ANNUAL REPORT
For the year ended 30 June 2020
Crater Gold Mining Limited (ASX: CGN) ABN 75 067 519 779
Contents
Corporate Directory
Directors' Report
Auditor's Independence Declaration
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Directors' Declaration
Independent Auditor's Report
ASX Additional Information
Page
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19
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45
46
49
Corporate Directory
Directors:
S W S Chan (Non-executive Chairman)
R D Parker (Managing Director)
T M Fermanis (Deputy Chairman)
L K K Lee (Non-executive Director)
D T Y Sun (Non-executive Director)
Company Secretary:
A S Betti
ABN:
75 067 519 779
Registered Office and
Principal place of business:
Level 2,
22 Mount Street,
Perth WA 6000
Australia
Telephone: +61 8 6188 8181
Email:
info@cratergold.com.au
Postal Address:
Share Registry:
Auditors:
Bankers
PO Box 7054
Cloisters Square
PERTH WA 6850
Australia
Link Market Services Limited
Level 12
250 St Georges Terrace
Perth WA 6000
Australia
Telephone: 1300 554 474
RSM Australia Partners
Level 32
2 The Esplanade
Perth WA 6000
Australia
Telephone: +61 8 9261 9100
National Australia Bank Ltd
100 St Georges Terrace
PERTH WA 6000
ASX Listing:
Crater Gold Mining Limited shares are quoted on the Australian Securities Exchange
under the code “CGN”.
Website address:
www.cratergold.com.au
Crater Gold Mining Limited
2
Directors’ Report
The Directors present their report, together with the financial statements, on the Group (referred to hereafter as the 'the Group')
consisting of Crater Gold Mining 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 Crater Gold Mining Limited during the whole of the financial year and up to the date of this
report, unless otherwise stated:
S W S Chan (Non-executive Chairman)
R D Parker (Managing Director)
T M Fermanis (Deputy Chairman)
L K K Lee (Non-executive Director)
D T Y Sun (Non-executive Director)
Principal Activities
The principal activities of the Group consist of the exploration, evaluation and exploitation of potential world-class gold and other
base metal projects at the Group’s mining tenements predominately situated near Goroka, Papua New Guinea and in Queensland,
Australia.
Dividends
No dividends of the Company or any entity of the Group have been paid, declared or recommended since the end of the preceding
year. The Directors do not recommend the payment of any dividend for the year ended 30 June 2020.
Review of Operations and Results
The Group incurred a loss of $4,496,723 for the year ended 30 June 2020 (2019: loss of $6,941,949).
Operations Report
High Grade Zone (HGZ) project at Crater Mountain, Papua New Guinea
During the year the Company announced that due to the current global COVID-19 pandemic, that the Company had taken appropriate
precautions and actions to protect staff and business operations, including precautions as advised and suggested by the World Health
Organization, the Australian Government and the Government of Papua New Guinea (PNG).
First and foremost, our priority is the health, safety and wellbeing of our staff and the people of the communities in which we operate,
and as such, the Company is actively monitoring the COVID‐19 situation and its potential impacts on these groups.
Due to continual spread of the COVID-19 virus, the PNG Government declared a National State of Emergency. As a result, this
prevented the Company moving expatriate personnel in and out of PNG. In addition to closing the country to international arrivals
the government of PNG also announced the grounding of all PNG domestic flights and is encouraging and implementing actions
consistent with other countries regarding limiting internal travel by other means, and implementing social distancing.
Due to the collective impact of these actions and the uncertainty regarding the timing of any recommencement of safe travel in light
of the COVID-19 pandemic, the Company has made the necessary decision to suspend until further notice production at the
Company’s Crater Mountain project and retain only a complement of security and maintenance staff to protect and maintain the
asset.
During the year the Company produced approximately 110oz of gold from mining operations at the High Grade Zone (“HGZ”) at
Crater Mountain.
Mining continued on three levels, 1960RL, 1950RL and 1930RL. Most of the 1960RL was developed and stoped out with only a few
remaining pillars left for ground support, which will be mined at a later date. The 1950RL progressed towards the north where it was
expected to intersect the JL1, JL2 & NV1 veins however significant development mining was required to access the ore structures
which resulted in reduced production. A second access was also commenced on this level to open up new stoping blocks.
Development on the 1930RL concentrated on lateral linear stoping base panels, which provided for selective mining of high grade
tonnage vertically to the 1950RL. A tight exploration drive to the north extreme to test the mineralisation and continuity progressed
beyond the current geological model and the Company is now putting plans together for a renewed drilling programme to further
enhance the resource knowledge.
A major focus for the year was the ML 510 mining license renewal application for the HGZ mine and the associated Mineral Resource
Authority (“MRA”) Warden’s hearings. The Company remains focused on the renewal process of ML510 and is working closely
with the Mineral Resources Authority (MRA) to secure a new ten (10) year mining licence.
Crater Gold Mining Limited
3
Directors’ Report
The Company carried out community awareness meetings in Guasa and Maimafu. Successful Warden’s hearings were held in both
communities and these were followed by a site inspection by the Mines Technical Assessor of the MRA of Papua New Guinea (“PNG”).
The Company received strong support from the local landowner community during the hearings and is now waiting on the decision
of the government of PNG regarding the mining license renewal application.
In addition, two new exploration licences, ELA 2643 and ELA 2644, were applied for during the period. Warden’s from the MRA
conducted hearings with the local communities of the license areas in January of 2020 pursuant to the application for the ELA’s. The
Company is also waiting on the decision of the PNG government in relation to those applications.
Work was carried out to re-establish the access road between the Guasa airstrip and the mining site, which will significantly reduce
logistics costs with the reduction in reliance on helicopters to long line supplies into the man camp at the HGZ. This development
when completed will re-open access via off road vehicles to the Guasa township and airfield, which will then be used as a forward
supplies base.
POLYMETALLIC PROJECT, CROYDON, NORTH QLD
During the year the Company received assays from core samples submitted from two Croydon Polymetallic Project drill holes, DDH
A2-010 and DDH A2-011. These holes were drilled in November 2019 to test high priority polymetallic anomalies identified from a
prior Spatiotemporal Geochemical Hydrocarbon (SGH) soil sampling program. It was decided to not drill a planned third drill hole
(Figure 2) to avoid the risk of the drill rig being “rained in” by the approaching wet season.
While the holes were each planned to be drilled for up to 450m down hole depth, both were terminated early after failing to intersect
any sulphide veining. This was despite visual observations that both holes intersected laminated dark grey shale and light grey to
grey siltstone and fine grained sandstone lithologies, together with the suggested presence of weak hydrothermal features (veining
and vein breccias), both similar to what was encountered in the 2006/2007 drilling programs. The basement was intersected at down
hole depths of 126.0m in hole DDH A2-010 and 133.0m in hole DDH A2-011.
Although the presence of a large hydrothermal system at least 2000m (N-S) by up to 1250m (E-W) is now interpreted, significant
mineralisation within it currently appears to be restricted to the 1,250m (E-W) by 600m (N-S) area previously drilled in the 2006/2007
drilling programs. Accordingly, future drilling will be directed towards in-fill follow-up of this latter area, including testing for
extensions to both the west and to the east of it. While a drilling program was planned to be undertaken in the first half of 2020,
commencement was delayed due to restrictions resulting from the current global COVID-19 pandemic.
ASSAY RESULTS FOR DRILL HOLE DDH A2-010
The first drill hole (DDH A2-010) tested a halo peak identified within polymetallic SGH soil anomalies located in the northern zone of
a large polymetallic anomaly (Figure 1). The hole was located some 550m north of the previously drilled central zone. The hole was
drilled on an azimuth of MGA Grid 0400 (0340 magnetic) at an inclination of 700 to intersect vertically below the peak of the anomaly.
The hole was terminated at 246.8m, having reached a point vertically below the soil anomaly peak without intersecting any sulphide
veining. However, visual observations indicate that the entire basement HQ cored from 147.2m to hole end at 240.4m intersected
laminated dark grey shales and light grey to grey siltstones and fine-grained sandstones that appear to display weak hydrothermal
veining features. A total of 59 one metre interval, half core samples, displaying the best veining were selected from the 99.6m drilled
basement interval and were submitted for 35 element Inductively Coupled Plasma (ICP) assay by ALS, Brisbane. This sampling
procedure was considered sufficient to determine if there was any significant mineralisation present.
Assay results for DDH A2-010 detected only background values reported for all 35 elements analysed for, except for Mn which
averaged an anomalous 0.2% for the samples analysed. It is suspected that the Mn is contained within the hydrothermal veining.
Core samples will now be submitted for petrological examination to check this and other features.
ASSAY RESULTS FOR DRILL HOLE DDH A2-011
The second drill hole (DDH A2-011) tested a halo peak identified within a high priority silver-copper SGH soil anomaly located in the
northern zone of large silver-copper anomalies (Figure 2). The hole is located some 1,250m NNW of drill hole DDH A2-010 and 1,800m
NNW of the previously drilled central zone. The hole was drilled on an azimuth of MGA Grid 0400 (0340 magnetic) at an inclination
of 700 to intersect vertically below the peak of the anomaly. The hole was terminated at 240.4m, having reached a point vertically
below the soil anomaly peak without intersecting any sulphide veining. However, visual observations indicate that the entire
basement HQ cored from 153.3m to hole end at 240.4m intersected laminated dark grey shales and light grey to grey siltstones and
fine-grained sandstones that appear to display weak hydrothermal features. A total of 45 one metre, half core, samples displaying
the best veining were selected from the 87.1m basement interval drilled and were submitted for 35 element ICP assay by ALS,
Brisbane. This sampling procedure was considered sufficient to determine if there was any significant mineralisation present.
Assay results for DDH A2-011 also detected only background values reported for all 35 elements analysed for. Results for Mn
averaged only 0.05% for the samples analysed compared to the higher 0.20% average obtained from hole DDH A2-010. It is suspected
that the Mn is contained within the weaker hydrothermal veining. Core samples will now be submitted for petrological examination
to check this and other features.
Crater Gold Mining Limited
4
Directors’ Report
FIGURE 2 (above): Location of Polymetallic Project First Drill Hole DDH A2-010
FUTURE DRILLING
The results obtained from the drilling program have raised doubts that the SGH soil sampling technique is suitable for delineating
sub-surface polymetallic mineralisation in this licence area. However, further technical evaluation of this will be undertaken. Data
from previous exploration techniques including aeromagnetics, ground magnetics and IP surveying that have been used at the A2
Polymetallic Project will also be re-evaluated.
As a consequence the Company will now drill test for extensions of the encouraging intersections obtained from the 2006/2007
drilling programs. The future program will in-fill drill the existing intersections and also include drill testing to the east and west of
the discovery area. A further drilling program was scheduled to commence in April, however, has been placed on hold pending the
outcome of the COVID-19 pandemic.
PREVIOUS EXPLORATION AT THE CROYDON A2 POLYMETALLIC PROJECT
The A2 project is defined by a 1.5km x 1.0km complex aeromagnetic feature, characterised by a small magnetically reversed circular
low shrouded by a doughnut shaped high immediately to its north, east and west. Nine (9) diamond drill holes for a total of 4,400.6m
have been drilled and have intersected laminated shale basement rocks under 115m of Mesozoic cover sediments. Narrow vein style
polymetallic stockwork mineralization was intersected throughout the basement rocks in all drill holes to the end of hole depths of
up to 536.6m, defining a large hydrothermal system at least 1250m long and 600m wide. Within this large zone are intersections of
wider massive sulphide polymetallic veins up to 13m downhole lengths with values of Zn up to 10.13%, Ag up to 672 g/t, Sn up to
0.69%, Pb up to 2.1% and Cu up to 0.57%. Details of significant mineralised intersections of 2.0m down hole lengths or greater, are
listed in Table A (as reported in previous ASX Announcement: ASX:CGN “Drilling Commences at the Croydon Polymetallic Project,
North Queensland”, dated 7 November 2012).
Hole #
A2-001
Intercept
(m)
Width
(m)
Zn
%
Ag
ppm
Au
ppm
Sn
%
Cu
%
Pb
%
129.5 - 133
142.8 - 146
151 - 153
175.4 - 177.7
211 - 222
409 - 414
3.5
3.2
2.0
2.3
11.0
5.0
91.8
68.6
27.5
3.59
1.34
10.13
209.6
6.33
8.00
66.9
180.0
0.05
0.15
0.24
0.15
0.69
0.34
0.58
0.57
0.32
0.13
0.57
Crater Gold Mining Limited
5
Directors’ Report
A2-002
449 - 453
4.0
0.12
16.1
0.42
A2-003
175 - 178
318 - 320
414 - 416
3.0
2.0
4.0
1.02
1.20
0.95
45.5
19.8
10.2
A2-004
351 - 353
2.0
3.24
32.7
A2-005
A2-006
A2-007
154 - 161
201 - 203
230 - 232
291 - 297
283 - 286
305 - 315
418 - 422
425 - 437
211 - 213
285 - 287
391 - 397
414 - 422
7.0
2.0
2.0
6.0
3.0
10.0
4.0
12.0
2.0
2.0
6.0
8.0
1.47
0.62
9.00
1.84
1.77
2.30
6.93
4.59
3.18
1.02
2.72
0.58
88.0
98.2
109.0
13.0
63.0
144.0
69.0
56.5
37.4
40.9
285.7
17.9
0.50
0.45
0.62
0.60
0.19
0.29
0.29
0.29
0.22
0.20
0.43
0.87
Tr
0.12
0.55
0.39
0.27
0.39
0.57
0.42
0.18
0.36
0.45
0.14
A2-008
359 - 363
4.0
3.09
416.6
0.63
0.42
0.63
A2-009
230 - 233
247 - 249
261 - 263
293 - 295
300 - 313
418 - 423.7
3.0
2.0
2.0
2.0
13.0
5.7
1.25
3.12
1.85
2.45
1.60
0.48
120.0
300.3
672.0
109.0
95.0
36.4
0.30
0.05
Tr
Table A: Details of Significant Intersections 2m or greater
0.55
1.50
2.10
0.09
0.25
0.27
Plan locations of the intersections are shown on Figure 3 (as reported in previous ASX Announcement ASX:CGN “Polymetallic-Tin
Massive Sulphide Drill Intercepts Show Potential for Discovery of Significant Mineral Deposits at Croydon, QLD dated 28 February
2012).
Geological age dating indicates an age of Upper Proterozoic (560 Million Years) for the host rocks and a Permian age (285-284 Million
Years) for the mineralization. It is encouraging to note that the latter age is very similar to the age of many of the world’s major ore
deposits and in particular, important Queensland deposits, including the Herberton tin-tungsten province to the east and the Cracow
Gold (~291 Million Years), Mount Leyshon Gold (~290 Million Years) and Mount Chalmers Copper-Gold (~277 Million Years) deposits.
Mineral zonation is evident with some holes displaying a dominant association of Zn-Ag-Sn with minor Cu-Pb and others displaying a
dominant Zn-Cu association. The presence of tin (mainly cassiterite with some stannite) suggests a granitic association and the
association with massive pyrrhotite draws a striking comparison with the large world class underground tin deposit previously mined
at Rennison in Tasmania.
Crater Gold Mining Limited
6
Directors’ Report
Figure 3 (above): Massive Sulphide Drill Hole Intersections at the A2 Anomaly.
The tabulated intercepts represent the down hole length (not apparent true widths) of massive sulphide zones and were selected
based on a minimum intercept width of 2m with up to a maximum of 1m of internal dilution. The intercept metal assays were
calculated using a weighted average, whereby the summation of the individual sample assay result is multiplied by the sample width
then divided by the summation of the intercept length.
Each sample is of half core and sample lengths varied from 0.4m to 1.3m, but the majority of samples were 1.0m in length.
GOLDEN GATE GRAPHITE PROJECT, CROYDON, NTH QLD
High graphite recovery and purity obtained from metallurgical test work
Floatation test work by Brisbane Met Labs P/L on a nominal 56 micron composite drill core sample has achieved a 96%
recovery of graphite into a floatation concentrate
A 2-stage caustic bake on the concentrate successfully removed gangue minerals to achieve a very encouraging total
carbon grade of 98.9%
Further test work is to be focused on maximisation of graphite grain size and purity
The Company announced during the year the results of preliminary metallurgical test work undertaken by Brisbane Met Labs P/L
(BML) on graphite recovery from graphite mineralised drill core from the Golden Gate Graphite Project.
As previously announced (ASX: 7 February 2018 “Thick Intervals of Graphite Mineralisation Intersected at Golden Gate Project, Qld”)
two diamond drill holes returned the following results;
GGDDH 1701: 62.7m (29.3 to 92.0m) @ 6.79% GC* at a cut-off of 3.4% GC*
GGDDH 1702: 53.9m (69.1 to 123.0m) @ 6.79% GC* at a cut-off of 3.1% GC*
GC* = graphitic carbon
Petrological examination on samples of the graphite mineralisation from both holes (as announced ASX: 12 April 2018: “Jumbo and
Large Flake Graphite Identified at Golden Gate”) identified the presence of significant graphite flake sizes of 0.05 to 0.50mm, with an
average of around 0.25mm. While this was encouraging, it is noted that the petrological work was undertaken on small core samples
mainly selected to investigate specific textural features and minerals present and as such these are not necessarily representative of
the overall graphite mineralisation.
In view of this, it was decided to undertake metallurgical test work on the graphite mineralisation to determine if high recovery of
graphite into a floatation concentrate could be achieved which could then be economically upgraded to a graphite product of >95%
GC*.
Crater Gold Mining Limited
7
Directors’ Report
For the test work, a composite sample (minus 3.35mm grain size), grading 8.2% total carbon from 29.3 to 45.0m depth in hole GGDDH
1701, was prepared. This represents the top 15.7m of the graphite intersection in that hole, which would perhaps approximate the
first two to three benches of an open cut mining operation.
The test work was contracted out to Brisbane Met Labs P/L (BML). As total carbon assays in this style of mineralisation closely
approximate graphitic carbon assays (essentially within normally expected assay error levels), only total carbon assays have been
determined in the test work to minimise laboratory costs that are significantly higher for determining graphitic carbon values. Bench
scale graphite concentration floatation test work was undertaken using standard floatation reagents (kerosene and MIBC) on
pulverised splits of the composite sample at various grain sizes.
The following table summarises the work conducted, and the results obtained. The ensuing discussion is a summary extracted from
BML’s report.
FLOAT TEST ID
GRIND SIZE
PURPOSE
Float 1
Float 2
Float 3
Float 4
Float 5
Float 6
Float 7
As received minus 3.35mm
Assess coarse graphite float
80% passing 300 microns
Assess a less coarse grind
80% passing 106 microns
Assess medium grind size
80% passing <20 microns
Assess ultra fine grind size
80% passing 56 microns
Assess intermediate size
80% passing 56 microns
Provide feed to cleaner test
80% passing 56 microns
Provide feed for caustic bake
Encouragement was generated from flotation of a 58 micron sample (Float 6) from which a graphite recovery of 94% was reported
into a rougher concentrate. Another nominal 56 micron grain size (P80/56) sample was prepared from the composite sample and
subjected to floatation testing. This resulted in recovery of 96% of the graphite to a rougher concentrate at a total carbon grade of
16.9%, with 56% of the sample mass rejected as gangue. When the rougher concentrate was subjected to a two-stage caustic bake,
a very encouraging total carbon product grade of 98.9% was achieved. This indicates that the caustic bake has been successful in
removing the gangue contaminants (mainly phyllosilicates and other silicates).
Based on the objectives of the Company and the results as outlined in the BML report, recommendations for follow-up test work
were as follows;
Optimisation of the floatation work – trying varying concentrations of the floatation reagents used (kerosene and MIBC) or
introducing sodium silicate or some other dispersant to improve the rejection of gangue.
Optimisation of grind size for achieving maximum graphite flake size. Optimisation of the caustic bake purification step The
encouraging test work undertaken in 2019 indicated that follow up testing, which would include optimisation of flotation
work, optimisation of grind size and optimisation of the caustic bake purification step. These activities have been placed
on hold pending the outcome of the COVID-19 pandemic.
Corporate
During the year, the Company arranged the following New Loan Facilities with Freefire Technology Ltd, both with an interest rate of
8% p.a. with funding to be provided by way of an unsecured loan facility:
-
-
-
$250,000 Facility as announced on 1 July 2019;
$2,000,000 Facility as announced on 17 July 2019; and
$2,000,000 facility as announced on 6 March 2020.
On 27 July 2019, 13,600,000 options with an exercise price of $0.25 expired unexercised.
Effective 16 August 2019, the address of Link Market Services, the Company’s share registry, changed to Level 12, 250 St Georges
Terrace, Perth WA 6000.
Significant Changes in the State of Affairs
There were no significant changes in the state of affairs of the consolidated entity during the financial year.
Crater Gold Mining Limited
8
Directors’ Report
Matters Subsequent to the End of the Financial Year
On 12 July 2020, 9,000,000 options with an exercise price of $0.125 expired unexercised.
The impact of the COVID-19 pandemic is ongoing. Operations at the Crater Mountain in Papua New Guinea were suspended during
the year as announced on 25 March 2020. The situation is continually developing and is dependent on measures imposed by the
Australian and Papua New Guinean Governments, such as maintaining social distancing requirements, quarantine, travel restrictions
and any economic stimulus that may be provided.
No other matter or circumstance has arisen since 30 June 2020 that has significantly affected, or may significantly affect the Group's
operations, the results of those operations, or the Group's state of affairs in future financial years.
Likely Developments, Expected Results of Operations and Future Strategy
The Group intends to continue its exploration, development and production activities on its existing projects with the Group’s
strategy to become a profitable gold producer at the HGZ mine, whilst at the same time restarting further exploration drilling work
in both the HGZ and the Mixing Zone. Gold production at the HGZ mine is yet to generate a positive cash flow for the Company, which
has caused delays in the planned re-start of exploration drilling at the Crater Mountain Project. Work is ongoing at the HGZ mine
with the aim of generating positive cash flows to support exploration activities and to reduce or eliminate the need for further
external funding in the future, to enable the Company to further develop the flagship Crater Mountain project and its other prospects
in Queensland, Australia.
Environmental Regulation and Performance
The Group is subject to environmental regulation in relation to its former mining activities in North Queensland by the Environmental
Protection Agency of Queensland. The Company complies with the Mineral Resources Act (1989) and Environmental Protection Act
(1994). It is also subject to the Environmental Act (2000) (Papua New Guinea) on its activities in PNG.
Schedule of Tenements
Set out below is the schedule of tenements that the Company and its subsidiaries hold as at 30 June 2020.
Schedule of Crater Gold Mining Limited tenements:
Registered
Holder
%
Owned
Status
Expiry
Area (Km2)
Particulars
Project Name
EPM 8795
Croydon
EPM 13775
Wallabadah
EPM 16002
Foote Creek
EPM 18616
Black Mountain
EPM 26749
Wallabadah Extended
CGN
CGN
CGN
CGN
CGN
EL 1115
Crater Mountain
ELA 2643
Crater Mountain
ELA 2644
Crater Mountain
Anomaly Ltd1
Anomaly Ltd1
Anomaly Ltd1
ML 510
Anomaly Ltd1
1 Anomaly Limited is CGN’s 100% owned PNG subsidiary
Crater Mountain
100
100
100
100
100
100
100
100
100
There were no tenements acquired or disposed of during the quarter.
The Company has no Farm-in or Farm-out arrangements.
Renewal lodged
6/09/2020
Renewal lodged
5/03/2020
Granted
Granted
Granted
30/01/2021
18/06/2023
11/04/2024
115.2
9.6
16
28.8
57.6
Renewal lodged
25/09/2018
Application lodged
Oct 2019
Application lodged
Oct 2019
41
68
78
Renewal lodged
4/11/2019
1.58
Crater Gold Mining Limited
9
Directors’ Report
COMPETENT PERSONS STATEMENTS
The information contained in this report relating to exploration activities at the Crater Mountain Gold Project is based on and fairly
represents information and supporting documentation prepared by appropriately qualified Company personnel and reviewed by Ken
Chapple, who is an Associate Member of The Australasian Institute of Mining and Metallurgy and a Fellow of the Australian Institute
of Geoscientists. Mr Chapple has sufficient experience relevant to the style of mineralisation and type of deposit involved to qualify as
a Competent Person as defined in the 2012 JORC Code. Mr Chapple is an independent principal geological consultant with KCICD Pty
Ltd and consents to the inclusion in the report of matters based on his information in the form and context in which it appears.
The information contained in this report that relates to Exploration Results at the Golden Gate Graphite and the A2 Polymetallic
Projects near Croydon, Queensland, is based on information compiled by Ken Chapple, or prepared by appropriately qualified external
technical experts and reviewed by him. Mr Chapple is an Associate Member of The Australasian Institute of Mining and Metallurgy
and a Fellow of the Australian Institute of Geoscientists. Mr Chapple has been assisting the Company as a technical consultant relating
to his areas of expertise. Mr Chapple has sufficient experience relevant to the style of mineralisation and type of deposit involved to
qualify as a Competent Person as defined in the 2012 JORC Code. Mr Chapple is an independent principal geological consultant with
KCICD Pty Ltd and consents to the inclusion in the report of matters based on his information in the form and context in which it
appears.
Forward Looking Statements
This Announcement may contain forward looking statements. The words 'anticipate', 'believe', 'expect', 'project', 'forecast', 'estimate',
'likely', 'intend', 'should', 'could', 'may', 'target', 'plan‘ and other similar expressions are intended to identify forward- looking
statements. Forward-looking statements are subject to risk factors associated with the Company’s business, many of which are
beyond the control of the Company. It is believed that the expectations reflected in these statements are reasonable at the time made
but they may be affected by a variety of variables and changes in underlying assumptions which could cause actual results or trends
to differ materially from those expressed or implied in such statements. You should therefore not place undue reliance on forward-
looking statements.
Presentation of technical data and Competent Persons review
Resource estimates contained in this report were previously announced in the Company’s ASX news releases of:
•
•
21 December 2011 Initial Resource Estimate (This information was prepared and first disclosed under the JORC Code 2004.
It has not been updated since to comply with the JORC Code 2012). The Company confirms that it is not aware of any new
information or data that materially affects the information included in that announcement, and that all material
assumptions and technical parameters underpinning the estimates continue to apply and have not materially changed.
14 November 2016 titled ‘Maiden JORC Gold Resource at HGZ Project, Crater Mountain, PNG’.
Such resource estimates are subject to the relevant assumptions, qualifications and procedures described in the relevant ASX news
releases.
To date, the Company has only announced estimates of Inferred Mineral Resources. Nothing in this report or prior announcements by
the Company constitutes presentation of Mineral Reserves. As such, economic analysis cannot be applied based on the date contained.
The Company has an ’exploration target’ of ‘multi-million ounces’ for the epithermal gold resources at the Nevera Prospect at Crater
Mountain Project. A targeting exercise was carried out by Mining Associates (“MA”) for the Nevera prospect using a simple 10x10x10m
block model informed by 5 m bench channel samples (not including rock chips) and a Nearest Neighbour (“NN”) estimation technique
with a limited search range. The NN method was chosen so that no averaging of the grades occurred although there is a risk that
estimates can be over selective. As the initial target is highly selective narrow underground mining, this is an acceptable approach.
An initial examination of the composited data shows two natural breaks in Au grade distribution. One at about 0.4 g/t Au and a second
at about 10 g/t Au. MA suggests that these represent low grade and high mineralisation events respectively. The block model was
informed using a 100m spherical search so that no assumption was made of the direction and trend of mineralisation. Informing
samples consisted of 2,766 5 m downhole composites and 1,479 5 m bench samples. No domain selection was used, but no blocks
above the topography were estimated. Volume covered is about 700 m long, 700 m wide and 100 m to 350 m deep (variable with
topography). This is certainly suitable for both selective mining and a bulk open pit. A bulk density of 2.5 t/m3 was used for reporting,
the grade tonnage plot using cut-off grades from 1 to 20 g/t Au was reported. The target for Nevera prospect bulk open pit mining
using a cut-off grade 1 g/t Au is 24 Mt @ 2.7 g/t Au for 2Moz of contained Au. The target for the HGZ only for selective underground
mining using a cut-off grade 10g/t is 60-100koz @ 13-30 g/t. The exploration targets are conceptual in nature as there has been
insufficient exploration to define them as Mineral Resources. It is uncertain if further exploration will result in the determination of a
Mineral Resource under the JORC Code 2012. The exploration targets are not being reported as part of any Mineral Resource.
No New Information or Data
This report contains references to exploration results and Mineral Resource estimates, all of which have been cross-referenced to
previous announcements made by the Company. The Company confirms that it is not aware of any new information or data that
materially affects the information included in the relevant announcements and in the case of estimates of Mineral Resources, that all
material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply
and have not materially changed.
Crater Gold Mining Limited
10
Information on Directors and Secretary
The Directors and Secretary of the Company in office at the date of this report, unless otherwise stated, and their qualifications,
experience and special responsibilities are as follows:
Directors’ Report
S W S Chan BA (Non-Executive Chairman), age 71
Mr Chan has been a Director of the Company since 29 January 2013 and was appointed
as Non-Executive Chairman on 11 March 2013.
Mr Chan is a director and the controller of Freefire Technology Limited (“Freefire”), the
major shareholder in the Company.
Mr Chan received a Bachelor’s degree from the University of Manchester, UK in 1970
and qualified as a chartered accountant in 1973. He was the Company secretary of
Yangtzekiang Garment Limited from 1974 to 1988 and has been a Director of
Yangtzekiang Garment Limited since 1977. Mr Chan was appointed the Managing
Director of YGM Trading Limited from 1987 to 2006 and the Chief Executive Officer of
YGM Trading Limited from 2006 to 2010. He has been the Vice Chairman of the board
of YGM Trading Limited since 2010. Mr Chan is also on the board of Yangtzekiang
Garment Limited.
Mr Chan was formerly a Director of Hang Ten Group Holdings Limited (listed in Hong
Kong) from January 2003 to March 2012.
As at the date of this report, Mr Chan has a beneficial interest of 1,044,953,183 ordinary
shares in the Company.
R D Parker B Eng (Managing Director), age 49
Mr Parker has been a Director of the Company since 12 March 2013 and was appointed
Managing Director on 1 April 2015.
Mr Parker lives in Hong Kong. He is a qualified Marine Engineer and Marine Industries
Manager having graduated from Southampton Institute of Higher Education, Marine
Division, in Warsash, United Kingdom. Mr Parker is a professional Company Director.
As at the date of this report, Mr Parker has an interest in 1,138,399 ordinary shares and
25,541,076 Performance Rights in the Company.
T M Fermanis F Fin, MSAA (Deputy Chairman), age 56
Mr Fermanis has been a Director of the Company since 2 November 2009 and was
appointed Deputy Chairman on 1 April 2015.
Mr Fermanis has extensive experience in stockbroking and has been an advisor since
1985 with extensive experience in the resource sector. He has been involved in gold
exploration in PNG for a number of years.
Mr Fermanis is a member of the Remuneration and Nomination Committee.
As at the date of this report, Mr Fermanis has an interest in 602,471 ordinary shares
and 25,541,076 Performance Rights in the Company.
L K K Lee MCom, MAppFin, CPA (Non-executive Director), age 59
Mr Lee has been a Director of the Company since 6 June 2014.
Mr Lee received a Bachelor of Commerce degree and a Master of Commerce degree
from the University of New South Wales, Australia. He also holds a Master of Applied
Finance degree from the Macquarie University, Australia. He has over 25 years of
experience in finance, corporate finance, management, auditing and accounting. He
worked in an international accounting firm for several years and has worked as group
financial controller, chief financial officer and Director of listed companies on the Hong
Kong Stock Exchange for over 10 years.
Mr Lee is a member of the Hong Kong Institute of Certified Public Accountants and a
member of CPA Australia.
Mr Lee is a member of the Audit Committee.
As at the date of this report, Mr Lee has an interest in 1,750,000 ordinary shares and
10,946,175 Performance Rights in the Company.
Crater Gold Mining Limited
11
Directors’ Report
D T Y Sun (Non-executive Director), age 72
Mr Sun has been a Director of the Company since 29 January 2013.
Mr Sun obtained a Bachelor of Economics from the University of Tasmania and held
management positions with the Ford Motor Company in Melbourne and in Brisbane,
as well as with Citibank NA and Lloyds Bank Plc in Hong Kong. He has been an executive
Director of several listed companies in Hong Kong and has been engaged in advisory
services on strategic planning and corporate development, mainly in corporate finance,
since 1991.
Mr Sun is Chairman of the Audit Committee and of the Remuneration and Nomination
Committee.
As at the date of this report, Mr Sun has an interest in 1,750,000 ordinary shares and
10,946,175 Performance Rights in the Company.
Andrea Betti CA AGIA ACIS BCom, MBA, GDipAppFin(SecInst), GDipACG
Ms Andrea Betti was appointed Company Secretary on 9 October 2017.
Directors’ Meetings
The Company held 1 Board meeting during the year. In addition to formal Board meetings during the year a number of issues were
dealt with by means of circular resolutions of the Board. The number of formal meetings attended by each Director was:
Name
S W S Chan
T M Fermanis
L K K Lee
R D Parker
D T Y Sun
Board
Audit Committee
Remuneration and Nomination
Committee
Eligible to
Attend
1
1
1
1
1
Attended
1
1
1
1
1
Eligible to
Attend
-
-
2
-
2
Attended
-
-
2
-
2
Eligible to
Attend
-
-
-
-
-
Attended
-
-
-
-
-
The Eligible to Attend column represents the number of meetings held during the time the Director held office or was a member of
the Committee during the year.
Remuneration Report (Audited)
The information provided under headings (a) - (d) is provided in accordance with section 300A of the Corporations Act 2001. These
disclosures have been audited.
a) Principles used to determine the nature and amount of remuneration
The Company has a Remuneration and Nomination Committee. The Board has adopted a Remuneration and Nomination Policy
which provides advice on remuneration and incentive policies and practices and specific recommendations on remuneration
packages and other terms of employment for executive Directors, other senior executives and Non-Executive Directors. The
performance of the Company is taken into consideration when the remuneration policies of the Company are assessed by the
Committee. The Corporate Governance Statement provides further information on the role of this Committee.
Executive Remuneration
The remuneration policy ensures that contracts for services are reviewed on a regular basis and properly reflect the duties and
responsibilities of the individuals concerned. The executive remuneration structure is based on a number of factors including relevant
market conditions, knowledge and experience with the industry, organisational experience, performance of the Company and that
the remuneration is competitive in retaining and attracting motivated people. There are no guaranteed pay increases included in
the senior executives' contracts.
Non-Executive Directors
Fees and payments to Non-Executive Directors reflect the demands which are made on, and the responsibilities of, the Directors.
Non-executive Directors’ fees and payments are reviewed annually by the Board.
Crater Gold Mining Limited
12
Directors’ Report
Additional information
The earnings of the Group for the five years to 30 June 2020 are summarised below:
Sales revenue
EBITDA
EBIT
Loss after income tax
2020
$‘000
2019
$‘000
2018
$‘000
227
(3,440)
(3,735)
(4,497)
328
(5,658)
(5,889)
(6,942)
-
(4,660)
(4,879)
(5,740)
2017
$‘000
225
(17,417)
(24,561)
(25,285)
2016
$‘000
385
(10,061)
(10,259)
(10,887)
The factors that are considered to affect Total Shareholders Return ('TSR') are summarised below:
Share price at financial year end ($)
Total dividends per share (cents per share)
2020
0.009
Nil
2019
0.012
Nil
2018
0.017
Nil
2017
0.01
Nil
2016
0.07
Nil
Basic earnings per share (cents per share)
(0.366)
(1.168)
(2.075)
(9.503)
(5.143)
Directors' fees
The current base remuneration was last reviewed with effect from 26 March 2009.
Non-Executive Director’s fees are determined within an aggregate Directors’ fee pool limit, which is periodically recommended for
approval by shareholders. The maximum currently stands at $200,000 per annum and was approved by shareholders at the Annual
General Meeting on 23 November 2010.
The following fees have applied for the year ended 30 June 2020:
Non-Executive Director’s base fee - $35,000 per annum;
The Managing Director and Deputy Chairman are paid a salary separate to the above;
Audit Committee and the Remuneration and Nomination Committee – no additional fees payable.
Except for retirement benefits provided by the superannuation guarantee legislation, there are no retirement benefits for the Non-
Executive Directors.
Voting and comments made at the company's 2019 Annual General Meeting ('AGM')
At the 2019 AGM, 85% of the votes received supported the adoption of the remuneration report for the year ended 30 June 2019.
The company did not receive any specific feedback at the AGM regarding its remuneration practices.
b) Details of remuneration
Directors and the key management personnel (as defined in section 300A Corporations Act 2001) of the Company and the Group are
set out in the following tables. The key management personnel of the Company and the Group includes the Directors and the
following executive officers who have authority and responsibility for the planning, directing and controlling the activities of the
Group.
Director / key management person
Short-term
Short-term Post-employment
Share based payments
Total
Base
Fees/salary
Other
Superannuation
Performance
Rights 1/
Options
% of
total
2020
Non-executive Directors
S W S Chan
D T Y Sun
L K K Lee
Subtotal
35,000
35,000
35,000
105,000
-
-
-
-
-
-
-
-
-
20,830
20,830
41,660
-
37.31%
37.31%
35,000
55,830
55,830
146,660
Executive Directors
R D Parker, Managing Director
T M Fermanis, Deputy Chair
162,000
142,466
Other key management personnel
M G O’Kane2
C Church
-
-
-
209,488
-
370,040
-
1,141,394
-
Total
1. In accordance with the requirement of AASB2 Share based payments, the value disclosed is the portion of the fair value of the performance rights
recognised as an expense in the reporting period. The amount included as remuneration is not related to nor indicative of the benefit (if any) that
may ultimately be realised should the performance rights vest.
-
13,534
-
-
-
13,534
160,885
317,691
888,042
48,603
52,349
239,818
210,603
204,603
23.20%
14.15%
23.08%
23.75%
48,603
48,603
2. From 1 March 2020, the CFO services to the Company were provided by Consilium Corporate Pty Ltd, for which Mr O’Kane is a consultant to.
Crater Gold Mining Limited
13
Directors’ Report
Director / key management person
Short-term
Short-term Post-employment
Share based payments
Total
Base
Fees/salary
Other
Superannuation
Performance
Rights 1/
Options
% of
total
2019
Non-executive Directors
S W S Chan
D T Y Sun
L K K Lee
Subtotal
35,000
35,000
35,000
105,000
-
-
-
-
-
-
-
-
-
12,337
12,337
24,674
-
26.06%
26.06%
35,000
47,337
47,337
129,674
Executive Directors
R D Parker, Managing Director
T M Fermanis, Deputy Chair
168,750
148,402
Other key management personnel
M G O’Kane
C Church
-
-
-
199,040
-
323,554
-
1,041,088
-
Total
1. In accordance with the requirement of AASB2 Share based payments, the value disclosed is the portion of the fair value of the performance rights
recognised as an expense in the reporting period. The amount included as remuneration is not related to nor indicative of the benefit (if any) that
may ultimately be realised should the performance rights vest.
-
14,098
-
-
-
14,098
170,255
299,356
891,763
28,785
24,198
135,227
197,535
191,285
14.57%
15.05%
14.46%
7.48%
28,785
28,785
No other Directors, officers or executives of the Company received any share based payments, other than those shown in the
remuneration table above.
Base salary and fees are on fixed rates. Refer section (c) of this remuneration report.
A summary of Director and key management personnel remuneration follows.
Remuneration component
Short-term
Post-employment benefits
Share based payments
Total
2020
$
888,042
13,534
239,818
2019
$
891,763
14,098
135,227
1,141,394
1,041,088
c) Service agreements
On appointment to the Board, all Non-Executive Directors enter into a service agreement with the Company in the form of a letter
of appointment. The letter summarises the Board policies and terms, including compensation, relevant to the office of Director.
Remuneration and other terms of employment for the Executive Directors and other key management personnel are also formalised
in service agreements. Major provisions of the agreements relating to remuneration are set out below. There are no current service
agreements that contain incentive clauses and as such future remuneration is not necessarily dependent on the performance results
of the Company:
Term of
agreement
No fixed term
Key management personnel
Commencement
date
Base salary and
fees
Superannuation
Period of notice
-
4 weeks
$35,000 pa
$162,000 pa
No fixed term
12 March 2013
29 January 2013
2 November 2009
S W S Chan
Chairman
R Parker
Managing Director
T M Fermanis
Deputy Chairman
D T Y Sun
Non-Executive Director
L K K Lee
Non-Executive Director
M G O’Kane
Chief Financial Officer
C Curtis
Chief Operations Officer
1. From 1 March 2020, the CFO services to the Company were provided by Consilium Corporate Pty Ltd, for which Mr O’Kane is a consultant to. Prior
No fixed term US$210,000 pa
29 January 2013
$126,000 pa1
No fixed term
No fixed term
No fixed term
No fixed term
$142,466 pa
1 April 2015
$35,000 pa
$13,534 pa
$35,000 pa
1 July 2017
1 July 2017
3 months
3 months
4 weeks
4 weeks
4 weeks
4 weeks
-
-
-
-
-
to this, Mr O’Kane received a fee directly of US$120,000 pa for his services as CFO.
Crater Gold Mining Limited
14
Directors’ Report
d) Equity based compensation
Securities granted as part of remuneration for the year ended 30 June 2020
The Employee Equity Incentive Plan (“Plan”) is designed to provide long-term incentives for executives to deliver long-term
shareholder returns. Participation in the plan is at the Board’s discretion.
Share based compensation for the year ended 30 June 2020
No shares were issued to Directors and other key management personnel as part of compensation during the year ended 30 June
2020 (2019: nil).
No options were issued to Directors and other key management personnel as part of compensation during the year ended 30 June
2020 (2019: nil).
No Performance Rights were issued to Directors and other key management personnel as part of compensation during the year
ended 30 June 2020 (2019: 91,858,309).
Options and rights over equity instruments
The number of options over ordinary shares in the Company held during the financial year by each Director and key management
personnel of the Group, including their personally related parties are set out below. Options granted carry no dividend or voting
rights.
Name
2020
Directors
S W S Chan
T M Fermanis
L K K Lee
R D Parker
D T Y Sun
Key management personnel
M G O’Kane
C Church
Balance at the
start of the
year
Granted during
the year as
compensation
Exercised
during the year
Other changes
during the year
Balance at the
end of the year
2,300,000
2,300,000
2,300,000
2,300,000
2,300,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(1,300,000) 1
(1,300,000) 1
(1,300,000) 1
(1,300,000) 1
(1,300,000) 1
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
-
-
-
-
1. Other changes during the year are in relation to the expiry of options on 25 July 2019.
Performance Rights
Performance Rights convert into fully paid ordinary share in the Company upon the achievement of specific hurdles within a specific
time frame. For full details on the terms and conditions of the Performance Rights granted during the financial period, refer to ASX
announcement dated 29 December 2018. Performance Rights granted carry no dividend or voting rights. The number of
Performance Rights in the Company held during the financial year by each Director and key management personnel of the Group,
including their personally related parties are set out below:
Name
2020
Directors
S W S Chan
T M Fermanis
L K K Lee
R D Parker
D T Y Sun
Key management personnel
M G O’Kane
C Church
Balance at the
start of the
year
Granted during
the year as
compensation
Exercised
during the year
Other changes
during the year
Balance at the
end of the year
-
25,541,076
10,946,175
25,541,076
10,946,175
25,541,076
22,757,491
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
25,541,076
10,946,175
25,541,076
10,946,175
25,541,076
22,757,491
Crater Gold Mining Limited
15
Directors’ Report
The value of Performance Rights granted, exercised and lapsed for Directors and other key management personnel as part of
compensation during the year ended 30 June 2020 are set out below:
Name
2020
Directors
S W S Chan
T M Fermanis
L K K Lee
R D Parker
D T Y Sun
Key management personnel
M G O’Kane
C Church
Value of
Performance Rights
granted
$
Value of Performance
Rights lapsed/converted
during the year
$
Value of
Performance
Rights expensed
during the year
$
Remuneration
consisting of
Performance
Rights for the year
%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
48,603
20,830
48,603
20,803
48,603
52,349
-
23.75%
37.31%
23.08%
37.31%
23.20%
14.15%
Share based payment expense is recognised on a straight-line basis over the vesting period.
The value disclosed in the remuneration of key management personnel is the portion of the fair value of the share based payment
recognised as expense in each reporting period in accordance with the requirement of AASB 2.
Share holdings
The number of shares in the Company held during the financial year by each Director and key management personnel of the Group,
including their personally related parties are set out below:
Name
Balance at the
start of the year
Granted during
the year as
compensation
Additions
Disposals /
Other changes
Balance at the
end of the year
2020
Directors
S W S Chan
T M Fermanis
L K K Lee
R D Parker
D T Y Sun
Key management personnel
M G O’Kane
C Church
1,044,953,183
602,471
1,750,000
1,138,399
1,750,000
100,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,044,953,183
602,471
1,750,000
1,138,399
1,750,000
100,000
-
Other transactions with key management personnel and their related parties
Mr S W S Chan is a Director and the controller of Freefire Technology Limited (“Freefire”), the major shareholder in the Company.
During the year loan interest and fees amounting to $552,027 (2019: $1,010,663) was paid or payable to Freefire. During the course
of the year, Freefire made a number of short-term loans to the Company (see Note 3d for further information on the loan).
This concludes the Remuneration Report, which has been audited.
Shares under Option
As at the date of this report, there are no unissued ordinary share of the Company under option.
Shares Issued on the Exercise of Options
No shares have been issued on the exercise of options during the course of the year (2019: nil) or subsequent to year end.
Crater Gold Mining Limited
16
Directors’ Report
Indemnification and Insurance of Directors
During the year, the Company paid premiums of $33,076 (2019: $21,206) to insure the Directors and Officers of the Company in
relation to all liabilities and expenses arising as a result of the performance of their duties in their respective capacities to the extent
permitted by the Corporations Act 2001.
Indemnity and insurance of auditor
The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the Company
or any related entity against a liability incurred by the auditor.
During the financial year, the Company has not paid a premium in respect of a contract to insure the auditor of the Company or any
related entity.
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
The Group paid $13,500 to RSM for non-audit services, relating to tax return preparation assistance, during the year. 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 above do not compromise the external auditor's independence
requirements of the Corporations Act 2001 for the following reasons:
-
all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity of the
auditor; and
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.
-
Annual General Meeting
All resolutions at the Company’s 2019 Annual General Meeting on 29 November 2019 were passed.
Auditor’s Independence Declaration
A copy of the auditors’ independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 18.
Corporate Governance
The Board is committed to achieving and demonstrating the highest standards of corporate governance. As such, Crater Gold Mining
Limited and its Controlled Entities (‘the Group’) have adopted a corporate governance framework and practices to ensure they meet
the interests of shareholders.
The Australian Securities Exchange Corporate Governance Council’s Corporate Governance Principles and Recommendations – 3rd
edition (‘the ASX Principles’) are applicable for financial years commencing on or after 1 July 2015, consequently for the Group’s 30
June 2020 year end. As a result, the Group has chosen to publish its Corporate Governance Statement on its website rather than in
this Annual Report.
The Corporate Governance Statement and governance policies and practices can be found in the corporate governance section of
the Company’s website at http://www.cratergold.com.au.
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
R D Parker
Managing Director
30 September 2020
T M Fermanis
Deputy Chairman
Crater Gold Mining Limited
17
RSM Australia Partners
Level 32, Exchange Tower
2 The Esplanade Perth WA 6000
GPO Box R1253 Perth WA 6844
T +61 (0) 8 9261 9100
F +61 (0) 8 9261 9111
www.rsm.com.au
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of Crater Gold Mining Limited for the year ended 30 June 2020,
I declare that, to the best of my knowledge and belief, there have been no contraventions of:
(i)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(ii)
any applicable code of professional conduct in relation to the audit.
RSM AUSTRALIA PARTNERS
Perth, WA
Dated: 30 September 2020
TUTU PHONG
Partner
THE POWER OF BEING UNDERSTOOD
AUDIT | TAX | CONSULTING
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent
accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction.
RSM Australia Partners ABN 36 965 185 036
Liability limited by a scheme approved under Professional Standards Legislation
Consolidated Statement of Profit or Loss
and Other Comprehensive Income
For the Financial Year ended 30 June 2020
Notes
June
2020
$
June
2019
$
Continuing Operations
Revenue
Cost of sales
Gross (loss) from gold production
Interest income
Other income
Gross profit / (loss) from continuing activities
Expenses
Administration expense
Corporate compliance expense
Depreciation expense
Exploration and evaluation and operating costs
Share based payments
Financing expense
Loss on disposal of assets
Loss before income tax expenses from continuing operations
Income tax expense
Loss for the year after income tax expense
Other comprehensive income
Items that will be reclassified subsequently to profit or loss when specific
conditions are met:
5
5
5
6
6
6
6
6
7
227,412
328,099
(486,816)
(1,302,644)
(259,404)
(974,545)
33
331,804
103
-
72,433
(974,442)
(2,138,655)
(2,950,543)
(91,798)
(109,667)
(294,860)
(231,638)
(975,133)
(1,440,514)
(299,380)
(182,419)
(761,574)
(1,052,726)
(7,756)
-
(4,496,723)
(6,941,949)
-
-
(4,496,723)
(6,941,949)
Exchange differences on translating foreign operations (net of tax)
21
16,597
224,201
Total comprehensive income for the year
(4,480,126)
(6,717,748)
Loss per share from continuing operations attributable to the ordinary equity holders of Crater Gold Mining Limited:
Basic loss - cents per share
Diluted loss - cents per share
8
8
(0.366)
(0.366)
(1.168)
(1.168)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the
accompanying notes.
Crater Gold Mining Limited
19
Consolidated Statement of Financial Position
As at 30 June 2020
Notes
June
2020
$
June
2019
$
10
11
12
13
14
15
16
17
18
19
19
20
21
21
27,095
94,143
121,238
130,016
156,381
286,397
65,600
65,122
9,190,151
9,197,097
441,023
122,219
648,051
-
9,818,993
9,910,270
9,940,231
10,196,667
2,233,043
1,845,870
1,321,895
1,118,773
9,015,809
5,849,782
107,037
-
12,677,784
8,814,425
60,951
60,951
-
-
12,738,735
8,814,425
(2,798,504)
1,382,242
75,036,554
75,036,554
(1,387,275)
(1,594,541)
(76,447,783)
(72,059,771)
(2,798,504)
1,382,242
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Total current assets
Non-current assets
Other financial assets
Exploration and evaluation
Plant and equipment
Right-of-use assets
Total non-current assets
Total Assets
LIABILITIES
Current liabilities
Trade and other payables
Related party payables
Interest-bearing liabilities
Lease liabilities
Total current liabilities
Non-current liabilities
Lease liabilities
Total non-current liabilities
Total liabilities
Net (liabilities) / assets
EQUITY
Contributed equity
Reserves
Accumulated losses
Total equity
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
Crater Gold Mining Limited
20
Consolidated Statement of Changes in Equity
For the Financial Year ended 30 June 2020
Contributed
equity
Convertible
note reserve
Reserves
Accumulated
losses
Note
s
21
21
Balance at 1 July 2019
Share based payments
Expiry of options
Transactions with owners
Loss for the year
Other comprehensive income
Exchange differences on translating foreign operations
21
Total comprehensive income for the year
$
75,036,554
-
-
-
-
-
-
Balance at 30 June 2020
75,036,554
$
-
-
-
-
-
-
-
-
$
$
Total
$
(1,594,541)
(72,059,771)
1,382,242
299,380
-
299,380
(108,711)
108,711
-
190,669
108,711
299,380
-
(4,496,723)
(4,496,723)
16,597
-
16,597
16,597
(4,496,723)
(4,480,126)
(1,387,275)
(76,447,783)
(2,798,504)
Balance at 1 July 2018
Share based payments
Issue of share capital
Transaction costs
Transactions with owners
Loss for the year
Other comprehensive income
Exchange differences on translating foreign operations
21
Total comprehensive income for the year
Balance at 30 June 2019
75,036,554
61,015,655
-
(2,001,161)
(65,117,822)
(6,103,328)
21
20
20
-
14,220,466
(199,567)
14,020,899
-
-
-
-
-
-
-
-
-
-
-
182,419
-
-
182,419
-
-
-
-
182,419
14,220,466
(199,567)
14,203,318
-
(6,941,949)
(6,941,949)
224,201
-
224,201
224,201
(6,941,949)
(6,717,748)
(1,594,541)
(72,059,771)
1,382,242
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
Crater Gold Mining Limited
21
Consolidated Statement of Cash Flows
For the Financial Year ended 30 June 2020
June
2020
$
June
2019
$
Notes
227,412
10,000
328,099
-
(2,598,736)
(5,169,909)
33
103
(38,970)
(42,063)
Cash flows from operating activities
Receipts from customers
Other receipts
Payments to suppliers and employees
Interest received
Interest paid
Net cash used in operating activities
29
(2,400,261)
(4,883,770)
Cash flows from investing activities
Purchases of property, plant and equipment
Payments for exploration and evaluation
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of ordinary shares and options
Share issue costs
Proceeds from borrowings
Lease liability repayments
Net cash provided by financing activities
Net (decrease) in cash held
Cash at the beginning of the period
Effects of foreign exchange movements on cash transactions and balances
Cash and cash equivalents at the end of the period
(9,793)
(233,772)
(153,726)
(308,778)
(243,565)
(462,504)
-
976,627
(42,066)
(126,277)
2,614,000
4,367,000
(50,177)
-
2,521,757
5,217,350
(122,069)
(128,924)
130,016
19,148
27,095
265,155
(6,215)
130,016
10
10
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
Crater Gold Mining Limited
22
Notes to the Consolidated Financial Statements
1
Summary of Significant Accounting Policies
Crater Gold Mining Limited (the “Company”) and its legal subsidiaries together are referred to in this financial report as the Group.
Details of the principal accounting policies adopted in the preparation of the financial report are set out below. These policies have
been consistently applied to all years presented, unless otherwise stated.
Crater Gold Mining Limited is a for profit public Company, limited by shares and domiciled in Australia.
The financial statements were authorised for issue, in accordance with a resolution of the Directors, on 30 September 2020. The
Directors have the power to amend and reissue the financial statements.
Basis of preparation
This general purpose financial report has been prepared in accordance with Australian Accounting Standards, Australian Accounting
Interpretations, and other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act
2001. These Financial Statements also comply with International Reporting Standards as issued by the International Accounting
Standards Board (IASB).
New, revised or amending Accounting Standards and Interpretations adopted
The Group has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the Australian
Accounting Standards Board (AASB) that are mandatory for the current reporting period.
Historical cost convention
The financial statements have been prepared under the historical cost convention, except for, where applicable, the revaluation of
available-for-sale financial assets, financial assets and liabilities at fair value through profit or loss, 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 Group'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 Group only. Supplementary
information about the parent entity is disclosed in Note 28.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Crater Gold Mining Limited
(‘Company' or 'Parent Entity') as at 30 June 2020 and the results of all subsidiaries for the year then ended. Crater Gold Mining Limited
and its subsidiaries together are referred to in these financial statements as the 'Group'.
Subsidiaries are all those entities over which the Group has control. The Group controls an entity when the Group is exposed to, or
has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to
direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They
are de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the Group are eliminated. Unrealised
losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies
of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.
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 Group. Losses incurred by the
Group are attributed to the non-controlling interest in full, even if that results in a deficit balance.
Where the Group 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 Group 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.
Crater Gold Mining Limited
23
Notes to the Financial Statements
Foreign currency translation
The financial statements are presented in Australian dollars, which is Crater Gold Mining Limited's functional and presentation
currency.
Foreign currency transactions
Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at
financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.
Foreign operations
The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at the reporting date.
The revenues and expenses of foreign operations are translated into Australian dollars using the average exchange rates, which
approximate the rates at the dates of the transactions, for the period. All resulting foreign exchange differences are recognised in
other comprehensive income through the foreign currency reserve in equity.
The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is disposed of.
Revenue recognition
Sale of gold and other metals
Sale of gold and other metals is recognised at the point of sale, which is where the customer has taken delivery of the goods, the
risks and rewards are transferred to the customer and there is a valid sales contract. Amounts disclosed as revenue are net of sales
returns and trade discounts.
Interest
Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the amortised
cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate
that exactly discounts future cash receipts through the expected life of the financial asset to the net carrying amount of the financial
asset.
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:
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
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.
Crater Gold Mining Limited (the 'Parent Entity') and its wholly-owned Australian subsidiaries have formed an income tax consolidated
group under the tax consolidation regime. The head entity and each subsidiary in the tax consolidated group continue to account for
their own current and deferred tax amounts. The tax consolidated group has applied the 'separate taxpayer within group' approach
in determining the appropriate amount of taxes to allocate to members of the tax consolidated group.
In addition to its own current and deferred tax amounts, the head entity also recognises the current tax liabilities (or assets) and the
deferred tax assets arising from unused tax losses and unused tax credits assumed from each subsidiary in the tax consolidated group.
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as amounts receivable
from or payable to other entities in the tax consolidated group. The tax funding arrangement ensures that the intercompany charge
Crater Gold Mining Limited
24
Notes to the Financial Statements
equals the current tax liability or benefit of each tax consolidated group member, resulting in neither a contribution by the head
entity to the subsidiaries nor a distribution by the subsidiaries to the Parent Entity.
Current and non-current classification
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 Group’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 Group'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.
Deferred tax assets and liabilities are always 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. For the statement of cash flows presentation purposes, cash and cash equivalents
also includes bank overdrafts, which are shown within borrowings in current liabilities on the statement of financial position.
Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest
method, less any allowances for expected credit losses.
The Group has applied the simplified approach to measuring expected credit losses, which uses a lifetime expected loss allowance.
To measure the expected credit losses, trade receivables have been grouped based on days overdue.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
Trade and other receivables are generally due for settlement within 120 days.
Investments and other financial assets
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. They 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 from the financial assets have expired or have been
transferred and the Group 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, its carrying value is written off.
Financial assets at fair value through profit or loss
Financial assets not measured at amortised cost or at fair value through other comprehensive income are classified as financial assets
at fair value through profit or loss. Typically, such assets will be either: (i) held for trading, where they are acquired for the purpose
of selling in the short-term with an intention of making a profit, or a derivative; or (ii) designated as such upon initial recognition,
where permitted. Fair value movements are recognised in profit or loss.
Financial assets at fair value through other comprehensive income
Financial assets at fair value through other comprehensive income include equity investments which the Group intends to hold for
the foreseeable future and has irrevocably elected to classify them as such upon initial recognition.
Impairment of financial assets
The Group recognises a loss allowance for expected credit losses on financial assets which are either measured at amortised cost or
fair value through other comprehensive income. The measurement of the loss allowance depends upon the Group’s assessment at
the end of each reporting period as to whether the financial instrument’s credit risk has increased significantly since initial
recognition, based on reasonable and supportable information that is available, without undue cost or effort to obtain.
Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-month expected credit loss
allowance is estimated. This represents a portion of the asset’s lifetime expected credit losses that is attributable to a default event
that is possible within the next 12 months. Where a financial asset has become credit impaired or where it is determined that credit
risk has increased significantly, the loss allowance is based on the asset’s lifetime expected credit losses. The amount of expected
credit loss recognised is measured on the basis of probability weighted present value of anticipated cash shortfalls over the life of
the instrument discounted at the original effective interest rate.
For financial assets measured at fair value through other comprehensive income, the loss allowance is recognised within other
comprehensive income. In all other cases, the loss allowance is recognised in profit or loss.
Crater Gold Mining Limited
25
Notes to the Financial Statements
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 plant and equipment over their expected
useful lives as follows:
Plant and equipment
3-7 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date.
An item of plant and equipment is derecognised upon disposal or when there is no future economic benefit to the Group. Gains and
losses between the carrying amount and the disposal proceeds are taken to profit or loss. Any revaluation surplus reserve relating to
the item disposed of is transferred directly to retained profits.
Right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which comprises
the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the commencement date
net of any lease incentives received, any initial direct costs incurred, and, except where included in the cost of inventories, an estimate
of costs expected to be incurred for dismantling and removing the underlying asset, and restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful life of the
asset, whichever is the shorter. Where the consolidated entity expects to obtain ownership of the leased asset at the end of the lease
term, the depreciation is over its estimated useful life. Right-of use assets are subject to impairment or adjusted for any
remeasurement of lease liabilities.
The consolidated entity has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases with
terms of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to profit or loss as incurred.
Exploration and evaluation assets
From 1 July 2017, the Group revised its accounting policy to expense all costs incurred in respect to the treatment of exploration and
evaluation expenditure. Prior to 30 June 2017, the Group would capitalise all exploration and evaluation expenditure and recognise
this as an exploration and evaluation asset in the statement of financial position on the basis that 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. The Group has determined that it is now more appropriate to account for exploration and evaluation
expenditure as an expense in the statement of profit or loss and other comprehensive income. An independent valuation of the
exploration and evaluation assets was previously undertaken. The Group has determined it is best to hold the value of the assets at
the level of the valuation until such time that new information is available which would indicate a material change to the independent
valuation.
Impairment of non-financial assets
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.
Trade and other payables
These amounts represent liabilities for goods and services provided to the Group 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.
Borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They are
subsequently measured at amortised cost using the effective interest method.
The component of the convertible notes that exhibits characteristics of a liability is recognised as a liability in the statement of
financial position, net of transaction costs.
On the issue of the convertible notes the fair value of the liability component is determined using a market rate for an equivalent
non-convertible bond and this amount is carried as a non-current liability on the amortised cost basis until extinguished on conversion
or redemption. The increase in the liability due to the passage of time is recognised and included in shareholders equity as a
convertible note reserve, net of transaction costs. The carrying amount of the conversion option is not remeasured in subsequent
years. The corresponding interest on convertible notes is expensed to profit or loss.
Crater Gold Mining Limited
26
Notes to the Financial Statements
Lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present value of
the lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease or, if that rate
cannot be readily determined, the consolidated entity's incremental borrowing rate. Lease payments comprise of fixed payments
less any lease incentives receivable, variable lease payments that depend on an index or a rate, amounts expected to be paid under
residual value guarantees, exercise price of a purchase option when the exercise of the option is reasonably certain to occur, and any
anticipated termination penalties. The variable lease payments that do not depend on an index or a rate are expensed in the period
in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured if there is
a change in the following: future lease payments arising from a change in an index or a rate used; residual guarantee; lease term;
certainty of a purchase option and termination penalties. When a lease liability is remeasured, an adjustment is made to the
corresponding right-of use asset, or to profit or loss if the carrying amount of the right-of-use asset is fully written down.
Finance costs
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are expensed in the period
in which they are incurred.
Provisions
Provisions are recognised when the Group has a present (legal or constructive) obligation as a result of a past event, it is probable
the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. The amount
recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting date,
taking into account the risks and uncertainties surrounding the obligation. If the time value of money is material, provisions are
discounted using a current pre-tax rate specific to the liability. The increase in the provision resulting from the passage of time is
recognised as a finance cost.
Employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be settled wholly
within 12 months of the reporting date are measured at the amounts expected to be paid when the liabilities are settled.
Share based payments
Equity-settled and cash-settled share based compensation benefits are provided to Directors and employees.
Equity-settled transactions are awards of shares, performance rights 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 an
appropriate valuation 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 Group 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 using an appropriate valuation
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:
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.
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.
All changes in the liability are recognised in profit or loss. The ultimate cost of cash-settled transactions is the cash paid to settle the
liability.
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.
Crater Gold Mining Limited
27
Notes to the Financial Statements
If the non-vesting condition is within the control of the Group or employee, the failure to satisfy the condition is treated as a
cancellation. If the condition is not within the control of the Group 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.
Fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the fair value is
based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date; and assumes that the transaction will take place either: in the principal market; or in the
absence of a principal market, in the most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or liability, assuming they
act in their economic best interests. For non-financial assets, the fair value measurement is based on its highest and best use.
Valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, are
used, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
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.
Dividends
Dividends are recognised when declared during the financial year and no longer at the discretion of the Company.
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Crater Gold Mining 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 Group for the annual reporting period ended 30 June 2020. The Group's assessment of the impact of
these new or amended Accounting Standards and Interpretations, most relevant to the Group, are set out below.
Crater Gold Mining Limited
28
Notes to the Financial Statements
Conceptual Framework for Financial Reporting (Conceptual Framework)
The revised Conceptual Framework is applicable to annual reporting periods beginning on or after 1 January 2020 and early adoption
is permitted. The Conceptual Framework contains new definition and recognition criteria as well as new guidance on measurement
that affects several Accounting Standards. Where the consolidated entity has relied on the existing framework in determining its
accounting policies for transactions, events or conditions that are not otherwise dealt with under the Australian Accounting
Standards, the Group has relied on the existing framework in determining its accounting policies for transactions, events or conditions
that are not otherwise dealt with under the Australian Accounting Standards, the Group may need to review such policies under the
revised framework. At this time, the application of the Conceptual Framework is not expected to have a material impact on the
Group’s financial statements.
New, Revised or amending Accounting Standards and Interpretations adopted
The Group 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 following Accounting Standards and Interpretations are most relevant to the Group:
AASB 16 Leases
The Group 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.
Impact of adoption of AASB 16
AASB 16 was adopted using the modified retrospective approach and as such, the comparatives have not been restated. The impact
of adoption on opening retained profits as at 1 July 2019 was as follows:
Right-of-use assets (AASB 16)1
Lease liabilities (AASB 16)1
Adjustment in opening retained profits as at 1 July 2019
1 These leases were identified in the current period.
2
Critical accounting judgements, estimates and assumptions
1 July 2019
$
216,401
(216,401)
-
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 Group 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 the ESO5 Barrier 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.
Crater Gold Mining Limited
29
Notes to the Financial Statements
Impairment of non-financial assets
The Group assesses impairment of non-financial assets at each reporting date by evaluating conditions specific to the Group and to
the particular asset that may lead to impairment. If an impairment trigger exists, the recoverable amount of the asset is determined.
This involves fair value less costs of disposal or value-in-use calculations, which incorporate a number of key estimates and
assumptions. It is reasonably possible that the underlying metal price assumption may change which may then impact the estimated
life of mine determinant and may then require a material adjustment to the carrying value of mining plant and equipment, mining
infrastructure and mining development assets. Furthermore, the expected future cash flows used to determine the value-in-use of
these assets are inherently uncertain and could materially change over time.
They are significantly affected by a number of factors including reserves and production estimates, together with economic factors
such as metal spot prices, discount rates, estimates of costs to produce reserves and future capital expenditure.
COVID-19 pandemic
Judgement has been exercised in considering the impacts that the COVID-19 pandemic has had, or may have, on the consolidated
entity based on known information. This consideration extends to the nature of the products and services offered, customers, supply
chain, staffing and geographic regions in which the consolidated entity operates. Other than as addressed in specific notes, there
does not currently appear to be either any significant impact upon the financial statements or any significant uncertainties with
respect to events or conditions which may impact the consolidated entity unfavourably as at the reporting date or subsequently as
a result of the COVID-19 pandemic.
3
Financial Risk Management
The Group’s major area of risk is managing liquidity and cash balances and embarking on fundraising activities in anticipation of
further projects. The activities expose the Group to a variety of financial risks: market risk (including interest rate risk and price risk),
credit risk and liquidity risk. The Group’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 Group. The Group uses different methods to measure
different types of risk to which it is exposed. These methods include sensitivity analysis in the case of interest rate, and other risks,
ageing analysis for credit risk.
Risk management is carried out under policies set by the Managing Director and approved by the Board of Directors.
The Board provides principles for overall risk management, as well as policies covering specific areas, such as, interest rate risk, credit
risk and investment of excess liquidity.
a.
Market risk
Foreign exchange risk
Foreign exchange risk arises when future commercial transactions and recognised assets and liabilities are denominated in a currency
that is not the Group’s functional currency. The Group operates internationally and is exposed to foreign exchange risk arising from
currency exposures to the Papua New Guinea Kina. As the Group is still in the development, exploration and evaluation stages, it has
not needed to use forward contracts to manage foreign exchange risk. The Board will continue to monitor the Group’s foreign
currency exposures.
The Group’s exposure to interest-rate risk is summarised in the following table. Fixed interest rate items mature within 12 months.
Price risk
The Group is exposed to both commodity price risk and revenue risk. The commodity prices impact the Group’s capacity to raise
additional funds and impact on future gold sales. Management actively monitors commodity prices and does not believe that the
current level in AUD terms warrants specific action.
b.
Credit risk
The credit risk on financial assets of the Group which have been recognised in the consolidated Statement of Financial Position is
generally the carrying value amount, net of any provisions for doubtful debts. Management scrutinizes outstanding debtors on a
regular basis and no items are considered past due or impaired.
c.
Liquidity risk
Prudent liquidity management implies maintaining sufficient cash and marketable securities and the ability of the Group to raise
funds on capital markets. The Managing Director and the Board continue to monitor the Group’s financial position to ensure that it
has available funds to meet its ongoing commitments.
Crater Gold Mining Limited
30
d.
Cash flow interest rate risk
Consolidated
Notes
Floating
interest rate
Fixed interest
rate
Non-interest
bearing
Notes to the Financial Statements
Total
27,095
94,143
65,600
186,838
2,233,043
1,321,895
9,015,809
167,988
12,738,735
21,150
-
-
21,150
0.06%
-
-
-
-
-
-
-
-
-
-
-
9,015,809
167,988
9,183,797
7.74%
5,945
94,143
65,600
165,688
2,233,043
1,321,895
-
-
3,554,938
21,150
(9,183,797)
(3,389,250)
(12,551,897)
13,679
-
-
13,679
0.14%
-
-
-
-
-
-
-
-
-
-
5,849,782
5,849,782
8.40%
116,337
156,381
65,122
337,840
1,845,870
1,118,773
-
2,964,643
130,016
156,381
65,122
351,519
1,845,870
1,118,773
5,849,782
8,814,425
13,679
(5,849,782)
(2,626,803)
(8,462,906)
2020
Financial assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Weighted average interest rate
Financial liabilities
Trade and other payables
Related party payables
Interest bearing liabilities - loans 1
Lease liabilities
Weighted average interest rate
Net financial assets/(liabilities)
2019
Financial assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Weighted average interest rate
Financial liabilities
Trade and other payables
Related party payables
Interest bearing liabilities - loans 1
Weighted average interest rate
Net financial assets/(liabilities)
10
11
12
16
17
18
19
10
11
12
16
17
18
The Company has assessed the potential interest rate risk on floating interest rate assets and does not consider the risk to be material
to the Company.
1 Freefire Technology Limited
The Company has secured short-term, interest bearing loans totalling $8,215,809 (2019: $5,049,782) from its major shareholder,
Freefire Technology Limited (“Freefire”).
• The loan funds are to be used by the Company principally for the purpose of developing the High Grade Zone at the Company’s
Crater Mountain, PNG project and for general working capital.
Interest on the Principal Sums is payable by the Company to Freefire at the rate of 8% (2019: 8%) per annum.
•
• The loans have various terms from three months to three years.
1 ICBC Loan Facility
The Company has a loan facility of up to $800,000 from the Industrial and Commercial Bank of China (Asia) Limited (“ICBC”). The ICBC
loan facility is repayable on call and is guaranteed by interests associated with the Chairman, Mr Sam Chan. The current interest rate
is 1.45% per annum.
Crater Gold Mining Limited
31
Notes to the Financial Statements
e.
Fair value estimation
The fair value of assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes. The
fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current
market interest rate that is available to the Group for similar financial instruments.
The Group measures fair values using the following fair value hierarchy that considers and reflects the significance of the inputs used
in making the measurements:
Level 1
Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2
Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (as
prices) or indirectly (derived from prices).
Level 3
Inputs for the asset or liability that are not based on observable market data (significant unobservable inputs).
The determination of what constitutes ‘observable’ requires significant judgment by the Group. The Group considers observable
data to be that market data that is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and
provided by independent sources that are actively involved in the relevant market.
The carrying amounts of trade and other receivables and trade and other payables are assumed to approximate their fair values due
to their short-term nature.
f.
Sensitivity analysis
Foreign currency risk sensitivity analysis
The Group is exposed to fluctuations in the value of the Australian Dollar to the PNG Kina (PGK). At 30 June 2020, the effect on profit
and equity of the Group as a result of changes in the value of the PKG to the Australian Dollar, with all other variables remaining
constant, is as follows:
Movement to
AUD
PGK by + 5%
Change in profit
$
101,849
Change in equity
$
(391,894)
PGK by - 5%
(101,849)
391,894
4
Going Concern
These financial statements are prepared on a going concern basis. The Group has incurred a net loss after tax of $4,496,723 for the
year ended 30 June 2020 with total cash outflows from operating and investing activities of 2,643,826. As at 30 June 2020, the Group
had net current liabilities of $12,556,546 and net liabilities of $2,798,504.
Whilst the above conditions indicate a material uncertainty which may cast significant doubt over the Group’s ability to continue as
a going concern and therefore whether it will realise its assets and extinguish its liabilities in the normal course of business and at
the amounts stated in the financial report, the Directors believe that there are reasonable grounds to believe that the Group will be
able to continue as a going concern, after consideration of the following factors:
a) The Company announced on 6 March 2020 that it had executed a new loan agreement for $2 million, the funding being provided
by way of an unsecured loan facility from the Company’s major shareholder, Freefire Technology Ltd. As at the date of this
report the undrawn balance is $1,016,000;
b)
c)
In accordance with the Corporations Act 2001, the Group has plans to raise further working capital through the issue of equity
during the financial year end 30 June 2021; and
The directors of the Company expect that major shareholders of the Group will support fundraising activities and reasonably
believe the Company will continue to receive financial support from Freefire Technology Limited, and remaining debt owed will
not be called back for a period of at least 12 months from the date of this report.
On this basis, the Directors are of the opinion that the financial statements should be prepared on a going concern basis and the
Group will be able to pay its debts as and when they fall due and payable.
Should the Group be unable to continue as a going concern it may be required to realise its assets and discharge its liabilities other
than in the normal course of business and at amounts different to those stated in the financial statements. The financial statements
do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount of liabilities
that might result should the Company be unable to continue as a going concern and meet its debts as and when they fall due.
Crater Gold Mining Limited
32
Note
5
Income from continuing operations
Revenue from gold sales1
Interest received
Government grants
Other income2
Notes to the Financial Statements
June
2020
$
June
2019
$
227,412
33
10,000
321,804
328,099
103
-
-
1 Sale of gold is recognised at the point of sale, which is where the customer has taken delivery of the goods, the risks and rewards
are transferred to the customer and there is a valid sales contract. Amounts disclosed as revenue are net of sales returns and
trade discounts. Anomaly Ltd in Papua New Guinea, a fully owned subsidiary of Crater Gold, sold 110 oz. of gold to one customer
during the financial year (2019: 205 oz.). The sale was a composite of low and high grade gold material produced from the HGZ
Gold mine.
2 Previously recognised penalties equivalent to AUD$321,810 payable on outstanding amounts owing to the Papua New Guinean
Internal Revenue Commission (“IRC”) were written off by the IRC as not payable and thus has been recognised as income.
6
Expenses
Profit before income tax includes the following specific expenses:
Audit fees
Accounting fees
Consulting fees
Directors’ fees
- Depreciation of right-of-use assets
- Depreciation of plant and equipment
Total depreciation
Employee benefits expense
Exploration and evaluation and operating costs
General administration expenses
- Insurance - Directors & officers indemnity insurance
- Insurance – Other
Total insurance
Legal Fees
Minimum lease payments
Share based payments
Share registry, meeting costs and other compliance costs
Telephone/internet
Travel
25
7
a.
Income Tax
Numerical reconciliation of income tax revenue to prima facie tax receivable
Loss before income tax
Tax at the Australian tax rate of 30%
Tax effect of amounts which are not deductible (taxable) in calculating taxable income:
Non-deductible share based payments
Non-deductible expenses
Deferred tax asset not brought to account
Other
Net adjustment to deferred tax assets and liabilities for tax losses and temporary
differences not recognised
Income tax expense
b.
Tax losses
Unused tax losses for which no deferred tax asset has been recognised
Opening balance
Taxable loss for the year
Closing balance
94,940
157,426
436,734
454,194
97,595
197,265
294,860
378,173
975,133
129,478
32,740
9,539
42,279
67,660
-
299,380
91,798
86,543
297,190
89,892
138,409
571,445
471,241
-
231,638
231,638
700,364
1,440,514
150,485
21,206
4,007
25,213
44,897
126,890
182,419
109,667
97,808
506,366
(4,496,723)
(1,349,017)
(6,961,949)
(2,088,585)
89,814
610,204
648,999
-
-
-
-
54,726
1,328,212
705,647
-
-
-
-
31,042,644
1,322,948
32,365,592
29,603,407
1,439,237
31,042,644
Crater Gold Mining Limited
33
Notes to the Financial Statements
Potential tax benefits @ 30%
9,709.678
9,312,793
Note
Earnings per Share
8
a.
Loss from continuing operations attributable to the ordinary equity holders of Crater
Gold Mining Limited (cents per share)
Basic loss per share
June
2020
$
June
2019
$
(0.366)
(1.168)
b.
Diluted loss per share
Loss from continuing operations attributable to the ordinary equity holders of Crater
(1.168)
Gold Mining Limited (cents per share)
The calculation of basic earnings per share at 30 June 2020 was based on the loss from continuing operations attributable to
ordinary shareholders of $4,496,723 (2019 loss: $6,941,949) and a weighted average number of ordinary shares outstanding
during the financial year ended 30 June 2020 of 1,227,495,867 (2019: 594,423,113), calculated as follows:
(0.366)
c.
Weighted average number of shares used as a denominator
Basic loss per share
Diluted loss per share
2020
Shares
2019
Shares
1,227,495,867
594,423,113
1,227,495,867
594,423,113
At the year end, the Group had 9,000,000 options on issue (2019: 22,600,000), representing:
9
9,000,000 unlisted options with weighted average exercise price of $0.125 (2019: 22,600,000 at average $0.20)
Operating Segments
Croydon
$
Crater
Mountain
$
Australian
Head Office
$
Intersegment
eliminations
$
Consolidated
$
Full-year to 30 June 2020
Gold sales revenue
Cost of sales
Other revenue
Assets written down/impaired
Other expenses
Segment loss
Segment assets
Segment liabilities
Full-year to 30 June 2019
Gold sales revenue
Cost of sales
Other revenue
Assets written down/impaired
Other expenses
Segment loss
Segment assets
Segment liabilities
8,847,388
52,096,253
33,848,624
11,758,379
(33,743,600)
(51,115,897)
-
-
-
-
227,412
(486,816)
321,804
-
-
-
10,033
-
(2,017,879)
(2,254,303)
(1,955,479)
(2,244,270)
-
-
-
-
328,099
(1,302,644)
-
-
-
-
103
-
(3,430,119)
(2,492,022)
(4,404,664)
(2,491,919)
(296,974)
(296,974)
987,819
-
(45,366)
(45,366)
987,819
-
-
-
-
-
-
-
-
-
-
-
-
-
227,412
(486,816)
331,837
-
(4,569,156)
(4,496,723)
9,940,231
12,738,735
328,099
(1,302,644)
103
-
(5,967,507)
(6,941,949)
10,196,666
8,814,425
9,115,372
50,377,357
32,027,784
7,743,675
(31,934,309)
(49,306,607)
Segment information is presented using a “management approach”, that is segment information is provided on the same basis as
information used for internal reporting purposes by the chief executive and the Board. In identifying its operating segments,
management generally follows the Group's project activities. Each of these activities is managed separately.
The Chief Operating Decision Makers (“CODM”) review EBITDA (earnings before interest, tax, depreciation and amortisation). The
accounting policies adopted for internal reporting to the CODM are consistent with those adopted in the financial statements.
Crater Gold Mining Limited
34
Notes to the Financial Statements
Description of segments
Accounting policies adopted
Unless stated otherwise, all amounts reported to the Board of Directors, being the chief operating decision makers with respect to
operating segments, are determined in accordance with accounting policies that are consistent with those adopted in the annual
financial statements of the Group.
Segment Assets
Where an asset is used across multiple segments, the asset is allocated to the segment that received the majority of the economic
value form the asset. In most instances, segment assets are clearly identifiable on the basis of their nature and physical condition.
Segment Liabilities
Liabilities are allocated to segments where there is a direct nexus between the incurrence of the liability and the operations of the
segment. Borrowings are generally considered to relate to the Group as a whole and are not allocated. Segment liabilities include
trade and other payables and certain direct borrowings.
Croydon
This project consists of two sub-projects in far North West Queensland, the Croydon Polymetallic Project and the Croydon Gold
Project.
Head Office Perth
These are the overhead and administrative costs for the parent entity.
Crater Mountain
This is an advanced exploration and production project located in the PNG Highlands approximately 50kms southwest of Goroka.
Geographical information
Sales to external customers
2020
$
2019
$
Geographical non-current
assets
2020
$
2019
$
Australia
Papua New Guinea
-
227,412
227,412
-
328,099
328,099
1,016,819
8,802,174
1,016,319
8,893,951
9,818,993
9,910,270
The geographical non-current assets above are exclusive of, where applicable, financial instruments, deferred tax assets, post-
employment benefits assets and rights under insurance contracts.
Types of products and services
The principal products and services of this operating segment are the mining and exploration operations in Australia and Papua New
Guinea.
Note
10
Current Assets - Cash and Cash Equivalents
June
2020
$
June
2019
$
Cash at bank and on hand
27,095
130,016
The effective (weighted average) interest rate on short term bank deposit was 0.06%
(2019: 0.14%).
11
Current Assets - Trade and Other Receivables
GST receivable
Other
Allowance for expected credit losses
No expected credit losses have been recognised for the year ended 30 June 2020.
12
Non-Current Assets - Other Financial Assets
Security deposits
33,607
60,536
94,143
80,533
75,848
156,381
65,600
65,600
65,122
65,122
Crater Gold Mining Limited
35
Note
13
Non-Current Assets - Exploration and Evaluation
Opening net book value
Expenditure capitalised
Exploration costs impaired
Effect of movement in exchange rates
Closing net book value
Notes to the Financial Statements
June
2020
$
June
2019
$
9,197,097
-
-
(6,946)
9,190,151
9,014,465
-
-
182,632
9,197,097
The ultimate recoupment of costs carried forward for exploration and evaluation assets is dependent on the successful
development and commercial exploitation or sale of the respective areas.
Some uncertainty exists as to the Group’s tenure at Crater Mountain. In accordance with AASB 6 Exploration for and Evaluation of
Mineral Resources an indication of impairment may exist if the right to explore in the specific area has expired during the period
and is not expected to be renewed. The Group has been engaged in discussions with the Papua New Guinea Government and has
made a renewal licence submission for EL 1115 and ML 510. To date, the Group has received no formal correspondence or
notification from the Government of Papua New Guinea. The balance of exploration and evaluation at 30 June 2020 includes
$8,202,332 in relation to these exploration licences held in Papua New Guinea.
14
Non-Current Assets – Plant and Equipment
Plant and equipment
Cost
Accumulated depreciation
Net book value
2,176,300
(1,735,277)
441,023
2,192,116
(1,544,065)
648,051
A reconciliation of the carrying amounts of each class of plant and equipment at the beginning and end of the current and prior
financial years are set out below.
Carrying amount as at 30 June 2018
Additions
Disposals
Depreciation expense
Effect of movements in exchange rates
Carrying amount as at 30 June 2019
Additions
Disposals
Depreciation expense
Effect of movements in exchange rates
Carrying amount as at 30 June 2020
15 Non-Current Assets – Right-of-use assets
Balance recognised on application of AASB 16
Depreciation
Effect of movement in exchange rates
Closing balance
Plant and
equipment
687,384
179,560
-
(231,638)
12,745
648,051
9,793
(24,431)
(197,265)
4,875
441,023
June
2020
$
June
2019
$
216,401
(97,595)
3,413
122,219
-
-
-
-
Crater Gold Mining Limited
36
Notes to the Financial Statements
Note
16
Current Liabilities – Trade and Other Payables
Trade payables
Accruals
Other payables
17
Current Liabilities – Related Party Payables
S W S Chan
T M Fermanis
L K K Lee
R D Parker
D T Y Sun
J S Spence (Director for Anomaly Ltd – PNG subsidiary)1
Matt O’Kane
C Church
1 J S Spence resigned as a director of Anomaly Ltd effective 16 October 2019.
18
Current Liabilities Interest-Bearing Liabilities
ICBC loan
Freefire Technology Limited loan
Refer to Note 3(d) for detailed information on financial instruments.
19 Lease liabilities
Balance recognised on application of AASB 16
Repayments of lease liabilities
Effect of movement in exchange rates
Closing balance
Breakdown of current vs non-current
Current
Non-current
Total
June
2020
$
June
2019
$
1,207,042
483,668
542,333
2,233,043
136,485
369,083
222,289
423,798
113,750
-
11,550
44,940
1,321,895
777,122
230,850
837,898
1,845,870
101,485
284,583
187,289
336,048
78,750
130,618
-
-
1,118,773
800,000
8,215,809
9,015,809
800,000
5,049,782
5,849,782
216,401
(50,177)
1,764
167,988
107,037
60,951
167,988
-
-
-
-
-
-
-
Crater Gold Mining Limited
37
20
Contributed Equity
a.
Share Capital
Equity Securities Issued
For the financial year ended 30 June 2020
As at 1 July 2019
Shares issued
As at 30 June 2020
For the financial year ended 30 June 2019
As at 1 July 2018
Shares issued
As at 30 June 2019
b. Ordinary Shares
Notes to the Financial Statements
No. of ordinary
shares
Total
$
1,227,495,867
-
1,227,495,867
75,036,554
-
75,036,554
279,464,775
948,031,092
1,227,495,867
61,015,655
14,020,899
75,036,554
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion to the
number of shares and the amounts paid on those shares held. The fully paid ordinary share 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.
Capital risk management
The Group’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.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital
to shareholders, issue new shares or sell assets to reduce debt.
The Group would look to raise capital when an opportunity to invest in a business or Company is value adding relative to the current
Company's share price at the time of the investment. The Group 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.
c.
Employee Equity Incentive Plan (previously Employee Share Option Plan (ESOP))
Information relating to the Employee Equity Incentive Plan (EEIP), including details of options and performance rights issued,
exercised, lapsed and outstanding during the financial year is set out in Note 25b.
d. Movements in Share Capital
Date
Details
For the financial year ended 30 June 2020
01-Jul-19
Balance 1 July - Ordinary Shares
For the financial year ended 30 June 2019
01-Jul-18
01-Mar-19
21-Mar-19
Balance 1 July - Ordinary Shares
Rights issue
Rights issue shortfall
Less: Transaction costs arising on share issues
No. of shares
Value
$
1,227,495,867
1,227,495,867
75,036,554
75,036,554
279,464,775
913,031,092
35,000,000
1,227,495,867
61,015,655
13,695,466
525,000
(199,567)
75,036,554
Crater Gold Mining Limited
38
e. Movement in options
Date
Details
For the financial year ended 30 June 2020
1 Jul 2019
Opening Balance
25 Jul 2019 Expiry of options exercisable at $0.25
For the financial year ended 30 June 2019
1 Jul 2018
Opening Balance
Notes to the Financial Statements
Class of options
Listed
Unlisted
Total
-
-
-
-
-
22,600,000
22,600,000
(13,600,000)
(13,600,000)
9,000,000
9,000,000
22,600,000
22,600,000
22,600,000
22,600,000
Each option entitles the holder to purchase one share. The names of all persons who currently hold share options, granted at any
time, are entered in the register kept by the Company, pursuant to Section 168 of the Corporations Act 2001, which may be inspected
free of charge. Persons entitled to exercise these options have no right, by virtue of the options, to participate in any share issue by
the parent entity or any other body corporate.
f. Details of performance rights on issue
During the prior financial year, the Group issued to Directors and employees Performance Rights as part of its long-term incentive
program under the Group’s Employee Equity Incentive Plan (EEIP).
Date
Details
A
B
C
D
E
F
Total
Class of performance rights
For the financial year ended 30 June 2020
1 Jul 2019 Opening Balance
46,598,674
23,299,335
23,299,335
23,299,335
23,299,335
17,099,165 156,895,179
46,598,674 23,299,335 23,299,335 23,299,335 23,299,335 17,099,165 156,895,179
Details on the Terms and Conditions of the individual classes of Performance Rights:
Class A Performance Rights – achievement of successful commercial gold production at the Crater Mountain Project, with
successful commercial gold production defined as attaining positive operating cash flow from mining operations (i.e. revenue
less: direct variable cash mining and processing costs; 50% of fixed overhead costs incurred at the Nevera Gold Mine; 50% of the
Chief Operating Officer’s employment expense; and the cost of any landowner compensation payments that relate to mining
activities) for three consecutive months.
Class B Performance Rights – on expansion of the Crater Mountain Project total Resource (ie, adding all categories of Measured,
Indicated and Inferred together) to 1,112,500 contained ounces of gold or more, with cut-off grade of 0.5g/t Au.
Class C Performance Rights – if at any time the share price remains at or above A$0.020 per share for 20 consecutive trading days
with an average daily trading liquidity for those trading days at or above A$5,000.
Class D Performance Rights – if at any time the share price remains at or above A$0.030 per share for 20 consecutive trading days
with an average daily trading liquidity for those trading days at or above A$5,000.
Class E Performance Rights – if at any time the share price remains at or above A$0.040 per share for 20 consecutive trading days
with an average daily trading liquidity for those trading days at or above A$5,000.
Class F Performance Rights – achievement of a 20m+ drill intersection averaging an accredited laboratory assay of 5% Zn, or Zn
with a polymetallic combination of Zn, Cu, Pb, Ag, Sn metal values that give a 5% Zn equivalent to be calculated and reported in
compliance with clause 50 of the 2012 JORC Code; or achievement of a 20m+ drill intersection averaging an accredited laboratory
assay of 3.0 g/t Au, or Au with a polymetallic combination of Zn, Cu, Pb, Ag, Sn metal values that give a 3.0 g/t Au equivalent to
be calculated and reported in compliance with clause 50 of the 2012 JORC Code.
Crater Gold Mining Limited
39
Notes to the Financial Statements
June
2020
$
June
2019
$
717,847
(2,105,121)
(1,387,274)
527,178
(2,121,719)
(1,594,541)
527,178
(108,711)
299,380
717,847
344,759
-
182,419
527,178
(2,121,719)
16,597
(2,105,122)
(2,345,920)
224,201
(2,121,719)
(72,059,771)
(4,496,723)
108,711
(65,117,822)
(6,941,949)
-
(76,447,783)
(72,059,771)
Note
21
Reserves and Accumulated Losses
Reserves
Share based payment reserve
Foreign currency translation reserve
Movements
Share based payments reserve
Balance 1 July
Transfer to accumulated losses (options expired)
Share based payments expense for year
Balance 30 June
Foreign currency translation reserve
Balance 1 July
Currency translation differences
Balance 30 June
Accumulated losses
Movements in accumulated losses were as follows:
Balance 1 July
Loss for the year
Transfer from reserves
Balance 30 June
Nature and purpose of reserves
Share based payments reserve
The share based payments reserve is used to recognise:
The fair value of options and performance rights issued to employees and Directors; and
The fair value of options and performance rights issued as consideration for goods or services rendered.
Foreign currency translation reserve
Exchange differences arising on translation of the foreign controlled entity are taken to the foreign currency translation reserve. The
reserve is recognised in the Consolidated Statement of Profit or Loss and Other Comprehensive Income when the net investment is
disposed.
22
Commitments
Exploration Leases
Committed at the reporting date but not recognised as liabilities, payable:
Within one year
Later than one year but not later than five years
23
Guarantees and Deposits
Non-Current
Deposits lodged with the Queensland Department of Mines
Accommodation and rental bonds
Deposits lodged with PNG Department of Mining and Petroleum
375,000
935,000
1,310,000
475,000
1,110,000
1,585,000
29,000
6,280
30,320
65,600
28,500
6,284
30,338
65,122
Crater Gold Mining Limited
40
Notes to the Financial Statements
24
Related Party Transactions
a. Parent Entity
Crater Gold Mining Limited is the Parent Entity.
b. Key Management Personnel
Disclosures relating to key management personnel are set out below and the remuneration report in the Directors' Report. The
aggregate compensation made to Directors and other members of key management personnel of the Group is set out below:
Remuneration component
Short term
Post-employment benefits
Share based payments
Total
2020
$
888,042
13,534
239,818
2019
$
891,763
14,098
135,227
1,141,394
1,041,088
c.
Transactions with Related Parties
Mr S W S Chan is a Director and the controller of Freefire Technology Limited (“Freefire”), the major shareholder in the Company.
Amounts paid or payable during the year to Freefire in interest were $552,027 (2019: $1,010,623). During the course of the year,
Freefire made a number of short-term loans to the Company at an annual interest rate of 8% (see Note 3d for further information on
the loan).
Amounts paid or payable for Mr R D Parker’s role as Managing Director were $162,000 (2019: $168,750).
Amounts paid or payable for Mr T Fermanis’ role as Executive Deputy Chairman were $156,000 (2019: $162,500).
All transactions with related parties are made at arms-length.
d. Receivable from and payable to Related Parties
Details can be found at Note 17.
e.
Subsidiaries
For details relating to subsidiaries, refer to Note 27. Transactions and balances between subsidiaries and the parent have been
eliminated on consolidation of the Group.
25
Share Based Payments
a. Recognised Share Based Payment Expenses
The expense recognised for share options and performance rights granted to Directors, key management personnel and employees
during the year is shown in the table below:
Expense arising from equity settled share based payment transactions
June
2020
$
June
2019
$
299,380
299,380
182,419
182,419
b. Employee Equity Incentive Plan
The establishment of the Crater Gold Mining Employee Equity Incentive Plan (“the Plan”) was approved by shareholders on 29
November 2017. The Plan is designed to provide long-term incentives for executives, staff and contractors to deliver long-term
shareholder returns. Participation in the Plan is at the Board’s discretion and no individual has a contractual right to participate in
the Plan or to receive any guaranteed benefits. Options granted under the Plan carry no dividend or voting rights.
Crater Gold Mining Limited
41
Notes to the Financial Statements
Summary of securities granted under the Employee Equity Incentive Plan (previously Employee Share Option Plan)
There were no options issued pursuant to the Employee Equity Incentive Plan during the year.
Expiry Date
27/07/2019
27/07/2019
12/07/2020
Exercise
price
$0.25
$0.25
$0.125
Balance at
start of the
year
7,800,000
5,800,000
9,000,000
22,600,000
Granted
Exercised
Forfeited/expired
Balance at
end of the
year
-
-
-
-
-
-
-
-
(7,800,000)
(5,800,000)
-
-
-
9,000,000
(13,600,000)
9,000,000
During the period, no Performance Rights were granted to Directors, key management personnel and employees under the Group’s
Employee Equity Incentive Plan (EEIP).
Date
Details
A
B
C
D
E
F
Total
1 Jul 19
Opening Balance
46,598,674
23,299,335
23,299,335
23,299,335
23,299,335
17,099,165 156,895,179
46,598,674
23,299,335
23,299,335
23,299,335
23,299,335
17,099,165 156,895,179
Class of performance rights
c.
Share Option Based Payments made to Unrelated Party
The Company did not issue any options over ordinary shares to extinguish its liabilities (2019: Nil).
d. Option Based Payments
The Company did not issue any options over ordinary shares to extinguish its liabilities (2019: Nil).
Note
26
Remuneration of Auditors
During the year, the following fees were paid or payable for services provided by RSM
Australia, the auditor of the parent entity, its related practices and unrelated firms.
RSM - Audit and review of financial reports
Non-audit services – RSM
BDO Papua New Guinea
(Auditors of Anomaly Limited)
Audit and review of financial reports
27
Subsidiaries
a. Ultimate Controlling Entity
Crater Gold Mining Limited is the ultimate controlling entity for the Group.
b. Subsidiaries
June
2020
$
June
2019
$
63,000
13,500
76,500
31,940
31,940
65,064
32,550
97,614
24,829
24,829
The consolidated financial statements incorporate the assets, liabilities and results of the following wholly-owned subsidiaries in
accordance with the accounting policy described in Note 1.
Name of entity
Principal place of
business / Country
of Incorporation
Class of shares
Percentage ownership
Anomaly Resources Limited
Australia
Ordinary
Anomaly Limited
Papua New Guinea
Ordinary
The proportion of ownership interest is equal to the proportion of voting power held.
There are no significant restrictions over the Group’s ability to access or use assets and settle liabilities.
Crater Gold Mining Limited
42
2020
%
100
100
2019
%
100
100
Note
28
Parent Entity information
Statement of Profit or Loss
Loss after income tax
Total Comprehensive Loss
Statement of Financial Position
Total current assets
Total assets
Total current liabilities
Total liabilities
Equity
Contributed equity
Reserves
Accumulated losses
Total Equity
Notes to the Financial Statements
June
2020
$
June
2019
$
(4,350,535)
(4,350,535)
(6,847,418)
(6,847,418)
76,024
1,121,993
11,758,379
11,758,379
64,974
1,158,444
7,743,675
7,743,675
97,324,638
97,324,638
1,925,051
1,734,382
(109,886,075)
(105,644,251)
(10,636,386)
(6,585,231)
Contingent liabilities
The Parent Entity had no contingent liabilities as at 30 June 2020 (2019: nil).
Capital commitments - Property, plant and equipment
The Parent Entity had no capital commitments for property, plant and equipment as at 30 June 2020 (2019: nil).
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the Group, as disclosed in Note 1, except for the following:
Investments in subsidiaries are accounted for at cost, less any impairment, in the Parent Entity.
Note
Reconciliation of loss for the period from continuing operations to net cash
29
outflow from operating activities
Loss for the period from continuing operations
Adjustments for non-cash income and expense items:
Depreciation and amortisation/impairment
Non-cash interest transactions
Exploration expenses/impairment
Loss on disposal of assets
Share based payment expenses
Change in operating assets and liabilities:
Movements in trade and other receivables
Movements in trade creditors and accruals
Net cash outflow from operating activities
June
2020
$
June
2019
$
(4,496,723)
(6,941,949)
294,860
722,605
353,239
7,756
299,380
64,546
354,076
231,638
1,010,663
223,252
-
182,419
(28,910)
439,117
(2,400,261)
(4,883,770)
During the financial year, the Group also had the following changes in liabilities arising from financing activities:
Increase of $216,401 in lease liabilities recognised upon adoption of AASB 16.
Increase of $2,614,000 in short-term interest bearing loans from major shareholder, Freefire Technology Limited.
Crater Gold Mining Limited
43
Notes to the Financial Statements
30
Post Reporting Date Events
On 12 July 2020, 9,000,000 options with an exercise price of $0.125 expired unexercised.
The impact of the COVID-19 pandemic is ongoing. Operations at the Crater Mountain in Papua New Guinea were suspended during
the year as announced on 25 March 2020. The situation is continually developing and is dependent on measures imposed by the
Australian and Papua New Guinean Governments, such as maintaining social distancing requirements, quarantine, travel restrictions
and any economic stimulus that may be provided.
No other matter or circumstance has arisen since 30 June 2020 that has significantly affected, or may significantly affect the Group's
operations, the results of those operations, or the Group's state of affairs in future financial years.
31
Contingent Liabilities
The Group's tenure at Crater Mountain is subject to a pending licence renewal submission made to the Papua New Guinea
Government. There is significant uncertainty as to whether future liabilities will arise in respect to potential closure and rehabilitation
costs in an event the licence renewal is denied. At this time the amount of the obligation cannot be measured with sufficient
reliability.
The Group does not have any other contingent liabilities (2019: nil).
Crater Gold Mining Limited
44
Directors’ Declaration
In the Directors' opinion:
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;
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;
the attached financial statements and notes give a true and fair view of the Group's financial position as at 30 June 2020
and of its performance for the financial year ended on that date; and
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
R D Parker
Managing Director
30 September 2020
Crater Gold Mining Limited
45
RSM Australia Partners
Level 32, Exchange Tower
2 The Esplanade Perth WA 6000
GPO Box R1253 Perth WA 6844
T +61 (0) 8 9261 9100
F +61 (0) 8 9261 9111
www.rsm.com.au
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
CRATER GOLD MINING LIMITED
Opinion
We have audited the financial report of Crater Gold Mining Limited (the Company) and its subsidiaries (the Group),
which comprises the consolidated statement of financial position as at 30 June 2020, the consolidated statement
of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the
consolidated statement of cash flows for the year then ended, and notes to the financial statements, including a
summary of significant accounting policies, and the directors' declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
(i)
Giving a true and fair view of the Group's financial position as at 30 June 2020 and of its financial
performance for the year then ended; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor's Responsibilities for the Audit of the Financial Report section of
our report. We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board's
APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial
report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to
the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor's
report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Emphasis of Matter
We draw attention to Note 13 to the financial statements, which describes the uncertainty relating to the outcome
of the renewal application of the mining and exploration licences in Papua New Guinea. Our opinion is not modified
in respect of this matter.
THE POWER OF BEING UNDERSTOOD
AUDIT | TAX | CONSULTING
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent
accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction.
RSM Australia Partners ABN 36 965 185 036
Liability limited by a scheme approved under Professional Standards Legislation
Material Uncertainty Related to Going Concern
We draw attention to Note 4 in the financial statements, which indicates that the Group incurred a net loss of
$4,496,723 and had total net cash outflows from operating activities and investing activities of $2,643,826 for the
year ended 30 June 2020. As at that date, the Group had net current liabilities of $12,556,546 and net liabilities
of $2,798,504. These conditions, along with other matters as set forth in Note 4, indicate that a material uncertainty
exists that may cast significant doubt on the Group’s ability to continue as a going concern. Our opinion is not
modified in respect of this matter.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial report of the current period. These matters were addressed in the context of our audit of the financial
report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
In addition to the matter described in the Material Uncertainty Related to Going Concern section, we have
determined the matters described below to be the key audit matters to be communicated in our report.
Key Audit Matter
Exploration and evaluation
Refer to Note 13 in the financial statements
The Group has capitalised exploration and
evaluation expenditure with a carrying value of
$9,190,151 as at 30 June 2020.
We considered this to be a key audit matter due to
the significant management judgments involved in
assessing the carrying value of the asset including:
the basis on which
Determination of whether the expenditure can
be associated with finding specific mineral
resources, and
that
expenditure is allocated to an area of interest;
Determination of whether exploration activities
have progressed to the stage at which the
existence of an economically
recoverable
mineral reserve may be assessed; and
Assessing whether any indicators of impairment
are present, and if so, judgments applied to
determine and quantify any impairment loss.
How our audit addressed this matter
Our audit procedures included:
Obtaining evidence that the Group has valid rights
to explore in the specific area of interest;
Reviewing and enquiring with management the
basis on which they have determined that the
exploration and evaluation of mineral resources
has not yet reached the stage which permits a
the existence or
reasonable assessment of
otherwise of economically recoverable reserves;
reviewing
budgets and other documentation as evidence
that active and significant operations in, or relation
to, the area of interest will be continued in the
future; and
Enquiring with management and
Critically assessing and evaluating management’s
assessment that no indicators of impairment
existed at the reporting date.
Other Information
The directors are responsible for the other information. The other information comprises the information included
in the Group's annual report for the year ended 30 June 2020, but does not include the financial report and the
auditor's report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
Auditor's Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and
Assurance Standards Board website at: https://www.auasb.gov.au/auditors_responsibilities/ar1.pdf. This
description forms part of our auditor's report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included within the directors' report for the year ended 30 June 2020.
In our opinion, the Remuneration Report of Crater Gold Mining Limited, for the year ended 30 June 2020, complies
with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
RSM AUSTRALIA PARTNERS
Perth, WA
Dated: 30 September 2020
TUTU PHONG
Partner
Shareholder Information
The following information is required to be disclosed under ASX Listing Rule 4:10 and is not disclosed elsewhere in this Report. This
information is correct as at 22 September 2020.
Substantial Shareholders
The following substantial shareholders are recorded in the Company’s register of substantial shareholders.
Name
Freefire Technology Ltd
Voting Rights
Number of shares
1,044,953,183
% holding
87.63%
Ordinary shares – on a show of hands, are one vote for every registered holder and on a poll, are one vote for each share held by
registered holders. Options holders have no voting rights.
Holders of Each Class of Equity Security
Name
Fully paid ordinary Shares
Code
CGN
Number of
holders
2,974
Unlisted Options (exercisable at $0.125 per option on or before 12 July 2020)
CGNO42
10
Top 20 Holders of Ordinary Shares
Name
Freefire Technology Ltd
China New Economy Fund Ltd
HSBC Custody Nominees (Australia) Limited
Mr Paul Thomas McGreal
Mr Norman Colburn Mayne
BNP Paribas Nominees Pty Ltd
Mr Graham John Bailey & Mrs Annette Maree Bailey
Ms Shiying Yang
Mr David Mingorance
Graham Bailey Earthmoving Pty Ltd
J P Morgan Nominees Australia Limited
Mr Fouad Abdo
Mr Joe Holloway
One Managed Investment Funds Limited
Mr Stephen Charles Lindsay
Bloom Star Investment Limited
Desmond Tak Yan Sun
Kin Keung Lee
Lennard Drilling Pty Ltd
Mr Brad Anthony Vaughan
Grand Total
Number of shares
1,040,558,539
% holding
84.77%
35,000,000
20,684,022
10,000,000
6,030,000
4,388,864
4,375,000
4,000,000
3,600,000
3,125,000
2,980,228
2,937,941
2,643,524
2,160,637
1,897,002
1,775,649
1,750,000
1,750,000
1,739,374
1,687,290
2.85%
1.69%
0.81%
0.49%
0.36%
0.36%
0.33%
0.29%
0.25%
0.24%
0.24%
0.22%
0.18%
0.15%
0.14%
0.14%
0.14%
0.14%
0.14%
1,153,083,070
93.93%
Crater Gold Mining Limited
49
Shareholder Information
Distribution of Equity Securities
Class of Security
Security Code
1 to 1,000
1,001 to
5,000
5,001 to
10,000
10,001 to
100,000
100,001
and Over
Total
Fully paid ordinary Shares
CGN
1,270
681
248
484
193
2,876
Number of Holders Holding Less than a Marketable Parcel of Shares
A marketable parcel is defined by the Market Rule Procedures of the ASX as a parcel of securities with a value of not less than $500.
The number of ordinary shareholders holding less than a marketable parcel of shares is 2,509.
On Market Buy-back
There is no current on market buy-back.
Stock Exchange Listing
Quotation has been granted for all the ordinary shares of the Company on all Member Exchanges of the Australian Securities
Exchange Limited.
Unquoted Securities
As at 22 September 2020, there were no options over unissued shares.
Performance Rights
A total number of 156,895,179 Performance Rights are on issue to directors, employees and consultants of the Company.
Crater Gold Mining Limited
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