DUKETON MINING LIMITED
ANNUAL REPORT
2020
Corporate Information
DUKETON MINING LIMITED
ABN 76 159 084 107
Directors
Seamus Cornelius (Non-Executive Chairman)
Stuart Fogarty (Managing Director)
Heath Hellewell (Non-Executive Director)
Company Secretary
Dennis Wilkins
Registered Office
Suite 2, 11 Ventnor Avenue
WEST PERTH WA 6005
Principal Place of Business
Level 2, 45 Richardson Street
WEST PERTH WA 6005
Telephone: +61 8 6315 1490
Facsimile: +61 8 9486 7093
Solicitors
House Legal
86 First Avenue
MT LAWLEY WA 6050
Share Registry
Automic Pty Ltd
Level 2, 267 St Georges Terrace
PERTH WA 6000
Telephone: 1300 288 664
Web: www.automicgroup.com.au
Auditors
Rothsay Auditing
Level 1, Lincoln House
4 Ventnor Avenue
WEST PERTH WA 6005
Internet Address
www.duketonmining.com.au
Stock Exchange Listing
Duketon Mining Limited shares are listed on the Australian Securities Exchange (ASX code: DKM)
2
Review of Operations
Directors' Report
Auditor’s Independence Declaration
Corporate Governance Statement
Statement of Profit or Loss and Other Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
Directors' Declaration
Independent Audit Report
ASX Additional Information
4
13
20
21
22
23
24
25
26
41
42
46
Review of Operations
1.
Review of Operations
1.1
Strategy and Objectives
The Company is in a strong position to build shareholder value from aggressive exploration and acquisition. Shareholders
should be encouraged as the Company is de-risked technically and has the appropriate personnel to take full advantage of
new opportunities as they are presented.
During the year ended 30 June 2020 the Company has worked actively to multiple internal and external opportunities. The
Company remains focused on the generation of numerous new targets with the view to creating a significant and robust
pipeline of organic opportunities including the following:
• Expanding known nickel deposits through targeted extensions to Rosie, C2 and Nariz on 100% owned Duketon
tenure; and
• Discovering new nickel deposits through regional work in the Bulge area and other new areas.
During August 2019 the Company executed a Tenement Sale Agreement with Regis Resources Limited (ASX: RRL) to sell
Duketon’s package of gold tenements for $25 million in cash. The consideration consisted of $20 million cash paid on
completion with $2.5 million in cash contingent on announcement of 250,000 ounces of gold in mineral resources and a further
$2.5 million in cash contingent on first gold production from the sale tenements. The Company has retained the nickel rights
over various tenements (E38/2866, E38/2805, E38/2916, E38/2834 and E38/2666) via a Nickel Rights Deed and retains 100%
ownership of mining licence M38/1252 (with Regis acquiring the gold rights on this licence via a Gold Rights Deed). The
Company’s primary objective continues to be achieving returns for shareholders through focused proactive exploration and
mining evaluations in the Duketon Belt whilst maintaining a watch over potential acquisitions outside of this area.
We have 3 main pillars of growth within our strategy:
1. Expanding and assessing our known nickel deposits and targeting extensions to Rosie, C2 and Nariz;
2. Acquiring advanced gold or nickel projects; and
3. Acquiring new tenure via opportunistic applications or simple low cost means.
We are uniquely de-risked technically with respect to both gold and nickel.
The Company’s tenement and nickel rights are within the Duketon Greenstone Belt in an area immediately north of the town
of Laverton. The Company believes that there is considerable upside in the areas covered by these and continues to review
the tenements to further understand the geological potential and mineralising controls with the intention of unlocking additional
value from within the Company’s current asset base.
Economic nickel sulphides have already been found within the Duketon tenements at Rosie, C2, and the Nariz prospect.
These discoveries show the further upside potential of the tenement package that Duketon controls. During August 2020 the
Rosie Mineral Resource was reviewed and recalculated. The total Mineral Resource that Duketon has at the C2 and Rosie
deposits (see below), is now 87,100t of nickel, 12,900t of copper and 205,000oz of PGEs (see ASX announcement 3
August 2020).
4
Review of Operations (Cont’d)
Figure 1: Location of the Duketon Project
5
Review of Operations (Cont’d)
Figure 2: Duketon Project showing DKM tenements and location of Gold and Nickel Prospects
6
Review of Operations (Cont’d)
1.2
Exploration
1.2.1 Rosie
The Rosie deposit is situated approximately 110km north of Laverton, Western Australia. The project can be accessed via
sealed and formed gravel roads from either Leonora or Laverton.
Mineralisation at Rosie consists of disseminated, matrix, stringer and brecciated massive Ni-Cu-PGE sulphides at, or adjacent
to, the contact of the Bulge ultramafic complex, interpreted to be a classic komatiitic lava channel style nickel sulphide
mineralisation.
The Nariz prospect is situated directly to the south east of Rosie and is now incorporated into the Rosie Mineral Resource.
During August 2020, the Rosie Mineral Resource was reviewed and recalculated (see Tables 1 and 2).
Figure 3: Location Plan of C2 and Rosie.
7
Review of Operations (Cont’d)
Rosie Nickel Resource >1% NiEq
Classification
Sulphide
Pentlandite
Indicated
Violarite
Tonnes
960,893
745,813
Sub-Total
1,706,706
Pentlandite
751,559
Inferred
Violarite
98,676
Sub-Total
850,234
Total
All
2,556,940
Ni
(%)
2.3
1.7
2.0
1.8
1.5
1.7
1.9
Cu
(%)
0.41
0.36
0.39
0.47
0.43
0.47
0.42
Co
(ppm)
610
490
560
570
460
560
560
Total PGEs
(g/t)
2.6
2.5
2.5
2.5
2.2
2.5
2.5
NiEq (%)
3.3
2.6
3.0
2.8
2.4
2.8
2.9
Table 1: Rosie Nickel Resource > 1.0% Ni as at August 2020
Contained Metal
Co (t)
Total PGEs (oz)
Classification
Ore Type
Ni (t)
Pentlandite
21,973
Indicated
Violarite
12,336
Sub-Total
34,309
Pentlandite
13,354
Cu (t)
3,987
2,679
6,666
3,537
Inferred
Violarite
1,452
421
Sub-Total
14,806
3,958
588
363
951
428
45
473
79,041
59,014
138,056
60,331
6,937
67,268
Total
49,115
10,624
1,423
205,324
Table 2: Rosie Nickel Resource > 1.0% Ni with Auxiliary Attributes as at August 2020
Figure 4: Long section of Rosie looking toward the east showing significant intercepts
8
Review of Operations (Cont’d)
1.2.2 C2
The C2 deposit is situated approximately 2km to the north of Rosie and is a komatiite-hosted nickel sulphide deposit. The
mineralisation is characterised by accumulations of massive, matrix, breccia and disseminated nickel, copper magmatic
sulphides and platinum group elements at the basal contact of a komatiite ultramafic rock, overlying a mafic pillow basalt
footwall with some fine-grained siltstone sediments which may also contain sulphides.
During 2015 DKM published the initial mineral resource estimate for the C2 resource. This Inferred Mineral Resource estimate
at C2 is 5.7 million tonnes averaging 0.7% nickel, 0.04% copper and 0.14g/t platinum and palladium for a contained 38,000
tonnes of nickel and associated copper, platinum and palladium (see Tables 4 and 5). This represents the in-situ
undiluted Mineral Resource at 0.5% nickel cut-off (see Tables 4 and 5). Nickel mineralisation is robust and continuous.
The total Mineral Resource for the Duketon project, comprising C2 and the Rosie deposit (see ASX Announcement 3 August
2020), is now 87,100t of nickel, 12,900t of copper and 205,000oz of PGEs.
During the year seven RC drillholes for 1186 metres were drilled at C2.
C2 Nickel Resource >0.5%Ni
Classification
Oxidation
Inferred
Fresh
Transitional
Total (as at 30 June 2020)
Total (as at 30 June 2019)
Tonnes
5,100,000
600,000
5,700,000
5,700,000
Ni (%)
0.7
0.6
0.7
0.7
Ni (t)
34,200
3,800
38,000
38,000
Table 3: C2 Nickel Resource > 0.5% Ni
C2 Nickel Resource >0.5%Ni (as at 30 June 2015)
Classification
Oxidation
Tonnes
Ni (%)
Cu (%)
Pt (ppb)
Pd (ppb)
S (%)
Inferred
Fresh
5,100,000
Transitional
600,000
Total (as at 30 June 2020)
5,700,000
Total (as at 30 June 2019)
5,700,000
0.7
0.6
0.7
0.7
0.04
0.04
0.04
0.04
60
72
61
61
79
105
82
82
3.3
0.9
3.1
3.1
Table 4: C2 Resource > 0.5% Ni with Auxiliary Attributes
Cut-Off (Ni %)
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
1.1
Tonnes
18,775,665
10,776,805
5,721,787
3,008,201
2,019,653
1,018,985
641,066
148,053
62,461
Grade (Ni %)
0.5
0.6
0.7
0.8
0.8
0.9
1.0
1.1
1.1
Table 5: C2 Deposit Grade Tonnage Table for different Ni cut-offs
Ni (t)
88,902
60,356
37,967
23,249
16,940
9,503
6,265
1,577
694
9
Review of Operations (Cont’d)
Figure 5: C2 Cross Section
C2 - Grade Tonnage Curve for Fresh and Transitional Material
Tonnes
Grade
20000000
18000000
16000000
14000000
12000000
s
e
n
10000000
n
o
T
8000000
6000000
4000000
2000000
0
0.3
0.4
0.5
0.6
0.7
Cut off
0.8
0.9
1
1.1
Figure 6: Grade Tonnage Curve at Ni cut-offs
10
1.2
1.1
1.0
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
f
f
o
-
t
u
c
e
v
o
b
a
e
d
a
r
G
Review of Operations (Cont’d)
1.2.3 Regional Exploration
Regional exploration has been ongoing throughout the year. Multiple new targets in both nickel and gold have been generated
creating a significant and robust pipeline of organic opportunities.
2.
Corporate
2.1
Element 25 Limited
The Company holds an equity position in Element 25 Limited.
For further details, please refer to the Element 25 Limited website at www.element25.com.au.
2.2
Buxton Resources Limited
The Company holds an equity position in Buxton Resources Limited.
For further details, please refer to the Buxton Resources Limited website at www.buxtonresources.com.au.
2.3 Other Equities
The Company continues to hold some minor equity positions in several other listed and unlisted companies.
For further details, please refer to the Company website.
11
Review of Operations (Cont’d)
Appendix 1 – Summary of JORC Resources
Table 1a: Total Nickel Mineral Resources as at 3 August 2020
Table 2a: Total Nickel Mineral Resources as at 30 June 2019
Table 2b: Total Gold Mineral Resources as at 30 June 2019
Mineral Resources
Attached as Appendix 1 are three tables comparing the Company’s Mineral Resources as at 3 August 2020 (Table 1a
Appendix 1) against those at 30 June 2019 (Table 2a and 2b Appendix 1). No ore reserves have been estimated.
Review of material changes
The Gold Mineral Resources reported at 30 June 2019 (Table 2b Appendix 1) were sold during August 2019 as part of the
Tenement Sale Agreement with Regis Resources Limited. The Company has no Gold Mineral Resources at 30 June 2020.
During August 2020 (refer ASX announcement 3 August 2020) the Company reported an increase to the Rosie Nickel Mineral
Resources which is included in the Total Nickel Mineral Resources reported above (Table 1a Appendix 1). The Nickel Mineral
Resource as at 30 June 2020 was unchanged from that reported at 30 June 2019 (Table 2a Appendix 1). The August 2020
announcement reported an increase of 50% contained nickel metal compared to the previous mineral resource estimate.
There have been no changes to the Company’s Mineral Resources after 3 August 2020. The Company confirms that it is not
aware of any new information or data that materially affects the information included in the original announcements and that
all material assumptions and technical parameters underpinning the estimates continue to apply and have not materially
changed.
Governance controls
All Mineral Resource estimates are prepared by qualified professionals following JORC Code compliant procedures and follow
standard industry methodology for drilling, sampling, assaying, geological interpretation, 3-dimensional modelling and grade
interpolation techniques.
The Mineral Resource estimates have been calculated by a suitably qualified consultant and overseen by suitably qualified
Duketon Mining Limited employee and/or consultant.
Competent Persons Statements
The information in this report that relates to exploration results is based on information compiled by Miss Kirsty Culver, Member of the
Australian Institute of Geoscientists (AIG) and an employee of Duketon Mining Limited. Miss Culver has sufficient experience which is relevant
to the style of mineralisation and type of deposit under consideration and to the activity that is being undertaken to qualify as a competent
person as defined in the JORC Code 2012. Miss Culver consents to the inclusion in the report of the matters based on the information in the
form and context in which it appears.
The information in the announcement that relates to Mineral Resources for Rosie is extracted from the ASX announcement titled “Increase
to Rosie Nickel Resource” dated 3 August 2020 and is available to view on the Company’s website (www.duketonmining.com.au). The
information in the announcement that relates to Mineral Resources for C2 is extracted from ASX announcement 29 January 2015. The
information that relates to Lancefield North is extracted from ASX announcement 14 March 2018. The company confirms that it is not aware
of any new information or data that materially affects the information included in the original market announcements and that all material
assumptions and technical parameters underpinning the estimates in the relevant market announcements continue to apply and have not
materially changed. The Company confirms that the form and context in which the Competent Person’s findings are presented have not been
materially modified from the original market announcement.
12
TonnesNi TonnesNi TonnesNi TonnesNi ('000)Tonnes('000)Tonnes('000)Tonnes('000)TonnesRosie1,7062.034,3098501.714,8062,5561.949,115C25,7000.738,0005,7000.738,000TOTAL1,7062.034,3096,5501.352,8068,2561.0687,115Project MeasuredIndicatedInferredNi (%)Ni (%)Ni (%)Ni (%)TotalTonnesNi TonnesNi TonnesNi TonnesNi ('000)Tonnes('000)Tonnes('000)Tonnes('000)TonnesRosie1,4101.724,1005301.68,6001,9401.732,700C25,7000.738,0005,7000.738,000TOTAL1,4101.724,1006,2300.746,6007,6400.970,700TotalNi (%)Project MeasuredNi (%)IndicatedNi (%)InferredNi (%)TonnesTonnesTonnesTonnes('000)('000)('000)('000)Lancefield Nth1,9201.68,6001,9201.696,000TOTAL1,9201.68,6001,9201.696,000OuncesOuncesOuncesOuncesTotalg/t Aug/t Aug/t Aug/t AuProject MeasuredIndicatedInferred
Directors’ Report
The directors present their report together with the financial report of Duketon Mining Limited (“Duketon” or “the Company”)
for the year ended 30 June 2020.
DIRECTORS
The names and details of the Company’s directors in office during the financial year and until the date of this report are as
follows. Where applicable, all current and former directorships held in listed public companies over the last three years have
been detailed below. Directors were in office for this entire period unless otherwise stated.
Names, qualifications, experience and special responsibilities
Seamus Cornelius
Non-Executive Chairman, LLB, LLM (Age 54)
Mr Cornelius is an experienced international corporate lawyer and company director. He was a partner with a major
international law firm from 2000 to 2010 and resided in China from 1993 until 2017. In 2010, Mr Cornelius commenced his
public company career as company director and is currently a director and non-executive chairman of Buxton Resources Ltd
since 29 November 2010, Element 25 Ltd since 30 June 2011 and Danakali Ltd since 15 July 2014.
Stuart Fogarty
Managing Director B.Sc (Geology) (Hons) (Age 48)
Mr Fogarty has over 20 years of exploration experience with BHP Billiton and Western Mining Corporation, and prior to leaving
he was BHP’s Senior Exploration Manager for North and South America. Mr Fogarty has a very strong background in nickel
and gold exploration, having commenced his career at Kambalda Nickel Operations in 1994. He has held senior roles with
BHP including Senior Geoscientist for nickel exploration in the Leinster and Mt Keith region, Project Manager WA Nickel
Brownfields and Regional Manager Australia – Asia where he was responsible for a $100 million per annum exploration budget.
Mr Fogarty is currently a non-executive director of ASX listed Buxton Resources Ltd since 15 March 2017, and of unlisted
Wildcat Resources Ltd.
Heath Hellewell
B.Sc (Hons), MAIG (Age 50)
Mr Hellewell is an exploration geologist with over 20 years of experience in gold, base metals and diamond exploration
predominantly in Australia and West Africa. Most recently, Mr Hellewell was the co-founding Executive Director of Doray
Minerals Ltd (Doray), where he was responsible for the company’s exploration and new business activities. Following the
discovery of its Andy Well gold deposits in 2010, Doray was named “Gold Explorer of the Year” in 2011 by The Gold Mining
Journal. In 2014 Mr Hellewell was the co-winner of the prestigious “Prospector of the Year” award, presented by the
Association of Mining and Exploration Companies.
Mr Hellewell was also part of the Independence Group NL team that identified and acquired the Tropicana project area,
eventually leading to the discovery of the Tropicana and Havana gold deposits.
Mr Hellewell is currently an independent Non-Executive Director of Core Lithium Ltd (formerly Core Exploration Ltd) since 15
September 2014. Within the last 3 years Mr Hellewell has been a former director of Capricorn Metals Ltd (resigned 8 November
2018).
COMPANY SECRETARY
Dennis Wilkins
B.Bus, MAICD, ACIS (Age 57)
Mr Wilkins is the founder and principal of DWCorporate Pty Ltd a leading privately held corporate advisory firm servicing the
natural resources industry. Since 1994 he has been a director of, and involved in the executive management of, several
publicly listed resource companies with operations in Australia, PNG, Scandinavia and Africa. From 1995 to 2001 he was the
Finance Director of Lynas Corporation Ltd during the period when the Mt Weld Rare Earths project was acquired by the group.
He was also founding director and advisor to Atlas Iron Ltd at the time of Atlas’ initial public offering in 2006.
Since July 2001 Mr Wilkins has been running DWCorporate Pty Ltd where he advises on the formation of, and capital raising
for, emerging companies in the Australian resources sector. Mr Wilkins is currently a non-executive director of Key Petroleum
Ltd since 5 July 2006, and an alternate director of Middle Island Resources Ltd since 1 May 2010.
13
Directors’ Report (Cont’d)
Interests in the shares and options of the company and related bodies corporate
As at the date of this report, the interests of the directors in the shares and options of Duketon Mining Limited were:
Seamus Cornelius
Stuart Fogarty
Heath Hellewell
Ordinary
Shares
7,149,723
550,000
100,000
Options over
Ordinary
Shares
1,750,000
5,000,000
1,500,000
PRINCIPAL ACTIVITIES
The principal activities of the Company during the year consisted of exploration and evaluation of mineral resources. There
was no significant change in the nature of the Company’s activities during the year.
DIVIDENDS
No dividends were paid or declared during the financial year. No recommendation for payment of dividends has been made.
OPERATING REVIEW
During August 2019 the Company executed a Tenement Sale Agreement with Regis Resources Limited (ASX: RRL) to sell
Duketon’s package of gold tenements for $25 million in cash. The consideration consisted of $20 million cash paid on
completion with $2.5 million in cash contingent on announcement of 250,000 ounces of gold in mineral resources and a further
$2.5 million in cash contingent on first gold production from the sale tenements. The Company has retained the nickel rights
over various tenements (E38/2866, E38/2805, E38/2916, E38/2834 and E38/2666) via a Nickel Rights Deed and retains 100%
ownership of mining licence M38/1252 (with Regis acquiring the gold rights on this licence via a Gold Rights Deed).
During the year ended 30 June 2020 the Company actively identified opportunities and drilled exploration targets.
The Company remains focused on the generation of multiple new targets with the view to creating a significant and robust
pipeline of organic opportunities including the following:
• Expanding known nickel deposits through targeted extensions to Rosie, C2 and Nariz on 100% owned Duketon tenure;
and
• Discovering new nickel deposits through regional work in the Bulge area and other new areas.
The Company is in a strong position to build shareholder value from aggressive exploration. Shareholders should be
encouraged as the Company is de-risked technically to take full advantage of new opportunities as they are presented.
Finance Review
The Company began the year with cash reserves of $2,085,199 and listed equity investments with a market value of
$1,221,199. During the year the Company issued 93,023 ordinary shares, with a value of $19,535, as part of employee
remuneration, and received $25,250 for the issue of 125,000 ordinary shares upon the exercise of unlisted options. Funds
were used for exploration activities on the nickel targets within the Duketon Project and working capital purposes.
Following completion of the sale of the gold assets to Regis for recognised income of $20,000,000, the Company recorded a
net profit after tax of $19,130,177 (2019: $2,890,296 loss) for the financial year ended 30 June 2020 and included in the result
for the year was exploration expenditure of $1,316,818 (2019: $2,399,720). In line with the Company’s accounting policies, all
exploration expenditure is expensed as it is incurred. The Company had total cash on hand at the end of the year of
$20,322,227, and listed equity investments with a market value of $2,280,615.
Operating Results for the Year
Summarised operating results are as follows:
2020
Revenues
$
Profit
$
Revenues and profit from ordinary activities before income tax expense
21,448,874
19,130,177
Shareholder Returns
Basic profit/(loss) per share (cents)
2020
16.2
2019
(2.5)
14
Directors’ Report (Cont’d)
Risk Management
The board is responsible for ensuring that risks, and opportunities, are identified on a timely basis and that activities are aligned
with the risks and opportunities identified by the board.
The Company believes that it is crucial for all board members to be a part of this process, and as such the board has not
established a separate risk management committee.
The board has numerous mechanisms in place to ensure that management's objectives and activities are aligned with the
risks identified by the board. These include the following:
• Board approval of a strategic plan, which encompasses strategy statements designed to meet stakeholders’ needs and
manage business risk.
Implementation of board approved operating plans and budgets and board monitoring of progress against these budgets.
•
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
Other than as disclosed in this Report, no significant changes in the state of affairs of the Company occurred during the
financial year.
SIGNIFICANT EVENTS AFTER THE REPORTING DATE
No matters or circumstances, besides those disclosed at note 19, have arisen since the end of the year which significantly
affected or may significantly affect the operations of the Company, the results of those operations, or the state of affairs of the
Company in future financial periods.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
Details of important developments occurring in this financial year have been covered in the Review of Operations section of
the Directors’ Report. The Company will continue activities in the exploration, evaluation and development of the Duketon
Project and mineral tenements with the objective of developing a significant mining operation and any significant information
or data will be released to the market and the shareholders pursuant to the Continuous Disclosure rules as and when they
come to hand.
ENVIRONMENTAL REGULATION AND PERFORMANCE
The Company is subject to significant environmental regulation in respect to its exploration activities. The Company aims to
ensure the appropriate standard of environmental care is achieved, and in doing so, that it is aware of and is in compliance
with all environmental legislation. The directors of the Company are not aware of any breach of environmental legislation for
the year under review.
REMUNERATION REPORT (AUDITED)
The information provided in this remuneration report has been audited as required by section 308(3C) of the Corporations Act
2001.
Principles used to determine the nature and amount of remuneration
Remuneration Policy
The remuneration policy of Duketon Mining Limited has been designed to align key management personnel objectives with
shareholder and business objectives by providing a fixed remuneration component and offering specific long-term incentives
based on key performance areas affecting the Company’s financial results. The board of Duketon Mining Limited believes the
remuneration policy to be appropriate and effective in its ability to attract and retain the best key management personnel to
run and manage the Company.
The board’s policy for determining the nature and amount of remuneration for board members and senior executives (if any)
of the Company is as follows:
The remuneration policy, setting the terms and conditions for the executive directors, was developed by the board. All
executives receive a base salary (which is based on factors such as length of service, performance and experience) and
superannuation. The board reviews executive packages annually by reference to the Company’s performance, executive
performance and comparable information from industry sectors and other listed companies in similar industries.
The board may exercise discretion in relation to approving incentives, bonuses and options. The policy is designed to attract
and retain the highest calibre of executives and reward them for performance that results in long-term growth in shareholder
wealth.
The directors and executives (if any) receive a superannuation guarantee contribution required by the government, which was
9.5% for the 2020 financial year. Some individuals may choose to sacrifice part of their salary to increase payments towards
superannuation.
15
Directors’ Report (Cont’d)
All remuneration paid to key management personnel is valued at the cost to the company and expensed. Options are valued
using the Black-Scholes methodology.
The board policy is to remunerate non-executive directors at market rates for comparable companies for time, commitment
and responsibilities. The board determines payments to the non-executive directors and reviews their remuneration annually,
based on market practice, duties and accountability. Independent external advice is sought when required. The maximum
aggregate amount of fees that can be paid to non-executive directors is (currently $300,000) and set in accordance with the
constitution of the Company. Fees for non-executive directors are not linked to the performance of the Company. However, to
align directors’ interests with shareholder interests, the directors are encouraged to hold shares in the Company.
Performance based remuneration
The Company currently has no performance based remuneration component built into key management personnel
remuneration packages.
Company performance, shareholder wealth and key management personnel remuneration
The remuneration policy has been tailored to increase the direct positive relationship between shareholders’ investment
objectives and key management personnel performance. Currently, this is facilitated through the issue of options to the majority
of key management personnel to encourage the alignment of personal and shareholder interests. The Company believes this
policy will be effective in increasing shareholder wealth. At commencement of mine production, performance based bonuses
based on key performance indicators are expected to be introduced. For details of key management personnel interests in
options at year end, refer to the ‘Option holdings’ section later in the Remuneration Report.
Use of remuneration consultants
The Company did not employ the services of any remuneration consultants during the financial year ended 30 June 2020.
Voting and comments made at the Company’s 2019 Annual General Meeting
The Company received approximately 99.7% of “yes” votes on its remuneration report for the 2019 financial year. The
Company did not receive any specific feedback at the Annual General Meeting or throughout the year on its remuneration
practices.
Details of remuneration
Details of the remuneration of the key management personnel of the Company are set out in the following table.
The key management personnel of the Company include the directors as per page 13 above.
Key management personnel of the Company
Post-
Short-Term
Salary
& Fees
$
Non-
Monetary
$
Employment Long-Term
Long Service
Leave
$
Super-
annuation
$
Share-based
Payments
Total
Options
$
$
Directors
Seamus Cornelius
2020
2019
Stuart Fogarty
2020
2019
Heath Hellewell
2020
2019
47,144
50,000
245,247
245,247
33,400
30,000
Total key management personnel compensation
2020
2019
325,791
325,247
1,585
-
23,299
23,299
-
-
-
-
38,050
-
86,779
50,000
4,764
8,398
76,100
112,400
349,410
389,344
-
-
38,050
-
71,450
30,000
24,884
23,299
4,764
8,398
152,200
112,400
507,639
469,344
-
-
-
-
-
-
-
-
16
Directors’ Report (Cont’d)
Service agreements
Stuart Fogarty, Managing Director:
• Annual salary of $268,545 (including statutory superannuation).
• The Company or the Executive may terminate, without cause, the Executive’s employment at any time by giving three
•
calendar months’ written notice.
In the event the Managing Director is terminated as result of one of the following circumstances the Company will make a
twelve calendar months Redundancy Payment to the Executive at the base salary:
o
o
o
the Executive’s position is made redundant by the Board;
there is a material diminution in the responsibilities or powers assigned to the Executive by the Board; or
there is a material reduction in the remuneration payable to the Executive as determined by the Board.
Share-based compensation
Options are issued at no cost to key management personnel as part of their remuneration. The options are not issued based
on performance criteria but are issued to the key management personnel of Duketon Mining Limited to increase goal
congruence between key management personnel and shareholders. The following options over ordinary shares of the
Company were granted to or vesting with key management personnel during the year:
Grant Date
Granted
Number Vesting Date Expiry Date
Exercise
Price
(cents)
Value per
option at
grant date
(cents) (1)
Exercised
Number
% of
Remuner-
ation
Directors
Seamus Cornelius
Stuart Fogarty
Heath Hellewell
29/11/2019
500,000 29/11/2019 28/11/2024
29/11/2019 1,000,000 29/11/2019 28/11/2024
500,000 29/11/2019 28/11/2024
29/11/2019
21.4
21.4
21.4
7.6
7.6
7.6
Nil
Nil
Nil
43.8
21.8
53.3
(1)
The value at grant date in accordance with AASB 2: Share Based Payments of options granted during the year as part
of remuneration. For options granted during the current year, the valuation inputs for the Black-Scholes option pricing
model were as follows:
Underlying
Share Price
(cents)
Exercise Price
(cents)
Volatility
Interest Rate Valuation Date Expiry Date
Risk Free
Directors
19.0
21.4
50.0%
0.7%
29/11/2019
28/11/2024
Details of ordinary shares in the Company provided as a result of the exercise of remuneration options to key management
personnel of the Group are set out below:
Number of ordinary
shares issued on exercise
of options during the year
Amount paid per ordinary
share (cents)
Value exercised ($) (1)
Directors
Seamus Cornelius
125,000
20.2
(4,000)
No amounts are unpaid on any shares issued on the exercise of options.
(1)
The value at exercise date of the options that were granted as part of remuneration and were exercised during the year
has been determined as the intrinsic value of the options at that date.
17
Directors’ Report (Cont’d)
Equity instruments held by key management personnel
Share holdings
The numbers of shares in the Company held during the financial year by each director of Duketon Mining Limited and other
key management personnel of the Company, including their personally related parties, are set out below. There were no
shares granted during the reporting period as compensation.
2020
Acquired
during the
year on the
exercise of
options
Balance at
start of the
year
Other
changes
during the
year
Balance at
end of the
year
Directors of Duketon Mining Limited
Ordinary shares
Seamus Cornelius
Stuart Fogarty
Heath Hellewell
4,031,870
550,000
100,000
125,000
-
-
2,992,853
-
-
7,149,723
550,000
100,000
Option holdings
The numbers of options over ordinary shares in the Company held during the financial year by each director of Duketon Mining
Limited and other key management personnel of the Company, including their personally related parties, are set out below:
2020
Balance at
start of the
year
Granted as
compen-
sation
Exercised
Other
changes
Balance at
end of the
year
Vested and
exercisable Unvested
Directors of Duketon Mining Limited
Seamus Cornelius
Stuart Fogarty
Heath Hellewell
1,750,000
5,000,000
1,500,000
500,000
1,000,000
500,000
(125,000)
-
-
(375,000)
(1,000,000)
(500,000)
1,750,000
5,000,000
1,500,000
1,750,000
5,000,000
1,500,000
-
-
-
Loans to key management personnel
There were no loans to key management personnel during the year.
End of audited Remuneration Report
DIRECTORS’ MEETINGS
The number of meetings of the Company’s Board of Directors held during the year ended 30 June 2020 and the number of
meetings attended by each Director were:
Directors Meetings
Audit Committee
Meetings
Total
Available
Attended
Total
Available
Attended
Remuneration
Committee Meetings
Attended
Total
Available
Seamus Cornelius
Stuart Fogarty
Heath Hellewell
5
5
5
5
5
5
1
1
1
1
1
1
-
-
-
-
-
-
SHARES UNDER OPTION
Unissued ordinary shares of Duketon Mining Limited under option at the date of this report are as follows:
Date options issued
Expiry date
Exercise price (cents)
Number of options
15 December 2015
1 December 2016
31 January 2017
28 November 2018
29 November 2019
30 November 2020
24 November 2021
31 January 2022
28 November 2023
28 November 2024
20.0
30.0
25.0
20.0
21.4
Total number of options outstanding at the date of this report
2,800,000
2,500,000
250,000
2,000,000
2,250,000
9,800,000
No option holder has any right under the options to participate in any other share issue of the Company or any other entity.
18
Directors’ Report (Cont’d)
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf
of the Company, or to intervene in any proceedings to which the Company is a party, for the purpose of taking responsibility
on behalf of the company for all or any part of those proceedings.
No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under section 237 of
the Corporations Act 2001.
INSURANCE OF DIRECTORS AND OFFICERS
During the year, the Company has paid a premium in respect of Directors’ and Executive Officers’ insurance. The contract
contains a prohibition on disclosure of the amount of the premium and the nature of the liabilities under the policy. The liabilities
insured are legal costs that may be incurred in defending civil or criminal proceedings that may be brought against the officers
in their capacity as officers of the Company and any other payments arising from liabilities incurred by the officers in connection
with such proceedings. This does not include such liabilities that arise from conduct involving a wilful breach of duty by the
officers or the improper use by the officers of their position or of information to gain advantage for themselves or someone
else or to cause detriment to the Company.
NON-AUDIT SERVICES
The following non-audit services were provided by the entity's auditor, Rothsay Auditing or associated entities. The directors
are satisfied that the provision of non-audit services is compatible with the general standard of independence for auditors
imposed by the Corporations Act 2001. The directors are satisfied that the provision of non-audit services by the auditor, as
set out below, did not compromise the auditor independence requirements of the Corporations Act 2001 for the following
reasons:
− All non-audit services have been reviewed by the audit committee to ensure they do not impact the impartiality and
objectivity of the auditor;
− None of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of
Ethics for Professional Accountants.
Rothsay Auditing received or are due to receive the following amounts for the provision of non-audit services:
Tax compliance services
2020
$
2,000
2019
$
900
AUDITOR’S INDEPENDENCE DECLARATION
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out on
page 20.
Signed in accordance with a resolution of the directors.
Stuart Fogarty
Managing Director
Perth, 23 September 2020
19
AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE
CORPORATIONS ACT 2001
As lead auditor of the review of Duketon Mining Limited for the year ended 30 June
2020, I declare that, to the best of my knowledge and belief, there have been:
no contraventions of the auditor independence requirements of the Corporations
Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the
audit.
Rothsay Auditing
Daniel Dalla
Partner
23 September 2020
Liability limited by a scheme approved under Professional Standards Legislation
Corporate Governance Statement
Duketon Mining Limited and the Board are committed to achieving and demonstrating the highest standards of corporate
governance. Duketon Mining Limited has reviewed its corporate governance practices against the Corporate Governance
Principles and Recommendations (4th edition) published by the ASX Corporate Governance Council.
The 2020 Corporate Governance Statement was approved by the Board on 23 September 2020 and is current as at 23
September 2020. A description of the Group’s current corporate governance practices is set out in the Group’s Corporate
Governance Statement which can be viewed at www.duketonmining.com.au.
21
Statement of Profit or Loss and Other Comprehensive Income
FOR THE YEAR ENDED 30 JUNE 2020
Notes
Company
REVENUE
Interest
Profit on sale of tenements
Other income
Fair value gains on financial assets at fair value through the profit or
loss
EXPENDITURE
Administration expenses
Depreciation expense
Employee benefits expenses
Exploration expenditure
Share based payment expense
PROFIT/(LOSS) BEFORE INCOME TAX
INCOME TAX
TOTAL COMPREHENSIVE INCOME/(LOSS) FOR THE YEAR
ATTRIBUTABLE TO THE OWNERS OF DUKETON MINING
LIMITED
4
4
22
6
2020
$
189,288
20,000,000
50,000
1,209,586
(359,785)
(30,527)
(420,807)
(1,316,818)
(190,760)
2019
$
69,871
-
26,586
62,352
(302,313)
(20,678)
(193,994)
(2,399,720)
(132,400)
19,130,177
(2,890,296)
-
-
19,130,177
(2,890,296)
Basic and diluted earnings/(loss) per share (cents per share)
21
16.2
(2.5)
The above Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes.
22
Statement of Financial Position
AS AT 30 JUNE 2020
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Financial assets at fair value through profit or loss
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Plant and equipment
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Employee benefit obligations
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Employee benefit obligations
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
Notes
Company
2020
$
2019
$
7
8
9
10
11
20,322,227
114,486
2,280,615
22,717,328
2,085,199
50,444
1,221,199
3,356,842
67,422
67,422
46,786
46,786
22,784,750
3,403,628
139,232
72,764
211,996
16,676
16,676
121,635
62,045
183,680
10,057
10,057
228,672
193,737
22,556,078
3,209,891
12
13(a)
13(b)
22,970,315
494,295
(908,532)
22,556,078
22,920,030
908,070
(20,618,209)
3,209,891
The above Statement of Financial Position should be read in conjunction with the accompanying notes.
23
Statement of Changes in Equity
FOR THE YEAR ENDED 30 JUNE 2020
Notes
Contributed
Equity
$
Options
Reserve
$
Accumulated
Losses
$
Total
$
BALANCE AT 1 JULY 2018
Loss for the year
TOTAL COMPREHENSIVE LOSS
22,900,030
-
-
1,163,425
-
-
(18,095,668)
(2,890,296)
(2,890,296)
5,967,787
(2,890,296)
(2,890,296)
TRANSACTIONS WITH OWNERS IN THEIR
CAPACITY AS OWNERS
Shares issued during the year
Employee and consultant options
13(a)
20,000
-
-
(255,355)
-
367,755
20,000
112,400
BALANCE AT 30 JUNE 2019
Profit for the year
TOTAL COMPREHENSIVE INCOME
22,920,030
908,070
(20,618,209)
3,209,891
-
-
-
-
19,130,177
19,130,177
19,130,177
19,130,177
TRANSACTIONS WITH OWNERS IN THEIR
CAPACITY AS OWNERS
Shares issued during the year
Employee and consultant options
12
13(a)
50,285
-
(5,500)
(408,275)
-
579,500
44,785
171,225
BALANCE AT 30 JUNE 2020
22,970,315
494,295
(908,532)
22,556,078
The above Statement of Changes in Equity should be read in conjunction with the accompanying notes.
24
Statement of Cash Flows
FOR THE YEAR ENDED 30 JUNE 2020
Notes
Company
CASH FLOWS FROM OPERATING ACTIVITIES
Interest received
Payments to suppliers and employees
Expenditure on mining interests
Proceeds from government COVID-19 grant
Proceeds from sale of tenements
Proceeds from disposal of financial assets at fair value through profit or
loss
NET CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES
20
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds on disposal of plant and equipment
Payments for plant and equipment
NET CASH (OUTFLOW)/INFLOW FROM INVESTING ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares
Payments for small parcel roundup
NET CASH INFLOW FROM FINANCING ACTIVITIES
2020
$
2019
$
155,674
(750,591)
(1,310,409)
50,000
20,000,000
118,699
18,263,373
-
(51,163)
(51,163)
25,250
(432)
24,818
81,632
(533,095)
(2,550,759)
-
-
-
(3,002,222)
26,586
(22,864)
3,722
-
-
-
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS
Cash and cash equivalents at the beginning of the financial year
CASH AND CASH EQUIVALENTS AT THE END OF THE
FINANCIAL YEAR
18,237,028
2,085,199
(2,998,500)
5,083,699
7
20,322,227
2,085,199
The above Statement of Cash Flows should be read in conjunction with the accompanying notes.
25
Notes to the Financial Statements
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies have
been consistently applied to all the years presented, unless otherwise stated. The financial statements are for the Company
consisting of Duketon Mining Limited. The financial statements are presented in the Australian currency. Duketon Mining
Limited is a company limited by shares, domiciled and incorporated in Australia. The financial statements were authorised for
issue by the directors on 23 September 2020. The directors have the power to amend and reissue the financial statements.
(a) Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards, other
authoritative pronouncements of the Australian Accounting Standards Board, Australian Accounting Interpretations and the
Corporations Act 2001.
(i) Compliance with IFRS
The financial statements of Duketon Mining Limited comply with International Financial Reporting Standards (IFRS) as issued
by the International Accounting Standards Board (IASB).
(ii) New and amended standards adopted by the Company
The Company has adopted all the new, revised or amending Accounting Standards and Interpretations issued by the AASB
that are relevant to its operations and effective for the current annual reporting period.
New and revised Standards and amendments thereof and Interpretations effective for the current year that are relevant to the
Company include:
•
•
AASB 16 Leases; and
Interpretation 23 Uncertainty Over Income Tax Treatments.
AASB 16 Leases
The Company has adopted AASB 16 Leases from 1 July 2019 which has resulted in changes in the classification,
measurement and recognition of leases. The new standard requires recognition of a right-of-use asset (the leased item) and
a financial liability (lease payments) and removes the former distinction between ‘operating’ and ‘finance’ leases. The
exceptions are short-term leases and leases of low value assets.
In applying AASB 16 for the first time, as permitted by the standard, the Company has elected not to reassess whether a
contract is, or contains, a lease at the date of initial application. Instead, for contracts entered before the transition date the
Company relied on its assessment made applying AASB 117 Leases and Interpretation 4 Determining whether an
Arrangement contains a Lease.
There was no material impact on adoption of the standard and no adjustment made to current or prior period amounts.
The Company is party to one lease agreement for the office premises for a fixed period of 12 months commencing 1 July
2019. Under AASB 16 this lease is classified as a short-term lease defined as a lease with a lease term of 12 months or less.
Payments associated with this short-term lease are recognised on a straight-line basis as an expense in profit or loss.
(iii) New standards and interpretations not yet adopted
Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2020 reporting
periods and have not been early adopted by the Company. The Company’s assessment of the impact of these new standards
and interpretations is that they are not expected to have a material impact on the entity in the current or future reporting periods
and on foreseeable future transactions.
(iv) Historical cost convention
These financial statements have been prepared under the historical cost convention, except for certain financial assets and
liabilities measured at fair value.
(b) Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision
maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the
operating segments, has been identified as the Managing Director.
(c) Revenue recognition
Interest revenue is recognised on a time proportionate basis that takes into account the effective yield on the financial assets.
26
Notes to the Financial Statements (Cont’d)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
(d) Government grants
Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will be
received, and the Company will comply with all attached conditions.
(e) Income tax
The income tax expense or revenue for the year is the tax payable on the current year’s taxable income based on the applicable
income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary
differences and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the
reporting period in the countries where the Company’s subsidiaries and associated operate and generate taxable income.
Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation
is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax
authorities.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the consolidated financial statements. However, the deferred income tax is
not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination
that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using
tax rates (and laws) that have been enacted or substantively enacted by the reporting date and are expected to apply when
the related deferred income tax asset is realised, or the deferred income tax liability is settled.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future
taxable amounts will be available to utilise those temporary differences and losses.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of
investments in controlled entities where the parent entity is able to control the timing of the reversal of the temporary differences
and it is probable that the differences will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities
and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where
the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle
the liability simultaneously.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other
comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly
in equity, respectively.
(f) Leases
As explained in note 1(a)(ii) above, the Company has changed its accounting policy for leases where the Company is the
lessee. The new policy and the impact of the change are described in note 1(a)(ii).
Until 30 June 2019, leases where a significant portion of the risks and rewards of ownership are not transferred to the Company
as lessee are classified as operating leases. Payments made under operating leases (net of any incentives received from the
lessor) are charged to profit or loss on a straight-line basis over the period of the lease.
(g) Impairment of assets
Assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not
be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable
amount. 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
that suffered an impairment are reviewed for possible reversal of the impairment at the end of each reporting period.
(h) Cash and cash equivalents
For statement of cash flows presentation purposes, cash and cash equivalents includes cash on hand, deposits held at call
with financial institutions and other short-term highly liquid investments with original maturities of three months or less that are
readily convertible to known amounts of cash and which are subject to insignificant risk of changes in value, and bank
overdrafts.
27
Notes to the Financial Statements (Cont’d)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
(i) Financial assets
(i) Classification
The Company classifies its financial assets in the following measurement categories:
•
Those to be measured subsequently at fair value (either through OCI or through profit or loss); and
Those to be measured at amortised cost.
•
The classification depends on the entity’s business model for managing the financial assets and the contractual terms of the
cash flows.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or OCI. For investments in equity
instruments that are not held for trading, this will depend on whether the Company has made an irrevocable election at the
time of initial recognition to account for the equity investment at fair value through other comprehensive income (FVOCI).
(ii) Recognition and derecognition
Regular way purchases and sales of financial assets are recognised on trade-date, the date on which the Company commits
to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash flows from the financial assets
have expired or have been transferred and the Company has transferred substantially all the risks and rewards of ownership.
(iii) Measurement
At initial recognition, the Company measures a financial asset at its fair value plus, in the case of a financial asset not at fair
value through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of the financial asset.
Transaction costs of financial assets carried at FVPL are expensed in profit or loss.
Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are
solely payment of principal and interest.
Debt instruments
Subsequent measurement of debt instruments depends on the Company’s business model for managing the asset and the
cash flow characteristics of the asset. There are three measurement categories into which the Company classifies its debt
instruments:
•
•
•
Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely
payments of principal and interest are measured at amortised cost. Interest income from these financial assets is
included in finance income using the effective interest rate method. Any gain or loss arising on derecognition is
recognised directly in profit or loss and presented in other income or expenses. Impairment losses are presented as a
separate line item in the statement of profit or loss.
FVOCI: Assets that are held for collection of contractual cash flows and for selling the financial assets, where the
assets’ cash flows represent solely payments of principal and interest, are measured at FVOCI. Movements in the
carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest income and
foreign exchange gains and losses which are recognised in profit or loss. When the financial asset is derecognised,
the cumulative gain or loss previously recognised in OCI is reclassified from equity to profit or loss and recognised in
other income or expenses. Interest income from these financial assets is included in finance income using the effective
interest rate method. Foreign exchange gains and losses are presented in other income or expenses and impairment
losses are presented as a separate line item in the statement of profit or loss.
FVPL: Assets that do not meet the criteria for amortised cost or FVOCI are measured at FVPL. A gain or loss on a debt
investment that is subsequently measured at FVPL is recognised in profit or loss and presented net within other income
or expenses in the period in which it arises.
Equity instruments
The Company subsequently measures all equity investments at fair value. Where the Company’s management has elected to
present fair value gains and losses on equity investments in OCI, there is no subsequent reclassification of fair value gains
and losses to profit or loss following the derecognition of the investment. Dividends from such investments continue to be
recognised in profit or loss as other income when the Company’s right to receive payment is established.
Changes in the fair value of financial assets at FVPL are recognised in other income or expenses in the statement of profit or
loss as applicable. Impairment losses (and reversal of impairment losses) on equity investments measured at FVOCI are not
reported separately from other changes in fair value.
(iv) Impairment
From 1July 2019 the Company assesses on a forward looking basis the expected credit losses associated with its debt
instruments carried at amortised cost and FVOCI. The impairment methodology depends on whether there has been a
significant increase in credit risk.
28
Notes to the Financial Statements (Cont’d)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
(j) Plant and equipment
All plant and equipment are stated at historical cost less depreciation. Historical cost includes expenditure that is directly
attributable to the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it
is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be
measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced.
All other repairs and maintenance are charged to the Statement of Comprehensive Income during the reporting period in which
they are incurred.
Depreciation of plant and equipment is calculated using the straight-line method to allocate their cost or revalued amounts,
net of their residual values, over their estimated useful lives or, in the case of leasehold improvements and certain leased plant
and equipment, the shorter lease term. The rates used range from 10% to 33% per annum.
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(g)).
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the
statement of comprehensive income. When revalued assets are sold, it is Company’s policy to transfer the amounts included
in other reserves in respect of those assets to retained earnings.
(k) Exploration and evaluation costs
Exploration and evaluation costs are expensed as they are incurred.
(l) Trade and other payables
These amounts represent liabilities for goods and services provided to the Company prior to the end of the financial year which
are unpaid. The amounts are unsecured, non-interest bearing and are paid on normal commercial terms.
(m) Employee benefits
(i) Wages and salaries and annual leave
Liabilities for wages and salaries, including non-monetary benefits, and annual leave expected to be settled within 12 months
of the reporting date are recognised in other payables in respect of employees’ services up to the reporting date and are
measured at the amounts expected to be paid when the liabilities are settled.
(ii) Share-based payments
The Company provides benefits to employees (including directors) of the Company in the form of share-based payment
transactions, whereby employees render services in exchange for shares or rights over shares (‘equity-settled transactions’).
The cost of these equity-settled transactions with employees is measured by reference to the fair value at the date at which
they are granted. The fair value is determined by an internal valuation using a Black-Scholes option pricing model.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which
the performance conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award
(‘vesting date’).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects (i) the
extent to which the vesting period has expired and (ii) the number of options that, in the opinion of the directors of the Company,
will ultimately vest. This opinion is formed based on the best available information at balance date. No adjustment is made for
the likelihood of market performance conditions being met as the effect of these conditions is included in the determination of
fair value at grant date.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a market
condition.
Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not
yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled award and
designated as a replacement award on the date that it is granted, the cancelled and new award are treated as if they were a
modification of the original award.
29
Notes to the Financial Statements (Cont’d)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
(n) Issued capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown
in equity as a deduction, net of tax, from the proceeds. Incremental costs directly attributable to the issue of new shares or
options for the acquisition of a business are not included in the cost of the acquisition as part of the purchase consideration.
(o) Earnings per share
(i) Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to owners of the Company, excluding any costs of
servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the
financial year, adjusted for bonus elements in ordinary shares issued during the year.
(ii) Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the
after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted
average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.
(p) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part of
the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the taxation authority is included with other receivables or payables in the statement of
financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities
which are recoverable from, or payable to the taxation authority, are presented as operating cash flows.
(q) Critical accounting judgements, estimates and assumptions
The preparation of these financial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the Company’s accounting policies. The areas involving a
higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial
statements are:
Environmental issues
Balances disclosed in the financial statements and notes thereto are not adjusted for any pending or enacted environmental
legislation, and the directors understanding thereof. At the current stage of the Company’s development and its current
environmental impact the directors believe such treatment is reasonable and appropriate.
Taxation generally
Balances disclosed in the financial statements and the notes thereto related to taxation are based on the best estimates of the
directors. These estimates consider both the financial performance and position of the Company as they pertain to current
income taxation legislation, and the directors understanding thereof. No adjustment has been made for pending or future
taxation legislation. The current income tax position represents the directors’ best estimate, pending an assessment by the
Australian Taxation Office.
Taxation uncertain tax position
The tax legislation concerning utilisation of carried forward tax losses is complex and highly subjective. The Company
considers it probable that it will have access to all carried forward tax losses by satisfying either the Continuity of Ownership
or Same Business tests but notes that access to losses from the 2013 financial year may be uncertain. The income tax return
for the 2020 financial year will be prepared on this basis that all prior losses are available, together with documentation to
support this position. If the ATO were to deem that the 2013 losses were not available this would reduce the Company’s
unrecognised carry forward tax losses to nil and create a current tax payable and current tax expense of $532,381 respectively.
Share based payment transactions
The Company measures the cost of equity-settled transactions with employees by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value is determined by an internal valuation using a Black-Scholes
option pricing model.
30
Notes to the Financial Statements (Cont’d)
2. FINANCIAL RISK MANAGEMENT
The Company’s activities expose it to a variety of financial risks: market risk (including currency risk, interest rate risk and price
risk), credit risk and liquidity risk. The Company’s overall risk management program focuses on the unpredictability of financial
markets and seeks to minimise potential adverse effects on the financial performance of the Company.
Risk management is carried out by the full Board of Directors as the Company believes that it is crucial for all board members
to be involved in this process. Senior management, as required, has responsibility for identifying, assessing, treating and
monitoring risks and reporting to the board on risk management.
(a) Market risk
(i) Foreign exchange risk
As all operations are currently within Australia, the Company is not exposed to any material foreign exchange risk.
(ii) Price risk
The Company is exposed to equity securities price risk. This arises from investments held by the Company and classified in
the statement of financial position at fair value through the profit and loss. The Company is not exposed to commodity price
risk. At the reporting date, the Company has investments in ASX listed equity securities.
Sensitivity analysis
The Company’s equity investments are listed on the Australian Stock Exchange (ASX) and are all classified at fair value
through the profit or loss. At 30 June 2020, if the value of the equity investments held had increased/decreased by 15% with
all other variables held constant, post tax loss for the Company would have been $342,092 lower/higher (2019: $183,180
lower/higher) as a result of gains/losses on the fair value of the financial assets.
(iii) Interest rate risk
The Company is exposed to movements in market interest rates on cash and cash equivalents. The Company’s policy is to
monitor the interest rate yield curve out to six months to ensure a balance is maintained between the liquidity of cash assets
and the interest rate return. The entire balance of cash and cash equivalents for the Company of $20,322,227 (2019:
$2,085,199) is subject to interest rate risk. The proportional mix of floating interest rates and fixed rates to a maximum of six
months fluctuate during the year depending on current working capital requirements. The weighted average interest rate
received on cash and cash equivalents by the Company was 1.0% (2019: 2.0%).
Sensitivity analysis
At 30 June 2020, if interest rates had changed by +/- 25 basis points from the weighted average rate for the year with all other
variables held constant, post-tax loss for the Company would have been $46,566 lower/higher (2019: $34,579 lower/higher
on a +/- 100 basis point change) as a result of lower/higher interest income from cash and cash equivalents.
(b) Credit risk
The Company has no significant concentrations of credit risk. The maximum exposure to credit risk at balance date is the
carrying amount (net of provision for impairment) of those assets as disclosed in the statement of financial position and notes
to the financial statements.
As the Company does not presently have any debtors, lending, significant stock levels or any other credit risk, a formal credit
risk management policy is not maintained. All surplus cash holdings of the Company are currently invested with AA- rated
financial institutions.
(c) Liquidity risk
The Company manages liquidity risk by continuously monitoring forecast and actual cash flows and ensuring sufficient cash
and marketable securities are available to meet the current and future commitments of the Company. Due to the nature of the
Company’s activities, being mineral exploration, the Company does not have ready access to credit facilities, with the primary
source of funding being equity raisings. The Board of Directors constantly monitor the state of equity markets in conjunction
with the Company’s current and future funding requirements, with a view to initiating appropriate capital raisings as required.
The financial liabilities of the Company are confined to trade and other payables as disclosed in the Statement of financial
position. All trade and other payables are non-interest bearing and due within 12 months of the reporting date.
31
Notes to the Financial Statements (Cont’d)
2. FINANCIAL RISK MANAGEMENT (Cont’d)
(d) Fair value estimation
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure
purposes. The equity investments held by the Company are classified at fair value through profit or loss. The market value of
all equity investments represents the fair value based on quoted prices on active markets (ASX) as at the reporting date without
any deduction for transaction costs. These investments are classified as level 1 financial instruments.
The carrying amounts and estimated fair values of financial assets and financial liabilities are as follows:
Financial Assets
Cash and cash equivalents
Trade and other receivables
Financial assets at fair value through profit or loss
Total Financial Assets
Financial Liabilities
Trade and other payables
Total Financial Liabilities
Company
2020
$
20,322,227
114,486
2,280,615
22,717,328
2019
$
2,085,199
50,444
1,221,199
3,356,842
139,232
139,232
121,635
121,635
The methods and assumptions used to estimate the fair value of financial instruments are outlined below:
Cash
The carrying amount is fair value due to the liquid nature of these assets.
Receivables/Payables
Due to the short-term nature of these financial rights and obligations, their carrying amounts are estimated to represent their
fair values.
Fair value measurements of financial assets
The carrying values of financial assets and liabilities of the Company approximate their fair values. Fair values of financial
assets and liabilities have been determined for measurement and / or disclosure purposes.
Fair value hierarchy
The Company classifies assets and liabilities carried at fair value using a fair value hierarchy that reflects the significance of
the inputs used in determining that value. The following table analyses financial instruments carried at fair value by the
valuation method. The different levels in the hierarchy have been defined as follows:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2:
inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly
(as prices) or indirectly (derived from prices); and
inputs for the asset or liability that are not based on observable market data (unobservable inputs).
Level 3:
Level 1
$
Level 2
$
Level 3
$
Total
$
30 June 2020
Financial assets at fair value through profit or loss
Total as at 30 June 2020
30 June 2019
Financial assets at fair value through profit or loss
Total as at 30 June 2019
2,280,615
2,280,615
1,221,199
1,221,199
-
-
-
-
-
-
-
-
2,280,615
2,280,615
1,221,199
1,221,199
32
Notes to the Financial Statements (Cont’d)
3. SEGMENT INFORMATION
Industry and geographical segment
The Company operates in one segment, being the mining exploration sector in Australia.
In determining operating segments, the Company has had regard to the information and reports the Managing Director uses
to make strategic decisions regarding resources. The Managing Director is considered to be the chief operating decision maker
and is empowered by the Board of Directors to allocate resources and assess the performance of the Company.
4. REVENUE AND OTHER INCOME
Revenue
Other revenue
Interest from financial institutions
Other income
Gain on disposal of plant and equipment
Government COVID-19 grant income
5. EXPENSES
Profit or loss before income tax includes the following specific
expenses:
Superannuation expense
Expenses relating to short-term leases
6.
INCOME TAX
(a) Income tax expense/(benefit)
Current tax
Deferred tax
Company
2020
$
2019
$
189,288
69,871
-
50,000
50,000
26,586
-
26,586
40,559
43,943
38,474
42,919
-
-
-
-
-
-
(b) Numerical reconciliation of income tax expense to prima facie
tax payable
Profit/(loss) from continuing operations before income tax expense
19,130,177
(2,890,296)
Prima facie tax expense/(benefit) at the Australian tax rate of 27.5%
(2019: 30%)
Tax effect of amounts which are not deductible (taxable) in calculating
taxable income:
Share-based payments
Government COVID-19 grant income
Movements in unrecognised temporary differences
Tax effect of current year tax losses for which no deferred tax asset
has been recognised
Previously unrecognised tax losses now recouped to reduce current
tax expense
Income tax expense/(benefit)
5,260,799
(867,089)
52,459
(13,750)
5,299,508
39,720
-
(827,369)
(310,999)
(18,705)
-
846,074
(4,988,509)
-
-
-
33
Notes to the Financial Statements (Cont’d)
6.
INCOME TAX (Cont’d)
(c) Unrecognised temporary differences
Deferred Tax Assets at 27.5% (2019: 30%)
On Income Tax Account
Financial assets at fair value through profit or loss
Carry forward tax losses
Set-off of deferred tax liabilities:
Financial assets at fair value through profit or loss
Net deferred tax assets
Less deferred tax assets not recognised
Company
2020
$
2019
$
-
549,004
549,004
(292,639)
256,365
(256,365)
-
20,029
6,040,922
6,060,951
-
6,060,951
(6,060,951)
-
Net deferred tax assets have not been brought to account as it is not probable within the immediate future that tax profits will
be available against which deductible temporary differences and tax losses can be utilised.
The Company’s ability to use losses in the future is subject to the Company satisfying the relevant tax authority’s criteria for
using these losses.
In April 2017, the Australian Government enacted legislation which reduces the corporate rate for small and medium business
(base rate) entities from 30% to 25% over the next decade. For the 2017 financial year the corporate tax rate reduced to 27.5%
for small business entities with turnover less than $10 million. This turnover threshold will progressively increase until it reaches
$50 million in the 2020 financial year. For the 2021 financial year, the tax rate will decrease to 26% and then 25% for the 2022
and later financial years. Duketon Mining Limited satisfies the criteria to be a base rate entity for the 2020 financial year.
7. CURRENT ASSETS - CASH AND CASH EQUIVALENTS
Cash at bank and in hand
Short-term deposits
Cash and cash equivalents as shown in the statement of financial
position and the statement of cash flows
292,227
20,030,000
348,232
1,736,967
20,322,227
2,085,199
Cash at bank earns interest at floating rates based on daily bank deposit rates.
Short-term deposits are made for varying periods of between one day and three months depending on the immediate cash
requirements of the Company and earn interest at the respective short-term deposit rates.
8. CURRENT ASSETS - TRADE AND OTHER RECEIVABLES
Trade and other receivables
114,486
50,444
9. CURRENT ASSETS – FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
Australian listed equity securities
2,280,615
1,221,199
Changes in fair values of financial assets at fair value through profit or loss are disclosed directly on the face of the statement
of profit or loss and other comprehensive income.
34
Notes to the Financial Statements (Cont’d)
10. NON-CURRENT ASSETS - PLANT AND EQUIPMENT
Plant and equipment
Cost
Accumulated depreciation
Net book amount
Plant and equipment
Opening net book amount
Additions
Depreciation charge
Closing net book amount
11. CURRENT LIABILITIES - TRADE AND OTHER PAYABLES
Trade payables
Other payables and accruals
Funds held on trust for unmarketable parcel roundup
Company
2020
$
2019
$
136,027
(68,605)
67,422
46,786
51,163
(30,527)
67,422
35,925
79,273
24,034
139,232
84,864
(38,078)
46,786
57,009
10,455
(20,678)
46,786
-
97,169
24,466
121,635
12. ISSUED CAPITAL
(a) Share capital
2020
2019
Notes
Number of
shares
$
Number of
shares
$
Ordinary shares fully paid
12(b), 12(d) 118,234,304
22,970,315
118,016,281
22,920,030
Total issued capital
118,234,304
22,970,315
118,016,281
22,920,030
(b) Movements in ordinary share capital
Beginning of the financial year
Issued during the year:
Transferred from share-based payments reserve
Issued upon exercise of $0.202 options
upon exercise of options
Issued as part of employee remuneration (1)
End of the financial year
2020
2019
Number of
shares
$
Number of
shares
$
118,016,281
22,920,030
117,849,615
22,900,030
125,000
25,250
-
-
-
93,023
118,234,304
5,500
19,535
22,970,315
-
166,666
118,016,281
-
20,000
22,920,030
(1)
On 27 September 2019 the Company issued 93,023 ordinary shares (9 January 2019, 166,666 ordinary shares) to an
employee as a reward and incentive. The closing price of $0.21 (2019: $0.12) on the date of issue was the grant date
fair value of the shares issued.
35
Notes to the Financial Statements (Cont’d)
12. ISSUED CAPITAL (Cont’d)
(c) Movements in options on issue
Beginning of the financial year
Issued, exercisable at $0.214 on or before 28 November 2024
Issued, exercisable at $0.20 on or before 28 November 2023
Exercised at $0.202, expiring on 18 November 2019
Expired on 1 August 2019, exercisable at $0.20
Expired on 18 November 2019, exercisable at $0.202
Expired on 31 March 2019, exercisable at $0.20
Expired on 31 March 2019, exercisable at $0.25
Expired on 31 March 2019, exercisable at $0.30
Expired on 31 March 2019, exercisable at $0.35
Expired on 14 May 2019, exercisable at $0.35
End of the financial year
Number of options
2019
2020
24,800,000
2,250,000
-
(125,000)
(15,000,000)
(2,125,000)
-
-
-
-
-
9,800,000
38,100,000
-
2,000,000
-
-
-
(3,000,000)
(1,500,000)
(1,000,000)
(1,550,000)
(8,250,000)
24,800,000
(d) Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion to
the number of and amounts paid on the shares held.
On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and
upon a poll each share is entitled to one vote.
Ordinary shares have no par value and the Company does not have a limited amount of authorised capital.
(e) Capital risk management
The Company’s objectives when managing capital are to safeguard their ability to continue as a going concern, so that they
may continue to provide returns for shareholders and benefits for other stakeholders.
Due to the nature of the Company’s activities, being mineral exploration, the Company does not have ready access to credit
facilities, with the primary source of funding being equity raisings. Therefore, the focus of the Company’s capital risk
management is the current working capital position against the requirements of the Company to meet exploration programmes
and corporate overheads. The Company’s strategy is to ensure appropriate liquidity is maintained to meet anticipated
operating requirements, with a view to initiating appropriate capital raisings as required. The working capital position of the
Company at 30 June 2020 and 30 June 2019 are as follows:
Cash and cash equivalents
Trade and other receivables
Financial assets at fair value through profit or loss
Trade and other payables
Employee benefit obligations (current)
Working capital position
Company
2020
$
20,322,227
114,486
2,280,615
(139,232)
(72,764)
22,505,332
2019
$
2,085,199
50,444
1,221,199
(121,635)
(62,045)
3,173,162
36
Notes to the Financial Statements (Cont’d)
13. RESERVES AND ACCUMULATED LOSSES
(a) Reserves
Share-based payments reserve
Balance at beginning of year
Employee and consultant options expense
Transferred to share capital upon exercise of options
Transferred to accumulated losses upon expiry of options
Balance at end of year
(b) Accumulated losses
Balance at beginning of year
Transferred from share-based payments reserve upon expiry of
options
Net profit/(loss) for the year
Balance at end of year
Company
2020
$
2019
$
908,070
171,225
(5,500)
(579,500)
494,295
1,163,425
112,400
-
(367,755)
908,070
(20,618,209)
(18,095,668)
579,500
19,130,177
(908,532)
367,755
(2,890,296)
(20,618,209)
(c) Nature and purpose of reserves
Share-based payments reserve
The share-based payments reserve is used to recognise the fair value of options granted and currently on issue.
14. DIVIDENDS
No dividends were paid during the financial year. No recommendation for payment of dividends has been made.
15. RELATED PARTY TRANSACTIONS
(a) Key management personnel compensation
Short-term benefits
Post-employment benefits
Other long-term benefits
Termination benefits
Share-based payments
325,791
24,884
4,764
-
152,200
507,639
325,247
23,299
8,398
-
112,400
469,344
Detailed remuneration disclosures are provided in the remuneration report on pages 15 to 18.
(b) Loans to related parties
There were no loans to related parties, including key management personnel, during the year.
16. REMUNERATION OF AUDITORS
During the year the following fees were paid or payable for services provided by the auditor of the Company, its related
practices and non-related audit firms:
(a) Audit services
Rothsay Auditing - audit and review of financial reports
37,500
39,500
(b) Non-audit services
Rothsay Auditing – tax compliance services
2,000
900
37
Notes to the Financial Statements (Cont’d)
17. CONTINGENCIES
There are no material contingent liabilities of the Company at balance date. The Company has contingent assets at balance
date resulting from the sale of gold tenements to Regis Resources Limited (“Regis”).
Gold tenements sale to Regis
Under the terms of the sale agreement with Regis to sell a package of tenements from the Duketon Project the following
contingent consideration is outstanding:
1)
Mineral resource contingent payment – $2.5m in cash payable on the first occasion that Regis announces to the ASX
mineral resources totalling more than 250,000 ounces of gold (Measured, Indicated or Inferred) on one or more of the
sale tenements.
Gold production contingent payment – $2.5m in cash payable on the first to occur of the following:
a)
first commercial gold production within the sale tenements (and not being an extension into the tenements of
Regis’ existing mining operation at Petra); or
in the case of an extension into the sale tenements of Regis’ existing mining operation at Petra, the mining of
greater than 5,000 ounces of gold from the sale tenements.
2)
b)
18. COMMITMENTS
Company
2020
$
2019
$
(a) Exploration commitments
The Company has certain commitments to meet minimum expenditure requirements on the mineral exploration assets it has
an interest in. Outstanding exploration commitments are as follows:
within one year
later than one year but not later than five years
later than five years
192,300
769,200
1,346,100
2,307,600
1,692,380
3,894,200
1,538,400
7,124,980
(b) Lease commitments: Company as lessee
Operating leases (non-cancellable):
Minimum lease payments
within one year
Aggregate lease expenditure contracted for at reporting date but not
recognised as liabilities
-
-
57,600
57,600
The Company has a non-cancellable property lease with a one-year term, with rent payable monthly in advance. The lease
includes standard conditions customary for commercial property leases.
From 1 July 2019, upon adoption AASB 16, the Company may recognise right-of-use assets for leases in the future, except
for short-term and low-value leases, refer to note 1(a)(ii).
19. EVENTS OCCURRING AFTER THE REPORTING DATE
No matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly
affect the operations of the Company, the results of those operations, or the state of affairs of the Company in future financial
periods.
38
Notes to the Financial Statements (Cont’d)
20. CASH FLOW INFORMATION
Company
2020
$
2019
$
(a) Reconciliation of net profit/(loss) after income tax to net cash outflow from operating activities
Net profit/(loss) for the year
Non-Cash Items
Share-based payment expense
Depreciation expense
Net gain on disposal of plant and equipment
Change in operating assets and liabilities
(Increase)/decrease in trade and other receivables
(Increase) in financial assets at fair value through profit or loss
Increase/(decrease) in trade and other payables
Increase in employee benefit obligations
Net cash inflow/(outflow) from operating activities
(64,042)
(1,059,416)
18,029
17,338
18,263,373
190,760
30,527
-
19,130,177
(2,890,296)
132,400
20,678
(26,586)
46,304
(62,352)
(228,669)
6,299
(3,002,222)
(b) Non-cash investing and financing activities
On 27 September 2019 the Company issued 93,023 ordinary shares (9 January 2019, 166,666 ordinary shares) to an
employee as a reward and incentive, for a value of $19,535 (2019: $20,000). This amount is included in ‘share-based payments
expense’ on the statement of profit or loss and other comprehensive income of the Company.
21. PROFIT/(LOSS) PER SHARE
(a) Reconciliation of earnings used in calculating earnings per
share
Profit/(loss) attributable to the owners of the Company used in
calculating basic and diluted earnings/(loss) per share
(b) Weighted average number of shares used as the denominator
19,130,177
(2,890,296)
No. of Shares
No. of Shares
Weighted average number of ordinary shares used as the denominator
in calculating basic and diluted earnings/(loss) per share
118,163,528
117,928,153
(c) Information on the classification of options
For the year ended 30 June 2020, all options on issue were anti-dilutive as the various exercise prices were all greater than
the average market price of the Company’s shares during the year. This has resulted in the diluted earnings per share being
the same as the basic earnings per share. The options currently on issue could potentially dilute basic earnings per share in
the future.
22. SHARE-BASED PAYMENTS
a) Employee and consultant options
The Company provides benefits to employees (including directors), contractors and consultants of the Company in the form
of share-based payment transactions, whereby employees, contractors and consultants render services in exchange for
options to acquire ordinary shares. The options on issue at 30 June 2020 have exercise prices ranging from $0.20 to $0.30
and expiry dates ranging from 30 November 2020 to 28 November 2024.
Options granted carry no dividend or voting rights. When exercisable, each option is convertible into one ordinary share of the
Company with full dividend and voting rights.
39
Notes to the Financial Statements (Cont’d)
22. SHARE-BASED PAYMENTS (Cont’d)
The weighted average fair value of the options granted during the 2020 financial year was 5.6 cents (2019: 5.6 cents). The fair
value was calculated by using the Black-Scholes European Option Pricing Model applying the following inputs:
Weighted average exercise price (cents)
Weighted average life of the option (years)
Weighted average underlying share price (cents)
Expected share price volatility
Risk free interest rate
2020
21.4
5.0
19.0
50.0%
0.7%
2019
20.0
5.0
15.0
50.0%
2.3%
b) Supplier options
Suppliers were granted options in accordance with the terms of the non-renounceable pro-rata rights issue prospectus issued
in May 2013. The options had an exercise price of $0.20 and expired on 1 August 2019.
There were no supplier options granted during the 2020 or 2019 financial years.
c) Employee shares
On 27 September 2019 the Company issued 93,023 ordinary shares (9 January 2019, 166,666 ordinary shares) to an
employee as a reward and incentive, for a value of $19,535 (2019: $20,000). The closing price of $0.21 (2019: $0.12) on the
date of issue was the grant date fair value of the shares issued.
Set out below are summaries of the share-based payment options granted per (a) and (b):
Outstanding at the beginning of the year
Granted
Forfeited
Exercised
Expired
Outstanding at year-end
Exercisable at year-end
Company
2020
2019
Weighted
average
exercise
price cents
21.1
21.4
-
20.2
20.0
23.0
23.0
Number of
options
38,100,000
2,000,000
-
-
(15,300,000)
24,800,000
24,800,000
Number of
options
24,800,000
2,250,000
-
(125,000)
(17,125,000)
9,800,000
9,800,000
Weighted
average
exercise
price cents
25.0
20.0
-
-
30.8
21.1
21.1
The weighted average remaining contractual life of share options outstanding at the end of the financial year was 2.2 years
(2019: 0.9 years), with exercise prices ranging from $0.20 to $0.30.
d) Expenses arising from share-based payment transactions
Total expenses arising from share-based payment transactions recognised during the period were as follows:
Options issued to employees shown as share-based payments
Shares issued to employees shown as share-based payments
Company
2020
$
171,225
19,535
190,760
2019
$
112,400
20,000
132,400
40
Directors’ Declaration
In the Directors’ opinion:
(a)
the financial statements and notes set out on pages 22 to 40 are in accordance with the Corporations Act 2001,
including:
(i)
(ii)
complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional
reporting requirements; and
giving a true and fair view of the Company’s financial position as at 30 June 2020 and of its performance for the
financial year ended on that date;
(b)
(c)
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due
and payable; and
a statement that the attached financial statements are in compliance with International Financial Reporting Standards
has been included in the notes to the financial statements.
The directors have been given the declarations by the Chief Executive Officer and Chief Financial Officer required by section
295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the directors.
Stuart Fogarty
Managing Director
Perth, 23 September 2020
41
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
DUKETON MINING LIMITED
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Duketon Mining Limited (“the Company”) which comprises the
statement of financial position as at 30 June 2020, the statement of profit or loss and other comprehensive
income, the statement of changes in equity and the statement of cash flows for the year then ended on that
date and notes to the financial statements, including a summary of significant accounting policies and the
directors’ declaration of the Company.
In our opinion the financial report of the Company is in accordance with the Corporations Act 2001,
including:
(i) giving a true and fair view of the Company’s financial position as at 30 June 2020 and of its financial
performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under these
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report
section of this report. We are independent of the Company in accordance with the auditor independence
requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and
Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards) (the “Code”) that are relevant to our audit of the financial report in Australia. We have also
fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given
to the directors of the Company, would be in the same terms if given to the directors as at the time of this
auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
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.
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
DUKETON MINING LIMITED (continued)
Key Audit Matter – Financial Assets
How our Audit Addressed the Key Audit Matter
The Company’s financial assets make up
almost 100% of total assets by value and are
considered to be the key driver of the
Company’s operations.
We do not consider financial assets to be at a
high risk of significant misstatement, however
due to the materiality in the context of the
financial statements as a whole, this is
considered to be an area which had an effect
on our overall strategy and allocation of
resources in planning and completing our
audit.
Key Audit Matter – Exploration and
evaluation expenditure
Our procedures over the existence of the Company’s
financial assets included but were not limited to:
Documenting and assessing the processes and
controls in place to record cash transactions;
Testing a sample of cash payments to determine
they were bona fide payments, were properly
authorised and recorded in the general ledger;
and
Agreeing
independent third-party confirmations.
significant
financial
assets
to
We have also assessed the appropriateness of the
disclosures included in the financial report.
How our Audit Addressed the Key Audit Matter
significant
The Company has
exploration and evaluation expenditure during
the year.
incurred
Our procedures in assessing exploration and evaluation
expenditure included but were not limited to the
following:
We do not consider exploration and evaluation
expenditure to be at a high risk of significant
misstatement, or to be subject to a significant
level of judgement. However due to the
materiality in the context of the financial
statements as a whole, this is considered to be
an area which had an effect on our overall
in
strategy and allocation of resources
planning and completing our audit.
We assessed exploration and evaluation
expenditure with
to AASB 6
Exploration for and Evaluation of Mineral
Resources.
reference
We tested a sample of exploration and
evaluation
supporting
documentation to ensure they were bona fide
payments; and
expenditure
to
We documented and assessed the processes and
controls in place to record exploration and
evaluation transactions.
We have also assessed the appropriateness of the
disclosures included in the financial report.
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
DUKETON MINING LIMITED (continued)
Other Information
The directors are responsible for the other information. The other information comprises the information
included in the Company’s annual report for the year ended 30 June 2020, 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 there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Directors’ Responsibility 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 the Australian Accounting Standards and the Corporations Act 2001 and for
such internal control as the directors determine is necessary to enable the preparation of the financial
report that gives a true and fair view and is free from material misstatement whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Company to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to liquidate the Company or cease operations,
or have no realistic alternative but to do so.
Auditor’s Responsibility 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 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: www.auasb.gov.au/Home.aspx.
We communicate with the directors regarding, amongst other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify
during our audit.
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
DUKETON MINING LIMITED (continued)
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence and where applicable, related safeguards.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit matters.
We describe those matters in our auditor’s report unless law or regulation precludes public disclosure about
the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be expected
to outweigh the public interest benefits of such communications.
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 2020.
In our opinion the remuneration report of Duketon Mining Limited for the year ended 30 June 2020 complies
with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an
opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing
Standards.
Rothsay Auditing
Dated 23 September 2020
Daniel Dalla
Partner
ASX Additional Information
Additional information required by Australian Stock Exchange Ltd and not shown elsewhere in this report is as follows. The
information is current as at 15 September 2020.
(a) Distribution of equity securities
Analysis of numbers of equity security holders by size of holding:
1
1,001
5,001
10,001
100,001
- 1,000
- 5,000
- 10,000
- 100,000
and over
The number of equity security holders holding less than a marketable parcel of
securities are:
(b) Twenty largest shareholders
The names of the twenty largest holders of quoted ordinary shares are:
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
ST BARBARA LIMITED
HARMANIS HOLDINGS PTY LTD
CAIRNGLEN INVESTMENTS PTY LTD
TWYNAM INVESTMENTS PTY LTD
JETOSEA PTY LTD
CITICORP NOMINEES PTY LIMITED
SFN HOLDINGS PTY LTD
MR LIAM RAYMOND CORNELIUS
SINO WEST ASSETS LIMITED
RANGUTA LIMITED
GANDRIA CAPITAL PTY LTD
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
CHEUNG SHUN RESOURCES LTD
ZERRIN INVESTMENTS PTY LTD
HARMANIS HOLDINGS PTY LTD
MS QING MI
ELEMENT 25 LIMITED
ALPHA BOXER LIMITED
MR SEAMUS CORNELIUS
KHE SANH PTY LTD
Ordinary Shares
Number of holders Number of shares
219
169
211
335
113
1,047
284
78,492
462,642
1,576,412
12,383,195
103,733,563
118,234,304
178,874
Listed ordinary shares
Number of shares
14,545,455
9,900,000
5,097,066
4,815,628
4,565,634
4,216,378
3,700,000
2,963,930
2,892,853
2,561,423
2,450,000
2,358,878
1,958,709
1,688,000
1,500,000
1,496,344
1,450,000
1,367,986
1,310,912
1,200,000
72,039,196
Percentage of
ordinary shares
12.30%
8.37%
4.31%
4.07%
3.86%
3.57%
3.13%
2.51%
2.45%
2.17%
2.07%
2.00%
1.66%
1.43%
1.27%
1.27%
1.23%
1.16%
1.11%
1.01%
60.93%
46
ASX Additional Information (Cont’d)
(c) Substantial shareholders
The names of substantial shareholders who have notified the Company in accordance with section 671B of the Corporations
Act 2001 are:
St Barbara Limited
Harmanis Holdings Pty Ltd
Seamus Cornelius
(d) Voting rights
All ordinary shares (whether fully paid or not) carry one vote per share without restriction.
(e) Unquoted securities
Number of Shares
14,545,455
7,572,816
7,149,723
Class
20 cent Options, Expiry 30 November 2020
20 cent Options, Expiry 28 November 2023
21.4 cent Options, Expiry 28 November 2024
Number of
Securities
2,800,000
2,000,000
2,250,000
Number of
Holders
7
1
4
25 cent Options, Expiry 31 January 2022
30 cent Options, Expiry 24 November 2021
250,000
2,500,000
1
4
(f) Schedule of interests in mining tenements
Location
Duketon
Duketon
Duketon
Duketon
Duketon
Duketon
Duketon North
Duketon North
Mulga Tank North
Doris
Fisher South
Stephens
Cat Camp
Cunyu
Eastside
Lost Bolt
Diemals
Halleys West
Pelican
Holders of 20% or more of the class
Holder Name
Pato Negro
Pato Negro
Pato Negro
Seamus Cornelius
Nedlands Nominees
Kristy Culver
Pato Negro
Seamus Cornelius
Nedlands Nominees
Number of
Securities
1,000,000
2,000,000
1,000,000
500,000
500,000
250,000
1,000,000
750,000
500,000
Tenement
E38/2666
E38/2805
E38/2834
E38/2866
E38/2916
M38/1252
E38/3523 (A)
E38/3524 (A)
E39/2173 (A)
E52/3833 (A)
E53/2143 (A)
E59/2414 (A)
E63/2050 (A)
E69/3763 (A)
E77/2660 (A)
E77/2667 (A)
E77/2670 (A)
E77/2682 (A)
E80/5493 (A)
Percentage held /
earning
100% Nickel rights only
100% Nickel rights only
100% Nickel rights only
100% Nickel rights only
100% Nickel rights only
100% Nickel rights only
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
47