ABN 40 119 031 864
Annual Report
30 June 2019
DREADNOUGHT RESOURCES LIMITED
CONTENTS
Corporate Directory
Chairman’s Letter
Directors’ Report
Auditor’s Independence Declaration
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Corporate Governance Statement
ASX Additional Information
PAGE NO
(i)
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CORPORATE DIRECTORY
Directors
Paul Chapman
(Non-executive Chairman)
Dean Tuck
Ian Gordon
Paul Payne
(Managing Director)
(Non-executive Director)
(Non-executive Director)
Company Secretary
Nicholas Day
Registered Office & Postal Address
Suite 5/16 Nicholson Road
Subiaco WA 6008
PO Box 572
Floreat WA 6014
Telephone: +61 (0) 428 824 343
Website: www.dreadnoughtresources.com.au
ABN 40 119 031 864
Share Registry
Computershare Investor Services Pty Limited
Level 11, 172 St Georges Terrace
Perth, WA 6000 Australia
(within Australia) 1300 850 505
(international) 61 3 9415 4000
Auditors
GrantThornton
Level 3 170 Frome Street
Adelaide SA 5000
Stock Exchange
Australian Securities Exchange
(Home Exchange: Perth, Western Australia)
ASX Code: DRE
DREADNOUGHT RESOURCES LIMITED
(i)
DREADNOUGHT RESOURCES LIMITED
Chairman’s Letter
Dear Fellow Shareholder,
We are pleased to present the 2019 Annual Report for Dreadnought Resources Limited (“Dreadnought”).
The past year has been a watershed year for Dreadnought.
On 4 April 2019 we completed the acquisition of the IronRinger Resources Group bringing with it the Tarraji-Yampi Project,
Chianti VMS Target, Texas Ni-Cu-PGE Magmatic Sulphide Target, Grants Cu-Au (IOCG) Target and Rocky Dam Au Project.
Following the IronRinger acquisition, we began a major transformation process. On the administrative side, the Company
changed its name from Tychean Resources Limited to Dreadnought Resources Limited. Dreadnought was chosen in
recognition of some of our projects being located on Commonwealth Defence ground. HMS Dreadnought was so revolutionary
in design that it became its own class of battleship. Dreadnought captures both the scale of deposit we are looking for and the
innovation being applied in doing so.
We also relocated the Registered Office from Adelaide to Perth necessitating a restructure of the board and management. In
this regard, I would take the opportunity to acknowledge the contributions of our former Chairman, Duncan Gordon, and former
Company Secretary Kaitlin Smith. David Chapman and I joined the board as non-executives in April 2019. Due to other
business commitments, David subsequently resigned and should be acknowledged for his contribution in establishing and
growing the IronRinger Resources Group.
Importantly, Ian Gordon and Paul Payne remained on the board and have provided continuity in addition to capability and
experience. We were then fortunate in being able to have Dean Tuck join us as Managing Director.
Finally, we completed a Small Shareholding Sale Facility in August 2019 via which the total number of shareholders in the
Company was reduced by ~1,580 to ~750. This significantly reduces administration costs going forward.
We have remained highly active on the acquisition front, including the following transactions:
Acquired the Illaara Greenstone Belt (“Illaara”) from a wholly owned subsidiary of Newmont Goldcorp Corporation,
during June 2019.
Finalised the acquisition of the Wombarella Project during August 2019.
Consolidated a significant land position prospective for Proterozoic Cu-Au, Cu-Zn-Pb-Ag VMS and Magmatic Ni-Cu-
PGE massive sulphides in the South Kimberley during August 2019.
Acquired 100% of the IronRinger (Tarraji) Pty Ltd subsidiary during June 2019.
We restructured Dreadnought’s balance sheet with the following funding:
Completed a Non-Renounceable Entitlement Issue and issued raising $235,975 at $0.003 per share before costs
during April 2019.
Completed three placements and issued 225,464,959 shares at an issue price of $0.003 raising a total of $676,395
before costs.
Issued 600,000 Convertible Notes each with a face value of $1.00 raising $600,000 before costs.
Completed a Share Purchase Plan and issued 140,166,663 shares at an issue price of $0.003 raising $420,500
before costs during August 2019.
On the operational front, we have taken some major steps forward including:
Illaara Gold Project: Field activities commenced, and historic data was compiled with significant mineralisation
potential identified. Three prospects were prioritised for drilling being: Illaara Central, CRA Homestead and
Lawrence’s Find. Drilling approvals over Illaara Central and CRA Homestead have been received and drilling is
planned for the December 2019 quarter.
Chianti VMS Target: confirmed massive sulphides in both the lower and upper EM plates through diamond drilling.
This successfully confirmed the style of mineralisation and that the geophysical methods deployed are effective at
identifying VMS mineralisation.
Grants Cu-Au Target: at the time of writing a 4-6 hole diamond drill program for up to ~700m is underway at Grants.
The program is EIS co-funded and assays are expected back by end of December 2019 quarter
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DREADNOUGHT RESOURCES LIMITED
Chairman’s Letter
Over the coming year we have set ourselves a number of goals including:
Illaara Gold Project
o Deliver maiden drill programs at the Lawrence's, CRA Homestead and Central Illaara camp scale targets
o Continue evaluating our camp scale targets to generate additional drill targets
o Evaluate the VMS potential of Illaara and undertake effective and efficient exploration programs to generate
drill targets
Chianti VMS Target:
o Follow up on down hole EM anomalies at Chianti
o Use the technical learnings from our successful drilling to generate additional drill targets with the aim of
confirming a mineralised VMS camp
o Evaluate the remainder of the project area for other prospective VMS horizons
Grants Cu-Au Target:
o Follow up drilling at Grants to test extents with an aim to assess its size and grade potential
o Feed the technical learnings from the Grants drilling back into the project area to generate additional drill
targets with the aim of confirming a mineralised Cu-Au camp
Texas Ni-Cu-PGE Target
o Drill the high priority coincident magnetic and VTEM anomaly within the Ruins Dolerite
Rocky Dam
o Confirm and evaluate the CRA anomaly which has not been followed up since the 1990s
In closing, we would like to thank our stakeholders including the Department of Defence, the Dambimangari Aboriginal
Corporation local communities, employees, joint venture alliance partners, suppliers and other business partners. We also
would take this opportunity to thank our fellow shareholders for your ongoing support.
Yours sincerely
Paul Chapman
Chairman
2
DREADNOUGHT RESOURCES LIMITED
Directors’ Report
Your directors present their report on the consolidated entity (referred to hereafter as the Group) consisting of
Dreadnought Resources Limited (referred to hereafter as the Parent Entity or the Company) and the entities it controlled
at the end of, or during, the year ended 30 June 2019.
DIRECTORS
The following persons were directors of the Parent Entity during the whole of the financial year and up to the date of
this report, unless otherwise stated:
Paul Chapman
(Non-executive Chairman)
Appointed 9 April 2019
David Chapman
(Non-executive Director)
Appointed 9 April 2019
Resigned 31 July 2019
Ian Gordon
(Non-executive Director)
Appointed 21 December 2017
Paul Payne
(Non-executive Director)
Appointed 21 December 2017
Dean Tuck
(Managing Director)
Appointed 9 April 2019
Duncan Gordon
(Non-executive Chairman)
Resigned 9 April 2019
PRINCIPAL ACTIVITIES
The principal activity of the Group during the financial year was minerals exploration. There were no significant changes
in the nature of activities of the Group during the year.
DIVIDENDS
No dividends have been declared or paid during the year (2018: Nil).
OPERATING RESULTS AND FINANCIAL POSITION
The net result of operations for the financial year was a loss of $680,822 (2018: $349,156).
The net assets of the Group have increased by $1,542,062 during the financial year from $513,582 at 30 June 2018 to
$2,055,644 at 30 June 2019 as a result of capital raising and asset acquisition via the issuance of 583,884,581 ordinary
shares and 50,000,000 options.
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DREADNOUGHT RESOURCES LIMITED
Directors’ Report
REVIEW OF OPERATIONS
Corporate Activities
The Company changed its name from Tychean Resources Limited to Dreadnought Resources Limited on 15 February
2019.
Dreadnought Resources Limited is an ASX-listed exploration and development company with nickel, copper and gold
projects mainly within the state of Western Australia. The Company’s strategy is focused on the discovery of major
nickel, copper and gold deposits within Western Australia.
The highlights and significant changes in state of affairs during the year and to date include;
Acquisitions
Completed the acquisition of 100% of IronRinger Resources Pty Ltd bringing with it the Tarraji-Yampi Project,
Chianti Cu-Zn-Pb-Ag VMS Target, Texas Ni-Cu-PGE Magmatic Sulphide Target, Grants Cu-Au (IOCG) Target
and Rocky Dam Au Project. The acquisition involved the issue of 393,333,334 fully paid ordinary shares and
50,000,000 options exercisable at $0.01 by 3 April 2024.
Acquired the Illaara Greenstone Belt (“Illaara”) from a wholly owned subsidiary of Newmont Goldcorp
Corporation, Newmont Goldcorp Exploration Pty Ltd (“Newmont Goldcorp”) during June 2019. Illaara is
prospective for gold and VMS mineralisation.
Finalised the acquisition of the Wombarella Project for 16 million fully paid ordinary shares and $20,000 cash
on 14 August 2019. Wombarella is prospective for nickel, copper, zinc, lead, silver and platinum group
elements.
Consolidated a significant land position prospective for Proterozoic Cu-Au, Cu-Zn-Pb-Ag VMS and Magmatic
Ni-Cu-PGE massive sulphides in the South Kimberley. The South Kimberley Project contains historic Cu-Au
occurrences similar to those seen within the Tarraji-Yampi Project.
Acquired 100% of the IronRinger (Tarraji) Pty Ltd subsidiary by an issue of 51,559,604 fully paid ordinary
shares during June 2019.
Funding
Completed a Non-Renounceable Entitlement Issue and issued raising $235,975 at $0.003 per share before
costs during April 2019.
Completed two placements and issued 60,333,332 shares at an issue price of $0.003 raising a total of
$181,000 before costs.
Issued 600,000 Convertible Notes each with a face value of $1.00 raising $600,000 before costs. This issue
was approved by shareholders on 16 August 2019.
Completed a placement and issued 165,131,627 shares at an issue price of $0.003 raising $495,395 before
costs during July 2019.
Completed a Share Purchase Plan and issued 140,166,663 shares at an issue price of $0.003 raising $420,500
before costs during August 2019.
Administration
Completed a Small Shareholding Sale Facility in August 2019 via which the total number of shareholders in
the Company was reduced by ~1,580 to ~750. This will significantly reduce administration costs going forward.
Relocated the Registered Office from Adelaide to Perth necessitating a restructure of the board and the
management.
Field Operations
Defined multiple high priority drill targets at the Tarraji-Yampi Project by ground Fixed-Loop Electro-Magnetic
(“FLEM”) surveys and/or confirmation of outcropping mineralisation at the Chianti Cu-Zn-Pb-Ag, Texas Ni-Cu-
PGE and Grants Cu-Au Targets.
Obtained all regulatory approvals to commence drilling at the Tarraji-Yampi Project in September 2019.
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DREADNOUGHT RESOURCES LIMITED
Directors’ Report
Key Projects
Tarraji-Yampi Ni-Cu-Au Project
Dreadnought controls a significant land holding in the highly prospective West Kimberley located only 85 kms from
Derby, Western Australia. The project area has been locked up as a Defence reserve since 1978 and was only recently
opened under the Commonwealth Government’s coexistence regime that balances Defence needs with the
requirements of others including Aboriginal groups, the resources industry, pastoralists and State Governments.
The Tarraji-Yampi Ni-Cu-Au Project presents a rare first mover opportunity in Western Australia with known outcropping
mineralisation and historic workings from the early 1900s which have seen no modern exploration.
Three styles of mineralisation occur at Tarraji including: volcanogenic massive sulphide (“VMS”); Proterozoic Cu-Au
(“IOCG”); and magmatic sulphide Ni-Cu-PGE. Numerous high priority nickel, copper and gold drill targets have been
identified from recent VTEM surveys, historical drilling and surface sampling of outcropping mineralisation.
Illaara Au-Cu-Pb-Zn Project:
The Illaara Au-Cu-Pb-Zn Project is located 160km northwest of Kalgoorlie-Boulder in the world class Yilgarn Craton and
covers 75 strike kilometres of the Illaara Greenstone Belt. The Project is prospective for typical Archean mesothermal
lode gold deposits and Cu-Pb-Zn VMS mineralisation.
The project was acquired from Newmont Goldcorp who defined several camp-scale targets which were undrilled due to
a change in corporate focus. Prior to Newmont Goldcorp, the Illaara greenstone belt was held predominantly by iron ore
explorers and has seen minimal gold and base metal exploration since the 1990s. The project contains several drill
ready gold targets and known VMS horizons which could produce exciting drill targets with the efficient and effective
application of modern exploration technology.
Rocky Dam Au-Cu-Zn Project:
The Rocky Dam Au Project is located 45kms east of Kalgoorlie-Boulder in the world class Eastern Goldfields
Superterrane of Western Australia. The Project is prospective for typical Archean mesothermal lode gold deposits and
Cu-Pb-Zn-Ag VMS mineralisation.
The project has known gold and VMS occurrences with drill ready gold targets based from 1990s mineralised gold
intercepts which have not been followed up.
Competent Person’s Statement
The information in this report that relates to geology and exploration results and planning was compiled by Mr. Dean Tuck, who is a
Member of the AIG and a director and shareholder of the Company. Mr. Tuck has sufficient experience which 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.
Tuck consents to the inclusion in the report of the matters based on the information in the form and context in which it appears.
The Company confirms that it is not aware of any new information or data that materially affects the information in the original reports,
and that the forma and context in which the Competent Persons findings are presented have not been materially modified from the
original reports.
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DREADNOUGHT RESOURCES LIMITED
Directors’ Report
MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR
Other than detailed below, there has not arisen in the interval between 1 July 2019 and the date of this report any item,
transaction or event of a material and unusual nature likely, in the opinion of the directors of the Group, to affect
significantly the operations of the consolidated entity, the results of those operations, or the state of affairs of the
consolidated entity, in future years.
During July 2019, the Group completed a share placement at an issue price of $0.003 and issued 165,131,627 ordinary
shares to sophisticated investors for exploration and working capital purposes. The placement raised $495,395 before
costs.
During August 2019, an issue of 600,000 Convertible Notes at a face value of $1.00 raising was approved by
shareholders. The convertible note issue raised $600,000 (before costs).
Dreadnought also completed a Share Purchase Plan and issued 140,166,663 ordinary shares at an issue price of
$0.003 raising $420,500 before costs during August 2019.
Completed a Small Shareholding Sale Facility in August 2019 via which the total number of shareholders in the
Company was reduced by ~1,580 to ~750. This will significantly reduce administration costs going forward.
The Group received a notification of a claim by Arrow Minerals Ltd ("Arrow") relating to the Group's acquisition of the
Illaara Greenstone Belt. Subsequently, Arrow decided not to pursue the claim (see ASX announcement on 13
September 2019).
The Group finalised the acquisition of the Wombarella Project for 16 million fully paid ordinary shares and $20,000
cash on 14 August 2019.
The Company consolidated a significant land position prospective for Proterozoic Cu-Au, Cu-Zn-Pb-Ag VMS and
Magmatic Ni-Cu-PGE massive sulphides in the South Kimberley. The South Kimberley Project contains historic Cu-Au
occurrences similar to those seen within the Tarraji-Yampi Project.
The Board resolved to terminate the Ramelius Tanami Joint Venture Agreement and surrender the remaining tenement.
FUTURE DEVELOPMENTS, PROSPECTS AND BUSINESS STRATEGY
Dreadnought Resources (ASX:DRE) is focused on greenfield exploration and the discovery for Tier 1 and Tier 2 Nickel,
Copper and Gold deposits within Western Australia.
ENVIRONMENTAL REGULATION
The operations of the Group in Australia are subject to environmental regulations under both Commonwealth and State
legislation. In the mining industry, many activities are regulated by environmental laws as they may have the potential
to cause harm and/or otherwise impact upon the environment. Therefore, the Group conducts its operations under the
necessary Commonwealth and State Licences and Works Approvals to carry out ground disturbing activities including
the discharge of hazardous waste and materials arising from any exploration or mining activities and development
conducted by the Group on any of its tenements. The Group considers it has complied with all relevant environmental
obligations.
6
DREADNOUGHT RESOURCES LIMITED
Directors’ Report
INFORMATION ON DIRECTORS
PAUL CHAPMAN B.Comm, ACA, Grad. Dip. Tax, MAICD, MAusIMM
Non-Executive Chairman
Mr Chapman is not considered to be independent because he is current a Substantial Shareholders as defined in the
Corporations Act.
Experience and Expertise
Paul is a chartered accountant with over 30 years’ experience in the resources sector gained in Australia and the United
States. Paul has experience across a range of commodity businesses including gold, nickel, uranium, manganese,
bauxite/alumina and oil/gas and has held managing director and other senior management roles in public companies.
Paul was a
founding shareholder/director of the following ASX listed companies: Reliance Mining; Encounter Resources; Rex
Minerals; Silver Lake Resources and Paringa Resources.
Special Responsibilities
Chairman of the Board.
Other current directorships
Mr Chapman is a director of Black Cat Syndicate Limited (ASX:BC8) and Encounter Resources Limited (ASX:ENR).
Former directorships in the last 3 years
Mr Chapman resigned as non-executive director of Brazilian copper/gold producer Avanco Resources Limited on 10
August 2018 following a successful takeover by OZ Minerals Limited.
DEAN TUCK B.Sc (Hons), FGAA, MAIG
Managing Director
Experience and expertise
Mr Tuck is an experienced geologist and exploration manager having worked across a wide range of commodities in
Australia, Brazil and Southeast Asia from project generation through to resource evaluation. He has held senior level
positions at BHP Billiton and ASX listed junior explorers. Mr Tuck has been instrumental in a number of discoveries
including the Strickland gold, Mallinda and Mallina LCT pegmatites and Wonmunna iron ore.
Other current directorships
None.
Former directorships in the last 3 years
None.
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DREADNOUGHT RESOURCES LIMITED
Directors’ Report
IAN GORDON B. Comm, MAICD
Independent Non-executive Director
Experience and Expertise
Mr Gordon is a mining executive with extensive experience in transaction generation, project acquisition, mine
development and the management of public companies. Mr Gordon was formally an Executive Director and Managing
Director of Ramelius Resources Limited for seven years and Managing Director of Flinders Mines Limited for two years
and is currently a Director of Auteco Minerals Limited. He holds a Bachelor of Commerce degree from Curtin University
(WA) and is a member of the Australian Institute of Company Directors.
Other current directorships
Mr Gordon is a Director of ASX listed company Auteco Minerals Limited (since August 2017).
Former directorships in the last 3 years
None.
PAUL PAYNE B.AppSc Grad Dip Min Ec, FAusIMM
Independent Non-executive Director
Experience and expertise
Mr Payne is a geologist, and holds in excess of 30 years’ experience in mining including 10 years independent consulting
across a range of commodities and jurisdictions. Mr Payne has extensive technical experience in the evaluation of
mineral deposits from early stage exploration to definitive feasibility studies and development. Mr Payne has held
corporate roles including Technical Director and Managing Director of ASX listed companies including founding
Managing Director of Dacian Gold Limited, and was instrumental in the Company’s successful IPO and making the
major initial gold discovery at its Mount Morgans project.
Other current directorships
Mr Payne is a director of Carnaby Resources Limited (since July 2016).
Former directorships in the last 3 years
Auteco Minerals Ltd.
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DREADNOUGHT RESOURCES LIMITED
Directors’ Report
DAVID CHAPMAN B.Sc (Hons), MAusIMM
Non-executive Director, resigned 31 July 2019
Experience and Expertise
Mr Chapman is a geologist and senior executive with extensive experience in the international resource industry. His diverse
experience in senior and corporate roles covers all aspects of the mining industry from exploration, operations and business
development, through to feasibility studies, financing and construction across a range of commodities. Mr Chapman was a
founding shareholder and director of ASX-listed Paringa Resources and formally a director of Western Mining Corporation
in Brazil. His is currently the Managing Director of Southern Geoscience Consultants.
Other current directorships
None.
Former directorships in the last 3 years
None.
DUNCAN GORDON B. Eng
Independent Non-Executive Chairman (resigned April 2019)
Experience and Expertise
Mr Gordon is a founder and co-principal of Adelaide Equity Partners Ltd and has extensive experience working within
the mining and natural resources sector. Mr Gordon is a qualified engineer with accompanying financial background.
Mr Gordon has taken principal roles in advising ASX-listed companies on a range of corporate matters including:
identification of major corporate acquisition and divestment opportunities; Initial Public Offerings; raising debt and raising
equity capital both within and outside Australia
Special Responsibilities
Former Chairman of the Board.
Former Chairman of the Audit Committee.
Other current directorships
None.
Former directorships in the last 3 years
None.
9
DREADNOUGHT RESOURCES LIMITED
Directors’ Report
COMPANY SECRETARY
NICHOLAS DAY BCom; MBA; FFINSIA; ASCPA
Appointed 1 July 2019
Experience and expertise
Nick Day has over 20 years experience as a company director, CFO and company secretary for a broad range of listed
and private technology companies and mining and exploration companies. These have included ASX, TSX and AIM listed
exploration and mining companies with copper, gold, lead, coal, zinc, rare earths and uranium projects in Madagascar, the
Philippines and North/South America, and Africa. Mr Day is currently the CFO and Company Secretary for Battery Minerals
Limited, Lindian Resources and previously was CFO and Company Secretary at Minbos Resources Limited and RTG
Mining Inc.
KAITLIN SMITH B.Com (Acc); CA
Resigned 31 July 2019
Experience and expertise
Ms Smith was appointed Company Secretary on 1 September 2015 and resigned on 31 July 2019. Ms Smith provides
company secretarial and accounting services to various public and proprietary companies and holds a Bachelor of
Commerce (Accounting) and is a Chartered Accountant.
10
DREADNOUGHT RESOURCES LIMITED
Directors’ Report
Meetings of directors
The numbers of meetings of the Company's board of directors and of each board committee held during the year ended
30 June 2019, and the numbers of meetings attended by each director were:
Full meetings of
directors
Audit committee
meetings
Remuneration
committee
meetings
Paul Chapman
David Chapman
Dean Tuck
Ian Gordon
Paul Payne
Duncan Gordon (resigned 9 April 2019)
A = Number of meetings attended
B = Number of meetings held during the time the director held office or was a member of the committee during the year
and was eligible to attend.
B
1
1
1
3
3
2
A
1
1
1
2
3
2
A
3
3
3
9
8
7
A
1
1
1
2
3
2
B
1
1
1
3
3
2
B
3
3
3
9
9
7
Indemnification and insurance of officers
The Company has indemnified the directors and officers of the Company for costs incurred, in their capacity as a director
or officer, for which they may be held personally liable, except where there is a lack of good faith.
During the financial year, the Company paid a premium in respect of a contract to insure the directors and officers of the
Company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits
disclosure of the nature of the liability and the amount of the premium.
Proceedings on behalf of the Group
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on
behalf of the Group or intervene in any proceedings to which the Group is a party for the purpose of taking responsibility
on behalf of the Group for all or any part of those proceedings.
No proceedings have been brought or intervened in on behalf of the Group with leave of the Court under section 237 of
the Corporations Act 2001.
Non-audit services
The Board of Directors is satisfied that the provision of non-audit services during the year is compatible with the general
standard of independence for auditors imposed by the Corporations Act 2001. The directors are satisfied that the services
disclosed below did not compromise the external auditor’s independence for the following reasons:
all non-audit services are reviewed and approved by the Board prior to commencement to ensure they do not
adversely affect the integrity and objectivity of the auditor; and
the nature of the services provided do not compromise the general principles relating to auditor independence
in accordance with APES 110: Code of Ethics for Professional Accountants set by the Accounting Professional
and Ethical Standards Board.
There were no fees for non-audit services paid or payable to the external auditors of the Parent Entity, their related
practices or non-related audit firms during the year ended 30 June 2019.
11
DREADNOUGHT RESOURCES LIMITED
Directors’ Report
Shares under option
At the date of this report unissued ordinary shares of Dreadnought Resources Limited under option are:
Expiry date
Exercise price
Number of
options
Vested
Unvested
Amount paid/payable
by recipient ($)
03/04/2024
$0.01
50,000,000
50,000,000
-
-
Remuneration report – audited
The remuneration report is set out under the following main headings:
A Principles used to determine the nature and amount of remuneration
B Details of remuneration
C Share-based compensation
D Shareholdings
E Use of Remuneration Consultants
The information provided in this remuneration report has been audited as required by section 308(3C) of the Corporations
Act 2001.
A Principles used to determine the nature and amount of remuneration
The Group's policy for determining the nature and amounts of emoluments of board members and senior executive
officers of the Group is as follows:
The Company's Constitution specifies that the total amount of remuneration of non-executive directors shall be fixed from
time to time by a general meeting. The current maximum aggregate remuneration of non-executive directors has been
set at $300,000 per annum. Directors may apportion any amount up to this maximum amount amongst the non-executive
directors as they determine. Directors are also entitled to be paid reasonable travelling, accommodation and other
expenses incurred in performing their duties as directors.
Non-executive and executive directors’ remuneration is by way of fees and statutory superannuation contributions. The
Company’s Incentive Options Plan was approved by shareholders on 16 August 2019. Directors may be eligible to
participate in the Incentive Options Plan.
The Company's remuneration structure is based on a number of factors including the financial position of the Company
and the particular experience and performance of the individual in meeting key objectives of the Company. The Board is
responsible for assessing relevant employment market conditions and achieving the overall, long term objective of
maximising shareholder benefits, through the retention of high quality personnel.
The Company does not presently emphasise payment for results through the provision of cash bonus schemes or other
incentive payments based on key performance indicators of the Company given the nature of the Company's business
as a mineral exploration entity. However, the Board may approve the payment of cash bonuses from time to time in order
to reward individual executive performance in achieving key objectives as considered appropriate by the Board.
The Company also has an Employee Incentive Option Plan approved by shareholders on 16 August 2019 that enables
the Board to offer eligible employees and directors options to acquire ordinary fully paid shares in the Company. Under
the terms of the Plan, options for ordinary fully paid shares may be offered to the Company's eligible employees at no
cost or no more than nominal monetary consideration unless otherwise determined by the Board in accordance with the
terms and conditions of the Plan. The objective of the Plan is to align the interests of employees and shareholders by
providing employees of the Company with the opportunity to participate in the equity of the Company as an incentive to
achieve greater success and profitability for the Company and to maximise the long term performance of the Company.
12
DREADNOUGHT RESOURCES LIMITED
Directors’ Report
Remuneration report – audited (continued)
Voting and comments made at the Company’s 2018 Annual General Meeting
Dreadnought Resources Limited received more than 83% of ‘yes’ votes on its remuneration report for the 2018 financial
year. The Company did not receive any specific feedback at the AGM or throughout the year on its remuneration practices.
B Details of remuneration
This report details the nature and amount of remuneration for each key management person of the Company.
The names and positions held by directors and key management personnel of the Company during the financial year are:
Paul Chapman – Chairman, non-executive (appointed 9 April 2019)
Dean Tuck – Managing Director (Appointed 9 April 2019)
Ian Gordon – Director, non-executive (since 21 December 2017)
Paul Payne – Director, non-executive (since 21 December 2017)
David Chapman - Director, non-executive (appointed 9 April 2019, resigned 31 July 2019)
Duncan Gordon – former Chairman, non-executive (resigned 9 April 2019)
Kaitlin Smith – former Company Secretary (resigned 31 July 2019)
13
DREADNOUGHT RESOURCES LIMITED
Directors’ Report
Remuneration report – audited (continued)
Key management personnel of the Group and other executives of the Company and the Group
2019
Name
Non-executive directors
Short-term
employee
benefits
Salary
$
Post-
employment
benefits
Super-
annuation
$
Share-
based
payments
Options
Total
$
$
Paul Chapman
David Chapman*
Dean Tuck
Ian Gordon
Paul Payne
Duncan Gordon**
Nicholas Day
Kaitlin Smith***
Total key management personnel compensation (Group)
*resigned on 31 July 2019
**resigned on 9 April 2019
***Ms Smith was engaged under a service contract with AE Administrative Services Pty Ltd to act as Company Secretary.
Ms Smith resigned on 31 July 2019.
-
-
58,400
27,000
36,000
27,800
-
88,205
237,405
-
-
53,333
27,000
34,438
27,800
-
88,205
230,776
-
-
5,067
-
1,562
-
-
-
6,629
-
-
-
-
-
-
-
-
-
2018
Name
Non-executive directors
Short-term
employee
benefits
Salary
$
Post-
employment
benefits
Super-
annuation
$
Duncan Gordon
Ian Gordon
Paul Payne
Robert Kennedy
Ewan Vickery
Ian Witton (Alternate Director)
Kevin Wills
Kaitlin Smith
Total key management personnel compensation (Group)
19,062
19,062
19,062
-
-
-
-
80,293
137,479
-
-
-
-
-
-
-
-
-
Share-
based
payments
Options
$
-
-
-
-
-
-
-
-
-
Total
$
19,062
19,062
19,062
-
-
-
-
80,293
137,479
Key management personnel of the Group and other executives of the Company and the Group
14
DREADNOUGHT RESOURCES LIMITED
Directors’ Report
Remuneration report – audited (continued)
C Share based compensation
Employee Incentive Options Plan
Shares issued on exercise of remuneration options
The Company has an Employee Incentive Options Plan approved by shareholders that enables the Board to offer eligible
employees and directors options to acquire ordinary fully paid shares in the Company. Under the terms of the Plan, options
to acquire ordinary fully paid shares may be offered to the Company's eligible employees at no cost unless otherwise
determined by the Board in accordance with the terms and conditions of the Plan. There were no employee share options
issued during the financial year.
Options granted as remuneration
No options were granted to directors or key management personnel of the Company during the financial year.
Shares issued on exercise of remuneration options
No shares were issued to directors as a result of the exercise of remuneration options during the financial year.
Directors' interests in shares and options
Directors' relevant interests in shares and options of the Company are disclosed below.
Options
The number of options in Dreadnought Resources Ltd held by each key management person of the Group during the
financial year is as follows:
No options were issued as remuneration to KMP.
Balance at
beginning
of year
Granted as
remuneration
during the
year
Options
exercised
Net change
other
Exercise
Price $
Total
vested
30/06/19
Total
exercisable
30/06/19
30 June 2019
Directors
Paul Chapman*
David Chapman*
CFO and Company Secretary
Nicholas Day*
*received from IronRinger acquisition
-
-
-
-
-
-
-
-
-
-
- 30,000,000
- 10,000,000
- 40,000,000
0.01 30,000,000 30,000,000
0.01 10,000,000 10,000,000
- 40,000,000 40,000,000
- 10,000,000
- 10,000,000
0.01 10,000,000 10,000,000
- 10,000,000 10,000,000
15
DREADNOUGHT RESOURCES LIMITED
Directors’ Report
D
Shareholdings
The number of ordinary shares in Dreadnought Resources Ltd held by each key management person of the Group during
the financial year is as follows:
Balance at
beginning of
year
Granted as
remuneration
during the year
Issued on
exercise of
options
during the
year
30 June 2019
Directors
Paul Chapman
David Chapman*
Dean Tuck
Ian Gordon
Paul Payne
Duncan Gordon**
CFO and Company Secretary
Nicholas Day***
*resigned 31 July 2019
**resigned 9 April 2019
***appointed 1 July 2019
-
-
-
26,651,505
10,000,000
14,006,528
50,658,033
-
-
E Use of Remuneration Consultants
-
-
-
-
-
-
-
-
-
Other changes
during the year
Balance at end
of year
-
-
-
-
-
-
-
-
-
234,169,743
62,270,555
8,333,333
9,003,840
16,666,670
(14,006,528)
316,437,613
234,169,743
62,270,555
8,333,333
35,655,345
26,666,670
-
367,095,646
65,603,889
65,603,889
65,603,889
65,603,889
The Remuneration Committee seeks external remuneration advice as required. No such advice was obtained during the
financial year ending 30 June 2019.
Remuneration report ends.
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on
page 17.
The Report of Directors, incorporating the Remuneration Report, is signed in accordance with a resolution of the Board of
Directors.
Dean Tuck
Managing Director
Dated 26 September 2019
16
Level 3, 170 Frome Street
Adelaide SA 5000
Correspondence to:
GPO Box 1270
Adelaide SA 5001
T +61 8 8372 6666
Auditor’s Independence Declaration
To the Directors of Dreadnought Resources Limited
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of
Dreadnought Resources Limited for the year ended 30 June 2019, I declare that, 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.
Grant Thornton Audit Pty Ltd
Chartered Accountants
J L Humphrey
Partner – Audit & Assurance
Adelaide, 26 September 2019
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
www.grantthornton.com.au
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients
and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International
Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are
delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one
another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to
Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to
Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation.
Dreadnought Resources Ltd and Controlled Entities
ABN: 40 119 031 864
Consolidated Statement of Profit or Loss and Other
Comprehensive Income
For the Year Ended 30 June 2019
Other income
Administration expenses
Consulting fees
Impairment of exploration expenditure
(Loss) before income tax
Income tax benefit (expense)
(Loss) for the year
Other comprehensive income, net of income tax
Equity instruments at fair value though other comprehensive income –
fair value changes
Total comprehensive income for the year
Consolidated
Note
30 June 2019
$
30 June 2018
$
2
3
3
3
4
3,474
3,993
(227,089)
(143,349)
(204,058)
(183,604)
(253,149)
(1,196)
(680,822)
(324,156)
-
-
(680,822)
(324,156)
(8,013)
(25,000)
(688,835)
(349,156)
Earnings per share for loss attributable to the ordinary equity holders of the Company
Cents
Basic earnings per share (cents)
Diluted earnings per share (cents)
Note
Cents
15
15
(0.09)
(0.09)
(0.07)
(0.07)
The above consolidated statement of profit or loss and comprehensive income should be read in conjunction with the
accompanying notes.
18
Dreadnought Resources Ltd and Controlled Entities
ABN: 40 119 031 864
Consolidated Statement of Financial Position
As at 30 June 2019
ASSETS
Current Assets
Cash and cash equivalents
Trade and other receivables
Other assets
Investments in equity instruments
Total Current Assets
Non-Current Assets
Property, plant and equipment
Exploration, evaluation and development assets
Total Non-Current Assets
Total Assets
LIABILITIES
Current Liabilities
Trade and other payables
Total Current Liabilities
Non-Current Liabilities
Other financial liabilities
Total Non-Current Liabilities
Total Liabilities
Net Assets
EQUITY
Issued capital
Reserves
Retained earnings
Total Equity
Consolidated
30 June 2019
$
30 June 2018
$
Note
6
7
8
9
647,966
18,917
11,527
-
350,451
1,520
6,807
25,000
678,410
383,778
10
11
2,158
2,130,136
190
252,521
2,132,294
252,711
2,810,704
636,489
12
194,580
122,907
194,580
122,907
13
560,480
560,480
-
-
755,060
122,907
2,055,644
513,582
14
40,263,315
74,520
(38,282,191)
38,106,938
(25,000)
(37,568,356)
2,055,644
513,582
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
19
Dreadnought Resources Ltd and Controlled Entities
ABN: 40 119 031 864
Consolidated Statement of Changes in Equity
For the Year Ended 30 June 2019
Attributable to owners of the
Dreadnought Resources Limited
Issued
Capital
Retained
Earnings
Equity
Reserves
FVOCI
Reserves
Total
Share-
based
payment
Reserves
$
$
$
$
$
$
Balance at 1 July 2017
37,661,627
(37,244,200)
Loss for year
Other comprehensive income
Total comprehensive income for the
year
Transactions with owners in their
capacity as owners
Share issues, net of transaction costs and
tax
Balance at 30 June 2018
Balance at 1 July 2018
Loss for year
Other comprehensive income
Total comprehensive income for the
year
Transactions with owners in their
capacity as owners
Share issues, net of transaction costs and
tax
Share issues, IronRinger acquisition
Equity component of convertible notes
(Note 13)
Option issues, net of transaction costs and
tax
-
-
-
(324,156)
-
(324,156)
445,311
-
38,106,938
(37,568,356)
38,106,938
(37,568,356)
-
-
-
(713,835)
-
(713,835)
376,805
1,779,572
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
39,520
-
Balance at 30 June 2019
40,263,315
(38,282,191)
39,520
-
-
(25,000)
(25,000)
-
(25,000)
(25,000)
33,013
(8,013)
25,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
417,427
(324,156)
(25,000)
(349,156)
445,311
513,582
513,582
(680,822)
(8,013)
(688,835)
376,805
1,779,572
39,520
35,000
35,000
35,000
2,055,644
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
20
Dreadnought Resources Ltd and Controlled Entities
ABN: 40 119 031 864
Consolidated Statement of Cash Flows
For the Year Ended 30 June 2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Payments to suppliers and employees
Interest received
Consolidated
30 June 2019
$
30 June 2018
$
Note
(429,276)
(264,192)
3,474
3,993
Net cash (used in) operating activities
24
(425,802)
(260,199)
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for exploration assets
Proceeds from the sale of investments in equity instruments
Payment for property, plant and equipment
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issue of shares
Proceeds from convertible notes (Note 13)
Net cash provided by financing activities
Net increase in cash and cash equivalents held
Cash and cash equivalents at beginning of year
(269,249)
16,987
(2,160)
(254,422)
-
-
-
-
377,739
445,311
600,000
-
977,739
445,311
297,515
185,112
350,451
165,339
Cash and cash equivalents at end of financial year
6
647,966
350,451
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
21
Dreadnought Resources Ltd and Controlled Entities
ABN: 40 119 031 864
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2019
1
Summary of Significant Accounting Policies
The principal accounting policies adopted in the preparation of these consolidated Financial Statements are set out
below. These policies have been consistently applied to all the periods presented, unless otherwise stated. The
Financial Statements are for the consolidated entity consisting of Dreadnought Resources Limited and its subsidiaries.
(a)
Basis of Preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting
Standards and interpretations issued by the Australian Accounting Standards Board (AASB) and the
Corporations Act 2001. Dreadnought Resources Limited is a for profit entity for the purpose of preparing the
financial statements.
(i) Compliance with IFRS
These consolidated financial statements also comply with International Financial Reporting Standards
(IFRS) as issued by the International Accounting Standards Board (IASB).
Australian Accounting Standards include Australian equivalents to International Financial Reporting
Standards (AIFRS). Compliance with AIFRSs ensures that the financial statements and notes comply
with International Financial Reporting Standards (IFRS).
(ii) Historical cost convention
These financial statements have been prepared on an accrual basis, under the historical cost convention,
as modified by the revaluation of available-for-sale financial assets, financial assets and liabilities
(including derivative instruments) at fair value through profit or loss and certain classes of property, plant
and equipment.
(iii) Critical accounting estimates
The directors evaluate estimates and judgments incorporated into the financial report based on historical
knowledge and best available current information. Estimates assume a reasonable expectation of future
events and are based on current trends and economic data, obtained both externally and within the
Company.
(b)
Adoption of new and revised accounting standards
Changes in the accounting policies adopted in the preparation of the annual consolidated financial statements
are consistent with those followed in the preparation of the Group’s annual consolidated financial statements
for the year ended 30 June 2018, except for the adoption of new standards effective as of 1 January 2018. The
Group has not early adopted any other standard, interpretation or amendment that has been issued but is not
yet effective. The Group applies, for the first time, AASB 9 Financial Instruments from 1 July 2018. The nature
and effect of these changes are disclosed below. Several other amendments and interpretations apply for the
first time in 2018, but do not have an impact on the annual consolidated financial statements of the Group. The
Group has not applied AASB 16 Leases due to the Group has no current lease commitment.
The accounting policies have been applied consistently throughout the Group for the purposes of preparation
of annual financial statements.
22
Dreadnought Resources Ltd and Controlled Entities
ABN: 40 119 031 864
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2019
1
Summary of Significant Accounting Policies continued
Financial Instruments
AASB 9 Financial Instruments replaces AASB 139 Financial Instruments: Recognition and Measurement for annual
periods beginning on or after 1 January 2018, bringing together all three aspects of the accounting for financial
instruments: classification and measurement; impairment; and hedge accounting.
When adopting AASB 9, the Group has applied transitional relief and elected not to restate prior periods. Rather
differences arising from the adoption of AASB 9 in relation to classification, measurement, and impairment are
recognised in opening retained earnings as at 1 July 2018.
The reclassifications and adjustments arising from the introduction of AASB 9 have not been reflected in the
statement of financial position as at 30 June 2018, but are recognised in the opening balance sheet from 1 July
2018. The following table shows the adjustments recognised for each individual line item. Line items that were not
affected by the change have not been included.
On 1 July 2018 (the date of initial application of AASB 9), the Group’s management assessed which business
models apply to the financial assets held by the Group and has classified its financial instruments into the
appropriate AASB 9 categories for 2019 financial year.
Balance Sheet Extract
30 June 2018 as
originally presented
$
AASB 9
reclassification
$
1 July 2018
$
Current Assets
Financial assets at fair value through
other comprehensive income (FVOCI)
Available-for-sale (AFS) financial assets
-
25,000
25,000
(25,000)
25,000
-
The impact of these changes on the Group’s equity is as follows:
Effect on AFS reserve
$
Effect on FVOCI reserve
$
Closing Balance 30 June 2018 – AASB 139
Reclassify non-trading equity instruments from
AFS financial assets to financial assets at FVOCI
Opening Balance 1 July 2018 – AASB 9
(25,000)
25,000
-
-
(25,000)
(25,000)
Equity investments previously classified as available-for-sale
The Group elected to present in OCI changes in the fair value of all its equity investments previously classified as
AFS. As a result, assets with a fair value of $25,000 were reclassified from AFS financial asset to financial assets
at FVOCI and fair value losses of $25,000 were reclassified from the AFS reserve to FVOCI reserve on 1 July 2018.
23
Dreadnought Resources Ltd and Controlled Entities
ABN: 40 119 031 864
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2019
1
Summary of Significant Accounting Policies continued
(c)
Basis of Consolidation
The Group financial statements consolidate those of the Parent and all of its subsidiaries as of 30 June 2019.
The Parent controls a subsidiary if it is exposed, or has rights, to variable returns from its involvement with the
subsidiary and has the ability to affect those returns through its power over the subsidiary. All subsidiaries have
a reporting date of 30 June. All transactions and balances between Group companies are eliminated on
consolidation, including unrealised gains and losses on transactions between Group companies. Where
unrealised losses on intra-group asset sales are reversed on consolidation, the underlying asset is also tested
for impairment from a group perspective. Amounts reported in the financial statements of subsidiaries have
been adjusted where necessary to ensure consistency with the accounting policies adopted by the Group.
Profit or loss and other comprehensive income of subsidiaries acquired or disposed of during the year are
recognised from the effective date of acquisition, or up to the effective date of disposal, as applicable.
Non-controlling interests, presented as part of equity, represent the portion of a subsidiary’s profit or loss and
net assets that is not held by the Group. The Group attributes total comprehensive income or loss of
subsidiaries between the owners of the parent and the non-controlling interests based on their respective
ownership interests.
(d)
Investments in associates and joint ventures
Associates are those entities over which the Group is able to exert significant influence but which are not
subsidiaries.
A joint venture is an arrangement that the Group controls jointly with one or more other investors, and over
which the Group has rights to a share of the arrangement’s net assets rather than direct rights to underlying
assets and obligations for underlying liabilities. A joint arrangement in which the Group has direct rights to
underlying assets and obligations for underlying liabilities is classified as a joint operation.
Investments in associates and joint ventures are accounted for using the equity method. Interests in joint
operations are accounted for by recognising the Group assets (including its share of any assets held jointly),
its liabilities (including its share of any liabilities incurred jointly), its revenue from the sale of its share of the
output arising from the joint operation, its share of the revenue from the sale of the output by the joint operation
and its expenses (including its share of any expenses incurred jointly).
Any goodwill or fair value adjustment attributable to the Group’s share in the associate or joint venture is not
recognised separately and is included in the amount recognised as investment.
The carrying amount of the investment in associates and joint ventures is increased or decreased to recognise
the Group’s share of the profit or loss and other comprehensive income of the associate and joint venture,
adjusted where necessary to ensure consistency with the accounting policies of the Group.
Unrealised gains and losses on transactions between the Group and its associates and joint ventures are
eliminated to the extent of the Group interest in those entities. Where unrealised losses are eliminated, the
underlying asset is also tested for impairment.
(e)
Comparative Amounts
Comparatives are consistent with prior years, unless otherwise stated.
Where a change in comparatives has also affected the opening retained earnings previously presented in a
comparative period, an opening statement of financial position at the earliest date of the comparative period
has been presented.
24
Dreadnought Resources Ltd and Controlled Entities
ABN: 40 119 031 864
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2019
1
Summary of Significant Accounting Policies continued
(f)
Income Tax
The tax expense recognised in the profit or loss and other comprehensive income relates to current income
tax expense plus deferred tax expense (being the movement in deferred tax assets and liabilities and unused
tax losses during the year).
Current tax is the amount of income taxes payable (recoverable) in respect of the taxable profit (tax loss) for
the year and is measured at the amount expected to be paid to (recovered from) the taxation authorities, using
the tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
Deferred tax is provided on temporary differences which are determined by comparing the carrying amounts
of tax bases of assets and liabilities to the carrying amounts in the consolidated financial statements. Deferred
tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset
is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively
enacted by the end of the reporting period.
Deferred tax consequences relating to a non-monetary asset carried at fair value are determined using the
assumption that the carrying amount of the asset will be recovered through sale.
Deferred tax assets are recognised for all deductible temporary differences and unused tax losses to the extent
that it is probable that taxable profit will be available against which the deductible temporary differences and
losses can be utilised.
Current tax assets and liabilities are offset where there is a legally enforceable right to set off the recognised
amounts and there is an intention either to settle on a net basis or to realise the asset and settle the liability
simultaneously.
Deferred tax assets and liabilities are offset where there is a legal right to set off current tax assets against
current tax liabilities and the deferred tax assets and the deferred tax liabilities relate to income taxes levied
by the same taxation authority on either the same taxable entity or different taxable entities which intend either
to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities
simultaneously in each future period in which significant amounts of deferred tax liabilities or assets are
expected to be settled or recovered.
Current and deferred tax is recognised as income or an expense and included in profit or loss for the period
except where the tax arises from a transaction which is recognised in other comprehensive income or equity,
in which case the tax is recognised in other comprehensive income or equity respectively.
Dreadnought Resources Limited and its wholly-owned Australian subsidiaries have formed an income tax
consolidated group under tax consolidation legislation. Each entity in the group recognises its own current and
deferred tax assets and liabilities. Such taxes are measured using the ‘stand-alone taxpayer’ approach to
allocation.
Current tax liabilities (assets) and deferred tax assets arising from unused tax losses and tax credits in the
subsidiaries are immediately transferred to the head entity.
The tax consolidated group has entered into a tax funding arrangement whereby each company in the group
contributes to the income tax payable by the group in proportion to their contribution to the group’s taxable
income. Differences between the amounts of net tax assets and liabilities derecognised and the net amounts
recognised pursuant to the funding arrangement are recognised as either a contribution by, or distribution to
the head entity.
25
Dreadnought Resources Ltd and Controlled Entities
ABN: 40 119 031 864
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2019
1
Summary of Significant Accounting Policies continued
(g)
Leases
Lease payments for operating leases, where substantially all of the risks and benefits remain with the lessor,
are charged as expenses on a straight-line basis over the life of the lease term.
(h)
Revenue and other income
Revenue is recognised when the amount of the revenue can be measured reliably, it is probable that economic
benefits associated with the transaction will flow to the entity and specific criteria relating to the type of revenue
as noted below, has been satisfied.
Revenue is measured at the fair value of the consideration received or receivable and is presented net of
returns, discounts and rebates.
All revenue is stated net of the amount of goods and services tax (GST).
(i)
Goods and Services Tax (GST)
Revenue, expenses and assets are recognised net of the amount of goods and services tax (GST), except
where the amount of GST incurred is not recoverable from the Australian Taxation Office (ATO).
Receivables and payable are stated inclusive of GST.
The net amount of GST recoverable from, or payable to, the ATO is included as part of receivables or payables
in the statement of financial position.
Cash flows in the statement of cash flows are included on a gross basis and the GST component of cash flows
arising from investing and financing activities which is recoverable from, or payable to, the taxation authority is
classified as operating cash flows.
(j)
Property, Plant and Equipment
Where the cost model is used, the asset is carried at its cost less any accumulated depreciation and any
impairment losses. Costs include purchase price, other directly attributable costs and the initial estimate of the
costs of dismantling and restoring the asset, where applicable.
Plant and equipment
Plant and equipment is measured on a cost basis. The carrying amount of plant and equipment is reviewed
annually by directors to ensure it is not in excess of the recoverable amount. The recoverable amount is
assessed on the basis of the expected net cash flows that will be received from the assets’ employment and
subsequent disposal. The expected net cash flows have been discounted to their present values in determining
recoverable amounts.
Subsequent costs are included in the assets’ carrying amounts or recognised as separate assets as
appropriate, only when it is probable that future economic benefits associated with the item will flow to the
Group and the cost can be measured reliably. All other repairs and maintenance are charged to the statement
of profit or loss and other comprehensive income during the financial year in which they are incurred.
Depreciation
The depreciable amount of all property, plant and equipment, except for freehold land is depreciated on a
reducing balance method from the date that management determine that the asset is available for use. The
depreciation rates used for each class of depreciable assets vary from 25% to 40%.
26
Dreadnought Resources Ltd and Controlled Entities
ABN: 40 119 031 864
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2019
1
Summary of Significant Accounting Policies continued
(j)
Property, Plant and Equipment
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date.
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 (note 1(k)).
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These are
included in the consolidated statement of profit or loss and other comprehensive income. When revalued
assets are sold, it is Group policy to transfer any amounts included in other reserves in respect of those assets
to retained earnings.
(k)
Financial instruments
AASB 9 Financial Instruments – Accounting Policies applied from 1 July 2018
a. Classification and Measurement
Except for certain trade receivables, under AASB 9, the Group initially measures a financial asset at its fair
value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs. Under AASB
9, debt financial instruments are subsequently measured at fair value through profit or loss (FVPL), amortised
cost, or fair value through other comprehensive income (FVOCI).
Classification is based on two criteria:
The Group’s business model for managing the assets; and
Whether the instruments’ contractual cash flows represent ‘solely payments of principal and interest’ on
the principal amount outstanding (the ‘SPPI criterion’).
The new classification and measurement of the Group’s debt financial assets are, as follows:
Debt instruments are amortised cost for financial assets that are held within a business model with the
objective to hold the financial assets in order to collect contractual cash flows that meet the SPPI criterion.
This category includes the Group’s Trade and other receivables.
Other financial assets are classified and subsequently measured, as follows:
Equity instruments at FVOCI, with no recycling of gains or losses to profit or loss on derecognition. This
category only includes equity instruments which the Group has irrevocably elected to so classify upon initial
recognition or transition.
The Group reclassified its quoted equity instruments from AFS financial asset to financial assets at FVOCI and
fair value losses were reclassified from the AFS reserve to FVOCI reserve on 1 July 2018. Equity instruments
at FVOCI are not subject to an impairment assessment under AASB 9. Under AASB 139, the Group’s quoted
equity instruments were classified as AFS financial assets.
The accounting for the Group’s financial liabilities remains largely the same as it was under AASB 139. Similar
to the requirements of AASB 139, AASB 9 requires contingent consideration liabilities to be treated as financial
instruments measured at fair value, with the changes in fair value recognised in the statement of profit or loss.
27
Dreadnought Resources Ltd and Controlled Entities
ABN: 40 119 031 864
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2019
1
Summary of Significant Accounting Policies continued
(k)
Financial instruments
b.
Impairment
The adoption of AASB 9 has fundamentally changed the Group’s accounting for impairment losses for financial
assets by replacing AASB 139’s incurred loss approach with a forward-looking Expected Credit Loss (ECL)
approach.
AASB 9 requires the Group to record an allowance for ECLs for all loans and other debt financial assets not
held at FVPL.
c. Compound financial instruments
Compound financial instruments issued by the Group comprise convertible notes that can be converted to
ordinary shares at the option of the holder, when the number of shares to be issued is fixed and does not vary
with changes in fair value.
The liability component of compound financial instruments is initially recognised at the fair value of a similar
liability that does not have an equity conversion option. The equity component is initially recognised at the
difference between the fair value of the compound financial instrument as a whole and the fair value of the
liability component. Any directly attributable transaction costs are allocated to the liability and equity
components in proportion to their initial carrying amounts.
Subsequent to initial recognition, the liability component of a compound financial instrument is measured at
amortised cost using the effective interest method. The equity component of a compound financial instrument
is not remeasured.
Interest related to the financial liability is recognised in profit or loss. On conversion at maturity, the financial
liability is reclassified to equity and no gain or loss is recognised.
Accounting policies applied in prior year
Financial instruments are recognised initially using trade date accounting, i.e. on the date the Group becomes
party to the contractual provisions of the instrument.
On initial recognition, all financial instruments are measured at fair value plus transaction costs (except for
instruments measured at fair value through profit or loss where transaction costs are expensed as incurred).
(l)
Impairment of non-financial assets
Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment,
or more frequently if events or changes in circumstances indicate that they might be impaired. Other assets
are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may
not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount
exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to
sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for
which there are separately identifiable cash inflows which are largely independent of the cash inflows from
other assets or groups of assets (cash generating units). Non-financial assets other than goodwill that suffered
an impairment are reviewed for possible reversal of the impairment at each reporting date.
(m)
Cash and cash equivalents
For the purpose of presentation in the consolidated 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
with original maturities of 12 months or less that are readily convertible to known amounts of cash and which
are subject to an insignificant risk of changes in value, and bank overdrafts. Any bank overdrafts the Group
have are shown within borrowings in current liabilities in the consolidated statement of financial position.
28
Dreadnought Resources Ltd and Controlled Entities
ABN: 40 119 031 864
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2019
1
Summary of Significant Accounting Policies continued
(n)
Employee benefits
Short-term employee benefits
Short-term employee benefits are benefits, other than termination benefits, that are expected to be settled
wholly within twelve (12) months after the end of the period in which the employees render the related service.
Examples of such benefits include wages and salaries, non-monetary benefits and accumulating sick leave.
Short-term employee benefits are measured at the undiscounted amounts expected to be paid when the
liabilities are settled.
Other long-term employee benefits
The Group’s liabilities for annual leave and 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 at the present value of the expected future
payments to be made to employees. 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
(2015: government 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.
(o)
Earnings per share
Dreadnought Resources Ltd presents basic and diluted earnings per share information for its ordinary shares.
Basic earnings per share is calculated by dividing the profit attributable to owners of the Company by the
weighted average number of ordinary shares outstanding during the year.
Diluted earnings per share adjusts the 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 additional ordinary shares that would have been outstanding assuming the conversion of all dilutive
potential ordinary shares.
(p)
Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares
and share options which vest immediately are recognised as a deduction from equity, net of any tax effects.
(q)
Share Based Payments
The Group operates equity-settled share-based payment employee share and option schemes. The fair value
of the equity to which employees become entitled is measured at grant date and recognised as an expense
over the vesting period, with a corresponding increase to an equity account. The fair value of shares is
ascertained as the market bid price. The fair value of options is ascertained using a Binomial pricing model
which incorporates all market vesting conditions. The amount to be expensed is determined by reference to
the fair value of the options or shares granted. This expense takes in account any market performance
conditions and the impact of any non-vesting conditions but ignores the effect of any service and non-market
performance vesting conditions.
29
Dreadnought Resources Ltd and Controlled Entities
ABN: 40 119 031 864
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2019
1
Summary of Significant Accounting Policies continued
(q)
Share Based Payments
Non-market vesting conditions are taken into account when considering the number of options expected to
vest. At the end of each reporting period, the Group revises its estimate of the number of options which are
expected to vest based on the non-market vesting conditions. Revisions to the prior period estimate are
recognised in profit or loss and equity.
(r)
Exploration and development expenditure
Exploration, evaluation and development expenditure incurred is accumulated in respect of each identifiable
area of interest. These costs are only carried forward to the extent that they are expected to be recouped
through successful development of the area or where activities in the area have not yet reached a stage that
permits reasonable assessment of the existence of economically recoverable reserves. As the asset is not
available for use it is not depreciated or amortised.
Accumulated costs in relation to an abandoned area are written off in full against profit or loss in the period in
which the decision to abandon that area 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.
(s)
Reserves
FVOCI reserves represent financial assets at fair value through other comprehensive income reserve. The
reserve records fair value change of equity instruments. Share-based payment reserves represent fair value
of the option issued to the IronRinger vendor. The equity reserve represents the equity component (conversion
rights) on the issue of unsecured convertible notes.
(t)
Key estimates
The preparation of the consolidated financial statements requires management to make estimates and
judgments. These estimates and judgments are continually evaluated and are based on historical experience
and other factors, including expectations of future events that may have a financial impact on the Group and
that are believed to be reasonable under the circumstances.
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will,
by definition, seldom equal the related actual results. The estimates and assumptions that have a significant
risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial
year are discussed below:
(i) Estimated impairment
The Group assesses impairment at each reporting date by evaluating conditions specific to the Group that may
lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is
determined.
(ii) Exploration and evaluation
The Group policy for exploration and evaluation is discussed in note 1 (q). The application of this policy requires
management to make certain assumptions as to future events and circumstances. Any such estimates and
assumptions may change as new information becomes available. If, after having capitalised exploration and
evaluation expenditure, management concludes that the capitalised expenditure is unlikely to be recovered by
future sale or exploration, then the relevant capitalised amount will be written off through the statement of profit
or loss. The related carrying amounts are disclosed in note 3.
30
Dreadnought Resources Ltd and Controlled Entities
ABN: 40 119 031 864
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2019
1
Summary of Significant Accounting Policies continued
(t)
Key estimates
The Group’s policy for compound financial instrument is discussed in Note 1(k). The fair value of the liability
component is determined based on the contractual stream of future cash flows which is discounted at the rate
of interest (14%) that would apply to an identical financial instrument without the conversion option. The Group
uses its judgement to determine the discount rate based on the market interest rates existing at the end of
each reporting period.
(u)
Financial report
The financial report was authorised for issue on 26 September 2019 by the Board of directors.
31
Dreadnought Resources Ltd and Controlled Entities
ABN: 40 119 031 864
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2019
2 Other Income
Other Income
Interest received
3 Expenses
Loss before income tax from continuing operations includes the following
expenses:
Administration
Compliance
Depreciation
Legal fees
Other costs
Employment costs
Consulting fees
Accounting and secretarial services
Audit fees
Corporate consulting
Impairment of assets
Capitalised exploration expenditure
Consolidated
30 June 2019
$
30 June 2018
$
3,474
3,474
3,993
3,993
29,880
19,565
192
117
9,717
19,186
87,356
47,090
99,944
227,089
57,391
143,349
91,705
84,044
34,460
34,560
77,893
65,000
204,058
183,604
253,149
253,149
1,196
1,196
32
Dreadnought Resources Ltd and Controlled Entities
ABN: 40 119 031 864
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2019
4
Income Tax Expense
Reconciliation of income tax to accounting loss:
Prima facie profit/(loss) from ordinary activities
Tax at the Australian tax rate of
Prima facie tax expenses/(income) on ordinary activities
Add:
Tax effect of amounts which are not deductible (taxable) in calculating taxable
income:
Impairment of exploration assets
Tax effect of temporary differences not brought to account as they do not meet the
recognition criteria
Consolidated
30 June 2019
$
30 June 2018
$
(680,822)
(324,155)
27.5%
27.5%
(187,226)
(89,143)
69,616
329
117,610
88,814
-
-
A deferred tax asset (DTA) has not been recognised in respect of temporary differences as they do not meet the recognition
criteria per AASB 112 Income Taxes. A DTA has not been recognised in respect of tax losses as realisation of the benefit
is not regarded as probable.
The Group has unrecognised assessed losses of $7,133,359 (2018: $6,900,936) that are available indefinitely for offset
against future taxable profits of the Group.
The tax rates applicable to each potential tax benefit are as follows:
Timing differences – 27.5%;
Tax losses – 27.5%.
The Tax losses may be reduced pending on allocation of Junior Minerals Exploration Incentive (JMEI) credit.
The Group has JMEI credits available from the Australian Taxation Office of $412,500 in respect of the year ending 30 June
2019. The JMEI entitles Australian resident investors in eligible minerals exploration companies to obtain either a
refundable tax offset or (where the Eligible Investor is a corporate tax entity) franking credits.
The maximum amount of credit the Group can create in the 2019 year is the lesser of the following:
(a) 2019 greenfield exploration expenditure x 27.5% tax rate;
(b) 2019 tax loss x 27.5% tax rate; or
(c) JMEI credits of $412,500.
33
Dreadnought Resources Ltd and Controlled Entities
ABN: 40 119 031 864
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2019
5 Operating Segments
The Directors have considered the requirements of AASB 8 – Operating Segments and the internal reports that are
reviewed by the chief operating decision maker (the Board) in allocating resources and have concluded that at this time
are no separately identifiable segments.
6 Cash and cash equivalents
Cash at bank and in hand
7
Trade and other receivables
CURRENT
GST receivable
Other receivables
Total current trade and other receivables
Consolidated
30 June 2019
$
30 June 2018
$
647,966
350,451
647,966
350,451
Consolidated
30 June 2019
$
30 June 2018
$
18,867
50
1,520
-
18,917
1,520
The maximum exposure to credit risk at the reporting date is the fair value of each class of receivable in the financial
statements.
As at 30 June 2019 there were no material trade and other receivables that were considered to be past due or impaired
(2018: Nil).
8 Other assets
CURRENT
Prepayments
Total other assets
Consolidated
30 June 2019
$
30 June 2018
$
11,527
11,527
6,807
6,807
34
Dreadnought Resources Ltd and Controlled Entities
ABN: 40 119 031 864
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2019
9
Investment in equity instruments
Investments – ASX Listed Company
Total other asset
Consolidated
30 June 2019
$
30 June 2018
$
-
-
25,000
25,000
In April 2019, the Company sold 25,000,000 shares in Maximus Resources Limited (ASX: MXR) for $16,987.
10 Property, plant and equipment
PLANT AND EQUIPMENT
At cost
Accumulated depreciation
Total property, plant and equipment
Consolidated
30 June 2019
$
30 June 2018
$
4,308
2,148
(2,150)
(1,958)
2,158
190
(a) Movements in carrying amounts of property, plant and equipment
Movement in the carrying amounts for each class of property, plant and equipment between the beginning and
the end of the current financial year:
Consolidated
Year ended 30 June 2019
Balance at the beginning of year
Acquisition
Disposal
Depreciation expense
Balance at the end of the year
Consolidated
Year ended 30 June 2018
Balance at the beginning of year
Disposal
Depreciation expense
Balance at the end of the year
Computer
Equipment
$
Computer
Software
$
Exploration
Equipment
$
Total
$
27
1,220
-
(105)
1,142
163
-
-
(65)
98
-
940
-
(22)
918
190
2,160
-
(192)
2,158
Computer
Equipment
$
Computer
Software
$
Exploration
Equipment
$
Total
$
36
-
(9)
27
271
-
(108)
163
-
-
-
-
307
-
(117)
190
35
Dreadnought Resources Ltd and Controlled Entities
ABN: 40 119 031 864
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2019
11 Exploration and evaluation assets
Exploration and evaluation
2019
Balance at beginning of the year
Impairment
Expenditure incurred, including shared acquisition (Note 26)
Balance at end of the year
2018
Balance at beginning of the year
Impairment
Expenditure incurred
Balance at end of the year
Consolidated
30 June 2019
$
30 June 2018
$
2,130,136
2,130,136
252,521
252,521
Exploration and
evaluation
$
252,521
(253,149)
2,130,764
2,130,136
252,521
(1,196)
1,196
252,521
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.
The impairment of the exploration assets in 2018/2019 relates predominantly to the impairment within the Spargoville
and Tanami Areas of Interest. During the period there was no field work performed by Ramelius Resources Limited
(ASX: RMS) relating to the Tanami Joint Venture. The Group and Ramelius surrendered 7 tenements of Tanami joint
venture during the period. Subsequently, the Board has resolved to terminate the Ramelius Joint Venture Agreement
and surrender the remaining tenement.
12 Trade and other payables
CURRENT
Unsecured liabilities
Trade payables
Other payables and accrued expenses
Total current liabilities
Consolidated
30 June 2019
$
30 June 2018
$
63,802
130,778
8,018
114,889
194,580
122,907
All amounts are short term and the carrying values are considered to be a reasonable approximation of fair value.
36
Dreadnought Resources Ltd and Controlled Entities
ABN: 40 119 031 864
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2019
13 Other financial liabilities
NON-CURRENT
Convertible notes – liability component (note (i))
Total non-current liabilities
Consolidated
30 June 2019
$
30 June 2018
$
560,480
560,480
-
-
Note (i) Convertible note deed related to issuance of 600,000 convertible notes (the “Note Issuance”) was entered
between the Company and three subscribers and $600,000 was received from these subscribers in June 2019. The
Note Issuance was subsequently approved at a General Meeting of shareholders on 16 August 2019. Each of the
Convertible Notes carries a face value of $1.00 with an annual interest rate of 10% and maturity date of 19 June 2021.
The holder may elect to convert into shares at $0.0055 per share. The Convertible Note was determined to be a
compound financial instrument, resulting in a split between liability and equity components (Note 1(k)).
Nominal value of convertible notes
Equity component
Liability component as at 30 June 2019
30 June 2019
$
600,000
(39,520)
560,480
14
Issued Capital
Ordinary Shares
(a) Ordinary shares
Consolidated
30 June 2019
$
40,263,315
30 June 2018
$
38,106,938
40,263,315
38,106,938
Consolidated
30 June 2019
Date
01/07/2018 At the beginning of the reporting period
No.
$
577,156,607
38,106,938
31/01/2019 Non-renounceable rights issue
65,324,977
195,975
25/02/2019
Issued shares to a Director of the Company
13,333,334
40,000
29/03/2019 Placement
51,666,666
155,000
4/04/2019
Issued to IronRinger vendors
373,333,334
1,493,333
24/04/2019 Placement
8,666,666
26,000
2/05/2019
Issued to parties in connection with IronRinger acquisition
20,000,000
80,000
28/06/2019
Issued to parties in connection with 100% acquisition of
IronRinger (Tarraji) Pty Ltd
Less: transaction costs
51,559,604
-
206,238
(40,169)
At the end of the reporting period
1,161,041,188
40,263,315
37
Dreadnought Resources Ltd and Controlled Entities
ABN: 40 119 031 864
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2019
14 Issued Capital continued
Capital Management
Management controls the capital of the Group in order to maintain and generate long-term shareholder value and
ensure that the Group can fund its operations and continue as a going concern.
The Group received a total amount of $600,000 raising from Convertible Notes. The issue of Convertible Notes were
approved by shareholders in August 2019. The Convertible Notes each with a face value of $1.00 bear interest at
10% per annum, have a Conversion Price of $0.0055 and have a Maturity Date of 19 June 2021.
The Group is not subject to any externally imposed capital requirements. Management effectively manages the Group
capital by assessing the Group financial risks and adjusting its capital structure in response to changes in these risks
and in the market. These responses include the management of debt levels, distributions to shareholders and share
issues.
(b) Options
50,000,000 share options were issued to vendors of IronRinger Resources Pty Ltd during the financial year.
At 30 June 2019, there were 50,000,000 (30 June 2018: nil) unissued shares for which the following options were
outstanding.
-
50,000,000 unlisted options exercisable at $0.01 by 3 April 2024.
15 Earnings per Share
(a) Basic earnings per share
Loss attributable to the ordinary equity holders
Weighted average number of shares outstanding during the year
Basic earnings per share (cents)
(b) Dilutive earnings per share
In accordance with AASB 133 Earnings per Share, potential ordinary
shares in the form of options and convertible notes are antidilutive when
their conversion to ordinary shares decrease loss per share from
continuing operations. The calculation of diluted earnings/(losses) per
share does not assume conversion, exercise, or other issue of potential
that would have an antidilutive effect on
ordinary shares
earnings/(losses) per share.
Consolidated year ended
30 June 2019
$
30 June 2018
$
(680,822)
717,425,329
(0.09)
(324,156)
469,881,082
(0.07)
38
Dreadnought Resources Ltd and Controlled Entities
ABN: 40 119 031 864
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2019
16 Capital and Leasing Commitments
(a) Contractual Commitments
In order to maintain current rights of tenure to exploration tenements, the Group will be required to outlay amounts
totalling $184,000 during the year ending 30 June 2019 (2018: $nil) in respect of tenement lease rentals and to meet
minimum expenditure requirements.
17 Financial Risk Management
The Group is exposed to a variety of financial risks through its use of financial instruments.
This note discloses the Group’s objectives, policies and processes for managing and measuring these risks. The
Group’s overall risk management plan seeks to minimise potential adverse effects due to the unpredictability of
financial markets. The Group does not speculate in financial assets.
Specific risks
Market risk - currency risk, cash flow interest rate risk and price risk
Credit risk
Liquidity risk
Financial instruments used
The principal categories of financial instrument used by the Group are:
Investments in equity instruments
Cash at bank
Trade and other payables
Convertible notes – liability component
Objectives, policies and processes
Specific information regarding the mitigation of each financial risk to which the Group is exposed is provided below.
Liquidity risk
Liquidity risk arises from the Group’s management of working capital. It is the risk that the Group will encounter
difficulty in meeting its financial obligations as they fall due.
The Group’s policy is to ensure that it will always have sufficient cash to allow it to meet its liabilities when they become
due. The Group maintains cash to meet its liquidity requirements for up to 30-day periods. The Group manages its
liquidity needs by carefully monitoring long-term financial liabilities as well as cash-outflows due in day-to-day
business.
Liquidity needs are monitored in various time bands, on a day-to-day and week-to-week basis, as well as on the basis
of a rolling 30-day projection. Long-term liquidity needs for a 180-day and a 360-day period are identified monthly. At
the reporting date, these reports indicate that the Group expected to have sufficient liquid resources to meet its
obligations under all reasonably expected circumstances.
39
Dreadnought Resources Ltd and Controlled Entities
ABN: 40 119 031 864
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2019
17 Financial Risk Management (continued)
The Group liabilities have contractual maturities which are summarised below:
Financial Liabilities
Trade and other payables
Within 1 year
More than 1 year
30 June
2019
$
30 June
2018
$
30 June
2019
$
30 June
2018
$
194,580
122,907
-
Convertible notes – liability component
-
-
560,480
Total
Market risk
(i) Foreign currency sensitivity
194,580
122,907
560,480
-
-
-
All of the Group transactions are carried out in Australian Dollars, therefore the Group is not exposed to foreign
exchange risk.
(ii) Cash flow interest rate sensitivity
The Company received shareholders’ approval for the issuance of 600,000 Convertible Notes on 16 August 2019.
The Group’s sensitivity to interest rates cash flow are not affected as the Convertible Notes carry fixed interest.
Interest rate risk on cash and cash equivalents is not considered to be a material risk due to the short term nature of
these financial instruments.
Credit risk
Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in a financial loss to
the Group.
Credit risk arises from cash and cash equivalents, derivative financial instruments and deposits with banks and
financial institutions, as well as credit exposure to wholesale and retail customers, including outstanding receivables
and committed transactions. Management considers that all the financial assets that are not impaired for each of the
reporting dates under review are of good credit quality, including those that are past due. The credit risk for liquid
funds and other short-term financial assets is considered negligible, since the counterparties are reputable banks with
high quality external credit ratings.
Net fair values
Fair value estimation
The fair values of financial assets and financial liabilities are presented in the following table and can be compared to
their carrying values as presented in the consolidated statement of financial position. Fair values are those amounts
at which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length
transaction.
Fair values derived may be based on information that is estimated or subject to judgement, where changes in
assumptions may have a material impact on the amounts estimated. Areas of judgement and the assumptions have
been detailed below. Where possible, valuation information used to calculate fair value is extracted from the market,
with more reliable information available from markets that are actively traded.
40
Dreadnought Resources Ltd and Controlled Entities
ABN: 40 119 031 864
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2019
17 Financial Risk Management (continued)
Financial assets
Cash and cash equivalents
30 June 2019
30 June 2018
Net
Carrying
Value
$
Net Fair
value
$
Net
Carrying
Value
$
Net Fair
value
$
647,966
647,966
350,451
350,451
Investments in equity investments
-
-
25,000
25,000
Total financial assets
Financial liabilities
Trade and other payables
Convertible notes – liability component
Total financial liabilities
647,966
647,966
375,451
375,451
194,580
194,580
122,907
122,907
560,480
560,480
-
-
755,060
755,060
122,907
122,907
18 Dividends
There were no dividends paid during the year (2018: nil).
19 Key Management Personnel Disclosures
The totals of remuneration paid to the key management personnel of Dreadnought Resources Ltd during the year are
as follows:
Short-term employee benefits
Post-employment benefits
Total Remuneration
Consolidated year ended
30 June 2019
$
30 June 2018
$
89,238
1,562
57,186
-
90,800
57,186
The Remuneration Report contained in the Directors' Report contains details of the remuneration paid or payable to
each member of the Group’s Key Management Personnel for the year ended 30 June 2019.
Other key management personnel transactions
For details of other transactions with key management personnel, refer to Note 23: Related Party Transactions.
41
Dreadnought Resources Ltd and Controlled Entities
ABN: 40 119 031 864
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2019
20 Remuneration of Auditors
Remuneration of the auditor of the Group, Grant Thornton (Australia), for:
Auditing or reviewing the financial report
Consolidated year ended
30 June 2019
$
30 June 2018
$
34,460
34,460
34,560
34,560
21 Deed of Cross-Guarantee
The Parent entity has not entered into any guarantees, in the current or previous financial year, in relation to the debts
of its subsidiaries.
22 Contingent Liabilities
In May 2018, IronRinger Resources Pty Ltd (a subsidiary of Dreadnought Resources) agreed to pay $70,000 plus
GST to licence a copy of airborne geophysical data held by Rio Tinto Exploration Pty Ltd (RTX) over the Western
Kimberley region of Western Australia which covers Exploration Licence E04/2315 and E04/2508. The payment is
subject to drilling commencement and location of drilling within specified areas..
23 Related Parties
(a)
The Group’s main related parties are as follows:
(i) Key management personnel:
Any person(s) having authority and responsibility for planning, directing and controlling the activities of the
entity, directly or indirectly, including any director (whether executive or otherwise) of that entity are considered
key management personnel.
For details of remuneration disclosures relating to key management personnel, refer to the remuneration report
in the Directors' Report.
The aggregate amounts recognised during the year (excluding re-imbursement of expenses incurred on behalf
of the Company) relating to Directors and their Director related entities were as follows:
Director
Transaction
D Gordon
D Gordon
P Payne
D Chapman
Payments to a Director related
entity for corporate advisory fees
Payments to a Director related
entity for company secretary and
accounting services
Payments to a Director related
entity for consulting services
Payments to a Director related
entity for consulting services
Consolidated
2019
$
2018
$
30,000
35,860
88,205
80,539
10,800
47,091
-
-
42
Dreadnought Resources Ltd and Controlled Entities
ABN: 40 119 031 864
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2019
23 Related Parties (continued)
(ii) Subsidiaries:
The consolidated financial statements include the financial statements of Dreadnought Resources Ltd and
the following subsidiaries:
Name of subsidiary
Tychean Tanami Pty Ltd (previously ERO Metals Pty Ltd)
Valley Floor Resources Pty Ltd
IronRinger Resources Pty Ltd
IronRinger (Tarraji) Pty Ltd
IronRinger (Industrial Minerals) Pty Ltd
% ownership
interest
2019
% ownership
interest
2018
100.0
100.0
100.0
100.0
100.0
100.0
100.0
-
-
-
24 Cash Flow Information
(a) Reconciliation of result for the year to cashflows from operating activities
Reconciliation of net income to net cash provided by operating activities:
(Loss) for the year
Cash flows excluded from profit attributable to operating activities
Non-cash flows in profit:
- depreciation
- impairment loss
Changes in assets and liabilities, net of the effects of purchase and
disposal of subsidiaries:
- (increase)/decrease in trade and other receivables
- (increase)/decrease in prepayments
- (increase)/decrease in investments
- increase/(decrease) in trade and other payables
Cashflow outflow from operations
Consolidated year ended
30 June 2018
$
30 June 2019
$
(680,822)
(349,156)
192
253,149
119
1,196
(17,397)
(4,720)
25,000
(1,204)
977
(2,150)
25,000
63,815
(425,802)
(260,199)
25 Events occurring after the reporting date
Other than detailed below, there has not arisen in the interval between 1 July 2019 and the date of this report any
item, transaction or event of a material and unusual nature likely, in the opinion of the directors of the Group, to affect
significantly the operations of the consolidated entity, the results of those operations, or the state of affairs of the
consolidated entity, in future years.
During July 2019, the Group completed a share placement to sophisticated shareholders for project exploration and
working capital purposes. The placement raised $495,395 before costs.
During August 2019, 600,000 Convertible Notes was approved by shareholders. Each convertible note has a face
value of $1.00 raising $600,000 (before costs).
Dreadnought also completed a Share Purchase Plan and issued 140,166,663 ordinary shares at an issue price of
$0.003 raising $420,500 before costs during August 2019.
Completed a Small Shareholding Sale Facility in August 2019 via which the total number of shareholders in the
Company was reduced by ~1,580 to ~750. This will significantly reduce administration costs going forward.
43
Dreadnought Resources Ltd and Controlled Entities
ABN: 40 119 031 864
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2019
25 Events occurring after the reporting date (continued)
Dreadnought Resources received a notification of a claim by Arrow Minerals Ltd ("Arrow") relating to the Group's
acquisition of the Illaara Gold Project. Subsequently, Arrow has decided not to pursue the claim (see ASX
announcement on 13 September 2019).
The Group finalised the acquisition of the Wombarella Project for 16 million fully paid ordinary shares and $20,000
cash on 14 August 2019.
Consolidated a significant land position prospective for Proterozoic Cu-Au, Cu-Zn-Pb-Ag VMS and Magmatic Ni-Cu-
PGE massive sulphides in the South Kimberley. The South Kimberley Project contains historic Cu-Au occurrences
similar to those seen within the Tarraji-Yampi Project.
The Board has resolved to terminate the Ramelius Joint Venture Agreement and surrender the remaining tenement.
26 Share based acquisition
The Group purchased IronRinger Resources Pty Ltd and its controlled entities for consideration that included shares
in the Group for the year ended 30 June 2019. The acquisition was treated as an asset acquisition as it did not meet
the definition of a business combination as per AASB 3 Business Combinations given the nature of the acquiree as a
junior exploration companies. The only material assets acquired in the acquisition was the acquiree’s mining
tenements and therefore, under the Group’s accounting policies, the consideration paid by the Group has been
accounted for under its accounting policies for Exploration and evaluation expenditure (Note 1 (r)), resulting in
capitalisation of the amounts at the fair value of the consideration paid.
IronRinger Resources Pty Ltd and controlled entities tenement list
Project
Tenement
Lease Name
Location Minerals
Status
Tarraji-Yampi
E04/2315
Tarraji-Yampi
E04/2508
Tarraji-Yampi
E04/2557
Tarraji-Yampi
E04/2572
Tarraji
Yampi
Yampi
Yampi
West Kimberley
E04/2574
Broome Creek
West Kimberley
E04/2573
Napier Downs
WA
WA
WA
WA
WA
WA
Nickel, Copper, Gold Granted
Nickel, Copper, Gold Granted
Nickel, Copper, Gold
Nickel, Copper, Gold Granted
Nickel, Copper, Gold
Application
Application
Nickel, Copper, Gold
Application
Tarraji-Yampi
E04/2608
Robinson River WA
Nickel, Copper, Gold
Application
Rocky Dam
E25/533
Rocky Dam
WA
Copper, Gold, Zinc
Granted
The fair value of the total consideration paid $1,814,572 is determined based on the fair value of the shares and
options issued to the vendor.
The fair value of the shares issued to the vendor was calculated by using the share price on the date of acquisition
multiplied by the number of shares awarded. The fair value of the share consideration was $1,779,572 through the
issuance of 444,892,938 ordinary shares.
On 3 April 2019, 50,000,000 share options were granted to IronRinger vendor at an exercise price of $0.01 each
with a fair value of $35,000. These options are exercisable on or before 3 April 2024. The fair value of the options
granted was calculated by using the Black-Scholes option pricing model applying the following inputs.
Fair value (Black – Scholes)
Exercise price
Life of the option
Strike price
Expected share price volatility
Risk free interest rate
$0.0007
$0.010
1,825 days
$0.002
82.04%
1.50%
44
Dreadnought Resources Ltd and Controlled Entities
ABN: 40 119 031 864
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2019
27 Parent entity
Statement of Financial Position
Assets
Current assets
Non-current assets
Total Assets
Liabilities
Current liabilities
Non-current liabilities
Total Liabilities
Equity
Issued capital
Retained earnings/ (losses)
Reserves
Total Equity
Statement of Profit or Loss and Other Comprehensive Income
Total profit or loss for the year
Total comprehensive income
The Parent has no contingent liabilities (2018:$nil).
Year ended
30 June 2019
$
30 June 2018
$
671,027
2,149,151
383,777
262,093
2,820,178
645,870
192,898
122,903
560,480
-
753,378
122,903
40,263,315
(38,271,035)
74,520
38,106,938
(37,583,971)
-
2,066,800
522,967
(687,183)
(348,247)
(687,183)
(348,247)
45
Dreadnought Resources Ltd and Controlled Entities
ABN: 40 119 031 864
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2019
28 Company Details
The registered office of and principal place of business of the Company is:
Dreadnought Resources Ltd
Suite 5, 16 Nicholson Road
Subiaco WA 6008
PO Box 572
Floreat WA 6014
www.dreadnoughtresources.com.au
Email: info@DreadnoughtResources.com.au
29 Going concern
The financial statements have been prepared on a going concern basis which assumes the Company and Consolidated
Group will have sufficient funds to pay its debts, as and when they become payable, for a period of at least 12 months from
the date the financial report is authorised for issue.
As at 30 June 2019, the Consolidated Group had net assets of $2,055,644 (2018: $513,582). During the financial year, the
Consolidated Group had cash outflows from operating activities of $425,802 (2018: $260,199) and cash outflows from
investing activities (including payments for exploration) of $254,422 (2018: nil). The Consolidated Group has minimum
expenditure commitments of $184,000 (as set out in Note 16(a)).
The Consolidated Group has prepared a cash flow forecast which indicates that the Consolidated Group will need to raise
additional funds to meet expenditure commitments, its business plan and to meet its current level of corporate overheads
to continue as a going concern.
To address the future funding requirements of the Consolidated Group, since 30 June 2019, the Directors have undertaken
the following initiatives:
developed a business plan that provides encouragement for investors to invest;
obtained approval for a JMEI tax credit amounting to $600,000 that can be passed on to potential investors as a further
incentive to invest;
entered into discussions to determine the availability of equity funding from current or new shareholders; and
continued their focus on maintaining an appropriate level of corporate overheads in line with the Consolidated Group’s
available cash resources.
The Directors are confident that they will be able to complete a capital raising to provide the Consolidated Group with its
funding requirements for the above period. The Directors also believe that discussions with equity providers are sufficiently
progressed to reasonably believe that such equity will be available. The Directors therefore believe that it is appropriate to
prepare the 30 June 2019 financial statements on a going concern basis.
However, in the event that the Consolidated Group is not able to successfully complete the equity fundraising referred to
above, material uncertainty would exist as to whether the Company and Consolidated Group will continue as a going
concern and, therefore, whether they will realise their assets and extinguish their liabilities in the normal course of business
and at the amounts stated in the financial statements.
The financial statements do not include adjustments relating to the recoverability and classification of recorded asset
amounts, nor to the amounts and classification of liabilities that might be necessary should the Company and the
Consolidated Group not continue as going concerns.
46
Dreadnought Resources Ltd and Controlled Entities
ABN: 40 119 031 864
Directors’ Declaration
The directors of the Group declare that:
1.
the consolidated financial statements and notes for the year ended 30 June 2019 are in accordance with the
Corporations Act 2001 and:
a. comply with Accounting Standards, which, as stated in accounting policy note 1 to the financial statements,
constitutes explicit and unreserved compliance with International Financial Reporting Standards (IFRS);
and
b. give a true and fair view of the financial position and performance of the Group;
2.
the Managing Director and Company Secretary have given the declarations required by Section 295A that:
a.
the financial records of the Group for the financial year have been properly maintained in accordance with
section 286 of the Corporations Act 2001;
b.
the financial statements and notes for the financial year comply with the Accounting Standards; and
c.
the financial statements and notes for the financial year give a true and fair view.
3.
in the directors' opinion, there are reasonable grounds to believe that the Group will be able to pay its debts as
and when they become due and payable.
This declaration is made in accordance with a resolution of the Board of Directors.
Director ................................................................................................................................................
Dean Tuck
Dated 26 September 2019
47
Level 3, 170 Frome Street
Adelaide SA 5000
Correspondence to:
GPO Box 1270
Adelaide SA 5001
T +61 8 8372 6666
Independent Auditor’s Report
To the Members of Dreadnought Resources Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Dreadnought Resources Limited (the Company) and its subsidiaries (the Group),
which comprises the consolidated statement of financial position as at 30 June 2019, the consolidated statement of profit
or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash
flows for the year then ended, and notes to the consolidated 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 Group’s financial position as at 30 June 2019 and of its 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 (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.
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
www.grantthornton.com.au
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients
and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International
Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are
delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one
another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to
Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to
Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation.
Material uncertainty related to going concern
We draw attention to Note 29 in the financial statements, which indicates that the Group incurred a net loss of $680,822 during
the year ended 30 June 2019, and as of that date, the Group’s cash outflows from operating and investing activities was
$680,224. As stated in Note 29, these events or conditions, along with other matters as set forth in Note 29, indicate that a
material uncertainty exists that may cast doubt on the Group’s ability to continue as a going concern. Our opinion is not
modified in respect of this matter.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
In addition to the matter described in the Material uncertainty related to going concern section, we have determined the
matters described below to be the key audit matters to be communicated in our report.
Key audit matter
How our audit addressed the key audit matter
Exploration and evaluation assets - Note 11
At 30 June 2019 the carrying value of exploration and
evaluation assets was $2,130,136.
In accordance with AASB 6 Exploration for and Evaluation
of Mineral Resources, the Group is required to assess at
each reporting date if there are any triggers for impairment
which may suggest the carrying value is in excess of the
recoverable value.
The process undertaken by management to assess whether
there are any impairment triggers in each area of interest
involves an element of management judgement.
This area is a key audit matter due to the significant
judgement involved in determining the existence of
impairment triggers.
Our procedures included, amongst others:
reviewing management’s area of interest considerations
against AASB 6;
conducting a detailed review of management’s
assessment of trigger events prepared in accordance with
AASB 6 including;
tracing projects to statutory registers, exploration
licenses and third party confirmations to determine
whether a right of tenure existed;
enquiry of management regarding their intentions to
carry out exploration and evaluation activity in the
relevant exploration area, including review of
management’s budgeted expenditure;
understanding whether any data exists to suggest that
the carrying value of these exploration and evaluation
assets are unlikely to be recovered through
development or sale;
assessing the accuracy of impairment recorded for the
year as it pertained to exploration interests;
evaluating the competence, capabilities and objectivity of
management’s experts in the evaluation of potential
impairment triggers; and
assessing the appropriateness of the related financial
statement disclosures.
Key audit matter
How our audit addressed the key audit matter
Convertible Notes - Note 1(k) and Note 13
As at 30 June 2019, the Group recognised the funds
received for a convertible notes totalling $600,000 as a
compound financial instrument as defined by AASB 132
Financial Instruments: Presentation.
The notes were formally approved by the shareholders for
issue at an Extraordinary General Meeting on 16 August
2019.
This area is a key audit matter as management is required
to exercise judgments and estimates in determining the
appropriate accounting treatment of the convertible notes,
including the determination of fair value of the liability
component.
Share based acquisition – Note 26
During the financial year the Group acquired 100%
IronRinger Resources Pty Ltd and its controlled entities,
which holds mining tenements in Western Australia, for a
total consideration of $1,814,572 satisfied by the issue
shares and options.
There are a number of risks associated with the accounting
for such acquisitions which include:
Incorrect application of AASB 3 Business Combinations;
Incorrect determination of the purchase consideration;
Accounting estimates and judgements that do not
appear reasonable;
Determination of the fair value of assets and liabilities
acquired; and
Presentation and disclosure of the acquisition.
This is a key audit matter due to the size of the acquisition
with pervasive impact on the Group’s financial statements
and the risk considerations identified above.
Our procedures included, amongst others:
inspecting the relevant convertible note agreements to
assess appropriateness of management's accounting
treatment for each element of the convertible note, such as
the conversion feature and attaching instruments;
assessing the appropriateness of the valuation
approach and the reasonableness of key inputs and
assumptions to the estimates of fair value of the notes
without the conversion feature for the purpose of
identifying the equity component of the notes;
re-calculating management's liability and equity
components for the convertible notes;
assessing the appropriateness of the subsequent
measurement of liability component under the effective
interest rate method;
inspecting evidence of subsequent approval and
issuance of convertible notes via ASX announcements;
and
assessing the appropriateness of financial statement
disclosures.
Our procedures included, amongst others:
reading the relevant acquisition agreements to assess
appropriateness of management’s determination of the
acquisition within or outside the scope of AASB 3;
testing the accuracy of acquisition consideration against
information inputs, including share price, and the terms of
acquisition agreement;
testing the identification and valuation of the identifiable
assets and liabilities against available supporting
documentation;
assessing the competence, capability and objectivity of
management experts used in the valuation of the assets
and liabilities acquired;
testing the mathematical accuracy of the calculations
prepared by management; and
assessing the appropriateness of the relevant disclosures
in the financial statements.
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
Group’s annual report for the year ended 30 June 2019, 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.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or
otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors’ for the financial report
The Directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in
accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the Directors
determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material
misstatement, whether due to fraud or error.
In preparing the financial report, the Directors are responsible for assessing the Group’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the
Directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing
Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions
of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance
Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar2.pdf. This description forms part of our
auditor’s report.
Report on the remuneration report
Opinion on the remuneration report
We have audited the Remuneration Report included in the Directors’ report for the year ended 30 June 2019.
In our opinion, the Remuneration Report of Dreadnought Resources Limited, for the year ended 30 June 2019 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.
Grant Thornton Audit Pty Ltd
Chartered Accountants
J L Humphrey
Partner – Audit & Assurance
Adelaide, 26 September 2019
DREADNOUGHT RESOURCES LIMITED
Corporate Governance Statement
The Company’s Corporate Governance Plan, Statement and Appendix 4G can be found on the Company’s
website at http://www.dreadnoughtresources.com.au/corporate-governance/
The Board of Directors (“the Board”) is responsible for the corporate governance of the Company. The Board
guides and monitors the business and affairs of the Company on behalf of the shareholders by whom they are
elected and to whom they are accountable.
This statement outlines the main Corporate Governance practices in place throughout the financial year, which
comply with the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations
with 2014 Amendments 3rd edition unless otherwise stated.
53
DREADNOUGHT RESOURCES LIMITED
ASX Additional Information
Additional information required by the ASX Limited Listing Rules not disclosed elsewhere in this Financial Report is
set out below.
1.
Shareholdings
The issued capital of the Company as at 22 October 2019 is:
1,466,339,478 ordinary fully paid shares
All issued ordinary fully paid shares carry one vote per share.
2.
Distribution of Equity Securities as at 22 October 2019
Ordinary Shares (ASX Code: DRE)
Holding Ranges
Holders
Total Units
% Issued Share Capital
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 Over
Totals
54
42
17
147
754
19,085
119,878
119,067
9,566,060
1,456,515,388
0.00
0.01
0.01
0.65
99.33
1,014
1,466,339,478
100.00%
Unmarketable parcels
There were 153 holders of less than a marketable parcel of ordinary shares.
3.
Substantial shareholder notices received as at 22 October 2019
Name
Number of Shares
% Holding
Stone Poneys Nominees Pty Ltd
239,169,743
16.31
4.
Restricted Securities Subject to Escrow as at 22 October 2019
There are no shares subject to escrow.
5.
On-market buy back
There is currently no on-market buyback program for any of the Company’s listed securities.
6.
Group cash and assets
In accordance with Listing Rule 4.10.19, the Group confirms that it has been using the cash and assets for the year
ended 30 June 2019 consistent with its business objective and strategy.
7.
Voting Rights
All ordinary shares fully paid have the same voting rights of one vote per ordinary shares fully paid. The Unquoted
Securitas listed below have no voting rights.
54
DREADNOUGHT RESOURCES LIMITED
ASX Additional Information
8.
Top 20 Largest Holders of Listed Securities as at 22 October 2019
Ordinary shares
Holder Name
Holding
%
STONE PONEYS NOMINEES PTY LTD
239,169,743
16.31
1
2
3
4
5
DAVID MICHAEL CHAPMAN + MICHELE WOLLENS
67,270,555
NICHOLAS FINDLAY DAY
RAMELIUS RESOURCES LIMITED
58,565,863
33,619,049
PAYNE GEOLOGICAL SERVICES PTY LTD
31,666,670
6 MRS BELINDA GORDON + MR IAN GORDON
27,333,337
7 MS SARAH JUNE MCALPINE
8 MR TAO WU
9
CITICORP NOMINEES PTY LIMITED
10 RMK SUPER PTY LTD
25,000,000
25,000,000
20,097,497
18,533,097
11 MR STEPHEN JAMES FOLEY + MS NATALIE CHANTAL MELLONIUS
12 BRIKEN NOMINEES PTY LTD
13 PHILIP DAVID CRUTCHFIELD
14 MR ROBERT JOHN MCARTHUR ANDERSON
15 CALM HOLDINGS PTY LTD
16 MR DREW GRIFFIN MONEY
17 MR GLENN GRIFFIN VENN MONEY
18 CHARMAINE LINDA LOBO
19 MRS KATIE ANNE MCMAHON
20 NUB HOLDINGS PTY LTD
16,666,660
14,166,666
13,889,901
12,889,901
12,889,901
12,889,901
12,387,277
11,777,178
11,700,000
4.59
3.99
2.29
2.16
1.86
1.70
1.70
1.37
1.26
1.25
1.14
0.97
0.95
0.88
0.88
0.88
0.84
0.80
0.80
Total held by top 20 registered shareholders
683,846,526
46.64
Total issued capital - selected security class(es)
782,492,952
53.36
55
DREADNOUGHT RESOURCES LIMITED
ASX Additional Information
9.
Unquoted securities
UNLISTED VENDOR OPTIONS @ $0.01 EXPIRING 03/04/2024
Holder Name
Holding
%
STONE PONEYS NOMINEES PTY LTD
30,000,000
DAVID MICHAEL CHAPMAN + MICHELE WOLLENS
10,000,000
1
2
3
NICHOLAS FINDLAY DAY
Total
60%
20%
20%
10,000,000
50,000,000
100.00%
UNLISTED INCENTIVE OPTIONS @ $0.005 EXPIRING 9/04/2021
Holder Name
Holding
%
1 MR DEAN TUCK + MRS DIANNE MAE TUCK
30,000,000
100%
UNLISTED INCENTIVE OPTIONS @ $0.005 EXPIRING 30/06/2024
Holder Name
1
2
3
PAUL IAN CHAPMAN
PAUL PAYNE
IAN JAMES GORDON
Holding
%
7,500,000
7,500,000
7,500,000
23%
23%
23%
32%
4 MR DEAN TUCK + MRS DIANNE MAE TUCK
10,500,000
Total
33,000,000
100.00%
UNLISTED INCENTIVE OPTIONS @ $0.008 EXPIRING 17/09/2024
Holder Name
1
OLIVER JUDD
Holding
%
10,000,000
100%
UNLISTED CONVERTIBLE NOTES CONVERTIBLE @ $0.0055 FACE VALUE A$1.00 PER NOTE
ANNUAL INTEREST RATE OF 10% AND MATURITY DATE 19 JUNE 2021
Holder Name
Holding
%
1
BUDWORTH CAPITAL PTY LTD
315,000
2 WESTGATE CAPITAL PTY LTD
70,000
3
SEASCAPE CAPITAL PTY LTD
215,000
53%
12%
36%
Total
600,000
100.00%
56
DREADNOUGHT RESOURCES LIMITED
ASX Additional Information – Tenement List
Project
Tenement
Lease Name
State
Status
% Owned by DRE
Holders
Tarraji-Yampi
E04/2315
Tarraji
WA
Granted
nil Registered and 80% Beneficial as a
Joint Venture
Whitewater Resources Pty Limited (pending transfer
to IronRinger (Tarraji) Pty Ltd)
Tarraji-Yampi
E04/2508
Yampi
WA
Granted
100%
Tarraji-Yampi
E04/2557
Yampi
WA
Application
100%
Tarraji-Yampi
E04/2572
Yampi
WA
Granted
100%
West
Kimberley
West
Kimberley
E04/2574
Broome Creek
WA
Application
100%
E04/2573
Napier Downs
WA
Application
100%
Tarraji-Yampi
E04/2608
Robinson River
WA
Application
100%
IronRinger (Tarraji) Pty Ltd
IronRinger (Tarraji) Pty Ltd
IronRinger (Tarraji) Pty Ltd
IronRinger (Tarraji) Pty Ltd
IronRinger (Tarraji) Pty Ltd
IronRinger (Tarraji) Pty Ltd
Rocky Dam
E25/533
Rocky Dam
WA
Granted
100%
IronRinger (Industrial Minerals) Pty Ltd
Illaara
E29/957
Illaara
WA
Granted
100%
Illaara
E29/959
Illaara
WA
Granted
100%
Illaara
E30/471
Illaara
WA
Granted
100%
Illaara
E30/476
Illaara
WA
Granted
100%
Newmont Goldcorp Exploration Pty Ltd (pending
transfer to IronRinger (Industrial Minerals) Pty Ltd)
Newmont Goldcorp Exploration Pty Ltd (pending
transfer to IronRinger (Industrial Minerals) Pty Ltd)
Newmont Goldcorp Exploration Pty Ltd (pending
transfer to IronRinger (Industrial Minerals) Pty Ltd)
Newmont Goldcorp Exploration Pty Ltd (pending
transfer to IronRinger (Industrial Minerals) Pty Ltd)
57
DREADNOUGHT RESOURCES LIMITED
ASX Additional Information – Tenement List
Project
Tenement
Lease Name
State
Status
% Owned by DRE
Holders
South
Kimberley
Project
South
Kimberley
Project
South
Kimberley
Project
South
Kimberley
Project
E80/5363
Horseshoe Range
Application
100%
E80/5364
Sparke Range
Application
100%
E80/5365
Lindner Hill
Application
100%
E80/5366
Mt Amhurst
Application
100%
Wombarella
E04/2560
Wombarella
Application
100%
Spargoville
L15/128
Kambalda West
WA
Granted
100% Registered, nil beneficially owned
Spargoville
L15/255
Kambalda West
WA
Granted
100% Registered, nil beneficially owned
Spargoville
M15/395
Kambalda West
WA
Granted
100% Registered, nil beneficially owned
Spargoville
M15/703
Kambalda West
WA
Granted
100% Registered, nil beneficially owned
Spargoville
P15/5953
Logan Dam
WA
Granted
49% Registered, nil beneficially owned
Tanami
EL 27995
Officer Hills South
NT
Granted
15% Registered and beneficially owned
IronRinger (Tarraji) Pty Ltd
IronRinger (Tarraji) Pty Ltd
IronRinger (Tarraji) Pty Ltd
IronRinger (Tarraji) Pty Ltd
IronRinger (Tarraji) Pty Ltd
Dreadnought Resources Ltd
Maximus Resources Ltd
Dreadnought Resources Ltd
Maximus Resources Ltd
Dreadnought Resources Ltd
Maximus Resources Ltd
Dreadnought Resources Ltd
Maximus Resources Ltd
Dreadnought Resources Ltd
Maximus Resources Ltd
Dreadnought Resources Ltd
Ramelius Resources Ltd
58