 18 September 2020. The directors have the power to amend and reissue the ﬁnancial statements. (cid:38)(cid:51)(cid:51)(cid:57)(cid:38)(cid:49)(cid:3)(cid:55)(cid:42)(cid:53)(cid:52)(cid:55)(cid:56)(cid:3)(cid:23)(cid:21)(cid:23)(cid:21)(cid:434)(cid:96)!(cid:22)(cid:434) WWW.COBRE.COM.AU(cid:23)(cid:434)(cid:200)(cid:460)(cid:26)(cid:107)(cid:24)(cid:127)(cid:41)(cid:3)(cid:88)(cid:70)(cid:97)(cid:70)(cid:137)(cid:41)(cid:37)Chairman’s letterDear Shareholder, On behalf of the Board of Directors of Cobre Limited (Cobre or Company) it is with great pleasure that I present to you this ﬁrst Annual Report for Cobre as an ASX listed Company, for the 2020 Financial Year (FY20).FY20 was a transformative year in which Cobre achieved a number of strategic milestones including the Company’s listing on the ASX following its successful Initial Public Offering (IPO) in January 2020 which raised $10m before costs. The funds from the IPO was the catalyst which enabled Cobre to embark on a 1500-metre diamond drilling program at the Perrinvale Project in Western Australia, to conﬁrm the high-grade Volcanogenic Hosted Massive Sulphide (VHMS) mineralization we discovered in 2019 at the Schwabe prospect when we were a private company with little more than a geological concept.In May, the Company announced the completion of the acquisition of the 20% minority stake in Toucan Gold Pty Ltd (Toucan), which it did not already own. Toucan is the 100% holder of the high-grade Perrinvale VHMS Project and is now a 100% wholly owned subsidiary of Cobre.Following this, in June, we launched a 6000-metre combined diamond and reverse circulation drilling program with the objective of extending the mineralisation at Schwabe and testing a number of promising ElectroMagentic (EM) conductors at other areas within Perrinvale. The Board is excited with the results achieved through these programs which are detailed within this Annual Report and of our systematic step-approach to exploration. We are looking forward to our next drilling programs at Schwabe and making new discoveries at Perrinvale. As we continue to advance exploration at Perrinvale, we will also begin to investigate the potential of our new copper opportunity announced subsequent to the end of FY20, within the underexplored Kalahari Copper Belt (KCB) in Botswana through Cobre’s latest acquisition, subject to shareholder approval later this year, being a controlling interest in Kalahari Metals Limited (KML). The Board believes that this acquisition will create a stronger Company poised for international growth. By adding a stake in the prospective and underexplored KCB in Botswana, we have broadened our project portfolio and increased our exposure to copper, a metal in strong demand.(cid:101)(cid:99)(cid:99)(cid:142)(cid:101)(cid:88)(cid:3)(cid:127)(cid:41)(cid:123)(cid:107)(cid:127)(cid:137)(cid:3)(cid:406)(cid:456)(cid:406)(cid:456)(cid:460)(cid:200)!(cid:24)(cid:434)I would like to take this opportunity to thank the ongoing support of the Company’s shareholders and key stakeholders who have all contributed to setting the Company on a path that your Board believes will deliver success and returns for our shareholders. I would also like to thank my fellow directors for their signiﬁcant efforts during what has been a challenging yet rewardable year. It is a testament to the Board and our experienced and professional exploration team and the protocols that the Company has in place that enabled Cobre to continue its exploration program largely unaffected by the COVID-19 pandemic.Thank you for joining us for the ride and remaining with us through these unprecedented times. We expect to have another rewarding year of exploration ahead of us.On behalf of the Board, I would like to not only thank once again all shareholders for their support over the last year but to also extend a welcome to new shareholders that have joined us since our IPO. Yours faithfully,Martin Holland Co-Founder, Executive Chairman, Managing Director (cid:542) (cid:25)(cid:434)(cid:200)(cid:460)(cid:26)(cid:107)(cid:24)(cid:127)(cid:41)(cid:3)(cid:88)(cid:70)(cid:97)(cid:70)(cid:137)(cid:41)(cid:37) WWW.COBRE.COM.AU (cid:542)(cid:17) Directors’ report The directors present their report, together with the ﬁnancial statements, on the consolidated entity (referred to hereafter as the ‘consolidated entity’) consisting of Cobre Limited (referred to hereafter as the ‘company’ or ‘parent entity’) and the entities it controlled at the end of, or during, the year ended 30 June 2020. DIRECTORS The following persons were directors of Cobre Limited during the whole of the ﬁnancial year and up to the date of this report, unless otherwise stated: Martin Christopher Holland – Executive Chairman and Managing Director Andrew Sissian – Finance Director Michael Addison – Non-Executive Director appointed 25 November 2019 Michael McNeilly – Non-Executive Director appointed 6 November 2019 Robert Crossman – Non-Executive Director until 21 November 2019 PRINCIPAL ACTIVITIES The principal activity of the consolidated entity during the ﬁnancial year was the exploration and evaluation of the assets owned by Toucan Gold Pty Ltd (Toucan), in which Cobre now owns a 100% shareholding, primarily at the Perrinvale Project, which covers 381km2 of the Panhandle and Illaara Greenstone Belts in Western Australia. During the year, the company also entered into the Sandiman Farmin Agreement on 13 November 2019 pursuant to which the company acquired an option to earn interests in an additional tenement, being the Mt Sandiman Tenement. The Sandiman Tenement is located in the Gascoyne Province, approximately 85km north of the town of Gascoyne Junction in Western Australia and spans across 202km2 on the eastern edge of the Carnarvon Basin. DIVIDENDS There were no dividends paid, recommended or declared during the current or previous ﬁnancial year. (cid:38)(cid:51)(cid:51)(cid:57)(cid:38)(cid:49)(cid:3)(cid:55)(cid:42)(cid:53)(cid:52)(cid:55)(cid:56)(cid:3)(cid:23)(cid:21)(cid:23)(cid:21)(cid:434)(cid:96)!(cid:26)(cid:434) (cid:3)(cid:41)(cid:46)(cid:55)(cid:42)(cid:40)(cid:56)(cid:52)(cid:55)(cid:8)(cid:12)(cid:3)(cid:55)(cid:42)(cid:53)(cid:52)(cid:55)(cid:56) REVIEW OF OPERATIONS The loss for the consolidated entity after providing for income tax and non-controlling interest amounted to $1,972,245 (30 June 2019: $150,210). Throughout the course of Financial year 2020 (FY20), Cobre achieved a number of signiﬁcant and transformative strategic milestones highlighted as follows: p A successful Initial Public Offering (IPO) on the ASX in January 2020 in which $10m was raised before costs; p A 1,500 metre drill program at Perrinvale which commenced immediately post listing and a further 6,000 metre exploration program at Perrinvale commencing in June; p The acquisition of the remaining 20% minority stake in Toucan Gold Pty Ltd (Toucan), which it did not already own. Toucan is the 100% holder of the high-grade Perrinvale VHMS Project and is now a 100% wholly owned subsidiary of Cobre. Consideration for the 20% Toucan stake was by way of a cash payment of $527,900 and 6,160,000 Cobre shares. 100% ownership of Toucan provides Cobre with complete control over the Perrinvale project and the ability to make key strategic decisions independently; and Post the end of FY20 in August, Cobre announced the signing of a binding Heads of Agreement for the proposed scrip-based acquisition of 51% of the equity of Kalahari Metals Limited (KML). KML is a private UK company which controls approximately 8,100 km2 of tenements within the Kalahari Copper Belt (KCB) in Botswana (with 6,650 km2 owned 100%, and 1,450 km2 in JVs). As stated in the Company’s announcement to the ASX at the time, the transaction is conditional upon a number of matters including: p Cobre conducting due diligence enquiries in relation to KML and its licences to Cobre’s satisfaction; p Cobre and the vendors negotiating and executing an agreed share purchase agreement; p Cobre and MTR negotiating and executing a shareholders’ JV agreement in relation to the future management of KML; p Cobre obtaining shareholder approval at its 2020 AGM; and p Metal Tiger plc obtaining FIRB approval, if required, for the receipt of additional Cobre shares. The Kalahari Copper Belt is ranked as one of the world’s most prospective areas for undiscovered sediment-hosted copper deposits by the United States Geological Survey (USGS)1. Already, a number of copper-silver deposits are under development adjacent to KML holdings. Sandﬁre Resources is optimising the feasibility study of the T3 deposit and Cupric Canyon Capital is planning to re-develop the Boseto Copper Mine (closed in 2015) as an underground mine and surrounding Khoemacau’s Zone 5 deposit is under construction with production expecting to start in mid-2021. In addition, drilling is underway at Kitlanya East. Cobre will purchase a 51% stake in KML by issuing approximately 21.4 million shares at A$0.20 per share to KML shareholders. The shares will be escrowed until 31 January 2022. Metal Tiger plc, a signiﬁcant shareholder of both Cobre and KML, will reduce its current stake in KML from approximately 62% to 49.9% post completion. Upon completion, Metal Tiger will have a 21% share ownership in Cobre. Exploration Following the IPO and with a strong treasury, Cobre embarked on a 1500-metre diamond drilling program on Perrinvale to conﬁrm the high-grade VHMS mineralization we discovered in 2019 at the Schwabe prospect when we were a private company with little more than a geological concept. The initial drilling at Schwabe was a success. Two holes intersected a shallow massive sulphide zone, conﬁrming the continuity of the high-grade VHMS system to the north and south. We also identiﬁed near-surface anomalous copper- zinc mineralization 2 kilometres west of Schwabe, within the same stratigraphy, on the Zinco Lago & Zinco Rame trend target area. 1 USGS Scientific Investigations Report 2010–5090–Y (cid:27)(cid:434)(cid:96)(cid:434)(cid:40)(cid:52)(cid:39)(cid:55)(cid:42)(cid:3)(cid:49)(cid:46)(cid:50)(cid:46)(cid:56)(cid:42)(cid:41) WWW.COBRE.COM.AU In June 2020, we launched a 6000-metre combined diamond and reverse circulation drilling program with the objective of extending the mineralisation at Schwabe and test a number of promising EM conductors in other parts of the project. This third phase of drilling delivered further high-grade VHMS intercepts at Schwabe and has extended the mineralisation to over a strike length of 500 metres: p 12m @ 2.9% Cu, 1.0% Zn, 10.2g/t Ag, and 0.7g/t Au from 45m (including 4m@ 8.3% Cu, 2.9% Zn, 0.12% Co, 555 ppm Pb, 2.0 g/t Au, 29.8 g/t Ag) p 3.5m @ 3.4% Cu, 0.8% Zn, 16.5g/t Ag, and 1.1g/t Au from 48m & 3.5m @ 2.0% Cu, 1.4% Zn, 7.4g/t Ag, and 0.3g/t Au from 54m We also drilled for the ﬁrst time a number of EM conductors and intersected anomalous VHMS mineralization at Costa del Islas, Piega del West and Ponchiera, again proving the efﬁciency of our geophysical targeting. These ﬁrst encouraging results do support DHEM surveys and the continuation of mapping and surface sampling to reﬁne targets for additional drilling. Geophysics Targeting Works Key to our encouraging results to date has been our geophysical program starting with an airborne electromagnetic (EM) survey in 2019, which successfully identiﬁed a total of 10 EM anomalies (potential VHMS targets). We also conducted Moving Loop EM surveys and downhole surveys to further reﬁne our targets and better prepare for the next drilling program. For full details of the results reported in this Annual Report, please refer to the Company’s ASX announcements, in particular the announcements of 16 and 22 April and 20 July 2020 including the JORC Table 1 information included therein. SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS Prior to completing its IPO, the company issued 9,833,445 fully paid ordinary shares raising $875,276 before costs. During the year, the company also entered into the Sandiman Farmin Agreement on 13 November 2019 pursuant to which the company acquired an option to earn interests in an additional tenement, being the Mt Sandiman Tenement. The consideration was cash of $50,000 and 166,667 fully paid ordinary shares valued at $25,000. The company’s main focus during the year was working towards its planned IPO and subsequent listing on the ASX, lodging its prospectus with ASIC on 6 December 2019 and the commencement of trading of the company’s shares on the ASX on 31 January 2020. The IPO raised $10,000,000 before costs upon the issue of 50,000,000 fully paid ordinary shares. As part of the IPO and to facilitate a listing on the ASX, Cobre’s shareholders approved the conversion of the Company’s status from a private company limited by shares (Pty Ltd) to a public company limited by shares (Ltd) which came into effect on 22 November 2019.During the year, the company acquired a further 20% of the issued capital of Toucan Gold Pty Ltd, meaning it now owns 100% of Toucan. The consideration was a cash payment of $528,000 plus 6,160,000 fully paid ordinary shares valued at $1,047,200. There were no other signiﬁcant changes in the state of affairs of the consolidated entity during the ﬁnancial year. MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR On 24 August 2020, the company announced that it has entered into an agreement to acquire a controlling interest in Kalahari Metals Limited, a copper exploration JV company in the highly prospective Kalahari Copper Belt in Botswana. The company will purchase an initial 49.99% stake with an option to move to a 51% stake subject to regulatory approvals. The purchase will be funded by the issue of approximately 21.4m fully paid ordinary shares in CBE, to be escrowed until 31 January 2022. The transaction is subject to ongoing due diligence, ﬁnalising JV management agreements, regulatory approvals, and approval by Cobre shareholders at the upcoming annual general meeting. The Kalahari Copper Belt is regarded as one of the world’s most prospective areas for yet-to-be-discovered sediment- hosted copper deposits by the US Geological Survey. Exploration drilling of Kalahari Metals’ tenements is currently underway by the existing owners, with future exploration activities to be jointly funded under the proposed JV arrangement. No other matter or circumstance has arisen since 30 June 2020 that has signiﬁcantly affected, or may signiﬁcantly affect the consolidated entity’s operations, the results of those operations, or the consolidated entity’s state of affairs in future ﬁnancial years. (cid:38)(cid:51)(cid:51)(cid:57)(cid:38)(cid:49)(cid:3)(cid:55)(cid:42)(cid:53)(cid:52)(cid:55)(cid:56)(cid:3)(cid:23)(cid:21)(cid:23)(cid:21)(cid:434)(cid:96)!(cid:28)(cid:434) (cid:3)(cid:41)(cid:46)(cid:55)(cid:42)(cid:40)(cid:56)(cid:52)(cid:55)(cid:8)(cid:12)(cid:3)(cid:55)(cid:42)(cid:53)(cid:52)(cid:55)(cid:56) LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS The consolidated entity will continue to focus on exploration, evaluation and development activities at the Perrinvale and Sandiman projects. ENVIRONMENTAL REGULATION The consolidated entity holds interests in a number of exploration tenements. The various authorities granting such tenements require the tenement holder to comply with the terms of the grant of the tenement and all directions given to it under those terms of the tenement. There have been no known breaches of the tenement conditions and no such breaches have been notiﬁed by any government agency during the year ended 30 June 2020. INFORMATION ON DIRECTORS Name: Title: Experience and expertise: Martin Holland Executive Chairman and Managing Director Mr Holland is a co-founder of Cobre. Mr Holland has over 12 years of M&A and corporate ﬁnance experience focused on the mining sector. Mr Holland was the founder and CEO of Lithium Power International (LPI:ASX) from 2015 to 2018. Mr Holland is the Chairman of Sydney based investment company, Holland International Pty Ltd, which has strong working relationships with leading institutions and banks across the globe. Other current directorships: Nil Former directorships (last 3 years): Lithium Power International (LPI:ASX) – resigned 24 May 2018 Interests in shares: 11,024,384 fully paid ordinary shares Interests in options: 6,525,000 options over ordinary shares Name: Title: Andrew Sissian Finance Director Qualiﬁcations: Mr Sissian is a CPA and holds a Masters of Accounting and a Bachelor of Commerce. Experience and expertise: Mr Sissian is a co-founder of Cobre. Mr Sissian has extensive experience in corporate ﬁnance as a technology and ﬁnance executive, advisor and investor. Mr Sissian has worked with Wilsons and the National Australia Bank, in both Australia and Shanghai, focused on institutional banking and acquisition ﬁnance. Mr Sissian is the CEO of ‘Internet of Things’ company, Procon Telematics Pty Ltd. Other current directorships: Former directorships (last 3 years): Nil Nil Interests in shares: 4,849,052 fully paid ordinary shares Interests in options: 3,337,000 options over ordinary shares (cid:29)(cid:434)(cid:96)(cid:434)(cid:40)(cid:52)(cid:39)(cid:55)(cid:42)(cid:3)(cid:49)(cid:46)(cid:50)(cid:46)(cid:56)(cid:42)(cid:41) WWW.COBRE.COM.AU Name: Title: Qualiﬁcations: Experience and expertise: Michael Addison Non-Executive Director appointed 25 November 2019 He is a former Rhodes Scholar, has an Oxford University postgraduate degree in Management Studies and is a Fellow of the Australian Institute of Management. Mr Addison has a long history of involvement in the Australian and international mining industry, having been instrumental in the founding of two former ASX-listed Australian mining exploration and development companies: Endocoal Limited (formerly as Atlas Coal Limited) and Carabella Resources Limited. Mr Addison has also held previous positions on the Boards of three other ASX-listed resource companies (Stratum Metals Limited, Intra Energy Limited and Frontier Diamonds Limited) and two unlisted public resource companies (Scott Creek Coal Limited and Northam Iron Limited). He was most recently a founding director of ASX-listed Genex Power Limited, a company focused on the origination and development of innovative clean energy generation and electricity storage solutions across Australia. Mr Addison has deep expertise in the management and running of listed companies and an intimate working knowledge of the regulatory, legal and governance environments in which listed companies operate. Other current directorships: Genex Power Limited (ASX: GNX) Former directorships (last 3 years): Frontier Diamonds Limited (ASX: FDX) resigned 1 June 2018 and Intra Energy Limited (ASX: IEC) resigned 28 September 2017. Interests in shares: 1,062,500 fully paid ordinary shares Interests in options: 500,000 options over ordinary shares Name: Title: Qualiﬁcations: Experience and expertise: Michael McNeilly Non-Executive Director appointed 6 November 2019 Mr McNeilly studied Biology at Imperial College London and has a BA in Economics from the American University of Paris. Michael is the Chief Executive Ofﬁcer of Metal Tiger plc (AIM:MTR) and a nominee Director of Cobre appointed by Metal Tiger. As a nominee non-executive director of MOD Resources Limited (previously ASX:MOD), he was actively involved in the Sandﬁre Resources NL (ASX:SFR) recommended scheme offer for MOD Resources which saw Metal Tiger receive circa 6.3 million shares in SFR. Mr McNeilly resigned from the Board of MOD as part of the scheme of arrangement. Mr McNeilly has formerly been a non- executive director of Greatland Gold plc (AIM:GGP) and a non-executive director at Arkle Resources plc (AIM:ARK). Mr McNeilly serves as a director on numerous of MTR’s investment and subsidiary entities. Mr McNeilly previously worked as a corporate ﬁnancier with both Allenby Capital and Arden Partners Limited (AIM:ARDN) as well as a corporate executive at Coinsilium (NEX:COIN) where he worked with early stage blockchain focussed start-ups. Other current directorships: Former directorships (last 3 years): Interests in shares: Nil Nil Nil Interests in options: 500,000 options over ordinary shares (cid:38)(cid:51)(cid:51)(cid:57)(cid:38)(cid:49)(cid:3)(cid:55)(cid:42)(cid:53)(cid:52)(cid:55)(cid:56)(cid:3)(cid:23)(cid:21)(cid:23)(cid:21)(cid:434)(cid:96)!(cid:30)(cid:434) (cid:3)(cid:41)(cid:46)(cid:55)(cid:42)(cid:40)(cid:56)(cid:52)(cid:55)(cid:8)(cid:12)(cid:3)(cid:55)(cid:42)(cid:53)(cid:52)(cid:55)(cid:56) Name: Title: Experience and expertise: Robert Crossman Non-Executive Director until 21 November 2019 Robert had over 20 years’ experience as a corporate adviser focused on M&A and capital markets transactions with extensive experience in resources and energy. He was a Managing Director of Corpac Partners, ABN AMRO Rothschild and NM Rothschild & Sons (Australia) and a former Partner of Gadens Law Firm. Other current directorships: Former directorships (last 3 years): Interests in shares: Interests in options: N/A N/A N/A N/A ‘Other current directorships’ quoted above are current directorships for listed entities only and excludes directorships of all other types of entities, unless otherwise stated. COMPANY SECRETARY Justin Clyne is a qualiﬁed Chartered Company Secretary and Member of the Australian Institute of Company Directors. Justin Clyne was admitted as a Solicitor of the Supreme Court of New South Wales and High Court of Australia in 1996 before gaining admission as a Barrister in 1998. He had 15 years of experience in the legal profession acting for a number of the country’s largest corporations, initially in the areas of corporate and commercial law before dedicating himself full- time to the provision of corporate advisory and company secretarial services. Justin has been a director and/or secretary of a number of public listed and unlisted companies. He has signiﬁcant experience and knowledge in international law, the Corporations Act, the ASX Listing Rules and corporate regulatory requirements generally. MEETINGS OF DIRECTORS The number of meetings of the company’s Board of Directors (‘the Board’) held during the year ended 30 June 2020, and the number of meetings attended by each director were: Martin Holland Andrew Sissian Michael Addison Michael McNeilly Robert Crossman Full Board Attended Held 11 11 7 8 3 11 11 8 8 3 Held: represents the number of meetings held during the time the director held office. (cid:22)(cid:21)(cid:434)(cid:96)(cid:434)(cid:40)(cid:52)(cid:39)(cid:55)(cid:42)(cid:3)(cid:49)(cid:46)(cid:50)(cid:46)(cid:56)(cid:42)(cid:41) WWW.COBRE.COM.AU REMUNERATION REPORT (AUDITED) The remuneration report details the key management personnel remuneration arrangements for the consolidated entity, in accordance with the requirements of the Corporations Act 2001 and its Regulations. Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including all directors. The remuneration report is set out under the following main headings: p Principles used to determine the nature and amount of remuneration p Details of remuneration p Service agreements p Share-based compensation p Additional information p Additional disclosures relating to key management personnel Principles used to determine the nature and amount of remuneration The objective of the consolidated entity’s and company’s executive reward framework is to ensure reward for performance is competitive and appropriate for the results delivered. The framework aligns executive reward with the achievement of strategic objectives and the creation of value for shareholders, and conforms with the market best practice for delivery of reward. The Board ensures that executive reward satisﬁes the following key criteria for good reward governance practices: p competitiveness and reasonableness p acceptability to shareholders p alignment of executive compensation p transparency The board is responsible for determining and reviewing remuneration arrangements for its directors and executives. The performance of the consolidated entity and company depends on the quality of its directors and executives. The remuneration philosophy is to attract, motivate and retain high performance and high quality personnel. The reward framework is designed to align executive reward to shareholders’ interests. The Board have considered that it should seek to enhance shareholders’ interests by: p having economic proﬁt as a core component of plan design p focusing on sustained growth in shareholder wealth, consisting of dividends and growth in share price, and delivering constant or increasing return on assets as well as focusing the executive on key non-ﬁnancial drivers of value p attracting and retaining high calibre executives Additionally, the reward framework should seek to enhance executives’ interests by: p rewarding capability and experience p reﬂecting competitive reward for contribution to growth in shareholder wealth p providing a clear structure for earning rewards In accordance with best practice corporate governance, the structure of non-executive director and executive director remuneration is separate. Non-executive directors remuneration Non-executive directors’ fees are paid within an aggregate limit which is approved by the shareholders from time to time. Retirement payments, if any, are agreed to be determined in accordance with the rules set out in the Corporations Act at the time of the directors retirement or termination. ASX listing rules requires that the aggregate non-executive directors’ remuneration shall be determined periodically by a general meeting. The shareholders have approved an aggregate remuneration of $400,000. (cid:38)(cid:51)(cid:51)(cid:57)(cid:38)(cid:49)(cid:3)(cid:55)(cid:42)(cid:53)(cid:52)(cid:55)(cid:56)(cid:3)(cid:23)(cid:21)(cid:23)(cid:21)(cid:434)(cid:96)!(cid:22)(cid:22)(cid:434) (cid:3)(cid:41)(cid:46)(cid:55)(cid:42)(cid:40)(cid:56)(cid:52)(cid:55)(cid:8)(cid:12)(cid:3)(cid:55)(cid:42)(cid:53)(cid:52)(cid:55)(cid:56) Executive remuneration In determining the level and make-up of executive remuneration, the Board negotiates a remuneration to reﬂect the market salary for a position and individual of comparable responsibility and experience. Remuneration is regularly compared with the external market by participation in industry salary surveys and during recruitment activities generally. If required, the board may engage an external consultant to provide independent advice in the form of a written report detailing market levels of remuneration for comparable executive roles. p base pay and non-monetary beneﬁts p share-based payments The combination of these comprises the executive’s total remuneration. Use of remuneration consultants The company has not made use of remuneration consultants during the current year. Share based remuneration Prior to listing, key management personnel received options as part of their remuneration for work prior to listing. The company does not have a formalised employee share option plan in place. Details of remuneration Amounts of remuneration Details of the remuneration of key management personnel of the consolidated entity are set out in the following tables. Short-term beneﬁts Post- employment beneﬁts Long-term beneﬁts Share- based payments Cash salary and fees $ Cash bonus $ Non- monetary $ Super- annuation $ Long service leave $ Equity- settled $ 2020 Non-Executive Directors: Andrew Sissian Michael Addison Michael McNeilly Robert Crossman* Executive Directors: Martin Holland 128,333 35,000 40,000 45,000 170,000 418,333 – – – – – – – – – – – – * Robert Crossman was a director until his passing on 21 November 2019. 18 May 2018 to 30 June 2019 Non-Executive Directors: Andrew Sissian Robert Crossman Executive Directors: Martin Holland 50,000 50,000 50,000 150,000 – – – – – – – – – – – – 9,500 9,500 – – – – – – – – – – – – – – Total $ 280,167 87,002 62,750 142,825 151,834 52,002 22,750 97,825 296,888 476,388 621,299 1,049,132 – – – – 50,000 50,000 50,000 150,000 (cid:22)(cid:23)(cid:434)(cid:96)(cid:434)(cid:40)(cid:52)(cid:39)(cid:55)(cid:42)(cid:3)(cid:49)(cid:46)(cid:50)(cid:46)(cid:56)(cid:42)(cid:41) WWW.COBRE.COM.AU The proportion of remuneration linked to performance and the ﬁxed proportion are as follows: Fixed remuneration At risk – STI At risk – LTI 18 May 2018 to 30 June 2019 2020 18 May 2018 to 30 June 2019 Name Non-Executive Directors: Andrew Sissian Michael Addison Michael McNeilly Robert Crossman Executive Directors: 2020 46% 40% 64% 32% Martin Holland 38% 100% Service agreements 100% – – 100% – – – – – – – – – – 18 May 2018 to 30 June 2019 – – – – – 2020 54% 60% 36% 68% 62% Remuneration and other terms of employment for key management personnel are formalised in service agreements. Details of these agreements are as follows: Name: Title: Martin Holland Executive Chairman and Managing Director Agreement commenced: 21 November 2019 Term of agreement: Mr Holland’s annual remuneration package under the Executive Services Agreement is $262,800, which consists of a base salary of $240,000 and superannuation of $22,800. Unless terminated by either party at an earlier date, the Executive Services Agreement will automatically terminate on the date that is three years after the date of Admission. Name: Title: Andrew Sissian Finance Director Agreement commenced: 21 November 2019 Term of agreement: Under the Consultancy Agreement, a monthly fee of $10,000 (excluding GST) is payable for the ﬁrst 40 hours of work provided each month. Additional fees are payable at $250 per hour (excluding GST) capped $18,333 per month. Name: Title: Michael Addison Non-Executive Director Agreement commenced: 25 November 2019 Term of agreement: The Non-Executive Director will be paid an annual director’s fee of $60,000 (plus GST if applicable) under the agreement. No additional retirement or termination payment will be made on termination of the agreement. (cid:38)(cid:51)(cid:51)(cid:57)(cid:38)(cid:49)(cid:3)(cid:55)(cid:42)(cid:53)(cid:52)(cid:55)(cid:56)(cid:3)(cid:23)(cid:21)(cid:23)(cid:21)(cid:434)(cid:96)!(cid:22)(cid:24)(cid:434) (cid:3)(cid:41)(cid:46)(cid:55)(cid:42)(cid:40)(cid:56)(cid:52)(cid:55)(cid:8)(cid:12)(cid:3)(cid:55)(cid:42)(cid:53)(cid:52)(cid:55)(cid:56) Name: Title: Michael McNeilly Non-Executive Director Agreement commenced: 6 November 2019 Term of agreement: The Non-Executive Director will be paid an annual Director’s fee of $60,000 (plus GST if applicable) under the agreement. No additional retirement or termination payment will be made on termination of the agreement. Key management personnel have no entitlement to termination payments in the event of removal for misconduct. Prior to the service arrangements being in place KMPs were paid consultant fees during the year in respect of services provided for the IPO and other services to the company. Share-based compensation Issue of shares There were no shares issued to directors and other key management personnel as part of compensation during the year ended 30 June 2020. Options The terms and conditions of each grant of options over ordinary shares affecting remuneration of directors and other key management personnel in this ﬁnancial year or future reporting years are as follows: Grant date Vesting date and exercisable date Expiry date Exercise price Fair value per option at grant date 24 September 2019 24 September 2019 23 September 2024 29 November 2019 29 November 2019 23 September 2024 $0.2000 $0.2000 $0.045 $0.104 Name Number of options granted Grant date Vesting date and exercisable date Expiry date Exercise price Fair value per option at grant date Martin Holland 6,525,000 24 September 2019 24 September 2019 23 September 2024 $0.2000 $0.045 Andrew Sissian 3,337,000 24 September 2019 24 September 2019 23 September 2024 $0.2000 $0.045 Robert Crossman 2,150,000 24 September 2019 24 September 2019 23 September 2024 $0.2000 $0.045 Michael McNeilly 500,000 24 September 2019 24 September 2019 23 September 2024 $0.2000 $0.045 Michael Addison 500,000 29 November 2019 29 November 2019 23 September 2024 $0.2000 $0.104 Options granted carry no dividend or voting rights. Additional information The earnings of the consolidated entity for the two years to 30 June 2020 are summarised below: Loss after income tax 2020 $ 18 May 2018 to 30 June 2019 $ (1,988,417) (150,210) (cid:22)(cid:25)(cid:434)(cid:96)(cid:434)(cid:40)(cid:52)(cid:39)(cid:55)(cid:42)(cid:3)(cid:49)(cid:46)(cid:50)(cid:46)(cid:56)(cid:42)(cid:41) WWW.COBRE.COM.AU The factors that are considered to indicate management performance are summarised below: Share price at ﬁnancial year end ($)* Basic earnings per share (cents per share) Diluted earnings per share (cents per share) 2020 $ 0.18 (2.93) (2.93) 18 May 2018 to 30 June 2019 $ – (1.79) (1.79) * On 29 January 2020, the company was admitted to the official list of the ASX with the trading of the Company’s shares commencing on 31 January 2020. Additional disclosures relating to key management personnel Shareholding The number of shares in the company held during the ﬁnancial year by each director and other members of key management personnel of the consolidated entity, including their personally related parties, is set out below: Ordinary shares Martin Holland Andrew Sissian Robert Crossman* Michael Addison Balance at the start of the year Held at appointment Additions Disposals/ other Balance at the end of the year 10,524,334 4,799,052 7,250,025 – – – – 1,062,500 500,000 50,000 – – – – (7,250,025) – 11,024,334 4,849,052 – 1,062,500 22,573,411 1,062,500 550,000 (7,250,025) 16,935,886 * Robert Crossman was a director until his passing on 21 November 2019. Option holding The number of options over ordinary shares in the company held during the ﬁnancial year by each director and other members of key management personnel of the consolidated entity, including their personally related parties, is set out below: Balance at the start of the year Grant as remuneration Exercised Expired/ forfeited/ other Balance at the end of the year Options over ordinary shares Martin Holland Andrew Sissian Robert Crossman* Michael Addison Michael McNeilly – – – – – – 6,525,000 3,337,000 2,150,000 500,000 500,000 13,012,000 – – – – – – – – (2,150,000) – – 6,525,000 3,337,000 – 500,000 500,000 (2,150,000) 10,862,000 * Robert Crossman was a director until his passing on 21 November 2019. (cid:38)(cid:51)(cid:51)(cid:57)(cid:38)(cid:49)(cid:3)(cid:55)(cid:42)(cid:53)(cid:52)(cid:55)(cid:56)(cid:3)(cid:23)(cid:21)(cid:23)(cid:21)(cid:434)(cid:96)!(cid:22)(cid:26)(cid:434) (cid:3)(cid:41)(cid:46)(cid:55)(cid:42)(cid:40)(cid:56)(cid:52)(cid:55)(cid:8)(cid:12)(cid:3)(cid:55)(cid:42)(cid:53)(cid:52)(cid:55)(cid:56) Options over ordinary shares Martin Holland Andrew Sissian Michael Addison Michael McNeilly Vested and exercisable Vested and unexercisable Balance at the end of the year 6,525,000 3,337,000 500,000 500,000 10,862,000 – – – – – 6,525,000 3,337,000 500,000 500,000 10,862,000 Loans to key management personnel and their related parties There are no loans to key management personnel and their related parties. This concludes the remuneration report, which has been audited. SHARES UNDER OPTION Unissued ordinary shares of Cobre Limited under option at the date of this report are as follows: Grant date Expiry date Exercise price Number under option 24 September 2019 29 November 2019 17 January 2020 23 September 2024 23 September 2024 16 January 2023 $0.2000 $0.2000 $0.3000 12,749,000 500,000 2,000,000 15,249,000 No person entitled to exercise the options had or has any right by virtue of the option to participate in any share issue of the company or of any other body corporate. SHARES ISSUED ON THE EXERCISE OF OPTIONS There were no ordinary shares of Cobre Limited issued on the exercise of options during the year ended 30 June 2020 and up to the date of this report. INDEMNITY AND INSURANCE OF OFFICERS The company has indemniﬁed the directors and executives of the company for costs incurred, in their capacity as a director or executive, for which they may be held personally liable, except where there is a lack of good faith. During the ﬁnancial year, the company paid a premium in respect of a contract to insure the directors and executives of the company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium. INDEMNITY AND INSURANCE OF AUDITOR To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst & Young, as part of the terms of its audit engagement agreement against claims by third parties arising from the audit (for an unspeciﬁed amount). No payment has been made to indemnify Ernst & Young during or since the ﬁnancial year. (cid:22)(cid:27)(cid:434)(cid:96)(cid:434)(cid:40)(cid:52)(cid:39)(cid:55)(cid:42)(cid:3)(cid:49)(cid:46)(cid:50)(cid:46)(cid:56)(cid:42)(cid:41) WWW.COBRE.COM.AU PROCEEDINGS ON BEHALF OF THE COMPANY No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the company, or to intervene in any proceedings to which the company is a party for the purpose of taking responsibility on behalf of the company for all or part of those proceedings. NON-AUDIT SERVICES Details of the amounts paid or payable to the auditor for non-audit services provided during the ﬁnancial year by the auditor are outlined in note 19 to the ﬁnancial statements. The directors are satisﬁed that the provision of non-audit services during the ﬁnancial year, by the auditor (or by another person or ﬁrm on the auditor’s behalf), is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The directors are of the opinion that the services as disclosed in note 19 to the ﬁnancial statements do not compromise the external auditor’s independence requirements of the Corporations Act 2001 for the following reasons: p all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity of the auditor; and p none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants issued by the Accounting Professional and Ethical Standards Board, including reviewing or auditing the auditor’s own work, acting in a management or decision-making capacity for the company, acting as advocate for the company or jointly sharing economic risks and rewards. OFFICERS OF THE COMPANY WHO ARE FORMER PARTNERS OF ERNST &YOUNG There are no ofﬁcers of the company who are former partners of Ernst &Young. AUDITOR’S INDEPENDENCE DECLARATION A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out immediately after this directors’ report. AUDITOR Ernst &Young continues in ofﬁce in accordance with section 327 of the Corporations Act 2001. This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations Act 2001. On behalf of the directors Andrew Sissian Finance Director 18 September 2020 (cid:38)(cid:51)(cid:51)(cid:57)(cid:38)(cid:49)(cid:3)(cid:55)(cid:42)(cid:53)(cid:52)(cid:55)(cid:56)(cid:3)(cid:23)(cid:21)(cid:23)(cid:21)(cid:434)(cid:96)!(cid:22)(cid:28)(cid:434) WWW.COBRE.COM.AU(cid:22)(cid:29)(cid:434)(cid:200)(cid:460)(cid:26)(cid:107)(cid:24)(cid:127)(cid:41)(cid:3)(cid:88)(cid:70)(cid:97)(cid:70)(cid:137)(cid:41)(cid:37)(cid:564)(cid:564)(cid:17) Ernst & Young 200 George Street Sydney NSW 2000 Australia GPO Box 2646 Sydney NSW 2001 Auditor’s Independence Declaration Tel: +61 2 9248 5555 Fax: +61 2 9248 5959 ey.com/au Auditor’s Independence Declaration to the Directors of Cobre Limited As lead auditor for the audit of the financial report of Cobre Limited for the year ended 30 June 2020, I declare to the best of my knowledge and belief, there have been: a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and b) no contraventions of any applicable code of professional conduct in relation to the audit. This declaration is in respect of Cobre Limited and the entities it controlled during the financial year. Ernst & Young 200 George Street Sydney NSW 2000 Australia GPO Box 2646 Sydney NSW 2001 Tel: +61 2 9248 5555 Fax: +61 2 9248 5959 ey.com/au Auditor’s Independence Declaration to the Directors of Cobre Limited Ernst & Young As lead auditor for the audit of the financial report of Cobre Limited for the year ended 30 June 2020, I declare to the best of my knowledge and belief, there have been: a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and b) no contraventions of any applicable code of professional conduct in relation to the audit. Ryan Fisk This declaration is in respect of Cobre Limited and the entities it controlled during the financial year. Partner 18 September 2020 Ernst & Young Ryan Fisk Partner 18 September 2020 A member firm of Ernst & Young Global Limited (cid:3) Liability limited by a scheme approved under Professional Standards Legislation (cid:38)(cid:51)(cid:51)(cid:57)(cid:38)(cid:49)(cid:3)(cid:55)(cid:42)(cid:53)(cid:52)(cid:55)(cid:56)(cid:3)(cid:23)(cid:21)(cid:23)(cid:21)(cid:434)(cid:96)!(cid:22)(cid:30)(cid:434) A member firm of Ernst & Young Global Limited (cid:3) Liability limited by a scheme approved under Professional Standards Legislation WWW.COBRE.COM.AU(cid:23)(cid:21)(cid:434)(cid:200)(cid:460)(cid:26)(cid:107)(cid:24)(cid:127)(cid:41)(cid:3)(cid:88)(cid:70)(cid:97)(cid:70)(cid:137)(cid:41)(cid:37)(cid:560)(cid:54)(cid:87)(cid:68)(cid:87)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:83)(cid:85)(cid:82)(cid:496)(cid:87)(cid:3)(cid:82)(cid:85)(cid:3)(cid:79)(cid:82)(cid:86)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3) other comprehensive income (cid:43)(cid:83)(cid:86)(cid:3)(cid:88)(cid:76)(cid:73)(cid:3)(cid:93)(cid:73)(cid:69)(cid:86)(cid:3)(cid:73)(cid:82)(cid:72)(cid:73)(cid:72)(cid:3)(cid:564)(cid:521)(cid:3)(cid:47)(cid:89)(cid:82)(cid:73)(cid:3)(cid:566)(cid:521)(cid:566)(cid:521) (cid:560)(cid:17) Revenue Other income Interest revenue calculated using the effective interest method Expenses Corporate and administration expenses Tenement expenses Employee beneﬁts expense Share based payment expense Depreciation and amortisation expense IPO expenses Loss before income tax expense Income tax expense Consolidated Note 2020 $ 18 May 2018 to 30 June 2019 $ 5 6 28 7 42,949 19,160 (946,325) (37,952) (109,500) (631,824) (172) (324,753) (1,988,417) – – (150,210) – – – – – (150,210) – – Loss after income tax expense for the year (1,988,417) (150,210) Other comprehensive income Items that will not be reclassified subsequently to profit or loss Gain on the revaluation of ﬁnancial assets at fair value through other comprehensive income, net of tax Other comprehensive income for the year, net of tax 31,287 31,287 – – Total comprehensive income for the year (1,957,130) (150,210) Loss for the year is attributable to: Non-controlling interest Owners of Cobre Limited Total comprehensive income for the year is attributable to: Non-controlling interest Owners of Cobre Limited Basic earnings per share Diluted earnings per share 27 27 (16,172) (1,972,245) (1,988,417) (16,172) (1,940,958) (1,957,130) Cents (2.93) (2.93) – (150,210) (150,210) – (150,210) (150,210) Cents (1.79) (1.79) The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes. (cid:38)(cid:51)(cid:51)(cid:57)(cid:38)(cid:49)(cid:3)(cid:55)(cid:42)(cid:53)(cid:52)(cid:55)(cid:56)(cid:3)(cid:23)(cid:21)(cid:23)(cid:21)(cid:434)(cid:96)!(cid:23)(cid:22)(cid:434) (cid:3)(cid:43)(cid:46)(cid:51)(cid:38)(cid:51)(cid:40)(cid:46)(cid:38)(cid:49)(cid:3)(cid:8)(cid:56)(cid:38)(cid:56)(cid:42)(cid:50)(cid:42)(cid:51)(cid:56)(cid:8) Statement of (cid:496)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:83)(cid:82)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81) (cid:38)(cid:87)(cid:3)(cid:69)(cid:88)(cid:3)(cid:564)(cid:521)(cid:3)(cid:47)(cid:89)(cid:82)(cid:73)(cid:3)(cid:566)(cid:521)(cid:566)(cid:521) Assets Current assets Cash and cash equivalents Trade and other receivables Total current assets Non-current assets Financial assets at fair value through other comprehensive income Property, plant and equipment Exploration and evaluation Financial assets Total non-current assets Total assets Liabilities Current liabilities Trade and other payables Total current liabilities Total liabilities Net assets Equity Issued capital Reserves Accumulated losses Equity attributable to the owners of Cobre Limited Non-controlling interest Total equity Consolidated Note 2020 $ 18 May 2018 to 30 June 2019 $ 8 9 10 11 12 13 14 7,171,872 162,577 7,334,449 74,236 4,152 2,505,440 20,000 2,603,828 9,938,277 830,853 830,853 830,853 9,107,424 11,932,725 (702,846) (2,122,455) 9,107,424 – 9,107,424 178,208 62,323 240,531 – – 710,302 – 710,302 950,833 200,031 200,031 200,031 750,802 815,597 – (150,210) 665,387 85,415 750,802 The above statement of financial position should be read in conjunction with the accompanying notes. (cid:23)(cid:23)(cid:434)(cid:96)(cid:434)(cid:40)(cid:52)(cid:39)(cid:55)(cid:42)(cid:3)(cid:49)(cid:46)(cid:50)(cid:46)(cid:56)(cid:42)(cid:41) WWW.COBRE.COM.AU Statement of changes in equity (cid:43)(cid:83)(cid:86)(cid:3)(cid:88)(cid:76)(cid:73)(cid:3)(cid:93)(cid:73)(cid:69)(cid:86)(cid:3)(cid:73)(cid:82)(cid:72)(cid:73)(cid:72)(cid:3)(cid:564)(cid:521)(cid:3)(cid:47)(cid:89)(cid:82)(cid:73)(cid:3)(cid:566)(cid:521)(cid:566)(cid:521) Issued capital $ Accumulated losses $ Non- controlling interest $ Consolidated Balance at 18 May 2018 Loss after income tax expense for the year Other comprehensive income for the year, net of tax Total comprehensive income for the year Non-controlling interest at acquisition Transactions with owners in their capacity as owners: Contributions of equity, net of transaction costs (note 13) – – – – – 815,597 – (150,210) – (150,210) – – Balance at 30 June 2019 815,597 (150,210) 85,415 85,415 85,415 – – – – – Total equity $ – (150,210) – (150,210) 815,597 750,802 Total equity $ Consolidated Balance at 1 July 2019 Loss after income tax expense for the year Other comprehensive income for the year, net of tax Total comprehensive income for the year Consideration to gain 100% ownership of Toucan Gold Pty Ltd Transfer on gain of 100% ownership of Toucan Gold Pty Ltd Transactions with owners in their capacity as owners: Contributions of equity, net of transaction costs (note 13) Share based payments Issued capital $ 815,597 – – – – – Reserves (Note 14) $ Accumulated losses $ Non- controlling interest $ – – (150,210) 85,415 750,802 (1,972,245) (16,172) (1,988,417) 31,287 – – 31,287 31,287 (1,972,245) (16,172) (1,957,130) (1,575,200) 69,243 – – – – – (1,575,200) (69,243) – – – – 11,117,128 771,824 9,107,424 11,117,128 – – 771,824 Balance at 30 June 2020 11,932,725 (702,846) (2,122,455) The above statement of changes in equity should be read in conjunction with the accompanying notes. (cid:38)(cid:51)(cid:51)(cid:57)(cid:38)(cid:49)(cid:3)(cid:55)(cid:42)(cid:53)(cid:52)(cid:55)(cid:56)(cid:3)(cid:23)(cid:21)(cid:23)(cid:21)(cid:434)(cid:96)!(cid:23)(cid:24)(cid:434) (cid:3)(cid:43)(cid:46)(cid:51)(cid:38)(cid:51)(cid:40)(cid:46)(cid:38)(cid:49)(cid:3)(cid:8)(cid:56)(cid:38)(cid:56)(cid:42)(cid:50)(cid:42)(cid:51)(cid:56)(cid:8) Statement of (cid:70)(cid:68)(cid:86)(cid:75)(cid:3)(cid:497)(cid:82)(cid:90)(cid:86) (cid:43)(cid:83)(cid:86)(cid:3)(cid:88)(cid:76)(cid:73)(cid:3)(cid:93)(cid:73)(cid:69)(cid:86)(cid:3)(cid:73)(cid:82)(cid:72)(cid:73)(cid:72)(cid:3)(cid:564)(cid:521)(cid:3)(cid:47)(cid:89)(cid:82)(cid:73)(cid:3)(cid:566)(cid:521)(cid:566)(cid:521) Consolidated Note 2020 $ 18 May 2018 to 30 June 2019 $ Cash ﬂows from operating activities Interest received Payments to suppliers and employees (inclusive of GST) Payments for security deposits 19,160 (1,476,897) (20,000) Net cash used in operating activities 25 (1,477,737) Cash ﬂows from investing activities Payments for property, plant and equipment Payments for exploration and evaluation Cash acquired on acquisition of Toucan Gold Pty Ltd Payment to acquire remaining 20% of Toucan Gold Pty Ltd Net cash used in investing activities Cash ﬂows from ﬁnancing activities Proceeds from issue of shares Proceeds from borrowings Share issue transaction costs Net cash from ﬁnancing activities Net increase in cash and cash equivalents Cash and cash equivalents at the beginning of the ﬁnancial year (4,324) (1,181,203) – (528,000) (1,713,527) 10,875,286 – (690,358) 10,184,928 6,993,664 178,208 Cash and cash equivalents at the end of the ﬁnancial year 8 7,171,872 The above statement of cash flows should be read in conjunction with the accompanying notes. – (210) – (210) – (296,014) 22,441 – (273,573) 474,518 4,500 (27,027) 451,991 178,208 – 178,208 (cid:23)(cid:25)(cid:434)(cid:96)(cid:434)(cid:40)(cid:52)(cid:39)(cid:55)(cid:42)(cid:3)(cid:49)(cid:46)(cid:50)(cid:46)(cid:56)(cid:42)(cid:41) WWW.COBRE.COM.AU (cid:38)(cid:51)(cid:51)(cid:57)(cid:38)(cid:49)(cid:3)(cid:55)(cid:42)(cid:53)(cid:52)(cid:55)(cid:56)(cid:3)(cid:23)(cid:21)(cid:23)(cid:21)(cid:434)(cid:96)!(cid:23)(cid:26)(cid:434) WWW.COBRE.COM.AU(cid:23)(cid:27)(cid:434)(cid:200)(cid:460)(cid:26)(cid:107)(cid:24)(cid:127)(cid:41)(cid:3)(cid:88)(cid:70)(cid:97)(cid:70)(cid:137)(cid:41)(cid:37)(cid:519)(cid:519)(cid:17) Notes to the (cid:496)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:86)(cid:87)(cid:68)(cid:87)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86) (cid:51)(cid:52)(cid:56)(cid:42)(cid:3)(cid:550)(cid:19)(cid:3)(cid:8)(cid:46)(cid:44)(cid:51)(cid:46)(cid:43)(cid:46)(cid:40)(cid:38)(cid:51)(cid:56)(cid:3)(cid:38)(cid:40)(cid:40)(cid:52)(cid:57)(cid:51)(cid:56)(cid:46)(cid:51)(cid:44)(cid:3)(cid:53)(cid:52)(cid:49)(cid:46)(cid:40)(cid:46)(cid:42)(cid:8) The principal accounting policies adopted in the preparation of the ﬁnancial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. New or amended Accounting Standards and Interpretations adopted The consolidated entity has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (‘AASB’) that are mandatory for the current reporting period. Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted. The adoption of these Accounting Standards and Interpretations did not have any signiﬁcant impact on the ﬁnancial performance or position of the consolidated entity. The following Accounting Standards and Interpretations are most relevant to the consolidated entity: AASB 16 Leases The consolidated entity has adopted AASB 16 from 1 July 2019. The standard replaces AASB 117 ‘Leases’ and for lessees eliminates the classiﬁcations of operating leases and ﬁnance leases. Except for short-term leases and leases of low-value assets, right-of-use assets and corresponding lease liabilities are recognised in the statement of ﬁnancial position. Straight-line operating lease expense recognition is replaced with a depreciation charge for the right-of-use assets (included in operating costs) and an interest expense on the recognised lease liabilities (included in ﬁnance costs). In the earlier periods of the lease, the expenses associated with the lease under AASB 16 will be higher when compared to lease expenses under AASB 117. However, EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) results improve as the operating expense is now replaced by interest expense and depreciation in proﬁt or loss. For classiﬁcation within the statement of cash ﬂows, the interest portion is disclosed in operating activities and the principal portion of the lease payments are separately disclosed in ﬁnancing activities. For lessor accounting, the standard does not substantially change how a lessor accounts for leases. The consolidated entity does not have any leases and the impact has not been material. Comparatives The company was incorporated on 18 May 2018. The comparative information covers the period from that date until 30 June 2019. (cid:38)(cid:51)(cid:51)(cid:57)(cid:38)(cid:49)(cid:3)(cid:55)(cid:42)(cid:53)(cid:52)(cid:55)(cid:56)(cid:3)(cid:23)(cid:21)(cid:23)(cid:21)(cid:434)(cid:96)!(cid:23)(cid:28)(cid:434) (cid:3)(cid:51)(cid:52)(cid:56)(cid:42)(cid:8)(cid:3)(cid:56)(cid:52)(cid:3)(cid:56)(cid:45)(cid:42)(cid:3)(cid:43)(cid:46)(cid:51)(cid:38)(cid:51)(cid:40)(cid:46)(cid:38)(cid:49)(cid:3)(cid:8)(cid:56)(cid:38)(cid:56)(cid:42)(cid:50)(cid:42)(cid:51)(cid:56)(cid:8) Basis of preparation These general purpose ﬁnancial statements have been prepared in accordance with Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (‘AASB’) and the Corporations Act 2001, as appropriate for for-proﬁt oriented entities. These ﬁnancial statements also comply with International Financial Reporting Standards as issued by the International Accounting Standards Board (‘IASB’). Historical cost convention The ﬁnancial statements have been prepared under the historical cost convention, except for, where applicable, the revaluation of ﬁnancial assets and liabilities at fair value through proﬁt or loss, ﬁnancial assets at fair value through other comprehensive income, investment properties, certain classes of property, plant and equipment and derivative ﬁnancial instruments. Critical accounting estimates The preparation of the ﬁnancial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the consolidated entity’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are signiﬁcant to the ﬁnancial statements, are disclosed in note 2. Parent entity information In accordance with the Corporations Act 2001, these ﬁnancial statements present the results of the consolidated entity only. Supplementary information about the parent entity is disclosed in note 22. Principles of consolidation The consolidated ﬁnancial statements incorporate the assets and liabilities of all subsidiaries of Cobre Limited (‘company’ or ‘parent entity’) as at 30 June 2020 and the results of all subsidiaries for the year then ended. Cobre Limited and its subsidiaries together are referred to in these ﬁnancial statements as the ‘consolidated entity’. Subsidiaries are all those entities over which the consolidated entity has control. The consolidated entity controls an entity when the consolidated entity 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 consolidated entity. They are de-consolidated from the date that control ceases. Intercompany transactions, balances and unrealised gains on transactions between entities in the consolidated entity 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 consolidated entity. The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest, without the loss of control, is accounted for as an equity transaction, where the difference between the consideration transferred and the book value of the share of the non-controlling interest acquired is recognised directly in equity attributable to the parent. Non-controlling interest in the results and equity of subsidiaries are shown separately in the statement of proﬁt or loss and other comprehensive income, statement of ﬁnancial position and statement of changes in equity of the consolidated entity. Losses incurred by the consolidated entity are attributed to the non-controlling interest in full, even if that results in a deﬁcit balance. Where the consolidated entity loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-controlling interest in the subsidiary together with any cumulative translation differences recognised in equity. The consolidated entity recognises the fair value of the consideration received and the fair value of any investment retained together with any gain or loss in proﬁt or loss. Operating segments Operating segments are presented using the ‘management approach’, where the information presented is on the same basis as the internal reports provided to the Chief Operating Decision Makers (‘CODM’). The CODM is responsible for the allocation of resources to operating segments and assessing their performance. (cid:23)(cid:29)(cid:434)(cid:96)(cid:434)(cid:40)(cid:52)(cid:39)(cid:55)(cid:42)(cid:3)(cid:49)(cid:46)(cid:50)(cid:46)(cid:56)(cid:42)(cid:41) WWW.COBRE.COM.AU Revenue recognition The consolidated entity recognises revenue as follows: Other revenue Other revenue is recognised when it is received or when the right to receive payment is established. Income tax The income tax expense or beneﬁt for the period is the tax payable on that period’s taxable income based on the applicable income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable to temporary differences, unused tax losses and the adjustment recognised for prior periods, where applicable. Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied when the assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted, except for: p When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting nor taxable proﬁts; or p When the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures, and the timing of the reversal can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future. 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. The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred tax assets recognised are reduced to the extent that it is no longer probable that future taxable proﬁts will be available for the carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent that it is probable that there are future taxable proﬁts available to recover the asset. Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets against current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable authority on either the same taxable entity or different taxable entities which intend to settle simultaneously. (cid:40)(cid:89)(cid:86)(cid:86)(cid:73)(cid:82)(cid:88)(cid:3)(cid:69)(cid:82)(cid:72)(cid:3)(cid:82)(cid:83)(cid:82)(cid:18)(cid:71)(cid:89)(cid:86)(cid:86)(cid:73)(cid:82)(cid:88)(cid:3)(cid:71)(cid:80)(cid:69)(cid:87)(cid:87)(cid:77)(cid:507)(cid:71)(cid:69)(cid:88)(cid:77)(cid:83)(cid:82) Assets and liabilities are presented in the statement of ﬁnancial position based on current and non-current classiﬁcation. An asset is classiﬁed as current when: it is either expected to be realised or intended to be sold or consumed in the consolidated entity’s normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months after the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period. All other assets are classiﬁed as non-current. A liability is classiﬁed as current when: it is either expected to be settled in the consolidated entity’s normal operating cycle; it is held primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities are classiﬁed as non-current. Cash and cash equivalents Cash and cash equivalents includes cash on hand, deposits held at call with ﬁnancial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insigniﬁcant risk of changes in value. Trade and other receivables Other receivables are recognised at amortised cost, less any allowance for expected credit losses. (cid:38)(cid:51)(cid:51)(cid:57)(cid:38)(cid:49)(cid:3)(cid:55)(cid:42)(cid:53)(cid:52)(cid:55)(cid:56)(cid:3)(cid:23)(cid:21)(cid:23)(cid:21)(cid:434)(cid:96)!(cid:23)(cid:30)(cid:434) (cid:3)(cid:51)(cid:52)(cid:56)(cid:42)(cid:8)(cid:3)(cid:56)(cid:52)(cid:3)(cid:56)(cid:45)(cid:42)(cid:3)(cid:43)(cid:46)(cid:51)(cid:38)(cid:51)(cid:40)(cid:46)(cid:38)(cid:49)(cid:3)(cid:8)(cid:56)(cid:38)(cid:56)(cid:42)(cid:50)(cid:42)(cid:51)(cid:56)(cid:8) (cid:46)(cid:82)(cid:90)(cid:73)(cid:87)(cid:88)(cid:81)(cid:73)(cid:82)(cid:88)(cid:87)(cid:3)(cid:69)(cid:82)(cid:72)(cid:3)(cid:83)(cid:88)(cid:76)(cid:73)(cid:86)(cid:3)(cid:507)(cid:82)(cid:69)(cid:82)(cid:71)(cid:77)(cid:69)(cid:80)(cid:3)(cid:69)(cid:87)(cid:87)(cid:73)(cid:88)(cid:87) Investments and other ﬁnancial assets are initially measured at fair value. Transaction costs are included as part of the initial measurement, except for ﬁnancial assets at fair value through proﬁt or loss. Such assets are subsequently measured at either amortised cost or fair value depending on their classiﬁcation. Classiﬁcation is determined based on both the business model within which such assets are held and the contractual cash ﬂow characteristics of the ﬁnancial asset unless an accounting mismatch is being avoided. Financial assets are derecognised when the rights to receive cash ﬂows have expired or have been transferred and the consolidated entity has transferred substantially all the risks and rewards of ownership. When there is no reasonable expectation of recovering part or all of a ﬁnancial asset, it’s carrying value is written off. Financial assets at amortised cost A ﬁnancial asset is measured at amortised cost only if both of the following conditions are met: (i) it is held within a business model whose objective is to hold assets in order to collect contractual cash ﬂows; and (ii) the contractual terms of the ﬁnancial asset represent contractual cash ﬂows that are solely payments of principal and interest. Financial assets at fair value through other comprehensive income Financial assets at fair value through other comprehensive income include equity investments which the consolidated entity intends to hold for the foreseeable future and has irrevocably elected to classify them as such upon initial recognition. Property, plant and equipment Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Depreciation is calculated on a straight-line basis to write off the net cost of each item of property, plant and equipment (excluding land) over their expected useful lives as follows: Plant and equipment 5 years The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date. Leasehold improvements are depreciated over the unexpired period of the lease or the estimated useful life of the assets, whichever is shorter. An item of property, plant and equipment is derecognised upon disposal or when there is no future economic beneﬁt to the consolidated entity. Gains and losses between the carrying amount and the disposal proceeds are taken to proﬁt or loss. Exploration and evaluation assets Exploration and evaluation expenditure in relation to separate areas of interest for which rights of tenure are current is carried forward as an asset in the statement of ﬁnancial position where it is expected that the expenditure will be recovered through the successful development and exploitation of an area of interest, or by its sale; or exploration activities are continuing in an area and activities have not reached a stage which permits a reasonable estimate of the existence or otherwise of economically recoverable reserves. Where a project or an area of interest has been abandoned, the expenditure incurred thereon is written off in the year in which the decision is made. (cid:46)(cid:81)(cid:84)(cid:69)(cid:77)(cid:86)(cid:81)(cid:73)(cid:82)(cid:88)(cid:3)(cid:83)(cid:74)(cid:3)(cid:82)(cid:83)(cid:82)(cid:18)(cid:507)(cid:82)(cid:69)(cid:82)(cid:71)(cid:77)(cid:69)(cid:80)(cid:3)(cid:69)(cid:87)(cid:87)(cid:73)(cid:88)(cid:87) Non-ﬁnancial assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. Recoverable amount is the higher of an asset’s fair value less costs of disposal and value-in-use. The value-in-use is the present value of the estimated future cash ﬂows relating to the asset using a pre-tax discount rate speciﬁc to the asset or cash-generating unit to which the asset belongs. Assets that do not have independent cash ﬂows are grouped together to form a cash-generating unit. (cid:24)(cid:21)(cid:434)(cid:96)(cid:434)(cid:40)(cid:52)(cid:39)(cid:55)(cid:42)(cid:3)(cid:49)(cid:46)(cid:50)(cid:46)(cid:56)(cid:42)(cid:41) WWW.COBRE.COM.AU Trade and other payables These amounts represent liabilities for goods and services provided to the consolidated entity prior to the end of the ﬁnancial year and which are unpaid. Due to their short-term nature they are measured at amortised cost and are not discounted. The amounts are unsecured and are usually paid within 30 days of recognition. (cid:42)(cid:81)(cid:84)(cid:80)(cid:83)(cid:93)(cid:73)(cid:73)(cid:3)(cid:70)(cid:73)(cid:82)(cid:73)(cid:507)(cid:88)(cid:87) Share-based payments Equity-settled share-based compensation beneﬁts are provided to employees. Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in exchange for the rendering of services. Cash-settled transactions are awards of cash for the exchange of services, where the amount of cash is determined by reference to the share price. The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined using either the Binomial or Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, 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, together with non-vesting conditions that do not determine whether the consolidated entity receives the services that entitle the employees to receive payment. No account is taken of any other vesting conditions. The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over the vesting period. The cumulative charge to proﬁt or loss is calculated based on the grant date fair value of the award, the best estimate of the number of awards that are likely to vest and the expired portion of the vesting period. The amount recognised in proﬁt or loss for the period is the cumulative amount calculated at each reporting date less amounts already recognised in previous periods. The cost of cash-settled transactions is initially, and at each reporting date until vested, determined by applying either the Binomial or Black-Scholes option pricing model, taking into consideration the terms and conditions on which the award was granted. The cumulative charge to proﬁt or loss until settlement of the liability is calculated as follows: p during the vesting period, the liability at each reporting date is the fair value of the award at that date multiplied by the expired portion of the vesting period. p from the end of the vesting period until settlement of the award, the liability is the full fair value of the liability at the reporting date. Market conditions are taken into consideration in determining fair value. Therefore any awards subject to market conditions are considered to vest irrespective of whether or not that market condition has been met, provided all other conditions are satisﬁed. If equity-settled awards are modiﬁed, as a minimum an expense is recognised as if the modiﬁcation has not been made. An additional expense is recognised, over the remaining vesting period, for any modiﬁcation that increases the total fair value of the share-based compensation beneﬁt as at the date of modiﬁcation. If the non-vesting condition is within the control of the consolidated entity or employee, the failure to satisfy the condition is treated as a cancellation. If the condition is not within the control of the consolidated entity or employee and is not satisﬁed during the vesting period, any remaining expense for the award is recognised over the remaining vesting period, unless the award is forfeited. If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining expense is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled and new award is treated as if they were a modiﬁcation. (cid:38)(cid:51)(cid:51)(cid:57)(cid:38)(cid:49)(cid:3)(cid:55)(cid:42)(cid:53)(cid:52)(cid:55)(cid:56)(cid:3)(cid:23)(cid:21)(cid:23)(cid:21)(cid:434)(cid:96)!(cid:24)(cid:22)(cid:434) (cid:3)(cid:51)(cid:52)(cid:56)(cid:42)(cid:8)(cid:3)(cid:56)(cid:52)(cid:3)(cid:56)(cid:45)(cid:42)(cid:3)(cid:43)(cid:46)(cid:51)(cid:38)(cid:51)(cid:40)(cid:46)(cid:38)(cid:49)(cid:3)(cid:8)(cid:56)(cid:38)(cid:56)(cid:42)(cid:50)(cid:42)(cid:51)(cid:56)(cid:8) Fair value measurement Assets and liabilities measured at fair value are classiﬁed into three levels, using a fair value hierarchy that reﬂects the signiﬁcance of the inputs used in making the measurements. Classiﬁcations are reviewed at each reporting date and transfers between levels are determined based on a reassessment of the lowest level of input that is signiﬁcant to the fair value measurement. For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is either not available or when the valuation is deemed to be signiﬁcant. External valuers are selected based on market knowledge and reputation. Where there is a signiﬁcant change in fair value of an asset or liability from one period to another, an analysis is undertaken, which includes a veriﬁcation of the major inputs applied in the latest valuation and a comparison, where applicable, with external sources of data. Issued capital Ordinary shares are classiﬁed as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. Earnings per share Basic earnings per share Basic earnings per share is calculated by dividing the proﬁt attributable to the owners of Cobre Limited, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the ﬁnancial year, adjusted for bonus elements in ordinary shares issued during the ﬁnancial year. Diluted earnings per share Diluted earnings per share adjusts the ﬁgures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other ﬁnancing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares. Goods and Services Tax (‘GST’) and other similar taxes Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part of the expense. Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the tax authority is included in other receivables or other payables in the statement of ﬁnancial position. Cash ﬂows are presented on a gross basis. The GST components of cash ﬂows arising from investing or ﬁnancing activities which are recoverable from, or payable to the tax authority, are presented as operating cash ﬂows. Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority. New Accounting Standards and Interpretations not yet mandatory or early adopted Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory, have not been early adopted by the consolidated entity for the annual reporting period ended 30 June 2020. The consolidated entity has not yet assessed the impact of these new or amended Accounting Standards and Interpretations. (cid:24)(cid:23)(cid:434)(cid:96)(cid:434)(cid:40)(cid:52)(cid:39)(cid:55)(cid:42)(cid:3)(cid:49)(cid:46)(cid:50)(cid:46)(cid:56)(cid:42)(cid:41) WWW.COBRE.COM.AU (cid:51)(cid:52)(cid:56)(cid:42)(cid:3)(cid:566)(cid:19)(cid:3)(cid:3)(cid:40)(cid:55)(cid:46)(cid:56)(cid:46)(cid:40)(cid:38)(cid:49)(cid:3)(cid:38)(cid:40)(cid:40)(cid:52)(cid:57)(cid:51)(cid:56)(cid:46)(cid:51)(cid:44)(cid:3)(cid:47)(cid:57)(cid:41)(cid:44)(cid:42)(cid:50)(cid:42)(cid:51)(cid:56)(cid:8)(cid:17)(cid:3)(cid:42)(cid:8)(cid:56)(cid:46)(cid:50)(cid:38)(cid:56)(cid:42)(cid:8)(cid:3) AND ASSUMPTIONS The preparation of the ﬁnancial statements requires management to make judgements, estimates and assumptions that affect the reported amounts in the ﬁnancial statements. Management continually evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and assumptions on historical experience and on other various factors, including expectations of future events, management believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal the related actual results. The judgements, estimates and assumptions that have a signiﬁcant risk of causing a material adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within the next ﬁnancial year are discussed below. Share-based payment transactions The consolidated entity measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by using either the Binomial or Black-Scholes model taking into account the terms and conditions upon which the instruments were granted. The accounting estimates and assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts of assets and liabilities within the next annual reporting period but may impact proﬁt or loss and equity. Recovery of deferred tax assets Deferred tax assets are recognised for deductible temporary differences only if the consolidated entity considers it is probable that future taxable amounts will be available to utilise those temporary differences and losses. Deferred tax assets have not been recognised because their realisation is not considered probable. Exploration and evaluation costs Exploration and evaluation costs have been capitalised . Key judgements are applied in considering costs to be capitalised which includes determining expenditures directly related to these activities. The directors have reviewed the carrying value of each area of interest and have concluded that there are no indicators of impairment at 30 June 2020. Key judgements are also applied in considering whether indicators of impairment exist at each reporting period. (cid:51)(cid:52)(cid:56)(cid:42)(cid:3)(cid:564)(cid:19)(cid:3)(cid:46)(cid:50)(cid:53)(cid:38)(cid:40)(cid:56)(cid:3)(cid:52)(cid:43)(cid:3)(cid:40)(cid:52)(cid:58)(cid:46)(cid:41)(cid:3)(cid:550)(cid:543)(cid:3)(cid:53)(cid:38)(cid:51)(cid:41)(cid:42)(cid:50)(cid:46)(cid:40) During the year ended 30 June 2020, the COVID-19 was declared a pandemic by the World Health Organisation (WHO). The pandemic has adversely affected the global economy, including an increase in unemployment, decrease in consumer demand, interruptions in supply chains, and tight liquidity and credit conditions. Since its outbreak, governments have set up measures to contain the pandemic. All states including Western Australia have required entities to limit or suspend business operations, and have also implemented travel restrictions and quarantine measures. Monetary and ﬁscal stimulus packages have also been introduced by both federal and state governments. The impact which COVID 19 has had on the consolidated entity is set out below. All employees, consultants and contractors have been able to continue with the planned exploration activities given its remote location and small crew on site. Local contractors have been utilised and all staff and contractors observed the necessary protocols. The situation is however dynamic, and management will continue to monitor developments. The consolidated entity has not been entitled to receive any of the government stimulus. (cid:51)(cid:52)(cid:56)(cid:42)(cid:3)(cid:527)(cid:19)(cid:3)(cid:52)(cid:53)(cid:42)(cid:55)(cid:38)(cid:56)(cid:46)(cid:51)(cid:44)(cid:3)(cid:8)(cid:42)(cid:44)(cid:50)(cid:42)(cid:51)(cid:56)(cid:8) (cid:46)(cid:72)(cid:73)(cid:82)(cid:88)(cid:77)(cid:507)(cid:71)(cid:69)(cid:88)(cid:77)(cid:83)(cid:82)(cid:3)(cid:83)(cid:74)(cid:3)(cid:86)(cid:73)(cid:84)(cid:83)(cid:86)(cid:88)(cid:69)(cid:70)(cid:80)(cid:73)(cid:3)(cid:83)(cid:84)(cid:73)(cid:86)(cid:69)(cid:88)(cid:77)(cid:82)(cid:75)(cid:3)(cid:87)(cid:73)(cid:75)(cid:81)(cid:73)(cid:82)(cid:88)(cid:87) The consolidated entity is organised into one operating segment: exploration for precious metals within Australia. This operating segment is based on the internal reports that are reviewed and used by the Board of Directors (who are identiﬁed as the Chief Operating Decision Makers (‘CODM’) in assessing performance and in determining the allocation of resources. (cid:38)(cid:51)(cid:51)(cid:57)(cid:38)(cid:49)(cid:3)(cid:55)(cid:42)(cid:53)(cid:52)(cid:55)(cid:56)(cid:3)(cid:23)(cid:21)(cid:23)(cid:21)(cid:434)(cid:96)!(cid:24)(cid:24)(cid:434) (cid:3)(cid:51)(cid:52)(cid:56)(cid:42)(cid:8)(cid:3)(cid:56)(cid:52)(cid:3)(cid:56)(cid:45)(cid:42)(cid:3)(cid:43)(cid:46)(cid:51)(cid:38)(cid:51)(cid:40)(cid:46)(cid:38)(cid:49)(cid:3)(cid:8)(cid:56)(cid:38)(cid:56)(cid:42)(cid:50)(cid:42)(cid:51)(cid:56)(cid:8) (cid:51)(cid:52)(cid:56)(cid:42)(cid:3)(cid:525)(cid:19)(cid:3)(cid:52)(cid:56)(cid:45)(cid:42)(cid:55)(cid:3)(cid:46)(cid:51)(cid:40)(cid:52)(cid:50)(cid:42) Other income Consolidated 2020 $ 42,949 18 May 2018 to 30 June 2019 $ – The other income relates to shares received in Metal Tiger PLC an entity listed in the UK. The shares were received as part of an exclusivity agreement during Metal Tiger PLC’s due diligence before it invested in the company. (cid:51)(cid:52)(cid:56)(cid:42)(cid:3)(cid:560)(cid:19)(cid:3)(cid:42)(cid:60)(cid:53)(cid:42)(cid:51)(cid:8)(cid:42)(cid:8) Corporate and administration expenses Directors fees Consultants and advisors Other administration expenses (cid:51)(cid:52)(cid:56)(cid:42)(cid:3)(cid:558)(cid:19)(cid:3)(cid:46)(cid:51)(cid:40)(cid:52)(cid:50)(cid:42)(cid:3)(cid:56)(cid:38)(cid:60)(cid:3)(cid:42)(cid:60)(cid:53)(cid:42)(cid:51)(cid:8)(cid:42) Numerical reconciliation of income tax expense and tax at the statutory rate Loss before income tax expense Consolidated 2020 $ 318,333 445,346 182,646 946,325 18 May 2018 to 30 June 2019 $ 150,000 – 210 150,210 Consolidated 2020 $ 18 May 2018 to 30 June 2019 $ (1,988,417) (150,210) Tax at the statutory tax rate of 30% (596,525) (45,063) Tax effect amounts which are not deductible/(taxable) in calculating taxable income: Share based payments Other non-deductible items Deductible exploration expenditure Other temporary difference Current year tax losses not recognised Income tax expense Tax losses not recognised Unused tax losses for which no deferred tax asset has been recognised Potential tax beneﬁt @ 30% 189,547 7,647 (515,232) (6,078) (920,641) 920,641 – 3,199,484 959,845 – – – – (45,063) 45,063 – 150,210 45,063 The above potential tax beneﬁt for tax losses has not been recognised in the statement of ﬁnancial position. These tax losses can only be utilised in the future if the continuity of ownership test is passed, or failing that, the same business test is passed. (cid:24)(cid:25)(cid:434)(cid:96)(cid:434)(cid:40)(cid:52)(cid:39)(cid:55)(cid:42)(cid:3)(cid:49)(cid:46)(cid:50)(cid:46)(cid:56)(cid:42)(cid:41) WWW.COBRE.COM.AU (cid:51)(cid:52)(cid:56)(cid:42)(cid:3)(cid:513)(cid:19)(cid:3)(cid:40)(cid:57)(cid:55)(cid:55)(cid:42)(cid:51)(cid:56)(cid:3)(cid:38)(cid:8)(cid:8)(cid:42)(cid:56)(cid:8)(cid:3)(cid:435)(cid:3)(cid:40)(cid:38)(cid:8)(cid:45)(cid:3)(cid:38)(cid:51)(cid:41)(cid:3)(cid:40)(cid:38)(cid:8)(cid:45)(cid:3)(cid:42)(cid:54)(cid:57)(cid:46)(cid:58)(cid:38)(cid:49)(cid:42)(cid:51)(cid:56)(cid:8) Cash on hand Cash at bank Consolidated 2020 $ 100 7,171,772 7,171,872 (cid:51)(cid:52)(cid:56)(cid:42)(cid:3)(cid:543)(cid:19)(cid:3)(cid:40)(cid:57)(cid:55)(cid:55)(cid:42)(cid:51)(cid:56)(cid:3)(cid:38)(cid:8)(cid:8)(cid:42)(cid:56)(cid:8)(cid:3)(cid:435)(cid:3)(cid:56)(cid:55)(cid:38)(cid:41)(cid:42)(cid:3)(cid:38)(cid:51)(cid:41)(cid:3)(cid:52)(cid:56)(cid:45)(cid:42)(cid:55)(cid:3)(cid:55)(cid:42)(cid:40)(cid:42)(cid:46)(cid:58)(cid:38)(cid:39)(cid:49)(cid:42)(cid:8) Other receivables Receivable from related party GST receivable Consolidated 2020 $ – – 162,577 162,577 2019 $ 100 178,108 178,208 2019 $ 36,361 4,500 21,462 62,323 (cid:51)(cid:52)(cid:56)(cid:42)(cid:3)(cid:550)(cid:521)(cid:19)(cid:3)(cid:3)(cid:51)(cid:52)(cid:51)(cid:18)(cid:40)(cid:57)(cid:55)(cid:55)(cid:42)(cid:51)(cid:56)(cid:3)(cid:38)(cid:8)(cid:8)(cid:42)(cid:56)(cid:8)(cid:3)(cid:435)(cid:3)(cid:43)(cid:46)(cid:51)(cid:38)(cid:51)(cid:40)(cid:46)(cid:38)(cid:49)(cid:3)(cid:38)(cid:8)(cid:8)(cid:42)(cid:56)(cid:8)(cid:3)(cid:38)(cid:56)(cid:3)(cid:43)(cid:38)(cid:46)(cid:55) VALUE THROUGH OTHER COMPREHENSIVE INCOME Ordinary shares Reconciliation Consolidated 2020 $ 74,236 2019 $ – Reconciliation of the fair values at the beginning and end of the current and previous ﬁnancial year are set out below: Opening fair value Additions Increase in fair value – 42,949 31,287 74,236 – – – – Refer to note 17 for further information on fair value measurement. During the year company received shares in Metal Tiger PLC an entity listed in the UK. The shares were received as part of an exclusivity agreement during Metal Tiger PLC’s due diligence before it invested in the company. This was recognised as other income. Refer to note 5 (cid:38)(cid:51)(cid:51)(cid:57)(cid:38)(cid:49)(cid:3)(cid:55)(cid:42)(cid:53)(cid:52)(cid:55)(cid:56)(cid:3)(cid:23)(cid:21)(cid:23)(cid:21)(cid:434)(cid:96)!(cid:24)(cid:26)(cid:434) (cid:3)(cid:51)(cid:52)(cid:56)(cid:42)(cid:8)(cid:3)(cid:56)(cid:52)(cid:3)(cid:56)(cid:45)(cid:42)(cid:3)(cid:43)(cid:46)(cid:51)(cid:38)(cid:51)(cid:40)(cid:46)(cid:38)(cid:49)(cid:3)(cid:8)(cid:56)(cid:38)(cid:56)(cid:42)(cid:50)(cid:42)(cid:51)(cid:56)(cid:8) (cid:51)(cid:52)(cid:56)(cid:42)(cid:3)(cid:550)(cid:550)(cid:19)(cid:3)(cid:51)(cid:52)(cid:51)(cid:18)(cid:40)(cid:57)(cid:55)(cid:55)(cid:42)(cid:51)(cid:56)(cid:3)(cid:38)(cid:8)(cid:8)(cid:42)(cid:56)(cid:8)(cid:3)(cid:435)(cid:3)(cid:42)(cid:60)(cid:53)(cid:49)(cid:52)(cid:55)(cid:38)(cid:56)(cid:46)(cid:52)(cid:51)(cid:3)(cid:38)(cid:51)(cid:41)(cid:3)(cid:42)(cid:58)(cid:38)(cid:49)(cid:57)(cid:38)(cid:56)(cid:46)(cid:52)(cid:51) Consolidated 2020 $ 2019 $ Exploration and evaluation - at cost 2,505,440 710,302 Reconciliations Reconciliations of the written down values at the beginning and end of the current and previous ﬁnancial year are set out below: Balance at 18 May 2018 Additions Balance at 30 June 2019 Additions Balance at 30 June 2020 Exploration & Evaluation $ – 710,302 710,302 1,795,138 2,505,440 Exploration expenditure includes $77,102 incurred in relation to the Sandiman project with the remainder of the additions relating to exploration expenditure on the Perrinvale project. (cid:51)(cid:52)(cid:56)(cid:42)(cid:3)(cid:550)(cid:566)(cid:19)(cid:3)(cid:40)(cid:57)(cid:55)(cid:55)(cid:42)(cid:51)(cid:56)(cid:3)(cid:49)(cid:46)(cid:38)(cid:39)(cid:46)(cid:49)(cid:46)(cid:56)(cid:46)(cid:42)(cid:8)(cid:3)(cid:435)(cid:3)(cid:56)(cid:55)(cid:38)(cid:41)(cid:42)(cid:3)(cid:38)(cid:51)(cid:41)(cid:3)(cid:52)(cid:56)(cid:45)(cid:42)(cid:55)(cid:3)(cid:53)(cid:38)(cid:61)(cid:38)(cid:39)(cid:49)(cid:42)(cid:8) Trade payables Directors' fee accrual Other payables Refer to note 16 for further information on ﬁnancial instruments. Consolidated 2020 $ 683,109 100,000 47,744 830,853 2019 $ 50,031 150,000 – 200,031 (cid:24)(cid:27)(cid:434)(cid:96)(cid:434)(cid:40)(cid:52)(cid:39)(cid:55)(cid:42)(cid:3)(cid:49)(cid:46)(cid:50)(cid:46)(cid:56)(cid:42)(cid:41) WWW.COBRE.COM.AU (cid:51)(cid:52)(cid:56)(cid:42)(cid:3)(cid:550)(cid:564)(cid:19)(cid:3)(cid:42)(cid:54)(cid:57)(cid:46)(cid:56)(cid:61)(cid:3)(cid:435)(cid:3)(cid:46)(cid:8)(cid:8)(cid:57)(cid:42)(cid:41)(cid:3)(cid:40)(cid:38)(cid:53)(cid:46)(cid:56)(cid:38)(cid:49) Consolidated 2020 Shares 2019 Shares 2020 $ 2019 $ Ordinary shares – fully paid 102,970,688 36,810,576 11,932,725 815,597 Details Date Shares Issue price – 100 20,000,000 4,500,000 2,250,000 2,698,361 7,362,115 – 36,810,576 6,600,000 993,378 331,126 1,158,941 Balance Founder shares Issue of shares Issue of shares Issue of shares Issue of shares Shares issued to acquire 80% of Toucan Gold Pty Ltd 18 June 2019 Cost of capital raised 18 May 2018 18 May 2018 19 February 2019 21 February 2019 4 June 2019 13 June 2019 Balance Issue of shares Issue of shares Issue of shares Issue of shares Shares issued as consideration for option over Sandiman tenement Issue of shares* Issue of IPO shares Shares issued to acquire remaining 20% of Toucan Gold Pty Ltd Cost of capital raised 30 June 2019 12 September 2019 9 October 2019 16 October 2019 4 November 2019 13 November 2019 31 January 2020 31 January 2020 166,667 750,000 50,000,000 12 May 2020 6,160,000 – $1.0000 $0.0001 $0.0500 $0.0500 $0.0500 $0.0500 $0.0760 $0.1510 $0.1510 $0.1510 $0.1500 $0.0000 $0.2000 $0.1700 $ – 100 2,000 225,000 112,500 134,918 368,106 (27,027) 815,597 500,285 150,000 50,000 175,000 25,000 1 10,000,000 1,047,200 (830,358) 11,932,725 Balance 30 June 2020 102,970,688 * On 20 November 2019 the Company issued 750,000 fully paid ordinary shares to Metal Tiger PLC (“Metal Tiger”) conditional upon Metal Tiger investing at least $2m in the IPO or IPO not taking place prior to 2 September 2020 (or such later date as agreed between the parties in writing). The share issue became unconditional on completion of the IPO on 29 January 2020. Ordinary shares Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the company in proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the company does not have a limited amount of authorised capital. On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have one vote. (cid:38)(cid:51)(cid:51)(cid:57)(cid:38)(cid:49)(cid:3)(cid:55)(cid:42)(cid:53)(cid:52)(cid:55)(cid:56)(cid:3)(cid:23)(cid:21)(cid:23)(cid:21)(cid:434)(cid:96)!(cid:24)(cid:28)(cid:434) (cid:3)(cid:51)(cid:52)(cid:56)(cid:42)(cid:8)(cid:3)(cid:56)(cid:52)(cid:3)(cid:56)(cid:45)(cid:42)(cid:3)(cid:43)(cid:46)(cid:51)(cid:38)(cid:51)(cid:40)(cid:46)(cid:38)(cid:49)(cid:3)(cid:8)(cid:56)(cid:38)(cid:56)(cid:42)(cid:50)(cid:42)(cid:51)(cid:56)(cid:8) Share buy-back There is no current on-market share buy-back. Capital risk management The consolidated entity’s objectives when managing capital is to safeguard its ability to continue as a going concern, so that it can provide returns for shareholders and beneﬁts for other stakeholders and to maintain an optimum capital structure to reduce the cost of capital. Capital is regarded as total equity, as recognised in the statement of ﬁnancial position, plus net debt. Net debt is calculated as total borrowings less cash and cash equivalents. The consolidated entity would look to raise capital when an opportunity to invest in a business or company was seen as value adding relative to the current company’s share price at the time of the investment. The consolidated entity is not actively pursuing additional investments in the short term as it continues to integrate and grow its existing businesses in order to maximise synergies. The capital risk management policy remains unchanged from the 30 June 2019 Annual Report. (cid:51)(cid:52)(cid:56)(cid:42)(cid:3)(cid:550)(cid:527)(cid:19)(cid:3)(cid:42)(cid:54)(cid:57)(cid:46)(cid:56)(cid:61)(cid:3)(cid:435)(cid:3)(cid:55)(cid:42)(cid:8)(cid:42)(cid:55)(cid:58)(cid:42)(cid:8) Financial assets at fair value through other comprehensive income reserve Share-based payments reserve Acquisition reserve Consolidated 2020 $ 31,287 771,824 (1,505,957) (702,846) 2019 $ – – – – Financial assets at fair value through other comprehensive income reserve The reserve is used to recognise increments and decrements in the fair value of ﬁnancial assets at fair value through other comprehensive income. Share-based payments reserve The reserve is used to recognise the value of equity beneﬁts provided to employees and directors as part of their remuneration, and other parties as part of their compensation for services. Acquisition reserve Transactions involving non-controlling interests that do not result in the loss of control for the company are recorded in the acquisition reserve. The acquisition reserve records the difference between the value of the non-controlling interest and the consideration. (cid:24)(cid:29)(cid:434)(cid:96)(cid:434)(cid:40)(cid:52)(cid:39)(cid:55)(cid:42)(cid:3)(cid:49)(cid:46)(cid:50)(cid:46)(cid:56)(cid:42)(cid:41) WWW.COBRE.COM.AU Movements in reserves Movements in each class of reserve during the current and previous ﬁnancial year are set out below: Consolidated Balance at 18 May 2018 Balance at 30 June 2019 Revaluation – gross Share based payments Consideration to gain 100% ownership of Toucan Gold Pty Ltd Transfer on gain of 100% ownership of Toucan Gold Pty Ltd Acquisition reserve $ Financial assets $ Share based payments $ – – – – (1,575,200) 69,243 – – 31,287 – – – – – – 771,824 – – Balance at 30 June 2020 (1,505,957) 31,287 771,824 Total $ – – 31,287 771,824 (1,575,200) 69,243 (702,846) (cid:51)(cid:52)(cid:56)(cid:42)(cid:3)(cid:550)(cid:525)(cid:19)(cid:3)(cid:42)(cid:54)(cid:57)(cid:46)(cid:56)(cid:61)(cid:3)(cid:435)(cid:3)(cid:41)(cid:46)(cid:58)(cid:46)(cid:41)(cid:42)(cid:51)(cid:41)(cid:8) There were no dividends paid, recommended or declared during the current or previous ﬁnancial year. (cid:51)(cid:52)(cid:56)(cid:42)(cid:3)(cid:550)(cid:560)(cid:19)(cid:3)(cid:43)(cid:46)(cid:51)(cid:38)(cid:51)(cid:40)(cid:46)(cid:38)(cid:49)(cid:3)(cid:46)(cid:51)(cid:8)(cid:56)(cid:55)(cid:57)(cid:50)(cid:42)(cid:51)(cid:56)(cid:8) Financial risk management objectives The consolidated entity’s activities expose it to a variety of ﬁnancial risks: market risk, credit risk and liquidity risk. The consolidated entity’s overall risk management program focuses on the unpredictability of ﬁnancial markets and seeks to minimise potential adverse effects on the ﬁnancial performance of the consolidated entity. Risk management is carried out by the board. Market risk Foreign currency risk The consolidated entity is not exposed to any signiﬁcant foreign currency risk. Price risk The consolidated entity is not exposed to any signiﬁcant price risk. Interest rate risk The consolidated entity is not exposed to signiﬁcant interest rate risk (cid:38)(cid:51)(cid:51)(cid:57)(cid:38)(cid:49)(cid:3)(cid:55)(cid:42)(cid:53)(cid:52)(cid:55)(cid:56)(cid:3)(cid:23)(cid:21)(cid:23)(cid:21)(cid:434)(cid:96)!(cid:24)(cid:30)(cid:434) (cid:3)(cid:51)(cid:52)(cid:56)(cid:42)(cid:8)(cid:3)(cid:56)(cid:52)(cid:3)(cid:56)(cid:45)(cid:42)(cid:3)(cid:43)(cid:46)(cid:51)(cid:38)(cid:51)(cid:40)(cid:46)(cid:38)(cid:49)(cid:3)(cid:8)(cid:56)(cid:38)(cid:56)(cid:42)(cid:50)(cid:42)(cid:51)(cid:56)(cid:8) Credit risk Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in ﬁnancial loss to the consolidated entity. The consolidated entity’s receivable balances relate to GST receivable and for this reason the consolidated entity is not exposed to material foreign exchange risk. Liquidity risk Vigilant liquidity risk management requires the consolidated entity to maintain sufﬁcient liquid assets (mainly cash and cash equivalents) and available borrowing facilities to be able to pay debts as and when they become due and payable. The consolidated entity manages liquidity risk by maintaining adequate cash reserves and available borrowing facilities by continuously monitoring actual and forecast cash ﬂows and matching the maturity proﬁles of ﬁnancial assets and liabilities. Remaining contractual maturities The following tables detail the consolidated entity’s remaining contractual maturity for its ﬁnancial instrument liabilities. The tables have been drawn up based on the undiscounted cash ﬂows of ﬁnancial liabilities based on the earliest date on which the ﬁnancial liabilities are required to be paid. The tables include both interest and principal cash ﬂows disclosed as remaining contractual maturities and therefore these totals may differ from their carrying amount in the statement of ﬁnancial position. Consolidated – 2020 Non-interest bearing Trade payables Other payables Total non-derivatives Consolidated – 2019 Non-interest bearing Trade payables Other payables Total non-derivatives Weighted average interest rate % 1 year or less $ Between 1 and 2 years $ Between 2 and 5 years $ Over 5 years $ – – – – 683,109 147,744 830,853 50,031 150,000 200,031 – – – – – – – – – – – – – – – – – – Remaining contractual maturities $ 683,109 147,744 830,853 50,031 150,000 200,031 The cash ﬂows in the maturity analysis above are not expected to occur signiﬁcantly earlier than contractually disclosed above. (cid:43)(cid:69)(cid:77)(cid:86)(cid:3)(cid:90)(cid:69)(cid:80)(cid:89)(cid:73)(cid:3)(cid:83)(cid:74)(cid:3)(cid:507)(cid:82)(cid:69)(cid:82)(cid:71)(cid:77)(cid:69)(cid:80)(cid:3)(cid:77)(cid:82)(cid:87)(cid:88)(cid:86)(cid:89)(cid:81)(cid:73)(cid:82)(cid:88)(cid:87) Unless otherwise stated, the carrying amounts of ﬁnancial instruments reﬂect their fair value. (cid:25)(cid:21)(cid:434)(cid:96)(cid:434)(cid:40)(cid:52)(cid:39)(cid:55)(cid:42)(cid:3)(cid:49)(cid:46)(cid:50)(cid:46)(cid:56)(cid:42)(cid:41) WWW.COBRE.COM.AU (cid:51)(cid:52)(cid:56)(cid:42)(cid:3)(cid:550)(cid:558)(cid:19)(cid:3)(cid:43)(cid:38)(cid:46)(cid:55)(cid:3)(cid:58)(cid:38)(cid:49)(cid:57)(cid:42)(cid:3)(cid:50)(cid:42)(cid:38)(cid:8)(cid:57)(cid:55)(cid:42)(cid:50)(cid:42)(cid:51)(cid:56) Fair value hierarchy The following tables detail the consolidated entity’s assets and liabilities, measured or disclosed at fair value, using a three level hierarchy, based on the lowest level of input that is signiﬁcant to the entire fair value measurement, being: Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly Level 3: Unobservable inputs for the asset or liability Consolidated – 2020 Assets Ordinary shares Total assets Level 1 $ 74,236 74,236 Level 2 $ Level 3 $ – – – – Total $ 74,236 74,236 There were no transfers between levels during the ﬁnancial year. (cid:51)(cid:52)(cid:56)(cid:42)(cid:3)(cid:550)(cid:513)(cid:19)(cid:3)(cid:48)(cid:42)(cid:61)(cid:3)(cid:50)(cid:38)(cid:51)(cid:38)(cid:44)(cid:42)(cid:50)(cid:42)(cid:51)(cid:56)(cid:3)(cid:53)(cid:42)(cid:55)(cid:8)(cid:52)(cid:51)(cid:51)(cid:42)(cid:49)(cid:3)(cid:41)(cid:46)(cid:8)(cid:40)(cid:49)(cid:52)(cid:8)(cid:57)(cid:55)(cid:42)(cid:8) Compensation The aggregate compensation made to directors and other members of key management personnel of the consolidated entity is set out below: Short-term employee beneﬁts Post-employment beneﬁts Share-based payments Consolidated 2020 $ 418,333 9,500 621,299 1,049,132 18 May 2018 to 30 June 2019 $ 150,000 – – 150,000 (cid:51)(cid:52)(cid:56)(cid:42)(cid:3)(cid:550)(cid:543)(cid:19)(cid:3)(cid:55)(cid:42)(cid:50)(cid:57)(cid:51)(cid:42)(cid:55)(cid:38)(cid:56)(cid:46)(cid:52)(cid:51)(cid:3)(cid:52)(cid:43)(cid:3)(cid:38)(cid:57)(cid:41)(cid:46)(cid:56)(cid:52)(cid:55)(cid:8) During the ﬁnancial year the following fees were paid or payable for services provided by Ernst &Young, the auditor of the company: Audit services – Ernst &Young Audit or review of the ﬁnancial statements Other assurance services – Ernst &Young Independent accountant's report Consolidated 2020 $ 18 May 2018 to 30 June 2019 $ 65,000 48,000 48,000 113,000 – 48,000 (cid:38)(cid:51)(cid:51)(cid:57)(cid:38)(cid:49)(cid:3)(cid:55)(cid:42)(cid:53)(cid:52)(cid:55)(cid:56)(cid:3)(cid:23)(cid:21)(cid:23)(cid:21)(cid:434)(cid:96)!(cid:25)(cid:22)(cid:434) (cid:3)(cid:51)(cid:52)(cid:56)(cid:42)(cid:8)(cid:3)(cid:56)(cid:52)(cid:3)(cid:56)(cid:45)(cid:42)(cid:3)(cid:43)(cid:46)(cid:51)(cid:38)(cid:51)(cid:40)(cid:46)(cid:38)(cid:49)(cid:3)(cid:8)(cid:56)(cid:38)(cid:56)(cid:42)(cid:50)(cid:42)(cid:51)(cid:56)(cid:8) (cid:51)(cid:52)(cid:56)(cid:42)(cid:3)(cid:566)(cid:521)(cid:19)(cid:3)(cid:40)(cid:52)(cid:51)(cid:56)(cid:46)(cid:51)(cid:44)(cid:42)(cid:51)(cid:56)(cid:3)(cid:49)(cid:46)(cid:38)(cid:39)(cid:46)(cid:49)(cid:46)(cid:56)(cid:46)(cid:42)(cid:8)(cid:3)(cid:38)(cid:51)(cid:41)(cid:3)(cid:40)(cid:52)(cid:50)(cid:50)(cid:46)(cid:56)(cid:50)(cid:42)(cid:51)(cid:56)(cid:8) Under the Metal Tiger subscription letter dated 19 November 2019, the company will fully indemnify Metal Tiger for any capital gains tax (or other tax) charge that it incurs on the disposal of the Pre-IPO Shares following the offer, up to a capped aggregate amount of $30,000. There are no additional commitments or contingent liabilities held by the consolidated entity. (cid:51)(cid:52)(cid:56)(cid:42)(cid:3)(cid:566)(cid:550)(cid:19)(cid:3)(cid:55)(cid:42)(cid:49)(cid:38)(cid:56)(cid:42)(cid:41)(cid:3)(cid:53)(cid:38)(cid:55)(cid:56)(cid:61)(cid:3)(cid:56)(cid:55)(cid:38)(cid:51)(cid:8)(cid:38)(cid:40)(cid:56)(cid:46)(cid:52)(cid:51)(cid:8) Parent entity Cobre Limited is the parent entity. Subsidiaries Interests in subsidiaries are set out in note 23. Key management personnel Disclosures relating to key management personnel are set out in note 18 and the remuneration report included in the directors’ report. Transactions with related parties The following transactions occurred with related parties: Consolidated 2020 $ 18 May 2018 to 30 June 2019 $ Payment for goods and services: Payment for services from those related to key management personnel 19,800 – Receivable from and payable to related parties The following balances are outstanding at the reporting date in relation to transactions with related parties: Current receivables: Receivables from key management personnel Current payables: Fees payable to key management personnel Loans to/from related parties Consolidated 2020 $ 2019 $ – 4,500 5,000 150,000 There were no loans to or from related parties at the current and previous reporting date. Terms and conditions All transactions were made on normal commercial terms and conditions and at market rates. (cid:25)(cid:23)(cid:434)(cid:96)(cid:434)(cid:40)(cid:52)(cid:39)(cid:55)(cid:42)(cid:3)(cid:49)(cid:46)(cid:50)(cid:46)(cid:56)(cid:42)(cid:41) WWW.COBRE.COM.AU (cid:51)(cid:52)(cid:56)(cid:42)(cid:3)(cid:566)(cid:566)(cid:19)(cid:3)(cid:53)(cid:38)(cid:55)(cid:42)(cid:51)(cid:56)(cid:3)(cid:42)(cid:51)(cid:56)(cid:46)(cid:56)(cid:61)(cid:3)(cid:46)(cid:51)(cid:43)(cid:52)(cid:55)(cid:50)(cid:38)(cid:56)(cid:46)(cid:52)(cid:51) Set out below is the supplementary information about the parent entity. (cid:8)(cid:88)(cid:69)(cid:88)(cid:73)(cid:81)(cid:73)(cid:82)(cid:88)(cid:3)(cid:83)(cid:74)(cid:3)(cid:84)(cid:86)(cid:83)(cid:507)(cid:88)(cid:3)(cid:83)(cid:86)(cid:3)(cid:80)(cid:83)(cid:87)(cid:87)(cid:3)(cid:69)(cid:82)(cid:72)(cid:3)(cid:83)(cid:88)(cid:76)(cid:73)(cid:86)(cid:3)(cid:71)(cid:83)(cid:81)(cid:84)(cid:86)(cid:73)(cid:76)(cid:73)(cid:82)(cid:87)(cid:77)(cid:90)(cid:73)(cid:3)(cid:77)(cid:82)(cid:71)(cid:83)(cid:81)(cid:73) Loss after income tax Total comprehensive income (cid:8)(cid:88)(cid:69)(cid:88)(cid:73)(cid:81)(cid:73)(cid:82)(cid:88)(cid:3)(cid:83)(cid:74)(cid:3)(cid:507)(cid:82)(cid:69)(cid:82)(cid:71)(cid:77)(cid:69)(cid:80)(cid:3)(cid:84)(cid:83)(cid:87)(cid:77)(cid:88)(cid:77)(cid:83)(cid:82) Total current assets Total assets Total current liabilities Total liabilities Equity Issued capital Financial assets at fair value through other comprehensive income reserve Share-based payments reserve Accumulated losses Total equity Parent 2020 $ (3,478,202) (3,478,202) 18 May 2018 to 30 June 2019 $ (150,210) (150,210) Parent 2020 $ 7,153,680 9,326,791 219,367 219,367 11,932,725 31,287 771,824 (3,628,412) 9,107,424 2019 $ 27,282 833,908 168,521 168,521 815,597 – – (150,210) 665,387 Guarantees entered into by the parent entity in relation to the debts of its subsidiaries The parent entity had no guarantees in relation to the debts of its subsidiaries as at 30 June 2020 and 30 June 2019. Contingent liabilities The parent entity had no contingent liabilities as at 30 June 2020 and 30 June 2019. Capital commitments - Property, plant and equipment The parent entity had no capital commitments for property, plant and equipment as at 30 June 2020 and 30 June 2019. (cid:8)(cid:77)(cid:75)(cid:82)(cid:77)(cid:507)(cid:71)(cid:69)(cid:82)(cid:88)(cid:3)(cid:69)(cid:71)(cid:71)(cid:83)(cid:89)(cid:82)(cid:88)(cid:77)(cid:82)(cid:75)(cid:3)(cid:84)(cid:83)(cid:80)(cid:77)(cid:71)(cid:77)(cid:73)(cid:87) The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in note 1, except for the following: p Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity. (cid:38)(cid:51)(cid:51)(cid:57)(cid:38)(cid:49)(cid:3)(cid:55)(cid:42)(cid:53)(cid:52)(cid:55)(cid:56)(cid:3)(cid:23)(cid:21)(cid:23)(cid:21)(cid:434)(cid:96)!(cid:25)(cid:24)(cid:434) (cid:3)(cid:51)(cid:52)(cid:56)(cid:42)(cid:8)(cid:3)(cid:56)(cid:52)(cid:3)(cid:56)(cid:45)(cid:42)(cid:3)(cid:43)(cid:46)(cid:51)(cid:38)(cid:51)(cid:40)(cid:46)(cid:38)(cid:49)(cid:3)(cid:8)(cid:56)(cid:38)(cid:56)(cid:42)(cid:50)(cid:42)(cid:51)(cid:56)(cid:8) (cid:51)(cid:52)(cid:56)(cid:42)(cid:3)(cid:566)(cid:564)(cid:19)(cid:3)(cid:46)(cid:51)(cid:56)(cid:42)(cid:55)(cid:42)(cid:8)(cid:56)(cid:8)(cid:3)(cid:46)(cid:51)(cid:3)(cid:8)(cid:57)(cid:39)(cid:8)(cid:46)(cid:41)(cid:46)(cid:38)(cid:55)(cid:46)(cid:42)(cid:8) The company acquired 80% of the fully paid shares in Toucan on 18 June 2019 in accordance with the terms of the Toucan Share Purchase Agreement between the company and Resource Assets Pty Ltd and Bernard Aylward in his own capacity and in his capacity as trustee for the Galbraith Family Trust (Aylward) (Toucan Vendors). Toucan holds sole legal ownership of the Perrinvale tenements. The consolidated entity had assessed the acquisition does not meet the deﬁnition of a business combination in accordance with the accounting standards and therefore recognises the individual identiﬁable assets acquired and liabilities assumed. The cost of the acquisition has been allocated to the individual identiﬁable assets and liabilities on the basis of their relative fair values at the date of purchase. The Perrinvale project was previously owned by Fortescue Metals Group Ltd (FMG), and as part of the original acquisition by Toucan to purchase the project, Toucan agreed to pay FMG 2% of revenue from copper production in the event that production began. This agreement is still in place for the consolidated entity, however the current estimation of the fair value of the ﬁnancial liability that arises on the acquisition of Toucan is nil given there are no probable and identiﬁable cash ﬂows that can stem from the assets acquired, therefore no liability is recognised. Under the shareholder loan agreement entered into by Cobre and the Toucan Vendors, the Toucan Vendors have no obligation to fund future exploration activity of the consolidated entity. On 12 May 2020, the company acquired the remaining 20% of the issued capital of Toucan Gold Pty Ltd, meaning it now owns 100% of Toucan. The consideration was a cash payment of $528,000 plus 6,160,000 fully paid ordinary shares valued at $0.17 cents a shares totalling $1,047,200. The consolidated ﬁnancial statements incorporate the assets, liabilities and results of the following subsidiary with non-controlling interests in accordance with the accounting policy described in note 1: Principal place of business/ Country of incorporation Principal activities Ownership interest 2020 % Ownership interest 2019 % Ownership interest 2020 % Ownership interest 2019 % Parent Non-controlling interest Name Toucan Gold Pty Ltd Australia Mineral exploration 100.00% 80.00% – 20.00% (cid:8)(cid:89)(cid:81)(cid:81)(cid:69)(cid:86)(cid:77)(cid:87)(cid:73)(cid:72)(cid:3)(cid:507)(cid:82)(cid:69)(cid:82)(cid:71)(cid:77)(cid:69)(cid:80)(cid:3)(cid:77)(cid:82)(cid:74)(cid:83)(cid:86)(cid:81)(cid:69)(cid:88)(cid:77)(cid:83)(cid:82) Summarised ﬁnancial information of the subsidiary with non-controlling interests that are material to the consolidated entity are set out below: Summarised statement of financial position Current assets Non-current assets Total assets Current liabilities Total liabilities Net assets Summarised statement of profit or loss and other comprehensive income Expenses Loss before income tax expense Income tax expense Loss after income tax expense Other comprehensive income Total comprehensive income Toucan 2020 $ – – – – – – (80,869) (80,869) – (80,869) – (80,869) 2019 $ 211,755 354,069 565,824 31,511 31,511 534,313 – – – – – – (cid:25)(cid:25)(cid:434)(cid:96)(cid:434)(cid:40)(cid:52)(cid:39)(cid:55)(cid:42)(cid:3)(cid:49)(cid:46)(cid:50)(cid:46)(cid:56)(cid:42)(cid:41) WWW.COBRE.COM.AU (cid:51)(cid:52)(cid:56)(cid:42)(cid:3)(cid:566)(cid:527)(cid:19)(cid:3)(cid:42)(cid:58)(cid:42)(cid:51)(cid:56)(cid:8)(cid:3)(cid:38)(cid:43)(cid:56)(cid:42)(cid:55)(cid:3)(cid:56)(cid:45)(cid:42)(cid:3)(cid:55)(cid:42)(cid:53)(cid:52)(cid:55)(cid:56)(cid:46)(cid:51)(cid:44)(cid:3)(cid:53)(cid:42)(cid:55)(cid:46)(cid:52)(cid:41) On 24 August 2020, the company announced that it has entered into an agreement to acquire a controlling interest in Kalahari Metals Limited, a copper exploration JV company in the highly prospective Kalahari Copper Belt in Botswana. The company will purchase an initial 49.99% stake with an option to move to a 51% stake subject to regulatory approvals. The purchase will be funded by the issue of approximately 21.4m fully paid ordinary shares in CBE, to be escrowed until 31 January 2022. The transaction is subject to ongoing due diligence, ﬁnalising JV management agreements, regulatory approvals, and approval by Cobre shareholders at the upcoming annual general meeting. The Kalahari Copper Belt is regarded as one of the world’s most prospective areas for yet-to-be-discovered sediment-hosted copper deposits by the US Geological Survey. Exploration drilling of Kalahari Metals’ tenements is currently underway by the existing owners, with future exploration activities to be jointly funded under the proposed JV arrangement. No other matter or circumstance has arisen since 30 June 2020 that has signiﬁcantly affected, or may signiﬁcantly affect the consolidated entity’s operations, the results of those operations, or the consolidated entity’s state of affairs in future ﬁnancial years. (cid:51)(cid:52)(cid:56)(cid:42)(cid:3)(cid:566)(cid:525)(cid:19)(cid:3)(cid:3)(cid:55)(cid:42)(cid:40)(cid:52)(cid:51)(cid:40)(cid:46)(cid:49)(cid:46)(cid:38)(cid:56)(cid:46)(cid:52)(cid:51)(cid:3)(cid:52)(cid:43)(cid:3)(cid:49)(cid:52)(cid:8)(cid:8)(cid:3)(cid:38)(cid:43)(cid:56)(cid:42)(cid:55)(cid:3)(cid:46)(cid:51)(cid:40)(cid:52)(cid:50)(cid:42)(cid:3)(cid:56)(cid:38)(cid:60)(cid:3) TO NET CASH USED IN OPERATING ACTIVITIES Consolidated 2020 $ 18 May 2018 to 30 June 2019 $ Loss after income tax expense for the year (1,988,417) (150,210) Adjustments for: Depreciation and amortisation Share-based payments Non cash income Change in operating assets and liabilities: Increase in trade and other receivables Increase in other operating assets Increase in trade and other payables Net cash used in operating activities 172 631,824 (42,949) (77,703) (20,000) 19,336 (1,477,737) – – – – – 150,000 (210) (cid:38)(cid:51)(cid:51)(cid:57)(cid:38)(cid:49)(cid:3)(cid:55)(cid:42)(cid:53)(cid:52)(cid:55)(cid:56)(cid:3)(cid:23)(cid:21)(cid:23)(cid:21)(cid:434)(cid:96)!(cid:25)(cid:26)(cid:434) (cid:3)(cid:51)(cid:52)(cid:56)(cid:42)(cid:8)(cid:3)(cid:56)(cid:52)(cid:3)(cid:56)(cid:45)(cid:42)(cid:3)(cid:43)(cid:46)(cid:51)(cid:38)(cid:51)(cid:40)(cid:46)(cid:38)(cid:49)(cid:3)(cid:8)(cid:56)(cid:38)(cid:56)(cid:42)(cid:50)(cid:42)(cid:51)(cid:56)(cid:8) (cid:51)(cid:52)(cid:56)(cid:42)(cid:3)(cid:566)(cid:560)(cid:19)(cid:3)(cid:51)(cid:52)(cid:51)(cid:18)(cid:40)(cid:38)(cid:8)(cid:45)(cid:3)(cid:46)(cid:51)(cid:58)(cid:42)(cid:8)(cid:56)(cid:46)(cid:51)(cid:44)(cid:3)(cid:38)(cid:51)(cid:41)(cid:3)(cid:43)(cid:46)(cid:51)(cid:38)(cid:51)(cid:40)(cid:46)(cid:51)(cid:44)(cid:3)(cid:38)(cid:40)(cid:56)(cid:46)(cid:58)(cid:46)(cid:56)(cid:46)(cid:42)(cid:8) Shares issued to gain 100% ownership of Toucan Gold Pty Ltd Options issued to lead broker during IPO Consolidated 2020 $ 1,047,200 140,000 1,187,200 18 May 2018 to 30 June 2019 $ – – – On 12 May 2020, the company acquired the remaining 20% of the issued capital of Toucan Gold Pty Ltd, meaning it now owns 100% of Toucan. The consideration was a cash payment of $528,000 plus 6,160,000 fully paid ordinary shares valued at $0.17 cents a shares totalling $1,047,200. On 17 January 2020, the lead broker was issued 2,000,000 options over ordinary shares. The options expire on 16 January 2023 and have an exercise price of 30 cents. (cid:51)(cid:52)(cid:56)(cid:42)(cid:3)(cid:566)(cid:558)(cid:19)(cid:3)(cid:42)(cid:38)(cid:55)(cid:51)(cid:46)(cid:51)(cid:44)(cid:8)(cid:3)(cid:53)(cid:42)(cid:55)(cid:3)(cid:8)(cid:45)(cid:38)(cid:55)(cid:42) Loss after income tax Non-controlling interest Loss after income tax attributable to the owners of Cobre Limited Weighted average number of ordinary shares used in calculating basic earnings per share Weighted average number of ordinary shares used in calculating diluted earnings per share Basic earnings per share Diluted earnings per share Consolidated 2020 $ (1,988,417) 16,172 (1,972,245) 18 May 2018 to 30 June 2019 $ (150,210) – (150,210) Number Number 67,210,702 8,386,447 67,210,702 8,386,447 Cents Cents (2.93) (2.93) (1.79) (1.79) (cid:25)(cid:27)(cid:434)(cid:96)(cid:434)(cid:40)(cid:52)(cid:39)(cid:55)(cid:42)(cid:3)(cid:49)(cid:46)(cid:50)(cid:46)(cid:56)(cid:42)(cid:41) WWW.COBRE.COM.AU (cid:51)(cid:52)(cid:56)(cid:42)(cid:3)(cid:566)(cid:513)(cid:19)(cid:3)(cid:8)(cid:45)(cid:38)(cid:55)(cid:42)(cid:18)(cid:39)(cid:38)(cid:8)(cid:42)(cid:41)(cid:3)(cid:53)(cid:38)(cid:61)(cid:50)(cid:42)(cid:51)(cid:56)(cid:8) The company issued unlisted options to the directors (or their nominee entities), the company secretary and lead manager. Set out below are summaries of options granted: Consolidated Outstanding at the beginning of the ﬁnancial year Granted Outstanding at the end of the ﬁnancial year Exercisable at the end of the ﬁnancial year Number of options 2020 – 15,249,000 15,249,000 13,249,000 Weighted average exercise price 2020 $0.0000 $0.2259 $0.2259 $0.2259 Number of options 2019 – – – – Weighted average exercise price 2019 $0.0000 $0.0000 $0.0000 $0.0000 2020 Grant date Expiry date 24/09/2019 29/11/2019 17/01/2020 23/09/2024 23/09/2024 16/01/2023 Exercise price $0.2000 $0.2000 $0.3000 Balance at the start of the year – – – – Granted Exercised 12,749,000 500,000 2,000,000 15,249,000 – – – – Expired/ forfeited/ other Balance at the end of the year – – – – 12,749,000 500,000 2,000,000 15,249,000 Weighted average exercise price $0.0000 $0.2259 $0.0000 $0.0000 $0.0000 The weighted average remaining contractual life of options outstanding at the end of the ﬁnancial year was 4.08 years. For the options granted during the current ﬁnancial year, the valuation model inputs used to determine the fair value at the grant date, are as follows: Grant date Expiry date Share price at grant date Exercise price Expected volatility Dividend yield Risk-free interest rate Fair value at grant date 24/09/2019 29/11/2019 17/01/2020 23/09/2024 23/09/2024 16/01/2023 $0.0758 $0.1500 $0.1500 $0.2000 $0.2000 $0.3000 100.00% 100.00% 100.00% – – – 0.75% 0.74% 1.10% $0.045 $0.104 $0.070 At the time of issuing the above options the company was not yet listed on the ASX. The share price used in the valuations was determined with reference to most recent capital raise and a volatility of 100% was used. A total share based payment expense of $631,824 has been recognised during the current ﬁnancial year. In addition options valued at $140,000 have been included as a cost of capital raised. (cid:38)(cid:51)(cid:51)(cid:57)(cid:38)(cid:49)(cid:3)(cid:55)(cid:42)(cid:53)(cid:52)(cid:55)(cid:56)(cid:3)(cid:23)(cid:21)(cid:23)(cid:21)(cid:434)(cid:96)!(cid:25)(cid:28)(cid:434) WWW.COBRE.COM.AU(cid:25)(cid:29)(cid:434)(cid:200)(cid:460)(cid:26)(cid:107)(cid:24)(cid:127)(cid:41)(cid:3)(cid:88)(cid:70)(cid:97)(cid:70)(cid:137)(cid:41)(cid:37)(cid:515)(cid:515)(cid:17) Directors’ declaration In the directors’ opinion: p the attached ﬁnancial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; p the attached ﬁnancial statements and notes comply with International Financial Reporting Standards as issued by the International Accounting Standards Board as described in note 1 to the ﬁnancial statements; p the attached ﬁnancial statements and notes give a true and fair view of the consolidated entity’s ﬁnancial position as at 30 June 2020 and of its performance for the ﬁnancial year ended on that date; and p there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable. The directors have been given the declarations required by section 295A of the Corporations Act 2001. Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001. On behalf of the directors Andrew Sissian Finance Director 18 September 2020 (cid:38)(cid:51)(cid:51)(cid:57)(cid:38)(cid:49)(cid:3)(cid:55)(cid:42)(cid:53)(cid:52)(cid:55)(cid:56)(cid:3)(cid:23)(cid:21)(cid:23)(cid:21)(cid:434)(cid:96)!(cid:25)(cid:30)(cid:434) WWW.COBRE.COM.AU(cid:26)(cid:21)(cid:434)(cid:200)(cid:460)(cid:26)(cid:107)(cid:24)(cid:127)(cid:41)(cid:3)(cid:88)(cid:70)(cid:97)(cid:70)(cid:137)(cid:41)(cid:37)(cid:555)200 George Street Sydney NSW 2000 Australia GPO Box 2646 Sydney NSW 2001 Tel: +61 2 9248 5555 Fax: +61 2 9248 5959 ey.com/au (cid:555)(cid:17) Independent Auditor’s Report to the Members of Cobre Limited Independent auditor’s report Report on the Audit of the Financial Report Opinion We have audited the financial report of Cobre Limited (the Company) and its subsidiaries (collectively the Group), which comprises the consolidated statement of financial position as at 30 June 2020, 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 report, including a summary of significant accounting policies, and the Directors’ declaration. 200 George Street Sydney NSW 2000 Australia GPO Box 2646 Sydney NSW 2001 Tel: +61 2 9248 5555 Fax: +61 2 9248 5959 ey.com/au In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: a) giving a true and fair view of the consolidated financial position of the Group as at 30 June 2020 and of its consolidated financial performance for the year ended on that date; and Independent Auditor’s Report to the Members of Cobre Limited b) complying with Australian Accounting Standards and the Corporations Regulations 2001. Report on the Audit of the Financial Report Basis for Opinion 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 We have audited the financial report of Cobre Limited (the Company) and its subsidiaries (collectively Report section of our report. We are independent of the Group in accordance with the auditor the Group), which comprises the consolidated statement of financial position as at 30 June 2020, the independence requirements of the Corporations Act 2001 and the ethical requirements of the consolidated statement of comprehensive income, the consolidated statement of changes in equity and Accounting Professional and Ethical Standards APES 110 Code of Ethics for Professional Accountants the consolidated statement of cash flows for the year then ended, notes to the financial report, including (including Independence Standards) (the Code) that are relevant to our audit of the financial report in a summary of significant accounting policies, and the Directors’ declaration. Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. In our opinion, the accompanying financial report of the Group is in accordance with the Corporations We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for Act 2001, including: our opinion. a) giving a true and fair view of the consolidated financial position of the Group as at 30 June 2020 Key Audit Matters and of its consolidated financial performance for the year ended on that date; and b) complying with Australian Accounting Standards and the Corporations Regulations 2001. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial report of the current year. These matters were addressed in the context of our Basis for Opinion audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under the matter is provided in that context. 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 We have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of the independence requirements of the Corporations Act 2001 and the ethical requirements of the Financial Report section of our report, including in relation to these matters. Accordingly, our audit Accounting Professional and Ethical Standards APES 110 Code of Ethics for Professional Accountants included the performance of procedures designed to respond to our assessment of the risks of material (including Independence Standards) (the Code) that are relevant to our audit of the financial report in misstatement of the financial report. The results of our audit procedures, including the procedures Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. performed to address the matters below, provide the basis for our audit opinion on the accompanying financial report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key Audit Matters A member firm of Ernst & Young Global Limited Key audit matters are those matters that, in our professional judgment, were of most significance in our Liability limited by a scheme approved under Professional Standards Legislation audit of the financial report of the current year. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context. (cid:38)(cid:51)(cid:51)(cid:57)(cid:38)(cid:49)(cid:3)(cid:55)(cid:42)(cid:53)(cid:52)(cid:55)(cid:56)(cid:3)(cid:23)(cid:21)(cid:23)(cid:21)(cid:434)(cid:96)!(cid:26)(cid:22)(cid:434) We have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the financial report. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying financial report. A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation 200 George Street Sydney NSW 2000 Australia Tel: +61 2 9248 5555 Fax: +61 2 9248 5959 GPO Box 2646 Sydney NSW 2001 ey.com/au Independent Auditor’s Report to the Members of Cobre Limited Report on the Audit of the Financial Report Opinion We have audited the financial report of Cobre Limited (the Company) and its subsidiaries (collectively the Group), which comprises the consolidated statement of financial position as at 30 June 2020, 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 report, including a summary of significant accounting policies, and the Directors’ declaration. In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: a) giving a true and fair view of the consolidated financial position of the Group as at 30 June 2020 and of its consolidated financial performance for the year ended on that date; and b) complying with Australian Accounting Standards and the Corporations Regulations 2001. (cid:3)(cid:46)(cid:51)(cid:41)(cid:42)(cid:53)(cid:42)(cid:51)(cid:41)(cid:42)(cid:51)(cid:56)(cid:3)(cid:38)(cid:57)(cid:41)(cid:46)(cid:56)(cid:52)(cid:55)(cid:12)(cid:8)(cid:3)(cid:55)(cid:42)(cid:53)(cid:52)(cid:55)(cid:56)(cid:3) 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 APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Carrying Value of Exploration and Evaluation Assets Key Audit Matters Key audit matters are those matters that, in our professional judgment, were of most significance in our Why significant Carrying Value of Exploration and Evaluation Assets audit of the financial report of the current year. These matters were addressed in the context of our The Group’s exploration assets of $2.5m as at Our procedures to address the Group’s assessment of audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide a 30 June 2020 represent 25% of the total assets separate opinion on these matters. For each matter below, our description of how our audit addressed impairment indicators for exploration assets included: How our audit addressed the key audit matter of the Group. the matter is provided in that context. How our audit addressed the key audit matter Why significant and any associated risks. and any associated risks. (cid:102) Understanding the current exploration program (cid:102) Understanding the current exploration program Our procedures to address the Group’s assessment of impairment indicators for exploration assets included: significant exploration and evaluation activity in the relevant areas of interest, which included an assessment of the Group’s cash-flow forecast Our procedures to address the Group’s assessment of models, discussions with senior management impairment indicators for exploration assets included: and Directors as to the intentions and strategy of the Group. (cid:102) Considering the Group’s right to explore in the relevant exploration area, which included (cid:102) Considering the Group’s intention to carry out obtaining and assessing supporting significant exploration and evaluation activity in documentation such as license agreements. the relevant areas of interest, which included an assessment of the Group’s cash-flow forecast (cid:102) Considering the Group’s intention to carry out models, discussions with senior management How our audit addressed the key audit matter and Directors as to the intentions and strategy of the Group. The Group’s exploration assets of $2.5m as at Exploration assets are initially recognised at cost We have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of the 30 June 2020 represent 25% of the total assets and any additional expenditure is capitalised to of the Group. Financial Report section of our report, including in relation to these matters. Accordingly, our audit (cid:102) Considering the Group’s right to explore in the the exploration asset in accordance with the included the performance of procedures designed to respond to our assessment of the risks of material relevant exploration area, which included Group’s accounting policy as outlined in Note 1. Exploration assets are initially recognised at cost misstatement of the financial report. The results of our audit procedures, including the procedures obtaining and assessing supporting and any additional expenditure is capitalised to performed to address the matters below, provide the basis for our audit opinion on the accompanying documentation such as license agreements. At each reporting date the Directors’ assess the the exploration asset in accordance with the financial report. Group’s exploration assets for indicators of Group’s accounting policy as outlined in Note 1. impairment. The decision as to whether there are indicators that require the Group’s At each reporting date the Directors’ assess the Carrying Value of Exploration and Evaluation Assets exploration assets to be assessed for impairment Group’s exploration assets for indicators of in accordance with AASB 6 involved judgment, impairment. The decision as to whether there including whether; the rights to tenure for the Why significant A member firm of Ernst & Young Global Limited are indicators that require the Group’s Liability limited by a scheme approved under Professional Standards Legislation areas of interest are current; the Group’s ability exploration assets to be assessed for impairment The Group’s exploration assets of $2.5m as at and intention to continue to evaluate and in accordance with AASB 6 involved judgment, 30 June 2020 represent 25% of the total assets develop the area of interest and whether the including whether; the rights to tenure for the results of the Group’s exploration and evaluation of the Group. areas of interest are current; the Group’s ability work to date are sufficiently progressed for a and intention to continue to evaluate and decision to be made as to the commercial Exploration assets are initially recognised at cost develop the area of interest and whether the viability or otherwise of the area of interest. and any additional expenditure is capitalised to results of the Group’s exploration and evaluation the exploration asset in accordance with the work to date are sufficiently progressed for a We have therefore considered this a Key Audit Group’s accounting policy as outlined in Note 1. decision to be made as to the commercial Matter due to the value of the exploration assets viability or otherwise of the area of interest. relative to total assets and the significant At each reporting date the Directors’ assess the judgments involved in the assessment of Group’s exploration assets for indicators of We have therefore considered this a Key Audit indicators of impairment. impairment. The decision as to whether there Matter due to the value of the exploration assets are indicators that require the Group’s relative to total assets and the significant exploration assets to be assessed for impairment judgments involved in the assessment of in accordance with AASB 6 involved judgment, indicators of impairment. including whether; the rights to tenure for the areas of interest are current; the Group’s ability and intention to continue to evaluate and develop the area of interest and whether the results of the Group’s exploration and evaluation work to date are sufficiently progressed for a decision to be made as to the commercial viability or otherwise of the area of interest. (cid:102) Agreeing a sample of costs capitalised for the period to supporting documentation and considering whether these costs meet the (cid:102) Understanding the current exploration program requirements of Australian Accounting (cid:102) Agreeing a sample of costs capitalised for the and any associated risks. Standards(cid:3)and the Group’s accounting policy. period to supporting documentation and (cid:102) Considering the Group’s right to explore in the considering whether these costs meet the (cid:102) Assessing whether the methodology used by the relevant exploration area, which included requirements of Australian Accounting Group to identify indicators of impairment met obtaining and assessing supporting Standards(cid:3)and the Group’s accounting policy. the requirements of Australian Accounting documentation such as license agreements. Standards. (cid:102) Assessing whether the methodology used by the (cid:102) Considering the Group’s intention to carry out Group to identify indicators of impairment met significant exploration and evaluation activity in the requirements of Australian Accounting the relevant areas of interest, which included an Standards. assessment of the Group’s cash-flow forecast (cid:102) Evaluating the adequacy of the related models, discussions with senior management disclosures in the financial report. and Directors as to the intentions and strategy of the Group. (cid:102) Agreeing a sample of costs capitalised for the period to supporting documentation and considering whether these costs meet the requirements of Australian Accounting Standards(cid:3)and the Group’s accounting policy. (cid:102) Evaluating the adequacy of the related disclosures in the financial report. We have therefore considered this a Key Audit Matter due to the value of the exploration assets relative to total assets and the significant judgments involved in the assessment of indicators of impairment. (cid:102) Assessing whether the methodology used by the Group to identify indicators of impairment met the requirements of Australian Accounting Standards. (cid:102) Evaluating the adequacy of the related disclosures in the financial report. A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation (cid:26)(cid:23)(cid:434)(cid:96)(cid:434)(cid:40)(cid:52)(cid:39)(cid:55)(cid:42)(cid:3)(cid:49)(cid:46)(cid:50)(cid:46)(cid:56)(cid:42)(cid:41) WWW.COBRE.COM.AU A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Carrying Value of Exploration and Evaluation Assets Information other than the Financial Statements and Auditor’s Report The Directors are responsible for the other information. The other information comprises the Why significant Carrying Value of Exploration and Evaluation Assets information included in the Company’s 2020 Annual Report other than the financial report and our The Group’s exploration assets of $2.5m as at auditor’s report thereon. We obtained the Directors’ Report that is to be included in the Annual Report, Our procedures to address the Group’s assessment of 30 June 2020 represent 25% of the total assets prior to the date of this auditor’s report, and we expect to obtain the remaining sections of the Annual impairment indicators for exploration assets included: How our audit addressed the key audit matter of the Group. Report after the date of this auditor’s report. How our audit addressed the key audit matter Why significant and any associated risks. and any associated risks. (cid:102) Understanding the current exploration program (cid:102) Understanding the current exploration program Our procedures to address the Group’s assessment of impairment indicators for exploration assets included: The Group’s exploration assets of $2.5m as at Exploration assets are initially recognised at cost Our opinion on the financial report does not cover the other information and we do not and will not 30 June 2020 represent 25% of the total assets and any additional expenditure is capitalised to of the Group. express any form of assurance conclusion thereon, with the exception of the Remuneration Report and (cid:102) Considering the Group’s right to explore in the the exploration asset in accordance with the our related assurance opinion. relevant exploration area, which included Group’s accounting policy as outlined in Note 1. obtaining and assessing supporting documentation such as license agreements. Exploration assets are initially recognised at cost and any additional expenditure is capitalised to In connection with our audit of the financial report, our responsibility is to read the other information (cid:102) Considering the Group’s right to explore in the At each reporting date the Directors’ assess the the exploration asset in accordance with the and, in doing so, consider whether the other information is materially inconsistent with the financial relevant exploration area, which included (cid:102) Considering the Group’s intention to carry out Group’s exploration assets for indicators of Group’s accounting policy as outlined in Note 1. report or our knowledge obtained in the audit or otherwise appears to be materially misstated. obtaining and assessing supporting significant exploration and evaluation activity in impairment. The decision as to whether there documentation such as license agreements. the relevant areas of interest, which included an are indicators that require the Group’s At each reporting date the Directors’ assess the If, based on the work we have performed on the other information obtained prior to the date of this exploration assets to be assessed for impairment assessment of the Group’s cash-flow forecast (cid:102) Considering the Group’s intention to carry out Group’s exploration assets for indicators of auditor’s report, we conclude that there is a material misstatement of this other information, we are in accordance with AASB 6 involved judgment, models, discussions with senior management impairment. The decision as to whether there required to report that fact. We have nothing to report in this regard. including whether; the rights to tenure for the and Directors as to the intentions and strategy are indicators that require the Group’s areas of interest are current; the Group’s ability of the Group. exploration assets to be assessed for impairment Responsibilities of the Directors for the Financial Report and intention to continue to evaluate and in accordance with AASB 6 involved judgment, (cid:102) Agreeing a sample of costs capitalised for the develop the area of interest and whether the including whether; the rights to tenure for the period to supporting documentation and results of the Group’s exploration and evaluation The Directors of the Company are responsible for the preparation of the financial report that gives a true areas of interest are current; the Group’s ability considering whether these costs meet the work to date are sufficiently progressed for a and intention to continue to evaluate and and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and requirements of Australian Accounting (cid:102) Agreeing a sample of costs capitalised for the decision to be made as to the commercial develop the area of interest and whether the for such internal control as the Directors determine is necessary to enable the preparation of the Standards(cid:3)and the Group’s accounting policy. period to supporting documentation and viability or otherwise of the area of interest. results of the Group’s exploration and evaluation financial report that gives a true and fair view and is free from material misstatement, whether due to considering whether these costs meet the (cid:102) Assessing whether the methodology used by the work to date are sufficiently progressed for a fraud or error. We have therefore considered this a Key Audit requirements of Australian Accounting Group to identify indicators of impairment met decision to be made as to the commercial Matter due to the value of the exploration assets Standards(cid:3)and the Group’s accounting policy. the requirements of Australian Accounting viability or otherwise of the area of interest. In preparing the financial report, the Directors are responsible for assessing the Group’s ability to relative to total assets and the significant Standards. continue as a going concern, disclosing, as applicable, matters related to going concern and using the judgments involved in the assessment of We have therefore considered this a Key Audit going concern basis of accounting unless the Directors either intend to liquidate the Group or cease indicators of impairment. Matter due to the value of the exploration assets operations, or have no realistic alternative but to do so. relative to total assets and the significant judgments involved in the assessment of indicators of impairment. significant exploration and evaluation activity in the relevant areas of interest, which included an assessment of the Group’s cash-flow forecast models, discussions with senior management and Directors as to the intentions and strategy of the Group. (cid:102) Assessing whether the methodology used by the Group to identify indicators of impairment met the requirements of Australian Accounting Standards. (cid:102) Evaluating the adequacy of the related disclosures in the financial report. Auditor’s responsibilities for the Audit of the Financial Report (cid:102) Evaluating the adequacy of the related disclosures in the financial report. Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. As part of an audit in accordance with Australian Auditing Standards, we exercise professional judgment and maintain professional scepticism throughout the audit. We also: A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation (cid:38)(cid:51)(cid:51)(cid:57)(cid:38)(cid:49)(cid:3)(cid:55)(cid:42)(cid:53)(cid:52)(cid:55)(cid:56)(cid:3)(cid:23)(cid:21)(cid:23)(cid:21)(cid:434)(cid:96)!(cid:26)(cid:24)(cid:434) (cid:3)(cid:46)(cid:51)(cid:41)(cid:42)(cid:53)(cid:42)(cid:51)(cid:41)(cid:42)(cid:51)(cid:56)(cid:3)(cid:38)(cid:57)(cid:41)(cid:46)(cid:56)(cid:52)(cid:55)(cid:12)(cid:8)(cid:3)(cid:55)(cid:42)(cid:53)(cid:52)(cid:55)(cid:56)(cid:3) • Carrying Value of Exploration and Evaluation Assets 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 Why significant not detecting a material misstatement resulting from fraud is higher than for one resulting Carrying Value of Exploration and Evaluation Assets from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, The Group’s exploration assets of $2.5m as at or the override of internal control. 30 June 2020 represent 25% of the total assets of the Group. Our procedures to address the Group’s assessment of impairment indicators for exploration assets included: How our audit addressed the key audit matter How our audit addressed the key audit matter Why significant • 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 entity’s internal control. Our procedures to address the Group’s assessment of impairment indicators for exploration assets included: (cid:102) Understanding the current exploration program and any associated risks. The Group’s exploration assets of $2.5m as at Exploration assets are initially recognised at cost 30 June 2020 represent 25% of the total assets and any additional expenditure is capitalised to of the Group. the exploration asset in accordance with the Group’s accounting policy as outlined in Note 1. • • • and any associated risks. (cid:102) Understanding the current exploration program (cid:102) Considering the Group’s right to explore in the relevant exploration area, which included Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Directors. obtaining and assessing supporting documentation such as license agreements. (cid:102) Considering the Group’s right to explore in the Conclude on the appropriateness of the Directors’ use of the going concern basis of relevant exploration area, which included (cid:102) Considering the Group’s intention to carry out accounting and, based on the audit evidence obtained, whether a material uncertainty exists obtaining and assessing supporting significant exploration and evaluation activity in related to events and conditions that may cast significant doubt on the Group’s ability to documentation such as license agreements. the relevant areas of interest, which included an continue as a going concern. If we conclude that a material uncertainty exists, we are assessment of the Group’s cash-flow forecast (cid:102) Considering the Group’s intention to carry out required to draw attention in our auditor’s report to the related disclosures in the financial models, discussions with senior management report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based and Directors as to the intentions and strategy on the audit evidence obtained up to the date of our auditor’s report. However, future events of the Group. or conditions may cause the Group to cease to continue as a going concern. Exploration assets are initially recognised at cost and any additional expenditure is capitalised to At each reporting date the Directors’ assess the the exploration asset in accordance with the Group’s exploration assets for indicators of Group’s accounting policy as outlined in Note 1. impairment. The decision as to whether there are indicators that require the Group’s At each reporting date the Directors’ assess the exploration assets to be assessed for impairment Group’s exploration assets for indicators of in accordance with AASB 6 involved judgment, impairment. The decision as to whether there including whether; the rights to tenure for the are indicators that require the Group’s areas of interest are current; the Group’s ability exploration assets to be assessed for impairment and intention to continue to evaluate and in accordance with AASB 6 involved judgment, (cid:102) Agreeing a sample of costs capitalised for the develop the area of interest and whether the including whether; the rights to tenure for the Evaluate the overall presentation, structure and content of the financial report, including the period to supporting documentation and results of the Group’s exploration and evaluation areas of interest are current; the Group’s ability disclosures, and whether the financial report represents the underlying transactions and considering whether these costs meet the work to date are sufficiently progressed for a and intention to continue to evaluate and events in a manner that achieves fair presentation. requirements of Australian Accounting (cid:102) Agreeing a sample of costs capitalised for the decision to be made as to the commercial develop the area of interest and whether the Standards(cid:3)and the Group’s accounting policy. period to supporting documentation and viability or otherwise of the area of interest. results of the Group’s exploration and evaluation • Obtain sufficient appropriate audit evidence regarding the financial information of the entities considering whether these costs meet the (cid:102) Assessing whether the methodology used by the work to date are sufficiently progressed for a or business activities within the Group to express an opinion on the financial report. We are We have therefore considered this a Key Audit requirements of Australian Accounting Group to identify indicators of impairment met decision to be made as to the commercial responsible for the direction, supervision and performance of the Group audit. We remain Matter due to the value of the exploration assets Standards(cid:3)and the Group’s accounting policy. the requirements of Australian Accounting viability or otherwise of the area of interest. solely responsible for our audit opinion. relative to total assets and the significant Standards. (cid:102) Assessing whether the methodology used by the judgments involved in the assessment of We communicate with the Directors regarding, among other matters, the planned scope and timing of Group to identify indicators of impairment met indicators of impairment. the audit and significant audit findings, including any significant deficiencies in internal control that we the requirements of Australian Accounting Standards. identify during our audit. significant exploration and evaluation activity in the relevant areas of interest, which included an assessment of the Group’s cash-flow forecast models, discussions with senior management and Directors as to the intentions and strategy of the Group. (cid:102) Evaluating the adequacy of the related disclosures in the financial report. We have therefore considered this a Key Audit Matter due to the value of the exploration assets relative to total assets and the significant judgments involved in the assessment of indicators of impairment. We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied. (cid:102) Evaluating the adequacy of the related disclosures in the financial report. From the matters communicated to the Directors, we determine those matters that were of most significance in the audit of the financial report of the current year 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. A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation (cid:26)(cid:25)(cid:434)(cid:96)(cid:434)(cid:40)(cid:52)(cid:39)(cid:55)(cid:42)(cid:3)(cid:49)(cid:46)(cid:50)(cid:46)(cid:56)(cid:42)(cid:41) WWW.COBRE.COM.AU Carrying Value of Exploration and Evaluation Assets Report on the Remuneration Report Why significant Opinion on the Remuneration Report Carrying Value of Exploration and Evaluation Assets The Group’s exploration assets of $2.5m as at We have audited the Remuneration Report included in pages 6 to 10 of the Directors' report for the 30 June 2020 represent 25% of the total assets year ended 30 June 2020. of the Group. Our procedures to address the Group’s assessment of impairment indicators for exploration assets included: How our audit addressed the key audit matter How our audit addressed the key audit matter Why significant and any associated risks. and any associated risks. (cid:102) Understanding the current exploration program (cid:102) Understanding the current exploration program (cid:102) Considering the Group’s right to explore in the relevant exploration area, which included obtaining and assessing supporting documentation such as license agreements. The Group’s exploration assets of $2.5m as at In our opinion, the Remuneration Report of Cobre Limited for the year ended 30 June 2020, complies Exploration assets are initially recognised at cost 30 June 2020 represent 25% of the total assets with section 300A of the Corporations Act 2001. and any additional expenditure is capitalised to of the Group. the exploration asset in accordance with the Responsibilities Group’s accounting policy as outlined in Note 1. Our procedures to address the Group’s assessment of impairment indicators for exploration assets included: (cid:102) Considering the Group’s right to explore in the relevant exploration area, which included (cid:102) Considering the Group’s intention to carry out obtaining and assessing supporting significant exploration and evaluation activity in documentation such as license agreements. the relevant areas of interest, which included an assessment of the Group’s cash-flow forecast (cid:102) Considering the Group’s intention to carry out models, discussions with senior management and Directors as to the intentions and strategy of the Group. Exploration assets are initially recognised at cost and any additional expenditure is capitalised to The Directors of the Company are responsible for the preparation and presentation of the At each reporting date the Directors’ assess the the exploration asset in accordance with the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our Group’s exploration assets for indicators of Group’s accounting policy as outlined in Note 1. impairment. The decision as to whether there responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in are indicators that require the Group’s accordance with Australian Auditing Standards. At each reporting date the Directors’ assess the exploration assets to be assessed for impairment Group’s exploration assets for indicators of in accordance with AASB 6 involved judgment, impairment. The decision as to whether there including whether; the rights to tenure for the are indicators that require the Group’s areas of interest are current; the Group’s ability exploration assets to be assessed for impairment and intention to continue to evaluate and in accordance with AASB 6 involved judgment, develop the area of interest and whether the including whether; the rights to tenure for the results of the Group’s exploration and evaluation areas of interest are current; the Group’s ability Ernst & Young work to date are sufficiently progressed for a and intention to continue to evaluate and decision to be made as to the commercial develop the area of interest and whether the viability or otherwise of the area of interest. results of the Group’s exploration and evaluation work to date are sufficiently progressed for a We have therefore considered this a Key Audit decision to be made as to the commercial Matter due to the value of the exploration assets viability or otherwise of the area of interest. relative to total assets and the significant judgments involved in the assessment of indicators of impairment. Ryan Fisk Partner Sydney 18 September 2020 (cid:102) Agreeing a sample of costs capitalised for the period to supporting documentation and considering whether these costs meet the requirements of Australian Accounting (cid:102) Agreeing a sample of costs capitalised for the Standards(cid:3)and the Group’s accounting policy. period to supporting documentation and considering whether these costs meet the (cid:102) Assessing whether the methodology used by the requirements of Australian Accounting Group to identify indicators of impairment met Standards(cid:3)and the Group’s accounting policy. the requirements of Australian Accounting Standards. significant exploration and evaluation activity in the relevant areas of interest, which included an assessment of the Group’s cash-flow forecast models, discussions with senior management and Directors as to the intentions and strategy of the Group. We have therefore considered this a Key Audit Matter due to the value of the exploration assets relative to total assets and the significant judgments involved in the assessment of indicators of impairment. (cid:102) Assessing whether the methodology used by the Group to identify indicators of impairment met the requirements of Australian Accounting Standards. (cid:102) Evaluating the adequacy of the related disclosures in the financial report. (cid:102) Evaluating the adequacy of the related disclosures in the financial report. A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation (cid:38)(cid:51)(cid:51)(cid:57)(cid:38)(cid:49)(cid:3)(cid:55)(cid:42)(cid:53)(cid:52)(cid:55)(cid:56)(cid:3)(cid:23)(cid:21)(cid:23)(cid:21)(cid:434)(cid:96)!(cid:26)(cid:26)(cid:434) WWW.COBRE.COM.AU(cid:26)(cid:27)(cid:434)(cid:200)(cid:460)(cid:26)(cid:107)(cid:24)(cid:127)(cid:41)(cid:3)(cid:88)(cid:70)(cid:97)(cid:70)(cid:137)(cid:41)(cid:37)(cid:552)(cid:552)(cid:17) ASX Additional Information Additional information required pursuant to ASX Listing Rule 4.10 and not disclosed elsewhere in this report is set out below. The information is effective as at 24 August, 2020. (cid:46)(cid:51)(cid:43)(cid:52)(cid:55)(cid:50)(cid:38)(cid:56)(cid:46)(cid:52)(cid:51)(cid:3)(cid:53)(cid:57)(cid:55)(cid:8)(cid:57)(cid:38)(cid:51)(cid:56)(cid:3)(cid:56)(cid:52)(cid:3)(cid:49)(cid:46)(cid:8)(cid:56)(cid:46)(cid:51)(cid:44)(cid:3)(cid:55)(cid:57)(cid:49)(cid:42)(cid:3)(cid:527)(cid:19)(cid:550)(cid:521)(cid:19)(cid:550)(cid:543) Between the date of the Company’s admission to the ofﬁcial list of the ASX on 29 January 2020 and the end of the reporting period on 30 June 2020, the Company used its cash and assets in a form readily convertible to cash that it had at the time of admission in a way consistent with its business objectives. (cid:46)(cid:51)(cid:43)(cid:52)(cid:55)(cid:50)(cid:38)(cid:56)(cid:46)(cid:52)(cid:51)(cid:3)(cid:53)(cid:57)(cid:55)(cid:8)(cid:57)(cid:38)(cid:51)(cid:56)(cid:3)(cid:56)(cid:52)(cid:3)(cid:49)(cid:46)(cid:8)(cid:56)(cid:46)(cid:51)(cid:44)(cid:3)(cid:55)(cid:57)(cid:49)(cid:42)(cid:3)(cid:525)(cid:19)(cid:566)(cid:521) Perrinvale Project The Perrinvale Project is based on a large conterminous group of nine exploration licenses held by Toucan Gold Pty Ltd, a wholly owned subsidiary of Cobre. The Perrinvale tenements total 381km2 in size. Tenement/ Application E29/1017 E29/929-I E29/938-I E29/946-I E29/986 E29/987 E29/988 E29/989 E29/990 1 BL = Blocks Holder/ Applicant Shares Grant Date Expiry Date Area1 Toucan Gold Pty Ltd 100/100 4 Jan2018 3 Jan 2023 Toucan Gold Pty Ltd 100/100 25 Aug 2015 24 Aug 20202 Toucan Gold Pty Ltd 100/100 8 Jul 2015 7 Jul 20202 Toucan Gold Pty Ltd 100/100 18 Aug 2015 17 Aug 20202 Toucan Gold Pty Ltd 100/100 11 Oct 2017 10 Oct 2022 Toucan Gold Pty Ltd 100/100 19 Sep 2017 18 Sep 2022 Toucan Gold Pty Ltd 100/100 19 Sep 2017 18 Sep 2022 Toucan Gold Pty Ltd 100/100 19 Sep 2017 18 Sep 2022 Toucan Gold Pty Ltd 100/100 19 Sep 2017 18 Sep 2022 18BL 32BL 21BL 5BL 20BL 7BL 1BL 3BL 9BL 2 Toucan Gold Pty Ltd is in the process of renewing these 3 tenements with all required lodgements having been made with the Department of Mines, Industry Regulation and Safety (DMIRS) within required time frames. (cid:38)(cid:51)(cid:51)(cid:57)(cid:38)(cid:49)(cid:3)(cid:55)(cid:42)(cid:53)(cid:52)(cid:55)(cid:56)(cid:3)(cid:23)(cid:21)(cid:23)(cid:21)(cid:434)(cid:96)!(cid:26)(cid:28)(cid:434) (cid:3)(cid:38)(cid:8)(cid:60)(cid:3)(cid:38)(cid:41)(cid:41)(cid:46)(cid:56)(cid:46)(cid:52)(cid:51)(cid:38)(cid:49)(cid:3)(cid:46)(cid:51)(cid:43)(cid:52)(cid:55)(cid:50)(cid:38)(cid:56)(cid:46)(cid:52)(cid:51) The above table is the tenement schedule for Toucan Gold Pty Ltd. All Perrinvale tenements are 100% owned by Toucan Gold, however FMG Resources Pty Ltd retains a 2% net smelter royalty on any future metal production from 3 tenements E29/929, 938 and 946. Mt Sandiman Project The Mt Sandiman Project is based on a single tenement (E09/2316) totalling 202km2 in size. Cobre does not hold a direct interest in the tenement which is subject to a farm-in agreement with GTTS Generations Pty Ltd dated 13 November 2019 (refer farm-in agreement summary in section 10.8 of the Company’s Prospectus dated 6 December 2019). Tenement/ Application Holder/ Applicant Shares Grant Date Expiry Date E09/2316 GTTS Generations Pty Ltd 100/100 9 Aug 2019 8 Aug 2024 Area1 65BL CORPORATE GOVERNANCE: The Company’s Corporate Governance Statement for the ﬁnancial year ended 30 June 2020 can be found at: https://www.cobre.com.au/wp-content/uploads/2020/01/2.2.5-Corporate-Governance-Statement.pdf SUBSTANTIAL SHAREHOLDERS The names of substantial shareholders in Cobre Ltd and the number of equity securities to which each substantial shareholder and their associates have a relevant interest, as disclosed in substantial shareholder notices given to Cobre Ltd, are set out below. Name of Substantial Holder within the meaning of section 671B of the Corporations Act Date Number of Shares in which the substantial holder holds a relevant interest % of total shares on issue Metal Tiger PLC 10 June 2020 19,350,000 18.792% Bernard Aylward Resource Assets Pty Ltd 13 May 2020 12 May 2020 5,408,846 8,113,269 Holland International Pty Ltd 4 February 2020 11,024,384 5.25% 7.87% 11.38% NUMBER OF HOLDERS OF EACH CLASS OF EQUITY SECURITIES Category Fully Paid Ordinary Shares Options exercisable at $0.20 expiring 24 September 2024 (not quoted on ASX) Options exercisable at $0.30 expiring 31 January 2023 (not quoted on ASX) Number of Holders 450 6 4 VOTING RIGHTS Shareholder voting rights are summarised within section 11.2 on page 226 of the Company’s Prospectus dated 6 December 2019 and paragraph 34 of the Company’s Constitution both lodged with the ASX on 29 January 2020. (cid:26)(cid:29)(cid:434)(cid:96)(cid:434)(cid:40)(cid:52)(cid:39)(cid:55)(cid:42)(cid:3)(cid:49)(cid:46)(cid:50)(cid:46)(cid:56)(cid:42)(cid:41) WWW.COBRE.COM.AU DISTRIBUTION SCHEDULE OF SHAREHOLDERS Range Total Holders Shares % of Shares 100,001 and Over 10,001 to 100,000 5,001 to 10,000 1,001 to 5,000 1 to 1,000 Total 81 180 99 75 15 450 93,971,091 7,856,929 903,105 235,627 3,936 91.260 7.630 0.880 0.230 0.000 102,970,688 100.000 UNMARKETABLE PARCELS There are 43 shareholders with an unmarketable parcel of shares being a holding of less than 2,564 shares each for a combined total of 62,141 shares. This is based on a closing price of $0.19 per share as at 21 August, 2020 and represents 0.06035% of the shares on issue on that day. (cid:56)(cid:52)(cid:53)(cid:3)(cid:566)(cid:521)(cid:3)(cid:8)(cid:45)(cid:38)(cid:55)(cid:42)(cid:45)(cid:52)(cid:49)(cid:41)(cid:42)(cid:55)(cid:8) Category METAL TIGER PLC HOLLAND INTERNATIONAL PTY LTD RESOURCE ASSETS PTY LTD MONTCAP PTY LTD MR BERNARD AYLWARD SISSIAN INTERNATIONAL PTY LTD ILWELLA PTY LTD J P MORGAN NOMINEES AUSTRALIA PTY LIMITED BROJO INVESTMENTS PTY LTD MR GRANT WILLIAM PETER REYNOLDS YARANDI INVESTMENTS PTY LTD Number of Holders % of Shares 19,350,000 18.792% 11,024,384 10.706% 8,113,269 7.879% 7,250,025 7.041% 5,408,846 5.253% 4,799,052 4.661% 4,739,500 4.603% 2,450,486 2.380% 2,375,250 2.307% 2,000,000 1.942% 1,916,932 1.862% CHIFLEY PORTFOLIOS PTY LIMITED 1,821,368 1.769% BT PORTFOLIO SERVICES LIMITED 1,300,000 1.262% PONDEROSA INVESTMENTS (WA) PTY LTD 1,200,000 1.165% LARRAKEYAH PTY LIMITED DANAWA (INV) PTY LTD PS SUPER NOMINEE PTY LTD BNP PARIBAS NOMINEES PTY LTD 1,149,625 1.116% 1,062,500 1.032% 850,984 0.826% 826,000 0.802% ASHANTI INVESTMENT FUND PTY LTD 771,269 0.749% SABIA HOLDINGS PTY LTD Total Top 20 Total Balance of Holders Total Shares 600,000 0.583% 79,009,490 76.730% 23,961,198 23.270% 102,970,688 100.00% (cid:38)(cid:51)(cid:51)(cid:57)(cid:38)(cid:49)(cid:3)(cid:55)(cid:42)(cid:53)(cid:52)(cid:55)(cid:56)(cid:3)(cid:23)(cid:21)(cid:23)(cid:21)(cid:434)(cid:96)!(cid:26)(cid:30)(cid:434) (cid:3)(cid:38)(cid:8)(cid:60)(cid:3)(cid:38)(cid:41)(cid:41)(cid:46)(cid:56)(cid:46)(cid:52)(cid:51)(cid:38)(cid:49)(cid:3)(cid:46)(cid:51)(cid:43)(cid:52)(cid:55)(cid:50)(cid:38)(cid:56)(cid:46)(cid:52)(cid:51) ESCROWED SECURITIES Category Number ASX or Voluntary End of Escrow Period Unlisted Options exercisable at $0.20 expiring 24 September 2024 237,000 Shares Shares Shares Shares 81,126 243,378 166,667 36,711,947 Unlisted Options exercisable at $0.20 expiring 24 September 2024 13,012,000 Unlisted Options exercisable at $0.30 expiring 31 January 2023 2,000,000 ASX ASX ASX ASX ASX ASX ASX 24 September 2020 16 October 2020 4 November 2020 13 November 2020 31 January 2022 31 January 2022 31 January 2022 UNQUOTED SECURITIES Category Number of Units Number of Holders Options exercisable at $0.20 expiring 24 September 2020 Options exercisable at $0.30 expiring 31 January 2023 13,249,000 2,000,000 6 4 Distribution of Optionholders – exercisable at $0.20 expiring 24 September 2020 Holding Ranges Holders Total Units Percentage 100,001 and Over 10,001 to 100,000 5,001 to 10,000 1,001 to 5,000 1 to 1,000 Total 6 0 0 0 0 6 13,249,000 100.00% 0 0 0 0 0.00% 0.00% 0.00% 0.00% 13,249,000 100.00% Optionholders with more than 20% of the Class of Options: Name Holland International Pty Ltd Sissian International Pty Ltd Number 6,525,000 3,337,000 Percentage 49.25% 25.18% Distribution of Optionholders – exercisable at $0.30 expiring 31 January 2023: Holding Ranges Holders Total Units Percentage 100,001 and Over 10,001 to 100,000 5,001 to 10,000 1,001 to 5,000 1 to 1,000 Total 4 0 0 0 0 4 2,000,000 100.00% 0 0 0 0 0.00% 0.00% 0.00% 0.00% 2,000,000 100.00% (cid:27)(cid:21)(cid:434)(cid:96)(cid:434)(cid:40)(cid:52)(cid:39)(cid:55)(cid:42)(cid:3)(cid:49)(cid:46)(cid:50)(cid:46)(cid:56)(cid:42)(cid:41) WWW.COBRE.COM.AU Optionholders with more than 20% of the Class of Options: Name Sternship Advisers Pty Ltd Mr Robert Anthony Hamilton Number 1,000,000 525,000 Percentage 50.00% 26.25% BUY-BACK There is no current on-market buy back. The Company is listed on the Australian Securities Exchange under the code ‘CBE’. Design & Production > APM Graphics Management > 1800 806 930 (cid:38)(cid:51)(cid:51)(cid:57)(cid:38)(cid:49)(cid:3)(cid:55)(cid:42)(cid:53)(cid:52)(cid:55)(cid:56)(cid:3)(cid:23)(cid:21)(cid:23)(cid:21)(cid:434)(cid:96)!(cid:27)(cid:22)(cid:434) Cobre Limited Level 7, 151 Macquarie Street Sydney NSW 2000(02) 9048 8856 www.cobre.com.au

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