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constellationresources.com.au
Level 9, 28 The Esplanade, Perth WA 6000
2021
ANNUAL REPORT
Constellation Resources Limited
ACN 153 144 211
Contents
Corporate
Directory
Directors’ Report .........................................1
Directors
Auditor’s Independence
Declaration ................................................18
Statement of Profit or Loss and
Other Comprehensive Income ...................19
Statement of Financial Position ............... 20
Statement of Changes in Equity ................21
Statement of Cash Flows .......................... 22
Notes to the Financial Statements ............ 23
Directors’ Declaration .............................. 40
Independent Auditor’s Report ...................41
Corporate Governance Statement ............ 45
ASX Additional Information ...................... 46
Chairman
Mr Ian Middlemas
Mr Peter Woodman Managing Director
Mr Peter Muccilli
Technical Director
Mr Robert Behets
Non-Executive Director
Mr Mark Pearce
Non-Executive Director
Company Secretary
Mr Lachlan Lynch
Registered and Principal Office
+61 8 9322 6322
+61 8 9322 6558
Level 9, 28 The Esplanade, Perth WA 6000
Tel:
Fax:
Auditor
William Buck Audit (WA) Pty Ltd
Solicitors
Thomson Geer
Bankers
National Australia Bank
Australia and New Zealand Banking Group Limited
Stock Exchange Listing
Australian Securities Exchange
Fully Paid Ordinary Shares (ASX Code: CR1)
Share Register
Automic Registry Services
Level 2, 267 St Georges Terrace
Perth WA 6000
AUSTRALIA
Tel:
1300 288 664
DIRECTORS’ REPORT
The Directors of Constellation Resources Limited present their report on the Company (the “Company” or
“Constellation Resources”) for the year ended 30 June 2021.
DIRECTORS
The names and details of the Company's directors in office at any time during, or since the end of, the financial year
are:
Current Directors
Mr Ian Middlemas
Mr Peter Woodman
Mr Peter Muccilli
Mr Robert Behets
Mr Mark Pearce
Chairman
Managing Director
Technical Director (appointed 22 July 2020)
Non-Executive Director
Non-Executive Director
Unless otherwise stated, Directors held their office from 1 July 2020 until the date of this report.
CURRENT DIRECTORS AND OFFICERS
Mr Ian Middlemas B.Com, CA
Chairman
Mr Middlemas is a Chartered Accountant and holds a Bachelor of Commerce degree. He worked for a large
international Chartered Accounting firm before joining the Normandy Mining Group where he was a senior group
executive for approximately 10 years. He has had extensive corporate and management experience, and is
currently a director with a number of publicly listed companies in the resources sector.
Mr Middlemas was appointed a Director of the Company on 17 November 2017. During the three year period to
the end of the financial year, Mr Middlemas has held directorships in Apollo Minerals Limited (July 2016 – present),
Paringa Resources Limited (October 2013 – present), Berkeley Energia Limited (April 2012 – present), Prairie
Mining Limited (August 2011 – present), Salt Lake Potash Limited (January 2010 – present), Equatorial Resources
Limited (November 2009 – present), Peregrine Gold Limited (September 2020 – present), Sovereign Metals Limited
(July 2006 – present), Odyssey Gold Limited (September 2005 – present), Piedmont Lithium Limited (September
2009 – December 2020) and Cradle Resources Limited (May 2016 – July 2019).
Mr Peter Woodman B.Sc. (Geology), MAusIMM
Managing Director
Mr Woodman is a geologist with over 25 years’ experience in exploration, development and operations in the
resource sector. He is a graduate of the Australian National University and is a corporate member of the Australian
Institute of Mining and Metallurgy. Mr Woodman has worked for a number of mining companies during his extensive
career in the resources sector and has been influential in major project acquisition and discovery. He has a strong
background in management, exploration planning and execution, resource development and mining operations
both in Australia and overseas.
Mr Woodman most recently held the position of Chief Geologist at Regis Resources Limited where he oversaw
exploration and resource development activities for its WA and NSW Projects. Prior to his role with Regis Resources
Limited, he held positions with Papillon Resources Limited, Sovereign Metals Limited, WCP Resources Limited
(now named Piedmont Lithium Limited), Samantha Gold NL, Ranger Minerals NL, Hellman & Schofield Pty Ltd,
Centamin Egypt Limited and Kingsgate Consolidated Limited.
Mr Woodman was appointed as Managing Director of the Company on 9 April 2018. During the three year period
to the end of the financial year, Mr Woodman has held directorships in Peregrine Gold Limited (September 2020 –
present).
Constellation Resources Limited ANNUAL REPORT 2021 1
DIRECTORS’ REPORT
(Continued)
Mr Peter Muccilli B.Sc. (Geology), MAusIMM
Technical Director
Mr Muccilli is a Geologist with over 28 years of extensive exploration, development and operational experience in
the resources sector, particularly nickel, gold, zinc and lead. Mr Muccilli was the former Managing Director and
Chief Executive Officer for Mincor Resources NL (“Mincor”). During his 14 years at Mincor, Mr Muccilli also held the
role of Kambalda Exploration Manager where he led the team that was responsible for much of Mincor’s nickel
exploration success, including the high-grade greenfield Cassini discovery.
Mr Muccilli has also previously worked for Samantha Gold NL and Resolute Mining Ltd with experience in mine
geology, exploration and resource estimation. He has worked at various gold and base metals projects across
Australia including being the Commissioning Mine Geologist at a number of operations including the Chalice Gold
mine and the Pillara Lead-Zinc mine.
Mr Muccilli was appointed as Technical Director of the Company on 22 July 2020. During the three year period to
the end of the financial year, Mr Muccilli has held directorships in Poseidon Nickel Limited (August 2020 – present).
Mr Robert Behets B.Sc(Hons), FAusIMM, MAIG
Non-Executive Director
Mr Behets is a geologist with 30 years’ experience in the mineral exploration and mining industry in Australia and
internationally. He has had extensive corporate and management experience and has been Director of a number
of ASX-listed companies in the resources sector including Mantra Resources Limited (“Mantra”), Papillon
Resources Limited and Berkeley Energia Limited. Mr Behets was instrumental in the founding, growth and
development of Mantra, an African-focussed uranium company, through to its acquisition by ARMZ for
approximately A$1 billion in 2011. Prior to Mantra, he held various senior management positions during a long
career with WMC Resources Limited.
Mr Behets has a strong combination of technical, commercial and managerial skills and extensive experience in
exploration, mineral resource and ore reserve estimation, feasibility studies and operations across a range of
commodities, including uranium, gold and base metals. He is a Fellow of The Australasian Institute of Mining and
Metallurgy, a Member of the Australian Institute of Geoscientists and was previously a member of the Australasian
Joint Ore Reserve Committee (“JORC”).
Mr Behets was appointed a Director of the Company on 30 June 2017. During the three year period to the end of
the financial year, Mr Behets has held directorships in Apollo Minerals Limited (October 2016 – present), Equatorial
Resources Limited (February 2016 – present), Berkeley Energia Limited (April 2012 - present) and Odyssey Gold
Limited (August 2020 – present).
Mr Mark Pearce B.Bus, CA, FCIS, FFin
Non-Executive Director
Mr Pearce is a Chartered Accountant and is currently a director of several listed companies that operate in the
resources sector. He has had considerable experience in the formation and development of listed resource
companies and has worked for several large international Chartered Accounting firms. Mr Pearce is also a Fellow
of the Governance Institute of Australia and a Fellow of the Financial Services Institute of Australasia.
Mr Pearce was appointed a Director of the Company on 29 July 2016. During the three year period to the end of
the financial year, Mr Pearce has held directorships in Prairie Mining Limited (August 2011 – present), Equatorial
Resources Limited (November 2009 – present), Sovereign Metals Limited (July 2006 – present), Peregrine Gold
Limited (September 2020 – present), Apollo Minerals Limited (July 2016 – February 2021), Salt Lake Potash Limited
(August 2014 – October 2020), Odyssey Gold Limited (September 2005 – August 2020) and Piedmont Lithium
Limited (September 2009 – August 2018).
Mr Lachlan Lynch B.Com, CA, AGIA
Company Secretary
Mr Lynch is a Chartered Accountant who commenced his career at a large international Chartered Accounting firm
and is currently a Financial Controller for the Apollo Group which is involved in a number of listed companies that
operate in the resources sector. Mr Lynch was appointed as Company Secretary of Constellation Resources Limited
on 24 October 2018.
Constellation Resources Limited ANNUAL REPORT 2021 2
DIRECTORS’ REPORT
(Continued)
PRINCIPAL ACTIVITIES
The principal activity of the Company during the year consisted of the exploration for minerals, including the
Orpheus Project.
OPERATING AND FINANCIAL REVIEW
Operations
Orpheus Project – Fraser Range
The Company is the majority owner and manages the Orpheus Project (Figure 1), comprising six tenements
covering approximately 558km2 in the Fraser Range province of Western Australia. In the Fraser Range, certain
Proterozoic mafic/ultramafic intrusion suites are prospective to host nickel-copper sulphide mineralisation. The
region is currently experiencing high levels of exploration activity for nickel following the Nova, Silver Knight,
Mawson and Lantern discoveries.
The Orpheus Project includes a 70% interest in three mineral exploration licences (E28/2403, E63/1281 and
E63/1282) and one mineral exploration licence application (E63/1695). The granted exploration licences form part
of a joint venture between the Company (70%) and Enterprise Metals Limited (“Enterprise”) (30%, ASX: ENT).
Pursuant to the joint venture agreement, the Company is responsible for sole funding all joint venture activities on
the tenements, which form part of the joint venture, up to completion of a bankable feasibility study.
Additionally, the Company has further 100% interests in two exploration licences (E28/2738 and E28/2957).
Figure 1: Tenement Plan – Orpheus Project
Constellation Resources Limited ANNUAL REPORT 2021 3
DIRECTORS’ REPORT
(Continued)
OPERATING AND FINANCIAL REVIEW (Continued)
Highlights during and subsequent to the end of the financial year include:
Air-Core (“AC”) drilling results to date have defined a highly prospective Ni-Cu-Co-PGE geochemical target
that is interpreted to be over three kilometres in strike and up to 400 metres wide – named the “Eyre
Anomaly”. There is strong evidence for magmatic nickel sulphides as being the source of the Eyre Anomaly
which supports the prospectivity of the other established Ni-Cu-Co-PGE anomalies as a pathfinder to nickel
sulphides in the basement intrusive.
Completion of a number of AC drilling programs, totalling 173 drill holes for circa 20,500 metres over tenement
E28/2403.
Based on Eyre Anomaly assay results, the Company intends to accelerate its nickel sulphide drilling effort to
include follow-up AC drilling in the September quarter, followed by an anticipated diamond drilling program.
Figure 2: AC drill results including Eyre Anomaly, geochemical footprints, MLTEM anomaly over aeromagnetics.
Constellation Resources Limited ANNUAL REPORT 2021 4
DIRECTORS’ REPORT
(Continued)
Eyre Anomaly Aircore Drilling Programs
During and subsequent to the financial year, the Company completed a number of AC drilling programs, 173 drill
holes for circa 20,500 metres across the tenement, resulting in the definition of the Eyre Anomaly. The Eyre Anomaly
is a highly prospective Ni-Cu-Co-PGE geochemical target interpreted to be over three kilometres in strike and up
to 400 metres wide (Figure 2). Strong evidence indicates magmatic nickel sulphides being the source of the Eyre
Anomaly with optical petrological analysis confirming trace levels of magmatic nickel-copper sulphides in multiple
holes in a fertile mafic intrusion.
The southern Eyre Anomaly has returned promising reconnaissance spaced intersections to date that include:
o KAC0091: 21m @ 0.21% Ni, 0.08% Cu, 0.03% Co, 52 ppb (Pt+Pd), 12ppb Au;
o KAC0124: 18m @ 0.21% Ni, 0.02% Cu and 0.05% Co, 14 ppb (Pt+Pd), 2ppb Au; and
o KAC0147: 4m @ 0.09% Ni, 0.02% Cu and 0.02% Co (Au-PGE assays pending).
A number of holes were completed to infill the southern Eyre Anomaly area to a notional 50 metre spacing. The
tighter drill densities have proved to be highly effective in demonstrating the continuity of both fertile peridotite/olivine
gabbronorite host rock, and potentially its associated Ni-Cu-Co-PGE geochemical dispersion. The Northern Eyre
Anomaly infill drilling was completed to 100 metre centres. Well-developed regolith profiles were formed over the
basement units. The pending assay results from the Company’s July program will guide the next steps in the area.
New Emerging Ni-Cu-Co Target
Broad geochemical dispersion in regolith around drill hole KAC0084 (4m @ 0.10% Ni, 0.05% Cu, 0.03% Co, 7ppb
(Pt+Pd), 4ppb Au) was recently returned from the first suite of assays submitted from the March 2021 drilling
program (Au-PGE results are still pending). Key results include:
o KAC0139: 16m @ 0.12% Ni, 0.01% Cu and 0.02% Co; and
o KAC0141: 4m @ 0.08% Ni, 0.08% Cu and 0.03% Co.
The assay and petrology results from the AC program over this emerging target has displayed promising host rocks
and pathfinder geochemistry patterns whilst acknowledging the early stage of evaluation for this emerging target
area.
Petrological Samples
Optical petrological analysis from selected samples from the Company’s AC drilling programs were submitted for
optical petrological analysis. The results from samples located within the southern, middle and northern sections of
the Eyre Anomaly, continues to demonstrate the presence of trace levels of magmatic Ni-Cu sulphides hosted in
olivine gabbronorite intrusive unit (Figure 2 and 3).
Combined, the magmatic Ni-Cu sulphide occurrences have now been identified over a two kilometre strike length.
The Ni-Cu sulphide occurrences in addition with the associated pathfinder (Ni-Cu-Co-PGE) regolith anomaly, both
track along the base of an interpreted large, and highly prospective fertile olivine bearing intrusion suite.
The link between nickel sulphides with associated pathfinder geochemistry is considered highly promising. The
results underscore the nickel sulphide fertility of the intrusions and its prospectivity to potentially host an
economically viable deposit in the tenement area.
Constellation Resources Limited ANNUAL REPORT 2021 5
DIRECTORS’ REPORT
(Continued)
KAC0147
Figure 3: Magmatic sulphide occurrences in KAC0147 comprising of pyrite, violarite (after pentlandite –
Ni sulphide) and chalcopyrite, Cu Sulphide) in an olivine gabbronorite host.
Corporate
On 20 July 2020, the Company announced the appointment of Mr Peter Muccilli as a Technical Director of the
Company.
During and subsequent to the end financial year, the Company raised $2.94 million through the exercise of options.
Business Development
Several opportunities have been reviewed during the financial year, and the Company will continue in its efforts to
identify and acquire suitable new business opportunities in the resources sector, both domestically and overseas.
However, no agreements have been reached or licences granted and the Directors are not able to assess the
likelihood or timing of a successful acquisition or grant of any opportunities.
Results of Operations
The net loss of the Company for the year ended 30 June 2021 was $1,681,070 (2020: $1,446,827). This loss is
predominately comprised of exploration and evaluation expenditure and is attributable to the Company’s accounting
policy of expensing exploration and evaluation expenditure (other than expenditures incurred in the acquisition of
the rights to explore) incurred by the Company. In the current financial year, the net loss also includes share based
payments expenses totalling $124,138 (2020: $17,068) relating to incentive options. The fair value of the incentive
options is recognised over the vesting period of the option.
Financial Position
As at 30 June 2021, the Company had a net current asset surplus of $2,765,807 (2020: $4,101,122). At 30 June
2021, the Company had cash reserves of $2,937,105 (2020: $4,313,710) and borrowings of nil (2020: $nil). At 30
June 2021, the Company had net assets of $3,121,137 (2020: $4,451,585). Subsequent to 30 June 2021, the
Company raised $2,709,581 from the exercise of 13,547,906 $0.20 options.
Constellation Resources Limited ANNUAL REPORT 2021 6
DIRECTORS’ REPORT
(Continued)
Business Strategies and Prospects for Future Financial Years
The objective of the Company is to create long-term shareholder value through the discovery, development and
acquisition of technically and economically viable mineral deposits. To date, the Company has not commenced
production of any minerals, nor has it identified a Mineral Resource in accordance with the JORC Code. To achieve
its objective, the Company currently intends over the medium term to conduct further exploration activities including
field work to follow up targets identified at the Orpheus Project. These activities are inherently risky and the Board
is unable to provide certainty of the expected results of these activities, or that any or all of these likely developments
will be achieved. The material business risks faced by the Company that could have an effect on the Company’s
future prospects, and how the Company manages these risks include:
The Company’s exploration programmes may not identify an economic deposit - The Orpheus Project is at an early
stage of exploration and current/potential investors should understand that mineral exploration, development and mining
are high-risk enterprises, only occasionally providing high rewards. The success of the Company depends, among other
things, on successful exploration and/or acquisition of reserves, securing and maintaining title to tenements and consents,
successful design, construction, commissioning and operating of mining and processing facilities, successful development
and production in accordance with forecasts and successful management of the operations. Exploration and mining
activities may also be hampered by force majeure circumstances, land claims and unforeseen mining problems. There is
no assurance that exploration and development of the mineral interests owned by the Company, or any other projects
that may be acquired in the future, will result in the discovery of mineral deposits which are capable of being exploited
economically. Even if an apparently viable deposit is identified, there is no guarantee that it can be profitably exploited. If
such commercial viability is never attained, the Company may seek to transfer its property interests or otherwise realise
value, or the Company may even be required to abandon its business and fail as a “going concern”;
The Company’s operations may be adversely affected by the COVID-19 pandemic – The global economic outlook is
facing uncertainty due to the current COVID-19 pandemic, which has been having, and will likely continue to have, a
significant impact on global capital markets, commodity prices and foreign exchange. To date, the COVID-19 pandemic
has not had any material impact on the Company’s operations, however, any infections occurring on site at the Company’s
projects could result in the Company’s operations being suspended and otherwise disrupted for an unknown period of
time, which may have an adverse impact on the Company’s operations as well as adverse implications on the Company’s
future cash flows, profitability and financial condition. Supply chain disruptions resulting from the COVID-19 pandemic
and measures implemented by governmental authorities around the world to limit the transmission of the virus (such as
travel bans and quarantining) may, in addition to the general level of economic uncertainty caused by the COVID-19
pandemic, also adversely impact the Company’s operations, financial position and prospects. Governmental or industry
measures taken in response to COVID-19 may materially adversely impact the Company's operations and are likely to be
beyond the control of the Company. To date, the measures imposed by Government or industry, including the restrictions
in place as at the date of this report, have not had a material adverse impact on the Company's operations. However,
future measures imposed by Government or industry may affect the Company's ability to freely move people and
equipment to and from exploration projects, which may cause delays or cost increases;
The Company’s exploration activities being delayed due to lack of available equipment and services - The
exploration activities of the Company requires the involvement of a number of third parties, including drilling contractors,
assay laboratories, consultants, other contractors and suppliers. Demand for drilling equipment and exploration related
services in Western Australia is currently very high and has resulted in higher exploration costs, delays in completing the
Company’s exploration activities, and delays in the assessment and reporting of the results. Should there continue to be
high demand for exploration equipment and related services, there may be further delays in undertaking exploration
activities, which may result in increased exploration costs and/or increased working capital requirements for the Company
and may have a material impact on the Company’s operations and performance;
The Company’s operations will require further capital – the exploration and any development of the Company’s
exploration properties will require substantial additional financing. Failure to obtain sufficient financing may result in
delaying, or the indefinite postponement of, exploration and any development of the Company’s properties or even a loss
of property interest. There can be no assurance that additional capital or other types of financing will be available if needed
or that, if available, the terms of such financing will be favourable to the Company;
The Company may be adversely affected by fluctuations in commodity prices – the price of commodities fluctuate
widely and are affected by numerous factors beyond the control of the Company. Future production, if any, from the
Company’s mineral properties will be dependent upon the price of commodities being adequate to make these properties
economic. The Company currently does not engage in any hedging or derivative transactions to manage commodity price
risk. As the Company’s operations change, this policy will be reviewed periodically going forward; and
Global financial conditions may adversely affect the Company’s growth and profitability – many industries,
including the mineral resource industry, are impacted by these market conditions. Some of the key impacts include
contraction in credit markets resulting in a widening of credit risk, devaluations and high volatility in global equity,
commodity, foreign exchange and precious metal markets, and a lack of market liquidity. Due to the current nature of the
Company’s activities, a slowdown in the financial markets or other economic conditions may adversely affect the
Company’s growth and ability to finance its activities.
Constellation Resources Limited ANNUAL REPORT 2021 7
DIRECTORS’ REPORT
(Continued)
Dividends
No dividends were paid or declared since the start of the financial year. No recommendation for payment of
dividends has been made.
EARNINGS PER SHARE
Basic and diluted loss per share ($ per share)
2021
$
2020
$
(0.05)
(0.04)
ENVIRONMENTAL REGULATION AND PERFORMANCE
The Company's operations are subject to various environmental laws and regulations under the relevant
government's legislation. Full compliance with these laws and regulations is regarded as a minimum standard for
all operations to achieve.
Instances of environmental non-compliance by an operation are identified either by external compliance audits or
inspections by relevant government authorities. There have been no known breaches of environmental laws and
regulations by the Company during the financial year.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
There were no significant changes in the state of affairs of the Company during the year ended 30 June 2021 not
otherwise disclosed.
SIGNIFICANT EVENTS AFTER THE REPORTING DATE
As at the date of this report, other than previously stated, there are no other matters or circumstances which have
arisen since 30 June 2021 that have significantly affected or may significantly affect:
the operations, in financial years subsequent to 30 June 2021, of the Company;
the results of those operations, in financial years subsequent to 30 June 2021, of the Company; or
the state of affairs, in financial years subsequent to 30 June 2021, of the Company.
SHARE OPTIONS
At the date of this report the following options have been issued over unissued Ordinary Shares of the Company:
300,000 Unlisted Options exercisable at $0.30 each on or before 9 October 2021;
400,000 Unlisted Options exercisable at $0.40 each on or before 9 April 2022;
433,333 Unlisted Options exercisable at $0.40 each on or before 30 June 2023;
433,333 Unlisted Options exercisable at $0.50 each on or before 30 June 2023; and
433,334 Unlisted Options exercisable at $0.60 each on or before 30 June 2023.
During the year ended 30 June 2021, 1,057,420 ordinary shares were issued as a result of the exercise of options.
Subsequent to year end and until the date of this report, 13,547,906 ordinary shares have been issued as a result
of the exercise of options.
Constellation Resources Limited ANNUAL REPORT 2021 8
DIRECTORS’ REPORT
(Continued)
REMUNERATION REPORT - AUDITED
This Remuneration Report, which forms part of the Directors' Report, sets out information about the remuneration
of Key Management Personnel (“KMP”) of the Company.
Details of Key Management Personnel
The KMP of the Company during or since the end of the financial year were as follows:
Directors
Mr Ian Middlemas
Mr Peter Woodman
Mr Peter Muccilli
Mr Robert Behets
Mr Mark Pearce
Other KMP
Mr Lachlan Lynch
Chairman
Managing Director
Technical Director (appointed 22 July 2020)
Non-Executive Director
Non-Executive Director
Company Secretary
Unless otherwise disclosed, the KMP held their position from 1 July 2020 until the date of this report.
Remuneration Policy
The Company’s remuneration policy for its KMP has been developed by the Board taking into account the size of
the Company, the size of the management team for the Company, the nature and stage of development of the
Company’s current operations, and market conditions and comparable salary levels for companies of a similar size
and operating in similar sectors. In addition to considering the above general factors, the Board has also placed
emphasis on the following specific issues in determining the remuneration policy for KMP:
(a)
the Company is currently focussed on undertaking exploration, appraisal and development activities;
(b)
risks associated with small cap resource companies whilst exploring and developing projects; and
(c) other than profit which may be generated from asset sales, the Company does not expect to be undertaking
profitable operations until sometime after the commencement of commercial production of the project.
Remuneration Policy for Executives
The Company’s remuneration policy is to provide a fixed remuneration component and a performance based
component (short term incentive and long term incentive). The Board believes that this remuneration policy is
appropriate given the considerations discussed in the section above and is appropriate in aligning executives’
objectives with shareholder and business objectives.
Fixed Remuneration
Fixed remuneration consists of base salary, as well as employer contributions to superannuation funds and other
non-cash benefits. Fixed remuneration is reviewed annually by the Board. The process consists of a review of
Company and individual performance, relevant comparative remuneration externally and internally and, where
appropriate, external advice on policies and practices.
Performance Based Remuneration – Short Term Incentive
Some executives are entitled to an annual cash incentive payment upon achieving various key performance
indicators (“KPI’s”), as set by the Board. Having regard to the current size, nature and opportunities of the Company,
the Board has determined that these KPI’s will include measures such as successful commencement and/or
completion of exploration activities (e.g. commencement/completion of exploration programs within budgeted
timeframes and costs), establishment of government relationships (e.g. establish and maintain sound working
relationships with government and officialdom), development activities (e.g. completion of infrastructure studies and
commercial agreements), corporate activities (e.g. recruitment of key personnel and representation of the company
at international conferences) and business development activities (e.g. corporate transactions and capital raisings).
These measures were chosen as the Board believes they represent the key drivers in the short and medium term
success of the Project’s development. On an annual basis, subsequent to year end, the Board assesses
performance against each individual executive’s KPI criteria. During the 2021 financial year, $90,000 of bonuses
(2020: nil) were approved, paid, or are payable.
Constellation Resources Limited ANNUAL REPORT 2021 9
DIRECTORS’ REPORT
(Continued)
Performance Based Remuneration – Long Term Incentive
The Board has or may issue incentive securities to some executives (if applicable) as a key component of the
incentive portion of their remuneration, in order to attract and retain the services of any executives and to provide
an incentive linked to the performance of the Company. The Board considers that for each executive who has or
may receive securities in the future, their experience in the resources industry will greatly assist the Company in
progressing its projects to the next stage of development and the identification of new projects. As such, the Board
believes that the number of incentive securities to be granted to any executives will be commensurate to their value
to the Company.
The Board has a policy of granting incentive securities to executives (if applicable) with exercise prices at and/or
above market share price (at the time of agreement). As such, incentive securities granted to executives will
generally only be of benefit if the executives perform to the level whereby the value of the Company increases
sufficiently to warrant exercising the incentive securities granted.
Other than service-based vesting conditions, there are not expected to be additional performance criteria if incentive
securities are granted to executives, as given the speculative nature of the Company’s activities and the small
management team responsible for its running, it is considered the performance of the executives and the
performance and value of the Company are closely related. If other forms of incentive securities are issued, then
performance milestones may be applied. The Company’s Securities Trading Policy prohibits KMP from entering
into arrangements to limit their exposure to Incentive Securities granted as part of their remuneration package.
During the year ended 30 June 2021, 1,050,000 unlisted incentive options were issued to KMP (30 June 2020: nil).
During the year ended 30 June 2021, 300,000 shares were issused to KMP upon the exercise of unlisted incentive
options (30 June 2020: nil).
Remuneration Policy for Non-Executive Directors
The Board policy is to remunerate Non-Executive Directors at or below market rates for comparable companies for
time, commitment and responsibilities. Given the current size, nature and risks of the Company, incentive securities
may be used to attract and retain Non-Executive Directors. The Board determines payments to the Non-Executive
Directors and reviews their remuneration annually, based on market practice, duties and accountability.
Independent external advice is sought when required.
The maximum aggregate amount of fees that can be paid to Non-Executive Directors is subject to approval by
shareholders at a General Meeting. Total Directors' fees paid to all Non-Executive Directors are not to exceed
$250,000 per annum. Director's fees paid to Non-Executive Directors accrue on a daily basis. Fees for Non-
Executive Directors are not linked to the performance of the entity. However, to align Directors' interests with
shareholder interests, the Directors are encouraged to hold shares in the Company and Non-Executive Directors
may in limited circumstances receive incentive securities in order to secure their services.
Fees for the Chairman are presently $36,000 and fees for other Non-Executive Directors are $20,000 per annum
plus superannuation. These fees cover main board activities only. Non-Executive Directors may receive additional
remuneration for other services provided to the Company.
Relationship between Remuneration of KMP and Shareholder Wealth
During the Company’s project identification, acquisition, exploration and development phases of its business, the
Board anticipates that the Company will retain earnings (if any) and other cash resources for the exploration and
development of its resource projects. Accordingly the Company does not currently have a policy with respect to
the payment of dividends and returns of capital. Therefore there is no relationship between the Board’s policy for
determining the nature and amount of remuneration of KMP and dividends paid and returns of capital by the
Company during the current and previous financial years.
The Board did not determine the nature and amount of remuneration of the KMP by reference to changes in the
price at which shares in the Company traded between the beginning and end of the current financial year.
Discretionary annual cash bonuses, when applicable, will be based on achieving various non-financial key
performance indicators to be determined by the Board. However, as noted above, KMP’s may receive Incentive
Securities which generally will only be of value should the value of the Company’s shares increase sufficiently to
warrant exercising the Incentive Securities.
Constellation Resources Limited ANNUAL REPORT 2021 10
DIRECTORS’ REPORT
(Continued)
Relationship between Remuneration of KMP and Earnings
As discussed above, the Company is currently undertaking new project acquisition, exploration and development
activities, and does not expect to be undertaking profitable operations (other than by way of material asset sales,
none of which are currently planned) until sometime after the successful commercialisation, production and sales
of commodities from one or more of its projects. Accordingly the Board does not consider earnings during the
current and previous financial years when determining the nature and amount of remuneration of KMP.
In addition to a focus on operating activities, the Board is also focussed on finding and completing new business
and other corporate opportunities. The Board considers that the prospects of the Company and resulting impact on
shareholder wealth will be enhanced by this approach. Accordingly, a bonus may be paid upon the successful
completion of a new business or corporate transaction. Bonuses of $90,000 were declared and paid to KMP in the
current financial year (2020: $nil).
Where required, KMP receive superannuation contributions, currently equal to 9.5% of their salary, and do not
receive any other retirement benefit. This amount will be increased to 10% beginning 1 July 2021.
All remuneration provided to KMP is valued at cost to the company and expensed. Incentive securities are valued
using the Black Scholes option or Binomial valuation methodology as appropriate. The value of these incentive
securities is expensed over the vesting period.
Employment Contracts with Key Management Personnel
Mr Peter Woodman, Managing Director, has a letter of appointment confirming the terms and conditions of his
appointment as Managing Director dated 9 April 2018. Mr Woodman receives a salary of $240,000 per annum plus
superannuation. Mr Woodman’s appointment is on a rolling annual basis and can be terminated by the Company
by giving notice no less than 3 months prior to the end of each annual period. In the event of termination by the
Company, Mr Woodman is entitled to receive his salary and benefits for a maximum period of 3 months. Subject to
the satisfaction of key performance indicators set by the Board, Mr Woodman will be entitled to a discretionary
performance cash bonus of up to $60,000 per annum. Given the current nature, size and opportunities of the
Company, these key performance indicators may include measures such as successful completion of exploration
activities (i.e. within budgeted timeframes and costs), development activities (such as completion of technical
assessments and technical studies), corporate activities and business development activities.
Mr Peter Muccilli, Technical Director, has a letter of appointment confirming the terms and conditions of his
appointment as Technical Director dated 18 July 2020. Mr Muccilli receives a salary of $180,000 per annum plus
superannuation which was increased to $225,000 per annum plus superannuation effective 1 July 2021. Mr
Muccilli’s appointment is on a rolling annual basis and can be terminated by the Company by giving notice no less
than 3 months prior to the end of each annual period. In the event of termination by the Company, Mr Muccilli is
entitled to receive his salary and benefits for a maximum period of 3 months. Subject to the satisfaction of key
performance indicators set by the Board, Mr Muccilli will be entitled to a discretionary performance cash bonus of
up to $45,000 per annum. Given the current nature, size and opportunities of the Company, these key performance
indicators may include measures such as successful completion of exploration activities (i.e. within budgeted
timeframes and costs), development activities (such as completion of technical assessments and technical studies),
corporate activities and business development activities.
All Directors have a letter of appointment confirming the terms and conditions of their appointment as Director of
the Company.
Constellation Resources Limited ANNUAL REPORT 2021 11
DIRECTORS’ REPORT
(Continued)
REMUNERATION REPORT – AUDITED (CONTINUED)
Remuneration of Key Management Personnel
Details of the nature and amount of each element of the remuneration of each director and KMP of the Company
for the years ended 30 June 2021 and 30 June 2020 are as follows:
Short-term
Post-
employment
Share based
Payments
Total
Performance
Related
Salary &
Fees
Other
Super-
annuation
benefits
Value of
Unlisted
Securities
$
36,000
240,000
170,538
20,000
20,000
-
$
-
45,0002
45,0002
-
-
-
$
-
22,800
16,201
1,900
1,900
$
-
-
68,280
-
-
$
36,000
307,800
300,019
21,900
21,900
%
-
15
38
-
-
-
33,039
33,039
100
486,538
90,000
42,801
101,319
720,658
Short-term
Post-
employment
Share based
Payments
Total
Performance
Related
Salary &
Fees
Other
Super-
annuation
benefits
Value of
Unlisted
Securities
$
36,000
240,000
20,000
20,000
-
316,000
$
-
-
-
-
-
-
$
-
22,800
1,900
1,900
-
$
-
$
36,000
17,068
279,868
-
-
-
21,900
21,900
-
26,600
17,068
359,668
%
-
6
-
-
-
2021
Directors
Mr Ian Middlemas
Mr Peter Woodman
Mr Peter Muccilli1
Mr Robert Behets
Mr Mark Pearce
Other KMP
Mr Lachlan Lynch3
Total
2020
Directors
Mr Ian Middlemas
Mr Peter Woodman
Mr Robert Behets
Mr Mark Pearce
Other KMP
Mr Lachlan Lynch3
Total
Notes:
1. Appointed 22 July 2020.
2. Represents 75% and 100% of total discretionary bonus for Mr Woodman and Mr Muccilli respectively.
3. Mr Lynch provides services as the Company Secretary through a services agreement with Apollo Group Pty Ltd (‘Apollo’). Apollo is paid
A$180,000 per annum for the provision of serviced office facilities and administrative, accounting and company secretarial services to the
Company. Mr Lynch was appointed. Due to the impact of COVID-19, the fees paid to Apollo were reduced to A$150,000 for the financial year
ended 30 June 2021 (30 June 2020: $165,000).
Constellation Resources Limited ANNUAL REPORT 2021 12
DIRECTORS’ REPORT
(Continued)
Ordinary Shareholdings of Key Management Personnel
Details of the ordinary shares held by each director and KMP of the Company for the year ended 30 June 2021 are
as follows:
Held at
1 July 2020
Granted as
Remuneration
Purchases
Net Change
Other
(#)
(#)
2,400,000
500,000
-1
600,000
1,000,000
25,000
4,525,000
-
-
-
-
-
-
-
(#)
-
300,000
-
-
-
-
300,000
(#)
-
-
-
-
-
-
-
Held at
30 June 2021
(#)
2,400,000
800,000
-
600,000
1,000,000
25,000
4,825,000
2021
Directors
Mr Ian Middlemas
Mr Peter Woodman
Mr Peter Muccilli
Mr Robert Behets
Mr Mark Pearce
Other KMP
Mr Lachlan Lynch
Total
Notes:
1. As at date of appointment.
Listed Option Holdings of Key Management Personnel
Details of the listed options held by each director and KMP of the Company for the year ended 30 June 2021 are
as follows:
Held at
1 July 2020
Granted as
Remuneration
Purchases
Net Change
Other
(#)
(#)
(#)
(#)
Held at
30 June 2021
(#)
800,000
166,666
-1
199,999
333,331
8,333
1,508,329
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
800,000
166,666
-
199,999
333,331
8,333
1,508,329
2021
Directors
Mr Ian Middlemas
Mr Peter Woodman
Mr Peter Muccilli
Mr Robert Behets
Mr Mark Pearce
Other KMP
Mr Lachlan Lynch
Total
Notes:
1. As at date of appointment.
Constellation Resources Limited ANNUAL REPORT 2021 13
DIRECTORS’ REPORT
(Continued)
REMUNERATION REPORT – AUDITED (CONTINUED)
Unlisted Option Holdings and Incentive Securities of Key Management Personnel
Details of the relevant incentive securities granted to or held by each director and KMP of the Company for the year
ended 30 June 2021 are as follows:
Held at
1 July
2020
(#)
Granted as
Remuneration
Options
exercised
Options
forfeited
Net Change
Other
Held at
30 June
2021
Vested and
exercisable
(#)
(#)
(#)
(#)
(#)
(#)
2021
Directors
Mr Ian Middlemas
-
Mr Peter Woodman
1,000,000
-
-
-
(300,000)
Mr Peter Muccilli
Mr Robert Behets
Mr Mark Pearce
Other KMP
Mr Lachlan Lynch1
-1
-
-
-
750,000
-
-
300,000
-
-
-
-
1,000,000
1,050,000
(300,000)
Notes:
1. As at date of appointment.
Options Granted to Key Management Personnel
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
700,000
750,000
-
-
-
700,000
250,000
-
-
300,000
300,000
1,750,000
1,250,000
Details of Incentive Options granted by the Company to each KMP previously are as follows:
2021
Director
Options
Granted
Grant
Date
Vesting
Date
Expiry
Date
Grant
Date
Fair
Value
$
Exercise
Price
$
No. Vested
as at 30 June
2021
%
vested
in year
%
forfeited
in year
Mr Peter Woodman
300,000
09/04/2018
09/10/2019 09/10/2021 $0.30
$0.1126
300,000
100%
Mr Peter Muccilli
250,000
22/07/2020
22/07/2020 30/06/2023 $0.40
$0.1250
250,000
100%
400,000
09/04/2018
09/04/2020 09/04/2022 $0.40
$0.1098
400,000
100%
250,000
22/07/2020
22/07/2021 30/06/2023 $0.50
$0.1092
250,000
22/07/2020
22/07/2022 30/06/2023 $0.60
$0.0967
-
-
-
-
Other KMP
Mr Lachlan Lynch
100,000
22/07/2020
22/07/2020 30/06/2023 $0.40
$0.1250
100,000
100%
100,000
22/07/2020
22/07/2020 30/06/2023 $0.50
$0.1092
100,000
100%
100,000
22/07/2020
22/07/2020 30/06/2023 $0.60
$0.0967
100,000
100%
-
-
-
-
-
-
-
-
There were no incentive securities that lapsed for any KMP of the Company during the 2021 and 2020 financial
years.
Constellation Resources Limited ANNUAL REPORT 2021 14
DIRECTORS’ REPORT
(Continued)
The fair value of Incentive Options granted is estimated as at the date of grant using the Black Scholes option
valuation model taking into account the terms and conditions upon which the Incentive Options were granted. The
table below lists the inputs to the valuation model used for share options granted by the Company to the KMP in
the previous table:
Inputs
Exercise price
Grant date share price
Dividend yield1
Volatility
Risk-free interest rate
Grant date
Expiry date
Expected life of option2
Series 1
Series 2
Series 3
Series 4
Series 5
A$0.30
A$0.20
-
95%
2.22%
9-Apr-18
9-Oct-21
A$0.40
A$0.20
-
95%
2.22%
9-Apr-18
9-Apr-22
A$0.40
A$0.29
-
80%
A$0.50
A$0.29
-
80%
A$0.60
A$0.29
-
80%
0.282%
0.282%
0.282%
16-July-20
16-July-20
16-July-20
30-Jun-23
30-Jun-23
30-Jun-23
3.50 years
4.00 years
3.00 years
3.00 years
3.00 years
Fair value at grant date
A$0.1126
A$0.1098
A$0.1250
A$0.1092
A$0.0967
Notes:
1
2
The dividend yield reflects the assumption that the current dividend payout will remain unchanged.
The expected life of the options is based on the expiry date of the options.
Details of the values of Incentive Options granted, exercised or lapsed for each KMP during the 2021 financial year
are as follows:
Value of Options
Granted during the
Year
$
Value of Options
exercised during the
year
$
Value of Options
included in
remuneration for the
year
$
Remuneration for the
year that consists of
Options
%
-
82,747
33,099
115,846
30,000
-
-
30,000
-
68,280
33,099
101,379
-
23
100
2021
Directors
Mr Peter Woodman
Mr Peter Muccilli
Other KMP
Mr Lachlan Lynch
Total
During the financial year ended 30 June 2021, Mr Woodman was issued 300,000 shares upon the exercise of $0.25
unlisted incentive options. The closing share price of the Company on the date of issue (16 March 2021) was $0.35
which calculates to a value of the options of $30,000 (being the market price of the shares less exercise price).
Other Transactions
Apollo Group Pty Ltd (“Apollo Group”), a Company of which Mr Mark Pearce is a director and beneficial shareholder,
provides corporate, administration and company secretarial services and serviced office facilities to the Company
under a services agreement. Either party can terminate the services agreement at any time for any reason by giving
one month’s written notice. Apollo Group received a monthly retainer of $15,000 (exclusive of GST) for the provision
of these services. Effective from 1 July 2021, the fee has been set at $20,000 (exclusive of GST) per month. The
monthly retainer is reviewed every six to twelve months and is based on Apollo Group’s budgeted cost of providing
the services to the Company (and other companies utilising same or similar services from Apollo Group) for the
next six to twelve month period, with minimal mark-up (if any). Due to the impact of COVID-19, the monthly fee of
$15,000 was reduced to $10,000 for the 6 months to 31 December 2020.
Loans from Key Management Personnel
No loans were provided to or received from Key Management Personnel during the year ended 30 June 2021 (2020:
Nil).
End of the audited Remuneration Report.
Constellation Resources Limited ANNUAL REPORT 2021 15
DIRECTORS’ REPORT
(Continued)
DIRECTORS' INTERESTS
As at the date of this report, the Directors' interests in the securities of the Company are as follows:
Ian Middlemas
Peter Woodman
Peter Muccilli
Robert Behets
Mark Pearce
Shares1
3,200,000
966,666
-
799,999
1,333,331
Unlisted Options2
-
700,000
750,000
-
-
Notes:
1 ‘Shares’ means fully paid ordinary shares in the capital of the Company.
2 ‘Unlisted Options’ means an unlisted option to subscribe for one Share in the capital of the Company.
TENEMENT SCHEDULE
Tenements held as at the date of the Directors’ Report are listed in the table below:
Reference
Project
State
Orpheus Project
Western Australia
Orpheus Project
Western Australia
Orpheus Project
Western Australia
Status
Granted
Granted
Granted
Orpheus Project
Western Australia
Application
Orpheus Project
Western Australia
Orpheus Project
Western Australia
Granted
Granted
E28/2403
E63/1281
E63/1282
E63/1695
E28/2738
E28/2957
Interest
70%
70%
70%
70%
100%
100%
MEETINGS OF DIRECTORS
The number of meetings of Directors held during the year and the number of meetings attended by each Director
was as follows:
Current Directors
Mr Ian Middlemas
Mr Peter Woodman
Mr Peter Muccili
Mr Robert Behets
Mr Mark Pearce
Board Meetings
Number Eligible to Attend
Board Meetings
Number Attended
3
3
2
3
3
2
3
2
3
3
There were no Board committees during the financial year. The Board as a whole currently performs the functions
of an Audit Committee, Risk Committee, Nomination Committee, and Remuneration Committee, however this will
be reviewed should the size and nature of the Company’s activities change.
INDEMNIFICATION AND INSURANCE OF OFFICERS
The Company has entered into Deeds of Indemnity with the Directors indemnifying them against certain liabilities
and costs to the extent permitted by law.
The Company has paid, or agreed to pay, premiums totalling $9,566 in respect of Directors’ and Officers’ Liability
Insurance and Company Reimbursement policies for the 12 months ended 30 June 2021 (2020: $6,622), which
cover all Directors and officers of the Company against liabilities to the extent permitted by the Corporations Act
2001. The policy conditions preclude the Company from any detailed disclosures.
Constellation Resources Limited ANNUAL REPORT 2021 16
DIRECTORS’ REPORT
(Continued)
PROCEEDINGS ON BEHALF OF COMPANY
No person has applied for leave of court to bring proceedings on behalf of the Company or intervene in any
proceedings to which the Company is a part for the purpose of taking responsibility on behalf of the Company for
all or any part of those proceedings.
The Company was not a party to any such proceedings during the year.
NON-AUDIT SERVICES
Non-audit services provided by our auditors William Buck and related entities for the financial year ended 30 June
2021 amounted to nil (2020: nil).
AUDITOR'S INDEPENDENCE DECLARATION
The lead auditor's independence declaration for the year ended 30 June 2021 has been received and can be found
on page 18 of the Directors' Report.
This report is made in accordance with a resolution of the Directors made pursuant to section 298(2) of the
Corporations Act 2001.
For and on behalf of the Directors
PETER WOODMAN
Managing Director
25 August 2021
COMPETENT PERSONS STATEMENT
The information in this report that relates to Exploration Results is extracted from the following ASX announcements:
“Drilling Results Confirm Trace Magmatic Nickel Sulphides” – dated 20 July 2021;
“Trace Magmatic Nickel Sulphides in Multiple Drill Holes” - dated 22 April 2021;
“Exploration Identifies Three Kilometre Ni-Cu-Co-PGE Target” – dated 19 January 2021;
“Trace Magmatic Nickel Sulphides Intersected in AC Drilling” – dated 8 December 2020; and
“Aircore Drilling Identifies Anomalous Nickel-Copper-Cobalt” – dated 14 July 2020.
These announcements are available to view at the Company’s website on www.constellationresources.com.au. The information
in the original ASX Announcements that related to Exploration Results was based on, and fairly represents information compiled
by Peter Muccilli, a Competent Person who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Muccilli is a
Technical Director of Constellation Resources Limited and a holder of options in Constellation Resources Limited. Mr Muccilli has
sufficient experience that is relevant to the styles of mineralisation and types of deposit under consideration, and to the activity
being undertaken, to qualify as a Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves” (JORC Code). The Company confirms that it is not aware of any
information or data that materially affects the information included in the original market announcements. The Company confirms
that the form and context in which the Competent Person’s findings are presented have not been materially modified from the
original market announcements.
FORWARD LOOKING STATEMENTS
Statements regarding plans with respect to Constellation’s project are forward-looking statements. There can be no assurance that
the Company’s plans for development of its projects will proceed as currently expected. These forward-looking statements are
based on the Company’s expectations and beliefs concerning future events. Forward looking statements are necessarily subject to
risks, uncertainties and other factors, many of which are outside the control of the Company, which could cause actual results to
differ materially from such statements. The Company makes no undertaking to subsequently update or revise the forward-looking
statements made in this announcement, to reflect the circumstances or events after the date of that announcement.
Constellation Resources Limited ANNUAL REPORT 2021 17
AUDITOR’S INDEPENDENCE DECLARATION
Constellation Resources Limited ANNUAL REPORT 2021 18
AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2001 TO THE DIRECTORS OF CONSTELLATION RESOURCES LIMITED I declare that, to the best of my knowledge and belief during the year ended 30 June 2021 there have been: — no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and — no contraventions of any applicable code of professional conduct in relation to the audit. William Buck Audit (WA) Pty Ltd ABN 67 125 012 124 Amar Nathwani Director Dated this 25th day of August 2021
STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2021
Interest income
Other income
Exploration and evaluation expenses
Administration expenses
Business development expenses
Share based payments expenses
Loss before income tax
Income tax expense
Loss for the year
Notes
2
2021
$
18,742
52,524
2020
$
78,448
47,476
(1,137,660)
(1,119,979)
(483,583)
(435,704)
(6,955)
-
13
(124,138)
(17,068)
(1,681,070)
(1,446,827)
4
-
-
(1,681,070)
(1,446,827)
Loss attributable to members of Constellation Resources
Limited
(1,681,070)
(1,446,827)
Other comprehensive income for the year, net of tax
Total comprehensive loss for the year
Total comprehensive loss attributable to members of
Constellation Resources Limited
Basic and diluted loss per share attributable to the ordinary
equity holders of the company ($ per share)
-
-
(1,681,070)
(1,446,827)
(1,681,070)
(1,446,827)
12
(0.05)
(0.04)
The accompanying notes form part of these financial statements.
Constellation Resources Limited ANNUAL REPORT 2021 19
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2021
ASSETS
Current Assets
Cash and cash equivalents
Other receivables
Total Current Assets
Non-Current Assets
Property, plant and equipment
Exploration and evaluation assets
Total Non-Current Assets
TOTAL ASSETS
LIABILITIES
Current Liabilities
Trade and other payables
Provisions
Total Current Liabilities
Notes
2021
$
2020
$
3
5
6
7
2,937,105
16,307
2,953,412
4,313,710
76,407
4,390,117
5,330
350,000
355,330
463
350,000
350,463
3,308,742
4,740,580
164,983
22,622
187,605
276,312
12,683
288,995
TOTAL LIABILITIES
187,605
288,995
NET ASSETS
EQUITY
Contributed equity
Reserves
Accumulated losses
TOTAL EQUITY
3,121,137
4,451,585
8
9
10
6,885,690
1,402,005
6,625,805
1,311,268
(5,166,558)
(3,485,488)
3,121,137
4,451,585
The accompanying notes form part of these financial statements.
Constellation Resources Limited ANNUAL REPORT 2021 20
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2021
Contributed
Equity
$
Accumulated
Losses
$
Share Based
Payment
Reserve
$
Other
Equity
Reserve
$
Total
Equity
$
6,625,805
-
(3,485,488)
(1,681,070)
111,120
-
1,200,148
-
4,451,585
(1,681,070)
-
(1,681,070)
226,484
33,401
-
-
-
6,885,690
-
(5,166,558)
-
-
(33,401)
124,138
201,857
1,200,148
-
(1,681,070)
-
-
-
226,484
-
124,138
3,121,137
6,625,805
-
(2,038,661)
(1,446,827)
94,052
-
1,200,148
-
5,881,344
(1,446,827)
-
(1,446,827)
-
-
(1,446,827)
2021
Balance at 1 July 2020
Net loss for the year
Total comprehensive
income/(loss) for the year
Transactions with owners
recorded directly in equity
Issue of shares upon exercise of
options
Transfer from SBP reserve upon
exercise of options
Share based payment expense
Balance at 30 June 2021
2020
Balance at 1 July 2019
Net loss for the year
Total comprehensive
income/(loss) for the year
Transactions with owners
recorded directly in equity
Share based payment expense
Balance at 30 June 2020
-
6,625,805
-
(3,485,488)
17,068
111,120
-
1,200,148
17,068
4,451,585
The accompanying notes form part of these financial statements.
Constellation Resources Limited ANNUAL REPORT 2021 21
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2021
Operating activities
Interest received from third parties
COVID-19 cash flow boost
Payments to employees and suppliers
Notes
2021
$
2020
$
24,003
66,868
91,314
33,132
(1,688,362)
(1,399,852)
Net cash flows used in operating activities
11(a)
(1,597,491)
(1,275,406)
Investing activities
Payments for property, plant and equipment
Net cash flows used in investing activities
Financing activities
Proceeds from issue of ordinary shares upon exercise of options
8
Net cash flows from financing activities
(5,598)
(5,598)
226,484
226,484
-
-
-
-
Net (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
(1,376,605)
(1,275,406)
4,313,710
5,589,116
Cash and cash equivalents at the end of the year
11(b)
2,937,105
4,313,710
The accompanying notes form part of these financial statements.
Constellation Resources Limited ANNUAL REPORT 2021 22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies adopted in preparing the financial report of Constellation Resources Limited
(“Constellation Resources” or “Company”) for the year ended 30 June 2021 are stated to assist in a general
understanding of the financial report. Constellation Resources is a Company limited by shares, incorporated and
domiciled in Australia. The financial report of the Company for the year ended 30 June 2021 was authorised for
issue in accordance with a resolution of the Directors on 20 August 2021.
(a) Basis of Preparation
The financial report is a general purpose financial report which has been prepared in accordance with Australian
Accounting Standards (“AASBs”) and interpretations adopted by the Australian Accounting Standards Board
(“AASB”) and the Corporations Act 2001. The financial statements comprise the financial statements of the
Company. For the purposes of preparing the financial statements, the Company is a for-profit entity. The financial
report has also been prepared on a historical cost basis. The financial report is presented in Australian dollars.
(b) Statement of Compliance
The financial report complies with Australian Accounting Standards and International Financial Reporting Standards
(“IFRS”) as issued by the International Accounting Standards Board.
In the current financial year, the Company has adopted all of the new and revised Standards and Interpretations
issued by the AASB that are mandatory for the current annual reporting period. Any new or amended Accounting
Standards or Interpretations that are not yet mandatory have not been early adopted.
(c) Issued standards and interpretations not early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet
effective have not been adopted by the Company for the reporting period ended 30 June 2021. Those which may
be relevant to the Company are set out in the table below, but these are not expected to have any significant impact
on the Company's financial statements:
Standard/Interpretation
AASB 2020-3 Amendments to Australian Accounting Standards – Annual
Improvements 2018-2020 and Other Amendments
AASB 2020-1 Amendments to Australian Accounting Standards – Classification of
Liabilities as Current or Non-Current
AASB 2020-6 Amendments to Australian Accounting Standards – Classification of
Liabilities as Current or Non-Current – Deferral of Effective Date
Application
Date of
Standard
Application
Date for
Company
1 January 2022
1 July 2022
1 January 2023
1 July 2023
1 January 2023
1 July 2023
(d) Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks and other short-term highly liquid
investments with original maturities of 3 months or less.
(e) Trade and Other Receivables
Trade receivables are recognised and carried at original invoice amount less an expected credit loss provision. An
estimate for the expected credit loss is made based on the historical risk of default and expected loss rates at the
inception of the transaction. Inputs are selected for the expected credit loss impairment calculation based on the
Company’s past history, existing market conditions as well as forward looking estimates.
(f) Payables
Liabilities are recognised for amounts to be paid in the future for goods and services received. Trade accounts
payable are normally settled within 30 days.
(g) Provisions
Provisions are recognised when the Company has a legal or constructive obligation, as a result of past events, for
which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured.
Constellation Resources Limited ANNUAL REPORT 2021 23
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
(Continued)
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(h) Earnings per Share
Basic earnings per share (“EPS”) is calculated by dividing the net profit attributable to members of the Company for
the reporting period, after excluding any costs of servicing equity, by the weighted average number of ordinary
shares of the Company.
Diluted EPS is calculated by dividing the basic EPS earnings, adjusted by the after tax effect of financing costs
associated with dilutive potential Ordinary Shares and the effect on revenues and expenses of conversion to
Ordinary Shares associated with dilutive potential Ordinary Shares, by the weighted average number of Ordinary
Shares and dilutive Ordinary Shares.
(i) Revenue Recognition
Interest revenue is recognised as it accrues, taking into account the effective yield on the financial asset.
(j) Exploration and Evaluation Expenditure
Expenditure on exploration and evaluation is accounted for in accordance with the 'area of interest' method and
with AASB 6 Exploration for and Evaluation of Mineral Resources, which is the Australian equivalent of IFRS 6.
Exploration and evaluation expenditure encompasses expenditures incurred by the Company in connection with
the exploration for and evaluation of mineral resources before the technical feasibility and commercial viability of
extracting a mineral resource are demonstrable.
For each area of interest, expenditure incurred in the acquisition of rights to explore is capitalised, classified as
tangible or intangible, and recognised as an exploration and evaluation asset. Exploration and evaluation assets
are measured at cost at recognition and are recorded as an asset if:
(i)
the rights to tenure of the area of interest are current; and
(ii) at least one of the following conditions is also met:
the exploration and evaluation expenditures are expected to be recouped through successful development
and exploitation of the area of interest, or alternatively, by its sale; and
exploration and evaluation activities in the area of interest have not at the reporting date reached a stage
which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves,
and active and significant operations in, or in relation to, the area of interest are continuing.
Exploration and evaluation expenditure incurred by the Company subsequent to the acquisition of the rights to
explore is expensed as incurred, up until the technical feasibility and commercial viability of the project has been
demonstrated with a bankable feasibility study.
Capitalised exploration costs are reviewed at each reporting date to establish whether an indication of impairment
exists. If any such indication exists, the recoverable amount of the capitalised exploration costs is estimated to
determine the extent of the impairment loss (if any). Where an impairment loss subsequently reverses, the carrying
amount of the asset is increased to the revised estimate of its recoverable amount, but only to the extent that the
increased carrying amount does not exceed the carrying amount that would have been determined had no
impairment loss been recognised for the asset in previous years.
Where a decision is made to proceed with development, accumulated expenditure is tested for impairment and
transferred to development properties, and then amortised over the life of the reserves associated with the area of
interest once mining operations have commenced. Recoverability of the carrying amount of the exploration and
evaluation assets is dependent on successful development and commercial exploitation, or alternatively, sale of the
respective areas of interest.
(k) Goods and Services Tax
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST
incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of
the cost of acquisition of the asset or as part of the expense. Receivables and payables in the statement of financial
position are shown inclusive of GST. Cash flows are presented in the statement of cash flows on a gross basis,
except for the GST component of investing and financing activities, which are disclosed as operating cash flows.
Constellation Resources Limited ANNUAL REPORT 2021 24
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
(Continued)
(l) Use and Revision of Accounting Estimates
The preparation of the financial report requires management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses.
Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if
the revision affects only that period, or in the period of the revision and future periods if the revision affects both
current and future periods.
In particular, information about significant areas of estimation uncertainty and critical judgements in applying
accounting policies that have the most significant effect on the amounts recognised in the financial statements are
described Note 1(v).
(m) Income Tax
The income tax expense for the period is the tax payable on the current period's taxable income based on the
notional income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable
to temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial
statements, and to unused tax losses.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when
the assets are recovered or liabilities are settled, based on those tax rates which are enacted or substantively
enacted for each jurisdiction. The relevant tax rates are applied to the cumulative amounts of deductible and taxable
temporary differences to measure the deferred tax asset or liability. An exception is made for certain temporary
differences arising from the initial recognition of an asset or a liability. No deferred tax asset or liability is recognised
in relation to these temporary differences if they arose on goodwill or in a transaction, other than a business
combination, that at the time of the transaction did not affect either accounting profit or taxable profit or loss.
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 deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer
probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be
utilised. Unrecognised deferred income tax assets are reassessed at each balance date and are recognised to the
extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.
Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly
in equity. Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off
current tax assets against tax liabilities and the deferred tax liabilities relate to the same taxable entity and the same
taxation authority.
(n) Issued Capital
Ordinary Shares are classified as equity. Issued and paid up capital is recognised at the fair value of the
consideration received by the Company. 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.
(o) Dividends
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the
discretion of the Company, on or before the end of the year but not distributed at reporting date.
(p) Government Grants
Governmment grants are recognised when there is reasonable assurance that the Company will comply with the
conditions attaching to the grant and that the grant will be received. Government grants are recognised in profit or
loss on a systematic basis over the periods in which the entity recognises as expenses the related costs for which
grants are intended to compensate. If the grant relates to expenses or losses already incurred by the entity, or to
provide immediate financial support to the entity with no future related costs, the income is recognised in the period
in which it becomes receivable.
(q) Interests in Joint Operations
The Company's share of the assets, liabilities, revenue and expenses of joint venture operations are included in the
appropriate items of the financial statements. Details of the Company's interests in joint operations are shown at
Note 19.
Constellation Resources Limited ANNUAL REPORT 2021 25
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
(Continued)
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(r) Impairment of Non-Financial Assets
The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any
such indication exists, or when annual impairment testing for an asset is required, the Company makes an estimate
of the asset's recoverable amount. An asset's recoverable amount is the higher of its fair value less costs to sell
and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that
are largely independent of those from other assets or groups of assets and the asset's value in use cannot be
estimated to be close to its fair value. In such cases the asset is tested for impairment as part of the cash-generating
unit to which it belongs. When the carrying amount of an asset or cash-generating unit exceeds its recoverable
amount, the asset or cash-generating unit is considered impaired and is written down to its recoverable amount. In
assessing the value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
(s) Share-Based Payments
Equity-settled share-based payments are provided to officers, employees, consultants and other advisors. These
share-based payments are measured at the fair value of the equity instrument at the grant date. Fair value is
determined using an appropriate option pricing model. The fair value determined at the grant date is expensed on
a straight-line basis over the vesting period, based on the Company's estimate of equity instruments that will
eventually vest. At each reporting date, the Company revises its estimate of the number of equity instruments
expected to vest. The impact of the revision of the original estimates, if any, is recognised in profit or loss over the
remaining vesting period, with a corresponding adjustment to the share based payments reserve. Equity-settled
share-based payments may also be provided as consideration for the acquisition of assets. Where ordinary shares
are issued, the transaction is recorded at fair value based on the quoted price of the ordinary shares at the date of
issue. The acquisition is then recorded as an asset or expensed in accordance with accounting standards.
(t) Plant and Equipment
(i)
Cost and valuation
All classes of plant and equipment are measured at cost. Where assets have been revalued, the potential effect of
the capital gains tax on disposal has not been taken into account in the determination of the revalued carrying
amount. Where it is expected that a liability for capital gains tax will arise, this expected amount is disclosed by
way of note.
(ii)
Depreciation
Depreciation is provided on a straight-line basis on all property, plant and equipment. Computer equipment is
depreciated over a three year useful life.
(u) Operating Segments
An operating segment is a component of an entity that engages in business activities from which it may earn
revenues and incur expenses (including revenues and expenses relating to transactions with other components of
the same entity), whose operating results are regularly reviewed by the entity's chief operating decision maker to
make decisions about resources to be allocated to the segment and assess its performance and for which discrete
financial information is available. The chief operating decision maker has been identified as the Board of Directors,
taken as a whole. This includes start up operations which are yet to earn revenues. Management will also consider
other factors in determining operating segments such as the existence of a line manager and the level of segment
information presented to the board of directors.
Operating segments have been identified based on the information provided to the Board of Directors. The
Company aggregates two or more operating segments when they have similar economic characteristics. Operating
segments that meet the quantitative criteria as prescribed by AASB 8 are reported separately. However, an
operating segment that does not meet the quantitative criteria is still reported separately where information about
the segment would be useful to users of the financial statements. Information about other business activities and
operating segments that are below the quantitative criteria are combined and disclosed in a separate category for
“all other segments”.
Constellation Resources Limited ANNUAL REPORT 2021 26
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
(Continued)
(v) Significant judgements and key assumptions
The directors evaluate estimates and judgements incorporated into the financial report based on historical
knowledge and best available current information. Estimates assume a reasonable expectation of future events
and are based on current trends and economic data, obtained both externally and within the Company.
(i)
Key judgements
The Company capitalises expenditure incurred in the acquisition of rights to explore and records this as an asset
where it is considered likely to be recoverable or where the activities have not reached a stage which permits a
reasonable assessment of the existence of reserves (Note 1(j)). There are areas of interest from which no reserves
have been extracted, but the directors are of the continued belief that such expenditure should not be written off
since the activities have not reached a stage which permits a reasonable assessment of the existence of reserves.
The Company recognises share based payments in accordance with the policy at Note 1(s). Key judgements
include the option valuation and estimate of the number of options likely to vest.
During the previous financial year, a new virus (“COVID-19”) emerged and infections started to occur around the
globe. Subsequently, on 11 March, 2020, the World Health Organisation (“WHO”) declared it a pandemic and
national governments have implemented a range of policies and actions to combat it. The outbreak of COVID-19
has resulted in quarantines, supply chain disruptions, lower consumer demand and general market uncertainty
which caused market volatility. If the financial markets and/or the overall economy are impacted for an extended
period, the Company’s results may be materially adversely affected. Management will continue to monitor
developments, their impact on the Company including its operations and the values and estimates reported in the
financial statements and accompanying notes. There was no material financial impact on the Company as a result
of COVID-19 during the current or previous financial year.
2.
INCOME AND EXPENSES
Other Income
COVID-19 cash flow boost
Employee benefits expense included in profit or loss
Wages, salaries and fees
Defined contribution plans
Share based payment expenses (note 13)
3. OTHER RECEIVABLES
Interest receivable
COVID-19 cash flow boost receivable
GST receivable
2021
$
52,524
52,524
2020
$
47,476
47,476
576,538
316,000
42,801
68,280
26,600
17,068
687,619
359,668
2021
$
9
-
16,298
16,307
2020
$
5,262
14,344
56,801
76,407
Constellation Resources Limited ANNUAL REPORT 2021 27
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
(Continued)
4.
INCOME TAX
2021
$
2020
$
(a) Recognised in the Statement of Comprehensive Income
Deferred income tax
Origination and reversal of temporary differences
(482,837)
(498,769)
Adjustments in respect of income tax of previous years
Deferred tax assets not brought to account
Income tax expense reported in the statement of comprehensive income
(10,280)
493,117
-
9,489
489,280
-
(b) Reconciliation Between Tax Expense and Accounting Loss
Before Income Tax
Accounting loss before income tax
(1,681,070)
(1,446,827)
At the domestic income tax rate of 30% (2020: 30%)
(504,321)
(434,048)
Expenditure not allowable for income tax purposes
Income not assessable for income tax purposes
Effect of changes in income tax rates
Adjustments in respect of income tax of previous years
Deferred tax assets not brought to account
Income tax expense attributable to loss
(c) Deferred Tax Assets and Liabilities
Deferred income tax at 30 June relates to the following:
Deferred Tax Liabilities
Accrued interest
Deferred tax assets used to offset deferred tax liabilities
Deferred Tax Assets
Accrued expenditure
Provisions
Capital allowances
Tax losses available to offset against future taxable income
Deferred tax assets used to offset deferred tax liabilities
Deferred tax assets not brought to account
37,241
(15,757)
-
(10,280)
493,117
-
5,120
(14,243)
(55,598)
9,489
489,280
-
3
(3)
-
8,828
6,787
29,769
1,578
(1,578)
-
7,115
3,805
52,227
1,558,088
1,048,783
(3)
(1,578)
(1,603,469)
(1,110,352)
-
-
The benefit of deferred tax assets not brought to account will only be brought to account if:
future assessable income is derived of a nature and of an amount sufficient to enable the benefit to be
realised;
the conditions for deductibility imposed by tax legislation continue to be complied with; and
no changes in tax legislation adversely affect the Company in realising the benefit.
Constellation Resources Limited ANNUAL REPORT 2021 28
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
(Continued)
5. PROPERTY, PLANT AND EQUIPMENT
Computer Equipment
At cost
Accumulated depreciation
Carrying amount at 30 June
Reconciliation
Carrying amount at 1 July
Additions
Depreciation
Carrying amount at 30 June
2021
$
11,642
(6,312)
5,330
463
7,397
(2,530)
5,330
2020
$
4,244
(3,781)
463
2,165
-
(1,702)
463
6. EXPLORATION AND EVALUATION ASSETS
Notes
2021
$
2020
$
(a)
Exploration and evaluation assets by area
of interest
Orpheus Project (Fraser Range - Western Australia)
6(b)
Total exploration and evaluation assets
350,000
350,000
350,000
350,000
(b) Reconciliation of carrying amount:
Carrying amount at beginning of year
Impairment of carrying value
Balance at end of financial year(1)
350,000
350,000
-
-
350,000
350,000
Notes:
1
The ultimate recoupment of costs carried forward for exploration and evaluation expenditure is dependent on the
successful development and commercial exploitation or sale of the respective areas of interest.
7. TRADE AND OTHER PAYABLES
Trade payables
Accrued expenses
2021
$
135,557
29,426
164,983
2020
$
252,596
23,716
276,312
Constellation Resources Limited ANNUAL REPORT 2021 29
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
(Continued)
8. CONTRIBUTED EQUITY
Issued Capital
(a)
36,057,520 (2020: 35,000,100) Ordinary Shares
Notes
8(b)
2021
$
2020
$
6,885,690
6,885,690
6,625,805
6,625,805
(b) Movements in Ordinary Shares During the Past Two Years Were as Follows:
Date
2021
Details
Number of
Ordinary
Shares
Issue
Price
$
$
1-Jul-20
Opening balance
35,000,100
-
6,625,805
17-Mar-21
Exercise of $0.25 unlisted incentive options
300,000
$0.25
17-Mar-21
Transfer from SBP reserve upon execise of options
-
-
75,000
33,401
Various
Exercise of $0.20 listed options
757,420
$0.20
151,484
30-Jun-21
Closing balance
36,057,520
6,885,690
2020
1-Jul-19
Opening balance
30-Jun-20
Closing balance
35,000,100
35,000,100
-
-
6,625,805
6,625,805
(c) Rights Attaching to Ordinary Shares
The rights attaching to fully paid ordinary shares (“Ordinary Shares”) arise from a combination of the Company's
Constitution, statute and general law. The clauses of the Constitution contain the internal rules of the Company and define
matters such as the rights, duties and powers of its shareholders and directors, including provisions to the following effect
(when read in conjunction with the Corporations Act 2001 or Listing Rules).
Shares
(i)
The issue of shares in the capital of the Company and options over unissued shares by the Company is under the control
of the directors, subject to the Corporations Act 2001 and any rights attached to any special class of shares.
Meetings of Members
(ii)
Directors may call a meeting of members whenever they think fit. Members may call a meeting as provided by the
Corporations Act 2001. The Constitution contains provisions prescribing the content requirements of notices of meetings
of members and all members are entitled to a notice of meeting. A meeting may be held in two or more places linked
together by audio-visual communication devices. A quorum for a meeting of members is 2 shareholders.
Voting
(iii)
Subject to any rights or restrictions at the time being attached to any shares or class of shares of the Company, each
member of the Company is entitled to receive notice of, attend and vote at a general meeting. Resolutions of members
will be decided by a show of hands unless a poll is demanded. On a show of hands each eligible voter present has one
vote. However, where a person present at a general meeting represents personally or by proxy, attorney or representative
more than one member, on a show of hands the person is entitled to one vote only despite the number of members the
person represents. On a poll each eligible member has one vote for each fully paid share held and a fraction of a vote for
each partly paid share determined by the amount paid up on that share.
Changes to the Constitution
(iv)
The Company's Constitution can only be amended by a special resolution passed by at least three quarters of the members
present and voting at a general meeting of the Company. At least 28 days' written notice specifying the intention to
propose the resolution as a special resolution must be given.
Constellation Resources Limited ANNUAL REPORT 2021 30
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
(Continued)
9. RESERVES
Share-based payments reserve
Other equity reserve
Note
9(b)
9(d)
2021
$
201,857
1,200,148
1,402,005
2020
$
111,120
1,200,148
1,311,268
(a) Nature and Purpose of Share-based Payments Reserve
The share-based payments reserve is used to record the fair value of Unlisted Options issued by the Company.
(b) Movements in the share-based payments reserve during the past two years were as
follows:
Date
Details
1 Jul 2020
20 Jul 2020
17 Mar 2021
30 Jun 2021
Opening balance
Issue of unlisted incentive options
Transfer from SBP reserve upon execise of options
Share-based payment expense
30 Jun 2021
Closing balance
1 Jul 2019
30 Jun 2020
Opening balance
Share-based payment expense
30 Jun 2020
Closing balance
Number of
Incentive
Options
1,000,000
1,300,000
(300,000)
-
2,000,000
1,000,000
-
1,000,000
$
111,120
-
(33,401)
124,138
201,857
94,052
17,068
111,120
(c)
Terms and Conditions of Unlisted Incentive Options
The Unlisted Options are granted based upon the following terms and conditions:
Each Unlisted Option entitles the holder to the right to subscribe for one Ordinary Share upon the exercise of each
Unlisted Option;
The Unlisted Options outstanding at the end of the financial year have the following exercise prices and expiry dates:
300,000 Unlisted Options exercisable at $0.30 each on or before 9 October 2021 (vested 9 October 2019);
400,000 Unlisted Options exercisable at $0.40 each on or before 9 April 2022 (vested 9 April 2020);
433,333 Unlisted Options exercisable at $0.40 each on or before 30 June 2023 (vested 20 July 2020);
433,333 Unlisted Options exercisable at $0.50 each on or before 30 June 2023 (100,000 vested 20 July
2020, 333,333 vest 20 July 2021); and
433,334 Unlisted Options exercisable at $0.60 each on or before 30 June 2023 (100,000 vested 20 July
2020, 333,334 vest 20 July 2022).
The Unlisted Options are exercisable at any time prior to the Expiry Date, subject to vesting conditions being satisfied
(if applicable);
Ordinary Shares issued on exercise of the Unlisted Options rank equally with the then Ordinary Shares of the
Company;
Application will be made by the Company to ASX for official quotation of the Ordinary Shares issued upon the exercise
of the Unlisted Options;
If there is any reconstruction of the issued share capital of the Company, the rights of the Unlisted Option holders
may be varied to comply with the ASX Listing Rules which apply to the reconstruction at the time of the reconstruction;
and
No application for quotation of the Unlisted Incentive Options will be made by the Company.
Constellation Resources Limited ANNUAL REPORT 2021 31
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
(Continued)
9. RESERVES (CONTINUED)
(d) Other Equity Reserve
On 30 April 2018, the Company entered into a Debt for Equity Subscription Agreement with its parent entity Apollo
Minerals. Under the terms of the agreement, Apollo Minerals agreed to forgive all loan advances made to the
Company in relation to exploration activities at the Orpheus Project. The balance of the loan as at the date of
forgiveness was $1,200,148. As the transaction was between a parent entity and subsidiary, the forgiven amount
has been recognised directly in equity.
10. ACCUMULATED LOSSES
Balance at 1 July
Net loss for the year
Balance at 30 June
11. STATEMENT OF CASH FLOWS RECONCILIATION
(a) Reconciliation of the Net Loss After Tax to the Net Cash
Flows from Operations
Loss for the year
Adjustment for non-cash income and expense items
Depreciation of plant and equipment
Share based payment expense
Change in operating assets and liabilities
Decrease/(Increase) in trade and other receivables
Increase/(decrease) in trade and other payables
Increase in provisions
Net cash outflow from operating activities
(b) Reconciliation of Cash
Cash at bank and on hand
Short-term deposits
Balance at 30 June
2021
$
2020
$
(3,485,488)
(2,038,661)
(1,681,070)
(1,446,827)
(5,166,558)
(3,485,488)
2021
$
2020
$
(1,681,070)
(1,446,827)
2,530
124,138
1,702
17,068
60,100
(113,128)
9,939
(31,888)
175,387
9,152
(1,597,491)
(1,275,406)
2,937,105
-
2,937,105
1,313,710
3,000,000
4,313,710
(c) Non-cash financing and investing activities
There were no non-cash financing or investing activities during the year ended 30 June 2021 or 30 June 2020.
Constellation Resources Limited ANNUAL REPORT 2021 32
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
(Continued)
12. EARNINGS PER SHARE
The following reflects the income and share data used in the calculations of basic and diluted earnings per share:
Basic and diluted loss per share ($ per share)
2021
$
(0.05)
(0.05)
2021
$
2020
$
(0.04)
(0.04)
2020
$
Net loss attributable to members of the parent used in calculating basic
and diluted earnings per share:
Earnings used in calculating basic and dilutive earnings per share
(1,681,070)
(1,681,070)
(1,446,827)
(1,446,827)
Number of
Ordinary Shares
2021
Number of
Ordinary Shares
2020
Weighted average number of Ordinary Shares used in calculating basic
and dilutive earnings per share
35,218,016
35,000,100
(a) Non-Dilutive Securities
As at reporting date, 13,908,982 Listed Options and 2,000,000 Unlisted Options (which represent 15,908,982
potential Ordinary Shares) were considered non-dilutive as they would decrease the loss per share.
(b) Conversions, Calls, Subscriptions or Issues after 30 June 2021
Subsequent to 30 June 2021, 13,547,906 Ordinary Shares were issued as a result of the conversion of options.
Other than stated above, there were no other conversions to, calls of, or subscriptions for Ordinary Shares or issues
of potential Ordinary Shares since the reporting date and before the completion of this financial report.
13. SHARE BASED PAYMENTS
(a) Recognised Share-based Payment Expense
From time to time, the Company provides incentive options to officers, employees, consultants and other key
advisors as part of remuneration and incentive arrangements. The number of options granted, and the terms of the
options granted are determined by the Board. Shareholder approval is sought where required.
During the past two years, the following equity-settled share-based payments have been recognised:
Expense arising from equity-settled share-based payment transactions
2021
$
124,138
2020
$
17,068
(b) Summary of Unlisted Options Granted as Share-based Payments
The following incentive options were granted as share-based payments during the past two financial years:
Security
Type
Options
Options
Options
Options
Options
Number
433,333
333,333
100,000
333,334
100,000
Grant
Date
16-Jul-20
16-Jul-20
16-Jul-20
16-Jul-20
16-Jul-20
Expiry
Date
30-Jun-23
30-Jun-23
30-Jun-23
30-Jun-23
30-Jun-23
Vesting
Date
20-Jul-20
20-Jul-21
20-Jul-20
20-Jul-22
20-Jul-20
Exercise Price
$
$0.40
$0.50
$0.50
$0.60
$0.60
Fair
Value
$
$0.1250
$0.1092
$0.1092
$0.0967
$0.0967
Constellation Resources Limited ANNUAL REPORT 2021 33
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
(Continued)
13. SHARE BASED PAYMENTS (CONTINUED)
The following table illustrates the number and weighted average exercise prices (WAEP) of Unlisted Options
granted as share-based payments at the beginning and end of the financial year:
Outstanding at beginning of year
Issued during the year
Exercised during the year
Outstanding at end of year
2021
Number
1,000,000
1,300,000
(300,000)
2,000,000
2021
WAEP
$0.33
$0.50
$0.25
$0.45
2020
Number
1,000,000
-
-
2020
WAEP
$0.33
-
-
1,000,000
$0.33
The outstanding balance of options issued as share based payments as at 30 June 2021 is represented by:
300,000 Unlisted Options exercisable at $0.30 each on or before 9 October 2021 (vested 9 October 2019);
400,000 Unlisted Options exercisable at $0.40 each on or before 9 April 2022 (vested 9 April 2020);
433,333 Unlisted Options exercisable at $0.40 each on or before 30 June 2023 (vested 20 July 2020);
433,333 Unlisted Options exercisable at $0.50 each on or before 30 June 2023 (100,000 vested 20 July
2020, 333,333 vest 20 July 2021); and
433,334 Unlisted Options exercisable at $0.60 each on or before 30 June 2023 (100,000 vested 20 July
2020, 333,334 vest 20 July 2022).
(c) Weighted Average Remaining Contractual Life
At 30 June 2021, the weighted average remaining contractual life of unlisted options on issue that had been granted
as share-based payments was 1.5 years (2020: 1.3 years).
(d) Range of Exercise Prices
At 30 June 2021, the range of exercise prices of Unlisted Options on issue that had been granted as share-based
payments was $0.30 to $0.60 (2020: $0.25 to $0.40).
(e) Weighted Average Fair Value
The weighted average fair value of Incentive Options that have been granted as share-based payments by the
Company is $0.1106 (2020: $0.1111).
(f)
Option Pricing Models
The fair value of Incentive Options granted is estimated as at the date of grant using the Black Scholes option
valuation model taking into account the terms and conditions upon which the Incentive Options were granted. The
table below lists the inputs to the valuation model used for share options granted by the Company:
Inputs
Exercise price
Grant date share price
Dividend yield1
Volatility
Risk-free interest rate
Grant date
Expiry date
Expected life of option2
A$0.30
A$0.20
-
95%
2.22%
9-Apr-18
9-Oct-21
A$0.40
A$0.20
-
95%
2.22%
9-Apr-18
9-Apr-22
A$0.40
A$0.29
-
80%
A$0.50
A$0.29
-
80%
A$0.60
A$0.29
-
80%
0.282%
0.282%
0.282%
16-July-20
16-July-20
16-July-20
30-Jun-23
30-Jun-23
30-Jun-23
3.50 years
4.00 years
3.00 years
3.00 years
3.00 years
Fair value at grant date
A$0.1126
A$0.1098
A$0.1250
A$0.1092
A$0.0967
Notes:
1 The dividend yield reflects the assumption that the current dividend payout will remain unchanged.
2 The expected life of the options is based on the expiry date of the options.
Constellation Resources Limited ANNUAL REPORT 2021 34
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
(Continued)
14. RELATED PARTIES
Transactions with Key Management Personnel are included at Note 15. There are no other related parties of the
Company.
15. KEY MANAGEMENT PERSONNEL
(a) Details of Key Management Personnel
The KMP of the Company during the financial year were as follows:
Current Directors
Mr Ian Middlemas
Mr Peter Woodman
Mr Peter Muccilli
Mr Robert Behets
Mr Mark Pearce
Other KMP
Mr Lachlan Lynch
Chairman
Managing Director
Technical Director (appointed 22 July 2020)
Non-Executive Director
Non-Executive Director
Company Secretary
Unless otherwise disclosed, KMP held their position from 1 July 2020 until 30 June 2021.
(b) Remuneration of Key Management Personnel
Short-term employee benefits
Post-employment benefits
Share-based payments
2021
$
576,538
42,801
101,319
720,658
2020
$
316,000
26,600
17,068
359,668
(c)
Loans from Key Management Personnel
No loans were provided to or received from Key Management Personnel during the year ended 30 June 2021 (2020:
Nil).
(d) Other Transactions
Apollo Group Pty Ltd (“Apollo Group”), a Company of which Mr Mark Pearce is a director and beneficial shareholder,
provides corporate, administration and company secretarial services and serviced office facilities to the Company
under a services agreement. Either party can terminate the services agreement at any time for any reason by giving
one month’s written notice. Apollo Group received a monthly retainer of $15,000 (exclusive of GST) for the provision
of these services. Effective from 1 July 2021, the fee has been set at $20,000 (exclusive of GST) per month. The
monthly retainer is reviewed every six to twelve months and is based on Apollo Group’s budgeted cost of providing
the services to the Company (and other companies utilising same or similar services from Apollo Group) for the
next six to twelve month period, with minimal mark-up (if any). Due to the impact of COVID-19, the monthly fee of
$15,000 was reduced to $10,000 for the 6 months to 31 December 2020.
16. SEGMENT INFORMATION
AASB 8 requires operating segments to be identified on the basis of internal reports about components of the
Company that are regularly reviewed by the chief operating decision maker in order to allocate resources to the
segment and to assess its performance.
The Company operates in one segment, being exploration for mineral resources and in one geographical location
being Australia. This is the basis on which internal reports are provided to the Directors for assessing performance
and determining the allocation of resources within the Company.
Constellation Resources Limited ANNUAL REPORT 2021 35
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
(Continued)
17. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
Overview
The Company's principal financial instruments comprise cash and cash equivalents, trade and other receivables
and trade and other payables. The main risks arising from the Company's financial instruments are liquidity risk,
interest rate risk and credit risk.
This note presents information about the Company's exposure to the above risks, its objectives, policies and
processes for measuring and managing risk, and the management of capital. Other than as disclosed, there have
been no significant changes since the previous financial year to the exposure or management of these risks.
The Company manages its exposure to key financial risks in accordance with the Company's financial risk
management policy. Key risks are monitored and reviewed as circumstances change (e.g. acquisition of a new
project) and policies are revised as required. The overall objective of the Company's financial risk management
policy is to support the delivery of the Company's financial targets whilst protecting future financial security.
Given the nature and size of the business and uncertainty as to the timing and amount of cash inflows and outflows,
the Company does not enter into derivative transactions to mitigate the financial risks. In addition, the Company's
policy is that no trading in financial instruments shall be undertaken for the purposes of making speculative gains.
As the Company's operations change, the Directors will review this policy periodically going forward.
The Board of Directors has overall responsibility for the establishment and oversight of the risk management
framework. The Board reviews and agrees policies for managing the Company's financial risks as summarised
below.
(a) Liquidity Risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The
Board's approach to managing liquidity is to ensure, as far as possible, that the Company will always have sufficient
liquidity to meet its liabilities when due.
The contractual maturities of financial liabilities, including estimated interest payments, are provided below. There
are no netting arrangements in respect of financial liabilities.
2021
Financial Liabilities
Trade and other payables
2020
Financial Liabilities
Trade and other payables
(b) Commodity Price Risk
≤6 Months
A$
6-12
Months
A$
1-5 Years
A$
≥5 Years
A$
Total
A$
164,983
164,983
-
-
-
-
-
-
164,983
164,983
≤6 Months
A$
276,312
276,312
6-12
Months
A$
1-5 Years
A$
≥5 Years
A$
Total
A$
-
-
-
-
-
-
276,312
276,312
The Company is exposed to commodity price risk. These commodity prices can be volatile and are influenced by
factors beyond the Company's control. As the Company is currently engaged in exploration and business
development activities, no sales of commodities are forecast for the next 12 months, and accordingly, no hedging
or derivative transactions have been used to manage commodity price risk.
Constellation Resources Limited ANNUAL REPORT 2021 36
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
(Continued)
17. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
(c) Capital Management
The Company manages its capital to ensure that it will be able to continue as a going concern while financing the
development of its projects through primarily equity based financing. The Board's policy is to maintain a strong
capital base so as to maintain investor, creditor and market confidence and to sustain future development of the
business. Given the stage of the Company, the Board's objective is to minimise debt and to raise funds as required
through the issue of new shares.
The Company is not subject to externally imposed capital requirements.
There were no changes in the Company's approach to capital management during the year. During the next 12
months, the Company will continue to explore financing opportunities, primarily consisting of additional issues of
equity should it be required.
(d) Fair Value
The net fair value of financial assets and financial liabilities approximates their carrying value as at 30 June 2021
and 30 June 2020.
(e)
Interest Rate Risk
The Company's exposure to the risk of changes in market interest rates relates primarily to the cash and short-term
deposits with a floating interest rate.
These financial assets with variable rates expose the Company to cash flow interest rate risk. All other financial
assets and liabilities, in the form of receivables and payables are non-interest bearing.
At the reporting date, the interest rate profile of the Company's interest-bearing financial instruments was:
Interest-bearing financial instruments
Cash and cash equivalents
2021
$
2020
$
2,937,105
2,937,105
4,313,710
4,313,710
The Company’s cash at bank and on hand had a weighted average floating interest rate at year end of 0.35% (2020:
0.84%). The Company currently does not engage in any hedging or derivative transactions to manage interest rate
risk.
Interest rate sensitivity
A sensitivity of 20 basis points has been selected as this is considered reasonable given the current level of both
short term and long term interest rates. A 20 basis point movement in interest rates at the reporting date would
have increased (decreased) equity and profit and loss by the amounts shown below. This analysis assumes that
all other variables, remain constant.
Profit or loss
Other Comprehensive
Income
20bp
Increase
20bp
Decrease
20bp
Increase
20bp
Decrease
2021
Cash and cash equivalents
2,063
(2,063)
2,063
(2,063)
2020
Cash and cash equivalents
7,273
(7,273)
7,273
(7,273)
Constellation Resources Limited ANNUAL REPORT 2021 37
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
(Continued)
(f) Credit Risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to
meet its contractual obligations. This arises principally from cash and cash equivalents and trade and other
receivables.
There are no significant concentrations of credit risk within the Company. The carrying amount of the Company's
financial assets represents the maximum credit risk exposure, as represented below:
Financial assets
Cash and cash equivalents
Other receivables
2021
$
2020
$
2,937,105
4,313,710
16,307
76,407
2,953,412
4,390,117
The Company does not have any customers and accordingly does not have any significant exposure to credit
losses. Other receivables comprise primarily GST refunds and interest receivable. At 30 June 2021, none (2020:
none) of the Company's receivables are past due. No impairment losses on receivables have been recognised.
With respect to credit risk arising from cash and cash equivalents, the Company's exposure to credit risk arises
from historical default of the counter party, with a maximum exposure equal to the carrying amount of these
instruments.
18. COMMITMENTS
As a condition of retaining the current rights to tenure to exploration tenements, the Company is required to pay an
annual rental charge and meet minimum expenditure requirements for each tenement. These obligations are not
provided for in the financial statements and are at the sole discretion of the Company:
Commitments for exploration expenditure:
Not longer than 1 year
Longer than 1 year and shorter than 5 years
19. INTERESTS IN JOINT OPERATIONS
The Company has interests in the following joint operations:
2021
$
323,625
523,500
847,125
2020
$
245,000
180,625
425,625
Principal Activities
Country
Interest
Carrying Amount
2021
%
2020
%
2021
$
2020
$
Exploration for nickel, copper and
gold in the Fraser Range
Australia
70
70
350,000
350,000
Name
Orpheus
Project
Orpheus Project
Constellation Resources has a 70% interest in the unincorporated Orpheus Joint Venture with Enterprise Metals
Limited (30% interest). The Orpheus Joint Venture area consists of four tenements (E28/2403, E63/1281, E63,1282
and E63/1695) in the prospective Fraser Range province.
Constellation Resources is required to sole fund all joint operation activities until the date it delivers a Bankable
Feasibility Study for a Mining Area to Enterprise Metals Limited.
Constellation Resources Limited ANNUAL REPORT 2021 38
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
(Continued)
20. CONTINGENT ASSETS AND LIABILITIES
As at the date of this report, no material contingent assets or liabilities had been identified as at 30 June 2021 (2020:
nil).
21. AUDITORS' REMUNERATION
Amounts received or due and receivable by William Buck for:
an audit or review of the financial report of the Company
other services in relation to the Company
2021
$
17,575
-
17,575
2020
$
15,500
-
15,500
22. EVENTS SUBSEQUENT TO REPORTING DATE
Subsequent to 30 June 2021, the Company raised $2,709,581 from the exercise of 13,547,906 $0.20 options.
As at the date of this report, other than previously stated, there are no other matters or circumstances which have
arisen since 30 June 2021 that have significantly affected or may significantly affect:
the operations, in financial years subsequent to 30 June 2021, of the Company;
the results of those operations, in financial years subsequent to 30 June 2021, of the Company; or
the state of affairs, in financial years subsequent to 30 June 2021, of the Company.
Constellation Resources Limited ANNUAL REPORT 2021 39
DIRECTORS’ DECLARATION
In accordance with a resolution of the directors of Constellation Resources Limited:
1.
In the opinion of the directors:
(a)
the attached financial statements, notes and the additional disclosures included in the directors' report
designated as audited, are in accordance with the Corporations Act 2001, including:
(i)
section 296 (compliance with accounting standards and Corporations Regulations 2001); and
(ii)
section 297 (gives a true and fair view of the financial position as at 30 June 2021 and of the
performance for the year ended on that date of the Company); and
(b)
there are reasonable grounds to believe that the Company will be able to pay its debts as and when
they become due and payable.
The attached financial statements and notes thereto are in compliance with International Financial Reporting
Standards, as stated in Note 1 to the financial statements.
The Directors have been given a declaration required by section 295A of the Corporations Act 2001 for the
financial year ended 30 June 2021.
2.
3.
On behalf of the Board
PETER WOODMAN
Managing Director
25 August 2021
Constellation Resources Limited ANNUAL REPORT 2021 40
Constellation Resources Limited
Independent auditor’s report to members
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Constellation Resources Limited (the Company),
which comprises the statement of financial position as at 30 June 2021, the statement
of profit or loss and other comprehensive income, the statement of changes in equity
and the statement of cash flows for the year then ended, and notes to the financial
statements, including a summary of significant accounting policies and other
explanatory information, and the directors’ declaration.
In our opinion, the accompanying financial report of the Company, is in accordance with
the Corporations Act 2001, including:
(i) giving a true and fair view of the Company’s financial position as at 30 June 2021
and of its financial performance for the year ended on that date; 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 Company in accordance with the auditor independence
requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (including Independence Standards) (the Code) that are
relevant to our audit of the financial report in Australia. We have also fulfilled our other
ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001,
which has been given to the directors of the Company, would be in the same terms if
given to the directors as at the time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
INDEPENDENT AUDITOR’S REPORT Constellation Resources Limited ANNUAL REPORT 2021 41
Constellation Resources Limited
Independent auditor’s report to members
Key Audit Matter
Key audit matters are those matters that, in our professional judgement, were of most
significance in our audit of the financial report of the current period. The key audit
matter was addressed in the context of our audit of the financial report as a whole, and
in forming our opinion thereon, and we do not provide a separate opinion on this matter.
CARRYING VALUE OF EXPLORATION COST
Area of focus
Refer also to notes 1(j) and 6
How our audit addressed it
The Company has capitalised the
acquisition costs of tenements
comprising the Orpheus Project located
in the Fraser Range area. The carrying
value of these costs represents a
significant asset of the Company
This is a key audit matter due to the fact
that significant judgement is applied in
determining whether the capitalised
exploration costs continue to meet the
recognition criteria of AASB 6
Exploration for and Evaluation of Mineral
Resources:
Our procedures focussed on evaluating
management’s assessment of whether
the exploration assets meet the
recognition criteria of AASB 6, including:
— Obtaining evidence that the
Company has valid rights to explore
the areas represented by the
capitalised exploration costs.
— Enquiring of management and
reviewing the cashflow forecast to
verify that substantive expenditure on
further exploration for and evaluation
of the mineral resources in the
Company’s areas of interest was
planned.
— Enquiring with management,
reviewing announcements made and
reviewing minutes of director
meetings to verify that the Company
had not decided to discontinue
activities in any of its areas of
interest.
NOTES TO THE FINANCIAL STATEMENTS THE YEAR ENDED 30 JUNE 2017 (Continued) Constellation Resources Limited ANNUAL REPORT 2021 42
Constellation Resources Limited
Independent auditor’s report to members
GOING CONCERN
Area of focus
Refer also to notes 1
The financial statements have been
prepared on a going concern basis as
stated in note 1.
The Company does not generate
revenues and is reliant on its cash
reserves and the issue of shares to fund
its operations.
Accumulated losses shown in the
Statement of Financial Position totalled
$5,166,558 as at 30 June 2021.
The adequacy of liquidity and funding is
a key audit matter as it is reliant on
existing cash reserves to cover
necessary expenditure.
How our audit addressed it
We evaluated the Company’s funding
and liquidity position and its ability to fund
current liabilities and future expenditure
for a minimum of 12 months from the
date of the approval of the financial
report, including:
— Assessing funding requirements of
the Company over the 15 months
from 30 June 2021 based on
cashflow forecasts.
— Understanding what forecast
expenditure is committed and what
could be considered discretionary.
— Assessing the Company’s working
capital position at 30 June 2021.
Other Information
The directors are responsible for the other information. The other information comprises
the information in the Company’s annual report for the year ended 30 June 2021, 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 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.
NOTES TO THE FINANCIAL STATEMENTS THE YEAR ENDED 30 JUNE 2017 (Continued) Constellation Resources Limited ANNUAL REPORT 2021 43
NOTES TO THE FINANCIAL STATEMENTS THE YEAR ENDED 30 JUNE 2017 (Continued) Constellation Resources Limited ANNUAL REPORT 2021 44 Constellation Resources Limited Independent auditor’s report to members In preparing the financial report, the directors are responsible for assessing the ability of the Company 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 Company or to cease operations, or has no realistic alternative but to do so. Auditor’s Responsibilities for the Audit of the Financial Report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. A further description of our responsibilities for the audit of these financial statements is located at the Auditing and Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar2.pdf This description forms part of our independent auditor’s report. Report on the Remuneration Report Opinion on the Remuneration Report We have audited the Remuneration Report included on pages 9 to 15 of the directors’ report for the year ended 30 June 2021. In our opinion, the Remuneration Report of Constellation Resources Limited, for the year ended 30 June 2021, complies with section 300A of the Corporations Act 2001. Responsibilities The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. William Buck Audit (WA) Pty Ltd Amar Nathwani ABN 67 125 012 124 Director Dated this 25th day of August 2021
CORPORATE GOVERNANCE STATEMENT
NOTES TO THE FINANCIAL STATEMENTS
THE YEAR ENDED 30 JUNE 2017
(Continued)
Constellation Resources Limited (“Constellation Resources” or “Company”) believes corporate governance is
important for the Company in conducting its business activities.
The Board of the Company has adopted a suite of charters and key corporate governance documents which
articulate the policies and procedures followed by the Company.
These documents are available
the Company’s website,
www.constellationresources.com.au. These documents are reviewed annually to address any changes in
governance practices and the law.
the Corporate Governance section of
in
The Company’s Corporate Governance Statement 2021, which explains how Constellation Resources complies
with the ASX Corporate Governance Council’s ‘Corporate Governance Principles and Recommendations – 4th
Edition’ in relation to the year ended 30 June 2021, is available in the Corporate Governance section of the
Company’s website, www.constellationresources.com.au and will be lodged with ASX together with an Appendix
4G at the same time that this Annual Report is lodged with ASX.
In addition to the ASX Corporate Governance Council’s ‘Corporate Governance Principles and Recommendations
– 4th Edition’ the Board has taken into account a number of important factors in determining its corporate
governance policies and procedures, including the:
relatively simple operations of the Company, which currently only undertakes mineral exploration and
development activities;
cost verses benefit of additional corporate governance requirements or processes;
size of the Board;
Board’s experience in the resources sector;
organisational reporting structure and number of reporting functions, operational divisions and employees;
relatively simple financial affairs with limited complexity and quantum;
relatively small market capitalisation and economic value of the entity; and
direct shareholder feedback.
Constellation Resources Limited ANNUAL REPORT 2021 45
ASX ADDITIONAL INFORMATION
NOTES TO THE FINANCIAL STATEMENTS
THE YEAR ENDED 30 JUNE 2017
(Continued)
The shareholder information set out below was applicable as at 3 August 2021.
1. TWENTY LARGEST HOLDERS OF ORDINARY SHARES
The names of the twenty largest holders of listed securities are listed below:
Name
Arredo Pty Ltd
Apollo Minerals Limited
Mr Thomas Francis Corr
Zero Nominees Pty Ltd
BNP Paribas Nominees Pty Ltd Six Sis Ltd
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