ABN: 65 094 206 292
2022
ANNUAL
REPORT
De Grey Mining Limited
Contents
Contents ................................................................................................................................................................................... 1
Corporate Information ............................................................................................................................................................. 2
Chairman’s Letter ..................................................................................................................................................................... 3
Managing Director’s Report and Review of Operations .......................................................................................................... 6
Environment, Social and Governance .................................................................................................................................... 19
Directors’ Report .................................................................................................................................................................... 25
Remuneration Report (Audited) ............................................................................................................................................ 32
Audit Independence Declaration ........................................................................................................................................... 48
Consolidated Statement of Comprehensive Income ............................................................................................................. 49
Consolidated Statement of Financial Position ....................................................................................................................... 50
Consolidated Statement of Changes in Equity ....................................................................................................................... 51
Consolidated Statement of Cash Flows ................................................................................................................................. 52
Notes to the Consolidated Financial Statements ................................................................................................................... 53
Director’s Declaration ............................................................................................................................................................ 85
Audit Report ........................................................................................................................................................................... 86
ASX Additional Information ................................................................................................................................................... 90
Annual Mineral Resources and Ore Reserve Statement ......................................................................................................... 92
Schedule of Interests in Mining Tenements ...........................................................................................................................98
1
De Grey Mining Limited
Corporate Information
ABN 65 094 206 292
Directors
Simon Lill (Non-Executive Chairman)
Glenn Jardine (Managing Director)
Andrew Beckwith (Technical Director)
Paul Harvey (Non-Executive Director) – appointed 4 July 2022
Samantha Hogg (Non-Executive Director) – appointed 28 January 2022
Peter Hood AO (Non-Executive Director)
Eduard Eshuys (Non-Executive Director) – resigned 8 September 2022
Bruce Parncutt AO (Non-Executive Director) – resigned 7 September 2022
Chief Financial Officer
Peter Canterbury
Company Secretaries
Craig Nelmes
Patrick Holywell – resigned 17 December 2021
Registered Office and Principal Place of Business
Ground Level
2 Kings Park Road
WEST PERTH WA 6005
Telephone: +61 (0)8 6117 9328
Postal Address
PO Box 84,
West Perth WA 6872
Share Registry
Automic Group
Level 5
191 St Georges Terrace
Perth WA 6000
Telephone: 1300 288 664
Auditors
Ernst & Young
11 Mounts Bay Road
PERTH WA 6000
Internet Address
www.degreymining.com.au
Email Address
admin@degreymining.com.au
Stock Exchange Listing
Australian Securities Exchange (ASX code DEG)
Frankfurt Stock Exchange (FRA code WKN 633879)
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De Grey Mining Limited
Chairman’s Letter
Sitting down to write a Chairman’s Letter for the Annual Report results in reflection on the year just past, and to
contemplate what the Company can achieve in the year ahead. It is with great satisfaction that shareholders should review
the year just gone as the Company has proven the potential of the Tier 1 gold discovery at Hemi into perhaps the most
exciting Tier 1 gold development project globally. When we announced Aircore drill hole results in February 2020 we knew
we were onto something special. We never tire of revisiting those results so I will do so again - 24m @ 7.5g/t Au, 49m @
3.7g/t Au and 36m @ 4.0g/t at what became the Aquila resource. Early Brolga results were strong with mineralisation
continuing at the end of the hole, with the initial RC hole resulting in 93m @ 3.3 g/t.
We have continued to enjoy strong drill results through the additional discoveries at Crow, Diucon, Eagle and Falcon
resulting in an outstanding maiden Hemi resource in June 2021, a significant resource update in May 2022 and a substantial
Maiden Hemi JORC Probable Reserve characterised by excellent conversion of inferred resource to reserve ounce. Project
economics through initial Scoping Study and the recently released Pre-Feasibility Study have also shown the Mallina Project
(Hemi plus regional resources) to be one of the world's best new mining projects. The maiden Hemi JORC Probable Reserve
of 5.1Moz @ 1.5g/t Au, is one of the largest and highest grade maiden Reserves in recent decades.
The Pre-Feasibility Study outcomes demonstrated substantial improvements in grade, annual production, mine life,
cashflow and NPV since the Scoping Study. These will be covered in greater detail in the Review of Operations but some of
the headline numbers showing the scale of what De Grey has achieved are as follows:
•
•
•
•
•
Maiden JORC Probable Ore Reserve of 5.1M oz @ 1.5 g/t Au.
Post tax payback of 1.8 years from single starter pit at Brolga.
Annual Production of 540,000 oz through years 1 to 10, including 550,000 oz pa in Years 1 to 5 and peak production
of 637,000 in Year 5.
Average grade of 1.8 g/t through Years 1 to 10.
NPV(5%) of $3.9Bn pre-tax, $2.7Bn post tax based on a Capex of $985M, excluding pre-strip of $68M, and an AISC
of $1,280/oz (Years 1 – 10).
The economics are particularly impressive given the inflationary period seen since the Scoping Study release in October
2021, further proving the robustness of the Project. Analysis indicates the Project resides in the lowest quartile of operating
costs and capital intensity. The PFS has also indicated further areas for Project improvement through increasing production
rates, grade and mine life. These outstanding results provide a catalyst for the financing of the Mallina project which still
scheduled to commence construction, subject to approvals, in the second half of calendar 2023.
During the year the Company had some 16 drilling rigs operating on any one day in order to ensure a drill out to achieve
the outstanding resource to reserve conversion to substantiate the excellent PFS results. Resources were increased by
1.7M oz through the relatively recent Diucon and Eagle discoveries. However, the infill drilling for PFS purposes did not
allow the level of exploration that the Company may have wished. There is a high level of confidence within the Company
that the exploration drilling will continue for many years to come. The recent August 2022 announcement of mineralised
extensions to Diucon in diamond hole HEDD128 which intersected 359.4 metres at a grade of 1.2 g/t Au, including 19.3m
@ 7.4g/t Au and 2.0m @ 22.5g/t Au, 200 metres beneath the May 2022 Resource, provided clear indication that there is
substantial upside potential still to come. The Company looks forward to, and will continue, its ongoing exploration
activities across and beneath both greater Hemi and Regional areas.
Last year’s Chairman’s address also indicated the increase in De Grey’s market capitalisation saw us knocking on the door
of the S&P/ASX 200 Market Index which we did indeed enter in March 2022. For a company to commence from the lowly
market capitalisation that we had prior to 2020 and enter the ASX 200 within a short 2 1/2 years is an outstanding
achievement, perhaps testimony to the excitement that the mining industry can still provide and one in which we take
immense pride.
We were well aware of the increased scrutiny such a move places on the Company and the Board. A Board transition
process commenced during last year which has to date resulted in the appointments of Samantha Hogg in January 2022
and Paul Harvey in July 2022. Both are experienced individuals who have had very successful executive careers and bring a
great and additional skill set to the board of the company.
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De Grey Mining Limited
We have enjoyed a supportive shareholder in DGO Gold Limited who entered our register during the period of lowly market
capitalisation, grew their interest to approximately 15% and were still involved as we entered the ASX 200. At a time when
there was little financial appetite for exploration companies their support has been well acknowledged by myself many
times previously. Their shareholders have deservedly also enjoyed the share price upside resulting from the Hemi
discovery. Ultimately they chose to move on through an agreed takeover offer from Gold Road Resources Ltd who have
since moved to 19.99% of the Company.
As an indirect result of these shareholder changes both Mr. Bruce Parncutt and Mr. Ed Eshuys resigned from the Board in
early September 2022. Ed is a very experienced gold exploration geologist whilst Bruce has extensive financing experience.
Both provided valuable guidance in a transformation period for the company and shareholders owe them a debt of
gratitude for their time and efforts on the Board. I personally thank them for their support of the Company and myself and
wish them both the best into the future. It is also an appropriate time to thank Mr. Peter Hood who joined the Board in
September 2018. Peter is the Company’s Lead Independent Director, and a chemical engineer with significant operational
management experience which has been invaluable for the Company as it transitions from an exploration junior into a
larger development entity.
The AMEC Prospector’s Award is awarded to the individual/s (rather than the Company) who made the most outstanding
mineral deposit discovery within recent years. We take great pride in that De Grey’s three senior geologists, Andy Beckwith,
Phil Tornatora and Allan Kneeshaw received this prestigious award during the year. Again, the Company thanks Andy, our
Technical Director, for putting the technical team together that lead to one of the largest gold discoveries in recent times.
That team remains excited about the potential still ahead.
Glenn Jardine commenced with De Grey back in May 2020 and has overseen the significant growth the Company has
experienced. The last 12 months has been particularly challenging with Covid restrictions creating many issues for all in the
mining industry, together with our significant drill out requiring 16 rigs across the project at various stages. This put a lot
of stress on infrastructure and human resources all of which was managed with aplomb. Over and above Glenn was able
to oversee and produce a quality Pre-Feasibility Study referred to at the commencement of this letter. He is well aware
that the hard work is still to commence as we move through Feasibility Studies, financing and on into the construction
activities. Through this he needs to build and assimilate a suitable development and operating team around him to ensure
that time lines are met and construction activities managed. Shareholders should thank he and his Executive Team for their
efforts during the year.
Glenn will provide greater detail of the group’s significant achievements of the organisation during the year in the Review
of Operations.
Other targets included Environmental approvals and the signing of suitable Native Title agreements for infrastructure and
mining purposes. I am pleased to note that a very comprehensive Environmental Review Document is to be lodged shortly.
Community Engagement is a critical part of the Company’s life as we seek all necessary approvals for the Project
development – but also how we treat our Traditional Owners, Shires and Station owners into the future. The Community
engagement team has been managed by Ms. Bronwyn Campbell with specific support from Technical Director Andy
Beckwith and senior management as required. Relationships between our team and the local community groups have been
positive and we particularly thank the Traditional Owner groups – the Kariyarra, Ngarluma, Nyamal, Ngarla and Mallina
peoples - with whom we regularly engage as we move forward with ongoing heritage clearances and negotiations for
mining agreements. We have been grateful for the manner and mutual respect in which negotiations have been conducted.
Widespread community consultation and traditional custodian engagement has been conducted including social impact
assessments of the Project. Engagement with the Kariyarra people, the traditional custodians of the land over Hemi, on a
Partnership Agreement which will provide business opportunities, employment training and community programs is at an
advanced stage.
We also thank our key pastoral holders across the De Grey tenement package, but particularly Betty and Colin Brierly of
Indee Station. Hemi and most of its infrastructure will be on Indee, and Betty and Colin have been supportive and helpful
towards various De Grey management personnel since the Company first commenced life and operations in the region in
2002.
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De Grey Mining Limited
We have been grateful for the support of our brokers during the year through capital raising and research activities.
Institutional support has continued to develop on our register, aided by the broking groups with whom we work. We believe
the recently released PFS should attract additional institutions to the register, whilst we look forward as well to the
continued support of existing shareholders through to production and beyond.
De Grey also finds itself in a fortunate position to cope with the burgeoning demands of ESG principles and carbon emission
reductions. The Company has conducted extensive environmental baseline studies and test work across the Project area
commencing in 2020, well prior to the maiden Mineral Resource being announced in June 2021. Management regimes
have been developed and are incorporated into the Project layout and PFS designs.
The Mallina Project is in a region with access to gas and probable solar power farms being developed in the near future
and will continue to look at drive in drive out options to offer employees a reasonable family life in the well developed
townsite at Port Hedland. The Pre-Feasibility Study contains an extensive list of options considered and actions being
developed to ensure the Project is built with a strong focus on all aspects of ESG.
A company is only as strong as its people, and we are very fortunate to have an outstanding team at De Grey. It is not an
easy task to grow from not many staff to over 100 in a Covid world with competing demands for staff from other Mining
Companies. Again, testimony to the quality of the Project to attract and retain staff as well as the ESG principles embraced
by the Company and the efforts of our HR department supported by our executive team.
I would like to express my sincere thanks to all staff and all contractors for their support and exceptional performances
along the way.
And lastly to our shareholders who have financed our activities I express my gratitude for your support, it has been a
privilege to be Chair of the Company during this exciting stage in the Company’s history.
Yours sincerely,
Simon Lill
Non-Executive Chairman
5
De Grey Mining Limited
Managing Director’s Report and Review of Operations
In last year’s Managing Directors report I talked about the Hemi discovery and the Mallina Gold Project redefining the
Pilbara. Whilst this remains true, our last 12 months has really been focussed on the transformation from an explorer into
the development stage for our Tier 1 world class Mallina Gold Project (MGP or the Project).
During FY2022 our dedicated team at De Grey has made significant strides in transforming the MGP from an exciting world
scale deposit to arguably one of the world’s premier gold development projects. This is an incredible achievement for a
deposit that was discovered less than three years ago.
Our major achievements during the last 12 months have been:
Publishing a Scoping Study which showed a production rate of approximately 430,000oz per year over 10 years
with AISC in the lowest quartile, pre-tax NPV5% of $2.8 billion, pre-tax IRR of 60% and a pre-tax payback of 1.6
years
Releasing the JORC Mineral Resource Update completed by Cube Consulting Pty Ltd which increased contained
gold by 25% to 8.5Moz including 5.8Moz in the JORC Indicated category, up from 2.8Moz. This resulted in the
total MGP JORC MRE increasing by 15% to 10.6Moz and the JORC Measured and Indicated categories increasing
by 80% to 6.9Moz
Recently releasing of the MGP Pre-Feasibility Study (PFS) and the declaration of the Maiden Hemi JORC Probable
Ore Reserve of 103Mt @ 1.5g/t Au for 5.1Moz. The PFS demonstrated the world class nature of the project with
a production rate of approximately 540,000oz per year for the first 10 years with AISC in the lowest quartile, pre-
tax NPV5% of $3.9 billion, pre-tax IRR of 51% and a pre-tax payback of 1.6 years
Whilst the discovery of Hemi was many years in the making, the transformation from an exciting resource into a world
class gold project in a Tier 1 mining jurisdiction has been truly impressive and exciting to be involved in.
Figure 1: Hemi Deposits and Regional Deposits Location Map
6
De Grey Mining Limited
Project Location
The Company has built a dominant position in the prospective Mallina Basin of the Pilbara Craton, located near Port
Hedland in the northwest of Western Australia, next to world class infrastructure which is unique in recent history in
Australia and in fact globally.
The Project is located approximately 1,300 kilometres (km) north of Perth in the Pilbara region of Western Australia and
approximately 85km by road south of the regional Pilbara hub of Port Hedland (Figure 1).
Existing infrastructure capable of servicing the Project includes:
Two two-lane bitumen highways; the North West Coastal highway and the Great Northern highway
Two gas pipelines; the Pilbara Energy gas pipeline and the Wodgina Mine gas pipeline
Port Hedland to Karratha 220kV power transmission line fed separately by two gas fired power stations located
at Port Hedland and Karratha
The port of Port Hedland, a bulk export and materials import facility
The international airport at Port Hedland
Existing combined mobile (cell) tower and optic fibre/wireless communications
Sufficient good quality groundwater at site
Port Hedland is the largest economic export port in Australia. The Port also has an operating import terminal which can
now receive mining equipment into the region, which will provide substantial transport cost savings to the Project during
development and operations.
Renewable energy sources are being constructed or planned by energy providers in the Pilbara along with an expanded
high voltage distribution network (Figure 2). These initiatives will provide De Grey with the potential to access renewable
energy sources as the Project is developed and throughout operations.
The Projects’ proximity to world class infrastructure and the import terminal of Port Hedland represents significant
advantages compared with other Tier 1 gold projects recently developed in Australia and globally where large scale gold
projects use pressure oxidation to recover gold.
Figure 2: Hemi Pilbara Energy Interconnect
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De Grey Mining Limited
MGP Scoping Study
The MGP Scoping Study, released in October 2021, was the first formal assessment of the development parameters of
the Project and confirmed its potential to be a Tier 1 gold operation. Highlights included:
Average gold production ranging from approximately 473,000oz per annum for the first five years to
approximately 427,000oz pa over the 10-year evaluation period
Average feed grade of 1.6g/t Au in the first five years and 1.4g/t Au over the 10-year evaluation period
The percentage of JORC Indicated resources of 78.1% (Inferred 21.9%) over the first five years and 70.2%
(Inferred 29.8%) over the 10-year evaluation period
Average AISC ranging from $1,111/oz over the first five years to $1,224/oz over the 10-year evaluation period,
placing the Project in the lowest quartile of Australian gold producing peers
Estimated capital cost for a 10Mtpa plant and site infrastructure of approximately $835M inclusive of a 25%
($167M) contingency
Total pre-production capital of $893M inclusive of $58M pre-stripping and $167M of contingency
Average processing recovery of approximately 93% is based on conventional comminution, flotation, oxidation
via one of pressure oxidation, Albion or biological oxidation, and CIL. The optimal oxidation process route will
be determined with further studies
Attractive financial outcomes demonstrating the quality of the Project:
o Pre-tax undiscounted free cashflow of approximately $3.9 billion (post-tax $2.9 billion) over 10 years
o Pre-tax Net Present Value (NPV5%) of approximately $2.8 billion and post-tax NPV5% of $2.0 billion
o Pre-tax Internal Rate of Return (IRR) of approximately 60% and post-tax IRR of 49%
o Unleveraged payback of approximately 1.6 years (pre-tax) and 1.8 years (post-tax)
These Scoping Study estimates were updated in the Pre-Feasibility Study (PFS) released in September 2022.
Exploration
The Project comprises a landholding of more than 1,500km2, stretching across a contiguous tenement package running
SW to NE for 150km and boasts greater than 200km of gold hosting shear zones and numerous intrusion targets (Figure
3). The Project area is yet to be fully tested and significant potential remains to discover new, large scale gold deposits.
Figure 3: Mallina Gold Project
During the year the exploration team has focussed on infill, geotechinal and metallurgical drilling at the Hemi deposit to
support the PFS and Maiden Ore Reserve. Also during the year significant effort was directed at advancing regional
exploration efforts targeting near surface intrusives and strucutrally related mineralisation within our relatively
underexplored tenement package.
The majority of this early stage regional work has focussed on re-evaluation of past exploration results, acquistion of new
geophysical data and interpretation, followed by aircore(AC) drilling and following up reverse circulation (RC) drilling.
Impacts to our overall exploration efforts due to COVID-19 have been minimal due to the company’s safety and health
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De Grey Mining Limited
management planning. COVID has also caused restrictions to various heritage survey team members which in turned has
caused various drilling access delays.
Overall the regional drilling programmes have been successful in discovering new gold mineralisation at Withnell South,
Calvert, Charity Well, Gemmas and Gillies all revealing significant drill results which will require further work.
The results at Withnell South, in particular, provides an immeidate opportunity to grow the existing resource base of
approximately 600koz(open pit 5Mt @ 1.8g/t for 282,900oz and underground 2.5Mt @ 3.9g/t for 317,100oz). Further
infill and extensional drilling has been planned in this area.
At Charity Well, recent drilling demonstrates an interpreted strike length of the mineralised intrusion of at least 1km and
has returned multiple mineralised intercepts from both AC and RC drilling. The intrusion remains open to the northeast
and gold mineralisation has been intersected to depths of 300m vertically and remains open. Additonal heritage surveys
are required to test the mineralisation with drilling to the east.
The gold mineralisation at Charity Well is hosted within intervals of predominantly shallowly dipping quartz-pyrite-
arsenopyrite veins within broad envelopes of strong sericite alteration in both the intrusion and adjacent sediments which
is a simialr geological setting to the nearby 524,100oz Toweranna Gold Deposit and represents an exciting opportunity
within the Company’s target portfolio. Importantly, the Charity Well intrusion is over 5 times larger than the Toweranna
intrusion providing added potential to define a large resource.
At Geemas, encouraging new results have been intersected in a similar style intrusion. The gold mineralisation intersected
by drilling is narrower, but also hosted within intervals of predominantly shallowly dipping quartz-pyrite-arsenopyrite
veins within broader envelopes of strong sericite alteration in the target intrusion.
RC drilling has been completed across five 200m-spaced sections at the main target area, confirming the intrusion with a
strike length of approximately 800m and 300m wide with multiple smaller, subordinate intrusions nearby.
The exploration results to date at the Charity Well and Geemas areas has confirmed the prospectivity and potential of the
western tenement portfolio for the discovery of new intrusion-hosted gold deposits like Toweranna.
At Hemi, whilst the focus was on the infill drilling required for the PFS and Maiden Ore Reserve, the Company has been
able to demonstrate broad zones of high grade mineralisation near surface at Duicon as well as increasing the overall
resources. The potential of deeper mineralisation at Duicon was recently demonstrated in diamond hole HEDD128 which
intersected 359.4 metres at a grade of 1.2 g/t Au, including 19.3m @ 7.4g/t Au and 2.0m @ 22.5g/t Au, 200 metres
beneath the May 2022 Resource.
Hemi Mineral Resource Estimate Update
A critical milestone during the year was the updated Hemi MRE. The update was completed by Cube Consulting Pty Ltd
and based on additional drilling and assay results to 5 April 2022 at the Hemi gold deposit. The Regional gold deposit
MRE’s remain unchanged from the April 2020 Mineral Resource statement.
In Summary:
A 25% increase in contained gold of 1.7Moz to 8.5Moz
Diucon and Eagle (combined) increase by 78% contained gold to 2.6Moz at a 30% higher grade
Hemi JORC Indicated category increases by 3Moz from 2.8Moz contained gold to 5.8Moz
Mallina Gold Project Province (MGP) resource increased by 15% to 10.6Moz
MGP JORC Measured and Indicated categories increase by 80% to 6.9Moz
9
Hemi Total Mineral Resource Estimate
(JORC 2012)
Indicated (68% of ounces)
Inferred (32% of ounces)
MGP Mineral Resource Estimate
(JORC 2012)
Measured & Indicated (65% of ounces)
Inferred (35% of ounces)
213Mt
1.2g/t Au
8.5Moz
139Mt
74Mt
1.3g/t Au
1.1g/t Au
5.8Moz
2.7Moz
251Mt
1.3g/t Au
10.6Moz
158Mt
97Mt
1.3g/t Au
1.3g/t Au
6.9Moz
3.8Moz
(0.3g/t Au Cut-off above 370m depth, 1.5g/t Au Cut-off below 370m depth, assays to 5th April 2022)
Global Mineral Resources for the MGP, following the inclusion of Hemi,
increased to 10.6Moz.
Figure 4: Mallina Gold Project Resource Locations
De Grey Mining Limited
MGP
10.6Moz
251Mt
1.3g/t Au
HEMI
+8.5Moz
213Mt
1.2g/t Au
Maiden Hemi JORC Probable Reserve
The maiden Hemi Ore Reserve leveraged off the Hemi Mineral Resource update announced in May 2022 of 8.5Moz @
1.2g/t Au of which 5.8Moz @ 1.3g/t Au were classified as JORC Indicated. This increase and the high conversion rate of
the Indicated Resource to Probable Reserve was achieved by targeted resource definition drilling within preliminary pit
shell optimisations which were regularly conducted over the Hemi deposits during the PFS.
The maiden Hemi JORC Probable Reserve of 5.1Moz @ 1.5g/t Au is one of the largest and highest grade maiden Reserves
in recent decades from Australia.
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De Grey Mining Limited
Table 1 – Hemi Maiden JORC Probable Reserve
Mining
Centre
Type
Proved
Probable
Total
M t
Au g/ t
Koz
M t
Au g/ t
Koz
M t
Au g/ t
Koz
Hemi Mining
Centre
Oxide
Transition
Sulphide
Total
-
-
-
-
-
-
-
-
-
-
-
-
7.3
6.0
1.7
1.7
403
329
7.3
6.0
1.7
403
1.7
329
90.1
1.5
4,408
90.1
1.5
4,408
103.4
1.5
5,139
103.4
1.5
5,139
Refer to ASX Announcement 8 September 2022: “Prefeasibility Study Outcomes – Mallina Gold Project”.
Mallina Gold Project PFS
On 8 September 2022 the Company released the results of the PFS into the MGP. This followed on from the release of
the Scoping Study in October 2021 and was targeting material improvements in annual gold production rate, grade, mine
life, confidence levels and project economics from that initial study.
Project Highlights
A future top 5
Australian Gold M ine
based on production
Total
production
6.4M oz over
13.6 years
M ining physicals
136M t @ 1.6g/ t Au
processed at 93.6% recovery
Annual production
550koz: first 5 years
540koz: first 10 years
M aiden Ore Reserve
5.1Moz @ 1.5g/ t Au
Plant
throughput
10Mtpa
Total production has increased by nearly 50% from the Scoping Study to 6.4Moz within the PFS, with the annual gold
production rate increasing by approximately 25% to 540,000ozpa over the first ten years.
The increased production has been achieved at increased levels of JORC Measured and Indicated Resources within the
production profile, averaging close to 90% over the first ten years of production compared with 70% in the scoping study.
11
The preproduction capital cost of the Project of $985M including $100M of growth/contingency and additional $68M of
mine pre-stripping capital costs have increased from the scoping study in line with inflationary expectations. The capital
cost excludes the cost of an oxygen plant. Oxygen will be supplied to the POx plant under contract. The location of the
project to world class Pilbara infrastructure has significantly reduced capital costs, project complexity and timelines.
De Grey Mining Limited
Undiscounted free cash flow
$5,900M : pre-tax
$4,200M : post-tax
IRR
AISC
51%: pre-tax
41%: post-tax
$1,220/ oz: first 5 years
$1,280/ oz: first 10 years
NPV5%
$3,900M : pre-tax
$2,700M : post-tax
Pre-production capital
$985M cost of plant and infrastructure including $100M growth
allowance plus
$68M pre-stripping cost
Unleveraged
payback
period
1.6 years: pre-tax
1.8 years: post-tax
The Company has identified opportunities to improve the PFS outcomes. These include:
Increasing the resource base at the Hemi and Regional deposits through extensional drilling
Increasing production potential by conducting new pit shell optimisations in areas where resources have been
extended
Increasing the percentage of JORC Indicated mineralisation within the open pit designs at Hemi
New discoveries that could result from the Company’s extensive and ongoing exploration activities
Increasing reserves at Hemi through targeted resource definition drilling
Converting Regional resources to reserves through additional technical studies and targeted resource definition
drilling
Assessing the potential for concurrent underground and open pit mining
The PFS did not include extensions to mineralisation at Hemi that have been announced since the assay cut-off date of 5
April 2022 for the completion of the May 2022 MRE, the potential for extensions to the existing resources at Hemi nor
new discoveries that could result from the Company’s extensive and ongoing exploration activities.
Increases to resources and reserves at Hemi with continued drilling appear likely. The Company announced in August
2022 the results of resource step out drill hole HEDD128 which intersected 359.4 metres at a grade of 1.2 g/t Au at Diucon,
including 19.3m @ 7.4g/t Au and 2.0m @ 22.5g/t Au, 200 metres beneath the May 2022 MRE (figure 5). Large scale step-
out drill targets exist at each deposit with extensional drilling ongoing. New pit shell optimisations can be conducted on
updated resource models.
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Figure 5: Cross section at Diucon showing drill hole HEDD128
De Grey Mining Limited
Increases to the Hemi reserve can be achieved through targeted resource definition drilling to increase JORC Indicated
resources. There are currently 0.5Moz JORC Inferred mineralisation within the open pit designs.
Aircore and reverse circulation (RC) drilling has continued to identify gold anomalism in the Greater Hemi and Regional
areas. Drilling will continue to follow up these targets with the aim of making new, near surface, large scale, intrusion
hosted gold deposits. Of note, the Company is following through on previously announced intersections of shallow
mineralisation at Antwerp, to the west of Eagle, and at Charity Well in the western part of the Regional tenement package.
Mineralisation has been consistently intersected at all Hemi deposits below the PFS open pit designs. The potential for
concurrent underground mining with open pit mining is an option for future consideration and centres on the scheduled
completion of the Stage 1 starter pit at Brolga early in Year 4 of production. The deposits at Aquila, Crow and Falcon are
located respectively within approximately 500m, 550m and 850m of the Brolga Stage 1 starter pit.
Along with the potential for moderate increases to plant throughput with de-bottlenecking, this has the potential to lift
annual gold production rates. Additional plant throughput of 1Mtpa (10%), combined with production from underground
sources at an average mined grade of 5g/t Au or extensions, to current open pit designs at the current LOM average
grade, has the potential to lift overall annual gold production respectively by approximately 150,000ozpa or 50,000ozpa.
Production
The production profile of the Project demonstrates an annual production range up to approximately 636,000 ounces in
year five, with average production of 550,000 ounces over the first five years and 540,000 ounces per annum over the
first 10 years (Figure 6). Production from the Hemi Mining Centre is sourced from six deposits; Aquila, Brolga, Crow, Falcon
and Diucon and Eagle.
13
De Grey Mining Limited
Production over the first five years is achieved with 97% coming from JORC Measured and Indicated resource
classifications and over the first 10 years coming from 89% JORC Measured and Indicated resource classifications. JORC
Measured and Indicated resources comprise 87% of the overall PFS production outcome of 6.4Moz. The Hemi deposits
comprise approximately 97% of production over the first five years, 85% of production over the first ten years and 83%
of the overall PFS production outcome of 6.4Moz.
Production in the PFS falls after year 10 as lower grade mineralisation is mined and low-grade stockpiles are processed.
However, the Project continues to generate strong cashflows throughout each of the remaining 3.5 years of its current
life of mine. Extensions to existing resources and the new discoveries have the potential to increase gold production
above 500,000ozpa beyond year 10.
Typically, nameplate plant throughput capacity is exceeded through plant de-bottlenecking and PFS conservatism. The
Company would reasonably expect plant throughput to increase by approximately 10% to 15% over the life of mine with
minimal capital expenditure. This would bring forward production from the later years of the PFS production profile or
make space for additional production from potential new discoveries.
Figure 6: PFS Production Profile years 1-10
800koz
700koz
600koz
500koz
400koz
300koz
200koz
100koz
0koz
556
551
503
506
637
595
567
518
524
436
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10
Production - Inferred
Production - M&I
Figure 7: Hemi Open Pit Layout
14
De Grey Mining Limited
Sensitivity Analysis
Sensitivity analysis (Figure 8) shows the Project to be resilient to changes in capital costs and recoveries, with significant
leverage to improved head grade, gold price and AISC.
The increase in capital cost of the Project of approximately 15% from the Scoping Study has been outweighed by increases
in average ore grade of approximately 10% and average annual gold production rate of approximately 25% such that the
Project NPV5% (post-tax) has increased by approximately 40%.
Figure 8: Sensitivity analysis
Grade (+ / -10%)
$1,972M
Gold Price (+ / -10%)
$1,971M
$3,400M
$3,400M
AISC (+ / -10%)
$2,320M
$3,051M
Discount Rate (+ / -1%)
$2,468M
$2,925M
Recoveries (+ / -2%)
$2,534M
$2,838M
Capex (+ / -10%)
$2,591M
$2,780M
$1,700M
$1,900M
$2,100M
$2,300M
$2,500M
$2,700M
$2,900M
$3,100M
$3,300M
$3,500M
Project Positioning
The PFS has identified that the Project will have potential:
Annual gold production in the top five Australian gold operations
Lowest capital intensities of any large scale undeveloped gold project on a global basis and a low sensitivity to
capital cost increases
Lowest quartile AISC operating costs
Low carbon intensity per ounce of production compared with open pit gold mines in Australia
The Project would be a low-cost producer compared with current Australian producing gold mines, with a projected
average AISC of $1,220/oz over the first five years and $1,280/oz over the first 10 years, placing the Project in the lowest
quartile of Australian producing gold mine. Increases in unit mine operating costs on a per tonne basis due increased strip
ratio and the current inflationary environment have been offset by increased annual gold production rates. The increase
in strip ratio follows the completion of a detailed geotechnical study supported by extensive geotechnical drilling.
Project Configuration
The Project comprises mine production, all currently from open pit mining, from Hemi and Regional deposits. The Hemi
deposits of Aquila, Brolga, Crow, Diucon, Eagle and Falcon are clustered together while the Regional deposits are located
across the Company’s Mallina tenement package. Toweranna is the most distal Regional deposit, being located
approximately 60 kilometres to the west of Hemi.
15
The Company assessed comminution circuit and oxidation circuit options for the process plant during the PFS. The
preferred comminution circuit comprises primary and secondary crushing, high pressure grinding roller (HPGR) and ball
mills followed by flotation, pressure oxidation (POx) and cyanide leaching. Similar comminution circuits are used in large
scale gold projects. Hemi ore has the advantage of generating a low (8%) mass pull sulphide concentrate as feed to the
POx circuit. This reduces the POx throughput to 0.8Mtpa compared with the overall plant throughput rate of 10Mtpa.
Hemi mineralisation achieves metallurgical recovery of 93.6%.
De Grey Mining Limited
Figure 9: MGP Simplified Process Flowsheet
ESG
The Company has conducted extensive environmental baseline studies and testwork across the Project area commencing
in 2020, well prior to the maiden Mineral Resource being announced in June 2021. Management regimes have been
developed and are incorporated into the Project layout and PFS designs.
Widespread community consultation and traditional custodian engagement has been conducted including social impact
assessments of the Project. Engagement with the Kariyarra people, the traditional custodians of the land over Hemi, on a
Partnership Agreement which will provide business opportunities, employment training and community programs is at
an advanced stage.
Heritage clearances have been completed over the Project area including at Hemi and over Regional deposits and
infrastructure corridors. Heritage surveys will continue over Greater Hemi and Regionally in support of exploration
programs.
16
The early adoption of grid based renewable energy sources, augmented by site based renewable energy as appropriate,
is planned with multiple options emerging within the North West Interconnected System (NWIS).
The Project is one of the largest undeveloped gold projects on a global basis and will have low start-up and future carbon
intensities respectively of 0.6 and 0.3t.CO2/oz as shown in Figure 10. The benchmarking shown in Figure 10 references
producer’s reported actual carbon intensities for financial year 2021. De Grey, along with other producers referenced in
Figure 10, have plans to further reduce carbon intensity over time.
De Grey Mining Limited
Figure 10: Carbon Intensity
Review of Objectives
Continue drilling programs with the aim to
extend the Mallina Gold Project Resources
above the 9-million-ounce JORC resource
defined to date
Complete the scoping study on the
project to deliver a Tier 1 production
capability at Hemi
Materially advance and evaluate early-
stage project de-risking studies including
metallurgy, environmental, hydrology and
geotechnical aspects of the project to
support the completion of a PFS during
Calendar year 2022
Pursue a corporate strategy aiming to use
the IP knowledge to identify Intrusion
style mineralisation targets within our
project area and the greater Pilbara
region
Update 8.5Moz Hemi JORC code compliant
MRE announced in May 2022 takes total MGP
resources to 10.6Moz
Scoping Study results announced October
2021 showing 10 year average annual
production of 427,000oz Au
PFS and Maiden Hemi Reserve completed and
released in September 2022
– Achieved –
– Achieved –
– Achieved –
– Achieved –
team and Hemi exploration
Regional
continue to identify and refine targets with
Charity Well and Geemas drilled during
2021/22 year.
17
De Grey Mining Limited
Building Organisational Capability
The Company has a firm commitment to build the organisational capability to take the MGP from the exploration phase
through development and into production. During the year the Company undertook an extensive workforce planning
evaluation process and has identified the key roles needed for the design, construction and operations phases.
Critical roles and timing of these appointments have been built into the human resource plan and budget. It is anticipated
over the coming months a number of project construction related appointments will be made as the Company pursues its
objective of taking the MGP project into production.
I have been extremely impressed with the skill, dedication, and commitment of our people to the MGP and the teamwork
displayed in managing a dynamic world class project.
It is a pleasure to be chosen to lead such an exceptional team at De Grey and together we are aiming to achieve the
following objectives in FY2023:
•
•
•
•
•
Increase the resource base at the Hemi and Regional deposits through extensional drilling;
Increase reserves at Hemi through targeted resource definition drilling;
Increase production potential by conducting new pit shell optimisations in areas where resources have been
extended;
Increase the percentage of JORC Indicated mineralisation within the open pit designs at Hemi
Converting Regional resources to reserves through additional technical studies and targeted resource definition
drilling;
Pursue new discoveries through the Company's extensive and ongoing exploration activities;
•
• Make environmental approval submissions;
• Assessing the potential for concurrent underground and open pit mining;
•
• Undertake project funding discussions with the aim of providing a funding solution for the construction of the
Complete the DFS for the MGP;
project during calendar year 2023; and
• De-risk the project to enable the Company to make a Financial Investment Decision during Calendar year 2023
I look forward to keeping you updated on our progress.
Glenn Jardine
Managing Director
18
De Grey Mining Limited
Environment, Social and Governance
1. Our Approach to Sustainability
We believe that responsible management of environmental, social and governance (ESG) elements are critical
for our investors, the communities with whom we interact and our team.
Our Project focus for the year was delivery of the Hemi Gold Project Pre-feasibility Study. As we progress this, we recognise
that implementation of ESG principles is central to the success of the Project and De Grey Mining as a business. Our
overarching Sustainability framework, shown in Figure 1-1, underpins our commitment to undertake business in a manner
consistent with the principles of intergenerational equity, environmental responsibility, and ethical practice. To guide
implementation of our framework and monitor performance, DEG’s Board resolved to adhere to the International Council
of Mining and Metals (ICMM) Mining Principles (ICMM 2022) which are aligned with the United Nations Sustainable
Development Goals (Figure 1-2).
Figure 1-1: De Grey Mining’s Sustainability
Framework
Figure 1-2: ICMM Mining with Principles
FY2021-2022 saw the continued global focus on climate change with COP26 and release of the Glasgow Climate Pact. At a
local level, the WA State Government made several announcements aimed at ensuring the State Climate Policy goal of net
zero by 2050 is achieved. De Grey recognises the fundamental role that renewable energy will play in the future sustainable
development of its projects. Accordingly, the Board also resolved to adopt the recommendation from the Task Force on
Climate-Related Financial Disclosures (TCFD 2017) as part of our ESG reporting framework. The core elements of
governance, strategy, risk management, and adoption of metrics and targets (Figure 1-3) have been imbedded in our
approach to climate-related planning. This, along with other elements of ESG, has been central to development of the
Hemi Gold Project PFS.
Figure 1-3: TCFD Core Elements
19
De Grey Mining Limited
2. Corporate Governance, People and Safety
De Grey is committed to behaving ethically and ensuring inclusion across the organisation, regardless of gender, marital
or family status, sexual orientation, gender identity, age, disabilities, ethnicity, religious beliefs, cultural background,
socio-economic background, perspective and experience.
FY2021-22 was a transformational period for the De Grey board with the appointment of Samantha Hogg and Paul Harvey
as Non-Executive Directors, progressing our commitment to build capability and diversity in the organisation. De Grey is
striving towards a target of 30% representation by women at a board level by 30 June 2023. At a senior management level,
women currently represent 20% of the full-time positions.
The health, safety and wellness of our employees, contractors, and the communities in which we operate is our number
one priority. We are therefore pleased to report that in 2021-22 we achieved 110 LTI-free days and a rolling LTI frequency
rate of 2.12, in comparison to the benchmark regional exploration industry rate of 2.00. During the reporting period we
increased the health and safety workforce capability through the appointment of a Health and Safety Manager, a Health
and Safety Superintendent, Safety and Training Coordinator. Additionally, we completed development and deployment of
our Health and Safety Management System and Emergency Response Plans.
De Grey recognises that as the Hemi Gold Project progresses toward feasibility and operations, the risks and opportunities
presented by ESG factors become more profound and complex, and that its management of ESG must evolve accordingly.
Consequently, De Grey established an Environmental, Social and Governance (ESG) Sub-Committee of the Board and an
ESG Working Group to facilitate the implementation of our adopted frameworks.
A third-party gap analysis against the ICMM and TCFD frameworks was also completed to identify where we need to focus
our efforts in FY2022-2023 in preparation for operations.
3. Stakeholder and Community Engagement
At De Grey, we acknowledge the Traditional Custodians of the land upon which we operate, the Kariyarra, Ngarluma,
Nyamal, Ngarla and Mallina peoples.
We recognise their unique cultural heritage, beliefs and connection to these lands, waters and communities and the
importance of continued protection and preservation of cultural, spiritual, and educational practices.
In recognition of the integral role that community plays in De Grey’s business, we established a community relations and
heritage team to implement our stakeholder engagement plan. Our approach to community consultation has focused on
a “Consult, Involve, Collaborate” framework, informed by the Public Participation Spectrum developed by the International
Association of Public Participation (IAP2).
20
De Grey Mining Limited
With our focus in FY2021-2022 being on progressing the Hemi PFS, consultation accordingly concentrated on stakeholders
with fundamental interests in the Hemi Project. Key consultation undertaken during the year included our inaugural Port
Hedland Town Hall meeting, presentations to regulatory decision makers (Department of Mines, Industry Regulation and
Safety and the Department of Water and Environmental Regulation), regular liaison with the Indee pastoral managers and
weekly meetings with the Karyiarra Aboriginal Corporation, who are the Native Title holders of the land on which Hemi is
located.
Our strong relationship with the Kariyarra has culminated in the advancement of a Mining Agreement which is in the final
stages of execution. We are proud of the Agreement that has been formulated with the Kariyarra and we look forward to
delivering on the substantial intergenerational benefits to the traditional owners of the land on which operate.
4. ESG Fundamentals Integrated into PFS
At De Grey, we recognise that understanding and mitigating significant impacts to the environment and community from
our operations, is fundamental to the business’ bottom line. It also forms part of the values that we are imbedding in
our business.
Accordingly, central to delivery of the Hemi PFS was integration of sustainability principles into the key components of the
Project, these being mine design, processing, power supply, tailings storage and landform design.
This was guided by stakeholder consultation and extensive environmental and social baseline data that was gathered
during the year, including ecological assessments (flora, fauna, short range endemics, subterranean fauna), hydrological
and hydrological assessments, materials characterisation (waste rock, tailings and soils), social impact assessment, and
heritage assessments.
For each component, the relevant ICMM Principles and associated performance expectations have been mapped out. The
design process for each principal component has then been qualitatively assessed against the identified expectations. In
addition, the relevant TCFD metrics for each principal component have been identified, with a view to setting targets at a
later stage in the Project’s development.
A summary of the key ESG outcomes of the PFS are presented below.
21
Mine Design
The mine design incorporates overarching goals of reducing scope 1 emissions, avoidance of drinking
water sources and management of groundwater and surface water impacts.
De Grey Mining Limited
Processing Facility
The processing circuit delivers the
environmentally benign tailings.
lowest carbon emissions
intensity option and produces
22
Power Supply
The Project’s decarbonisation strategy demonstrates that it can achieve significant reductions in GHG
emissions relative to the baseline scenario, and can provide a trajectory to Net Zero by 2050
De Grey Mining Limited
23
Waste Storage (Tailing Storage Facility and Mine Waste)
The tailings storage facility adopts an Integrated Waste Landform (IWL) design with stability and footprint
the key ESG factors influencing the decision. Waste rock characterisation indicates that waste rock
produced from mining can be safely stored in stable surface waste rock landforms (WRL).
De Grey Mining Limited
24
De Grey Mining Limited
Directors’ Report
Your directors present their report on the consolidated entity comprising De Grey Mining Limited (“De Grey” or “the
Company”) and its controlled entities (“the consolidated entity” or “Group”) for the financial year ended 30 June 2022.
All amounts are expressed in Australian dollars unless otherwise stated.
De Grey is a company limited by shares that is incorporated and domiciled in Australia.
Directors
The following persons were Directors of the Company during the whole of the financial year and up to the date of this
report, except as otherwise indicated:
Simon Lill
Glenn Jardine
Andrew Beckwith
Peter Hood
Paul Harvey – appointed 4 July 2022
Samantha Hogg – appointed 28 January 2022
Eduard Eshuys – resigned 8 September 2022
Bruce Parncutt – resigned 7 September 2022
Information on Directors
Simon Lill, BSc MBA
Non-executive Chairman
Mr Lill was appointed to the board in October 2013 and became Executive Chairman in 2014. In May 2020 he was appointed
Non-Executive Chairman. He has previously worked with Anaconda Nickel Limited through engineering studies, financing,
and construction phases of the Murrin Murrin Nickel mine. He also has extensive experience since the 1980’s with ASX
listed companies, spanning small cap companies to larger concerns, involving restructuring, corporate, compliance,
marketing, company secretarial and management activities, resulting in his role at De Grey Mining Ltd.
During the past three years Mr Lill has also served as a director of the following listed companies:
Company
Finexia Financial Group Limited (formerly Mejority Capital Limited)
Iris Metals Limited
Nimy Resources Limited
Purifloh Limited
XPD Soccer Gear Group Limited
Date appointed
18 May 2011
29 December 2020
16 August 2021
2 September 2013
29 March 2018
Date ceased
25 November 2019
-
-
-
10 October 2021
Interest in shares and rights at the date of this report:
13,369,629 ordinary fully paid shares
No unlisted options over ordinary shares in De Grey Mining Limited
500,000 performance rights
Committees
Audit & Risk Committee
Remuneration & Nomination Committee
25
De Grey Mining Limited
Glenn Jardine, BE (Mining) FAusIMM
Managing Director
Mr Jardine was appointed Managing Director in May 2020. He is an experienced mining executive of 35 years with direct
experience in growing resource companies from early-stage exploration through to multi-operation entities, including
taking projects through feasibility studies, equity funding, debt financing, project development and operations. His
experience includes Project Manager & General Manager of the Henty Gold Mine in Tasmania for Goldfields Ltd; Project
Manager of the Emily Ann & Maggie Hays nickel mines; General Manager New Business, Chief Operating Officer &
Managing Director for Lion Ore Australia. He has more recently been Chief Operating Officer of Azure Minerals Limited.
Commodity experience includes precious metals, base metals, and bulk commodities across underground and open pit
operations. Processing methods utilised at these projects and operations include CIP/CIL, DMS, sulphide flotation, BIOX,
pressure oxidation and SX/EW.
Projects developed have received Australian State and Federal recognition for environmental best practice and health and
safety and human resources systems.
During the past three years Mr Jardine has not served as a director of any other listed companies.
Interest in shares, options and rights at the date of this report:
140,846 ordinary fully paid shares
601,425 unlisted options over ordinary shares in De Grey Mining Limited
94,738 performance rights (Tranche 3)
Rights issued to Mr Jardine are issued in 3 tranches, T1 140,846 vested in September 2021 and were exercised in August
2022, T2 91,008 were forfeited in September 2022 and T3 94,738 should vest in September 2023.
Andrew Beckwith, BSc Geology, Aus IMM
Technical Director
Mr Beckwith was appointed to the board in October 2017, having commenced his time with De Grey as a Technical
Consultant in February 2016.
He is a successful and experienced exploration geologist who has previously held senior technical roles with AngloGold
Ashanti, Acacia Resources, Helix Resources, Normandy NFM, North Flinders Mines, BP Minerals Australia and Westgold
Resources. At Westgold, Mr Beckwith initially held the role of exploration manager before appointment as Managing
Director. Additionally, Mr Beckwith was an Executive director of Bulletin Resources Limited until June 2014.
During his time at Westgold, he was intimately involved in the Explorer 108 Pb-Zn-Ag and the Au-Cu Rover 1 (1.2Moz)
discoveries in the Northern Territory as well as the acquisition of the Central Murchison Gold Project located in Western
Australia.
During the past three years Mr Beckwith has also served as a director of the following listed companies:
Company
Carnavale Resources Limited
Date appointed
29 July 2014
Date ceased
-
Interest in shares, options and rights at the date of this report:
6,209,875 ordinary fully paid shares
496,689 unlisted options over ordinary shares in De Grey Mining Limited
400,000 performance rights
26
De Grey Mining Limited
Peter Hood AO, BE(Chem), MAusIMM, FlChemE, FAICD
Lead Independent Non-executive Director
Mr Hood was appointed to the board on 19 November 2018. Mr Hood, a Chemical Engineer, has had a distinguished career
in the Australian Mining and Chemical Industries. He held the position of Senior Production Engineer at the Kwinana Nickel
Refinery from 1971 to 1981, then Mill Superintendent of the WMC Kambalda Nickel and Gold Operations between 1982 to
1985. In 1985, he joined Coogee Chemicals Pty Ltd in the position of General Manager and then as their CEO between 1998
and 2005. He then held the position of CEO of Coogee Resources Ltd before retiring in 2008. Through that period, he was
part of the management team that oversaw significant growth in Coogee Chemicals.
In 2020, Mr Hood was recognised as an Officer of the Order of Australia in the Australia Day Honours List for distinguished
service to business and commerce at the state, national and international level, and to the resources sector.
During the past three years Mr Hood has also served as a Director of the following listed companies:
Company
Cue Energy Resources Limited
GR Engineering Limited
Matrix Composites and Engineering Limited
Date appointed
23 February 2018
10 February 2011
15 September 2011
Date ceased
-
-
-
Interest in shares and options at the date of this report:
3,502,227 ordinary fully paid shares
No unlisted options over ordinary shares in De Grey Mining Limited
21,816 performance rights
Committees
Audit & Risk Committee, including as Committee Chair 28 January 2022 – 24 March 2022
Chair of the ESG Committee
Chair of the Remuneration & Nomination Committee, appointed as the Committee Chair 24 March 2022
Paul Harvey, BE (Mining), FAus IMM, GAICD
Independent Non-executive Director
Mr. Harvey is an experienced resource executive with operational and projects leadership built from over 35 years global
experience in the resources sector, including gold. His recent roles include leadership positions at South32 (2015 – 2020)
including four years as Chief Operating Officer with accountability for global manganese, base metals, coal for steel
operations and all supporting technical and project functions. Prior to that he held the position of Chief Transformation
Officer, a founding Executive Committee role established as part of the South32 demerger from BHP. Senior executive roles
at BHP included President Nickel West and President and COO BHP Billiton Diamonds.
Mr Harvey has since 2021 held the role of Senior Operating Partner with London based Appian Capital Advisory, providing
operational oversight to Appian’s portfolio companies and advice with the analysis and evaluation of potential investments.
In 2022, Mr Harvey was also appointed to Wyloo Metals Pty Ltd Advisory Committee.
During the past three years Mr Harvey has not served as a director of any other listed companies.
Interest in shares and options at the date of this report:
No ordinary fully paid shares
No options or rights over ordinary shares in De Grey Mining Limited
Committees
Remuneration & Nomination Committee (appointed 7 July 2022)
ESG Committee (appointed 7 July 2022)
27
De Grey Mining Limited
Samantha Hogg, Bcom
Independent Non-executive Director
Ms. Hogg has had a distinguished executive career with international experience across the resources and infrastructure
sectors. She previously held senior finance and governance leadership positions at Transurban Group (2008 – 2014)
including three years as CFO during a significant growth phase when the company entered the S&P/ASX20 Index.
Ms. Hogg has also had significant mineral resources experience through executive roles held with Vale (2006 – 2007) and
Western Mining Company (1992 – 2005) with experience spanning finance, treasury, strategic projects, marketing, people
and corporate services.
During the past three years Ms Hogg has also served as a Director of the following listed companies:
Company
Adbri Limited
Cleanaway Waste Management Ltd
MaxiTRANS Industries Limited
Date appointed
29 March 2022
1 November 2019
28 April 2016
Date ceased
-
-
19 March 2021
Interest in shares, options and rights at the date of this report:
No ordinary fully paid shares
No options or rights over ordinary shares in De Grey Mining Limited
Committees
Chair of the Audit & Risk Committee (appointed 28 January 2022, Committee Chair since 24 March 2022
ESG Committee (appointed 24 March 2022)
Remuneration & Nomination Committee
Eduard Eshuys, BSc, FAusIMM, FAICD
Non-executive Director
Mr Eshuys was appointed to the board on 23 July 2019 and on 8 September 2022, being subsequent to the end of the
financial year, has resigned from the board.
Mr Eshuys is a highly experienced and well credentialled geologist with over 40 years exploration and company
management experience in Australia. In the late 1980s and early 1990s he led the teams that discovered the Plutonic,
Bronzewing and Jundee gold deposits, and the Cawse Nickel Deposit.
During the past three years Mr Eshuys has also served as a director of the following listed companies:
Company
DGO Gold Limited¹
NTM Gold Limited
Dacian Gold Limited
Date appointed
15 July 2010
26 March 2019
16 March 2021
Date ceased
24 June 2022
16 March 2021
-
¹On 24 June 2022, Mr. Eshuys resigned as Managing Director of former ASX listed and major De Grey shareholder DGO Gold Limited on
their takeover by ASX listed Gold Road Resources Limited.
Interest in shares and options at the date of this report:
52,227 ordinary fully paid shares on resignation
Committees
Audit and Risk Committee (resigned 28 January 2022)
ESG Committee (resigned 8 September 2022)
Remuneration & Nomination Committee, was Committee Chair 1 July 2021 - 24 March 2022 (resigned 8 September 2022)
28
De Grey Mining Limited
Bruce Parncutt AO, BSc, MBA
Non-executive Director
Mr Parncutt was appointed to the board on 23 July 2019 and on 7 September 2022, being subsequent to the end of the
financial year, has resigned from the board.
Mr Parncutt holds the Chairman role for investment banking group Lion Capital and has had a career spanning over 40
years in investment management, investment banking and stock broking, where he has previously held roles as Managing
Director of McIntosh Securities, Senior Vice President of Merrill Lynch, Director of Australian Stock Exchange Ltd.
During the past three years Mr Parncutt has also served as a director of the following listed companies:
Company
DGO Gold Limited¹
Date appointed
23 May 2018
Date ceased
24 June 2022
¹On 24 June 2022, Mr. Parncutt resigned as a Director of former ASX listed and major De Grey shareholder DGO Gold Limited
on their takeover by ASX listed Gold Road Resources Limited.
Interest in shares and options at the date of this report:
52,227 ordinary fully paid shares on resignation
Committees
Audit and Risk Committee (resigned 28 January 2022)
Remuneration & Nomination Committee (resigned 24 March 2022)
Company Secretaries
The following persons acted as Company Secretary of the Company during the financial year:
Craig Nelmes, BBus
Mr Nelmes is an Accountant who joined De Grey in October 2013 and has over 30 years’ experience in the provision of
finance, secretarial, governance, financial systems and providing accounting services to the mining sector in Australia and
overseas. His experiences include over seven years with International Accounting firm Deloitte, nine years with a multi-
national resource’s entity as well as ten years with Corporate Consultants Pty Ltd, a Company providing accounting,
secretarial and administrative services to ASX and TSX listed entities.
Patrick Holywell, FGIA GradDipCA GAICD BCom
Mr Holywell is a Chartered Accountant who joined De Grey in July 2018 and resigned as joint Company Secretary on 17
December 2022. He has over 15 years’ experience in corporate governance, finance and accounting including employment
with Deloitte and Patersons Securities Ltd. Mr Holywell has been employed by and acted as company secretary, CFO and/or
director of several companies in various sectors.
Chief Financial Officer
Peter Canterbury, BBus CPA
Mr Canterbury is an experienced mining executive and Certified Practicing Accountant with substantial experience in
leading ASX-listed mining companies, most recently as MD of ASX-listed Triton Minerals and CEO of Bauxite Resources.
Peter has as a broad skillset spanning financial and corporate management, accounting, project financing, feasibility
studies, contract negotiation and mining operations. He has held senior roles within the mining industry for close to 30
years. Previously CFO and Acting CEO of Sundance Resources, where he played a lead role in rebuilding the company
following a plane accident in 2010 and was instrumental in negotiating the Mining and Development convention for
Sundance in Cameroon and Republic of Congo for the US$5 billion iron ore mine, rail and port project. His previous positions
include CFO of Dadco Europe with its alumina and bauxite operations in Europe and Africa and several positions with Alcoa
in finance, marketing and project development. Peter brings highly relevant financial expertise to support De Grey’s
ambitions of becoming a Tier 1 gold producer from Hemi.
29
De Grey Mining Limited
Principal Activities
The principal activity of the consolidated entity during the year was our focus on the 100% owned Mallina Gold Project
(MGP) in the Pilbara region of WA, and includes the large scale, high value, near surface 2019 Hemi gold discovery.
The Hemi discovery is an intrusion-hosted form of gold mineralisation new to the Pilbara region and shows a scale of
mineralisation not previously encountered in the Mallina Basin. Gold mineralisation at Hemi is hosted in a series of
intrusions associated with stringer and disseminated sulphide rich zones.
The MGP scoping study was completed in October 2021. In September 2022, subsequent to the end of the financial year,
the Company completed its Pre-Feasibility study (PFS) a major de-risking milestone in that it provides much greater detail
and confidence on the proposed development scenario for the MGP.
MGP is a “world class project” representing a newly discovered Tier 1 asset in a top global mining jurisdiction. DEG is
targeting the completion of a Definitive Feasibility Study (DFS) and Final Investment Decision (FID) within the coming 12-
months and to be then followed by an expected two year construction phase into first production by the 2nd half of calendar
2025.
Financial Review
The consolidated loss after tax for the year ended 30 June 2022 was $10,536,710 (2021: $5,250,269). Details of our
operations is included in the Managing Directors report and operations review, preceding this report.
Earnings per share
The basic loss per share for the year ended 30 June 2022 was 0.77 cents per share (2021: 0.41 cents per share).
Dividends
No dividends were paid or declared during the financial year (2021: None). No recommendation for payment of dividends
has been made.
Significant changes in state of affairs
There were no significant changes in the nature of the activities of the Group during the year, other than those included
in the Key Highlights within the Review of Operations.
Governance
We have adopted Corporate Governance policies representing the system of control and accountability for the
administration of corporate governance. De Grey Mining’s Board is committed to managing these policies and procedures
in a manner which is directed at achieving our objectives in a proper and ethical manner.
To the extent they are applicable to De Grey, the Board has adopted the ASX Corporate Governance Council’s Corporate
Governance Principles and Recommendations 4th Edition.
To read the Company’s Corporate Governance Statement and Appendix 4G to 30 September 2022 visit our website at
https://degreymining.com.au/corporate-governance/.
30
De Grey Mining Limited
Matters subsequent to the end of the financial year
Subsequent to the end of the financial year, the Company announced the Prefeasibility Study (PFS) outcomes for the
Mallina Gold Project showing a substantial improvement in grade, annual productions, mine life, cashflow and NPV from
the release of the scoping study earlier in the financial year. The PFS also resulted in the Company’s maiden 5.1Moz reserve
statement.
The Mallina Gold Project includes the Hemi and some Regional deposits, and the PFS outcomes boasts gold production of
540,000ozpa over the first 10 years and a total gold production of 6.4Moz over a mine life of 13.6 years.
The PFS financial metrics outcomes over the project include a NPV of $3.9 billion pre-tax and $2.7 billion post-tax, IRR of
51% pre-tax and 41% post tax with a payback of 1.6 years pre-tax and 1.8 years post-tax, and an AISC of $1.220/oz in the
first 5 years and then $1,280/oz to year 10.
The PFS capital costs outcomes for the 10Mtpa plant and site infrastructure estimated to be $985M inclusive of $100M in
growth allowance and an additional mine preproduction pre-strip capital cost of $68M.
Likely developments and expected results
There are no further developments or expected results other than those listed in the PFS which have been reported
under matters subsequent to the end of the financial year.
31
De Grey Mining Limited
Remuneration Report (Audited)
The remuneration report is set out under the following headings:
A. Details of Key Management Personnel
B. Remuneration Governance
C. Company Financial Performance Over Past 5 Years
D. Overview of Executive Remuneration
E. Executive STI and LTI Remuneration Performance Outcomes
F. Executive Service agreements
G. Non-executive Director remuneration
H. Details of 2021-22 KMP remuneration
I. Key Management Personnel - shareholdings, unlisted option holdings and performance rights holdings
J.
Securities based compensation options and performance rights
K. Other transactions and balances with key management personnel
A. Details of Key Management Personnel (KMP)
The Directors of De Grey Mining Limited present the Remuneration Report for the Group for the year ended 30 June 2022.
The report forms part of the Directors’ Report and has been audited in accordance with section 300A of the Corporations
Act 2001.
The report details the remuneration arrangements for the Company’s Key Management Personnel (KMP):
• Non-executive directors (NEDs)
•
Executive directors and senior executives
KMPS are those persons who, directly or indirectly, have authority and responsibility for planning, directing, and controlling
the major activities of the Group including all directors of the Company.
The table below outlines each KMP of the Company and their movements during the year.
Name
Non-Executive directors
Mr Simon Lill
Mr Peter Hood AO
Ms Samantha Hogg
Mr Eduard Eshuys²
Mr Bruce Parncutt AO¹
Executive Directors
Mr Glenn Jardine
Mr Andrew Beckwith
Position
Term
Non-Executive Chairman
Lead Independent non-Executive Director
Independent non-Executive Director
Non-Executive Director
Non-Executive Director
Full financial year
Full financial year
Appointed 28 January 2022
Full financial year
Full financial year
Managing Director
Technical Director
Full financial year
Full financial year
Other Key Management Personnel
Mr Craig Nelmes
Mr Patrick Holywell
Mr Peter Canterbury
Mr Philip Tornatora
Company Secretary
Company Secretary
Chief Financial Officer
General Manager - Exploration
Full financial year
Resigned 17 December 2021
Full financial year
Full financial year
Mr. Bruce Parncutt¹ and Mr. Eduard Eshuys² resigned subsequent to the end of the year on 7 September 2022 and 8 September 2022
respectively.
32
De Grey Mining Limited
B. Remuneration Governance
The Remuneration and Nomination Committee is chaired by the Lead Independent Director Peter Hood and as at 30 June
2022 its other members being Samantha Hogg (Independent non-executive Director), Simon Lill (Non-executive Chair of
the Board), Eduard Eshuys (Non-executive Director), with a standing invitation made to other directors to attend all or part
of Committee meetings but do not participate in recommendations by the Committee to the Board.
The Committee meets periodically during the year to review and make recommendations to the full board in accordance
with the Remuneration Committee Charter.
During the 2021-22 financial year, the Committee reviewed and made recommendations to the board in relation to KMP,
other executives and overriding employee remuneration considerations in respect to:
Executive remuneration policies;
•
• Determining the eligibility, awarding and where applicable the vesting of short-term incentives (STI) and long-term
incentives (LTI), including the issuing of securities in accordance with existing shareholder approved plans and seeking
approval by shareholders (as required);
• Non-executive Director remuneration;
•
• Appropriate remuneration disclosures in ASX releases including the Annual report; and
• Other employment retention policies with respect to employees.
The aggregate non-executive Remuneration pool and seeking approval by shareholders for changes (as required);
Expert advice and recommendations are sought from remuneration consultants whose scope of work, engagement and
reporting is directly back to the Remuneration Committee. That advice on the remuneration policy and settings included
benchmarking director and key management personnel remuneration against comparable entities to ensure that
remuneration packages are consistent with the market and are appropriate for the organisation. During the year, the
Remuneration & Nomination Committee approved the engagement of BDO Rewards (WA) Pty Ltd, (“BDO”) to provide
advice on the Executive Incentive Framework, Executive Remuneration Benchmarking and Non-Executive Director
Remuneration.
Both BDO and the Committee are satisfied the advice from BDO is free from undue influence from the KMP to whom the
remuneration recommendations apply. The remuneration recommendations were provided to the Committee as an input
into decision making only. The Remuneration & Nomination Committee considered the recommendations, along with
other factors, in making its decisions.
Fees paid to BDO with respect to the advice were $24,750. In addition to providing remuneration recommendations, BDO
provided advice on other aspects of remuneration of the Groups employees. Fees for these services amounted to $7,000.
The Board will make final decisions after taking into consideration the recommendations of the Remuneration Committee.
Voting on the Remuneration Report - 2021 Annual General Meeting
The Company received approximately 85.32% of “yes” votes on its remuneration report for the 2021 financial year (2020:
98.39%).
33
De Grey Mining Limited
C. Company Financial Performance Over the Past 5 Years
The table below sets out information about De Grey Mining’s performance and movements in shareholder wealth for the
past four years up to and including the current financial year.
Net loss
Share price at year end ($)
Basic EPS (cents)
Total Dividends per share
2022
10,536,710
0.81
(0.77)
-
2021
5,250,269
1.24
(0.41)
-
2020
3,976,002
0.91
(0.41)
-
2019
2,009,130
0.67
(0.50)
-
2018
2,476,951
0.16
(0.85)
-
$1.80
$1.60
$1.40
$1.20
$1.00
$0.80
$0.60
$0.40
$0.20
$0.00
Share Price & Volume
Share Price
Volume
s
n
o
i
l
l
i
M
450
400
350
300
250
200
150
100
50
0
D. Overview of Executive Remuneration
The remuneration policy of De Grey has been designed by the board taking into consideration the stage of development of
the Group and the activities undertaken. The guidance is to build mutually beneficial outcomes by aligning key management
personnel with shareholder and business objectives.
The performance of any company depends largely on the quality of its executives, to this end, De Grey Mining Limited
endeavours to attract, motivate and retain highly skilled executives and embodies the following principles in its
remuneration framework.
Provide competitive rewards to attract high calibre executives
Link executive rewards to shareholder value
Ensure a significant portion of executive remuneration is ‘at risk’, dependent on meeting performance
benchmarks
Establish appropriate, demanding performance hurdles in relation to variable executive remuneration
Fixed Annual Remuneration
We reward executives by providing a mix of fixed remuneration (base salary plus superannuation capped at $27,500 for
the 2021-22 financial year) and variable remuneration consisting of short-term (“STI”) and long-term incentives (“LTI”) on
key performance areas affecting the Group’s financial results or operational milestones.
34
Measurement tools used in determining fixed annual remuneration include consideration of general market conditions and
that includes benchmarking against industry peers for comparable executive roles. The process is incorporated into the
periodic remuneration reviews undertaken and with oversight of the Remuneration and Nomination Committee.
De Grey Mining Limited
Mix of Remuneration (Target)
Managing Director
Fixed Remuneration
STI
LTI
Other KMP’s
Fixed Remuneration
STI
LTI
%
50%
17%
33%
50-53%
17-23%
27-30%
Final quantum determination based upon annual performance review,
including consideration of their performance against a KPI scorecard.
Up to 50% of annual LTI is held at risk and measured against
performance
Final quantum determination based upon annual performance review,
including consideration of their performance against a KPI scorecard.
Up to 50% of annual LTI is held at risk and measured against
performance
During the current financial year, Patrick Hollywell resigned. As he met the criteria and was considered a ‘good leaver’, the
25,714 options granted to him in the 2020-21 financial year vested on 30 June 2022 and have since been exercised. Refer
to Section H: Details of KMP Remuneration.
Performance Rights and Option Plan (PR&OP), Performance Rights (PRP) and Employee Option Plans (EOP) of De Grey
Mining Limited
The Performance Rights and Option Plan (PR&OP) was approved by Shareholders at the 2021 Annual General Meeting
(“AGM”). This combined plan will supersede the previous and separate shareholder approved Performance Rights Plan
(PRP) and Employee Option Plan (EOP).
All Directors, full and part time employees, as well as key consultants of De Grey Mining Limited are eligible to participate
in each Plan. Any issue of Rights or Options to Directors under either Plan will be subject to Shareholder approval pursuant
to the provisions of the ASX Listing Rules and the Corporations Act 2001. The Directors consider that the PR&OP and
previously the PRP and EOP collectively represents an appropriate method to:
• Reward Directors, Key management personnel and employees for their past performance;
•
•
•
•
Provide long term incentives for participation in the Company’s future growth;
To motivate and retain Directors, KMP and senior employees;
Establish a sense of ownership in the Company for the Directors and employees;
Enhance the relationship between the Company and its employees for the long-term mutual benefit of all
parties; and
Enable the Company to attract high calibre individuals who can bring specific expertise to the Company.
•
35
De Grey Mining Limited
E. Executive STI and LTI Performance Review Outcomes
Short-term Incentive (STI)
The STI is designed to reward employee performance with respect to a balanced scorecard of financial and non-financial
performance measures.
The annual STI opportunity exists for all Executives in the form of a cash bonus. The executive must be employed to be
eligible to receive the payment and achieve a score of at least 65% in respect to Wealth Creation and Preservation
performance metrics used in guiding the annual STI review process.
The Key features of the Annual STI review are as follows:
• One year performance period covers 1 July 2021 – 30 June 2022;
Each Executive is assessed utilising a KPI Scorecard rating process - up to 100% (with 100% being a factor of 1.0);
•
• Remuneration and Nomination Committee discretion to reward a factor greater than 1.0 for executives considered to
•
have achieved higher or exceptional performance; and
The 2021-22 KPI Scorecard is weighted against the following key measures:
o Global resources growth/new discoveries;
o Advancing the prefeasibility study (PFS);
o Strategy and development opportunities and initiatives, with emphasis on innovation & technology;
o Occupational health and safety – leadership, culture and systems;
o People & capability – building board and organisational capabilities;
o Maintaining robust compliance and asset tenure process;
o Community relations – partnering and seeking agreements with key stakeholders
o Finances and systems – capable of funding to meet corporate objectives, with strong underlying systems of
control; and
o governance and reporting systems, including best practice regulatory obligations;
These measures were chosen to best align the performance of the KMP with the business objectives included in the
strategic plan. The focus this year was to advance the project to the PFS stage whilst ensuring the safety of employees,
relationships with stakeholders are maintained and compliance elements are met. KMPs will be assessed using a scorecard
that considers a weighted evaluation against these criteria. This is considered the best approach given the size and nature
of the company.
The Remuneration and Nomination Committee (and ultimately the board for final decision) retain discretion to vary or
supplement the STI, following conferral with the executive, to better define and formalise those criteria, having regard to
the nature and scale of the business and any other applicable matters relevant to the current transition which is underway
from explorer toward development and ultimately as a producer.
In carrying out the assessment against the suite of KPI’s and on the recommendation of the Committee, the board took
into consideration the following matters:
•
•
•
The scale of the project has increased over the year with significant projected annual production metrics
improvements from the October 2021 scoping study of ~430,000ozpa for the first 10 years to the PFS of ~540,000ozpa
for the first 10 years;
The PFS included the higher confidence maiden ore reserve of 5.1Moz at 1.5g/t Au and the value added by the increase
in project production rate, mine life and confidence level at the PFS stage have in part outweighed further short-term
resource growth metrics;
There were many challenges confronted in the year that included the ongoing impacts of Covid-19 restrictions and
considerations and keeping people safe, border closures, staffing challenges, the global fuel cost shock, instability from
the Ukraine conflict as well as global supply chain impacts, these needed to be taken into consideration and considered
to be outside of managements control.
The scorecard was used to assess the performance of the KMP and outcomes for the 2021-22 financial year are included
within the table below where the amount to be paid in the 2022-23 financial year (STI Awarded) is calculated as the STI
base multiplied by the STI Achievement %.
36
De Grey Mining Limited
Executive KMP
Glenn Jardine
Andrew Beckwith
Peter Canterbury
Craig Nelmes¹
Philip Tornatora
STI Base
$
$175,000
$150,000
$120,000
$60,000
$120,000
STI Achievement
%
80%
79%
85%
77%
84%
STI Forfeited
%
-
-
-
-
-
STI Awarded
$
$140,000
$118,500
$102,000
$46,200¹
$100,800
¹ The 2021-22 financial year reported bonus of $96,200 reported in section H of the Remuneration Report includes this $46,200 bonus
as well as a $55,000 cash bonus relating to the 2020-21 financial year as approved in November 2021. Refer also to Section H: Details of
KMP Remuneration.
Long-term Incentive (LTI)
The annual LTI opportunity consists of zero priced unlisted options (ZEPO’s) and are issued to both executive directors and
other key management personnel. The current LTI is designed to reward performance over a three-year period.
The ZEPO’s will vest upon satisfaction of all of the following vesting conditions or where, vesting conditions are not satisfied
the Board does have overall discretion whether or not to vest the options.
• Remain employed by the company until vesting date to be eligible to receive the payment;
• Delineation of Mineral Resources (as that term is defined in JORC, 2012 Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves) of not less than 12 million ounces of gold at the
Company’s Mallina Gold Project (inclusive of the existing regional 2.2 million ounces) by 3 December 2024;
Completion of a Definitive Feasibility Study (DFS) confirming feasibility for a 500,000 ounces of gold per annum
project through a mine life of no less than 12 years, or such other number as approved by the Board following
completion of a Pre-Feasibility Study. The DFS is to be signed off in its entirety by a suitably qualified engineering
group (with oversight from the Board); and
The Company securing debt and/or equity finance for a Board approved Project arising from the DFS.
•
•
Non-market measures are intended to reward executives for aligning their rewards with De Grey’s business outcomes and
creating sustainable shareholder value. The objectives for De Grey are to exploit the Mallina Gold project, which entails
defining the resource and completing both prefeasibility and definitive feasibility studies, as well as funding the project.
The measures identified achieves these objectives and will create significant shareholder value. The successful completion
of these vesting conditions will be confirmed by the Board and LTIP will be issued. If the milestones are not achieved by
the vesting date, the options will be forfeited.
One half of these LTI ZEPOs will be evaluated against the KPI Scorecard in June of each year and upon achieving 65%+ score
then the 50% of these ZEPOs having achieved the incentive condition remain eligible to vest. If the executive does not
achieve the annual score of 65% or more, then the 50% of the ZEPOs will be cancelled, whilst the balance will vest solely
subject to achieving the LTI milestones. The LTI milestones are tested at the end of year three.
LTI granted in 2021-22 financial year
There were 199,879 ZEPO’s issued to executives as LTI Incentives in FY2022 that have a 3-year term. These additional LTI
ZEPO's, issued at the discretion of the board are subject to evaluation over a 2-year period, with 50% at risk based upon
the STI annual KPI scorecard result.
The incentives issued at the commencement of the remuneration cycle cover a 3-year period, however where additional
ZEPOs are issued, they will be evaluated over the remaining period of the remuneration cycle. ZEPOs issued during this
financial year will be evaluated over the remaining 2 years of the remuneration cycle.
If the executive ceases employment before the STI and LTI payment, they will lose the STI and any LTI award unless the
executive is a defined as a "Good Leaver". Where the executive is a "Good Leaver", a pro-rata award may be made, subject
to the Board's discretion (and would include consideration of the employment time served during the performance period
and the satisfaction of any agreed KPI). The executive loses the award on cessation of employment where they are
considered a "Bad Leaver". A good Leaver means:
37
De Grey Mining Limited
•
The Executive ceases to be employed by the Company because the Executive: dies or is permanently incapacitated
so that they are unable to perform their employment duties;
Is aged 60 or older and permanently retires from all employment;
•
• Validly terminates the Employment in accordance with its terms due to material breach by the Company;
• has the Employment terminated by the Company other than for reasons justifying summary dismissal, a material
breach of contract, underperformance or any other reason specified under the ESA; and/or
• Validly terminates the Employment because of a diminution of role after the Company undergoes a Change in
Control.
Additional LTI – Managing Director
The Managing Director also receives an annual LTI $100,000 in the form of performance rights, under his employment
agreement and issued on the following dates with an annual performance milestone of the Company’s Shares reaching a
price equal to or greater than 120% of the VWAP for the 10 trading days prior to the date of issue of the Performance
Rights, as well as remaining employed by the Company as Managing Director as at the annual date of satisfaction of the
milestone (15 September).
•
•
•
1st tranche – was issued in September 2020, milestone achieved, and performance rights vested;
2nd tranche – was issued in September 2021; milestone (being the achievement of a share price of $1.318) not
achieved, and performance rights forfeited; and
3rd tranche - was issued in September 2022, milestone assessment 15 September 2023.
This award was granted in 2021 following approval of Shareholders at the Annual General Meeting held 29th November
2021.The Company will be required to seek fresh Shareholder approval in order to issue further Performance Rights under
the terms of the Employment Agreement, beyond Tranche 3.
All STI and LTI’s have been awarded for the 2022 financial year except for the additional LTI, performance rights for the
Managing Director. To have earned that tranche, the share price needed to reach $1.318 during the 10 days prior to issue
date (15 September 2022).
No ZEPO’s awarded as LTI’s vested during the year, however 91,008 performance rights granted to Mr Glenn Jardine were
forfeited which represents 30% of the LTI opportunity to the Managing Director.
Other LTI granted in the 2017-2018 financial year
Issued and approved November 2017:
As at 30 June 2022, the remaining Tranche 4 is not yet vested, with the vesting condition being that “The Company securing
Project Financing for the Pilbara Gold Project at a minimum throughput of 1M tpa” and with an expiry date of 30 November
2022.
F. Executive service agreements
Remuneration and other terms of employment for the executive directors and other KMP are formalised in employment
or service agreements. The major provisions of the agreements relating to remuneration for the year ended 30 June 2022
are set out in the table below:
Name
Agreement
Glenn Jardine
Andrew Beckwith
Craig Nelmes
Patrick Holywell1
Peter Canterbury
Philip Tornatora
Service
Service
Service
Service
Service
Service
Base Salary
/Fees (p.a.)
$500,000
$325,000
$260,000
-
$375,000
$325,000
STI
Base
$175,000
$150,000
$60,000
-
$120,000
$120,000
LTI
Base
$325,000
$175,000
$80,000
-
$210,000
$180,000
Consulting/Hr
Duration
-
-
-
$140
-
-
Ongoing
Ongoing
Ongoing
Terminated¹
Ongoing
Ongoing
Notice
Period
3 months
3 months
3 months
1 month
3 months
3 months
Termination
6 months
6 months
6 months
1 month
3 months
3 months
1 Mr Holywell provided Company Secretarial services as a consultant under a service agreement and resigned on 17
December 2021
38
De Grey Mining Limited
G. Non-executive Director remuneration
The board policy is to remunerate non-executive directors at market rates for comparable companies for time,
commitment, and responsibilities. The board determines payments to the non-executive directors and reviews their
remuneration annually, based on market practice, duties and accountability.
Fees for non-executive directors are not linked to the performance of the Group. However, to align Directors’ interests
with shareholder interests, the non-executive directors may receive short term performance incentives and longer-term
performance incentives as approved by shareholders.
NED’s fees are determined within an aggregate NED fee pool limit, which is periodically approved by shareholders. The
maximum aggregate amount of fees that can be paid to non-executive directors is subject to approval by shareholders at
the Annual General Meeting. The last aggregate pool was approved at the AGM held in November 2021 and is currently
$1,500,000.
The annual remuneration for each non-executive director was set in the range of $150,000 - $200,000 per annum for the
2021-2022 financial year. These fees have been supported by independent advice from BDO Rewards (WA) Pty Ltd and
determined by the Board of the Company. The fees take into consideration factors such as the market rates of industry
peer companies, the current level of activity and the experience of the Directors. Where there is a significant change in the
size and scale of Company activities these annual fees will be reviewed. Where approved and at the request of the board,
any of the Non-Executive Directors may from time to time be required to fulfil certain executive functions.
The Non-Executive Directors can elect at the start of each financial year to receive up to a $50,000 portion of their annual
remuneration base fee in Share Rights under the Non-Executive Director Share Plan (NED Share Plan) and subject to
obtaining shareholder approval.
Specific to the 2021-22 financial year, Director Peter Hood made an election to receive a quantum of NED share rights
which were granted to the Non-Executive Directors after approved by shareholders was received at the AGM held on 29
November 2021, and at which meeting the NED Share Plan was also approved.
21,816 NED share rights were issued to Peter Hood and was determined by dividing an amount of $25,000 by the face
value of Shares (calculated as the 30 day VWAP as at 1 January 2022 of $1.14597). The maximum possible total value of
the NED share rights is the assessed fair value at the grant date of the NED Share Rights, calculated in accordance with
Accounting Standards.
The only vesting condition of this issue of NED share rights is that the individual remains a Non-Executive Director of the
Company on 30 June 2022, with pro rata reduction if the directorship ends for any reason prior to 30 June 2022.
Performance hurdles are not required on these rights as it is considered part of the fixed remuneration for services provided
by the NED.
Non-executive Directors Share Plan
The objective of the NED Share Plan is to attract, motivate and retain its non-executive directors and the Company considers
that the adoption of the Share Plan and the future issue of Shares Rights under the Share Plan will provide non-executive
directors with the opportunity to participate in the future growth of the Company.
39
H. Details of 2021-22 KMP remuneration
Details of the remuneration of the directors, the key management personnel of the Group.
Short-term
Post-Employment
Share Based Payments
Cash,
Salary &
Fees
$
Cash
Bonus1
$
Leave
Other
Termination
Payments
Super
Options
Performance/
Share Rights
$
$
$
$
$
$
$
$
%
181,819
124,201
-
-
-
-
-
-
-
-
18,181
11,799
-
103,800
17,132
17,235
De Grey Mining Limited
Long term
benefits
Long
Service
Leave
Total
% of
remuneration
Performance
Based
472,500
370,268
140,000
150,000
25,443
20,567
2022
2021
287,584
261,994
118,500
67,260
(4,148)
11,123
Directors
Simon Lill
Glenn Jardine
2022
2021
2022
2021
Andrew Beckwith
Samantha Hogg2
Peter Hood
2022
2021
2022
2021
57,867
-
117,045
85,845
Bruce Parncutt
2022
2021
136,364
85,845
Eduard Eshuys
2022
2021
Sub-total Directors
2022
2021
136,364
85,845
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,389,543
1,013,998
258,500
217,260
21,295
31,690
-
-
27,500
25,000
165,840
87,916
(25,957)4
155,355
-
-
27,500
24,889
138,452
208,649
13,705
13,788
-
-
-
-
5,787
-
7,955
8,155
-
-
13,636
8,155
-
-
13,636
8,155
-
-
-
41,520
-
41,520
-
41,520
-
-
27,161
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,322
-
8,814
-
-
-
-
-
-
-
-
-
217,132
257,035
808,648
809,106
590,407
587,703
63,654
-
152,161
135,520
150,000
135,520
150,000
135,520
8%
47%
35%
49%
46%
49%
0%
0%
18%
31%
0%
31%
0%
31%
-
-
114,195
86,153
304,292
524,925
32,041
186,378
12,136
-
2,132,002
2,060,404
40
De Grey Mining Limited
Long term
benefits
Long
Service
Leave
Total
% of
remuneration
Performance
Based
Short-term
Post-Employment
Share Based Payments
Leave
Other
Termination
Payments
Super
Options
Performance/
Share Rights
Cash,
Salary &
Fees
$
Cash
Bonus1
$
$
$
$
$
$
$
$
$
%
Other Executives
Craig Nelmes 5
2022
2021
232,500
219,178
101,200
-
14,331
10,959
Patrick Holywell3
2022
2021
6,780
62,040
3,000
-
-
-
Peter Canterbury
2022
2021
347,500
145,833
102,000
35,625
15,890
6,771
Philip Tornatora
2022
2021
297,500
257,230
100,800
95,200
19,452
18,821
Sub-total other executives
2022
2021
889,280
684,281
302,000
130,825
49,673
36,551
Total key management personnel compensation
2022
2021
2,278,823
1,698,279
560,500
348,085
70,968
68,241
-
-
-
-
-
-
-
-
-
-
-
-
-
-
27,500
20,822
63,292
36,068
10,279
10,341
5,712
-
-
-
-
-
27,444
2,256
-
-
27,500
-
150,873
57,055
-
-
27,500
24,437
113,978
54,102
-
-
-
-
-
-
-
-
82,500
45,259
355,587
149,481
10,279
10,341
-
-
952
-
11,898
-
18,562
-
454,814
297,368
37,224
64,296
644,715
245,284
571,128
449,790
1,707,881
1,056,738
-
-
196,695
131,412
659,879
674,406
42,320
196,719
30,698
-
3,839,883
3,117,142
37%
16%
82%
4%
39%
38%
38%
33%
¹The FY2022 bonus will be paid in the FY2023 reporting period.
2 Samantha Hogg commenced with the company on 28 January 2022.
3 Patrick Holywell resigned from the company on 17 December 2021.
4 Rights issued to Glenn Jardine are issued in 3 tranches, T1 140,846 vested in September 2021, T2 91,008 were forfeited in September 2022 and T3 94,738 should vest in September 2023. The number of rights to be issued for T2 and T3
have been adjusted for the actual issue. As the T2 rights were forfeited any amount previously recorded for these rights has been reversed in the current reporting period.
⁵ The bonus consists of the FY2021 bonus approved and paid in FY2022 reporting period of $55,000 (inclusive of 10% superannuation) and $46,200 bonus will be paid in the FY2023 reporting period.
41
De Grey Mining Limited
Shareholdings of Key Management Personnel
Opening
Balance
1 July 2021
Received on
exercise
of rights &/or
options3
Held at
resignation
Disposals
during the year
Other changes
during the year
Closing
Balance
30 June 2022
No.
No.
No.
No.
No.
No.
13,739,063
-
8,031,668
-
4,300,000
-
-
4,948,253
170,000
4,000
5,648,479
36,841,463
-
-
-
-
-
-
-
-
-
-
-
-
-
-
600,000
-
-
800,000
1,400,000
-
(170,000)
-
-
(170,000)
(500,000)
-
(1,985,000)
-
(850,000)
-
-
(555,000)
-
-
-
(3,890,000)
-
-
-
-
-
-
-
-
-
-
-
-
13,239,063
-
6,046,668
-
3,450,000
-
-
4,993,253
-
4,000
6,448,479
34,181,463
2022
Directors
Simon Lill
Glenn Jardine
Andrew Beckwith
Samantha Hogg1
Peter Hood
Bruce Parncutt
Eduard Eshuys
Other executives
Craig Nelmes
Patrick Holywell2
Peter Canterbury
Philip Tornatora
Total
1Samantha Hogg was appointed 28 January 2022 and at the time held nil shares.
2Patrick Holywell resigned 17 December 2021 and at the time held 170,000 shares.
3 Shares received on the exercise of options carried an exercise price of $0.35. The share price on the date of exercise was $1.405.
Option-holdings of Key Management Personnel
Opening
Balance
1 July 2021
Options
granted
during the
year
Options
exercised
during the
year
Options
Lapsed
during the
year
Closing
Balance
30 June 2022
Vested and
exercisable
30 June
20222
Held at
resignation
No.
No.
No.
No.
No.
No.
No.
130,566
553,454
659,896
-
52,227
52,227
52,227
827,058
325,714
547,422
1,140,587
4,341,378
-
47,971
-
-
-
-
-
-
-
55,966
95,942
-
-
-
-
-
-
-
(600,000)
-
-
(800,000)
199,879
(1,400,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(325,714)
-
-
130,566
601,425
659,896
-
52,227
52,227
52,227
227,058
-
603,388
436,529
130,566
-
163,207
52,227
52,227
52,227
-
-
-
-
(325,714)
2,815,543
450,454
2022
Directors
Simon Lill
Glenn Jardine
Andrew Beckwith
Samantha Hogg1
Peter Hood
Bruce Parncutt
Eduard Eshuys
Other executives
Craig Nelmes
Patrick Holywell2
Peter Canterbury
Philip Tornatora
Total
1Samantha Hogg was appointed 28 January 2022 and at the time held nil options.
2Patrick Holywell resigned 17 December 2021 and at the time held 325,714 options.
42
De Grey Mining Limited
Performance rights of Key Management Personnel
Opening
Balance
1 July 2021
Rights
granted
during the
year
Rights
exercised
during the
year
Rights
forfeited
during the
year
Other
changes
during the
year3
Closing
Balance
30 June 2022
Vested and
exercisable
30 June 2022
No.
No.
No.
No.
No.
No.
No.
500,000
723,632
400,000
-
-
-
-
300,000
-
-
-
1,923,632
-
-
-
-
21,816
-
-
-
-
-
-
21,816
-
-
-
-
-
-
-
-
-
-
-
-
-
(91,008)
-
-
-
-
-
-
-
-
-
(91,008)
-
(306,032)
-
-
-
-
-
-
-
-
-
(306,032)
500,000
326,592
400,000
-
21,816
-
-
300,000
-
-
-
1,548,408
-
140,846
-
-
21,816
-
-
-
-
-
-
162,662
2022
Directors
Simon Lill
Glenn Jardine
Andrew Beckwith
Samantha Hogg1
Peter Hood
Bruce Parncutt
Eduard Eshuys
Other executives
Craig Nelmes
Patrick Holywell2
Peter Canterbury
Philip Tornatora
Total
1Samantha Hogg was appointed 28 January 2022 and at the time held nil rights.
2Patrick Holywell resigned 17 December 2021 and at the time held nil rights.
3 Rights issued to Mr Jardine are issued in 3 tranches, T1 140,846 vested in September 2021, T2 91,008 have been forfeited in September 2022 and T3
94,738 should vest in September 2023. The number of rights to be issued for T2 and T3 have been adjusted for the actual issue.
I. Securities based compensation – options
The Company granted 199,879 (2021: 2,641,378) options over unissued ordinary shares during the financial year to
Directors and other key management personnel as part of their remuneration, as detailed in the table below:
Grant
Date
29 Nov 21
21 Dec 21
21 Dec 21
Expiry
Date
3 Dec 24
3 Dec 24
3 Dec 24
2022
Glenn Jardine
Peter Canterbury
Philip Tornatora
2021
Andrew Beckwith
10 Jul 2020
29 Jul 2022
Simon Lill
10 Jul 2020
29 Jul 2022
Eduard Eshuys
10 Jul 2020
29 Jul 2022
Bruce Parncutt
10 Jul 2020
29 Jul 2022
Peter Hood
10 Jul 2020
29 Jul 2022
Andrew Beckwith
4 Dec 2020
3 Dec 2024
Glenn Jardine
4 Dec 2020
3 Dec 2024
Philip Tornatora
4 Dec 2020
3 Dec 2024
Craig Nelmes
4 Dec 2020
3 Dec 2024
Patrick Holywell
31 May 2021
30 Jun 2022
Peter Canterbury
1 Feb 2021
3 Dec 2024
Value
per
option at
grant
date
(cents)
Exercise
Price
(cents)
Granted
Number
Value of
Options
Granted
Vesting Date
Number
Vested and
exercisable
in prior
periods
Maximum
expense to
be
recognised
in future
years
-
-
-
-
-
-
-
-
-
-
-
-
-
-
124.5
112.0
112.0
47,971
$59,724
55,966
$62,682
3 Dec 24
3 Dec 24
95,942
$107,455
3 Dec 24
-
-
-
48,159
51,577
88,416
163,207
$129,750
30 Jul 2020
130,566
$103,800
30 Jul 2020
52,227
$41,520
30 Jul 2020
52,227
$41,520
30 Jul 2020
52,227
$41,520
30 Jul 2020
496,689
$553,808
3 Dec 2024
553,454
$617,101
3 Dec 2024
340,587
$379,755
3 Dec 2024
227,058
$253,170
3 Dec 2024
25,714
$29,700
30 Jun 2022
547,422
$536,474
3 Dec 2024
163,207
130,566
52,227
52,227
52,227
-
-
-
-
-
-
-
-
-
-
-
474,910
529,185
325,652
217,102
27,444
479,418
79.5
79.5
79.5
79.5
79.5
111.5
111.5
111.5
111.5
115.5
98.00
43
De Grey Mining Limited
Options granted to Key management personnel under the shareholder approved Employee Option plans as both
compensation for their past performance and as a mechanism to retain key management personnel. Options are subject
to vesting conditions which are disclosed in Part B, Remuneration Policy.
J. Securities based compensation – performance rights
The Company granted 21,816 (2021: 723,632) performance rights over unissued ordinary shares during the financial year
to Directors and other key management personnel as part of their remuneration, as detailed in the table below:
Grant
Date
Expiry
Date
Value per
right at
grant date
(cents)
Granted
Number
Exercised
Number
Expired
Number
Vesting Date
Number
Vested at
end of
year
Maximum
expense to be
recognised in
future years
2022
Peter Hood
29 Nov 2021 31 Dec 2026
124.5
21,816
2021
Glenn Jardine
Glenn Jardine
10 Jul 2020
23 Sep 2023
10 Jul 2020
23 Sep 2024
69.2
33.3
140,8461
91,0081
-
-
-
-
30 Jun 2022
21,816
-
-
15 Sep 2021
140,846
15 Sep 2022
-
-
-
-
10 Jul 2020
1,604
Glenn Jardine
1 Rights issued to Mr Jardine are issued in 3 tranches, T1 140,846 vested in September 2021, T2 91,008 have been forfeited in September 2022 and
T3 94,738 should vest in September 2023. The number of rights to be issued for T2 and T3 have been adjusted on the actual issue. Refer to section B
above for further information.
15 Sep 2023
23 Sep 2025
94,7381
35.4
-
-
-
K. Other transactions and balances with Key Management Personnel
De Grey have entered into a number of contracts which resulted in transactions with key management personnel as follows.
Paid for promotional activities
Paid to relatives of Mr Beckwith
Paid to relatives of Mr Tornatora
2022
$
2021
$
9,961
86,715
81,651
-
95,323
78,500
• Victoria Lill provided promotional filming and corporate photography services. Victoria Lill is the daughter of Simon
Lill, the non-executive chairman of De Grey.
Where personnel are employed by De Grey and are considered a related party to key management personnel, those
transactions are entered into in the ordinary course of business at arm’s length.
• De Grey employed a relative of Mr Andrew Beckwith and a relative of Mr Phil Tornatora. None of these employees
reported directly to a KMP.
Terms and conditions of transactions with related parties
Outstanding balances at the yearend are unsecured and interest free and settlement occurs in cash and are presented as
part of trade payables.
----------- End of Audited Remuneration Report -----------
44
De Grey Mining Limited
Directors’ and Committee Meetings
The number of meetings of the Company’s Board of Directors and its committees held in the 12 months to 30 June 2022
and the number of meetings attended by each Director are as per the following table:
Directors Meetings
Audit & Risk
Committee1
Remuneration &
Nomination Committee2
Environment, Social
Governance Committee
Eligible
Attended
Eligible Attended
Eligible
Attended
Eligible
Attended
Simon Lill
Glenn Jardine
Andrew Beckwith
Samantha Hogg
Peter Hood
Eduard Eshuys
Bruce Parncutt
1The Committee Chair changed on 28 January 2022, when Peter Hood took over the role of Committee Chair, Samantha Hogg was appointed, with Eduard
Eshuys and Bruce Parncutt leaving the Committee. The Committee have both an Independent Chair as well as a composition consisting of a majority of
Independent Directors. The Committee Chair moved to Samantha Hogg from 24 March 2022.
1
n/a
n/a
1
1
1
n/a
4
n/a
n/a
2
4
4
2
4
n/a
n/a
2
4
4
2
4
n/a
n/a
2
4
4
2
1
n/a
n/a
1
1
1
n/a
4
n/a
n/a
2
4
4
2
11
11
11
4
11
11
11
11
11
11
4
11
11
11
2The Committee Chair changed from Eduard Eshuys to Peter Hood on 24 March 2022, with Samantha Hogg appointed and with Bruce Parncutt leaving
the Committee.
Share Options and Performance rights
At the date of this report there are 3,966,574 unissued ordinary shares in respect of which options are outstanding and
1,566,554 performance rights outstanding.
Type
Unlisted options
Unlisted options
Performance rights
Performance rights
Performance rights
Number
927,022
3,039,552
21,816
1,450,000
94,7381
Exercise Price
Nil cents
Nil cents
N/A
N/A
N/A
Expiry Date
31 July 2024
3 December 2024
31 December 2024
30 November 2022
23 September 2025
1 Rights issued to Mr Jardine are issued in 3 tranches, T1 140,846 vested in September 2021, T2 91,008 were forfeited in September 2022 and T3 94,738
should vest in September 2023. Refer to section B above for further information.
During the financial year 420,226 options were issued, 2,790,000 options were exercised, and 242,150 options were
forfeited. 112,824 performance rights were issued, none were exercised, and none expired. Since the end of the financial
year, 927,022 options have been issued and 1,811,544 options have been exercised. Since the end of the financial year
94,738 performance rights have been issued, 140,846 have been exercised and 91,008 have been forfeited.
No person entitled to exercise options and/or performance rights had or has any right by virtue of the option to participate
in any share issue of the Company or a right to vote at a shareholder meeting.
Insurance of Directors and Officers
During the financial year, De Grey paid a premium to insure the directors, officers and joint secretaries of the Company.
The total amount of insurance contract premiums paid is confidential under the terms of the insurance policy.
The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be brought
against the officers in their capacity as officers of the Company, and any other payments arising from liabilities incurred by
the officers in connection with such proceedings. This does not include such liabilities that arise from conduct involving a
wilful breach of duty by the officers or the improper use by the officers of their position or of information to gain advantage
for themselves or someone else or to cause detriment to the company. It is not possible to apportion the premium between
amounts relating to the insurance against legal costs and those relating to other liabilities.
45
De Grey Mining Limited
Indemnification of auditors
To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst & Young Australia, as part of the
terms of its audit engagement agreement against claims by third parties arising from the audit (for an unspecified amount).
No payment has been made to indemnify Ernst & Young Australia during or since the financial year.
Non-Audit Services
There were no non-audit services provided by the Group’s current auditor, Ernst & Young, or associated entities (refer Note
23) in the current year.
Proceedings on behalf of the Company
As at the date of this report there are no leave applications or proceedings booked on behalf of De Grey under section 237
of the Corporations Act 2001.
Environmental Regulation
The Group is subject to environmental regulation in respect to its exploration activities. The Group aims to ensure the
appropriate standard of environmental care is achieved, and in doing so, that it is aware of and compliant with all
environmental legislation. The directors of the Group are not aware of any breach of environmental legislation for the year
under review.
46
Auditor’s Independence Declaration
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out
on page 48.
De Grey Mining Limited
This report is made in accordance with a resolution of the Directors
Simon Lill
Non-Executive Chairman
Perth, 30 September 2022
Samantha Hogg
Chair of the Audit & Risk Committee
47
Ernst & Young
11 Mounts Bay Road
Perth WA 6000 Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222
Fax: +61 8 9429 2436
ey.com/au
Auditor’s independence declaration to the directors of
De Grey Mining Limited
As lead auditor for the audit of the financial report of De Grey Mining Limited for the financial year
ended 30 June 2022, I declare to the best of my knowledge and belief, there have been:
a. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
b. No contraventions of any applicable code of professional conduct in relation to the audit.
c. No non- audit services provided that contravene any applicable code of professional conduct in
relation to the audit.
This declaration is in respect of De Grey Mining Limited and the entities it controlled during the
financial year.
Ernst & Young
Pierre Dreyer
Partner
30 September 2022
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Consolidated Statement of Comprehensive Income
FOR THE YEAR ENDED 30 JUNE 2022
Notes
Consolidated
De Grey Mining Limited
REVENUE & OTHER INCOME
Revenue
Interest income
Other income
EXPENDITURE
Employee benefits expense
Share based payments expense
Compliance expenses
Corporate advisory and consulting expenses
Administration and other expenses
Depreciation and amortisation
Finance costs
LOSS BEFORE INCOME TAX
INCOME TAX EXPENSE
LOSS FOR THE YEAR
OTHER COMPREHENSIVE INCOME
Items that may be reclassified to profit or loss
Other comprehensive income for the year, net of tax
5
5
5
6/31
2022
$
2021
$
31,833
263,135
552,938
35,751
279,198
260,540
(3,770,003)
(2,395,810)
(692,768)
(430,879)
(2,293,149)
(1,640,221)
(161,786)
(2,294,547)
(1,043,414)
(422,972)
(548,389)
(777,046)
(636,426)
(102,964)
(10,536,710)
(5,250,269)
7
-
-
(10,536,710)
(5,250,269)
-
-
TOTAL COMPREHENSIVE LOSS FOR THE YEAR ATTRIBUTABLE TO EQUITY
HOLDERS OF DE GREY MINING LIMITED
(10,536,710)
(5,250,269)
Basic and diluted loss per share for loss attributable to the ordinary equity
holders of the company (cents per share)
30
(0.77)
(0.41)
The above Consolidated Statement of Comprehensive Income should be read in conjunction with the Notes to the
Consolidated Financial Statements.
49
Consolidated Statement of Financial Position
AT 30 JUNE 2022
Notes
Consolidated
De Grey Mining Limited
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories
Other assets
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Financial assets
Deferred exploration & evaluation expenditure
Property, plant and equipment
Right of use asset
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Lease liabilities
Employee benefit obligations
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Lease liabilities
Employee benefit obligations
Rehabilitation provision
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Reserves
Accumulated losses
TOTAL EQUITY
2022
$
63,494,235
1,878,079
279,071
1,308,943
66,960,328
24,866
233,963,542
8,815,213
1,843,584
244,647,205
2021
$
70,949,700
1,503,359
206,656
924,936
73,584,651
111,871
114,402,821
6,581,282
2,223,792
123,319,766
311,607,533
196,904,417
18,217,028
420,745
946,684
19,584,457
1,474,351
136,625
2,270,954
3,881,930
17,339,122
353,212
616,570
18,308,904
1,870,580
65,303
1,022,230
2,958,113
23,466,387
21,267,017
288,141,146
175,637,400
356,706,505
3,565,203
(72,130,562)
288,141,146
235,892,228
1,339,024
(61,593,852)
175,637,400
8
9
10
11
12
13
14
15
16
17
18
17
18
19
20
21
21
The above Consolidated Statement of Financial Position should be read in conjunction with the Notes to the Consolidated
Financial Statements.
50
De Grey Mining Limited
Consolidated Statement of Changes in Equity
FOR THE YEAR ENDED 30 JUNE 2022
Share Based
Contributed
Payments
Notes
Equity
Reserves
Accumulated
Losses
Consolidated
$
$
$
Total
$
BALANCE AT 30 JUNE 2021
235,892,228
1,339,024
(61,593,852)
175,637,400
Loss for the year
OTHER COMPREHENSIVE INCOME
TOTAL COMPREHENSIVE LOSS
TRANSACTIONS WITH OWNERS IN THEIR CAPACITY
AS OWNERS
Shares issued during the year
Share issue costs
Share based payments
Transfer of reserve on exercise/expiry of SBP
BALANCE AT 30 JUNE 2022
21(b)
20(a)
20(a)
21(a)
21(a)
-
-
-
-
-
-
(10,536,710)
-
(10,536,710)
(10,536,710)
-
(10,536,710)
125,976,620
(5,331,975)
-
169,632
356,706,505
-
-
2,395,811
(169,632)
3,565,203
-
-
-
-
(72,130,562)
125,976,620
(5,331,975)
2,395,811
-
288,141,146
BALANCE AT 30 JUNE 2020
130,713,404
862,609
(56,343,583)
75,232,430
Loss for the year
OTHER COMPREHENSIVE INCOME
TOTAL COMPREHENSIVE LOSS
TRANSACTIONS WITH OWNERS IN THEIR CAPACITY
AS OWNERS
21(b)
-
-
-
-
-
-
(5,250,269)
-
(5,250,269)
(5,250,269)
-
(5,250,269)
Shares issued during the year
Share issue costs
Share based payments
Share based reserve transfer – exercised
BALANCE AT 30 JUNE 2021
20(a)
20(a)
21(a)
21(a)
109,181,570
(4,569,745)
-
566,999
235,892,228
-
-
1,043,414
(566,999)
1,339,024
-
-
-
-
(61,593,852)
109,181,570
(4,569,745)
1,043,414
-
175,637,400
The above Consolidated Statement of Changes in Equity should be read in conjunction with the Notes to the Consolidated
Financial Statements.
51
Consolidated Statement of Cash Flows
De Grey Mining Limited
FOR THE YEAR ENDED 30 JUNE 2022
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Other income received
Payments to suppliers and employees
Interest payments
Interest received
NET CASH OUTFLOW FROM OPERATING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Option payments to acquire tenements
Proceeds from insurance
Payments for plant and equipment
Payments for exploration and evaluation expenditure
NET CASH OUTFLOW FROM INVESTING ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issues of ordinary shares
Payments of share issue transaction costs
Principal elements of lease payments
NET CASH INFLOW FROM FINANCING ACTIVITIES
Notes
Consolidated
2022
$
2021
$
29
36,542
469,843
(6,971,469)
(63,348)
248,465
(6,279,967)
-
-
(3,543,875)
(117,918,538)
(121,462,413)
125,976,620
(5,327,352)
(362,353)
120,286,915
(7,455,465)
70,949,700
63,494,235
27,664
327,622
(4,723,223)
(13,228)
273,892
(4,107,273)
(500,000)
36,800
(5,931,327)
(50,877,906)
(57,272,433)
108,864,570
(4,569,746)
(118,040)
104,176,784
42,797,078
28,152,622
70,949,700
NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS
Cash and cash equivalents at the beginning of the financial year
CASH AND CASH EQUIVALENTS AT THE END OF THE FINANCIAL YEAR
8
The above Consolidated Statement of Cash Flows should be read in conjunction with the Notes to the Consolidated Financial
Statements.
52
De Grey Mining Limited
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 June 2022
1. General Information and summary of significant accounting policies
De Grey Mining Limited is a company limited by shares, domiciled and incorporated in Australia. The registered office and
principal place of business of De Grey Mining Limited is Ground Floor, 2 Kings Park Road, West Perth, WA, 6005. De Grey’s
principal activity is focused on the 100% owned Mallina Gold project in the Pilbara region of WA, and includes the large scale,
high value, near surface 2019 Hemi gold discovery.
The financial statements are for the consolidated entity consisting of De Grey Mining Limited and its subsidiaries (“Group”)
and have been presented in Australian dollars rounded to the nearest dollar unless stated otherwise.
The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies
have been consistently applied to all the years presented, unless otherwise stated.
The financial statements were authorised for issue by the directors on 30 September 2022.
A. Basis of preparation
These general purpose financial statements have been prepared in accordance with the Corporations Act 2001, Australian
Accounting Standards, and other authoritative pronouncements of the Australian Accounting Standards Board (AASB). De
Grey Mining Limited is a for-profit entity for the purpose of preparing the financial statements.
(i) Compliance with IFRS
The financial report also complies with the International Financial Reporting Standards (IFRS) as issued by the International
Accounting Standards Board (IASB).
(ii) Historical cost convention
These financial statements have been prepared on a historical cost basis, except for certain financial assets which have been
measured at fair value through profit or loss.
(iii) New or amended Accounting Standards and Interpretations adopted
The Group has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian
Accounting Standards Board (‘AASB’) that are mandatory for annual periods beginning 1 July 2021. The adoption of these
Accounting Standards and Interpretations did not have any significant impact on the financial performance or position of the
Group during the financial year.
(iv) New and amended Accounting Standards and Interpretations issued but not yet adopted
Several Australian Accounting Standards and Interpretations, that have recently been issued or amended but are not yet
mandatory, have not been early adopted by the Group for the annual reporting period ended 30 June 2022. The Group is
assessing the impacts of the amendments; however, the amendments are not expected to have a material impact on the
Group.
AASB 2021-2 Amendments to AASB 7, AASB 101, AASB 134 Interim Financial Reporting and AASB Practice Statement 2 Making
Materiality Judgements15 – Disclosure of Accounting Policies
(effective 1 January 2023)
The amendments to AASB 101 Presentation of Financial Statements require disclosure of material accounting policy
information, instead of significant accounting policies. Unlike ‘material’, ‘significant’ was not defined in Australian Accounting
Standards. The guidance illustrates circumstances where an entity is likely to consider accounting policy information to be
material.
De Grey will consider where these amendments result in changes to the Group’s accounting policies and look to update any
required disclosure in line with the requirements outlined.
53
De Grey Mining Limited
AASB 2021-2 Amendments to AASB 108 – Definition of Accounting Estimates
(effective 1 January 2023)
The amendments to AASB 108 clarify the definition of an accounting estimate, making it easier to differentiate it from an
accounting policy. The new definition provides that ‘Accounting estimates are monetary amounts in financial statements
that are subject to measurement uncertainty.’
De Grey will consider where this amendment results in changes to the Group’s accounting policies and look to update any
required accounting treatments in line with the requirements outlined.
AASB 2020-1 Amendments to AASs – Classification of Liabilities as Current or Non-current
(Effective 1 January 2023)
A liability is classified as current if the entity has no right at the end of the reporting period to defer settlement for at least
12 months after the reporting period. These amendments to AASB 101 Presentation of Financial Statements clarify the
requirements for classifying liabilities as current or non-current. Specifically:
► The amendments specify that the conditions which exist at the end of the reporting period are those which will be used
to determine if a right to defer settlement of a liability exists.
► Management intention or expectation does not affect classification of liabilities.
► In cases where an instrument with a conversion option is classified wholly as a liability, the transfer of equity instruments
would constitute settlement of the liability for the purpose of classifying it as current or non-current. The classification of
liabilities between current and non-current can have important implications for key ratios, debt covenants etc.
Whilst not applicable to De Grey right now, De Grey will consider the amendments and their impact on the classification of
debt from future financing.
AASB 2020-3 Amendments to AASs – Annual Improvements 2018–2020 and Other Amendments
(effective 1 January 2022)
Provides amendments in:
► AASB 116, Property, Plant & Equipment: Proceeds before Intended Use – to prohibit an entity from deducting from the
cost of an item of property, plant & equipment, the proceeds from selling items produced before that asset is available for
use.
► AASB 141, Taxation in Fair Value Measurements – removed from AASB 141 the requirement to exclude taxation cash
flows when measuring fair value
De Grey will need to consider the impact once the project goes into development.
AASB 2021-5 Amendments to AASs – Deferred Tax related to Assets and Liabilities arising from a Single Transaction
(effective 1 January 2023)
The amendments to AASB 112 clarify that the initial recognition exception would not normally apply. That is, the scope of
this exception has been narrowed such that it no longer applies to transactions that, on initial recognition, give rise to equal
amounts of taxable and deductible temporary differences.
De Grey will consider where this amendment results in changes to the Group’s accounting policies and look to update any
required accounting treatments in line with the requirements outlined. The impact is still being determined.
(v) Going concern
The financial statements have been prepared on the going concern basis, which contemplates the continuity of normal
business activities and the realisation of assets and settlement of liabilities in the ordinary course of business.
Management have considered the funding and operational status of the business in arriving at their assessment of going
concern and believe that the going concern basis of preparation is appropriate.
54
De Grey Mining Limited
B. Principles of consolidation
Subsidiaries
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of De Grey Mining Limited
(“company” or “parent entity”) as at 30 June 2022 and the results of all subsidiaries for the year then ended. De Grey Mining
Limited and its subsidiaries together are referred to in this financial report as the Group or the consolidated entity.
Subsidiaries are entities the parent controls. The parent controls an entity when it is exposed to, or has rights to, variable
returns from its involvement with the entity and could affect those returns through its power over the entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from
the date that control ceases. The acquisition method of accounting is used to account for business combinations by the
Group.
Intercompany transactions, balances, and unrealised gains on transactions between Group companies are eliminated.
Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by
the Group.
Investments in subsidiaries are accounted for at cost in the separate financial statements of De Grey Mining Limited.
Changes in ownership interests
The Group treats transactions with non-controlling interests that do not result in a loss of control as transactions with equity
owners of the Group. A change in ownership interest results in an adjustment between the carrying amounts of the
controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any difference between the
amount of the adjustment to non-controlling interests and any consideration paid or received is recognised in a separate
reserve within equity attributable to owners of De Grey Mining Limited.
When the Group ceases to have control, joint control or significant influence, any retained interest in the entity is remeasured
to its fair value with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount
for the purposes of subsequently accounting for the retained interest as an associate, jointly controlled entity or financial
asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted
for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised
in other comprehensive income are reclassified to profit or loss.
C. Joint operations
A joint operation is an arrangement in which the Group shares joint control, primarily via contractual arrangements with
other parties. In a joint operation, the Group has rights to the assets and obligations for the liabilities relating to the
arrangement. This includes situations where the parties benefit from the joint activity through a share of the output, rather
than by receiving a share of the results of trading. In relation to the Group’s interest in a joint operation, the Group
recognises: its assets and liabilities, including its share of any assets and liabilities held or incurred jointly; revenue from the
sale of its share of the output and its share of any revenue generated from the sale of the output by the joint operation; and
its expenses including its share of expenses incurred jointly. All such amounts are measured in accordance with the terms of
the arrangement, which is usually in proportion to the Group’s interest in the joint operation. Details of the joint operations
are set out in Note 28.
D. Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision
maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the
operating segments, has been identified as the full Board of Directors.
55
De Grey Mining Limited
E. Foreign currency translation
Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary
economic environment in which the entity operates (‘the functional currency’). The consolidated financial statements are
presented in Australian dollars, which is De Grey Mining Limited’s functional and presentation currency.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of
the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the
translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised
in profit or loss.
F. Revenue recognition
Interest Revenue
Interest income is recognised as it accrues using the effective interest method.
G. Cash and cash equivalents
For the purposes of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits
held at call with financial institutions, other short-term highly liquid investments that are readily convertible to known
amounts of cash and which are subject to insignificant risk of changes in value.
H. Inventories
Inventories are valued at the lower of cost and net realisable value. Cost is determined on a weighted average basis. Any
provision for obsolescence or damage is determined by reference to specific stock items identified. The carrying value of
obsolete or damaged items is written down to net realisable value.
I.
Income tax
The income tax expense or revenue for the period is the tax payable on the current period’s taxable income based on the
applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to
temporary differences and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the
reporting period in the countries where the Company’s subsidiaries and associates operate and generate taxable income.
Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation
is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the
tax authorities.
Deferred income tax is provided in full, using the full liability method, on temporary differences arising between the tax bases
of assets and liabilities and their carrying amounts in the consolidated financial statements. However, the deferred income
tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business
combination that at the time of the transaction affects neither accounting nor taxable profit or loss.
Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the
reporting date and are expected to apply when the related deferred income tax asset is realised, or the deferred income tax
liability is settled.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilise those temporary differences and losses.
56
De Grey Mining Limited
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases
of investments in controlled entities where the parent entity is able to control the timing of the reversal of the temporary
differences and it is probable that the differences will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities
and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset
where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset
and settle the liability simultaneously.
De Grey Mining Limited and its wholly owned Australian resident entities are part of a tax-consolidated group under
Australian taxation law. De Grey Mining Limited is the head entity in the tax-consolidated group. Current tax liabilities and
assets and deferred tax assets arising from unused tax losses and tax credits of the members of the tax-consolidated group
are recognised by the Company (as head entity in the tax-consolidated group).
Members of the tax consolidated group have entered into a tax sharing agreement that provides for the allocation of income
tax liabilities between the entities should the head entity default on its tax payment obligations. No amounts have been
recognised in the financial statements in respect of this agreement on the basis that the possibility of default is remote.
Due to the existence of a tax funding arrangement between the entities in the tax-consolidated group, amounts are
recognised as payable to or receivable by the Company and each member of the Group in relation to the tax contribution
amounts paid or payable between the parent entity and the other members of the tax-consolidated group in accordance
with the arrangement. Further information about the tax funding arrangement is detailed in Note 7 to the financial
statements. Where the tax contribution amount recognised by each member of the tax consolidated group for a particular
period is different to the aggregate of the current tax liability or asset and any deferred tax asset arising from unused tax
losses and tax credits in respect of that period, the difference is recognised as a contribution from (or distribution to) equity
participants.
J. Financial instruments
Classification of financial instruments
The Group classifies its financial assets into the following measurement categories:
•
•
The classification depends on the Group’s business model for managing financial assets and the contractual terms of the
financial assets’ cash flows.
those to be measured at fair value (either through other comprehensive income, or through profit or loss); and
those to be measured at amortised cost.
The Group classifies its financial liabilities at amortised cost unless it has designated liabilities at fair value through profit or
loss or is required to measure liabilities at fair value through profit or loss such as derivative liabilities.
Measurement of financial instruments
Receivables
Receivables are measured at amortised cost where they have:
•
contractual terms that give rise to cash flows on specified dates, that represent solely payments of principal and interest
on the principal amount outstanding; and
are held within a business model whose objective is achieved by holding to collect contractual cash flows.
•
Trade receivables are initially recognised at the transaction price. Other receivables are initially recognised at fair value plus
directly attributable transaction costs and subsequently measured at amortised cost using the effective interest rate (EIR)
method. The measurement of credit impairment is based on the expected credit loss (ECL) model described below regarding
impairment of financial assets.
Equity instruments
Equity instruments held at fair value through profit or loss are initially recognised at fair value, with transaction costs
recognised in the income statement as incurred. Subsequently, they are measured at fair value and any gains or losses are
recognised in the income statement as they arise.
57
De Grey Mining Limited
Trade and other creditors
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year which
are unpaid. The amounts are unsecured and are paid on normal commercial terms.
All trade and other creditors are recognised initially at fair value and, in the case of payables, net of directly attributable
transaction costs.
For purposes of subsequent measurement, trade and other creditors are measured at amortised cost.
Impairment of financial assets
The Group recognises a loss allowance for expected credit losses on financial assets which are either measured at amortised
cost or fair value through other comprehensive income. The ECL is based on the difference between the contractual cash
flows due in accordance with the contract and all the cashflows that the Group expects to receive, discounted at an
approximation of the original EIR.
For trade and other receivables due in less than 12 months, the Group recognises a loss allowance based on the financial
asset’s lifetime ECL at each reporting date. The Group establishes a provision matrix for these receivables that is based on
its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic
environment as sales from product eventuate or significant receivables come to hand.
The Group considers a financial asset in default when contractual payments are 60 days past due. In certain cases, the Group
may consider a financial asset to be in default when internal or external information indicates that the Group is unlikely to
receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group.
A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows and usually
occurs when past due for more than one year and not subject to enforcement activity.
Recognition and derecognition of financial instruments
A financial asset or financial liability is recognised in the statement of financial position when the Group becomes a party to
the contractual provisions of the instrument, which is generally on trade date.
The Group derecognises a financial asset when the contractual cash flows from the asset expire or it transfers its rights to
receive contractual cash flows from the financial asset in a transaction in which substantially all the risks and rewards of
ownership are transferred. Any interest in transferred financial assets that is created or retained by the Group is recognised
as a separate asset or liability.
A financial liability is derecognised from the statement of financial position when the Group has discharged its obligations,
or the contract is cancelled or expires.
Offsetting
Financial assets and liabilities are offset and the net amount is presented in the balance sheet when the Group has a legal
right to offset the amounts and intends to settle on a net basis or to realise the asset and settle the liability simultaneously.
K. Property, plant and equipment
Each class of plant, equipment and motor vehicle is carried at historical cost less, where applicable, any accumulated
depreciation and impairment losses. Cost includes expenditure that is directly attributable to the asset.
The carrying amounts are reviewed annually by Directors to ensure it is not more than the estimated recoverable amount
from these assets. The recoverable amount is assessed based on the expected net cash flows that will be received from the
asset’s employment and subsequent disposal. The expected net cash flows have been discounted to their present values in
determining recoverable amounts and an asset’s carrying amount is written down immediately to its recoverable amount if
the asset’s carrying amount is greater than its estimated recoverable amount.
58
Depreciation of property, plant and equipment is calculated using the straight line or reducing balance method to allocate
their cost, net of their residual values, over their estimated useful lives, as follows:
De Grey Mining Limited
Plant and Equipment
Furniture and fittings
Computers
Motor Vehicles
Land and buildings
4% - 50%
5% - 50%
20% - 50%
17% - 40%
5% - 30%
Straight line
Straight line
Straight line
Reducing balance
Straight line
The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each
reporting date.
L. Leases – group as lessee
An assessment is made, at inception or when contract terms are changed, to determine whether the contract is, or contains,
a lease. A contract is or contains a lease if the contract conveys a right to control the use of an identified asset for a period
of time in exchange for consideration.
Right-of-use assets
The Group recognises all right of use assets, except for leases that are short-term (12 months or less) and low value leases
at the lease commencement date. Right-of-use assets are measured at cost, less any accumulated depreciation and
impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the
amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement
date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the
lease term and the estimated useful lives of the assets.
If ownership of the leased asset transfers to the Group at the end of the lease term or the cost reflects the exercise of a
purchase option, depreciation is calculated using the estimated useful life of the asset.
The right-of-use assets are also subject to impairment.
Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease
payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed
payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts
expected to be paid under residual value guarantees. The lease payments also include lease extension options and the
exercise price of a purchase option that are reasonably certain to be exercised by the Group and payments of penalties for
terminating the lease, if the lease term reflects the Group exercising the option to terminate.
Variable lease payments that do not depend on an index or a rate are recognised as expenses (unless they are incurred to
produce inventories) in the period in which the event or condition that triggers the payment occurs.
The present value of future lease payments is determined by discounting future lease payments using the interest rate
implicit in the lease or, if that rate cannot be determined, then the Group’s incremental borrowing rate, which is generally
the case.
The present value of the lease liability is increased by the interest cost and decreased by the lease payment each period over
the life of the lease. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in
the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate
used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset
Short-term leases and leases of low-value assets
For leases that are short-term (12 months or less) and/or low value asset leases at the lease commencement date, the Group
recognises the lease payments as an operating expense on a straight-line basis over the term of the lease unless another
systematic basis is more representative of the time pattern in which economic benefits from the leased assets are consumed.
59
M. Deferred exploration & evaluation expenditure
De Grey Mining Limited
Exploration and evaluation expenditures in relation to each separate area of interest are recognised as an exploration and
evaluation asset in the year in which the expenditure is incurred where:
•
•
The Group has secured (or has the legal right to) tenure, and/or the legal rights to explore an area of interest; and
Exploration and evaluation activities in the area of interest have not at the end of the reporting period 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; or
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.
•
Where the conditions outlined are not met in relation to specific area(s) of interest, then those exploration and evaluation
costs are expensed as incurred.
If an area of interest is abandoned or if the Directors consider the expenditure to be of reduced value, accumulated costs
carried forward are written off or impaired in the year in which that assessment is made. A regular review is undertaken of
each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest.
When a decision is made to proceed with development in a particular area of interest, the relevant exploration and
evaluation asset is tested for impairment and the balance is transferred to mine properties under development.
N. Employee benefits
Wages and salaries and other short-term benefits
Liabilities for wages and salaries, including non-monetary benefits are measured at the amounts expected to be paid when
the liabilities are settled.
The liability for annual leave is recognised in the provision for employee benefits. All other short-term employee benefit
obligations are presented as payables.
Other long-term employee benefits
The Group’s liabilities for long service leave are included in other long-term benefits as they are not expected to be settled
wholly within twelve (12) months after the end of the period in which the employees render the related service. They are
measured using the projected unit credit valuation method. The expected future payments incorporate anticipated future
wage and salary levels, experience of employee departures and periods of service, and are discounted at rates determined
by reference to market yields at the end of the reporting period on high quality corporate bonds that have maturity dates
that approximate the timing of the estimated future cash outflows. Any re-measurements arising from experience
adjustments and changes in assumptions are recognised in profit or loss in the periods in which the changes occur.
The Group presents employee benefit obligations as current liabilities in the statement of financial position if the Group does
not have an unconditional right to defer settlement for at least twelve (12) months after the reporting period, irrespective
of when the actual settlement is expected to take place.
60
De Grey Mining Limited
O. Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is
probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated.
Provisions are not recognised for future operating losses.
Rehabilitation provision
Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the
present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate
that reflects current market assessments of the time value of money and the risks specific to the liability to the extent the
estimated future cashflows have not been adjusted for the risks
Rehabilitation costs include the dismantling and removal of mining plant, equipment and building structures, waste removal
and rehabilitation of the site in accordance with the requirements of the mining permits. Such costs are determined using
estimates of future costs, current legal requirements, and technology.
Rehabilitation costs are recognised in full at present value as a non-current liability. An equivalent amount is capitalised as
part of the cost of the asset when an obligation arises to decommission or restore a site to a certain condition after
abandonment because of bringing the assets to its present location. The capitalised cost is amortised over the life of the
project and the provision is accreted periodically as the discounting of the liability unwinds. The unwinding of the discount
is recorded as a finance cost.
Any changes in the estimates for the costs or other assumptions against the cost of relevant assets are accounted for on a
prospective basis. In determining the costs of site restoration there is uncertainty regarding the nature and extent of the
restoration due to community expectations and future legislation.
P. Contributed equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are
shown in equity as a deduction, net of tax, from the proceeds.
Q. Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to owners of the company, excluding any costs of
servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the
financial year, adjusted for bonus elements in ordinary shares issued during the year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the
after-income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the
weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential
ordinary shares.
61
De Grey Mining Limited
R. Share-based payments
The Group provides benefits to employees (including directors) of the Group in the form of share-based payment
transactions, whereby employees render services in exchange for shares or rights over shares (‘equity-settled transactions’),
refer to Note 31.
The cost of these equity-settled transactions with employees is measured by reference to the fair value at the date at which
they are granted. The fair value is determined by a combination of internal and external sources using a Black-Scholes option
pricing model and independent third-party valuations.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in
which the performance conditions are fulfilled, ending on the date on which the relevant employees become fully entitled
to the award (‘vesting date’).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects (i) the
extent to which the vesting period has expired and (ii) the number of options that, in the opinion of the directors of the
Group, will ultimately vest. This opinion is formed based on the best available information at balance date. No adjustment is
made for the likelihood of market performance conditions being met as the effect of these conditions is included in the
determination of fair value at grant date.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a
market condition. Where awards are forfeited because non-market-based vesting conditions are not satisfied, the expense
previously recognised is reversed.
Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not
yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled award and
designated as a replacement award on the date that it is granted, the cancelled and new award are treated as if they were a
modification of the original award.
Options over ordinary shares have also been issued as consideration for the acquisition of interests in tenements and other
services. These options have been treated in the same manner as employee options described above, with the expense being
included as part of exploration expenditure.
S. Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part
of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable
from, or payable to, the taxation authority is included with other receivables or payables in the statement of financial
position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities
which are recoverable from, or payable to the taxation authority, are presented as operating cash flows.
62
De Grey Mining Limited
T. Significant accounting judgements estimates and assumptions
The preparation of the Group’s consolidated financial statements requires management to make judgements, estimates and
assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, the accompanying disclosures,
and the disclosure of contingent liabilities at the date of the consolidated financial statements. Estimates and assumptions
are continually evaluated and are based on management’s experience and other factors, including expectations of future
events that are believed to be reasonable under the circumstances. Uncertainty about these assumptions and estimates
could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future
periods.
In particular, the Group has identified a number of areas where significant judgements, estimates and assumptions are
required. Further information on each of these areas and how they impact the various accounting policies are described and
highlighted separately with the associated accounting policy note within the related qualitative and quantitative note, as
described below.
These include:
• Deferred exploration and evaluation expenditure – Note 13
• Right of use asset & lease liability – Note 15 & 17
• Rehabilitation provision – Note 19
Share based payments – Note 31.
•
2. Financial Risk Management
The Group’s exposure to a variety of financial risks that may affect the Group’s future financial performance. The Board has
the overall responsibility for the establishment, with the Audit and Risk Committee having oversight of all risk management
policies.
The Committee reports periodically to the Board on its activities and with the assistance of senior management team are
responsible for identifying, assessing, treating, and monitoring risks and risk management policies. The Committee oversees
management’s compliance monitoring processes as well as reviewing the adequacy of the risk management framework in
relation to the risks faced by the Group.
Risk management policies and systems are reviewed regularly by the senior management team to reflect changes in market
conditions and the Group’s activities. The Group aims to develop a disciplined and constructive control environment in which
all employees understand their roles and obligations.
A. Market risk
Foreign exchange risk
The Group’s operations are in Australia and currently has limited exposures to foreign exchange risk arising from foreign
currency transactions.
Foreign exchange risk arises from recognising assets and liabilities denominated in a currency that is not the functional
currency of the relevant entity. The Company has a holding of Canadian dollar listed securities.
Financial assets at fair value through the profit or loss
Consolidated Total
2022
$
2021
$
24,866
24,866
111,871
111,871
The sensitivity of profit or loss to changes in the exchange rates arises mainly from Canadian dollar-denominated financial
instruments. A 10 percent increase in the AUD/CAD exchange rate would increase post tax loss by $2,261 (2021: $10,170),
while a 10 percent decrease in the AUD/CAD exchange rate would decrease post tax loss by $2,763 (2021: $12,430).
63
De Grey Mining Limited
Price risk
The Group’s listed and equity investments are susceptible to market price risk arising from uncertainties about future values
of the investment securities. The Group manages the market price risk by placing limits on individual and total equity
instruments.
At the reporting date, the exposure to equity investments at fair value listed on the TSX was CAD $22,051 (2021: CAD
$104,241). Given that the changes in fair values of the equity investments held are strongly positively correlated with changes
of the TSX market index, the Group has determined that an increase/(decrease) of 10% on the TSX market index could have
an impact of $2,487 (2021: $11,187) increase/(decrease) on the income and equity attributable to the Group.
Interest rate risk
The Group is exposed to movements in market interest rates on cash and cash equivalents. The Group policy is to monitor
the interest rate yield curve out to six months to ensure a balance is maintained between the liquidity of cash assets and the
interest rate return.
The balance of cash and cash equivalents for the Group of $63,494,235 (2021: $70,949,700) is subject to interest rate risk.
The proportional mix of floating interest rates and fixed rates to a maximum of six months fluctuate during the year
depending on current working capital requirements. The weighted average interest rate received on cash and cash
equivalents by the Group was 0.39% (2021: 0.56%).
Sensitivity analysis
At 30 June 2022, if interest rates had changed by -/+ 100 basis points from the weighted average rate for the year with all
other variables held constant, post-tax loss for the Group would have been $672,220 lower or $263,135 higher (2021:
$247,756 lower/higher) as a result of lower/higher interest income from cash and cash equivalents.
B. Credit risk
Credit risk refers to the risk that a counter party will default on its contractual obligation resulting in financial loss to the
Group.
(i) Risk management
The Group has adopted the policy of dealing with creditworthy counterparties as a means of mitigating the risk of financial
loss from a counterparty not meeting its obligations. Customer receivables have 30-day payment term and outstanding
receivables are regularly monitored. Cash is deposited only with institutions approved by the Board and typically with a
current minimum credit rating of A (or equivalent) as determined by a reputable credit rating agency. The Group has
established a policy of having aggregate funds on term deposit or invested in money markets allocated across financial
counterparties. The carrying amount of the Group’s financial assets represents the maximum credit risk exposure.
Trade receivables
Counterparties without external credit rating – other
Total trade receivables
Cash and cash equivalents
A + external credit rating
A – external credit rating
Total cash and cash equivalents
Consolidated
2022
$
2021
$
100,639
100,639
13,546
13,546
63,494,235
-
63,494,235
64,904,307
6,045,393
70,949,700
(ii) Impaired trade receivables
In determining the recoverability of trade and other receivables, the Group performs a risk analysis using a provision matrix
to measure expected credit losses. The provisions rates are based on the type and age of the outstanding receivable and the
creditworthiness of the counterparty. The calculation reflects the probability-weighted outcome, the time value of money
and reasonable and supportable information that is available at the reporting date about past events, current conditions and
forecasts of future economic conditions. If appropriate, an impairment loss is recognised in profit or loss. The Group does
not have any impaired trade and other receivables as at 30 June 2022 (2021: nil).
64
De Grey Mining Limited
C. Liquidity risk
The Group manages liquidity risk by monitoring the immediate and forecasted cash requirements and ensures that adequate
cash reserves and/or marketable securities are available to pay debts as and when due.
The Group’s primary activities are currently mineral exploration. Prudent liquidity risk management implies maintaining
sufficient cash and marketable securities as the Group does not have ready access to credit facilities at this stage of its life
cycle. Management regularly monitors its rolling cash forecasts and the state of equity markets in initiating the timing of
capital raisings for its future funding requirements.
Maturities of financial liabilities
An analysis of the Group’s financial liabilities into relevant maturity groupings based on their contractual maturities and on
the basis of the contractual undiscounted cash flows as presented in the table that follows.
As at 30 June 2022
Trade and other payables
Lease liabilities
Total non-derivatives
As at 30 June 2021
Trade and other payables
Lease liabilities
Total non-derivatives
D. Fair value estimation
Less than
6 months
$
6 – 12
months
$
1 – 2
Years
$
2 – 5
years
$
Total
$
17,676,778
235,922
17,912,700
17,339,122
190,875
17,529,997
-
235,922
235,922
-
229,051
229,051
-
486,000
486,000
-
1,060,432
1,060,432
17,676,778
2,018,276
19,695,054
-
471,844
471,844
-
1,546,432
1,546,432
17,339,122
2,438,202
19,777,324
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure
purposes. All financial assets and financial liabilities of the Group at the balance date are recorded at amounts approximating
their fair value. The fair value of financial instruments traded in active markets is based on quoted market prices at the
reporting date. The quoted market price used for financial assets held by the Group is the current bid price.
Movements in the fair value of financial assets and liabilities may be recognised through the consolidated statement of
comprehensive income.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the
fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as
a whole:
•
•
Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is
directly or indirectly observable
Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is
unobservable
•
The financial assets and liabilities are presented by class in the table below at their carrying amounts.
Financial assets
Investment in listed shares
Level 1
Fair value through profit and loss
24,866
111,871
Fair value
hierarchy
AASB 9 classification
2022
$
2021
$
There have been no transfers between fair value levels during the reporting period.
The carrying value of trade receivables and payables approximate their fair values due to their short-term nature.
65
De Grey Mining Limited
3. Capital management
For the purpose of the Group’s capital management, capital includes issued capital, and all other equity reserves attributable
to the equity holders of the parent. The Group’s objectives when managing capital are to safeguard their ability to continue
as a going concern, so that they may continue to provide returns for shareholders and benefits for other stakeholders.
Due to the nature of the Group’s activities, being mineral exploration, the Group does not have ready access to credit
facilities, with the primary source of funding being equity raisings. Therefore, the focus of the Group’s capital risk
management is the current working capital position against the requirements of the Group to meet exploration programmes
and corporate overheads.
The Group’s strategy is to ensure appropriate liquidity is maintained to meet anticipated operating requirements, with a
view to initiating appropriate capital raisings as required. The working capital position of the Group at 30 June 2022 and 30
June 2021 are as follows:
Cash and cash equivalents
Trade and other receivables
Trade and other payables
Working capital position
4. Segment Information
Consolidated
2022
$
2021
$
63,494,235
1,878,079
(18,217,028)
70,949,700
1,503,359
(17,339,122)
47,155,286
55,113,937
Management has determined the operating segments based on the reports reviewed by the Board of Directors that are used
to make strategic decisions. For management purposes, the Group has identified one reportable operating segment being
exploration activities undertaken in one geographical segment being Australasia. This segment includes the activities
associated with the determination and assessment of the existence of commercial economic reserves, from the Group’s
mineral assets in the sole geographic location.
5. Revenue and other income
Revenue
Revenue
Interest income
Other Income
EIS Grant
Gain sale of assets
Other income
Consolidated
2022
$
2021
$
31,833
263,135
-
-
552,938
847,906
35,751
279,198
22,775
7,200
230,565
575,489
66
6. Expenses
Loss before income tax includes the following specific expenses:
Contributions to superannuation funds
Lease liability – interest charge
Share based payments – options
Share based payments – performance rights
Loss on Change in fair value of investment
31
31
7. Income tax
(a) Income tax expense
Current tax expense
Deferred tax expense
Total Income tax expense per income statement
De Grey Mining Limited
Consolidated
2022
$
2021
$
459,651
57,573
2,226,375
169,436
87,005
718,030
13,228
892,717
150,697
89,405
Consolidated
2022
$
2021
$
-
-
-
-
-
-
(b) Numerical reconciliation between tax expense and pre-tax net loss
Net loss before tax
(10,536,710)
(5,250,269)
Corporate tax rate applicable 30% (2021: 30%)
30%
30%
Income tax benefit on above at applicable corporate tax rate
(3,161,013)
(1,575,081)
Increase/(decrease) in income tax due to tax effect of:
Share based payments expense
Non-deductible expenses
Deductible temporary differences not recognised
Non-assessable income
Effect of Tax rate change at 30%
(c) Recognised deferred tax assets and liabilities
Deferred tax assets
Employee provisions
Other provisions and accruals
Rehabilitation assets and liabilities
ROU assets
Tax losses
Set-off deferred tax liabilities
Net deferred tax assets
67
718,743
18,787
2,423,483
-
-
-
30%
306,079
174,410
-
15,454
65,402,901
65,898,843
313,024
45,603
1,227,704
(11,250)
-
-
30%
204,562
10,736
306,669
-
29,921,240
30,443,207
(65,898,843)
-
(30,443,207)
-
Deferred tax liabilities
Prepayments
Exploration & mine properties
Unearned Income
Gross deferred tax liabilities
Set-off of deferred tax assets
Net deferred tax liabilities
(d) Unused tax losses and temporary differences for which no deferred tax
asset has been recognised
Deductible temporary differences
Tax revenue losses
Tax capital losses
Total unrecognised deductible temporary differences
De Grey Mining Limited
Consolidated
2022
$
2021
$
(33,967)
(65,850,853)
(14,023)
(65,898,843)
-
(30,433,585)
(9,622)
(30,443,207)
65,898,843
-
30,443,207
-
30%
30%
2,565,666
20,008,838
77,100
22,651,604
1,750,095
16,693,707
-
18,443,802
The corporate tax rates on both recognised and unrecognised deferred tax assets and deferred tax liabilities have been
calculated with respect to the tax rate that is expected to apply in the year the deferred tax asset is realised, or the liability
is settled.
(e) Tax consolidation
Effective 1 July 2004, for the purposes of income taxation, De Grey Mining Limited and its 100% owned Australian subsidiaries
formed a tax consolidated group. The head entity of the tax consolidated group is De Grey Mining Limited. Members of the
group have entered a tax sharing arrangement that provides for the allocation of income tax liabilities between the entities
should the head entity default on its tax payment obligations. At the balance date, the possibility of default is remote.
Measurement method adopted under AASB Interpretation 1052 Tax Consolidation Accounting
De Grey Mining Limited and the controlled entities in the tax consolidated group continue to account for their own current
and deferred tax amounts. The Group has applied the group allocation approach in determining the appropriate amount of
current taxes and deferred taxes to allocate to members of the tax consolidated group. The current and deferred tax amounts
are measured in a systematic manner that is consistent with the broad principles in AASB 112 Income Taxes.
In addition to its own current and deferred tax amounts, De Grey Mining Limited also recognises current tax liabilities (or
assets) and the deferred tax assets arising from unused tax losses and unused tax credits assumed from controlled entities
in the tax consolidated group.
The entities have also entered into a tax funding agreement under which the wholly owned entities fully compensate De
Grey Mining Limited for any current tax payable assumed and are compensated by De Grey Mining Limited for any current
tax receivable and deferred tax assets relating to unused tax losses or unused tax credits that are transferred to De Grey
Mining Limited under the tax consolidation legislation. The funding amounts are determined by reference to the amounts
recognised in the wholly owned entities’ financial statements.
The amounts receivable/payable under the tax funding agreement are due upon receipt of the funding advice from the head
entity, which is issued as soon as practicable after the end of each financial year. The head entity may also require payment
of interim funding amounts to assist with its obligations to pay tax instalments. The funding amounts are recognised as
current intercompany receivables or payables. Subsidiaries will recognise any current tax expense equal to the current tax
liability and be charged through intercompany by the head entity.
(f) Franking credits
The company has no franking credits available for use in future years (2021: Nil).
68
8. Cash and cash equivalents
Cash at bank & on hand (i)
Short-term deposits (ii)
De Grey Mining Limited
Consolidated
2022
$
2021
$
32,056,853
31,437,382
63,494,235
52,427,074
18,522,626
70,949,700
(i) Cash at bank earns interest at floating rates based on daily bank deposit rates.
(ii) Short term deposits held for the purposes of meeting short term cash commitments of the Group are made for varying periods typically
between one day and three months depending on the immediate cash requirements of the Group. If the short-term deposits have an
original maturity greater than three months, principal amounts must be able to be redeemed in full prior to scheduled maturity with
no significant penalty otherwise the deposits will be classified as other financial assets. The weighted average interest rate achieved
for the year was 0.39% (2021: 0.56%).
9. Trade and other receivables
Trade and other receivables
GST receivable (net)
Accrued interest
Consolidated
2022
$
257,069
1,574,268
46,742
1,878,079
2021
$
536,931
934,356
32,072
1,503,359
As the majority of receivables are short term in nature, their carrying amount approximates fair value. Trade and other
receivables are measured at amortised cost as the SPPI test is satisfied. Receivables are generally due for settlement within
30 days and held for the business model of collecting contractual cash flows.
10.
Inventories
Diesel fuel inventories
11. Other assets
Prepayment – other (i)
Advances & deposits
Consolidated
2022
$
2021
$
279,071
279,071
206,656
206,656
Consolidated
2022
$
2021
$
1,308,943
-
1,308,943
918,388
6,548
924,936
(i)
Prepayments – other includes prepaid insurance premiums for the period 1 July 2022 to 30 April 2023.
69
12. Financial assets
Financial assets at fair value through profit or loss
Canadian (TSX-V) listed equity securities (i) (ii)
De Grey Mining Limited
Consolidated
2022
$
2021
$
24,866
24,866
111,871
111,871
(i) The financial assets are presented as non-current assets unless management intends to dispose of them within 12 months of the end
of the reporting period.
(ii) Financial assets are valued at the quoted closing share price as at reporting date, being CAD $0.44 (2021: CAD $2.08). During the year,
a loss of $87,005 (2021: loss of $89,405) was recognised in the consolidated statement of comprehensive income (Note 5).
13. Deferred exploration & evaluation expenditure
Beginning of financial year
Exploration expenditure - all areas of interest (i)
Tenement acquisition
Rehabilitation additions
Fuel Tax credit offset
Consolidated
2022
$
2021
$
114,402,821
119,756,940
-
1,248,724
(1,444,943)
233,963,542
48,938,399
65,908,260
817,000
-
(1,260,838)
114,402,821
(i) The Group has capitalised all costs associated with The Mallina Project. The 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.
(ii) At 30 June 2022, the Group conducted an assessment to determine whether there were any indicators of impairment in relation to
the carrying value of its capitalised deferred exploration and evaluation expenditure. No indicators of impairment were present and
therefore the Group did not impair any previously capitalised expenditure (2021: $Nil).
Significant judgements, estimates and assumptions
The application of the Group’s accounting policy for E&E expenditure requires judgement to determine whether future
economic benefits are likely from either future exploitation or sale, or whether activities have not reached a stage that
permits a reasonable assessment of the existence of reserves.
In addition to applying judgement to determine whether future economic benefits are likely to arise from the Group’s E&E
assets or whether activities have not reached a stage that permits a reasonable assessment of the existence of reserves, the
Group has to apply a number of estimates and assumptions. The determination of a JORC (The Australasian Code for
Reporting of exploration results, mineral resources and ore reserves) resource is itself an estimation process that involves
varying degrees of uncertainty depending on how the resources are classified (i.e., measured, indicated or inferred). The
estimates directly impact when the Group defers E&E expenditure.
The deferral policy requires management to make certain estimates and assumptions about future events and circumstances,
particularly, whether an economically viable extraction operation can be established. Any such estimates and assumptions
may change as new information becomes available. If, after expenditure is capitalised, information becomes available
suggesting that the recovery of expenditure is unlikely, the relevant capitalised amount is written off to the statement of
profit or loss and other comprehensive income in the period when the new information becomes available.
70
De Grey Mining Limited
14. Property, plant and equipment
2022
Gross carrying amount – at cost
Accumulated depreciation
Net book amount
Property, plant and equipment
movement 2022
Opening net book amount
Additions
Depreciation charge
Closing net book amount
Plant &
Equipment
Computer
Equipment
Furniture &
Fittings
Motor
Vehicles
Land &
Buildings
Medical
Equipment
Assets in
Progress
$
$
$
$
$
$
$
Total
$
Consolidated
2,205,161
(699,309)
1,505,852
931,135
(412,929)
518,206
778,821
(155,578)
623,243
1,706,303
(534,247)
1,172,056
842,099
(432,135)
409,964
1,850
(307)
1,543
4,584,349 11,049,718
(2,234,505)
8,815,213
-
4,584,349
939,917
909,162
(343,227)
1,505,852
332,469
445,019
(259,282)
518,206
93,690
654,665
(125,112)
623,243
1,213,417
259,596
(300,957)
1,172,056
607,433
-
(197,469)
409,964
-
1,850
(307)
1,543
3,394,356
1,189,993
-
4,584,349
6,581,282
3,460,285
(1,226,354)
8,815,213
Plant &
Equipment
Computer
Equipment
Furniture &
Fittings
Motor
Vehicles
Land &
Buildings
Medical
Equipment
Assets in
Progress
$
$
$
$
$
$
$
Total
$
Consolidated
2021
Gross carrying amount – at cost
1,295,999
486,116
124,156
1,446,707
842,099
Accumulated depreciation
(356,082)
(153,647)
(30,466)
(233,290)
(234,666)
Net book amount
939,917
332,469
93,690
1,213,417
607,433
Property, plant and equipment
movement 2021
Opening net book amount
Additions
Completion of assets in progress
Assets written off
Depreciation charge
Closing net book amount
204,895
898,641
-
-
(163,619)
939,917
122,360
304,692
-
-
(94,583)
332,469
36,698
78,664
-
-
(21,672)
93,690
427,444
965,214
-
(29,600)
(149,641)
1,213,417
507,782
31,586
172,641
-
(104,576)
607,433
-
-
-
-
-
-
-
-
-
3,394,356
7,589,433
-
(1,008,151)
3,394,356
6,581,282
155,826
3,411,171
(172,641)
-
-
3,394,356
1,455,005
5,689,968
-
(29,600)
(534,091)
6,581,282
71
15. Right of use asset
Right of use asset – office premises
Gross carrying amount (i)
Accumulated depreciation
Net book amount
De Grey Mining Limited
Consolidated
2022
$
2021
$
2,257,449
(413,865)
1,843,584
2,223,792
-
2,223,792
Opening net book amount
Additions on inception
Additions – additions for the year
Depreciation for the year – leased office premises
Office lease cancelled during the year
Closing net book amount
(i) The right of use asset consists of De Grey Mining Limited’s head office lease and assumes that the options for office lease term
2,223,792
-
33,657
(413,865)
-
1,843,584
499,975
2,223,792
-
(102,335)
(397,640)
2,223,792
extensions will not be exercised.
(ii) The present value of future lease payments is determined by discounting future lease payments using the incremental borrowing rate
at the commencement date of the lease. The incremental borrowing rate for the year ending 30 June 2022 is 3% (2021: 3%). See Note
17 for associated lease liabilities.
(iii) The expense relating to the short-term leases is $8,570,049 (2021: $1,367,904) which includes $6,437,541 (2021: $243,000) of camp
site accommodation. The rental of this accommodation was terminated in July 2022. All short-term lease expenses were capitalised
to deferred exploration and evaluation expenditure (Note 13).
(iv) The total cash outflow for all leases, including short-term leases, was $8,306,478 (2021: $1,351,182).
16. Trade and other payables
Trade payables
Other payables and accruals(i)
Consolidated
2022
$
2021
$
16,803,472
1,413,556
18,217,028
15,950,850
1,388,272
17,339,122
(i) Other payables and accruals are non-interest bearing and are normally settled on terms of 30-90 days.
17. Lease liabilities
Current
Lease liabilities – office premises
Non-current
Lease liabilities – office premises
Carrying value - beginning of the year
Interest expense
Lease payments
lease terminations
Additions
Carrying value - end of the year
Consolidated
2022
$
2021
$
420,745
353,212
1,474,351
1,870,580
2,223,792
57,573
(419,926)
-
33,657
1,895,096
515,679
13,899
(129,763)
(399,815)
2,223,792
2,223,792
The group is required to make significant judgements, estimates and assumptions in assessing the lease liability of the office
lease and has used an interest rate of 3% and a term of 5 years. However, the contract provides for an extension of a further
3 years and this has not been included in the calculations of the lease liability and would have the effect of increasing the
lease liability.
72
18. Employee benefit obligations
Current
Annual Leave (i)
Non-current
Long Service Leave (ii)
De Grey Mining Limited
Consolidated
2022
$
2021
$
946,684
616,570
136,625
65,303
(i) The current provision for employee benefits includes all unconditional entitlements where employees have completed the required
period of service. The entire amount is presented as current, since the consolidated entity does not have an unconditional right to
defer settlement and has an expectation that employees will take the full amount of accrued leave or require payment within the next
12 months.
(ii) The Group’s employee benefit obligations for long service leave are shown as non-current as they are not expected to be settled wholly
within twelve (12) months after the end of the period in which the employees render the related service.
19. Rehabilitation provision
Opening balance
Additions for the Withnell Project
Closing balance
Consolidated
2022
$
2021
$
1,022,230
1,248,724
2,270,954
1,022,230
-
1,022,230
(i) This provision was brought to account on settlement of the Indee Gold acquisition and covers the mining leases that are subject of an
approved Mine closure plan. The Group assesses its mine rehabilitation provision annually and have prepared an updated mine closure
financial assurance cost estimate for the Withnell Project as at 30 June 2022. Significant judgement is required in determining the
provision for mine rehabilitation and closure as there are many factors that will affect the ultimate liability payable to rehabilitate the
mine sites, including future disturbances caused by further development, changes in technology, changes in regulations, price
increases, changes in timing of cash flows which are based on life of mine plans and changes in discount rates. When these factors
change or become known in the future, such differences will impact the mine rehabilitation provision in the period in which the change
becomes known. The timing of the rehabilitation activities is expected to occur between FY2033 and FY2034.
In determining the liability, a discount rate of 3.66% has been applied. Sensitivity analysis was performed to evaluate the difference
by increasing or decreasing the discount rate by +/- 200 basis points which provided a NPV of $1,841,225 and $2,817,907 respectively.
73
De Grey Mining Limited
20. Contributed equity
(a) Share capital
Ordinary shares issued and fully paid
2022
2021
Issue
Price
Number of
shares
1,408,843,525
$
Number of
shares
356,706,505 1,292,417,061
$
235,892,228
Total contributed equity
1,408,843,525
356,706,505 1,292,417,061
235,892,228
(b) Movements in ordinary share capital
Beginning of the financial year
Issued during the current & prior years:
Placement share issue(i)
Shares issued on exercise of options
Shares issued on exercise of options
Shares issued on exercise of options
Placement share issue
Placement share issue
$1.10
$0.10
$0.30
$0.35
$0.28
$1.20
Shares issued as part consideration for tenement purchase
$1.585
Transaction costs
Share based payments reserve transfer on exercise
End of the financial year
1,292,417,061
235,892,228 1,172,514,206
130,713,404
113,636,364
-
-
2,790,000
-
100
-
-
-
1,408,843,525
125,000,000
-
-
976,500
-
120
-
(5,331,975)
169,632
-
9,210,714
5,733,333
2,110,000
19,232,142
83,416,666
200,000
-
-
356,706,505 1,292,417,061
-
921,071
1,720,000
738,500
5,385,000
100,100,000
317,000
(4,569,746)
566,999
235,892,228
(c) Movements in options on issue
Beginning of the financial year
Net issued / (exercised or cancelled) during the year:
− Exercisable at 10 cents, on or before 31 Oct 2020
− Exercisable at 30 cents, on or before 30 May 2021
− Exercisable at 30 cents, on or before 30 Sept 2021
− Exercisable at 10 cents, on or before 31 Dec 2021
− Exercisable at 35 cents, on or before 12 Mar 2021
− Exercisable at 35 cents, on or before 12 Mar 2022
− Exercisable at 0 cents, on or before 29 July 2022
− Exercisable at 0 cents, on or before 3 Dec 2024
− Exercisable at 0 cents, on or before 29 Jun 2022
− Forfeited at 0 cents, on 30 Jun 2022
End of the financial year
Number of options
2022
7,463,020
2021
19,844,047
Unlisted
Unlisted
Unlisted
Unlisted
Unlisted
Unlisted
Unlisted
Unlisted
Unlisted
Unlisted
-
-
-
-
-
(2,790,000)
-
420,226
-
(242,150)
4,851,096
(7,210,714)
(4,233,333)
(1,500,000)
(2,000,000)
(2,110,000)
-
450,454
2,619,326
1,603,240
-
7,463,020
(i) De Grey issued 113,636,364 ordinary fully paid shares at $1.10 per share. Canaccord Genuity (Australia) Limited acted as Global
Coordinator, Joint Lead Manager, Joint Underwriter and Joint Bookrunner to the Placement. Argonaut Securities Pty Ltd acted as Joint
Lead Manager and Joint Bookrunner, and Argonaut PCF Limited acted as Joint Underwriter to the Placement. Azure Capital acted as
Corporate Advisor to the Placement.
74
(d) Movement in performance/share rights on issue
During the year there were 21,816 unlisted Performance/Share Rights issued (2021: 140,846) to directors of the Group.
De Grey Mining Limited
2022
Opening balance – 1 July 2021
Performance/Share rights issued
Adjustments made during the year – T2
Revised estimate of the provisional rights – T3
Closing balance – 30 June 2022
2021
Opening balance – 1 July 2020
Performance rights issued
Performance rights issued
Performance rights issued
Closing balance – 30 June 2021
2017
Tranche 4
2021 Tranche
1,2 and 3
Peter Hood Share
Rights
Total
1,450,000
-
-
-
1,450,000
723,632
-
(209,292)1
(187,748)1
326,592
-
21,816
-
-
21,816
2,173,632
21,816
(209,292)
(187,748)
1,798,408
1,450,000
-
-
-
1,450,000
-
140,8461
300,3001
282,4861
723,632
-
-
-
-
-
1,450,000
140,846
300,300
282,486
2,173,632
1Rights issued to Mr Jardine are issued in 3 tranches, T1 140,846 vested in September 2021, T2 91,008 have been forfeited in September 2022 and T3 94,738
should vest in September 2023. The number of rights to be issued for T2 and T3 have been adjusted on the actual issue.
1. Tranche 1-2021 - Vesting conditions for the performance rights issued during 2021 are.
• the Company’s shares reaching a price equal to or greater than 120% of the volume weighted average price of the
Company’s shares for 10 trading days after acceptance of the Offer, within the period 27 July 2020 and 15 September
2021. For completeness it is noted the share price target to be achieved is $0.852 which must be achieved on or
before 15 September 2021.
• Satisfactory completion of a probationary period; and
• remaining employed by the Company as at 15 September 2021.
Tranche 2 – 2021 - Vesting conditions for the performance rights issued during 2022 are.
• the Company’s shares reaching a price equal to or greater than 120% of the volume weighted average price of the
Company’s shares. For completeness it is noted the share price target to be achieved is $1.318; and
• The executive remaining employed as Managing Director by the Company as at 15 September 2022.
Tranche 3 - 2021 was approved for issue on 10 July 2020 and will be issued at 15 September 2022. The number of
performance rights to be issued is 94,738 and have the following vesting conditions:
• the Company’s shares reaching a price equal to or greater than 120% of the volume weighted average price of the
Company’s shares; and
• The executive remaining employed as Managing Director by the Company as at 15 September 2023.
2. Performance Rights issued in November 2017 have mostly vested, however this tranche remains outstanding as at the
end of the financial year and have the following vesting conditions:
• Tranche Four – The Company securing Project Financing for the Mallina Gold Project at a minimum throughput of 1
million tpa.
3. The Share Rights issued to Peter Hood are in lieu of directors fees and have the following vesting conditions:
• remaining employed by the Company as at 30 June 2022.
(e) Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion
to the number of and amounts paid on the shares held. On a show of hands every holder of ordinary shares present at a
meeting in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to one vote. Ordinary shares
have no par value, and the Company does not have a limited number of authorised shares. Neither the Company, nor any of
its subsidiaries, holds any shares in the Company at 30 June 2022 (2021: Nil).
75
21. Reserves and accumulated losses
(a) Reserves
Share-based payments reserve (i)
Movements:
Share-based payments reserve
Balance at beginning of year
Share based payments (options) expense (Directors & EOP plan)
Share based payments (performance rights) expense (Directors & PR plan)
Transfer to Issued Capital on exercise of options
Balance at end of year
(b) Accumulated losses
Balance at beginning of year
Net loss for the year
Balance at end of year
De Grey Mining Limited
Consolidated
2022
$
2021
$
3,565,203
3,565,203
1,339,024
1,339,024
1,339,024
2,226,375
169,436
(169,632)
3,565,203
862,609
892,717
150,697
(566,999)
1,339,024
(61,593,852)
(10,536,710)
(56,343,583)
(5,250,269)
(72,130,562)
(61,593,852)
(i) Share-based payments reserve - the share-based payments reserve is used to recognise the value of equity benefits provided to either
employees or directors as remuneration or to suppliers as payment for products and services.
22. Dividends
Consolidated
2022
$
2021
$
-
-
Consolidated
2022
$
2021
$
-
65,000
65,000
4,718
49,000
53,718
No dividends were paid during the financial year (2021: Nil).
No recommendation for payment of dividends has been made.
23. Remuneration of auditors
During the year the following fees were paid or payable for services provided by the
auditor of the parent entity, its related practices and non-related audit firms:
(a) Audit services
Butler Settineri (Audit) Pty Ltd - audit and review of financial reports
Ernst & Young - audit and review of financial reports
Total remuneration for audit services
76
24. Contingent liabilities
Mount Dove Iron Rights
On 22 September 2015, the company entered into a Deed of Termination with the Atlas Iron Group, where the Atlas Iron
Group relinquished its iron ore rights on any of the Turner River Project tenements. If De Grey mines iron ore on any of its
the Turner River Project tenements it will pay the Atlas Iron Group a one-off payment of $50,000.
De Grey Mining Limited
25. Commitments
(a) Exploration commitments
The Group has certain commitments to meet minimum expenditure requirements on the
mineral exploration assets it has an interest in.
Outstanding Mallina Project exploration commitments are as follows:
Mallina Project tenements (100% owned)
Tenements under option agreements (i)
Annual commitment for the Mallina Project assets
Consolidated
2022
$
2021
$
1,732,320
126,000
1,858,320
1,569,040
199,280
1,768,320
(i) The tenements that remain under option and/or earn-in agreements are with respect to the Farno McMahon, as detailed in Note 28.
(b) Capital commitments
The Group did not have any capital commitments as at the current or prior balance date.
26. Related party transactions
(a) Parent entity
The ultimate parent entity within the Group is De Grey Mining Limited.
(b) Subsidiaries
Interests in subsidiaries are set out in Note 27.
(c) Transactions with related parties
De Grey have entered into a number of contracts which resulted in transactions with key management personnel as follows:
Transactions with related parties
Paid for promotional activities
Paid to relatives of Mr Beckwith (ii)
Paid to relatives of Mr Tornatora (ii)
2022
$
2021
$
9,961
86,715
81,651
-
95,323
78,500
(i) Victoria Lill provided promotional filming and corporate photography services. Victoria Lill is the daughter of Simon Lill,
the non-executive chairman of De Grey.
(ii) Where personnel are employed by De Grey and are considered a related party to key management personnel, those
transactions are entered into in the ordinary course of business at arm’s length.
a. De Grey employed a relative of Mr Andrew Beckwith, the Technical Director of De Grey; and
b. De Grey employed a relative of Mr Phil Tornatora, the General Manager – Exploration of De Grey.
None of these employees reported directly to a KMP.
77
Details of compensation paid to key management personnel are disclosed in the Remuneration Report.
De Grey Mining Limited
Compensation of key management personnel of the Group
Short term employee benefits
Post-Employment benefits
Termination benefits
Long term benefits
Share based payment transaction
Total compensation paid to key management personnel
27. Subsidiaries
2022
$
2021
$
2,910,291
196,695
-
30,698
702,199
3,839,883
2,114,605
131,412
-
-
871,125
3,117,142
The consolidated financial statements incorporate the assets, liabilities, and results of the following subsidiaries in
accordance with the accounting policy described in Note 1(b):
Name
Country of Incorporation
Class of Shares
Equity Holding¹
Beyondie Gold Pty Ltd
Domain Mining Pty Ltd
Winterwhite Resources Pty Ltd
Last Crusade Pty Ltd
Indee Gold Pty Ltd
Australia
Australia
Australia
Australia
Australia
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
¹ The proportion of ownership interest is equal to the proportion of voting power held.
2022
%
2021
%
100
100
100
100
100
100
100
100
100
100
28.
Interests in joint operations
Farno McMahon Project Option
Principal place of business: Perth, WA
On 28 July 2017, De Grey secured an option to enter into a joint arrangement for tenement E47/2502 and referred to as the
Farno McMahon Project. An option fee of $40,000 was paid to the vendor granting De Grey an exclusive right and period to
assess the project and on 2 October 2017, the Company elected to enter into a Joint Venture Earn-in. The vendor retains all
alluvial rights.
During the 2021 financial year De Grey Mining successfully earned a 75% equity interest in the Farno McMahon Project and
has continued exploration during the 2022 financial year. De Grey Mining Limited will manage the joint arrangement.
78
29. Notes to the statement of cash flows
a) Reconciliation of net loss after income tax to net cash outflow from
operating activities
Net loss for the year
Non-Cash Items
Depreciation of non-current assets
Share based payments (options and performance rights)
Loss on foreign currency fluctuation
Loss on available for sale investments
Loss on disposal of PP&E
Change in operating assets and liabilities
(Increase) in prepayments
(Increase)/decrease in trade and other receivables
Increase/(decrease) in trade and other payables
Increase in provisions
Net cash outflow from operating activities
30. Loss per share
(a) Basic and Diluted Loss per Share
Basic and diluted loss per share for loss attributable to the ordinary equity holders of the
company (cents per share)
De Grey Mining Limited
Consolidated
2022
$
2021
$
(10,536,710)
(5,250,269)
1,640,221
2,395,810
11,433
87,005
-
(581,797)
(733,105)
1,035,745
401,431
(6,279,967)
636,426
1,043,414
-
89,405
(7,200)
-
58,285
(677,334)
-
(4,107,273)
Consolidated
2022
$
2021
$
(0.77)
(0.41)
(b) Reconciliation of earnings used in calculating loss per share
Loss attributable to the owners of the company used in calculating basic and diluted loss per
share
(10,536,710)
(5,250,269)
(c) Weighted average number of shares used as the denominator
Weighted average number of ordinary shares used as the denominator in calculating basic
and diluted loss per share
1,369,724,240
1,266,164,930
(d) Information on the classification of options
As the Group has made a loss for the year ended 30 June 2022, all options on issue are considered antidilutive and have not been included
in the calculation of diluted earnings per share. These options could potentially dilute basic earnings per share in the future. There are
4,851,096 unlisted options, of which 1,811,544 are fully vested and potentially issued as ordinary shares at 30 June 2022. No further
options will vest and become exercisable with the potential to become ordinary shares in the next financial year. Since the end of the
financial year, 927,022 options have been issued and 1,811,544 options have been exercised.
79
De Grey Mining Limited
31. Share-based payments
From time-to-time options are granted to;
(i) Eligible employees under the shareholder approved Performance Rights and Option Plan (PR&OP) of De Grey Mining
Limited (previously under the separate Performance Rights Plan (PRP) and Employee Option Plan (EOP)) to align their
interests with that of the shareholders of the company.
(ii) Directors under rules comparable with the PR&OP, but subject to shareholder approval pursuant to the provisions of
the ASX Listing Rules and the Corporations Act 2001.
(a) Options
Performance rights and Option Plan (‘PR&OP’) of De Grey Mining Limited
Shareholders last approved the PR&OP at the Annual General Meeting held on 29 November 2021. The PR&OP is
designed to attract and retain eligible employees, provide an incentive to deliver growth and value for the benefit of all
shareholders and facilitate capital management by enabling the Company to preserve cash reserves for expenditure on
principal activities. Participation in the PR&OP is at the discretion of the Board and no eligible employee has a contractual
right to receive an option under the Plan.
The exercise price and expiry date for all options granted will be determined by the board prior to granting of the options,
and in the case of Director options subject to shareholder approval. The options granted may also be subject to
conditions on exercise and usually have a contractual life of two to three years. Options granted carry no dividend or
voting rights. When exercisable, each option is convertible into one ordinary share in the capital of the company with
full dividend and voting rights.
ZEPO’s have been issued during the year to executives and directors. The ZEPO’s will vest upon satisfaction of all of the
following non-market vesting conditions, or where, despite vesting conditions not being satisfied, the Board (in its
absolute discretion) resolves that unvested Options have vested:
• Upon the satisfaction of the following project milestones (LTIP Milestones):
a) Delineation of Mineral Resources (as that term is defined in JORC, 2012 Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves) of not less than 12 million ounces of gold at the
Company’s Mallina Gold Project (inclusive of the existing regional 2.2 million ounces) as at the date of this
Meeting);
b) Completion of a Definitive Feasibility Study (DFS) confirming feasibility for a 500,000 ounces of gold per
annum project through a mine life of no less than 12 years, or such other number as approved by the Board
following completion of a Pre-Feasibility Study. The DFS is to be signed off in its entirety by a suitably
qualified engineering group (with oversight from the Board); and
c) The Company securing debt and/or equity finance for a Board approved Project arising from the DFS; and
• Upon the executive achieving a score of 65% or more on the annual short term incentive criteria (STIC), as
determined by the Board annually. If the executive does not achieve the score of 65% or more, 50% of the
Options will be cancelled, whilst the balance will vest solely subject to achieving the LTIP Milestones.
•
The ZEPO’s were granted on 29 November and 21 December 2021 and have an expiry date of 3 December 2024.
80
De Grey Mining Limited
There were 47,971 director options granted (2021: 1,500,597) and 372,255 employee options granted (2021: 3,172,423)
in the financial year ended 30 June 2022. They are all currently outstanding and detailed in the following table:
Grant date
Expiry date
Weighted
average exercise
price
Cents
Balance at
start of the
year
Granted
during the
year
Forfeited
during the
year
Exercised
during the
year
Balance at
end of the
year
Vested and
exercisable at
end of the
year1
2021-2022
12 Mar 2020
10 Jul 2020
4 Dec 2020
1 Feb 2021
31 May 2021
29 Nov 2021
21 Dec 2021
2020-2021
24 Sept 2017
17 Oct 2018
12 Mar 2020
10 Jul 2020
4 Dec 2020
1 Feb 2021
31 May 2021
12 Mar 2022
29 Jul 2022
3 Dec 2024
3 Dec 2024
30 Jun 2022
3 Dec 2024
3 Dec 2024
31 Oct 2020
30 May 2021
12 Mar 2022
29 Jul 2022
3 Dec 2024
3 Dec 2024
30 Jun 2022
35 cents
0 cents
0 cents
0 cents
0 cents
0 cents
0 cents
10 cents
30 cents
35 cents
0 cents
0 cents
0 cents
0 cents
2,790,000
450,454
2,071,904
547,422
1,603,240
-
-
7,463,020
-
-
-
-
-
47,971
372,255
420,226
-
-
-
-
(242,150)
-
-
(242,150)
(2,790,000)
-
-
-
-
-
-
(2,790,000)
-
450,454
2,071,904
547,422
1,361,090
47,971
372,255
4,851,096
-
450,454
-
-
1,361,090
-
-
1,811,544
2,250,000
4,233,333
4,900,000
-
-
-
-
11,383,333
-
-
-
450,454
2,071,904
547,422
1,603,240
4,673,020
-
-
-
-
-
-
-
-
(2,250,000)
(4,233,333)
(2,110,000)
-
-
-
-
(8,593,333)
-
-
2,790,000
450,454
2,071,904
547,422
1,603,240
7,463,020
-
-
2,790,000
450,454
-
-
-
3,240,454
1There are no options that have vested that are not exercisable.
Expenses arising from share-based payment transactions - options
The weighted average fair value of the options granted during the year was $1.13 (2021: $1.12). The price was calculated
by using the Black-Scholes European Option Pricing Model applying the following inputs:
2021-2022
Weighted average exercise price (cents)
Weighted average life of the option (years)
Weighted average underlying share price (cents)
Expected share price volatility
Weighted average risk-free interest rate
2020-2021
Weighted average exercise price (cents)
Weighted average life of the option (years)
Weighted average underlying share price (cents)
Expected share price volatility
Weighted average risk-free interest rate
29 Nov 2021
21 Dec 2021
0
3.02
124.5
95%-110%
0.184%
10 Jul 2020
0
2.05
79.5
95%-110%
0.184%
0
2.96
112.0
95%-110%
0.184%
4 Dec 2020
0
4.00
111.5
95%-110%
0.184%
1 Feb 2021
0
4.01
98.0
95%-110%
0.184%
31 May 2021
0
1.08
115.5
95%-110%
0.184%
Historical volatility has been used as the basis for determining expected share price volatility as it assumed that this is
indicative of future trends, which may not eventuate.
No assumptions have been made relating to dividends and there are no other inputs to the model. There are no options that
have vested that are not exercisable.
81
Total expenses arising from equity settled share-based payment transactions recognised during the period were as follows:
De Grey Mining Limited
Options issued to directors and EOP to eligible employees
(b) Performance rights and Non-executive Director Share rights
Performance rights and Option Plan (‘PR&OP’) of De Grey Mining Limited
2022
$
2,226,375
2021
$
892,717
Shareholders last approved the PR&OP at the Annual General Meeting held on 29 November 2021. This shareholder
plan is designed to attract and retain eligible employees, provide an incentive to deliver growth and value for the benefit
of all shareholders and facilitate capital management by enabling the Company to preserve cash reserves for
expenditure on principal activities. Participation in the PR&OP is at the discretion of the Board and no eligible employee
has a contractual right to receive performance rights under the PR&OP.
Non-executive Director Share Plan (‘NED-Share Plan’) of De Grey Mining Limited
Shareholders approved the NED-Share Plan at the Annual General Meeting held on 29 November 2021.
The objective of the NED-Share Plan is to attract, motivate and retain its non-executive directors and the Company
considers that the adoption of the Share Plan and the future issue of Shares Rights under the Share Plan will provide
non-executive directors with the opportunity to participate in the future growth of the Company.
The performance/share rights granted will be determined by the board prior to granting of the rights, and in the case of
grants to Directors, these are subject to shareholder approval. The rights granted may be subject to performance
milestones before the holder has the right to exercise (Refer Note 21 (d)) and can have a contractual life of up to 5 years.
Rights granted carry no dividend or voting rights. When exercisable, each right is convertible into one ordinary share in
the capital of the company with full dividend and voting rights.
The following vesting conditions apply to the performance/share rights issued during 2022:
Rights issued in January 2022 (Approved 29 November 2021):
•
The director remaining employed by the Company at 30 June 2022.
Rights issued to Glenn Jardine (Managing Director) in September 2021 (granted 10 July 2020) Tranche 2 – FY2022.
The executive remaining employed as the Managing Director by the Company at 15 September 2022, and
The Company’s share price reaching a price equal to or greater than 120% of the volume weighted average
price at 15 September 2021 and calculated as $1.0988 on the next annual issue date of 15 September 2022.
•
•
Rights that have been granted in FY2021 but will be issued at 15 September 2022 (Tranche 3), have the following
vesting conditions;
•
•
The executive remaining employed as the Managing Director by the Company at 15 September 2023, and
The Company’s share price reaching a price equal to or greater than 120% of the volume weighted average
price at 15 September 2022 on the next annual issue date of 15 September 2023.
82
De Grey Mining Limited
Grant date
Expiry date
2021-2022
20 Dec 2017
10 July 2020
29 Nov 2021
30 Nov 2022
23 Sep 2023
31 Dec 2026
2020-2021
20 Dec 2017
10 July 2020
30 Nov 2022
23 Sep 2023
Balance at start
of the year
Number
Granted during
the year
Number
Adjustments
made during the
year (T2)
Revised estimate
of the
provisional rights
(T3)
Balance at end of
the year
Number
Vested and
exercisable
30 June 2022
1,450,000
723,632
-
2,173,632
-
21,816
21,816
-
(209,292)1
-
(209,292)
-
(187,748)1
-
(187,748)
1,450,000
326,592
21,816
1,798,408
-
140,846
21,816
162,662
1,450,000
-
1,450,000
-
723,6321
723,632
-
-
-
-
-
-
1,450,000
723,632
2,173,632
-
-
-
1 Rights issued to Mr Jardine are issued in 3 tranches, T1 140,846 vested in September 2021, T2 was forfeited in September 2022 and T3 94,738 should vest
in September 2023. The number of rights to be issued for T3 will be adjusted on the actual issue.
Expenses arising from share-based payment transactions – performance/share rights
On 12 January 2022, 21,816 unlisted share rights were issued to directors of the Group. As at the end of the financial year
1,986,156 performance/share rights remain outstanding.
Number Issued (No.)
Grant Date
Exercise Price ($)
Expiry Date
Amortisation date
Underlying Share Price on Grant ($)
Fair value of performance rights
Total Fair Value ($) – Life of Right issued during 2022
Issued January 2022
21,816
29 November 2021
N/A
31 December 2026
30 June 2022
$1.245
$1.245
$27,161
Total Fair Value for all rights ($) – Expensed 30 June 2022
$169,436
32.
Events occurring after the reporting date
Subsequent to the end of the financial year, De Grey mining limited announced the Prefeasibility Study Outcomes for the
Mallina Gold Project showing a substantial improvement in grade, annual productions, mine life, cashflow and NVP from the
release of the scoping study earlier in the financial year. The PFS also resulted in the Company’s maiden 5.1Moz reserve
statement.
The Mallina Gold Project includes the Hemi and some Regional deposits, and the PFS outcomes boasts gold production of
540,000ozpa over the first 10 years. This has a total gold production of 6.4Moz over a mine life of 13.6 years.
The PFS financial metrics outcomes over the project include a NPV of $3.9 billion pre-tax and $2.7 billion post-tax, IRR of 51%
pre-tax and 41% post tax with a payback of 1.6 years pre-tax and 1.8 years post-tax, and an AISC of $1.220/oz in the first 5
years and then $1,280/oz to year 10.
The PFS capital costs outcomes for the 10Mtpa plant and site infrastructure estimated to be $985M inclusive of $100M in
growth allowance and an additional mine preproduction pre-strip capital cost of $68M.
83
33. Parent entity information
De Grey Mining Limited
Parent Entity
2022
$
2021
$
The following information relates to the parent entity, De Grey Mining Limited, at 30 June 2022. The information presented here has been
prepared using accounting policies consistent with those presented in Note 1.
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Contributed equity
Reserves
Accumulated losses
Total equity
Loss for the year
Other comprehensive loss
Total comprehensive loss for the year
Contingent liabilities
66,960,327
244,687,884
311,648,211
19,721,077
3,745,305
23,466,382
356,706,505
3,565,203
(72,089,879)
288,181,829
(10,536,710)
-
(10,536,710)
73,584,651
120,949,948
194,534,599
16,920,632
1,935,883
18,856,515
235,892,228
1,339,024
(61,553,168)
175,678,084
(5,250,269)
-
(5,250,269)
The parent entity had no contingent liabilities as at 30 June 2022 and 30 June 2021.
Capital commitments
The parent entity had no capital commitments as at 30 June 2022 and 30 June 2021.
Accounting policies
The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in Note 1.
84
De Grey Mining Limited
Director’s Declaration
In the directors’ opinion:
(a)
the financial statements and notes set out on pages 49 to 84 are in accordance with the Corporations Act 2001,
including:
(i)
(ii)
complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional
reporting requirements; and
giving a true and fair view of the consolidated entity’s financial position as at 30 June 2022 and of its
performance for the financial year ended on that date;
(b)
(c)
the audited remuneration report set out on pages 32 to 44 of the directors’ report complies with section 300A of
the Corporations Act 2001;
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become
due and payable; and
Note 1 confirms that the financial statements also comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board.
The directors have been given the declarations by the chief executive officer and chief financial officer required by section
295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the directors.
Simon Lill
Non-Executive Chairman
Perth, 30 September 2022
85
Ernst & Young
11 Mounts Bay Road
Perth WA 6000 Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222
Fax: +61 8 9429 2436
ey.com/au
Independent auditor’s report to the members of De Grey Mining Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of De Grey Mining Limited (the Company) and its subsidiaries
(collectively the Group), which comprises the consolidated statement of financial position as at
30 June 2022, the consolidated statement of comprehensive income, the consolidated statement of
changes in equity and the consolidated statement of cash flows for the year then ended, notes to the
financial statements, including a summary of significant accounting policies, and the directors’
declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
a. Giving a true and fair view of the consolidated financial position of the Group as at 30 June 2022
and of its consolidated financial performance for the year ended on that date; and
b. Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial
report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial report of the current year. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide
a separate opinion on these matters. For the matter below, our description of how our audit addressed
the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the
financial report section of our report, including in relation to this matter. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risks of
material misstatement of the financial report. The results of our audit procedures, including the
procedures performed to address the matter below, provide the basis for our audit opinion on the
accompanying financial report.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
2
Carrying amount of exploration and evaluation assets
Why significant
How our audit addressed the key audit matter
As disclosed in Note 13 to the financial
statements, at 30 June 2022 the Group held
capitalised exploration and evaluation assets of
$233.9 million.
The carrying amount of capitalised exploration
and evaluation assets is assessed for impairment
by the Group when facts and circumstances
indicate that the carrying amount of capitalised
exploration and evaluation assets may exceed
its recoverable amount.
The determination as to whether there are any
indicators of impairment, involves a number of
judgments including whether the Group has
tenure, will be able to perform ongoing
expenditure and whether there is sufficient
information for a decision to be made that the
area of interest is not commercially viable. The
directors did not identify any impairment
indicators as at 30 June 2022.
Given the size of the balance and the judgmental
nature of impairment indicator assessments
associated with exploration and evaluation
assets, we consider this a key audit matter.
In performing our procedures, we:
• Considered whether the Group’s right to
explore was current, which included
obtaining and assessing supporting
documentation such as license agreements.
• Considered the Group’s intention to carry
out significant ongoing exploration and
evaluation activities in the relevant areas of
interest which included reviewing the
Group’s Board meeting minutes and
enquiring of senior management and the
directors as to their intentions and the
strategy of the Group.
• Assessed whether exploration and
evaluation data existed to indicate that the
carrying amount of capitalised exploration
and evaluation is unlikely to be recovered
through development or sale.
• Assessed the adequacy of the disclosures in
the financial report.
Information other than the financial report and auditor’s report thereon
The directors are responsible for the other information. The other information comprises the
information included in the Company’s 2022 annual report, but does not include the financial report
and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon, with the exception of the Remuneration Report
and our related assurance opinion.
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.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
3
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters relating to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgment and maintain professional scepticism throughout the audit. We also:
►
Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
► Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s internal control.
► Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
► Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Group’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in
our auditor’s report to the related disclosures in the financial report or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up
to the date of our auditor’s report. However, future events or conditions may cause the Group to
cease to continue as a going concern.
► Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events
in a manner that achieves fair presentation.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
4
► Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Group audit. We remain solely
responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, actions
taken to eliminate threats or safeguards applied.
From the matters communicated to the directors, we determine those matters that were of most
significance in the audit of the financial report of the current year and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Report on the audit of the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30
June 2022.
In our opinion, the Remuneration Report of De Grey Mining Limited for the year ended 30 June 2022,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
Ernst & Young
Pierre Dreyer
Partner
Perth
30 September 2022
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
De Grey Mining Limited
ASX Additional Information
Additional information required by Australian Stock Exchange Ltd, and not shown elsewhere in this report, is as follows. The
information is current as at 16 September 2021.
(a) Distribution of equity securities
Analysis of numbers of equity security holders by size of holding:
1
1,001
5,001
10,001
100,001
-
-
-
-
1,000
5,000
10,000
100,000
and over
Ordinary shares
Number of holders
2,780
4,624
2,054
3,292
641
13,391
Number of shares
1,772,771
13,031,307
16,454,529
110,150,083
1,269,387,225
1,410,795,915
The number of shareholders holding less than a marketable parcel of
shares are:
762
205,362
(b) Twenty largest shareholders
The names of the twenty largest holders of quoted ordinary shares are as follows:
NATIONAL NOMINEES LIMITED
BNP PARIBAS NOMINEES PTY LTD
CS THIRD NOMINEES PTY LIMITED
CITICORP NOMINEES PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
NORTHWEST NONFERROUS AUSTRALIA MINING PTY LTD
BNP PARIBAS NOMS PTY LTD
1
2
3
4
5
6
7 Mr Yi Weng & Ms Ning Li
8
9
10 BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM
11 BNP PARIBAS NOMINEES PTY LTD
12 Mr Yi Weng & Ms Ning Li Super A/C's
13 CAROLINE HOUSE SUPERANNUATION FUND PTY LTD
14 MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED
15 WARBONT NOMINEES PTY LTD
16 MR ANDREW RHYS JACKSON
17 UBS NOMINEES PTY LTD
18 FIRST SAMUEL LTD ACN 086243567
19 PENAND PTY LTD
20 MR JOHN HENRY MATTERSON
90
Listed ordinary shares
Number of
shares
281,992,494
235,637,196
229,914,436
75,855,984
43,580,870
28,431,382
21,336,597
20,467,566
9,536,071
8,971,270
8,653,293
8,235,603
7,236,364
6,801,187
5,750,000
5,595,000
4,452,140
4,062,345
4,023,334
3,800,000
1,014,333,132
Percentage of
ordinary
shares
19.99%
16.70%
16.30%
5.38%
3.09%
2.02%
1.51%
1.45%
0.68%
0.64%
0.61%
0.58%
0.51%
0.48%
0.41%
0.40%
0.32%
0.29%
0.29%
0.27%
71.90%
(c) Substantial shareholders
The names of substantial shareholders who have notified the Company in accordance with section 671B of the Corporations
Act 2001 are:
De Grey Mining Limited
Gold Road Resources Limited
Jupiter Investment Management Limited
(d) Unquoted (unlisted) Securities
Number of Shares
%
281,992,494
114,615,663
19.99%
8.12%
Class
Holders of 20% or more of the class
Number of
Securities
Number
of
Holders
Holder Name
Number of
Securities
Unlisted $Nil options, expiry 31 July 2024
Unlisted $Nil options, expiry 3 December 2024
927,022
3,039,552
77 Nil
Nil
9
Performance rights – Series 1
1,450,000
Performance rights – Series 2 Tranche 3
Share rights
94,738
21,816
5
1
1
Simon Lill
Andrew Beckwith
Craig Nelmes
Glenn Jardine
Peter Hood
500,000
400,000
300,000
94,738
21,816
(e) Voting rights
All ordinary shares (whether fully paid or not) carry one vote per share without restriction.
The Quoted and unquoted (unlisted) options have no voting rights.
(f) Corporate Governance
De Grey Mining Ltd, its subsidiaries (“Group”) and its Board of directors are committed to achieving and demonstrating the
highest standards of corporate governance. The Board is responsible to its shareholders for the performance of the Company
and seeks to communicate extensively with shareholders. The Board believes that sound corporate governance practices will
assist in the creation of shareholder wealth and provide accountability. In accordance with ASX Listing Rule 4.10.3, the
Company has elected to disclose its corporate governance policies and its compliance with them on its website, rather than
in this Annual Report. Accordingly, information about the Company's corporate governance practices is set out on the
Company's website at www.https://degreymining.com.au/corporate-governance.
(g) Application of Funds
During the financial year, in accordance with ASX Listing Rule 4.10.19, De Grey Mining Limited confirms that it has used its
cash and assets (in a form readily convertible to cash) in a manner which is consistent with the Company’s business
objectives.
91
Annual Mineral Resources and Ore Reserve Statement
De Grey Mining Limited
Ore Reserves – Hemi Mining Centre, September 2022
Deposit
Oxide
Transition
Sulphide
Total
Tonnes
Mt
Proved
Au
g/t
Au
Moz
Tonnes
Mt
7.3
6.0
90.1
103.4
Probable
Au
g/t
1.7
1.7
1.5
1.5
Au
Moz
0.4
0.3
4.4
5.1
Tonnes
Mt
7.3
6.0
90.1
103.4
Total
Au
g/t
1.7
1.7
1.5
1.5
Au
Moz
0.4
0.3
4.4
5.1
Mallina Gold Project - Global Mineral Resource Estimate, May 2022
Measured
Indicated
Inferred
Total
Mining Centre
Hemi Mining Centre
Withnell Mining Centre
Wingina Mining Centre
Total
Mt
1.6
3.1
4.7
Au
g/t
1.8
1.7
1.7
Koz
Mt
139.1
92
11.7
173
265
2.5
153.4
Au
g/t
1.3
1.8
1.5
1.3
Koz
Mt
5,804
664
122
74.1
12.2
6.3
6,590
92.6
Au
g/t
1.1
2.2
1.2
1.3
Koz
Mt
2,666
213.3
870
243
25.6
11.9
3,779
250.7
Au
g/t
1.2
2.0
1.4
1.3
Koz
8,470
1,626
538
10,634
The regional resource estimates at the Withnell and Wingina Mining Centres have not changed since the April 2020 statement.
Mallina Gold Project – Global Mineral Resource Estimate by Type, May 2022
Mining
Centre
Hemi
Mining
Centre
Withnell
Mining
Centre
Wingina
Mining
Centre
Type
Oxide
Sulphide
Total
Oxide
Sulphide
Total
Oxide
Sulphide
Total
Oxide
Total
Sulphide
Total
Measured
Indicated
Inferred
Total
Mt
Au
g/t
Au
KOz
1.0
0.7
1.6
2.7
0.4
3.1
3.7
1.1
4.7
1.8
1.7
1.8
1.8
1.6
1.7
1.8
1.6
1.7
58
35
92
152
21
173
210
55
Mt
6.7
132.4
139.1
2.7
9.0
11.7
1.8
0.7
2.5
11.2
142.1
265
153.4
Au
KOz
324
5,480
Mt
1.4
72.7
5,804
74.1
113
550
664
88
35
122
525
1.7
10.5
12.2
2.2
4.0
6.3
5.3
6,065
87.3
6,590
92.6
Au
g/t
0.9
1.1
1.1
1.4
2.4
2.2
1.1
1.3
1.2
1.1
1.3
1.3
Au
KOz
41
Mt
8.1
2,624 205.1
2,666 213.3
74
796
870
75
168
243
190
5.4
20.2
25.6
6.7
5.1
11.9
20.2
3,589 230.5
3,779 250.7
Au
g/t
1.4
1.2
1.2
1.4
2.1
2.0
1.5
1.4
1.4
1.4
1.3
1.3
Au
KOz
365
8,105
8,470
245
1,381
1,626
315
224
538
925
9,709
10,634
Au
g/t
1.5
1.3
1.3
1.3
1.9
1.8
1.5
1.6
1.5
1.5
1.3
1.3
92
Mallina Gold Project – Mineral Resource Estimate by Mining Centre and Deposit, May 2022
Hemi Mining Centre
De Grey Mining Limited
Measured
Au
g/t
Koz
Mt
Deposit
Type
Oxide
Aquila
Sulphide
Brolga
Total
Oxide
Sulphide
Total
Oxide
Crow
Sulphide
Diucon
Total
Oxide
Sulphide
Total
Oxide
Eagle
Sulphide
Total
Oxide
Sulphide
Total
Oxide
Sulphide
Total
Falcon
Hemi
Mining
Centre
Wingina Mining Centre
Deposit
Type
Oxide
Wingina
Sulphide
Mt
Berghaus
Total
Oxide
Sulphide
Total
Oxide
Amanda
Sulphide
Wingina
Mining
Centre
Total
Oxide
Sulphide
Total
Measured
Au
g/t
1.8
1.6
1.7
Koz
152
21
173
Mt
2.7
0.4
3.1
2.7
0.4
3.1
1.8
1.6
1.7
152
21
173
Mt
1.3
11.6
12.9
2.2
35.1
37.3
1.0
19.2
20.3
0.2
29.2
29.4
0.1
16.5
16.6
1.8
20.9
22.7
6.7
132.4
139.1
Mt
0.6
0.3
1
0.7
0.3
1
0.5
0.1
0.6
1.8
0.7
2.5
Indicated
Au
g/t
1.4
1.5
1.5
1.5
1.3
1.3
1.0
1.1
1.1
1.9
1.4
1.4
1.9
1.2
1.2
1.8
1.2
1.3
1.5
1.3
1.3
1.5
1.4
1.8
1.7
1.7
1.3
1.8
1.4
1.5
1.6
1.5
93
Inferred
Au
g/t
0.5
1.3
1.3
0.9
1.1
1.1
0.7
1.2
1.2
1.2
1.2
1.2
0.6
1.0
1.0
0.0
1.2
1.2
0.9
1.1
1.1
Koz
2
309
311
28
793
821
4
471
474
7
318
325
0
312
312
0
422
422
41
Mt
1.4
19.1
20.5
3.2
58.4
61.6
1.2
31.6
32.8
0.4
37.5
37.9
0.2
26.3
26.5
1.8
32.3
34.1
8.1
2,624 205.1
2,666 213.3
Total
Au
g/t
1.3
1.4
1.4
1.3
1.2
1.2
1.0
1.1
1.1
1.6
1.3
1.3
1.8
1.1
1.1
1.8
1.2
1.2
1.4
1.2
1.2
Koz
58
863
921
136
2,296
2,432
37
1,137
1,174
20
1,616
1,635
9
939
948
106
1,253
1,359
365
8,105
8,470
Koz
56
554
610
Mt
0.1
7.5
7.6
107
1,503
1.0
23.3
1,611
24.2
33
667
700
13
1,298
1,311
9
627
636
106
831
937
324
0.2
12.4
12.5
0.2
8.4
8.6
0.0
9.9
9.9
0.0
11.4
11.4
1.4
5,480
72.7
5,804
74.1
Indicated
Au
g/t
1.3
Koz
Inferred
Au
g/t
1.3
1.7
1.6
1.1
1.2
1.2
0.9
1.1
0.9
1.1
1.3
1.2
Total
Au
g/t
1.6
1.6
1.6
1.4
1.2
1.3
1
1.2
1.1
1.5
1.4
1.4
Koz
194
94
288
75
106
181
46
23
70
315
224
538
Koz Mt
14
57
72
36
92
128
25
19
44
75
168
243
3.7
1.8
5.5
1.7
2.7
4.3
1.4
0.6
2
6.7
5.1
11.9
Mt
0.3
1.1
1.4
1
2.4
3.4
0.9
0.6
1.4
2.2
4
6.3
27
16
43
39
14
53
22
4
26
88
35
123
Withnell Mining Centre
Deposit
Type
Withnell OP
Withnell UG
Mallina
Toweranna
OP
Toweranna
UG
Camel
Calvert
Roe
Dromedary
Leach Pad
Hester
Withnell
Mining
Centre
Oxide
Sulphide
Total
Oxide
Sulphide
Total
Oxide
Sulphide
Total
Oxide
Sulphide
Total
Oxide
Sulphide
Total
Oxide
Sulphide
Total
Oxide
Sulphide
Total
Oxide
Sulphide
Total
Oxide
Sulphide
Total
Oxide
Sulphide
Total
Oxide
Sulphide
Total
Oxide
Sulphide
Total
Measured
Au
g/t
1.4
1.6
1.5
Koz
29
33
62
Mt
0.6
0.6
1.3
0.2
0
0.2
2.8
2.1
2.8
16
1
17
0.1
0
0.1
0.1
2.7
2.5
2.7
2.2
0.1
2.2
6
1
7
7
7
1
0.7
1.6
1.8
1.7
1.8
58
35
92
Mt
0.4
2.7
3
0.1
0.1
0.5
1.1
1.6
0
4.3
4.3
0.3
0.1
0.5
0.4
0.6
1
0.1
0.1
0.2
0
0
0.1
0.9
0.9
0
0
0.1
2.7
9
11.7
Koz
Indicated
Au
g/t
1.2
1.9
1.8
De Grey Mining Limited
Inferred
Au
g/t
1.1
2.2
2
2.5
3.9
3.9
1.4
1.5
1.5
2.2
2.1
2.1
3.6
3.6
1.1
1.8
1.7
0.8
1.2
1.2
1.6
2.2
2
1.6
1.8
1.7
1.3
1.4
1.4
1.4
2.4
2.2
Mt
0.2
0.5
0.7
0
2.4
2.4
1.2
3.9
5.1
0
2.4
2.5
0.6
0.6
0
0.1
0.2
0.1
0.2
0.3
0.1
0.2
0.3
0
0.1
0.1
0
0
0.1
1.7
10.5
12.2
Total
Au
g/t
1.3
1.9
1.8
2.5
3.9
3.9
1.3
1.4
1.4
2.6
2.1
2.1
3.6
3.6
2.6
1.7
2.2
1.3
1.3
1.3
1.8
2.2
2
1.9
1.7
1.9
0.7
0.7
1.8
1.6
1.7
1.4
2.1
2.0
Koz
48
235
283
0
317
317
73
235
307
8
451
460
65
65
45
16
60
19
33
52
17
21
38
11
6
17
19
19
4
3
7
245
1,381
1,626
Koz Mt
5
38
43
0
301
301
53
190
243
4
163
166
65
65
2
9
10
1
9
11
6
15
21
2
5
7
1
2
3
74
796
870
1.1
3.8
5
0
2.5
2.5
1.7
5.1
6.8
0.1
6.7
6.8
0.6
0.6
0.5
0.3
0.8
0.5
0.8
1.3
0.3
0.3
0.6
0.2
0.1
0.3
0.9
0.9
0.1
0.1
0.1
5.4
20.2
25.6
14
164
178
16
16
20
44
64
5
289
293
27
7
33
18
24
42
6
5
11
1
2
3
19
19
3
1
4
113
550
664
4.3
4.3
1.3
1.2
1.2
3.1
2.1
2.1
2.6
1.4
2.2
1.3
1.3
1.3
1.5
2.3
1.8
1.6
1.6
1.6
0.7
0.7
2.1
2.1
2.1
1.3
1.9
1.8
94
De Grey Mining Limited
Review of Material Changes
Material changes have been made to the Company’s Gold Mineral Resources between June 2021 and May 2022, and then a
further material change subsequent to the end of the financial year with the release of the maiden Hemi Ore Reserves in
September 2022 that coincided with the release of the Prefeasibility Study Outcomes on 8 September 2022.
The Hemi maiden Ore Reserves are compiled in the Table “Ore Reserves – Hemi Mining Centre – September 2022” and
represents a material change in its totality. The Hemi Ore Reserves were reported as a result of the PFS completed in
September 2022.
The Hemi Mining Centre total inventory for the Gold Mineral Resources has increased from 6.8Moz to 8.47Moz between
June 2021 and May 2022, as shown for the various deposits in the table below. All the Wingina and Withnell Mineral
Resources remain unchanged.
Table: Comparison of June 2021 and May 2022 Hemi Gold Mineral Resources
Deposit
Type
Measured
Mt
Au g/t
Koz
Indicated
Au g/t
Koz
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Aquila
Brolga
Crow
Diucon
Eagle
Falcon
Hemi
Mining
Centre
Mt
10.6
12.9
28.1
37.3
9.8
20.3
-
29.4
-
16.6
17
22.7
65.5
139.1
1.5
1.5
1.3
1.3
1.1
1.1
-
1.4
-
1.2
1.3
1.3
1.3
1.3
Inferred
Au g/t
1.3
1.3
0.9
1.1
1.1
1.2
0.9
1.2
-
1.0
1.0
1.2
1.0
1.1
10%
Koz
317
311
1,050
821
680
474
1,450
325
-
312
529
422
4,026
2,666
-34%
Mt
7.5
7.6
34.7
24.2
19.5
12.5
48.6
8.6
-
9.9
16.6
11.4
126.9
74.1
-42%
Total
Au g/t
1.4
1.4
1.1
1.2
1.1
1.1
0.9
1.3
-
1.1
1.1
1.2
1.1
1.2
9%
Mt
18.1
20.5
62.8
61.6
29.3
32.8
48.6
37.9
-
26.5
33.7
34.1
192.5
213.3
11%
Koz
841
921
2,256
2,432
1,032
1,174
1,450
1,635
-
948
1,226
1,359
6,805
8,470
24%
525
610
1,206
1,611
352
700
-
1,311
-
636
697
937
2,779
5,804
109%
0%
Note: For the 2021 MRE, Diucon and Eagle were combined
Change
112%
-
-
-
The changes to Mineral Resources occurred at the various Hemi deposits due to increased infill and extensional drilling. A
large portion of the drilling programme was focussed on infill drilling to increase the confidence from Inferred to Indicated
category which is reflected in the 109% overall increase in Indicated Resources and occurred across all deposits. The overall
34% reduction in Inferred Resources is a direct result in large portions of the Inferred Resources being elevated to Indicated
category. Additionally, significant resources were discovered at the Diucon and Eagle deposits. The Diucon and Eagle
resources were reported individually in the May 2022 resource statement whereas they were reported as a combined deposit
in 2021.
Mineral Resource and Ore Reserve governance and internal controls
De Grey ensures that the Mineral Resource and Ore Reserve estimates quoted are subject to governance arrangements and
internal controls activated at a site level and at the corporate level. Internal and external reviews of Mineral Resource
estimation procedures and results are carried out through a team of experience technical personnel that is comprised of
highly competent and qualified professionals. These reviews have not identified any material issues.
De Grey reports its Mineral Resources and Ore Reserves on at least an annual basis in accordance with the Australasian Code
for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code) 2012 Edition. Competent Persons
named by De Grey are Members or Fellows of the Australasian Institute of Mining and Metallurgy and/or the Australian
Institute of Geoscientists and qualify as Competent Persons as defined in the JORC Code.
The Company’s procedures for the sample techniques and sample preparation are regularly reviewed and audited by
independent experts. Assays are performed by independent internationally accredited laboratories with a QAQC program
showing acceptable levels of accuracy and precision. The exploration assay results database is maintained and appropriate
backed-up internally. All De Grey Mineral Resource estimates have been undertaken independently by Payne Geological
Services Pty Ltd.
95
De Grey Mining Limited
COMPETENT PERSON STATEMENT
Exploration Results
The information in this report that relates to Exploration Results is based on, and fairly represents information and supporting
documentation prepared by Mr. Phil Tornatora, a Competent Person who is a Member of The Australian Institute of
Geoscientists. Mr. Tornatora is an employee of De Grey Mining Limited. Mr. Tornatora has sufficient experience that is
relevant to the style of mineralisation and type 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
Resource and Ore Reserves”. Mr. Tornatora consents to the inclusion in this report of the matters based on his information
in the form and context in which it appears.
Ore Reserves - Hemi
The information in this report that relates to Ore Reserves at the Hemi Gold Project is based on and fairly represents
information and supporting documentation compiled by Mr Quinton de Klerk, a Competent Person who is a full-time
employee of Cube Consulting Pty Ltd, a company engaged by De Grey. Mr de Klerk is a Fellow of the Australasian Institute
of Mining and Metallurgy. Mr de Klerk has sufficient experience which is relevant to the style of mineralisation and type of
deposit under consideration and to the activity which 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 (2012 JORC
Code). Mr de Klerk consents to the inclusion in the report of the matters based on his information in the form and context
in which it appears.
Mineral Resources - Regional
The Information in this report that relates to Wingina and Withnell Mining Centre Mineral Resources is based on information
compiled by Mr Paul Payne, a Competent Person who is a Fellow of the Australasian Institute of Mining and Metallurgy. Mr
Payne is a full-time employee of Payne Geological Services. Mr Payne has sufficient experience that is relevant to the style
of mineralisation and type 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”. Mr Payne consents to the inclusion in the report of the matters based on his information in the form and
context in which it appears.
Mineral Resources - Hemi
The Information in this report that relates to Hemi Mining Centre Mineral Resources is based on information compiled by
Mr. Michael Job, a Competent Person who is a Fellow of the Australasian Institute of Mining and Metallurgy. Mr Job is a full-
time employee of Cube Consulting. Mr Job has sufficient experience that is relevant to the style of mineralisation and type
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”. Mr Job
consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
96
De Grey Mining Limited
Forward Looking Statements
These materials prepared by De Grey Mining Limited (or the “Company”) include forward looking statements. Often, but not
always, forward looking statements can generally be identified by the use of forward looking words such as “may”, “will”,
“expect”, “intend”, “plan”, “estimate”, “anticipate”, “continue”, and “guidance”, or other similar words and may include,
without limitation, statements regarding plans, strategies and objectives of management, anticipated production or
construction commencement dates and expected costs or production outputs.
Forward looking statements inherently involve known and unknown risks, uncertainties and other factors that may cause
the Company’s actual results, performance and achievements to differ materially from any future results, performance or
achievements. Relevant factors may include, but are not limited to, changes in commodity prices, foreign exchange
fluctuations and general economic conditions, increased costs and demand for production inputs, the speculative nature of
exploration and project development, including the risks of obtaining necessary licenses and permits and diminishing
quantities or grades of reserves, political and social risks, changes to the regulatory framework within which the Company
operates or may in the future operate, environmental conditions including extreme weather conditions, recruitment and
retention of personnel, industrial relations issues and litigation.
Forward looking statements are based on the Company and its management’s good faith assumptions relating to the
financial, market, regulatory and other relevant environments that will exist and affect the Company’s business and
operations in the future. The Company does not give any assurance that the assumptions on which forward looking
statements are based will prove to be correct, or that the Company’s business or operations will not be affected in any
material manner by these or other factors not foreseen or foreseeable by the Company or management or beyond the
Company’s control.
Although the Company attempts and has attempted to identify factors that would cause actual actions, events, or results to
differ materially from those disclosed in forward looking statements, there may be other factors that could cause actual
results, performance, achievements or events not to be as anticipated, estimated or intended, and many events are beyond
the reasonable control of the Company. Accordingly, readers are cautioned not to place undue reliance on forward looking
statements. Forward looking statements in these materials speak only at the date of issue. Subject to any continuing
obligations under applicable law or any relevant securities exchange listing rules, in providing this information the Company
does not undertake any obligation to publicly update or revise any of the forward looking statements or to advise of any
change in events, conditions or circumstances on which any such statement is based.
97
Schedule of Interests in Mining Tenements
De Grey Mining Limited
Project/Location
Country
Tenement
Percentage
held/earning
Mallina Gold Project
Mallina Gold Project
Mallina Gold Project
Mallina Gold Project
Mallina Gold Project
Mallina Gold Project
Mallina Gold Project
Mallina Gold Project
Mallina Gold Project
Mallina Gold Project
Mallina Gold Project
Mallina Gold Project
Mallina Gold Project
Mallina Gold Project
Mallina Gold Project
Mallina Gold Project
Mallina Gold Project
Farno-McMahon
Mallina Gold Project
Mallina Gold Project
Mallina Gold Project
Mallina Gold Project
Mallina Gold Project
Mallina Gold Project
Mallina Gold Project
Mallina Gold Project
Mallina Gold Project
Mallina Gold Project
Mallina Gold Project
Mallina Gold Project
Mallina Gold Project
Mallina Gold Project
Mallina Gold Project
Mallina Gold Project
Mallina Gold Project
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
E47/891
E45/2533
E45/2364
E45/2983
E45/2995
E45/3390
E45/3391
E45/3392
E45/5140
E45/4751
E47/3552
E47/3553
E47/3554
E47/3750
E47/4565
P45/3029
P47/1866
E47/2502
E47/2720
E47/3504
M47/473
M47/474
M47/475
M47/476
M47/477
M47/480
L45/578
L47/164
L47/165
E47/3399
E47/3428
E47/3429
E47/3430
P47/1732
P47/1733
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
75%¹
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
¹ De Grey has earned a 75% interest in the joint venture agreement with Farno McMahon Pty Ltd (owned 100% by Novo Resources Corp)
details of the agreement can be found in Note 298(d).
98