ANNUAL REPORT
For the year ended 30 June 2023
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
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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 Secretaries:
A S Betti
L K Woods
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
Website address:
www.cratergold.com.au
Corporate Directory
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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 2023.
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 graphite, gold and
base metal projects at the Group’s tenements 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 2023.
Review of Operations and Results
The Group incurred a loss of $4,406,403 for the year ended 30 June 2023 (2022: loss of $2,706,453).
Operations Report
CROYDON PROJECTS, NORTH QUEENSLAND
The Croydon Projects consist of a total of five Exploration Permits for Minerals (EPMs) and one exploration Permit for Minerals licence
application as detailed below. Croydon is located 1,490km northwest of Brisbane and 150km southeast of Normanton and 530km by
road west-southwest of Cairns. The Croydon Projects tenements surround and include the regional centre and historic gold mining
town of Croydon.
Four New Graphite Discoveries
The Company announced four new graphite discovery areas identified from the reverse circulation (RC) drilling program undertaken
in November of last year (Four New Graphite Discoveries from RC Drilling Results, ASX 30 March 2023). The program was designed to
commence follow-up investigation of first priority EM anomalies identified by the helicopter borne EM survey undertaken in July
2022 (refer to ASX announcement 5th October 2022 titled, “Preliminary Results Identify High Priority Targets at the Croydon Project,
Nth Qld”).
Key Highlights included:
•
•
•
•
The S1-S graphite discovery potentially extends the currently known Golden Gate Graphite Prospect by over 1.5kms to
the SE
The discovery to the NW of the Golden Gate Graphite Prospect possibly extends the prospect by 1.5kms to the NW
3 Drill holes at S4 indicate graphite mineralisation with a strike length of 800m
Graphite intersections ranging up to 6.02% over 21m and 8.87% over 5m
Drilling Result Highlights included:
Anomaly S1-S
•
•
Hole_RC058 21m (40-61m) @ 6.02% graphite (cut-off 4.41% graphite)
Hole RC059 4m (113-117m) @ 6.78% graphite (cut-off 5.3% graphite)
NW Extension of Golden Gate Graphite Prospect
•
RC01 SHAFT 1 including 9m (9-18m) @ 3.26% graphite (cut-off 2.85% graphite)
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Hole RC251 including 5m (54-59m) @ 8.87% graphite (cut-off 4.06% graphite),
Anomaly 4-N- 3 Holes Drilled Over a 800m Strike Length
•
•
•
Hole RC252 including 6m (73-79m) @ 5.29% graphite (cut-off 4.13% graphite)
Hole RC253 including 12m (40-52m) @ 5.36% graphite (cut-off 3.91% graphite)
Anomaly S7
•
•
•
Hole RC05 SHAFT 4 8m (32-40m) @ 3.57% graphite (cut-off 3.03% graphite) -open ended intersection
Hole 501 20m (1-21m) @ 2.08% graphite (cut-off 1.50% graphite)
Hole 503 12m (5-17m) @ 2.29% total carbon (cut-off 1.41% total carbon)
The program involved a total of 19 drill holes for a total of 1,075m. Of this total, 8 holes for 674m were drilled in EPM 18616 with 11
holes for 401m drilled in EPM 8795 (refer to Figure 1 for hole and Anomaly locations).
Of the seven major anomalies identified from the EM program, the initial anomalies drill tested were anomalies S1-South, S4-N and
S7. Two holes were drilled to test Anomaly S1-S, located at the southern end of EM Anomaly S1, where there had been no previous
drilling undertaken for graphite. Both holes intersected graphite mineralisation grades of over 6.0% indicating a new SE extension
zone of the Golden Gate Graphite Prospect, potentially extending that prospect by over 1.5kms to the SE. Two holes were also drilled
to test an area of old shallow mine workings in an area of graphite mineralised scree (not identified as an EM anomaly), located along
a potential NW strike extension of the Golden Gate Graphite Prospect approximately 1.5km to the NW. A significant new zone of
shallow low-grade graphite was intersected, ranging up to 2.72% over 19m.
Good results were also obtained from Anomaly S4-N with all three holes drilled in this anomaly intersecting a new discovery zone
with good graphite grades. All 3 holes intersected graphite grades of over 5%. Drill testing within this anomalous zone has indicated
that graphite mineralisation extends along a strike extent of at least 800m
Significant zones of lower grade mineralisation from close to surface were intersected in 3 of the 5 holes drilled at a new graphite
discovery area at Anomaly S7.
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Figure 1: Location of drill holes Croydon RC drilling program. All holes pre-fixed with RC. Holes RC051 to RC057 located under the
RC058 and RC059 locations.
Drilling Program
The Company announced it had completed eight (8) diamond drill holes at the S3 Graphite Prospect. Eight (8) diamond drill holes for
776.2 metres have been completed at the Company’s S3 Graphite target area in EPM18616 at Croydon, drilling at the S3 prospect is
ongoing. Geological logging of the drill core is proceeding prior to despatch of samples for assay.
Metallurgical Test Work Confirms Fine Flake Graphite Golden Gate Graphite Project
The Company announced the results of ongoing metallurgical test work on graphite mineralisation from the Gold Gate Graphite
Project (Encouraging Metallurgical Test Work Confirms Graphite Flake, ASX 3 March 2023).
Key Highlights included:
•
•
•
•
Flotation of a composite sample achieved a final concentrate product with a graphite grade of 95.3%
Graphite is ultra-fine grained with 90.5% less than 53 microns and 66.6% less than 25 microns
Graphite is present as platy flake
Future test work to focus on optimisation and if the graphite is amenable to micronisation and/or spheronisation
processing
Encouraging flotation test work results were obtained for a 7-stage cleaner concentrate from a 850 micron composite sample. There
was very little coarse material present and insufficient of the finer grained fractions remaining to enable microscopic examination of
the graphite product. The lack of coarse grains was surprising as previous petrological examination had indicated the presence of
graphite flakes from fine sizes, up to, and exceeding 500 microns.
Therefore the test work was run again and further optimised which eventually resulted in a final concentrate grade of 95.3% graphite,
with the graphite recovery to the rougher concentrate much higher at 78.9%. This result indicated that the optimisation was headed
in the right direction, with the Company confident that further optimisation will achieve higher graphite recovery and final product
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purity. Sizing of the graphite concentrate also indicated that most of the graphite was ultra-fine grained with 90.5% being less than
53 microns and 66.6% being less than 25 microns.
The minus 25 micron (Figure 2), minus 25 micron (Figure 3) minus 38 to +24 micron (Figure 4) and the minus 53 to + 38 micron
(Figure 5) graphite concentrates from the optimised 1.0mm composite sample were then examined at high magnification via a
Scanning Electron Microscope (SEM). This revealed that the graphite in all three ultra-fine grain sizes was present as platy flake. This
has raised optimism that the graphite, being mostly ultra-fine grained and present as platy flake, may potentially be amenable to
production of high value products and in particular battery anode material. Future metallurgical test work will concentrate on
investigating these possibilities at a specialised metallurgical test laboratory.
Figure 2: 1.0mm composite sample rougher concentrate, 500 microns fraction, showing sub-rounded graphite nodules and silicate
gangue
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Figure 3: Platy graphite flake in minus 25 micron cleaner concentrate
Figure 4: Platy graphite flake in minus 38 to + 25 micron cleaner concentrate
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Figure 5: Platy graphite flake in minus 53 to + 38 micron cleaner concentrate
Crater Gold Mining awarded a Queensland government CEI Grant
The Company announced it had been successful in securing a Queensland Government Collaborative Exploration Initiative (CEI) grant
of $110,000 (CGN Awarded a Queensland Government CEI Grant, ASX 3 April 2023). The funds from the Grant will be utilised for the
initial evaluation of the S3 Graphite Prospect in Croydon to assist in funding diamond core drill holes for a total of 500m to confirm
the presence of interpreted graphite mineralisation.
HEM survey
The Company announced results from the XCITE Helicopter Electromagnetic and Magnetic Survey (HEM) flown over its gold-
graphite tenements, EPMs 8795 and 18616 (refer ASX announcement released 5 October 2022 titled “Preliminary HEM results
identify high priority targets at the Croydon Project, Nth QLD”). Preliminary plots presented in here in Figures 3, 4 and 5 are as
follows (see Figure 6 for locations within the tenements):
Figure 3: Early channel – CH10BZ
Figure 4: Mid channel – CH15BZ
Figure 5: Late channel – CH20BZ
There are numerous strong anomalies defined, together with additional moderate to weak strength anomalies. The red stars
on the figures indicate the strongest /higher priority anomalies, with the black stars indicating the additional moderate to weak
anomalies.
A strong cluster of high priority anomalies are defined in the Golden Gate Graphite Project area. Graphite is particularly
conductive and commonly well defined in HEM surveys. Many of the anomalies are represented as extensive linear type
conductive units with a well-defined easterly dip. There is also possible evidence for the presence of more localised thicker
fold-type/pipe-like conductors.
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Figure 3: XCITE Preliminary Imagery – Early Channels CH10BZ with Stacked Profiling and Anomalism
Figure 4: XCITE Preliminary Imagery – Mid Channels CH15BZ with Stacked Profiling and Anomalism
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Figure 5: XCITE Preliminary Imagery – Late Channels CH20BZ with Stacked Profiling and Anomalism
Figure 6: Area covered by Figures 3, 4 and 5
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The Company announced results from the completed Electromagnetic and Magnetic Survey (EM) flown over its polymetallic
tenement EPM16002 (refer ASX Announcement released 8 November 2022 titled “Priority HEM Targets Identified in EPM
16002 – North Queensland”).
EM Anomaly 5.4, located within Anomaly A5 prospect in EPM 16002, is considered to be a priority target as it is co-incident
with the A5 aeromagnetic anomaly and SGH soil sampling Cu-Ag-Au anomalism.
In addition, several other EM targets have been identified, including weaker strength anomalies at A5 (EM targets 5.2 and 5.5)
and A3 (EM target 3.1) aeromagnetic anomaly areas. The blue crosses on Figures 10 and 13 indicate the strongest targets, with
the green crosses indicating additional moderate to weak EM anomalies.
Priority EM Target Identified in EPM 26749
The Company announced the results from the NRG Electromagnetic and Magnetic Survey (EM) flown over the Company’s
polymetallic tenements, EPMs 26749 and EPM 13775 (Priority EM Target Identified in EPM 26749, ASX 17 January 2023).
Key Highlights included:
•
•
Results received for Electromagnetic Survey (EM) flown over Croydon Polymetallic EPM’s 13775 & 26749
Anomaly W_4, located in EPM 26749 has been identified as a large priority target
A large priority EM anomaly (W_4) was identified in the western corner of EPM 26749. Three other discrete lower priority anomalies
were also identified, one of these (W_3) being located in the centre of EPM 26749, with the other two located in the Anomaly 1 area
of EPM 13775 (Figure 6).
Modelling of Anomaly W_4 indicates that the data best fits the presence of one or two shallow dipping plates which can be tested
by a 120m vertical hole with expected plate intersections at depths of 71m and 93m. This test hole will be included in the current
drilling program
W_4
W_1
W_2
W_3
Figure 6: Image showing the large (W_4) EM conductor in the NW corner of EPM 26749 and discrete low priority anomalies W_1,
W_2 and W_ 3. The WNW to N trending pattern of weak linear EM anomalies is related to cover, possibly reflecting faults or
geological-trends in the bedrock.
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Figure 7: The large Anomaly W_4 shown together with rectangular shaped blocks modelled from the data projected to surface.
Drill hole WAL_DRC01 has been selected to test this large anomaly. Previous unsuccessful hole G1-001, sited to test a residual
gravity anomaly, lies some 1.2km to the SSE.
Aeromagnetic Anomaly A5
Anomaly A5 was previously identified by a Queensland Government Aeromagnetic survey. The anomaly is a, discrete, almost
circular aeromagnetic low, approximately 30 nT in amplitude, 800m in diameter and located in the central western side of the
EPM block (Figures 9 and 10). It occurs immediately SW of a larger aeromagnetic anomaly complex (hosting EM Anomaly 5.1)
that is elongated NW-SE, is about 20km in length and about 10km in width. EM Anomaly 5.4 was also investigated by
Spatiotemporal Geochemical Hydrocarbon (SGH) soil sampling. This indicated co-incident polymetallic-silver-copper
anomalism which was partly overlapped by gold anomalism all of which directly overlies the central part of the main (western)
A5 aeromagnetic low (Figure 11) which is a reversed magnetic high feature (refer to ASX Announcement released 12 June 2018
titled “Gold and Silver-Copper-Polymetallic Anomalies Identified from SGH Soil Sampling at the A5 Anomaly Prospect, North
Qld”). This has provided encouragement not only from the co-incident anomalism but also from past drilling by the Company
at Anomaly A2 (EPM 13775) which intersected polymetallic mineralisation that is also associated with a magnetic low (a
reversed previous magnetic high).
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Directors’ Report
Figure 9: Aeromagnetic Anomaly A5. HEM survey flight lines shown.
Figure 10: Aeromagnetic Anomaly A5 with EM anomalies A5.1 to A5.6. EM anomaly A5.1 is located within the eastern magnetic
low and EM anomaly A5.4 within the western magnetic low
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Figure 11: SGH soil Cu-Ag anomalism co-incident with Au anomalism located within the western aeromagnetic low
Aeromagnetic Anomaly A3
Aeromagnetic anomaly A3 is a discrete, almost circular magnetic low, of approximately 20nT amplitude and around 1500m in
diameter. It is possibly part of, or at least associated with, relatively subtle, WNW and NW trending positive linear anomalies
that are more apparent further to the SE. It appears from the data that the anomaly is caused by a body with reversed remanent
magnetisation. The depths below ground surface to the main possible sources range from 170 to 245m.
Figure 12 shows the 4 sub-block tenement area of EPM 16002 that covers Anomaly A3. An EM Anomaly, A3.1, has been
identified within A3 which is co-incident with the magnetic low (Figure 13). This co-incidence is considered to be of particular
interest.
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Directors’ Report
Figure 12: Aeromagnetic Anomaly A3 located within a 4 sub-block segment of EPM 16002 (the rectangular shapes are associated
with magnetic data modelling). HEM survey flight lines shown.
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Figure 13: Aeromagnetic Anomaly A3. EM Anomaly A3.1 is co-incident with the aeromagnetic low.
CRATER MOUNTAIN GOLD PROJECT, PAPUA NEW GUINEA
All of the Crater Gold Mountain Project tenements are the subject of renewal applications or extensions, lodged with the Papua
New Guinea Minister for Mining some time ago. The Company continues to work with the Papua New Guinea government on
the renewal of existing licences and the issue of new licences under application. The project is currently in care and
maintenance until such time as the tenement renewals and applications have been formally determined by the Papua New
Guinea government.
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Directors’ Report
Corporate
On 9 July 2021, the Company requested a voluntary suspension of its securities pending the finalisation of the details of a material
acquisition. The voluntary suspension was extended on 16 September 2022, 10 January 2023.
On 16 September 2022, the Company announced it was not proceeding with the material acquisition.
On 18 October 2022, the Company announced that Ms Laura Woods joined the Company as Joint Company Secretary.
On 10 May 2023, the Company announced to the market that it had executed a new loan agreement for $500,000 with Freefire
Technology Limited. The new facility is unsecured, has an applicable interest rate of 8% p.a. and is repayable two years from the date
of the first drawdown unless agreed otherwise in advance.
On 21 June 2023, the Company completed a ten (10) shares to one (1) share consolidation.
Subsequent to financial year end, on 10 July 2023, the Company was delisted from the ASX Official List in accordance with Listing
Rule 17.12.
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.
Matters Subsequent to the End of the Financial Year
Subsequent to the end of the financial year, the Company raised additional funds via the issue of:
•
•
•
•
•
1 September 2023: 1,000,000 fully paid ordinary shares at an issue price of $0.12 per share, raising $120,000;
3 October 2023: 1,000,000 fully paid ordinary shares at an issue price of $0.12 per share, raising $120,000;
16 October 2023: 833,600 fully paid ordinary shares at an issue price of $0.12 per share, raising $100,032;
19 October 2023: 833,600 fully paid ordinary shares at an issue price of $0.12 per share, raising $100,032; and
21 November 2023: 1,000,000 fully paid ordinary shares at an issue price of $0.12 per share, raising $120,000.
The Company has also issued the following additional shares at nil consideration:
•
•
3 October 2023: 80,000 fully paid ordinary shares; and
21 November 2023: 160,000 fully paid ordinary shares.
On 28 July 2023, the Company executed 2 Convertible Loan Agreements with a total face value of $500,000. The term of the loans is
12 months, with an interest rate of 8% per annum. The loans are convertible at $0.12 under the following terms:
•
•
Lenders can elect to convert to shares during the 12 months term; and
The loan will automatically convert to shares if the Company is reinstated to trading on ASX within the term.
If the loans have not been converted to shares within the 12 months term, the Company will be required to repay the loans in full
within 10 business days of the end of the term.
On 25 October 2023, the Company executed a new loan agreement for $1,000,000 with the Company’s major shareholder, Freefire
Technology Limited. The terms of the unsecured loan facility are consistent with those disclosed in Note 3(d).
No other matter or circumstance has arisen since 30 June 2023 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 and development activities on its existing projects and to acquire further suitable
projects for exploration as opportunities arise.
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.
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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.
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Material business risks
The Company’s exploration and evaluation operations will be subject to the normal risks of mineral exploration. The material business
risks that may affect the Company are summarised below.
Future capital raisings
The Company’s ongoing activities may require substantial further financing in the future. The Company will require additional funding
to continue its exploration and evaluation operations on its projects with the aim to identify economically mineable reserves and
resources. Any additional equity financing may be dilutive to shareholders, may be undertaken at lower prices than the current
market price and debt financing, if available, may involve restrictive covenants which limit the Company’s operations and business
strategy. Although the Directors believe that additional capital can be obtained, no assurances can be made that appropriate capital
or funding, if and when needed, will be available on terms favourable to the Company or at all. If the Company is unable to obtain
additional financing as needed, it may be required to reduce, delay or suspend its operations and this could have a material adverse
effect on the Company’s activities and could affect the Company’s ability to continue as a going concern.
Exploration risk
The success of the Company depends on the delineation of economically mineable reserves and resources, access to required
development capital, movement in the price of commodities, securing and maintaining title to the Company’s exploration and mining
tenements and obtaining all consents and approvals necessary for the conduct of its exploration activities. Exploration on the
Company’s existing tenements may be unsuccessful, resulting in a reduction in the value of those tenements, diminution in the cash
reserves of the Company and possible relinquishment of the tenements. The exploration costs of the Company are based on certain
assumptions with respect to the method and timing of exploration. By their nature, these estimates and assumptions are subject to
significant uncertainties and, accordingly, the actual costs may materially differ from these estimates and assumptions.
Accordingly, no assurance can be given that the cost estimates and the underlying assumptions will be realised in practice, which
may materially and adversely affect the Company’s viability. If the level of operating expenditure required is higher than expected,
the financial position of the Company may be adversely affected.
Regulatory risk
The Company’s operations are subject to various Commonwealth, State and Territory and local laws and plans, including those
relating to mining, prospecting, development permit and licence requirements, industrial relations, environment, land use, royalties,
water, native title and cultural heritage, mine safety and occupational health. Approvals, licences and permits required to comply
with such rules are subject to the discretion of the applicable government officials.
No assurance can be given that the Company will be successful in maintaining such authorisations in full force and effect without
modification or revocation. To the extent such approvals are required and not retained or obtained in a timely manner or at all, the
Company may be limited or prohibited from continuing or proceeding with exploration. The Company’s business and results of
operations could be adversely affected if applications lodged for exploration licences are not granted. Mining and exploration
tenements are subject to periodic renewal. The renewal of the term of a granted tenement is also subject to the discretion of the
relevant Minister. Renewal conditions may include increased expenditure and work commitments or compulsory relinquishment of
areas of the tenements comprising the Company’s projects. The imposition of new conditions or the inability to meet those conditions
may adversely affect the operations, financial position and/or performance of the Company.
Environmental risk
The operations and activities of the Company are subject to the environmental laws and regulations of Australia. As with most
exploration projects and mining operations, the Company’s operations and activities are expected to have an impact on the
environment, particularly if advanced exploration or mine development proceeds. The Company attempts to conduct its operations
and activities to the highest standard of environmental obligation, including compliance with all environmental laws and regulations.
The Company is unable to predict the effect of additional environmental laws and regulations which may be adopted in the future,
including whether any such laws or regulations would materially increase the Company’s cost of doing business or affect its
operations in any area. However, there can be no assurances that new environmental laws, regulations or stricter enforcement
policies, once implemented, will not oblige the Company to incur significant expenses and undertake significant investments which
could have a material adverse effect on the Company’s business, financial condition and performance.
Availability of equipment and contractors
Prior to the COVID-19 pandemic, appropriate equipment, including drill rigs, was in short supply. There was also high demand for
contractors providing other services to the mining industry. The COVID-19 pandemic only served to exacerbate these issues.
Consequently, there is a risk that the Company may not be able to source all the equipment and contractors required to fulfil its
proposed activities. There is also a risk that hired contractors may underperform or that equipment may malfunction, either of which
may affect the progress of the Company’s activities.
Crater Gold Mining Limited
19
Information on Directors and Secretaries
The Directors and Secretaries 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)
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.
R D Parker B Eng (Managing Director)
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.
T M Fermanis F Fin, MSIAA (Deputy Chairman)
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 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.
L K K Lee MCom, MAppFin, CPA (Non-executive Director)
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.
D T Y Sun (Non-executive Director)
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.
Crater Gold Mining Limited
20
Directors’ Report
Company Secretaries
Andrea Betti
Ms Andrea Betti was appointed Company Secretary on 9 October 2017. Ms Betti has a Bachelor of Commerce, Graduate Diploma in
Corporate Governance, Graduate Diploma in Applied Finance and Investment and a Masters of Business Administration. Ms. Betti is
a member of the Institute of Chartered Accountants in Australia and New Zealand and an associate member of the Governance
Institute of Australia.
Laura Woods
Ms Laura Woods was appointed Company Secretary on 18 October 2022. Ms Woods holds a Bachelor of Science (Actuarial Science),
a Master of Accounting a Graduate Diploma of Applied Corporate Governance and is a member of the Institute of Chartered
Accountants Australia and New Zealand.
Directors’ Meetings
The Company held one 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
-
-
1
-
1
Attended
-
-
1
-
1
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.
Shares under Option
As at the date of this report, there are no unissued ordinary shares 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 (2022: nil) or subsequent to year end.
Indemnification and Insurance of Directors
During the financial year, the Company maintained an insurance policy which indemnifies the Directors and Officers of the Company
in respect of any liability incurred in connection with the performance of their duties as Directors or Officers of the Company. The
Company's insurers have prohibited disclosure of the amount of the premium payable and the level of indemnification under the
insurance contract.
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 $26,700 to RSM for non-audit services, relating to the preparation of an investigating accountants report and
assistance with the preparation of the Company’s tax return preparation 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.
Crater Gold Mining Limited
21
Directors’ Report
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.
-
There are no officers of the company who are former partners of RSM.
Annual General Meeting
All resolutions at the Company’s 2022 Annual General Meeting on 29 November 2022 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 23.
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
29 November 2023
T M Fermanis
Deputy Chairman
Crater Gold Mining Limited
22
Level 32 Exchange Tower, 2 The Esplanade Perth WA 6000
GPO Box R1253 Perth WA 6844
RSM Australia Partners
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
2023, 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: 29 November 2023
MATTHEW BEEVERS
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 2023
Notes
5
5
5
5
5
5
6
June
2023
$
523
523
June
2022
$
-
-
(1,267,379)
(756,129)
(139,037)
(168,166)
(214,966)
(125,358)
(1,342,137)
(335,898)
-
(82,423)
(1,443,407)
(1,238,479)
(4,406,403)
(2,706,453)
-
-
(4,406,403)
(2,706,453)
Interest income
Expenses
Administration expense
Corporate compliance expense
Depreciation expense
Exploration and evaluation and operating costs
Share based payments
Financing expense
Loss before income tax expenses
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:
Exchange differences on translating foreign operations (net of tax)
20
(23,140)
(46,055)
Total comprehensive income for the year
(4,429,543)
(2,752,508)
Loss per share attributable to the ordinary equity holders of Crater Gold Mining Limited:
Basic loss - cents per share
Diluted loss - cents per share
7
7
(3.56)
(3.56)
(2.20)
(2.20)
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
24
Consolidated Statement of Financial Position
As at 30 June 2023
Notes
9
10
11
12
13
14
15
16
17
18
19
20
20
June
2023
$
201,810
336,098
537,908
66,054
987,819
-
-
June
2022
$
130,560
277,059
407,619
64,831
987,819
210,596
-
1,053,873
1,263,246
1,591,781
1,670,865
3,938,813
2,675,170
1,977,108
1,758,107
16,640,714
13,776,771
117,241
113,369
22,673,876
18,323,417
22,673,876
18,323,417
(21,082,095)
(16,652,552)
75,178,398
75,178,398
(2,956,899)
(2,933,759)
(93,303,594)
(88,897,191)
(21,082,095)
(16,652,552)
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
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
25
Consolidated Statement of Changes in Equity
For the Financial Year ended 30 June 2023
Contributed
equity
$
Reserves
$
Accumulated
losses
$
Total
$
Notes
Balance at 1 July 2022
75,178,398
(2,933,759)
(88,897,191)
(16,652,552)
Transactions with owners
Loss for the year
Other comprehensive income
Exchange differences on translating foreign operations
20
Total comprehensive income for the year
-
-
-
-
-
-
-
-
(4,406,403)
(4,406,403)
(23,140)
-
(23,140)
(23,140)
(4,406,403)
(4,429,543)
Balance at 30 June 2023
75,178,398
(2,956,899)
(93,303,594)
(21,082,095)
Balance at 1 July 2021
Share based payments
Conversion of performance rights
Forfeiture of performance rights
Transactions with owners
Loss for the year
Other comprehensive income
75,036,554
(2,414,484)
(86,604,537)
(13,982,467)
20
20
20
-
82,423
141,844
(141,844)
-
-
-
(413,799)
413,799
82,423
-
-
141,844
(473,220)
413,799
82,423
-
-
-
-
(2,706,453)
(2,706,453)
(46,055)
-
(46,055)
(46,055)
(2,706,453)
(2,752,508)
Exchange differences on translating foreign operations
20
Total comprehensive income for the year
Balance at 30 June 2022
75,178,398
(2,933,759)
(88,897,191)
(16,652,552)
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
Crater Gold Mining Limited
26
Consolidated Statement of Cash Flows
For the Financial Year ended 30 June 2023
June
2023
$
June
2022
$
Notes
(946,795)
(1,191,627)
(832,902)
(173,674)
523
-
-
(7,774)
Cash flows from operating activities
Payments to suppliers and employees
Payments for exploration and evaluation
Interest received
Interest paid
Net cash used in operating activities
28
(1,779,174)
(1,373,075)
Cash flows from financing activities
Proceeds from borrowings
Repayment of borrowings
Funds received from shares not yet issued
Lease liability repayments
Net cash provided by financing activities
Net increase 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
1,646,000
2,280,000
-
(800,000)
185,988
-
-
(3,130)
1,831,988
1,476,870
52,814
130,560
18,436
201,810
103,795
27,097
(332)
130,560
9
9
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
Crater Gold Mining Limited
27
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 29 November 2023. 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 27.
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 2023 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
28
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
29
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
30
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
31
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
32
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 2023. The Group's has not yet assessed the
impact of these new or amended Accounting Standards and Interpretations.
Crater Gold Mining Limited
33
Notes to the Financial Statements
Critical accounting judgements, estimates and assumptions
2
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.
Exploration and evaluation costs
The Directors have conducted a review of the Group’s capitalised exploration expenditure to determine the existence of any
indicators of impairment. Based upon this review, the Directors have determined that no impairment exists.
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.
Interest rate risk
The Group’s exposure to interest-rate risk is summarised in the following table.
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 scrutinises 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
34
Notes to the Financial Statements
d.
Cash flow interest rate risk
Consolidated
Floating
interest
rate
Notes
Fixed interest
rate
Non-interest
bearing
2023
Financial assets
Cash and cash equivalents
other
and
Trade
(excluding prepayment)
Other financial assets
receivables
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)
2022
Financial assets
Cash and cash equivalents
Trade
other
and
(excluding prepayment)
Other financial assets
receivables
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)
9
10
11
15
16
17
18
9
10
11
15
16
17
18
Total
201,810
291,620
66,054
559,484
3,752,825
1,977,108
16,640,714
117,241
22,487,888
1,445
-
-
1,445
0.01%
-
-
-
-
-
-
-
-
-
-
-
16,640,714
117,241
16,757,955
8.01%
200,365
291,620
66,054
558,039
3,752,825
1,977,108
-
-
5,729,933
1,445
(16,757,955)
(5,171,894)
(21,928,404)
1,445
-
-
1,445
0.01%
-
-
-
-
-
-
-
-
-
-
-
13,776,771
113,369
13,890,140
8.02%
129,115
234,842
64,831
428,788
2,675,170
1,758,107
-
-
4,433,277
130,560
234,842
64,831
430,233
2,675,170
1,758,107
13,776,771
113,369
18,323,417
1,445
(13,890,140)
(4,004,490)
(17,893,185)
1 Freefire Technology Limited
The Company has secured short-term, interest bearing loans totalling $16,757,955 (2022: $13,776,771) from its major shareholder,
Freefire Technology Limited (“Freefire”).
• The loan funds are to be used by the Company principally for the purpose of supporting the Company’s Crater Mountain Project
in PNG, and to advance several of the Company’s targets in Croydon, Queensland. The loan fund also provide for general working
capital.
Interest on the Principal Sums is payable by the Company to Freefire at the rate of 8% (2022: 8%) per annum.
•
Crater Gold Mining Limited
35
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) and United States Dollar (USD). The
carrying amount of the consolidated entity's foreign currency denominated financial assets and financial liabilities at the reporting
date were as follows:
Assets
Liabilities
Consolidated
PGK
USD
2023
$
257,358
-
2022
$
248,908
-
2023
$
1,069,181
1,370,623
2022
$
999,185
1,148,698
At 30 June 2023, the effect on profit and equity of the Group as a result of changes in the value of the PGK and USD to the Australian
Dollar, with all other variables remaining constant, is as follows:
Movement to
AUD
PGK by + 5%
PGK by - 5%
USD by + 5%
USD by - 5%
30 June 2023
30 June 2022
Change in profit
$
40,591
Change in equity
$
40,591
Change in profit
$
19,618
Change in equity
$
19,618
(40,591)
68,531
(68,531)
(40,591)
68,531
(68,531)
(21,684)
8,114
(8,968)
(21,684)
8,114
(8,968)
Crater Gold Mining Limited
36
Notes to the Financial Statements
Going Concern
4
These financial statements are prepared on a going concern basis. The Group has incurred a net loss after tax of $4,406,403 and had
cash outflows from operating activities of $1,779,174 for the year ended 30 June 2023. As at that date, the Group had net current
liabilities of $22,135,968 and net liabilities of $21,082,094.
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)
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 2024;
b) Freefire Technology Limited and Directors have provided undertakings to not seek repayment of amounts owed to them (refer
to note 16 and note 17) for a period of at least 12 months from the date of this report unless the Company has excess available
cash funds which could be applied to the settlement of some or all of the amounts due and in the case of Freefire and R Parker,
unless the loans are converted from debt to equity; and
c)
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 the 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 that 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 Group be unable to continue as a going concern and meet its debts as and when they fall due.
Crater Gold Mining Limited
37
Notes to the Financial Statements
5
Expenses
Profit before income tax includes the following specific expenses:
Directors’ fees
- Depreciation of right-of-use assets
- Depreciation of plant and equipment
Total depreciation
Employee benefits expense
Defined contribution superannuation expense
Insurance
Share based payments
Interest and finance charges paid/payable on borrowings
Interest and finance charges paid/payable on lease liabilities
June
2023
$
June
2022
$
349,208
-
214,966
214,966
293,363
7,412
60,249
-
1,443,407
-
348,892
54,386
70,972
125,358
240,441
7,094
51,472
82,423
1,148,335
2,063
24
6
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 25% (2022: 25%)
Tax effect of amounts which are not deductible (taxable) in calculating taxable income:
Non-deductible share based payments
Other Non-deductible items
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
Prior year adjustment
Taxable loss for the year
Closing balance
Potential tax benefits @ 25% (2022: 25%)
(4,406,403)
(1,101,732)
(2,706,453)
(676,613)
-
314,813
786,919
-
-
-
-
20,606
(102,997)
759,004
-
-
-
-
35,721,932
(681,091)
1,460,007
36,500,848
33,888,261
-
1,833,671
35,721,932
9,125,212
8,930,483
The above potential tax benefit for deductible temporary differences has not been recognised in the statement of financial position as the
recovery of this benefit is uncertain.
The tax benefits of the above deferred tax assets will only be obtained if:
●
●
●
the Group derives future assessable income of a nature and of an amount sufficient to enable the benefits to be utilised;
the Group continues to comply with the conditions for deductibility imposed by law; and
no changes in income tax legislation adversely affect the Group in utilising the benefits.
Crater Gold Mining Limited
38
Notes to the Financial Statements
Earnings per Share
7
a.
Loss from continuing operations attributable to the ordinary equity holders of Crater
Gold Mining Limited (cents per share)
Basic loss per share
June
2023
$
June
2022
$
(3.56)
(2.20)
b.
Diluted loss per share
Loss from continuing operations attributable to the ordinary equity holders of Crater
(2.20)
Gold Mining Limited (cents per share)
The calculation of basic and diluted earnings per share at 30 June 2023 was based on the loss from continuing operations
attributable to ordinary shareholders of $4,406,403 (2022 loss: $2,706,453) and a weighted average number of ordinary shares
outstanding during the financial year ended 30 June 2023 of 123,903,446 (2022: 123,227,323) post share consolidation.
(3.56)
c.
Weighted average number of shares used as a denominator
Basic and diluted loss per share
There were no options on issue as at year end (2022: nil).
8
Operating Segments
2023
Shares
2022
Shares
123,903,446
123,227,323
Full-year to 30 June 2023
Other revenue
Other expenses
Segment loss
Segment assets
Segment liabilities
Full-year to 30 June 2022
Other revenue
Other expenses
Segment loss
Segment assets
Segment liabilities
Croydon
$
Crater
Mountain
$
Australian
Head Office
$
Intersegment
eliminations
$
Consolidated
$
-
-
523
(1,247,128)
(1,247,128)
987,819
-
-
(185,849)
(185,849)
987,819
-
(507,740)
(507,740)
257,358
53,693,338
-
(411,987)
(411,987)
459,504
53,364,604
(2,652,058)
(2,651,535)
36,372,281
22,376,052
-
(2,108,617)
(2,108,617)
35,216,663
17,324,232
-
-
-
(36,025,680)
(53,395,514)
-
-
-
(34,993,121)
(52,365,419)
523
(4,406,926)
(4,406,403)
1,591,778
22,673,876
-
(2,706,453)
(2,706,453)
1,670,865
18,323,417
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.
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.
Crater Gold Mining Limited
39
Notes to the Financial Statements
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
Geographical non-current
assets
2023
$
2022
$
Australia
Papua New Guinea
1,016,819
37,054
1,016,819
246,427
1,053,873
1,263,246
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.
June
2023
$
June
2022
$
9
Current Assets - Cash and Cash Equivalents
Cash at bank and on hand
201,810
130,560
The effective (weighted average) interest rate on short term bank deposit was 0.01%
(2022: 0.01%).
Current Assets - Trade and Other Receivables
10
GST receivable
Prepayments
Other
Allowance for expected credit losses
No expected credit losses have been recognised for the year ended 30 June 2023.
11
Non-Current Assets - Other Financial Assets
Security deposits
219,986
44,478
71,634
336,098
165,060
42,217
69,782
277,059
66,054
66,054
64,831
64,831
Crater Gold Mining Limited
40
Notes to the Financial Statements
June
2023
$
June
2022
$
987,819
-
-
-
987,819
987,819
-
-
-
987,819
12
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
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. As a result of this uncertainty, the Directors resolved in previous years
to fully impair $7,383,934 expenditure capitalised in relation to the Crater Mountain exploration and evaluation asset until such
time that the licences are officially renewed by the Papua New Guinea Government. The balance of exploration and evaluation at
30 June 2023 included $nil (2022: $nil) in relation to these exploration licences held in Papua New Guinea.
13
Non-Current Assets – Plant and Equipment
Plant and equipment
Cost
Accumulated depreciation
Net book value
1,947,673
(1,947,673)
-
1,947,673
(1,737,077)
210,596
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 1 July 2021
Additions
Disposals
Depreciation expense
Effect of movements in exchange rates
Carrying amount as at 30 June 2022
Additions
Disposals
Depreciation expense
Effect of movements in exchange rates
Carrying amount as at 30 June 2023
Non-Current Assets – Right-of-use assets
14
Opening balance
Depreciation
Effect of movement in exchange rates
Closing balance
Plant and
equipment
268,811
-
(4,721)
(70,972)
17,478
210,596
-
-
(214,966)
4,370
-
June
2023
$
June
2022
$
-
-
-
-
50,011
(54,386)
4,375
-
Crater Gold Mining Limited
41
15
Current Liabilities – Trade and Other Payables
Trade payables
Accruals
Other payables
Funds received for shares net yet issued 1
Notes to the Financial Statements
June
2023
$
June
2022
$
1,899,120
1,043,934
809,771
185,988
3,938,813
1,259,134
647,513
768,523
-
2,675,170
1 This amount represents share funds received for a proposed capital raising, which did not proceed. Subsequent to year end,
these share funds were refunded.
16
Current Liabilities – Related Party Payables
S W S Chan
T M Fermanis
L K K Lee
R D Parker
D T Y Sun
17
Current Liabilities – Interest-Bearing Liabilities
Freefire Technology Limited loan
Refer to Note 3(d) for detailed information on financial instruments.
Lease liabilities
18
Opening balance
Repayments of lease liabilities
Interest
Effect of movement in exchange rates
Closing balance
Breakdown of current vs non-current
Current
Non-current
Total
236,250
584,454
310,000
642,654
203,750
1,977,108
201,250
506,453
290,000
576,654
183,750
1,758,107
16,640,714
16,640,714
13,776,771
13,776,771
113,369
-
-
3,872
117,241
117,241
-
117,241
109,274
-
2,063
2,032
113,369
113,369
-
113,369
Crater Gold Mining Limited
42
19
Contributed Equity
a.
Share Capital
Equity Securities Issued
For the financial year ended 30 June 2023
As at 1 July 2022
Share consolidation (10 to 1)
As at 30 June 2023
For the financial year ended 30 June 2022
As at 1 July 2021
Shares issued – conversion of Performance Rights
As at 30 June 2022
b. Ordinary Shares
Notes to the Financial Statements
No. of ordinary
shares
Total
$
1,239,027,862
(1,115,124,416)
123,903,446
75,178,398
-
75,178,398
1,227,495,867
11,531,995
1,239,027,862
75,036,554
141,844
75,178,398
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 2022 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 2023
1 Jul 2022
21 Jun 2023
Balance 1 July - Ordinary Shares
Share consolidation (10 to 1)
For the financial year ended 30 June 2022
1 Jul 2021
31 Jan 2022
Balance 1 July - Ordinary Shares
Conversion of Performance Rights
No. of shares
1,239,027,862
(1,115,124,416)
123,903,446
1,227,495,867
11,531,995
1,239,027,862
Value
$
75,178,398
-
75,178,398
75,036,554
141,844
75,178,398
Crater Gold Mining Limited
43
Notes to the Financial Statements
e. Movement in options
Date
Details
For the financial year ended 30 June 2023
1 Jul 2022
Opening Balance
Closing Balance
For the financial year ended 30 June 2022
1 Jul 2021
Opening Balance
12 Jul 2021 Expiry of options exercisable at $0.125
Closing Balance
Class of options
Listed
Unlisted
Total
-
-
-
-
-
-
-
-
-
9,000,000
9,000,000
(9,000,000)
(9,000,000)
-
-
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.
Crater Gold Mining Limited
44
Notes to the Financial Statements
June
2023
$
June
2022
$
-
(2,956,899)
(2,956,899)
-
(2,933,759)
(2,933,759)
-
-
-
-
-
473,220
(413,799)
(141,844)
82,423
-
(2,933,759)
(23,140)
(2,956,899)
(2,887,704)
(46,055)
(2,933,759)
(88,897,191)
(4,406,403)
-
(86,604,537)
(2,706,453)
413,799
(93,303,594)
(88,897,191)
20
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 (PR’s expired)
Transfer to contributed equity (PR’s converted)
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.
Commitments
21
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
22
Guarantees and Deposits
Non-Current
Deposits lodged with the Queensland Department of Resources
Accommodation and rental bonds
Deposits lodged with PNG Department of Mining and Petroleum
715,000
260,000
975,000
540,000
130,000
670,000
29,000
5,868
31,186
66,054
29,000
5,674
30,156
64,830
Crater Gold Mining Limited
45
Notes to the Financial Statements
23
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
June
2023
$
498,176
14,824
-
513,000
June
2022
$
449,870
14,182
58,004
522,056
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 $1,217,943 (2022: $976,050). 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).
All transactions with related parties are made at arms-length.
d. Receivable from and payable to Related Parties
Details can be found at Note 16.
e.
Subsidiaries
For details relating to subsidiaries, refer to Note 26. Transactions and balances between subsidiaries and the parent have been
eliminated on consolidation of the Group.
24
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
2023
$
June
2022
$
-
-
82,423
82,423
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.
Summary of securities granted under the Employee Equity Incentive Plan (previously Employee Share Option Plan)
There were no options on issue pursuant to the Employee Equity Incentive Plan during the year.
c.
Share Option Based Payments made to Unrelated Party
The Company did not issue any options over ordinary shares to extinguish its liabilities (2022: Nil).
d. Option Based Payments
The Company did not issue any options over ordinary shares to extinguish its liabilities (2022: Nil).
Crater Gold Mining Limited
46
Notes to the Financial Statements
Remuneration of Auditors
25
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 – Preparation of Investigating Accountants Report
RSM – Tax compliance service
BDO Papua New Guinea
(Auditors of Anomaly Limited)
Audit and review of financial reports
26
Subsidiaries
a. Ultimate Controlling Entity
Crater Gold Mining Limited is the ultimate controlling entity for the Group.
b. Subsidiaries
June
2023
$
June
2022
$
50,500
48,500
17,200
9,500
77,200
-
-
-
8,500
57,000
23,841
23,841
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
2023
%
100
100
2022
%
100
100
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
47
Notes to the Financial Statements
June
2023
$
June
2022
$
(4,157,401)
(4,157,401)
(2,294,464)
(2,294,464)
317,605
1,334,424
21,604,695
21,604,695
20,270,271
194,541
1,211,361
17,324,231
17,324,231
16,112,870
97,466,481
97,466,481
1,207,204
1,207,204
(118,943,956)
(114,786,555)
(20,270,271)
(16,112,870)
27
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
Net liabilities
Equity
Contributed equity
Reserves
Accumulated losses
Total Equity
Contingent liabilities
The Parent Entity had no contingent liabilities as at 30 June 2023 (2022: nil).
Capital commitments - Property, plant and equipment
The Parent Entity had no capital commitments for property, plant and equipment as at 30 June 2023 (2022: 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.
28
Reconciliation of loss for the period from continuing operations to net cash
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
Other
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
2023
$
June
2022
$
(4,406,403)
(2,706,453)
214,966
1,217,943
(471)
-
(52,209)
1,247,000
125,358
1,230,704
-
82,423
16,062
(121,169)
(1,779,174)
(1,373,075)
Crater Gold Mining Limited
48
Notes to the Financial Statements
29
Post Reporting Date Events
Subsequent to the end of the financial year, the Company raised additional funds via the issue of:
•
•
•
•
•
1 September 2023: 1,000,000 fully paid ordinary shares at an issue price of $0.12 per share, raising $120,000;
3 October 2023: 1,000,000 fully paid ordinary shares at an issue price of $0.12 per share, raising $120,000;
16 October 2023: 833,600 fully paid ordinary shares at an issue price of $0.12 per share, raising $100,032;
19 October 2023: 833,600 fully paid ordinary shares at an issue price of $0.12 per share, raising $100,032; and
21 November 2023: 1,000,000 fully paid ordinary shares at an issue price of $0.12 per share, raising $120,000.
The Company has also issued the following additional shares at nil consideration:
•
•
3 October 2023: 80,000 fully paid ordinary shares; and
21 November 2023: 160,000 fully paid ordinary shares.
On 28 July 2023, the Company executed 2 Convertible Loan Agreements with a total face value of $500,000. The term of the loans is
12 months, with an interest rate of 8% per annum. The loans are convertible at $0.12 under the following terms:
•
•
Lenders can elect to convert to shares during the 12 months term; and
The loan will automatically convert to shares if the Company is reinstated to trading on ASX within the term.
If the loans have not been converted to shares within the 12 months term, the Company will be required to repay the loans in full
within 10 business days of the end of the term.
On 25 October 2023, the Company executed a new loan agreement for $1,000,000 with the Company’s major shareholder, Freefire
Technology Limited. The terms of the unsecured loan facility are consistent with those disclosed in Note 3(d).
No other matter or circumstance has arisen since 30 June 2023 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.
30
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 (2022: nil).
Crater Gold Mining Limited
49
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 2023
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.
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
29 November 2023
Crater Gold Mining Limited
50
Level 32 Exchange Tower, 2 The Esplanade Perth WA 6000
GPO Box R1253 Perth WA 6844
RSM Australia Partners
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 2023, 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 2023 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.
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 after
tax of $4,406,403 and had cash outflows from operating activities of $1,779,174 for the year ended 30 June 2023.
As at that date, the Group had net current liabilities of $22,135,968 and net liabilities of $21,082,095, respectively.
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.
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
Other Information
The directors are responsible for the other information. The other information comprises the director’s report 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/ar4.pdf. This
description forms part of our auditor's report.
RSM AUSTRALIA PARTNERS
Perth, WA
Dated: 30 November 2023
MATTHEW BEEVERS
Partner
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