A S X A n n o u n c e m e n t | 2 8 O c t o b e r 2 0 2 0
2020 Annual Report
Eagle Mountain Mining Limited (ASX:EM2) (“Eagle Mountain”, the “Company”) is pleased to attach
the Annual Report for the year ending 30 June 2020.
For further information please contact:
Tim Mason
BEng, MBA, GAICD
Chief Executive Officer
tim@eaglemountain.com.au
Jane Morgan
Investor and Media Relations
jm@janemorganmanagement.com.au
Mark Pitts
B.Bus, FCA, GAICD
Company Secretary
mark@eaglemountain.com.au
This Announcement has been approved for release by the Mark Pitts, Company Secretary of Eagle
Mountain Mining Limited
EAGLE MOUNTAIN MINING LIMITED
Eagle Mountain is a copper-gold explorer focused on the strategic exploration and development of highly
prospective greenfields and brownfields projects in Arizona, USA.
Arizona is at the heart of America’s mining industry and home to some of the world’s largest copper
discoveries such as Bagdad, Miami and Resolution, one of the largest undeveloped copper deposits in
the world.
Follow the Company developments through our website and social media channels
Website https://eaglemountain.com.au/
Twitter
https://twitter.com/eagle_mining
LinkedIn https://www.linkedin.com/company/eagle-mountain-mining-ltd/
EAGLE MOUNTAIN mining
2 0 2 0 A n n u a l R e p o r t
CORPORATE DIRECTORY
DIRECTORS
Rick Crabb (Non-Executive Chairman)
Charles Bass (Managing Director)
Roger Port (Non-Executive Director)
REGISTERED OFFICE
Ground Floor
22 Stirling Highway
Nedlands WA 6009
ALTERNATE DIRECTOR
AUDITORS
Brett Rowe
(Alternate Director for Charles Bass)
EXECUTIVE
Tim Mason (Chief Executive Officer)
COMPANY SECRETARY
Mark Pitts
REGISTERED OFFICE AND PRINCIPAL PLACE
OF BUSINESS
Ground Floor, 22 Stirling Highway
Nedlands, Western Australia 6009
Email:
Website: eaglemountain.com.au
info@eaglemountain.com.au
William Buck Audit (WA) Pty Ltd
Level 3
15 Labouchere Road
South Perth WA 6151
SHARE REGISTRY
Computershare Investor Services Pty Ltd
Level 11, 172 St Georges Terrace
Perth WA 6000
CORPORATE GOVERNANCE
The Company is transitioning to the 4th
Edition of the ASX Corporate Governance
Recommendations.
A summary statement reporting against
the 3rd Edition of the ASX Corporate
Governance Recommendations which has
been approved by the Board together with
current policies and charters is available on
the Company website.
http://eaglemountain.com.au/corporate-
governance/
ASX CODE
EM2
ABN
34 621 541 204
CONTENTS PAGE
Corporate Directory
Chairman’s Letter
CEO Letter
Review of Operations
Directors’ Report
Auditor’s Independence Declaration
Consolidated Statement of Profit or Loss and Other Comprehensive
Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Directors’ Declaration
Independent Auditor’s Report
ASX Additional information
Page
1
3
4
6
29
44
45
46
47
48
49
84
85
90
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 2
CONTENTS PAGE
Corporate Directory
Chairman’s Letter
CEO Letter
Review of Operations
Directors’ Report
Auditor’s Independence Declaration
Consolidated Statement of Profit or Loss and Other Comprehensive
Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Directors’ Declaration
Independent Auditor’s Report
ASX Additional information
Page
1
3
4
6
29
44
45
46
47
48
49
84
85
90
Chairman’s Letter
Dear Shareholders,
It is with pleasure that I present Eagle Mountain Mining’s third Annual Report. The 2020
financial year has been very productive for the Company with most of the year focused on
acquiring and progressing the Oracle Ridge copper project in Arizona. Oracle Ridge
complements our existing Silver Mountain project which is also prospective for a large-scale
porphyry system at depth.
We believe that Oracle Ridge was a quality acquisition due to its location, existing high-grade
copper resource and multiple exploration targets. These attributes and more are described
further in this Annual report.
Oracle Ridge has the potential to support a future mining operation with attractive cash costs.
Our goal is to further build on the existing high-grade mineral resource to support an
attractive mine life while maximising the production rates necessary to minimise mining unit
costs.
We continue to undertake our exploration program with a systematic approach, including the
use of modern geophysics techniques along with remodelling the extensive available
historical information. We are well on track with this goal and the recently commenced
diamond drill exploration program is targeting high-grade copper zones as extensions of the
existing resources.
Exploration programs at Silver Mountain continued during the year including geophysical
surveys and mapping. This work enhances our understanding of the geology and the
potential source of the outcropping high-grade copper and gold mineralisation.
Tim Mason commenced during the year as our CEO and is well supported by the leadership
and expertise of Charlie Bass as Managing Director. I have been impressed with Tim’s
professional and enthusiastic approach and the Directors are pleased with how he has
overseen work in Arizona despite COVID-19 travel restrictions. Notwithstanding the turbulent
year, the team has successfully undertaken various geophysical and geological studies,
culminating in the drilling program at Oracle Ridge which is now underway.
On behalf of the Directors, I would like to thank the Eagle Mountain team in Perth and Arizona
for the work they have done on both the Oracle Ridge and Silver Mountain Projects. Next year
promises to be very active and exciting for the Company and I thank shareholders for their
ongoing support.
Yours faithfully
Rick Crabb
Chairman
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 2
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 3
CEO Letter
Dear Shareholders,
In my first year as CEO of Eagle Mountain Mining, I am proud to present this report to you
and excited with your Company’s prospects in both near and longer terms. The past year has
been pivotal with the acquisition of the advanced stage, high-grade, Oracle Ridge Copper
Project in Arizona. It is a credit to the Eagle Mountain Mining technical team and Board to
have recognised the value of this project and to have negotiated such excellent acquisition
terms. This is an outstanding opportunity because of its existing resources, the potential for
much greater resource expansion, substantial infrastructure, and exploration potential in the
near mine vicinity, all located in a Tier 1 mining jurisdiction.
Our aim is to have Oracle Ridge operating in the lowest quartile of the global cost curve for
copper mines. This requires growth of the mineral resources from either the existing mine or
from the near-mine vicinity. The existing mineral resources at Oracle Ridge benefit from being
high-grade, having multiple lodes and situated on the side of Marble Mountain, the
combination of which is likely to support relatively lower unit mining costs, increased
production rates and overall lower carbon emissions per tonne of copper for any future
mining operation.
Both pre and post-acquisition of Oracle Ridge, our systematic and modern approach to
exploration included thoroughly reviewing extensive historical information and field mapping,
in conjunction with magnetic and VTEM Plus geophysical surveys. This work led to the
definition of a significant exploration target as an extension of the existing mineralisation,
along with further exploration targets close to the mine. At the time of writing, we had
commenced a diamond drilling program targeting extensions to the known mineralisation.
We are also well on track with our reinterpretation of existing Mineral Resources to a JORC
2012 standard.
Several major copper porphyry mines within Arizona have high grade skarn mineralisation
very similar to that occurring at Oracle Ridge. These skarns have been mineralised by the
influx of very hot solutions emanating from a nearby porphyry system. The much larger
supporting mineralised system, likely a porphyry, has not yet been discovered at Oracle Ridge.
This presents the Company with significant exploration potential.
Our follow-up exploration of geophysical anomalies near the mine included high-grade grab
samples of 9.15% Cu, 192 g/t Ag and 0.15g/t Au and 2.38% Cu, 721g/t Ag, 0.44g/t Au and
0.32% Zn which provides support for a potential major feeder system in the area. In October
2020, the Company was successful in securing tenements over these targets for future
exploration and drilling.
Whilst our recent focus has been on Oracle Ridge, Silver Mountain remains very prospective
for the Company. Silver Mountain has seen copper values up to 11% and gold up to 10g/t in
surface samples. Further interpretation is ongoing to understand the complex geological
system.
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 4
The COVID-19 pandemic created many difficulties for our people and therefore our business,
both in Australia and in Arizona. The health and safety of our employees, contractors and the
communities in which we operate is always our priority. We implemented a range of measures
to protect our people whilst being able to progress exploration at both our Oracle Ridge and
Silver Mountain projects. In the early days of COVID-19, our employees and Board all
graciously took pay cuts, reduced hours and made other sacrifices. I’m both delighted and
grateful for the dedication and support that our people gave to your Company.
Following my commencement with Eagle Mountain in January this year, I have been
continuously impressed by the calibre and dedication of the team. I believe we are well
positioned with great people and high-quality assets with significant growth potential. I would
like to thank all our dedicated employees, contractors, business partners and shareholders
for their contributions to our Company over the last year. I look forward to providing further
updates as our activities progress in the coming months.
Yours faithfully
Tim Mason
Chief Executive Officer
CEO Letter
Dear Shareholders,
In my first year as CEO of Eagle Mountain Mining, I am proud to present this report to you
and excited with your Company’s prospects in both near and longer terms. The past year has
been pivotal with the acquisition of the advanced stage, high-grade, Oracle Ridge Copper
Project in Arizona. It is a credit to the Eagle Mountain Mining technical team and Board to
have recognised the value of this project and to have negotiated such excellent acquisition
terms. This is an outstanding opportunity because of its existing resources, the potential for
much greater resource expansion, substantial infrastructure, and exploration potential in the
near mine vicinity, all located in a Tier 1 mining jurisdiction.
Our aim is to have Oracle Ridge operating in the lowest quartile of the global cost curve for
copper mines. This requires growth of the mineral resources from either the existing mine or
from the near-mine vicinity. The existing mineral resources at Oracle Ridge benefit from being
high-grade, having multiple lodes and situated on the side of Marble Mountain, the
combination of which is likely to support relatively lower unit mining costs, increased
production rates and overall lower carbon emissions per tonne of copper for any future
mining operation.
Both pre and post-acquisition of Oracle Ridge, our systematic and modern approach to
exploration included thoroughly reviewing extensive historical information and field mapping,
in conjunction with magnetic and VTEM Plus geophysical surveys. This work led to the
definition of a significant exploration target as an extension of the existing mineralisation,
along with further exploration targets close to the mine. At the time of writing, we had
commenced a diamond drilling program targeting extensions to the known mineralisation.
We are also well on track with our reinterpretation of existing Mineral Resources to a JORC
2012 standard.
Several major copper porphyry mines within Arizona have high grade skarn mineralisation
very similar to that occurring at Oracle Ridge. These skarns have been mineralised by the
influx of very hot solutions emanating from a nearby porphyry system. The much larger
supporting mineralised system, likely a porphyry, has not yet been discovered at Oracle Ridge.
This presents the Company with significant exploration potential.
Our follow-up exploration of geophysical anomalies near the mine included high-grade grab
samples of 9.15% Cu, 192 g/t Ag and 0.15g/t Au and 2.38% Cu, 721g/t Ag, 0.44g/t Au and
0.32% Zn which provides support for a potential major feeder system in the area. In October
2020, the Company was successful in securing tenements over these targets for future
exploration and drilling.
Whilst our recent focus has been on Oracle Ridge, Silver Mountain remains very prospective
for the Company. Silver Mountain has seen copper values up to 11% and gold up to 10g/t in
surface samples. Further interpretation is ongoing to understand the complex geological
system.
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 4
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 5
Review of Operations
Eagle Mountain acquired an 80% interest in the Oracle Ridge Copper Mine (“Oracle
Ridge”) in November 2019 after a lengthy due diligence. Oracle Ridge complements
the Silver Mountain exploration project. Both projects are located in Arizona (Figure
1), a Tier 1 mining jurisdiction1 which hosts many large copper mines and projects
operated by major mining companies including BHP, Rio Tinto, Freeport-McMoran,
Asarco, Hudbay and South 32.
Silver Mountain and Oracle Ridge are prospective for both high-grade copper-silver-
gold mineralisation and large-scale copper porphyry systems. Both projects are
located within the Laramide Arc, a copper porphyry province hosting most of the large
copper projects in Arizona (Figure 1).
Oracle Ridge benefits from an existing high-grade mineral resources and extensive
infrastructure around the existing mine.
Silver Mountain
Oracle Ridge
Figure 1 - Location of Oracle Ridge and Silver Mountain projects
1Arizona is ranked 9th in the world by the Fraser Institute for mining investment attractiveness
https://www.fraserinstitute.org/sites/default/files/annual-survey-of-mining-companies-2019.pdf
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 6
Review of Operations
Oracle Ridge Copper Project (80%)
Eagle Mountain acquired an 80% interest in the Oracle Ridge Copper Mine (“Oracle
Overview
Ridge”) in November 2019 after a lengthy due diligence. Oracle Ridge complements
the Silver Mountain exploration project. Both projects are located in Arizona (Figure
1), a Tier 1 mining jurisdiction1 which hosts many large copper mines and projects
operated by major mining companies including BHP, Rio Tinto, Freeport-McMoran,
Asarco, Hudbay and South 32.
Silver Mountain and Oracle Ridge are prospective for both high-grade copper-silver-
gold mineralisation and large-scale copper porphyry systems. Both projects are
located within the Laramide Arc, a copper porphyry province hosting most of the large
copper projects in Arizona (Figure 1).
Oracle Ridge benefits from an existing high-grade mineral resources and extensive
infrastructure around the existing mine.
Silver Mountain
Oracle Ridge
Oracle Ridge is an advanced stage project underpinned by a high-grade copper
resource with significant gold and silver. The mine has approximately 18 kilometres
of underground development along with other supporting infrastructure. The most
current Mineral Resource Estimate (“MRE”) from 2014 is 11.7 million tonnes at 1.57%
Cu, 17.47 g/t Ag and 0.18g/t Au, calculated under Canada’s NI43-101 reporting
regime2 (refer ASX announcement 29 October 2019). The current resource is a high-
grade skarn deposit, well known at major mines throughout Arizona, and typically
associated with a copper porphyry system.
Eagle Mountain has identified a range of exploration targets including extensions to
the existing mineralisation and other near mine prospects. The Company believes
that Oracle Ridge has the characteristics to become a long-term, flagship operation.
The Company’s aim at Oracle Ridge is to define sufficient mineral resources for a
future mining operation to have mining costs in the lower quartile of the global cost
curve. Various geological studies have been undertaken during the year which
culminated in the commencement of a diamond drilling program in September 2020
targeting extensions to the known high-grade resource.
Location
The Oracle Ridge Copper Mine is located northeast of Tucson and 26 kilometres from
BHP’s San Manuel mine, once the largest underground mine in the USA. The site is
easily accessible by road and is supported by a nearby railway and copper smelters
in the state. Figure 2 shows the location of the Oracle Ridge copper project.
Figure 1 - Location of Oracle Ridge and Silver Mountain projects
1Arizona is ranked 9th in the world by the Fraser Institute for mining investment attractiveness
https://www.fraserinstitute.org/sites/default/files/annual-survey-of-mining-companies-2019.pdf
2 Cautionary Statement: (refer ASX announcement 29 October 2019) references in this report to the publicly quoted resource
tonnes and grade of the Project are foreign in nature and not reported in accordance with the JORC Code 2012, or the categories
of mineralisation as defined in the JORC Code 2012. A competent person has not done sufficient work to classify the resource
estimate as mineral resources or ore reserves in accordance with the JORC Code 2012. It is uncertain that following evaluation
and/or further exploration work that the foreign/historic resource estimates of mineralisation will be able to be reported as
mineral resources or ore reserves in accordance with the JORC Code 2012. Resource estimates and other information used in
this report are based on the March 2014 NI43-101 compliant Independent Technical Report prepared by Dr Giles Arseneau of
Arseneau Consulting Services Inc for Oracle Mining Corp. This report can be found on the Company’s website
“www.eaglemountain.com.au”.
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 6
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 7
Project History
Figure 2 - Location of Oracle Ridge Copper Project
Since mining ceased in 1996, there has been little modern exploration and very
minimal drilling beyond the defined MRE, until Eagle Mountain acquired the project.
Table 1 below shows a brief history of Oracle Ridge.
Property Owner
Phelps Dodge Copper Co.
Time Period
1873-1937
Daily Arizona Copper Co,
Control Mines
Continental
Union Mines Inc
Copper
Inc,
1937 - 1968
1968 - 1988
Santa Catalina Mining Corp
1988 - 2004
Marble Mountain Ventures
LLC
Oracle Mining Corp
2004 - 2010
Events
• Mining in district begins
• 20 t/day copper smelter constructed
• Exploration and development
• 90 t/day flotation plant constructed
• Operations occur sporadically
•
Large scale analysis of mineralisation
• Reported US$19 million expenditure on
exploration and development
• 750 short ton (“st”)/day mill constructed 1991
• 1000 st/day mill expansion completed 1993
• Roughly 1 million st of ore processed 1991-1995
• Operation closed 1996 and mill removed
• Real estate developers – no mining or
exploration
2010 - 2014
• Gold Hawk, renamed Oracle Mining Corp,
purchased 100% in the Oracle Ridge property
from Marble Mountain Ventures
• 21,700 m validation and expansion drill program
2010-2013
• Air Quality Permit received 2012
• MOU with Pima County on land exchange
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 8
Receiver of Oracle Ridge
Mining LLC (ORM) - Vincere
Resource Holdings LLC
2014 – 2019
• Updated Mineral Resource Estimate NI43-101
2014
• Secured note granted to Vincere
• Vincere’s secured note puts ORM in receivership
• Oracle Ridge mine assets held on care and
maintenance at cost of approx. US$400,000 per
annum
Wedgetail Operations LLC
(80% controlled by Eagle
Mountain Mining)
2019-2020
• Wedgetail Operations LLC undertook due
diligence and negotiations on Oracle Ridge,
which resulted in Wedgetail acquiring an 80%
interest in the project November 2019
(commercial details of the acquisition are outlined
later in the report)
Table 1: History of the Oracle Ridge Copper Project
Existing Infrastructure and permits
The project has substantial infrastructure at the mine including approximately 18
kilometres of underground development, access roads, tailings storage facility,
underground ventilation, electrical and water services and surface infrastructure
including offices and maintenance buildings.
Key mining permits and approvals are in place but will require amendment prior to
the recommencement of mining operations.
The existing infrastructure and approved permits will reduce capital costs and the
time required to re-start potential production, which will be assessed in any future
mining study.
Project History
Figure 2 - Location of Oracle Ridge Copper Project
Since mining ceased in 1996, there has been little modern exploration and very
minimal drilling beyond the defined MRE, until Eagle Mountain acquired the project.
Table 1 below shows a brief history of Oracle Ridge.
Property Owner
Time Period
Events
Phelps Dodge Copper Co.
1873-1937
• Mining in district begins
Daily Arizona Copper Co,
1937 - 1968
• 90 t/day flotation plant constructed
Continental
Copper
Inc,
1968 - 1988
•
Large scale analysis of mineralisation
Control Mines
Union Mines Inc
• 20 t/day copper smelter constructed
• Exploration and development
• Operations occur sporadically
• Reported US$19 million expenditure on
exploration and development
Santa Catalina Mining Corp
1988 - 2004
• 750 short ton (“st”)/day mill constructed 1991
Marble Mountain Ventures
2004 - 2010
• Real estate developers – no mining or
LLC
exploration
Oracle Mining Corp
2010 - 2014
• Gold Hawk, renamed Oracle Mining Corp,
• 1000 st/day mill expansion completed 1993
• Roughly 1 million st of ore processed 1991-1995
• Operation closed 1996 and mill removed
purchased 100% in the Oracle Ridge property
from Marble Mountain Ventures
• 21,700 m validation and expansion drill program
2010-2013
• Air Quality Permit received 2012
• MOU with Pima County on land exchange
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 8
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 9
Photos 1 – 3 – Infrastructure at Oracle Ridge
Mineralisation
Mineralisation at Oracle Ridge occurs within five main skarn zones, hosted by three
limestone formations; Abrigo, Martin and Escabrosa. These same formations also
host significant skarn deposits at other major porphyry mines in Arizona. Skarn
alteration and copper mineralisation is believed to have formed during the Laramide,
a geologic period when many major world class copper deposits such as Globe-Miami,
Magma, Resolution, Ray and San Manuel-Kalamazoo were formed in Arizona and
throughout the southwestern US.
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 10
Skarns are formed by an influx of hot solutions and a nearby intrusive was likely
responsible for altering the mineral composition of the pre-existing limestone and
prior to depositing copper, gold and silver minerals. The location of the intrusive at
Oracle Ridge is not known and locating this system remains a key exploration
objective for the Company. A conceptual section of Oracle Ridge is shown in Figure 3
below.
Figure 3 - Cross-Section of Conceptual Skarn Mineralisation
Previous drilling through skarn-hosted mineralisation at Oracle Ridge has returned
excellent intersections including3:
• 18.3m @ 2.84% Cu, 0.42g/t Au, 24.8/t Ag
• 7.7m @ 5.11% Cu, 0.72g/t Au, 55.8 g/t Ag
• 7.6m @ 4.63% Cu, 0.74g/t Au, 43.06g/t Ag
• 9.1m @ 3.97% Cu, 1.04g/t Au, 29.89g/t Ag
Photos 1 – 3 – Infrastructure at Oracle Ridge
Mineralisation
Exploration
Mineralisation at Oracle Ridge occurs within five main skarn zones, hosted by three
limestone formations; Abrigo, Martin and Escabrosa. These same formations also
host significant skarn deposits at other major porphyry mines in Arizona. Skarn
alteration and copper mineralisation is believed to have formed during the Laramide,
a geologic period when many major world class copper deposits such as Globe-Miami,
Magma, Resolution, Ray and San Manuel-Kalamazoo were formed in Arizona and
throughout the southwestern US.
Since acquiring the project in November 2019, the Company has continued to build
on the geological knowledge of the mine and region. This work has included
reinterpretation of existing data, structural reviews, multispectral studies, and
geophysical surveys.
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 10
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 11
3 refer ASX announcement 25 May 2020
Photo 4 – Mineralisation accessible from underground development
Figure 4 – Cross Section through Oracle Ridge
The existing Oracle Ridge drilling database included 618 drill holes for over 76,000
metres of drilling and 11,553 assays. A review of the database was undertaken
highlighting multiple zones of high-grade copper mineralisation, along with significant
gold and silver (refer ASX announcement 25 May 2020).
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 12
As the project benefits from an accessible underground mine, verification of skarn-
hosted mineralisation was undertaken along with interpretation of major structures.
In addition, a multispectral study and various field programs were undertaken in areas
surrounding the mine to further understand the potential location of feeder systems
and other areas prospective for mineralisation.
Two airborne geophysical programs were undertaken during the year. The programs
included a drone magnetic survey and a helicopter VTEM geophysical survey to build
the local and regional geological knowledge and assist in the definition of exploration
targets. The magnetic survey covered an area within and around Oracle Ridge. The
results identified an area of increased magnetism extending beyond the drill-defined
mineralised zones. The area of increased magnetism could be due to potential
extensions of the known mineralisation. Conversely, it is also known that some
mineralisation at Oracle Ridge has a subdued magnetic response. The magnetic
survey identified a zone of low magnetic response (shown in blue in Figure 5) and this
area is also considered prospective.
In addition to the magnetic geophysical survey, a Versatile Time Domain
Electromagnetic (“VTEM”) PlusTM survey was completed covering an area over the
Oracle Ridge mine tenement package and the surrounding areas. The results of the
VTEM survey will be used in conjunction with the multispectral survey and field
mapping to evaluate prospective areas which have potential to further increase the
overall mineralisation at Oracle Ridge. This work will include seeking to identify the
source of skarn mineralisation such as a concealed porphyry system.
Photo 4 – Mineralisation accessible from underground development
Figure 4 – Cross Section through Oracle Ridge
The existing Oracle Ridge drilling database included 618 drill holes for over 76,000
metres of drilling and 11,553 assays. A review of the database was undertaken
highlighting multiple zones of high-grade copper mineralisation, along with significant
gold and silver (refer ASX announcement 25 May 2020).
Photo 5 - VTEM Plus Survey being undertaken at Oracle Ridge
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 12
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 13
Following the various geological reviews and the results of the magnetic survey and
VTEM survey, a significant Exploration Target was defined during the period as shown
in Table 2.
Following completion of the aeromagnetic survey and the review of select historical
drill core and existing data and internal geological analysis, the Company has
delineated an Exploration Target as extensions to existing mineralisation that is
constrained by a magnetic ‘high’ anomaly.
The Exploration Target is in addition to the existing NI43-101 MRE and falls entirely
within the Company’s existing patented and unpatented mining claims.
Exploration Target
Tonnes
Grade
Copper
1.1-1.9 %
Gold
14 – 29 Mt
0.03-0.26 g/t
Silver
7.1-19.3 g/t
Table 2 – Oracle Ridge Exploration Target (Excludes Existing MRE & Mined Out Areas)
The potential quantity and grade of the exploration target is conceptual in nature and that there has been
insufficient additional exploration to estimate an expanded Mineral Resource as at the date of this
announcement and whilst additional exploration is planned it is uncertain if this will result in the estimation
of an expanded Mineral Resource.
The Exploration Target is based on a geological model of the mine stratigraphy and
major intrusions built from the existing drilling database. Approximately 50 holes have
been previously drilled within the Exploration Target with many of these holes
intersecting skarn horizons which is evidence of an active hydrothermal system. The
spacing of previous drilling is quite irregular, varying from 50 to 150 metres, thus
leaving large areas untested. Several of these holes which intersected the skarn
horizons also intersected copper mineralisation of varying grade.
The model was constrained by the footprint of the historical MRE and excluded mined
out areas. Geological zones highly likely to contain skarn-hosted mineralisation were
interpreted to be within an area showing a high magnetic anomaly. The resulting
volumes were converted to tonnes using a specific gravity of 3t/m3, which is
appropriate for mineralisation at Oracle Ridge. A reduction factor of 65% (average)
was then applied to the tonnage based on the ratio between known mineralised
domains and potentially mineralised volumes within the historical MRE footprint. Final
ranges were estimated by applying a lower side discount of 40% and upper side
addition of 20%. Where no constraints were available, the average thickness of the
potentially mineralised units was used.
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 14
Following the various geological reviews and the results of the magnetic survey and
VTEM survey, a significant Exploration Target was defined during the period as shown
in Table 2.
Eagle Mountain has also identified other prospective areas outside the Exploration
Target which have potential to further increase the overall mineralisation at Oracle
Ridge.
Timeline to test the Exploration Target
The Company has adopted a stepped approach to its exploration program. It has
digitised the database from previous drilling which, together with recent geophysical
analysis, field work and ground truthing, has assisted in defining priority drill targets
within the Exploration Target.
Mineralisation outside
the exploration target
Exploration Target
constrained by a
magnetic anomaly
Figure 5 – Exploration Target at Oracle Ridge Copper Project
The exploration strategy at Oracle Ridge is to initially prove the exploration target
through drilling. Concurrently, as skarn mineralisation is sourced from porphyry
systems, locating the structural controls leading to the porphyry system remains a key
exploration focus for the Company.
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 14
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 15
Following completion of the aeromagnetic survey and the review of select historical
drill core and existing data and internal geological analysis, the Company has
delineated an Exploration Target as extensions to existing mineralisation that is
constrained by a magnetic ‘high’ anomaly.
The Exploration Target is in addition to the existing NI43-101 MRE and falls entirely
within the Company’s existing patented and unpatented mining claims.
Exploration Target
Tonnes
Grade
Copper
1.1-1.9 %
Gold
14 – 29 Mt
0.03-0.26 g/t
Silver
7.1-19.3 g/t
Table 2 – Oracle Ridge Exploration Target (Excludes Existing MRE & Mined Out Areas)
The potential quantity and grade of the exploration target is conceptual in nature and that there has been
insufficient additional exploration to estimate an expanded Mineral Resource as at the date of this
announcement and whilst additional exploration is planned it is uncertain if this will result in the estimation
of an expanded Mineral Resource.
The Exploration Target is based on a geological model of the mine stratigraphy and
major intrusions built from the existing drilling database. Approximately 50 holes have
been previously drilled within the Exploration Target with many of these holes
intersecting skarn horizons which is evidence of an active hydrothermal system. The
spacing of previous drilling is quite irregular, varying from 50 to 150 metres, thus
leaving large areas untested. Several of these holes which intersected the skarn
horizons also intersected copper mineralisation of varying grade.
The model was constrained by the footprint of the historical MRE and excluded mined
out areas. Geological zones highly likely to contain skarn-hosted mineralisation were
interpreted to be within an area showing a high magnetic anomaly. The resulting
volumes were converted to tonnes using a specific gravity of 3t/m3, which is
appropriate for mineralisation at Oracle Ridge. A reduction factor of 65% (average)
was then applied to the tonnage based on the ratio between known mineralised
domains and potentially mineralised volumes within the historical MRE footprint. Final
ranges were estimated by applying a lower side discount of 40% and upper side
addition of 20%. Where no constraints were available, the average thickness of the
potentially mineralised units was used.
Commencement of Diamond Drilling
In September 2020, the Company commenced a surface diamond drilling program at
Oracle Ridge. The drilling program is targeting extensions to high-grade portions of
the existing MRE in three priority zones as shown in Figure 6.
The zones are within the Exploration Target outlined in Figure 5 and are supported
by a combination of:
• previous drilling outside the existing MRE which has intersected mineralisation;
• unconstrained mineral resources; and
• a magnetic anomaly.
Figure 6 - Significant intercepts at Oracle Ridge mine and proposed Target areas for drilling program
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 16
Commencement of Diamond Drilling
In September 2020, the Company commenced a surface diamond drilling program at
Oracle Ridge. The drilling program is targeting extensions to high-grade portions of
the existing MRE in three priority zones as shown in Figure 6.
The zones are within the Exploration Target outlined in Figure 5 and are supported
by a combination of:
• previous drilling outside the existing MRE which has intersected mineralisation;
• unconstrained mineral resources; and
• a magnetic anomaly.
Photo 6 - Core from diamond drilling program in September 2020
New ‘Near Mine’ Claims Staked
Subsequent to the end of the year, and following the completion of field work
undertaken to follow-up geophysical anomalies in the near-mine area, the Company
staked 105 new Unpatented Mining Claims (“Claims”).
The new Claims are within five kilometres of mine portals and cover two prospective
areas named OREX and Red Hawk. OREX is prospective for skarn-hosted high-grade
Cu-Ag-Au mineralisation while Red Hawk is prospective for porphyry copper
mineralisation (Figure 7).
The new claims are held by the 80% owned USA subsidiary of Eagle Mountain,
Wedgetail Operations LLC.
Figure 6 - Significant intercepts at Oracle Ridge mine and proposed Target areas for drilling program
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Figure 7 - Oracle Ridge area with existing tenements and new Unpatented Mining Claims over OREX and Red
Hawk prospects. Results of VTEMTM Plus surveys (SFz25) shown within recently staked ground.
Photo 7 - High-grade waste from dump material at OREX target assaying 9.15% Cu, 192 g/t Ag and 0.15 g/t
Au. The sample was collected next to a small adit mined along a copper-bearing shear within the Leatherwood
intrusive.
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 18
Figure 7 - Oracle Ridge area with existing tenements and new Unpatented Mining Claims over OREX and Red
Hawk prospects. Results of VTEMTM Plus surveys (SFz25) shown within recently staked ground.
Summary of Key Terms for the Acquisition of Oracle Ridge
Consideration for Eagle Mountain’s acquisition of an 80% interest in the Oracle Ridge
Copper Mine is as follows:
• US$500,000 paid to the Receiver of the Oracle Ridge Copper Mine for the benefit
of Vincere;
• A 20% interest in Wedgetail Operations LLC granted to Vincere;
• Project was acquired by Wedgetail Operations LLC in which Eagle Mountain owns
an 80% interest through its 100% owned Arizona subsidiary, Wedgetail Holdings
LLC;
• Osisko Gold Royalties has a 3% NSR attached to the property;
• A secured loan (‘Seller Note’) for the amount of US$6,423,000 plus accrued
interest is repayable to Vincere in five equal annual instalments commencing after
five years;
Interest accrues on the principal for the first five years at the rate of 3.15% per
annum and is interest free thereafter;
•
• Eagle Mountain, through Wedgetail Holdings, will free-carry Vincere for the first
US$5,000,000 of expenditure. There is no time frame or minimum spend required,
however if Eagle Mountain does not incur the expenditure of US$5,000,000 or
otherwise wishes to withdraw, it will relinquish its 80% interest in Wedgetail to
Vincere with no additional recourse to Eagle Mountain;
• Vincere will have a one-time only election to contribute its pro rata share of costs
or dilute its interest in Wedgetail Operations upon the $US5,000,000 expenditure
being reached;
• Eagle Mountain’s wholly owned subsidiary Silver Mountain Mining Operations Inc
will be the Operator of Wedgetail Operations; and
• Replacement reclamation and environmental bonds will be put in place by
Wedgetail Operations to satisfy regulatory requirements. Wedgetail Operations
may use existing funds held as financial assurance for a period of three years, after
which Wedgetail Operations shall repay these funds to Vincere.
The Seller Note is secured solely against the assets comprising the Oracle Ridge
Copper Mine and the 80% interest in Wedgetail Operations held by Wedgetail
Holdings.
Upon the occurrence of each of three milestone events, Vincere can elect to convert
up to US$1,000,000 of the Note into ordinary shares in Eagle Mountain Mining
Limited.
Photo 7 - High-grade waste from dump material at OREX target assaying 9.15% Cu, 192 g/t Ag and 0.15 g/t
Au. The sample was collected next to a small adit mined along a copper-bearing shear within the Leatherwood
intrusive.
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The three milestone events are as follows:
• The completion by Wedgetail Operations of a preliminary feasibility study in
connection with the Mortgaged Properties;
• The completion of a feasibility study in connection with the Mortgaged Properties
leading to a decision to proceed with a bankable feasibility study; and
• The decision by Wedgetail Operations to commission the financing for the
Mortgaged Properties as evidenced by a feasibility study sufficient to obtain third
party financing for the Mortgaged Properties.
Notwithstanding the conversion rights held by Vincere, in no event can Vincere hold
greater than 10% of Eagle Mountain’s issued shares. Any Eagle Mountain shares
issued to Vincere upon the exercise of these conversion rights will be subject to
transfer and sale restrictions for six months from date of issue. Eagle Mountain will
provide a performance guarantee in relation to the issue of shares on conversion.
The Operating Agreement
Wedgetail Operations is subject to an operating agreement between Wedgetail
Holdings and Vincere. A Management Committee is in place which comprises three
members nominated by Wedgetail Holdings and two members nominated by Vincere.
For certain circumstances that may affect the asset base or financial stability of
Wedgetail Operations, there must be 100% agreement between the parties. Eagle
Mountain’s wholly owned Tucson-based subsidiary Silver Mountain Mining
Operations Inc. is the Operator of Wedgetail Operations.
Silver Mountain Project – 100% owned
Overview
The Silver Mountain copper/gold project (“Silver Mountain”) is located in Arizona north
west of Phoenix. The project area sits on the northwest-southeast Laramide Arc, a
geological feature containing world-class porphyry copper mines such as Bagdad,
Miami and Resolution. It also lies on the southern extension of a northeast-southwest
prospective metallogenic belt which hosts United Verde and Iron King, two historical
mines of volcanogenic massive sulphide affinity. The intersection of these two trends
results in a favourable geologic setting with high complexity and potential for multiple
mineralisation styles.
The northern portion of the project area has a history of prospecting and mining of
high-grade copper from the 1890s into the 1920s.
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 20
Except for very limited campaigns in the 1960s, 1970s and early 1990’s, there had
been no modern exploration of the Silver Mountain area. Eagle Mountain and its
subsidiaries have been the first companies to undertake modern exploration over the
Silver Mountain project area commencing in 2013.
Eagle Mountain was the first group to combine the fragmented land ownership along
the main copper mining trend. A portion of the tenements are held in patented
claims, which grant royalty-free surface and mineral rights with very low carrying costs.
Silver Mountain encompasses three main prospects known as “Pacific Horizon”,
“Scarlett” and “Red Mule”, each having a unique mineralisation style.
Figure 8 below shows a hypothetical cross section across the Silver Mountain project
illustrating the different types of mineralisation targets and a postulated porphyry
source at depth which could explain the different mineralisation styles observed on
the property.
The three milestone events are as follows:
• The completion by Wedgetail Operations of a preliminary feasibility study in
connection with the Mortgaged Properties;
• The completion of a feasibility study in connection with the Mortgaged Properties
leading to a decision to proceed with a bankable feasibility study; and
• The decision by Wedgetail Operations to commission the financing for the
Mortgaged Properties as evidenced by a feasibility study sufficient to obtain third
party financing for the Mortgaged Properties.
Notwithstanding the conversion rights held by Vincere, in no event can Vincere hold
greater than 10% of Eagle Mountain’s issued shares. Any Eagle Mountain shares
issued to Vincere upon the exercise of these conversion rights will be subject to
transfer and sale restrictions for six months from date of issue. Eagle Mountain will
provide a performance guarantee in relation to the issue of shares on conversion.
The Operating Agreement
Wedgetail Operations is subject to an operating agreement between Wedgetail
Holdings and Vincere. A Management Committee is in place which comprises three
members nominated by Wedgetail Holdings and two members nominated by Vincere.
For certain circumstances that may affect the asset base or financial stability of
Wedgetail Operations, there must be 100% agreement between the parties. Eagle
Mountain’s wholly owned Tucson-based subsidiary Silver Mountain Mining
Operations Inc. is the Operator of Wedgetail Operations.
Silver Mountain Project – 100% owned
Overview
The Silver Mountain copper/gold project (“Silver Mountain”) is located in Arizona north
west of Phoenix. The project area sits on the northwest-southeast Laramide Arc, a
geological feature containing world-class porphyry copper mines such as Bagdad,
Miami and Resolution. It also lies on the southern extension of a northeast-southwest
prospective metallogenic belt which hosts United Verde and Iron King, two historical
mines of volcanogenic massive sulphide affinity. The intersection of these two trends
results in a favourable geologic setting with high complexity and potential for multiple
mineralisation styles.
The northern portion of the project area has a history of prospecting and mining of
Figure 8 - Conceptual mineralisation system at Silver Mountain Project
high-grade copper from the 1890s into the 1920s.
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Figure 9 - Map showing the land tenure and local geology of the Pacific Horizon, Scarlett and Red Mule
prospects
Pacific Horizon
The local geology of the Pacific Horizon prospect comprises a belt of Proterozoic
metamorphic schists with a northeast-southwest strike. Latite porphyry dykes intrude
the Proterozoic sequence. Minor siderite-calcite-quartz breccias outcrop along the
Pacific Horizon prospect. Anomalous copper, gold, silver and other base metals values
are widespread along the horizon.
Several historical high-grade copper mines were developed from the 1890s to the
1920s, including, Number 10, Copper Ash, Buffalo, Wellington and Pacific mines.
Figure 10 shows the historical mine dump samples taken at each of these historic
mines (refer ASX announcement 14 March 2018 – IPO Prospectus).
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 22
Figure 9 - Map showing the land tenure and local geology of the Pacific Horizon, Scarlett and Red Mule
prospects
Pacific Horizon
The local geology of the Pacific Horizon prospect comprises a belt of Proterozoic
metamorphic schists with a northeast-southwest strike. Latite porphyry dykes intrude
the Proterozoic sequence. Minor siderite-calcite-quartz breccias outcrop along the
Pacific Horizon prospect. Anomalous copper, gold, silver and other base metals values
are widespread along the horizon.
Several historical high-grade copper mines were developed from the 1890s to the
1920s, including, Number 10, Copper Ash, Buffalo, Wellington and Pacific mines.
Figure 10 shows the historical mine dump samples taken at each of these historic
mines (refer ASX announcement 14 March 2018 – IPO Prospectus).
Figure 10 - Results of historical mine dump samples at the Pacific Horizon prospect.
Historic mine waste dump samples collected by Silver Mountain Mining LLC, a wholly
owned subsidiary of Eagle Mountain Mining, in the Pacific Horizon prospect have
assayed as high as 11.1% Cu, 10.7 g/t Au and 251 g/t Ag.
Drilling along the Pacific Horizon was completed in March 2019. The drilling confirmed
the complex mineralogy in the area with results providing a significant volume of
technical and structural information.
The occurrence of quartz-carbonate breccia below the Horizon’s footwall gave the
Company cause to re-think the mineralization genesis and model. Geochemical
analysis suggests a possible epithermal gold signature and this model remains to be
investigated.
Scarlett
The Scarlett prospect is located immediately west of the Pacific Horizon prospect, with
a northwest-southeast fault dividing the Scarlett prospect into two domains. To the
northeast of the fault, Proterozoic granitoids host a swarm of gold-bearing quartz
veins. To the southwest, Tertiary volcanic rocks overlay a basal conglomerate unit
resting on Proterozoic basement. Latite dykes with a northeast strike cross the area.
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 22
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Gold mineralisation up to 80 g/t Au is hosted in the sulphide-bearing quartz veins.
These veins have a northeast-southwest strike occurring
in a corridor of
approximately 1,500 metres by 300 metres which is subparallel to the regional fault.
Small scale mining at the Scarlett prospect was carried out intermittently between the
1860s and 1950s. The Silver Dollar mine was discovered in the 1860s. Several
historical adits and small workings are scattered throughout the area.
Figure 11 shows the location of rock chip samples taken by Silver Mountain at the
Scarlett prospect.
Figure 11 - Map showing the location of rock chip samples taken by Silver Mountain at the Scarlett
prospect
Eagle Mountain considers the Scarlett prospect to be prospective for vein-hosted gold
and porphyry copper mineralisation.
Drilling at the Scarlett prospect area was designed to test depth extensions to the
gold-bearing veins visible at surface and the porphyry potential of the area. This is
quite different to the mineralisation encountered along the Pacific Horizon. Results
from three holes were inconclusive but the Company was very encouraged by the
extent and style of alteration encountered in drilling. Further work is required to
understand where the mineralised parts of the system could be found.
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 24
Gold mineralisation up to 80 g/t Au is hosted in the sulphide-bearing quartz veins.
Red Mule
These veins have a northeast-southwest strike occurring
in a corridor of
approximately 1,500 metres by 300 metres which is subparallel to the regional fault.
Small scale mining at the Scarlett prospect was carried out intermittently between the
1860s and 1950s. The Silver Dollar mine was discovered in the 1860s. Several
historical adits and small workings are scattered throughout the area.
Figure 11 shows the location of rock chip samples taken by Silver Mountain at the
Scarlett prospect.
Figure 11 - Map showing the location of rock chip samples taken by Silver Mountain at the Scarlett
prospect
Eagle Mountain considers the Scarlett prospect to be prospective for vein-hosted gold
and porphyry copper mineralisation.
Drilling at the Scarlett prospect area was designed to test depth extensions to the
gold-bearing veins visible at surface and the porphyry potential of the area. This is
quite different to the mineralisation encountered along the Pacific Horizon. Results
from three holes were inconclusive but the Company was very encouraged by the
extent and style of alteration encountered in drilling. Further work is required to
understand where the mineralised parts of the system could be found.
The Red Mule prospect is located to the south of the Scarlett prospect and
immediately west of the southern end of the Pacific Horizon prospect.
The Red Mule prospect straddles the Proterozoic basement to the northeast and
Tertiary cover to the southwest. The Proterozoic basement is the southern extension
of the Pacific Horizon. Tertiary rocks include a basal conglomerate with frequent red
staining and volcanics. A northwest-southeast fault system with significant brittle
deformation characterises the local geology. Extensive iron-oxide, clay and sericite
alteration occurs in the fault zones. Anomalous copper values are widespread and
gold values up to 7.6 g/t Au have been sampled from mafic dykes.
Several geochemical anomalies have been identified along the fault system crossing
the Red Mule prospect, including extensive hematite alteration. Eagle Mountain
considers the Red Mule prospect to be prospective for detachment fault-related gold
and copper mineralisation as well as porphyry copper mineralisation.
One drillhole was completed at Red Mule target which tested a fault structure in the
vicinity of a high-grade silver sample. No significant mineralisation was encountered.
The VMS horizon discovered near the Rhyolite target and south of Red Mule has a
slightly different rock mineralogy. This area requires more field work including
mapping and sampling before drill targets can be established.
Rhyolite Target
The Rhyolite target was identified in 2018 during a geophysical acquisition program.
Field crews identified a previously unreported historical mine to the south of Red
Mule. Follow up mapping near the historical shaft identified a rhyolite intrusive in
contact with Proterozoic schists similar to those at the Pacific Horizon. Assays up to
27 g/t Au and 0.13% Cu were reported at the contact between rhyolite and schist.
Preliminary interpretation supports a mineralising event associated with or following
the rhyolite emplacement. The rhyolite is younger than the schists and possibly
Tertiary in age.
This area requires more field work including mapping and sampling before drill
targets can be established.
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COMPETENT PERSON STATEMENTS
Information in this report relating to Exploration Results is based on information compiled under the
supervision of Mr Charles Bass who is a Director of the Company. Mr Bass is a Fellow of the Australasian
Institute of Mining and Metallurgy and a Fellow of the Australian Institute of Geoscientist. He holds
shares and options in the Company. Mr Bass has sufficient experience which is relevant to the style of
mineralisation and type of deposit under consideration and to the activity he is undertaking to qualify
as a Competent Person as defined in the 2012 Edition of the Joint Ore Reserves Committee (JORC)
Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Bass
consents to the inclusion in this report of the matters based on his information in the form and context
in which it appears.
Where the Company references previous ASX announcements, JORC Table 1 disclosures are included
within them. The Company confirms that it is not aware of any new information or data that materially
effects the information included in those announcements, and that the form and context in which the
Competent Persons findings are presented have not been materially modified from the original
reports.
The information in this report that relates to the Exploration Target and technical information and
Mineral Resource Estimate disclosed in the Annual Mineral Resource Statement is based on, and fairly
represents information and supporting documentation compiled and reviewed by Mr Kevin Francis
who is an independent consultant to the company. Mr Francis is a Registered Member of the Society
of Mining, Metallurgy & Exploration. Mr Francis holds no interest in the Company and has sufficient
experience which is relevant to the style of mineralisation and type of deposit under consideration and
to the activity which he is undertaking to qualify as a Competent Person as defined in the December
2012 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and
Ore Reserves” (‘JORC Code’). Mr Francis consents to the inclusion in this report of the matters based
upon the information in the form and context in which it appears.
The Information in this report and including in relation to the NI43-101 Mineral Resource Estimate and
references to the ASX announcement made by the Company on 29 October 2019 is an accurate
representation of the available data and studies for the Oracle Ridge Copper Mine Project. The
Company confirms it is not in possession of any new information or data which impacts on the reliability
of the Mineral Resource Estimate and the supporting information disclosed in the initial market
announcement on 29 October 2019 continue to apply and have not materially changed;
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 26
COMPETENT PERSON STATEMENTS
Information in this report relating to Exploration Results is based on information compiled under the
supervision of Mr Charles Bass who is a Director of the Company. Mr Bass is a Fellow of the Australasian
Institute of Mining and Metallurgy and a Fellow of the Australian Institute of Geoscientist. He holds
shares and options in the Company. Mr Bass has sufficient experience which is relevant to the style of
mineralisation and type of deposit under consideration and to the activity he is undertaking to qualify
as a Competent Person as defined in the 2012 Edition of the Joint Ore Reserves Committee (JORC)
Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Bass
consents to the inclusion in this report of the matters based on his information in the form and context
in which it appears.
Where the Company references previous ASX announcements, JORC Table 1 disclosures are included
within them. The Company confirms that it is not aware of any new information or data that materially
effects the information included in those announcements, and that the form and context in which the
Competent Persons findings are presented have not been materially modified from the original
reports.
The information in this report that relates to the Exploration Target and technical information and
Mineral Resource Estimate disclosed in the Annual Mineral Resource Statement is based on, and fairly
represents information and supporting documentation compiled and reviewed by Mr Kevin Francis
who is an independent consultant to the company. Mr Francis is a Registered Member of the Society
of Mining, Metallurgy & Exploration. Mr Francis holds no interest in the Company and has sufficient
experience which is relevant to the style of mineralisation and type of deposit under consideration and
to the activity which he is undertaking to qualify as a Competent Person as defined in the December
2012 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and
Ore Reserves” (‘JORC Code’). Mr Francis consents to the inclusion in this report of the matters based
upon the information in the form and context in which it appears.
The Information in this report and including in relation to the NI43-101 Mineral Resource Estimate and
references to the ASX announcement made by the Company on 29 October 2019 is an accurate
representation of the available data and studies for the Oracle Ridge Copper Mine Project. The
Company confirms it is not in possession of any new information or data which impacts on the reliability
of the Mineral Resource Estimate and the supporting information disclosed in the initial market
announcement on 29 October 2019 continue to apply and have not materially changed;
ANNUAL MINERAL RESOURCE STATEMENT
Mineral Resources
The Mineral Resource Estimate provided in this report is Canadian NI43-101 compliant. As such, the
Canadian Institute of Mining applies a standard that there are “reasonable prospects for economic
extraction” in its definition of Mineral Resources. These resources were acquired with the Oracle Ridge
Project and have been taken from the 31 March 2014 Independent Technical Report for the Oracle
Ridge Project prepared by Dr Gilles Arseneau, P.Geo, principal of Arseneau Consulting Services Inc.
(refer ASX announcement 29 October 2019).
The table below presents the Mineral Resource Estimate calculated by Arseneau at a 1.0% CuEq
(copper equivalent) cut-off grade. The Mineral Resource Estimate is not JORC compliant.
Resource
Class
Tonnes
(Millions)
Cu
%
Ag
g/t
Au
g/t
Measured
Indicated
Inferred
Total
1.06
5.58
5.12
11.76
0.24
0.21
0.14
0.18
Table 3 - Summary of latest Mineral Resource Estimate – NI43-101 Compliant.
18.86
17.83
16.80
17.47
1.59
1.61
1.53
1.57
Contained
Cu, lbs
(Millions)
37
199
173
409
Contained
Ag, oz
(Millions)
0.6
3.2
3
6.8
Contained
Au, oz
(‘000)
8
38
22
68
Note in respect to Copper Equivalency:
The cut-off grade of 1% CuEq was used to ensure reasonable prospects of economic extraction assuming
underground mining. Silver and gold grade estimates were based on a less comprehensive data set than the
copper grade estimates. Where copper grade estimates exist without accompanying silver and gold grade
estimates, the drill hole was not used to estimate silver or gold grade. Copper equivalency has been estimated
using metal pricing of US$2.80 per pound of copper, US$20 per ounce of silver and US$1,300 per ounce of gold.
Metallurgical recovery was derived from preliminary locked cycle test results and assumed to be 81% for gold and
silver. The prices used were a reflection of market at the time of the Mineral Resource Estimate and reasonable
forecasts. The formula used is as follows:
CuEQ= Cu% + {(Ag oz/ton*US$20*0.81)+(Au oz/ton*US$1,300* 0.81)} /$2.80/2,000*100
As previously advised Eagle Mountain is currently reviewing the NI43-101 Mineral Resource having
methodically reviewed available historic data the technical team together with independent
consultants are re-interpreting the existing geological information including additional data Eagle
Mountain has obtained.
The Company is intent on defining a JORC 2012 compliant Mineral Resource in the December 2020
Quarter.
Cautionary Statement: (refer ASX announcement 29 October 2019) references in this report to the publicly quoted
resource tonnes and grade of the Project are historical and foreign in nature and not reported in accordance with
the JORC Code 2012, or the categories of mineralisation as defined in the JORC Code 2012. A competent person
has not done sufficient work to classify the resource estimate as mineral resources or ore reserves in accordance
with the JORC Code 2012. It is uncertain that following evaluation and/or further exploration work that the
foreign/historic resource estimates of mineralisation will be able to be reported as mineral resources or ore
reserves in accordance with the JORC Code 2012. Resource estimates and other information used in this report
are based on the March 2014 NI43-101 compliant Independent Technical Report prepared by Dr Giles Arseneau
of Arseneau Consulting Services Inc for Oracle Mining Corp. This report can be found on the Company’s website
“www.eaglemountain.com.au”.
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ANNUAL MINERAL RESOURCE STATEMENT
Review of Material Changes
As set out in this report Eagle Mountain completed the acquisition of 80% of the Oracle Ridge Copper
Project during the period and in doing so acquired an existing NI43-101 Mineral Resource Estimate.
The Company is in the process of re-interpreting the geological information together with additional
data it has obtained with the intention of preparing a JORC 2012 compliant resource estimate.
Other than the above noted change, there were no material changes from the prior year.
Governance and Internal Controls
The Company acquired the Mineral Resource Estimate it is disclosing.
The NI43-101 Mineral Resource Estimate is considered by Eagle Mountain to be both relevant and of
significant materiality as it provides an appropriate level of context and background to the Project,
informing shareholders of publicly available mining information over a former producing mine.
The Company undertook its own due diligence on the Oracle Ridge Copper Mine Project and is
confident that the existence of the NI43-101 estimate and the historic production records for the
Oracle Ridge Copper Mine provide a reasonable basis for relying on the Foreign Mineral Resource
Estimate which was prepared by Dr Gilles Arseneau, P.Geo, principal of Arseneau Consulting Services
Inc, an independent consultant.
Since 2010, diamond drill core has been geologically and geotechnically logged to a level of detail to
support Mineral Resource Estimation, mining studies and metallurgical studies. Drill core was logged
in detail for lithology, alteration, mineralisation, structure and veining. In addition, rock quality
designation was kept for geotechnical purposes. Core photos and the remaining half core have been
retained for further geologic or geotechnical samplings as may become necessary. Since 2011, the
project has assayed 6,771 core samples; 5,672 were assayed at Skyline Assayers and Laboratories and
1,099 were assayed at the SGS Mineral Services laboratory.
The surface and underground geology was examined by an
independent consultant. The
mineralisation was observed in drill core and in the underground workings. Drill sites were located at
surface and underground. The core logging, sample handling procedures and were also examined.
The historical drill core was examined for integrity and all historical drill core was re-sampled so that
silver and gold values could be included in the database and so that the apparent high assay bias
associated with the historical data could be better quantified.
Of the 10,499 assay data in the drill hole database, 6,771 were verified against original assay certificates
and no significant errors were identified. In addition, all historical assay data for the surface drilling
program were verified against the scanned copies of original drill logs. Several discrepancies were
noted with the historical drill holes. All were corrected to match the information on the drill logs.
The geologic model is considered robust with information from over 600 surface and underground
diamond drill holes.
The Company will report any future mineral reserves and resources estimates in accordance with the
2012 JORC Code.
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 28
ANNUAL MINERAL RESOURCE STATEMENT
Review of Material Changes
As set out in this report Eagle Mountain completed the acquisition of 80% of the Oracle Ridge Copper
Project during the period and in doing so acquired an existing NI43-101 Mineral Resource Estimate.
The Company is in the process of re-interpreting the geological information together with additional
data it has obtained with the intention of preparing a JORC 2012 compliant resource estimate.
Other than the above noted change, there were no material changes from the prior year.
Governance and Internal Controls
The Company acquired the Mineral Resource Estimate it is disclosing.
The NI43-101 Mineral Resource Estimate is considered by Eagle Mountain to be both relevant and of
significant materiality as it provides an appropriate level of context and background to the Project,
informing shareholders of publicly available mining information over a former producing mine.
The Company undertook its own due diligence on the Oracle Ridge Copper Mine Project and is
confident that the existence of the NI43-101 estimate and the historic production records for the
Oracle Ridge Copper Mine provide a reasonable basis for relying on the Foreign Mineral Resource
Estimate which was prepared by Dr Gilles Arseneau, P.Geo, principal of Arseneau Consulting Services
Inc, an independent consultant.
Since 2010, diamond drill core has been geologically and geotechnically logged to a level of detail to
support Mineral Resource Estimation, mining studies and metallurgical studies. Drill core was logged
in detail for lithology, alteration, mineralisation, structure and veining. In addition, rock quality
designation was kept for geotechnical purposes. Core photos and the remaining half core have been
retained for further geologic or geotechnical samplings as may become necessary. Since 2011, the
project has assayed 6,771 core samples; 5,672 were assayed at Skyline Assayers and Laboratories and
1,099 were assayed at the SGS Mineral Services laboratory.
The surface and underground geology was examined by an
independent consultant. The
mineralisation was observed in drill core and in the underground workings. Drill sites were located at
surface and underground. The core logging, sample handling procedures and were also examined.
The historical drill core was examined for integrity and all historical drill core was re-sampled so that
silver and gold values could be included in the database and so that the apparent high assay bias
associated with the historical data could be better quantified.
Of the 10,499 assay data in the drill hole database, 6,771 were verified against original assay certificates
and no significant errors were identified. In addition, all historical assay data for the surface drilling
program were verified against the scanned copies of original drill logs. Several discrepancies were
noted with the historical drill holes. All were corrected to match the information on the drill logs.
The geologic model is considered robust with information from over 600 surface and underground
diamond drill holes.
2012 JORC Code.
The Company will report any future mineral reserves and resources estimates in accordance with the
DIRECTORS’ REPORT
The Directors present their report on Eagle Mountain Mining Limited (“Eagle Mountain” or the
“Company”) and its controlled entities (the “Group”) for the year ended 30 June 2020.
DIRECTORS
The names and details of the Group’s Directors in office during the year until the date of this report
are as follows. Directors were in office for this entire year unless otherwise stated.
Rick Crabb - B. Juris (Hons), LLB, MBA, FAICD
(Non-Executive Chairman)
Rick Crabb holds degrees of Bachelor of Jurisprudence (Honours), Bachelor
of Laws and Master of Business Administration from the University of
Western Australia. He practised as a solicitor from 1980 to 2004 with
Robinson Cox (now Clayton Utz) and Blakiston & Crabb (now Gilbert + Tobin)
specialising in mining, corporate and commercial law, advised in relation to
numerous project developments in Australia and Africa.
Rick has since focused on his public company directorships and
investments. He has been involved as a director and strategic shareholder
in a number of successful public companies. He is currently Non-executive
Chairman of Ora Gold Limited and a Non-executive Director of WarpForge Limited. He is a former
director of Paladin Energy Limited (February 1994-October 2019).
Charles Bass - B.Sc. Geology, M.Sc. Mining Engineering/Mineral Processing, FAICD, FAusIMM, FAIG
(Managing Director. Resigned as Chief Executive Officer on 15 January 2020)
Charles Bass completed his B.Sc. in Geology at Michigan Technological
University, followed by a M.Sc in Mining Engineering & Mineral Processing
at Queen’s University, Canada. Between his degrees Charles worked as a
geologist and then Plant Metallurgist at a copper-gold mine in Northern
Quebec.
Charles joined AMAX Inc, an American mining company in their Head Office
in 1976 and came to Perth in 1978. Between 1980 to 1981, AMAX had him
work in Tucson, Arizona at the Twin Buttes copper mine. Charles returned
to Australia and established his first company, Metech Pty Ltd in late 1981.
Charles established Eagle Mining Corporation in 1992 with Tony Poli and was responsible for the deal
that led to the discovery of the very successful Nimary Gold Mine. Eagle Mining Corporation won both
Explorer of the Year and then Developer of the Year at Diggers and Dealers conference and was subject
to a hostile takeover in 1997.
Charles then co-founded Aquila Resources Ltd with Tony Poli in 2000 and helped transition it from a
gold explorer to iron ore and coal before it too was subject to a hostile $1.4 billion takeover in 2014 at
the hands of a joint bid between Baosteel and ASX listed Aurizon.
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DIRECTORS’ REPORT
Roger Port – BA, FCA, SF Fin, FAICD
(Non-Executive Director)
Roger Port was a partner of PricewaterhouseCoopers from 1997 to 2016.
He has 30 years’ experience in financial analysis, company and business
valuations, transaction due diligence and mergers and acquisitions and led
the PricewaterhouseCoopers Perth Deals team from 2009 to 2016. He has
had significant experience in the resources sector in his career and jointly
led the PwC Australia Deals Energy & Mining industry group for five years.
Roger is a graduate of Macquarie University and gained a Graduate
Diploma in Applied Finance and Investment from the Securities Institute of
Australia. He is a Fellow of Chartered Accountants Australia and New
Zealand, a Senior Fellow of the Financial Services Institute of Australasia
and a Fellow of the Australian Institute of Company Directors.
Roger is a board member of MG Kailis Holdings Pty Ltd, the Harry Perkins Institute of Medical Research
and Chair of Council of Guildford Grammar School.
Brett Rowe - BComm, MAcc, GAICD
(Alternate Director for Charles Bass)
Brett Rowe has over 20 years’ experience in the financial services industry
and is a graduate of the Australian Institute of Company Directors. He holds
a Bachelor of Commerce degree and a Masters of Accounting.
Brett is a director and the chief executive officer of The Bass Group, as well
as a director of The Bass Family Foundation and Silver Mountain Mining Pty
Ltd. Brett is responsible for managing the global financial interests of the
Bass Family, as well as the Foundation’s ongoing support of education and
health in disadvantaged children and youth in regional Western Australia.
Brett is also a director of the Centre for Entrepreneurial Research and
Innovation Limited (CERI). CERI aims to assist the growth of WA’s non-mining industry through a strong
innovation base where high-knowledge start-up company formation can be accelerated. This is
achieved through the co-creation of a WA-based venture capital industry.
CHIEF EXECUTIVE OFFICER
Tim Mason – B. Eng (Hons) MBA; GAICD
Mr Mason has 18 years’ experience in the mining and engineering sectors
across a broad range of corporate, operations, business development and
engineering roles. His recent roles of General Manager Operations and
General Manager Projects and Innovation involved conducting feasibility
studies, project development and operations start-up, business
development, project financing and corporate presentations.
Mr Mason holds a Bachelor of Engineering Honours (Geotechnical) from the
Royal Melbourne
Institute of Technology, a Masters of Business
Administration from Murdoch University and is a Graduate Member of the
Australian Institute of Company Directors.
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 30
DIRECTORS’ REPORT
Roger Port – BA, FCA, SF Fin, FAICD
(Non-Executive Director)
Roger Port was a partner of PricewaterhouseCoopers from 1997 to 2016.
He has 30 years’ experience in financial analysis, company and business
valuations, transaction due diligence and mergers and acquisitions and led
the PricewaterhouseCoopers Perth Deals team from 2009 to 2016. He has
had significant experience in the resources sector in his career and jointly
led the PwC Australia Deals Energy & Mining industry group for five years.
Roger is a graduate of Macquarie University and gained a Graduate
Diploma in Applied Finance and Investment from the Securities Institute of
Australia. He is a Fellow of Chartered Accountants Australia and New
Zealand, a Senior Fellow of the Financial Services Institute of Australasia
and a Fellow of the Australian Institute of Company Directors.
Roger is a board member of MG Kailis Holdings Pty Ltd, the Harry Perkins Institute of Medical Research
and Chair of Council of Guildford Grammar School.
Brett Rowe - BComm, MAcc, GAICD
(Alternate Director for Charles Bass)
Brett Rowe has over 20 years’ experience in the financial services industry
and is a graduate of the Australian Institute of Company Directors. He holds
a Bachelor of Commerce degree and a Masters of Accounting.
Brett is a director and the chief executive officer of The Bass Group, as well
as a director of The Bass Family Foundation and Silver Mountain Mining Pty
Ltd. Brett is responsible for managing the global financial interests of the
Bass Family, as well as the Foundation’s ongoing support of education and
health in disadvantaged children and youth in regional Western Australia.
Brett is also a director of the Centre for Entrepreneurial Research and
Innovation Limited (CERI). CERI aims to assist the growth of WA’s non-mining industry through a strong
innovation base where high-knowledge start-up company formation can be accelerated. This is
achieved through the co-creation of a WA-based venture capital industry.
CHIEF EXECUTIVE OFFICER
Tim Mason – B. Eng (Hons) MBA; GAICD
Mr Mason has 18 years’ experience in the mining and engineering sectors
across a broad range of corporate, operations, business development and
engineering roles. His recent roles of General Manager Operations and
General Manager Projects and Innovation involved conducting feasibility
studies, project development and operations start-up, business
development, project financing and corporate presentations.
Mr Mason holds a Bachelor of Engineering Honours (Geotechnical) from the
Royal Melbourne
Institute of Technology, a Masters of Business
Administration from Murdoch University and is a Graduate Member of the
Australian Institute of Company Directors.
DIRECTORS’ REPORT
COMPANY SECRETARY
Mark Pitts - B.Bus; FCA; GAICD
(Company Secretary)
Mark Pitts is a Partner in Corporate Advisory firm Endeavour Corporate and
has over 30 years’ experience in business administration and corporate
compliance. Having started his career with KPMG in Perth, Mark has worked
at a senior management level in a variety of commercial and consulting roles
including mining services, healthcare and property development. The
majority of the past 15 years has been spent working for or providing
services to publicly listed companies in the resources sector.
Mark is a registered company auditor and holds a Bachelor of Business
Degree from Curtin University, is a Fellow of Chartered Accountants
Australia and New Zealand and is a graduate of the Australian Institute of
Company Directors.
DIRECTORS’ INTERESTS
As at the date of this report, the Directors’ interests in shares and unlisted options of the Company are
as follows:
Director
R Crabb
C Bass
R Port
B Rowe (alternate for C
Bass)
Directors’ Interests
in Ordinary
Shares
732,000
48,980,001
516,000
Directors’ Interests
in Unlisted
Options
1,561,000
9,665,000
1,543,000
500,000
1,000,000
Options vested at
the reporting date
1,561,000
9,665,000
1,543,000
1,000,000
The Directors’ interests include Unlisted Options which are vested or exercisable as at the date of
signing this report.
DIRECTORS’ MEETINGS
The number of meetings of the Company’s Directors held during the year ended 30 June 2020, and
the number of meetings attended by each Director are as follows:
Director
R Crabb
C Bass
R Port
B Rowe (alternate for C
Bass)
Board of Directors’ Meetings
Attended
8
8
8
8
Eligible to Attend
8
8
8
8
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DIRECTORS’ REPORT
PRINCIPAL ACTIVITIES
The Company’s principal activities for the year ended 30 June 2020 have been focussed on, for the first
six months, a review of the initial exploration program completed on the Group’s Silver Mountain
Project in Arizona in the United States of America and on due diligence and the subsequent acquisition
of the Oracle Ridge Copper Mine. The focus for the second half of the year was undertaking exploration
activities at the wholly owned Silver Mountain Project and the 80% owned Oracle Ridge Copper Mine
in Arizona, as well as capital raising activities.
REVIEW OF OPERATIONS
With the outbreak of the COVID-19 pandemic, the wellbeing of employees and contractors is of utmost
importance to the Company. The Company continues to monitor and abide by all government health
advice both in Australia and in the United States of America. The exploration team is based in Arizona
and whilst travel has been restricted between the two countries, the exploration activities have been
relatively unimpeded at this time. However, due to the uncertainty across global markets, the Group
instituted a number of cost reductions including the waiving of Directors’ fees for the June 2020 quarter
and a reduction in employee salaries by 20-30%. In addition, the Company qualified for government
assistance and received A$50,000 cash flow boost from the Australian government. A wholly owned
US subsidiary qualified for US government assistance via a short-term loan of US$106,000. This loan
was used to pay employee costs and is expected to be forgiven in the next financial year.
The operating loss after income tax of the Group for the year ended 30 June 2020 was $4,368,936
(2019: $6,890,466). Included in the loss for the year are uncapitalised exploration costs of $2,717,101
(2019: $6,004,485) and non-cash items (in respect of depreciation, share-based payments expenses
and fair value gains) amounting to $367,623 (2019: $199,637).
At 30 June 2020, cash assets amounted to $507,750 (2019: $1,879,883). During the year ended 30 June
2020, the Company received $1,800,001, before related costs, on the issue of shares and options
(2019: $1,935,306).
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
During the financial year, the Group acquired a controlling interest in the Oracle Ridge Copper Mine.
The mine and its assets are held 100% within Wedgetail Operations LLC (“WTO”), which in turn is held
80% by Wedgetail Holdings LLC, a wholly owned subsidiary of Eagle Mountain. The remaining 20% is
held by Vincere Resource Holdings LLC (“Vincere”). The consideration paid consisted of an upfront cash
payment of US$500,000, the issue to Vincere of a US$6,423,000 10 year secured note and the issue
of a 20% interest in the issued capital of WTO.
Other than the matters stated in this report, there have been no significant changes in the Group’s
state of affairs during the financial year.
EQUITY SECURITIES ON ISSUE
Class of Security
Ordinary fully paid shares
Unlisted options over unissued
shares
Performance rights
30 June 2020
115,901,045
26,409,716
30 June 2019
103,816,039
23,801,315
245,000
180,000
Subsequent to the end of the financial year, the Company issued 23,076,923 ordinary shares to
institutional and professional investors at an issue price of $0.13 per share.
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DIRECTORS’ REPORT
PRINCIPAL ACTIVITIES
The Company’s principal activities for the year ended 30 June 2020 have been focussed on, for the first
six months, a review of the initial exploration program completed on the Group’s Silver Mountain
Project in Arizona in the United States of America and on due diligence and the subsequent acquisition
of the Oracle Ridge Copper Mine. The focus for the second half of the year was undertaking exploration
activities at the wholly owned Silver Mountain Project and the 80% owned Oracle Ridge Copper Mine
in Arizona, as well as capital raising activities.
REVIEW OF OPERATIONS
With the outbreak of the COVID-19 pandemic, the wellbeing of employees and contractors is of utmost
importance to the Company. The Company continues to monitor and abide by all government health
advice both in Australia and in the United States of America. The exploration team is based in Arizona
and whilst travel has been restricted between the two countries, the exploration activities have been
relatively unimpeded at this time. However, due to the uncertainty across global markets, the Group
instituted a number of cost reductions including the waiving of Directors’ fees for the June 2020 quarter
and a reduction in employee salaries by 20-30%. In addition, the Company qualified for government
assistance and received A$50,000 cash flow boost from the Australian government. A wholly owned
US subsidiary qualified for US government assistance via a short-term loan of US$106,000. This loan
was used to pay employee costs and is expected to be forgiven in the next financial year.
The operating loss after income tax of the Group for the year ended 30 June 2020 was $4,368,936
(2019: $6,890,466). Included in the loss for the year are uncapitalised exploration costs of $2,717,101
(2019: $6,004,485) and non-cash items (in respect of depreciation, share-based payments expenses
and fair value gains) amounting to $367,623 (2019: $199,637).
At 30 June 2020, cash assets amounted to $507,750 (2019: $1,879,883). During the year ended 30 June
2020, the Company received $1,800,001, before related costs, on the issue of shares and options
(2019: $1,935,306).
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
During the financial year, the Group acquired a controlling interest in the Oracle Ridge Copper Mine.
The mine and its assets are held 100% within Wedgetail Operations LLC (“WTO”), which in turn is held
80% by Wedgetail Holdings LLC, a wholly owned subsidiary of Eagle Mountain. The remaining 20% is
held by Vincere Resource Holdings LLC (“Vincere”). The consideration paid consisted of an upfront cash
payment of US$500,000, the issue to Vincere of a US$6,423,000 10 year secured note and the issue
of a 20% interest in the issued capital of WTO.
Other than the matters stated in this report, there have been no significant changes in the Group’s
state of affairs during the financial year.
EQUITY SECURITIES ON ISSUE
Class of Security
Ordinary fully paid shares
30 June 2020
115,901,045
Unlisted options over unissued
26,409,716
30 June 2019
103,816,039
23,801,315
shares
Performance rights
245,000
180,000
Subsequent to the end of the financial year, the Company issued 23,076,923 ordinary shares to
institutional and professional investors at an issue price of $0.13 per share.
DIRECTORS’ REPORT
EQUITY SECURITIES ON ISSUE (continued)
Unlisted Options over Ordinary Shares
As at 30 June 2020, 26,409,716 unissued ordinary shares of the Company were under option as follows:
Number of Options Granted
Exercise Price
Expiry Date
4,500,000 1
7,000,000 2
4,500,000 3
815,000 4
5,644,716 5
1,800,000 6
1,500,000 7
650,000 8
30 cents
20 cents
30 cents
20 cents
20 cents
20 cents
21.5 cents
20 cents
7 December 2020
15 January 2023
6 March 2021
1 February 2023
31 July 2021
1 July 2023
15 January 2023
7 October 2023
1 Offer options and vendor options issued as part consideration for the acquisition of Silver Mountain
Mining Pty Ltd.
2 Options issued to Directors, Alternate Director, employees and Company Secretary.
3 Options issued pursuant to the IPO Offer.
4 Options issued to employees pursuant to the Company’s employee incentive plan.
5 Options issued pursuant to a pro-rata entitlement offer which closed on 7 June 2019.
6 Options issued to employees pursuant to the Company’s employee incentive plan.
7 Options issued to the Chief Executive Officer.
8 Options issued to employees pursuant to the Company’s employee incentive plan.
During the year, no options were exercised and a total of 1,341,599 options were cancelled.
Subsequent to 30 June 2020 and the date of this report, 5,771,154 options have vested. No options
have been exercised or cancelled in this period.
Subsequent to 30 June 2020, the following options were issued:
Number of Options Granted
Exercise Price
Expiry Date
1,923,077
1,923,077
1,325,000
20 cents
30 cents
20 cents
30 June 2021
1 July 2022
1 July 2022
Vesting Date
28 July 2020
28 July 2020
7 August 2020
Options do not entitle the holder to participate in any share issue of the Company or any other body
corporate.
The holders of unlisted options are not entitled to any voting rights until the options are exercised into
ordinary shares.
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DIRECTORS’ REPORT
EQUITY SECURITIES ON ISSUE (continued)
Performance Rights over Ordinary Shares
During the year ended 30 June 2020, the Company issued 150,000 performance rights to the Chief
Executive Officer of the Company. Each performance right provides the holder with the right to be
issued one ordinary share subject to satisfaction of vesting criteria.
During the year, 210,000 performance rights vested and 85,000 vested performance rights were
exercised and converted into shares. No performance rights were cancelled during the reporting
period.
No performance rights have been issued, vested, converted or cancelled between 30 June 2020 and
the date of this report.
DIVIDENDS
No dividend has been paid during the year and no dividend is recommended for the current financial
year.
EVENTS SUBSEQUENT TO THE END OF THE REPORTING YEAR
Subsequent to the end of the financial year, the Company completed a placement of 23,076,923
ordinary shares to institutional and professional investors at an issue price of $0.13 per share, raising
a total of $3.0 million (before costs).
In August 2020, global drilling company Boart Longyear Limited was appointed to undertake a maiden
surface diamond drilling program at the Oracle Ridge Copper Mine.
The impact of the COVID-19 pandemic is ongoing. The situation is dependent on measures imposed
by the Australian Government, United States government and other countries, such as maintaining
social distancing requirements, quarantine, travel restrictions and any economic stimulus that may be
provided. It is not practicable to estimate the potential impact, positive or negative, after the reporting
date.
Other than as stated above, there has not arisen in the interval between the end of the financial year
and the date of this report any item, transaction or event of a material and unusual nature likely, in the
opinion of the Directors of the Company to affect substantially the operations of the Group, the results
of those operations or the state of affairs of the Group in subsequent financial years.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS
The Group intends to undertake further exploration programs at the Silver Mountain Project and
Oracle Ridge Copper Mine in Arizona in the United States of America.
Any other likely developments in the operations of the Group and the expected results of those
operations in future financial years have not been included in this report as the inclusion of such
information is likely to result in unreasonable prejudice to the Group.
ENVIRONMENTAL ISSUES
The Group’s operations are not regulated under any significant environmental regulation under a law
of the Commonwealth of Australia, a State or a Territory. The operations and proposed activities of the
Group are subject to United States Federal and Arizona State laws and regulations concerning the
environment.
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 34
the date of this report.
period.
DIVIDENDS
year.
DIRECTORS’ REPORT
EQUITY SECURITIES ON ISSUE (continued)
Performance Rights over Ordinary Shares
During the year ended 30 June 2020, the Company issued 150,000 performance rights to the Chief
Executive Officer of the Company. Each performance right provides the holder with the right to be
issued one ordinary share subject to satisfaction of vesting criteria.
During the year, 210,000 performance rights vested and 85,000 vested performance rights were
exercised and converted into shares. No performance rights were cancelled during the reporting
No performance rights have been issued, vested, converted or cancelled between 30 June 2020 and
No dividend has been paid during the year and no dividend is recommended for the current financial
EVENTS SUBSEQUENT TO THE END OF THE REPORTING YEAR
Subsequent to the end of the financial year, the Company completed a placement of 23,076,923
ordinary shares to institutional and professional investors at an issue price of $0.13 per share, raising
a total of $3.0 million (before costs).
In August 2020, global drilling company Boart Longyear Limited was appointed to undertake a maiden
surface diamond drilling program at the Oracle Ridge Copper Mine.
The impact of the COVID-19 pandemic is ongoing. The situation is dependent on measures imposed
by the Australian Government, United States government and other countries, such as maintaining
social distancing requirements, quarantine, travel restrictions and any economic stimulus that may be
provided. It is not practicable to estimate the potential impact, positive or negative, after the reporting
date.
Other than as stated above, there has not arisen in the interval between the end of the financial year
and the date of this report any item, transaction or event of a material and unusual nature likely, in the
opinion of the Directors of the Company to affect substantially the operations of the Group, the results
of those operations or the state of affairs of the Group in subsequent financial years.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS
The Group intends to undertake further exploration programs at the Silver Mountain Project and
Oracle Ridge Copper Mine in Arizona in the United States of America.
Any other likely developments in the operations of the Group and the expected results of those
operations in future financial years have not been included in this report as the inclusion of such
information is likely to result in unreasonable prejudice to the Group.
ENVIRONMENTAL ISSUES
The Group’s operations are not regulated under any significant environmental regulation under a law
of the Commonwealth of Australia, a State or a Territory. The operations and proposed activities of the
Group are subject to United States Federal and Arizona State laws and regulations concerning the
environment.
DIRECTORS’ REPORT
ENVIRONMENTAL ISSUES (continued)
The Board believes that the Group has adequate systems in place for the management of its
environmental requirements. The Group 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 Group are not aware of any breach of environmental legislation for the
financial year under review.
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS AND AUDITORS
During the year ended 30 June 2020, the Company paid an insurance premium to insure certain
officers of the Company. The officers of the Company covered by the insurance policy include the
Directors named in this report.
The Directors and Officers Liability insurance provides cover against all costs and expenses that may
be incurred in defending civil or criminal proceedings that fall within the scope of the indemnity and
that may be brought against the officers in their capacity as officers of the Company. The insurance
policy does not contain details of the premium paid in respect of individual officers of the Company.
Disclosure of the nature of the liability cover and the amount of the premium is subject to a
confidentiality clause under the insurance policy.
The Company has not provided any insurance for an auditor of the Company.
PROCEEDINGS ON BEHALF OF THE GROUP
No person has applied for leave of court to bring proceedings on behalf of the Group or intervene in
any proceedings to which the Group is a party for the purpose of taking responsibility on behalf of the
Group for all or any part of those proceedings.
The Company was not a party to any such proceedings during the year.
NON-AUDIT SERVICES
The following non-audit services were provided by William Buck (WA) Pty Ltd, a related entity of the
entity’s auditor, William Buck Audit (WA) Pty Ltd. 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 nature and scope of each type of non-audit service provided means that
auditor independence was not compromised.
William Buck (WA) Pty Ltd received or is due to receive the following amounts for the provision of non-
audit services:
Taxation services for Silver Mountain Mining
Pty Ltd
Taxation services for Eagle Mountain Mining
Limited
30 June 2020
30 June 2019
$1,660
$3,960
Nil
$3,880
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DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED)
Remuneration paid to Directors and Officers of the Company is set by reference to such payments
made by other ASX listed companies of a similar size and operating in the mineral exploration industry.
In addition, reference is made to the specific skills and experience of the Directors and Officers.
Details of the nature and amount of remuneration of each Director, and other Key Management
Personnel are disclosed annually in the Remuneration Report.
Remuneration Committee
The Board has adopted a formal Nomination and Remuneration Policy which provides a framework
for the consideration of remuneration matters.
The Company does not have a separate remuneration committee and as such all remuneration
matters are considered by the Board as a whole, with no member deliberating or considering such
matter in respect of their own remuneration.
In the absence of a separate Remuneration Committee, the Board is responsible for:
1. Setting remuneration packages for Executive Directors, Non-Executive Directors and other Key
2.
Management Personnel; and
Implementing employee incentive and equity based plans and making awards pursuant to those
plans.
Non-Executive Remuneration
The Company’s policy is to remunerate Non-Executive Directors, at rates comparable to other ASX
listed companies in the same industry, for their time, commitment and responsibilities.
Non-Executive Remuneration is not linked to the performance of the Company, however to align
Directors’ interests with shareholders’ interests, remuneration may be provided to Non-Executive
Directors in the form of equity based long term incentives.
1.
Fees payable to Non-Executive Directors are set within the aggregate amount approved by
shareholders at the Company’s Annual General Meeting;
2. Non-Executive Directors’ fees are payable in the form of cash and superannuation benefits;
3. Non-Executive Directors’ superannuation benefits are limited to statutory superannuation
entitlements; and
4. Participation in equity based remuneration schemes by Non-Executive Directors is subject to
consideration and approval by the Company’s shareholders.
The maximum aggregate Non-Executive Directors fees payable are currently set at $300,000 per
annum.
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 36
made by other ASX listed companies of a similar size and operating in the mineral exploration industry.
In addition, reference is made to the specific skills and experience of the Directors and Officers.
Details of the nature and amount of remuneration of each Director, and other Key Management
Personnel are disclosed annually in the Remuneration Report.
Remuneration Committee
The Board has adopted a formal Nomination and Remuneration Policy which provides a framework
for the consideration of remuneration matters.
The Company does not have a separate remuneration committee and as such all remuneration
matters are considered by the Board as a whole, with no member deliberating or considering such
matter in respect of their own remuneration.
In the absence of a separate Remuneration Committee, the Board is responsible for:
1. Setting remuneration packages for Executive Directors, Non-Executive Directors and other Key
Management Personnel; and
plans.
Non-Executive Remuneration
Directors’ interests with shareholders’ interests, remuneration may be provided to Non-Executive
Directors in the form of equity based long term incentives.
1.
Fees payable to Non-Executive Directors are set within the aggregate amount approved by
shareholders at the Company’s Annual General Meeting;
2. Non-Executive Directors’ fees are payable in the form of cash and superannuation benefits;
3. Non-Executive Directors’ superannuation benefits are limited to statutory superannuation
entitlements; and
4. Participation in equity based remuneration schemes by Non-Executive Directors is subject to
consideration and approval by the Company’s shareholders.
The maximum aggregate Non-Executive Directors fees payable are currently set at $300,000 per
annum.
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED)
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED) (continued)
Remuneration paid to Directors and Officers of the Company is set by reference to such payments
Executive Director and Other Key Management Personnel Remuneration
Executive remuneration consists of base salary, plus other performance incentives to ensure that:
1. Remuneration packages incorporate a balance between fixed and incentive pay, reflecting short
and long term performance objectives appropriate to the Company’s circumstances and
objectives; and
2. A proportion of remuneration is structured in a manner to link reward to corporate and individual
performances.
Executives are offered a competitive level of base salary at market rates (based on comparable ASX
listed companies) and are reviewed regularly to ensure market competitiveness. To date the Company
has not engaged external remuneration consultants to advise the Board on remuneration matters.
Incentive Plans
The Company provides long term incentives to Directors and Employees pursuant to the Company’s
Employee Incentive Plan.
The Board, acting in remuneration matters:
2.
Implementing employee incentive and equity based plans and making awards pursuant to those
1. Ensures that incentive plans are designed around appropriate and realistic performance targets
and provide rewards when those targets are achieved;
2. Reviews and approves existing incentive plans established for employees; and
The Company’s policy is to remunerate Non-Executive Directors, at rates comparable to other ASX
3. Approves the administration of the incentive plans, including receiving recommendations for and
listed companies in the same industry, for their time, commitment and responsibilities.
the consideration and approval of grants pursuant to such incentive plans.
Non-Executive Remuneration is not linked to the performance of the Company, however to align
Engagement of Non-Executive Directors
Non-Executive Directors conduct their duties under the following terms:
1. A Non-Executive Director may resign from his/her position and thus terminate their contract on
written notice to the Company; and
2. A Non-Executive Director may, following resolution of the Company’s shareholders, be removed
before the expiration of their period of office (if applicable). Payment is made in lieu of any notice
period if termination is initiated by the Company, except where termination is initiated for serious
misconduct.
In consideration of the services provided by Mr Rick Crabb as Non-Executive Chairman, the Company
will pay him a fee inclusive of statutory superannuation of $50,000 per annum.
In consideration of the services provided by Mr Roger Port as Non-Executive Director, the Company
will pay him a fee inclusive of statutory superannuation of $50,000 per annum.
For the quarter ended 30 June 2020, director fees owing to Messrs Crabb and Port were waived as
part of a cost reduction exercise following the outbreak of the COVID-19 pandemic.
Messrs Crabb and Port are also entitled to fees for other amounts as the Board determines where
they perform special duties or otherwise perform extra services or make special exertions on behalf
of the Company. There were no such fees paid during the year ended 30 June 2020.
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 36
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 37
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED) (continued)
Engagement of Executive Directors
The Company has entered into an executive service agreement with Mr Charles Bass in his role as
Managing Director on the following material terms and conditions.
Mr Bass receives a base salary inclusive of statutory superannuation of $50,000 per annum from the
commencement of the agreement until 1 June 2018, at which time the remuneration was reviewed.
Mr Bass’ remuneration was unchanged as a result of this review.
For the quarter ended 30 June 2020, Mr Bass waived his salary as part of a cost reduction exercise
following the outbreak of the COVID-19 pandemic.
Either party may terminate the agreement by providing 30 days written notice to the other party. Eagle
Mountain may otherwise terminate the Managing Director’s employment in accordance with the
Constitution or the Corporations Act. Upon termination of the agreement, Mr Bass will cease
employment with Eagle Mountain as its Managing Director and will become a Non-Executive Director
of Eagle Mountain.
Mr Bass may, subject to shareholder approval, participate in Eagle Mountain’s Employee Incentive Plan
and other long term incentive plans adopted by the Board.
Engagement of Chief Executive Officer
The Company has entered into an executive service agreement with Mr Timothy Mason, effective 15
January 2020, in his role as Chief Executive Officer (CEO) on the following material terms and conditions.
Mr Mason receives a base salary inclusive of statutory superannuation of $300,000 per annum.
For the quarter ended 30 June 2020, Mr Mason’s salary was reduced to $210,000 per annum as part
of a cost reduction exercise following the outbreak of the COVID-19 pandemic.
The CEO may terminate the agreement by providing 3 months written notice. Eagle Mountain may
terminate the agreement with 3 months written notice or the provision of 3 month’s salary in lieu of
notice; or may otherwise terminate the CEO’s employment in accordance with the Constitution or the
Corporations Act.
Upon commencement of his employment, Mr Mason received 1,500,000 unlisted options and 150,000
unlisted performance rights over unissued shares of the Company. An expense of $59,240 was
recognised through the consolidated statement of profit or loss and other comprehensive income in
the current reporting period in respect of the issue of these securities.
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 38
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED) (continued)
Short Term Incentive Payments
The Non-Executive Directors set annual Key Performance Indicators (“KPIs”) for Executive Directors.
The KPIs are chosen to align the reward of the individual Executives to the strategy and performance
of the Company.
Performance objectives, which may be financial or non-financial, or a combination of both, are
weighted when calculating the maximum Short Term Incentives payable to Executives. At the end of
the year, the Non-Executive Directors will assess the actual performance of the Executives against the
set Performance Objectives. The maximum amount of the Short Term Incentive, or a lesser amount
depending on actual performance achieved is paid to the Executives as a cash payment.
No Short Term Incentives are payable to Executives where it is considered that the actual performance
has fallen below the minimum requirement.
Shareholding Qualifications
The Directors are not required to hold any shares in Eagle Mountain under the terms of the Company’s
Constitution.
and other long term incentive plans adopted by the Board.
Group Performance
In considering the Company’s performance, the Board provides the following indices in respect of the
current financial year:
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED) (continued)
Engagement of Executive Directors
The Company has entered into an executive service agreement with Mr Charles Bass in his role as
Managing Director on the following material terms and conditions.
Mr Bass receives a base salary inclusive of statutory superannuation of $50,000 per annum from the
commencement of the agreement until 1 June 2018, at which time the remuneration was reviewed.
Mr Bass’ remuneration was unchanged as a result of this review.
For the quarter ended 30 June 2020, Mr Bass waived his salary as part of a cost reduction exercise
following the outbreak of the COVID-19 pandemic.
Either party may terminate the agreement by providing 30 days written notice to the other party. Eagle
Mountain may otherwise terminate the Managing Director’s employment in accordance with the
Constitution or the Corporations Act. Upon termination of the agreement, Mr Bass will cease
employment with Eagle Mountain as its Managing Director and will become a Non-Executive Director
of Eagle Mountain.
Mr Bass may, subject to shareholder approval, participate in Eagle Mountain’s Employee Incentive Plan
Engagement of Chief Executive Officer
The Company has entered into an executive service agreement with Mr Timothy Mason, effective 15
January 2020, in his role as Chief Executive Officer (CEO) on the following material terms and conditions.
Mr Mason receives a base salary inclusive of statutory superannuation of $300,000 per annum.
For the quarter ended 30 June 2020, Mr Mason’s salary was reduced to $210,000 per annum as part
of a cost reduction exercise following the outbreak of the COVID-19 pandemic.
The CEO may terminate the agreement by providing 3 months written notice. Eagle Mountain may
terminate the agreement with 3 months written notice or the provision of 3 month’s salary in lieu of
notice; or may otherwise terminate the CEO’s employment in accordance with the Constitution or the
Corporations Act.
Upon commencement of his employment, Mr Mason received 1,500,000 unlisted options and 150,000
unlisted performance rights over unissued shares of the Company. An expense of $59,240 was
recognised through the consolidated statement of profit or loss and other comprehensive income in
the current reporting period in respect of the issue of these securities.
Closing share price at 30 June
$0.16
$0.125
$0.42
As a Group focussed on exploration activities, the Board does not consider the loss attributable to
shareholders as one of the performance indicators when implementing Short Term Incentive
payments.
In addition to technical exploration success, the Board considers the effective management of safety,
environmental and operational matters and successful management, acquisition and consolidation of
high quality landholdings, as more appropriate indicators of management performance for the
financial year.
Remuneration Disclosures
The Key Management Personnel of the Company have been identified as:
Mr Rick Crabb
Mr Charles Bass
Mr Roger Port
Mr Brett Rowe
Mr Tim Mason
Non-Executive Chairman
Managing Director
Non-Executive Director
Alternate Director for Charles Bass
Chief Executive Officer
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 38
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 39
2020
2019
2018
to
$(3,985,856)
$(6,890,466)
$(1,681,900)
Loss
shareholders
the year/period attributable
for
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED) (continued)
The details of the remuneration of each Director and member of Key Management Personnel of the
Company is as follows:
Year Ended 30
June 2020
Base Salary
$
Rick Crabb
34,247
Charles Bass
34,247
Roger Port
34,247
Brett Rowe
-
Tim Mason 1
108,418
Total
211,159
Short Term
Post Employment
Short Term
Incentive
Superannuation
Contributions
Other Long
Term
Value of Equity
Based
Remuneration2
$
-
-
-
-
Value of Equity
as Proportion
of
Remuneration
%
-
-
-
-
Total
$
37,500
37,500
37,500
-
$
3,253
3,253
3,253
-
9,383
59,240
177,041
33.5%
19,142
59,240
289,541
-
$
-
-
-
-
-
-
1 Appointed 15 January 2020.
2 The fair value of Options and Performance Rights is calculated at the date of grant using a Black
Scholes option pricing model and allocated to each reporting period evenly over the period from grant
date to vesting date. The value disclosed in the above table is the portion of the fair value of the
securities recognised in the reporting period. The basis of the fair value is disclosed later in this
Remuneration Report.
Short Term
Post Employment
Year Ended 30
June 2019
Base Salary
$
Rick Crabb
45,662
Charles Bass
45,662
Roger Port
45,662
Brett Rowe
-
Total
136,986
Short Term
Incentive
Superannuation
Contributions
$
-
-
-
-
-
$
4,338
4,338
4,338
-
13,014
Other Long
Term
Value of Equity
Based
Remuneration
$
-
-
-
-
-
Value of Equity
as Proportion
of
Remuneration
%
-
-
-
-
-
Total
$
50,000
50,000
50,000
-
150,000
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 40
DIRECTORS’ REPORT
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED) (continued)
REMUNERATION REPORT (AUDITED) (continued)
The details of the remuneration of each Director and member of Key Management Personnel of the
Company is as follows:
Details of Performance Related Remuneration
Short Term
Post Employment
Term
Other Long
During the year ended 30 June 2020, no Short Term Incentive payments were paid to the Directors or
Key Management Personnel.
Value of Equity
as Proportion
Equity Based Remuneration
During the year ended 30 June 2020, 1,500,000 unlisted options and 150,000 unlisted performance
rights over unissued shares of the Company were issued to Mr Tim Mason pursuant to his executive
services agreement. No options, rights or shares were issued to the Directors of the Company as
remuneration during the financial years ended 30 June 2020 and 30 June 2019.
The fair value of options and performance rights issued as remuneration is allocated to the relevant
vesting period of the securities. Options and performance rights are provided at no initial cost to the
recipients.
No options were exercised by Key Management Personnel during the year ended 30 June 2020.
Tim Mason 1
108,418
9,383
59,240
177,041
33.5%
Exercise of Options Granted as Remuneration
During the year ended 30 June 2020, no ordinary shares were issued in respect of the exercise of
options or performance rights previously granted as remuneration to Directors or Key Management
Personnel of the Company.
Equity Instrument Disclosures Relating to Key Management Personnel
Option Holdings
Key Management Personnel have the following interests in unlisted options over unissued shares of
the Company.
Year ended 30
June 2020
Name
Balance at
beginning of
the year
Received
during the
year as
remuneration
Other
changes
during the
year
Balance at
the end of
the year
Vested and
exercisable
at the end of
the year
Rick Crabb
1,561,000
Charles Bass
9,665,000
Roger Port
1,543,000
Brett Rowe
1,000,000
-
-
-
-
Tim Mason
-
1,500,000
-
-
-
-
-
1,561,000
1,561,000
9,665,000
9,665,000
1,543,000
1,543,000
1,000,000
1,000,000
1,500,000
-
Year Ended 30
June 2020
Short Term
Superannuation
Based
Value of Equity
Base Salary
Incentive
Contributions
Remuneration2
Total
Remuneration
Rick Crabb
34,247
Charles Bass
34,247
Roger Port
34,247
Brett Rowe
$
3,253
3,253
3,253
-
37,500
37,500
37,500
$
-
Total
211,159
19,142
59,240
289,541
1 Appointed 15 January 2020.
2 The fair value of Options and Performance Rights is calculated at the date of grant using a Black
Scholes option pricing model and allocated to each reporting period evenly over the period from grant
date to vesting date. The value disclosed in the above table is the portion of the fair value of the
securities recognised in the reporting period. The basis of the fair value is disclosed later in this
Remuneration Report.
Short Term
Post Employment
Term
Other Long
Year Ended 30
June 2019
Short Term
Superannuation
Based
Value of Equity
Value of Equity
as Proportion
Base Salary
Incentive
Contributions
Remuneration
Total
Remuneration
Rick Crabb
45,662
Charles Bass
45,662
Roger Port
45,662
Brett Rowe
Total
136,986
$
4,338
4,338
4,338
-
13,014
50,000
50,000
50,000
$
-
150,000
of
%
-
-
-
-
-
of
%
-
-
-
-
-
$
-
-
-
-
-
-
$
-
-
-
-
-
$
-
-
-
-
$
-
-
-
-
-
$
-
$
-
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 40
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 41
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED) (continued)
Performance Rights Holdings
Key Management Personnel have the following interests in unlisted performance rights over unissued
shares of the Company.
Balance at
beginning of
the year
Received
during the
year as
remuneration
Other
changes
during the
year
Balance at
the end of
the year
Vested and
exercisable
at the end of
the year
-
-
-
-
-
-
-
-
-
150,000
-
-
-
-
-
-
-
-
-
150,000
-
-
-
-
-
Year ended 30
June 2020
Name
Rick Crabb
Charles Bass
Roger Port
Brett Rowe
Tim Mason
Share Holdings
The number of shares in the Company held during the financial year by Key Management Personnel
of the Company, including their related parties are set out below. There were no shares granted during
the reporting period as compensation.
Year ended 30
June 2020
Name
Rick Crabb
Balance at
beginning of the
year
Received during
the year as
remuneration
732,000
Charles Bass
43,980,001
Roger Port
Brett Rowe
Tim Mason
516,000
500,000
-
1 Placement shares issued at 15 cents per share.
Loans made to Key Management Personnel
Other changes
during the year
Balance at the
end of the year
-
732,000
5,000,000 1
48,980,001
-
-
-
516,000
500,000
-
-
-
-
-
-
No loans were made to Key Management Personnel including personally related entities during the
financial year.
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 42
REMUNERATION REPORT (AUDITED) (continued)
DIRECTORS’ REPORT
Performance Rights Holdings
shares of the Company.
Key Management Personnel have the following interests in unlisted performance rights over unissued
Balance at
beginning of
Received
during the
Other
Vested and
changes
Balance at
exercisable
year as
during the
the end of
at the end of
the year
remuneration
year
the year
the year
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
150,000
150,000
Year ended 30
June 2020
Name
Rick Crabb
Charles Bass
Roger Port
Brett Rowe
Tim Mason
Share Holdings
The number of shares in the Company held during the financial year by Key Management Personnel
of the Company, including their related parties are set out below. There were no shares granted during
the reporting period as compensation.
Year ended 30
June 2020
Balance at
Received during
Charles Bass
43,980,001
5,000,000 1
48,980,001
Name
Rick Crabb
Roger Port
Brett Rowe
Tim Mason
beginning of the
the year as
Other changes
Balance at the
year
remuneration
during the year
end of the year
732,000
516,000
500,000
-
-
-
-
-
-
-
-
-
-
732,000
516,000
500,000
-
1 Placement shares issued at 15 cents per share.
Loans made to Key Management Personnel
No loans were made to Key Management Personnel including personally related entities during the
financial year.
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED) (continued)
Loans received from Key Management Personnel
During the year, the Company entered into an unsecured loan agreement with a director related entity,
Quartz Mountain Mining Pty Ltd (Quartz Mountain) as trustee for the Bass Family Trust. The principal
of US$1,000,000 attracts interest at 2% per annum with the first three months being interest free.
Interest expense of US$8,474 (A$13,005) was recognised during the reporting period. Subsequent to
the end of the financial year, the Company reached an agreement with Quartz Mountain to extend the
maturity date of the loan such that it is repayable on or before 31 December 2021. In addition and
subject to shareholder approval, Quartz Mountain has agreed to accept 950,000 unlisted options
exercisable at 20 cents each on or before 1 July 2022 in lieu of interest.
Other transactions with Key Management Personnel
Transactions between related parties are on commercial terms and conditions, no more favourable
than those available to other parties unless otherwise stated.
The Company has entered into a lease agreement with Elk Mountain Mining Limited (“Elk”), an entity
associated with Mr Charles Bass, for the lease of the Company’s administration offices in Perth,
Western Australia. Total lease repayments of $85,847 were paid during the year, including interest of
$35,402 and lease principal repayments of $50,445. In the prior year, such payments were included in
the statement of profit or loss and other comprehensive income and totalled $86,590.
Other than the above, there were no other transactions with Key Management Personnel.
End of Remuneration Report
AUDITOR’S INDEPENDENCE DECLARATION
Section 307C of the Corporations Act 2001 requires our auditors, William Buck Audit (WA) Pty Ltd, to
provide the Directors of the Group with an Independence Declaration in relation to the audit of the
financial report. This Independence Declaration is set out on the following page and forms part of this
Directors’ report for the year ended 30 June 2020.
This report has been made in accordance with a resolution of the Board of Directors.
Rick Crabb
Chairman
Dated at Perth this 18th day of September 2020
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 42
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 43
AUDITORS INDEPENDENCE DECLARATION
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 44
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME
For the Year Ended 30 June 2020
Continuing Operations
Other revenue
Interest income
Administration and other costs
Employee expenses – non-exploration
Employee expenses – equity based
Finance costs
Depreciation expense
Exploration and evaluation costs
Net change in fair value of convertible notes
Realised gain on foreign currency exchange
Loss before income tax
Income tax expense
Notes
4
Year ended 30
June 2020
A$
Year ended 30
June 2019
A$
50,000
867
(779,231)
(310,957)
(248,723)
(247,281)
(387,772)
(2,717,101)
268,872
2,390
12
27,389
(555,971)
(271,771)
(45,494)
-
(154,143)
(6,004,485)
-
113,997
4
5
(4,368,936)
(6,890,466)
-
-
Loss after income tax from continuing operations
(4,368,936)
(6,890,466)
Other comprehensive income net of income tax
Other comprehensive income to be re-classified to
profit or loss in subsequent years net of income tax
Unrealised gain on foreign currency exchange
Total comprehensive loss for the year
16a
-
103,077
-
77,575
(4,265,859)
(6,812,891)
Loss attributable to:
Owners of the parent
Non-controlling interests
Total comprehensive loss attributable to:
Owners of the parent
Non-controlling interests
Basic and diluted loss per share
28
(3,985,856)
(383,080)
(4,368,936)
(6,890,466)
-
(6,890,466)
(3,892,026)
(373,833)
(4,265,859)
(6,812,891)
-
(6,812,891)
cents
(3.7)
cents
(7.4)
The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 45
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2020
30 June 2020
30 June 2019
Note
A$
A$
Current Assets
Cash and cash equivalents
Trade and other receivables
Total Current Assets
Non-Current Assets
Exploration and evaluation expenditure
Property, plant and equipment
Right-of-use assets
Bonds and security deposits
Total Non-Current Assets
TOTAL ASSETS
Current Liabilities
Trade and other payables
Employee leave liabilities
Lease liabilities
Borrowings
Total Current Liabilities
Non-Current Liabilities
Lease liabilities
Borrowings
Total Non-Current Liabilities
TOTAL LIABILITIES
NET ASSETS
6
7
8
9
10
11
12
13
12
13
507,750
138,309
646,059
10,378,496
1,265,634
208,493
132,945
11,985,568
1,879,883
54,626
1,934,509
1,164,027
435,324
-
130,101
1,729,452
12,631,627
3,663,961
179,444
58,923
111,315
1,636,325
1,986,007
117,895
9,290,293
9,408,188
224,648
59,391
-
10,908
294,947
-
25,484
25,484
11,394,195
320,431
1,237,432
3,343,530
Equity
15,322,265
Issued capital
4,500
Option capital
(1,518,029)
Reserves
(12,381,375)
Accumulated losses
1,427,361
Equity attributable to owners of the parent
(189,929)
Non-controlling interest
1,237,432
TOTAL EQUITY
13,579,949
4,500
(1,828,582)
(8,412,337)
3,343,530
-
3,343,530
15
16
The above statement of financial position should be read in conjunction with the accompanying notes.
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 46
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2020
30 June 2020
30 June 2019
Note
A$
A$
Current Assets
Cash and cash equivalents
Trade and other receivables
Total Current Assets
Non-Current Assets
Exploration and evaluation expenditure
Property, plant and equipment
Right-of-use assets
Bonds and security deposits
Total Non-Current Assets
TOTAL ASSETS
Current Liabilities
Trade and other payables
Employee leave liabilities
Lease liabilities
Borrowings
Total Current Liabilities
Non-Current Liabilities
Lease liabilities
Borrowings
Total Non-Current Liabilities
NET ASSETS
Equity
Option capital
Reserves
Accumulated losses
Non-controlling interest
TOTAL EQUITY
Equity attributable to owners of the parent
6
7
8
9
10
11
12
13
12
13
15
16
12,631,627
3,663,961
507,750
138,309
646,059
10,378,496
1,265,634
208,493
132,945
11,985,568
179,444
58,923
111,315
1,636,325
1,986,007
117,895
9,290,293
9,408,188
1,879,883
54,626
1,934,509
1,164,027
435,324
-
130,101
1,729,452
224,648
59,391
10,908
294,947
-
-
25,484
25,484
1,237,432
3,343,530
15,322,265
4,500
(1,518,029)
(12,381,375)
1,427,361
(189,929)
1,237,432
13,579,949
4,500
(1,828,582)
(8,412,337)
3,343,530
-
3,343,530
TOTAL LIABILITIES
11,394,195
320,431
The above statement of financial position should be read in conjunction with the accompanying notes.
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 46
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T
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Year Ended 30 June 2020
Cash Flows from Operating Activities
Payments to suppliers and employees
Payments for exploration and evaluation
Payments for interest and other financing costs
Interest received
Government assistance received
Year ended 30
June 2020
A$
Year ended 30
June 2019
A$
Note
(1,208,540)
(2,674,607)
(51,911)
867
50,000
(668,591)
(5,941,606)
-
39,920
-
Net cash used in operating activities
17
(3,884,191)
(6,570,277)
Cash Flows from Investing Activities
Payment for acquisition of exploration assets
Payments for purchase of fixed assets
Payments for bonds and deposits
Net cash used in investing activities
Cash Flows from Financing Activities
Proceeds from the issue of shares and options
Payments for the issue of share and options
Proceeds from borrowings
Repayments of borrowings
Repayment of lease liabilities
Net cash generated by financing activities
(729,667)
(8,644)
-
(738,311)
1,800,001
(72,867)
1,626,798
(11,373)
(100,590)
3,241,969
-
(116,183)
(127,510)
(243,693)
1,935,306
(147,910)
-
(11,509)
-
1,775,887
Net increase/(decrease) in cash held
(1,380,533)
(5,038,083)
Cash and cash equivalents at the beginning of the
year
Effect of foreign exchange on cash and cash
equivalents
1,879,883
6,795,421
8,400
122,545
Cash and cash equivalents at the end of the year
507,750
1,879,883
6
The above statement of cash flows should be read in conjunction with the accompanying notes.
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 48
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Year Ended 30 June 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
Net cash used in operating activities
17
(3,884,191)
(6,570,277)
Cash Flows from Operating Activities
Payments to suppliers and employees
Payments for exploration and evaluation
Payments for interest and other financing costs
Interest received
Government assistance received
Cash Flows from Investing Activities
Payment for acquisition of exploration assets
Payments for purchase of fixed assets
Payments for bonds and deposits
Net cash used in investing activities
Cash Flows from Financing Activities
Proceeds from the issue of shares and options
Payments for the issue of share and options
Proceeds from borrowings
Repayments of borrowings
Repayment of lease liabilities
Net cash generated by financing activities
Year ended 30
Year ended 30
June 2020
June 2019
A$
A$
Note
(1,208,540)
(2,674,607)
(51,911)
867
50,000
(668,591)
(5,941,606)
39,920
-
-
-
-
-
(116,183)
(127,510)
(243,693)
1,935,306
(147,910)
(11,509)
1,775,887
(729,667)
(8,644)
-
(738,311)
1,800,001
(72,867)
1,626,798
(11,373)
(100,590)
3,241,969
Net increase/(decrease) in cash held
(1,380,533)
(5,038,083)
Cash and cash equivalents at the beginning of the
year
equivalents
Effect of foreign exchange on cash and cash
1,879,883
6,795,421
8,400
122,545
Cash and cash equivalents at the end of the year
507,750
1,879,883
6
The above statement of cash flows should be read in conjunction with the accompanying notes.
These consolidated financial statements and notes represent those of Eagle Mountain Mining Limited and its
controlled entities (the “Group”). Eagle Mountain Mining Limited is a public limited liability company, incorporated
and domiciled in Australia.
The Group is a for-profit entity for financial reporting purposes under Australian Accounting Standards. The
financial statements for the year ended 30 June 2020 were approved and authorised for issue by the Board of
Directors on 18 September 2020.
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the material accounting policies adopted by the Group in the preparation of the
financial report. The accounting policies have been consistently applied, unless otherwise stated.
(a)
Basis of Preparation
These general purpose financial statements for the reporting year ended 30 June 2020 have been prepared
in accordance with the requirements of the Corporations Act 2001, Australian Accounting Standards and
other authoritative pronouncements of the Australian Accounting Standards Board. The financial
statements and notes comply with International Financial Reporting Standards.
The financial report has been prepared on an accruals basis and is based on historical cost and does not
take into account changing money values or, except where stated, current valuations of non-current assets.
Cost is based on the fair values of the consideration given in exchange for assets.
(i) Going Concern
The Group has incurred a loss of $4,368,936 and a net operating cash outflow of $3,884,191 during the
year ended 30 June 2020. Cash assets at 30 June 2020 were $507,750 and current liabilities at that date
were $1,986,007.
The financial statements have been prepared on the going concern basis which contemplates the
continuity of normal business activities and the realisation of assets and discharge of liabilities in the normal
course of business.
In January 2020, the Group successfully raised $1.8 million (before costs) pursuant to a placement to
institutional and sophisticated investors. In July 2020, the Company completed a placement to institutional
and professional investors raising an additional $3.0 million (before costs). The ability of the Group to
continue to adopt the going concern assumption will depend on future successful capital raisings, the
successful exploration and subsequent exploitation of the Group’s mining licences and permits, and/or
sale of non-core assets
The Directors will continue to manage the Group’s activities with due regard to current and future funding
requirements. The Directors reasonably expect that the Company will be able to raise sufficient capital to
fund the Group’s exploration and working capital requirements, and that the Group will be able to settle
debts as and when they become due and payable. On this basis, the Directors are therefore of the opinion
that the use of the going concern basis is appropriate in the circumstances.
Should the Company be unable to raise additional funding when required, there is a material uncertainty
that may cast significant doubt on whether the Company will be able to continue as a going concern and
therefore, whether it will be able to realise its assets and extinguish its liabilities in the normal course of
business and at the amounts stated in the financial report.
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 48
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 49
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(a) Basis of Preparation (continued)
(ii) Basis of Consolidation
The financial information comprises the financial information of Eagle Mountain and entities (including
special purpose entities) controlled by Eagle Mountain (its “subsidiaries”).
Control is achieved when Eagle Mountain:
•
•
•
has power over the investee;
is exposed, or has rights, to variable returns from its involvement with the investee; and
has the ability to use its power to affect its returns.
Eagle Mountain reassesses whether or not it controls an investee if facts and circumstances indicate that
there are changes to one or more of the three elements of control listed above.
The financial information of subsidiaries is prepared for the same reporting period as Eagle Mountain, using
consistent accounting policies. Adjustments are made to bring into line any dissimilar accounting policies
that may exist. All inter-company balances and transactions, including unrealised profits arising from intra-
group transactions, have been eliminated in full. Unrealised losses are eliminated unless costs cannot be
recovered.
Subsidiaries are consolidated from the date on which control is transferred to the Group and cease to be
consolidated from the date on which control is transferred out of the Group. Total comprehensive income
of subsidiaries is attributed to the owners of Eagle Mountain and to the non-controlling interests even if
this results in the non-controlling interests having a deficit balance.
Specifically, income and expenses of a subsidiary acquired or disposed of during the year are included in
the consolidated statement of profit or loss and other comprehensive income from the date Eagle
Mountain gains control until the date when Eagle Mountain ceases to control the subsidiary.
When the Group loses control of a subsidiary, a gain or loss is recognised in profit or loss and is calculated
as the difference between:
•
•
the aggregate of the fair value of the consideration received and the fair value of any retained
interest; and
the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and
any non-controlling interests.
All amounts previously recognised in other comprehensive income in relation to that subsidiary are
accounted for as if the Group had directly disposed of the related assets or liabilities of the subsidiary (i.e.
reclassified to profit and loss or transferred to another category of equity as specified/permitted by the
applicable Accounting Standards). The fair value of any investment retained in the former subsidiary at the
date when control is lost is regarded as the fair value on initial recognition for subsequent accounting
under AASB 9, or when applicable, the cost on initial recognition of an investment in an associate or a joint
venture.
(iii)
New Accounting Standards Adopted in the Current Year
Application of New and Revised Accounting Standards
The Group has adopted all of the new, revised or amending Accounting Standards and Interpretations
issued by the Australian Accounting Standards Board (“AASB”) that are mandatory for the current reporting
period.
Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have
not been early adopted by the Group for the reporting year ended 30 June 2020.
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 50
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(a) Basis of Preparation (continued)
(ii) Basis of Consolidation
(iii)
New Accounting Standards Adopted in the Current Year (continued)
The following Accounting Standards and Interpretations are most relevant to the Group:
The financial information comprises the financial information of Eagle Mountain and entities (including
special purpose entities) controlled by Eagle Mountain (its “subsidiaries”).
AASB 16 Leases
Control is achieved when Eagle Mountain:
has power over the investee;
•
•
•
•
•
is exposed, or has rights, to variable returns from its involvement with the investee; and
has the ability to use its power to affect its returns.
Eagle Mountain reassesses whether or not it controls an investee if facts and circumstances indicate that
there are changes to one or more of the three elements of control listed above.
The financial information of subsidiaries is prepared for the same reporting period as Eagle Mountain, using
consistent accounting policies. Adjustments are made to bring into line any dissimilar accounting policies
that may exist. All inter-company balances and transactions, including unrealised profits arising from intra-
group transactions, have been eliminated in full. Unrealised losses are eliminated unless costs cannot be
recovered.
Subsidiaries are consolidated from the date on which control is transferred to the Group and cease to be
consolidated from the date on which control is transferred out of the Group. Total comprehensive income
of subsidiaries is attributed to the owners of Eagle Mountain and to the non-controlling interests even if
this results in the non-controlling interests having a deficit balance.
Specifically, income and expenses of a subsidiary acquired or disposed of during the year are included in
the consolidated statement of profit or loss and other comprehensive income from the date Eagle
Mountain gains control until the date when Eagle Mountain ceases to control the subsidiary.
When the Group loses control of a subsidiary, a gain or loss is recognised in profit or loss and is calculated
the aggregate of the fair value of the consideration received and the fair value of any retained
as the difference between:
interest; and
the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and
any non-controlling interests.
All amounts previously recognised in other comprehensive income in relation to that subsidiary are
accounted for as if the Group had directly disposed of the related assets or liabilities of the subsidiary (i.e.
reclassified to profit and loss or transferred to another category of equity as specified/permitted by the
applicable Accounting Standards). The fair value of any investment retained in the former subsidiary at the
date when control is lost is regarded as the fair value on initial recognition for subsequent accounting
under AASB 9, or when applicable, the cost on initial recognition of an investment in an associate or a joint
venture.
period.
(iii)
New Accounting Standards Adopted in the Current Year
Application of New and Revised Accounting Standards
The Group has adopted all of the new, revised or amending Accounting Standards and Interpretations
issued by the Australian Accounting Standards Board (“AASB”) that are mandatory for the current reporting
Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have
not been early adopted by the Group for the reporting year ended 30 June 2020.
The Group has adopted AASB 16 with effect from 1 July 2019. The standard replaces AASB 117 'Leases'
and for lessees eliminates the classifications of operating leases and finance leases. Except for short-
term leases and leases of low-value assets, right-of-use assets and corresponding lease liabilities are
recognised in the statement of financial position. Straight-line operating lease expense recognition is
replaced with a depreciation charge for the right-of-use assets (included in operating costs) and an
interest expense on the re cognised lease liabilities (included in finance costs). In the earlier periods of
the lease, the expenses associated with the lease under AASB 16 will be higher when compared to lease
expenses under AASB 117. However, EBITDA (Earnings Before Interest, Tax, Depreciation and
Amortisation) results improve as the operating expense is now replaced by interest expense and
depreciation in profit or loss. For classification within the statement of cash flows, the interest portion is
disclosed in operating activities and the principal portion of the lease payments is separately disclosed in
financing activities.
Reconciliation of operating lease commitments
AASB 16 was adopted using the modified retrospective approach and as such the comparatives have not
been restated.
Below is a reconciliation of total operating lease commitments as at 30 June 2019, as disclosed in the
annual financial statements for the year ended 30 June 2019, and the lease liabilities recognised on 1 July
2019.
Operating lease commitments as disclosed at 30 June 2019
Additional operating lease
Discounted using the lessee’s weighted average incremental borrowing rate of
10.6% at 1 July 2019
Foreign currency differences
Lease liabilities as at 1 July 2019
1 July 2019
395,947
15,515
(92,485)
3,154
322,131
New accounting policies adopted for the first time during this reporting period in relation to operating
leases are disclosed in notes 1(k) and 1(o).
New Accounting Standards and Interpretations Not Yet Mandatory or Early Adopted
The AASB has issued new and amended Accounting Standards and Interpretations that have mandatory
application date for future reporting periods. There are no material new or amended Accounting
Standards which will materially affect the Group.
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 50
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 51
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(b) Exploration, Evaluation and Development Expenditure
Exploration and evaluation expenditure is generally written off in the year incurred, except for acquisition
of exploration properties which is capitalised and carried forward.
When production commences, any accumulated costs for the relevant area of interest which have been
capitalised and carried forward will be amortised over the life of the area according to the rate of depletion
of the economically recoverable resources. A regular review is undertaken of each area of interest to
determine the appropriateness of continuing to carry forward costs in relation to the area of interest. The
carrying value of any capitalised expenditure is assessed by the Directors each reporting period to
determine if any provision should be made for the impairment of the carrying value. The appropriateness
of the Group’s ability to recover these capitalised costs has been assessed at the end of each reporting
period and the Directors are satisfied that the value is recoverable.
The carrying value of capitalised exploration and evaluation expenditure is assessed for impairment at an
overall level whenever facts and circumstances suggest that the carrying amount of the assets may exceed
recoverable amount. An impairment exists when the carrying amount of the assets exceeds the estimated
recoverable amount. The assets are then written down to their recoverable amount. Any impairment losses
are recognised in the income statement.
(c) Trade and Other Receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using
the effective interest method, less any allowance for expected credit losses. Trade receivables are generally
due for settlement within 30 days.
The Group has applied the simplified approach to measuring expected credit losses, which uses a lifetime
expected loss allowance. To measure the expected credit losses, trade receivables have been grouped
based on days overdue.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
(d)
Interest Income
Interest income is recognised as it accrues.
(e) Foreign Currency Transactions
The financial statements are presented in Australian dollars, which is the functional currency of the Group.
Foreign currency transactions
Foreign currency transactions are translated into the functional currency at the rates of exchange prevailing
at the dates of the transaction. Non-monetary items measured at historical cost continue to be carried at
the exchange rate at the date of the transaction. Non-monetary items measured at fair value are reported
at the exchange rate at the date when fair values were determined.
Exchange differences arising on the translation of monetary items are recognised in the consolidated
statement of profit or loss and other comprehensive income. Exchange differences arising on the
translation of non-monetary items are recognised directly in equity to the extent that the gain or loss is
directly recognised in equity, otherwise the exchange difference is recognised in the consolidated
statement of profit or loss and other comprehensive income.
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 52
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(b) Exploration, Evaluation and Development Expenditure
(e) Foreign Currency Transactions (continued)
Exploration and evaluation expenditure is generally written off in the year incurred, except for acquisition
of exploration properties which is capitalised and carried forward.
When production commences, any accumulated costs for the relevant area of interest which have been
capitalised and carried forward will be amortised over the life of the area according to the rate of depletion
of the economically recoverable resources. A regular review is undertaken of each area of interest to
determine the appropriateness of continuing to carry forward costs in relation to the area of interest. The
carrying value of any capitalised expenditure is assessed by the Directors each reporting period to
determine if any provision should be made for the impairment of the carrying value. The appropriateness
of the Group’s ability to recover these capitalised costs has been assessed at the end of each reporting
period and the Directors are satisfied that the value is recoverable.
The carrying value of capitalised exploration and evaluation expenditure is assessed for impairment at an
overall level whenever facts and circumstances suggest that the carrying amount of the assets may exceed
recoverable amount. An impairment exists when the carrying amount of the assets exceeds the estimated
recoverable amount. The assets are then written down to their recoverable amount. Any impairment losses
are recognised in the income statement.
(c) Trade and Other Receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using
the effective interest method, less any allowance for expected credit losses. Trade receivables are generally
due for settlement within 30 days.
The Group has applied the simplified approach to measuring expected credit losses, which uses a lifetime
expected loss allowance. To measure the expected credit losses, trade receivables have been grouped
based on days overdue.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
(d)
Interest Income
Interest income is recognised as it accrues.
(e) Foreign Currency Transactions
The financial statements are presented in Australian dollars, which is the functional currency of the Group.
Foreign currency transactions
Foreign currency transactions are translated into the functional currency at the rates of exchange prevailing
at the dates of the transaction. Non-monetary items measured at historical cost continue to be carried at
the exchange rate at the date of the transaction. Non-monetary items measured at fair value are reported
at the exchange rate at the date when fair values were determined.
Exchange differences arising on the translation of monetary items are recognised in the consolidated
statement of profit or loss and other comprehensive income. Exchange differences arising on the
translation of non-monetary items are recognised directly in equity to the extent that the gain or loss is
directly recognised in equity, otherwise the exchange difference is recognised in the consolidated
statement of profit or loss and other comprehensive income.
Foreign operations
The assets and liabilities of foreign operations are translated into Australian dollars using the exchange
rate at the reporting date. The revenues and expenses of foreign operations are translated into Australian
dollars using the average exchange rates, which approximate the rates at the dates of the transactions, for
the period. All resulting foreign exchange differences are recognised in other comprehensive income
through the foreign currency reserve in equity.
The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment
is disposed of.
(f) Operating Segments
An operating segment is a component of an entity that engages in business activities from which it may
earn revenues and incur expenses (including revenues and expenses relating to transactions with other
components of the same entity), whose operating results are regularly reviewed by the entity's chief
operating decision maker to make decisions about resources to be allocated to the segment and assess
its performance and for which discrete financial information is available. This includes start-up operations
which are yet to earn revenues. The chief operating decision maker has been identified as the Board of
Directors taken as a whole. Management will also consider other factors in determining operating
segments such as the existence of a line manager and the level of segment information presented to the
Board of Directors.
Operating segments have been identified based on the information provided to the Board of Directors.
(g) Financial Instruments
Investments and other financial assets are initially measured at fair value. Transaction costs are included
as part of the initial measurement, except for financial assets at fair value through profit or loss. Such assets
are subsequently measured at either amortised cost or fair value depending on their classification.
Classification is determined based on both the business model within which such assets are held and the
contractual cash flow characteristics of the financial asset unless, an accounting mismatch is being avoided.
Financial assets are derecognised when the rights to receive cash flows have expired or have been
transferred and the Group has transferred substantially all the risks and rewards of ownership. When there
is no reasonable expectation of recovering part or all of a financial asset, its carrying value is written off.
Financial assets at fair value through profit or loss
Financial assets not measured at amortised cost or at fair value through other comprehensive income are
classified as financial assets at fair value through profit or loss. Typically, such financial assets will be either:
(i)
held for trading, where they are acquired for the purpose of selling in the short-term with an intention
of making a profit, or a derivative; or
(ii) designated as such upon initial recognition where permitted. Fair value movements are recognised
in profit or loss.
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 52
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 53
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(g) Financial Instruments (continued)
Financial assets at fair value through other comprehensive income
Financial assets at fair value through other comprehensive income include equity investments which the
Group intends to hold for the foreseeable future and has irrevocably elected to classify them as such upon
initial recognition.
Impairment of financial assets
The Group recognises a loss allowance for expected credit losses on financial assets which are either
measured at amortised cost or fair value through other comprehensive income. The measurement of the
loss allowance depends upon the Group's assessment at the end of each reporting period as to whether
the financial instrument's credit risk has increased significantly since initial recognition, based on
reasonable and supportable information that is available, without undue cost or effort to obtain.
Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12
month expected credit loss allowance is estimated. This represents a portion of the asset's lifetime
expected credit losses that is attributable to a default event that is possible within the next 12 months.
Where a financial asset has become credit impaired or where it is determined that credit risk has increased
significantly, the loss allowance is based on the asset's lifetime expected credit losses. The amount of
expected credit loss recognised is measured on the basis of the probability weighted present value of
anticipated cash shortfalls over the life of the instrument discounted at the original effective interest rate.
For financial assets measured at fair value through other comprehensive income, the loss allowance is
recognised within other comprehensive income. In all other cases, the loss allowance is recognised in profit
or loss.
(h) Borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of
transaction costs. They are subsequently measured at amortised cost using the effective interest method.
(i) Convertible Note – Derivative Liability
Derivative financial instruments are stated at fair value. The fair value of the derivative has been valued
using a valuation technique, including inputs that include reference to similar instruments and option
pricing models, which is updated each period. Gains and losses arising from changes in fair value of these
instruments together with settlements in the period are accounted for through the consolidated statement
of profit or loss and other comprehensive income through net finance costs. The convertible note liability
and derivative are removed from the statement of financial position when the obligations specified in the
contract are discharged, cancelled or expired.
(j) Convertible Note – Debt Liability
The liability component of a convertible note is recognised initially at the fair value of a similar liability that
does not have an equity conversion option. The embedded derivative component is recognised initially at
fair value and the debt liability component is calculated as the difference between the financial instrument
as a whole and the value of the derivative liability at inception. Any directly attributable transaction costs
are allocated to the convertible note debt liability and convertible note derivative liability in proportion to
their initial carrying amounts. Subsequent to initial recognition, the debt liability component of the
convertible note is measured at amortised cost using the effective interest method.
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 54
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(g) Financial Instruments (continued)
Financial assets at fair value through other comprehensive income
Financial assets at fair value through other comprehensive income include equity investments which the
Group intends to hold for the foreseeable future and has irrevocably elected to classify them as such upon
initial recognition.
Impairment of financial assets
The Group recognises a loss allowance for expected credit losses on financial assets which are either
measured at amortised cost or fair value through other comprehensive income. The measurement of the
loss allowance depends upon the Group's assessment at the end of each reporting period as to whether
the financial instrument's credit risk has increased significantly since initial recognition, based on
reasonable and supportable information that is available, without undue cost or effort to obtain.
Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12
month expected credit loss allowance is estimated. This represents a portion of the asset's lifetime
expected credit losses that is attributable to a default event that is possible within the next 12 months.
Where a financial asset has become credit impaired or where it is determined that credit risk has increased
significantly, the loss allowance is based on the asset's lifetime expected credit losses. The amount of
expected credit loss recognised is measured on the basis of the probability weighted present value of
anticipated cash shortfalls over the life of the instrument discounted at the original effective interest rate.
For financial assets measured at fair value through other comprehensive income, the loss allowance is
recognised within other comprehensive income. In all other cases, the loss allowance is recognised in profit
or loss.
(h) Borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of
transaction costs. They are subsequently measured at amortised cost using the effective interest method.
(i) Convertible Note – Derivative Liability
Derivative financial instruments are stated at fair value. The fair value of the derivative has been valued
using a valuation technique, including inputs that include reference to similar instruments and option
pricing models, which is updated each period. Gains and losses arising from changes in fair value of these
instruments together with settlements in the period are accounted for through the consolidated statement
of profit or loss and other comprehensive income through net finance costs. The convertible note liability
and derivative are removed from the statement of financial position when the obligations specified in the
contract are discharged, cancelled or expired.
(j) Convertible Note – Debt Liability
The liability component of a convertible note is recognised initially at the fair value of a similar liability that
does not have an equity conversion option. The embedded derivative component is recognised initially at
fair value and the debt liability component is calculated as the difference between the financial instrument
as a whole and the value of the derivative liability at inception. Any directly attributable transaction costs
are allocated to the convertible note debt liability and convertible note derivative liability in proportion to
their initial carrying amounts. Subsequent to initial recognition, the debt liability component of the
convertible note is measured at amortised cost using the effective interest method.
(k) Lease Liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised
at the present value of the lease payments to be made over the term of the lease, discounted using the
interest rate implicit in the lease or, if that rate cannot be readily determined, the Group's incremental
borrowing rate. Lease payments comprise of fixed payments less any lease incentives receivable, variable
lease payments that depend on an index or a rate, amounts expected to be paid under residual value
guarantees, exercise price of a purchase option when the exercise of the option is reasonably certain to
occur, and any anticipated termination penalties. The variable lease payments that do not depend on an
index or a rate are expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts
are remeasured if there is a change in the following: future lease payments arising from a change in an
index or a rate used; residual guarantee; lease term; certainty of a purchase option and termination
penalties. When a lease liability is remeasured, an adjustment is made to the corresponding right-of use
asset, or to profit or loss if the carrying amount of the right-of-use asset is fully written down.
(l) Cash and Cash Equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with banks, other short term highly
liquid investments with original maturities of three months or less, and bank overdrafts.
(m) Impairment of Assets
At each reporting date, the Group reviews the carrying amounts of its tangible assets to determine whether
there is any indication that those assets have suffered an impairment loss. If any such indication exists, the
recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if
any). Where the asset does not generate cash flows that are independent from the other assets, the Group
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use,
the estimated future cash flows are discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and the risks specific to the asset for which
the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generated unit) is estimated to be less than its carrying
amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An
impairment loss is recognised in profit or loss immediately, unless the relevant asset is carried at fair value,
in which case the impairment loss is treated as a revaluation decrease. Where an impairment loss
subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised
estimate of its recoverable amount, but only to the extent that the increased carrying amount does not
exceed the carrying amount that would have been determined had no impairment loss been recognised
for the asset (cash-generating unit) in prior years.
A reversal of an impairment loss is recognised in profit or loss immediately, unless the relevant asset is
carried at fair value, in which case the impairment loss is treated as a revaluation increase.
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 54
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 55
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(n) Property, Plant and Equipment
Property, plant and equipment assets are initially recognised at acquisition cost or manufacturing cost,
including any costs directly attributable to bringing the assets to the location and condition necessary for
the assets to be capable of operating in the manner intended by the Group’s management.
Property, plant and equipment assets are subsequently measured using the cost model which reflects cost
less subsequent depreciation and impairment losses. Depreciation is recognised on a diminishing value
basis to write down the cost less estimated residual value of the assets.
Leasehold improvements are capitalised and subsequently amortised over the term of the respective lease.
The following depreciation rates are applied to property, plant and equipment assets on the diminishing
value basis:
•
•
Motor vehicles: 25%
Other property, plant and equipment: 20-50%
Material residual value estimates and estimates of useful life are updated as required, but at least annually.
Gains or losses arising on the disposal of property, plant and equipment assets are determined as the
difference between the disposal proceeds and the carrying amount of the assets and are recognised in
profit or loss within other income or other expenses.
(o) Right of Use Assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured
at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at
or before the commencement date net of any lease incentives received, any initial direct costs incurred,
and, except where included in the cost of inventories, an estimate of costs expected to be incurred for
dismantling and removing the underlying asset, and restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the
estimated useful life of the asset, whichever is the shorter. Where the Group expects to obtain ownership
of the leased asset at the end of the lease term, the depreciation is over its estimated useful life. Right-of
use assets are subject to impairment or adjusted for any remeasurement of lease liabilities.
The Group has elected not to recognise a right-of-use asset and corresponding lease liability for short-term
leases with terms of 12 months or less and leases of low-value assets. Lease payments on these assets are
expensed to profit or loss as incurred.
(p) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST
incurred is not recoverable from the Australian Taxation Office (“ATO”). In these circumstances, the GST is
recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables
and payables in the statement of financial position are shown inclusive of GST.
The net amount of GST recoverable from, or payable to, the ATO is included as a current asset or liability
in the statement of financial position.
Cash flows are included in the statement of cash flows on a gross basis. The GST components of cash flows
arising from investing and financing activities which are recoverable from, or payable to, the ATO are
classified as operating cash flows.
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 56
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(n) Property, Plant and Equipment
(q) Taxation
Property, plant and equipment assets are initially recognised at acquisition cost or manufacturing cost,
including any costs directly attributable to bringing the assets to the location and condition necessary for
the assets to be capable of operating in the manner intended by the Group’s management.
Property, plant and equipment assets are subsequently measured using the cost model which reflects cost
less subsequent depreciation and impairment losses. Depreciation is recognised on a diminishing value
basis to write down the cost less estimated residual value of the assets.
Leasehold improvements are capitalised and subsequently amortised over the term of the respective lease.
The following depreciation rates are applied to property, plant and equipment assets on the diminishing
value basis:
•
•
Motor vehicles: 25%
Other property, plant and equipment: 20-50%
Material residual value estimates and estimates of useful life are updated as required, but at least annually.
Gains or losses arising on the disposal of property, plant and equipment assets are determined as the
difference between the disposal proceeds and the carrying amount of the assets and are recognised in
profit or loss within other income or other expenses.
(o) Right of Use Assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured
at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at
or before the commencement date net of any lease incentives received, any initial direct costs incurred,
and, except where included in the cost of inventories, an estimate of costs expected to be incurred for
dismantling and removing the underlying asset, and restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the
estimated useful life of the asset, whichever is the shorter. Where the Group expects to obtain ownership
of the leased asset at the end of the lease term, the depreciation is over its estimated useful life. Right-of
use assets are subject to impairment or adjusted for any remeasurement of lease liabilities.
The Group has elected not to recognise a right-of-use asset and corresponding lease liability for short-term
leases with terms of 12 months or less and leases of low-value assets. Lease payments on these assets are
expensed to profit or loss as incurred.
(p) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST
incurred is not recoverable from the Australian Taxation Office (“ATO”). In these circumstances, the GST is
recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables
and payables in the statement of financial position are shown inclusive of GST.
The net amount of GST recoverable from, or payable to, the ATO is included as a current asset or liability
in the statement of financial position.
Cash flows are included in the statement of cash flows on a gross basis. The GST components of cash flows
arising from investing and financing activities which are recoverable from, or payable to, the ATO are
classified as operating cash flows.
The income tax expense (revenue) for the year comprises current income tax expense (income) and
deferred tax expense (income).
Current income tax expense charged to the profit and loss is the tax payable on the taxable income using
applicable income tax rates enacted or substantially enacted as at the end of the reporting period. Current
tax liabilities (assets) are therefore measured at the amounts expected to be paid to (recovered from) the
relevant taxation authority.
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 assets and liabilities are ascertained based on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the financial information. Deferred tax assets
also result where amounts have been fully expensed but future tax deductions are available. No deferred
income tax will be recognised from the initial recognition of an asset or liability, excluding a business
combination, where there is no effect on accounting or taxable profit or loss.
Where temporary differences exist in relation to investments in subsidiaries and associates, deferred tax
assets and liabilities are not recognised where the timing of the reversal of the temporary difference can
be controlled and it is not probable that the reversal will occur in the foreseeable future.
(r) Trade and Other Payables
Trade payables and other payables are carried at amortised cost and represent liabilities for goods and
services provided to the Group prior to the end of the financial year that are unpaid and arise when the
Group becomes obliged to make future payments in respect of the purchase of these goods and services.
(s) Provisions and Contingencies
Provisions are recognised when the Group has a legal or constructive obligation, as a result of a past event,
for which it is probable that an outflow of economic benefits will result and that outflow can be reliably
measured.
(t) Employee benefits
Short Term Employee Benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave
expected to be settled wholly within 12 months of the reporting date are measured at the amounts
expected to be paid when the liabilities are settled.
Other Long Term Employee Benefits
The liability for annual leave and long service leave not expected to be settled within 12 months of the
reporting date are measured at the present value of expected future payments to be made in respect of
services provided by employees up to the reporting date using the projected unit credit method.
Consideration is given to expected future wage and salary levels, experience of employee departures and
periods of service. Expected future payments are discounted using market yields at the reporting date on
corporate bonds with terms to maturity and currency that match, as closely as possible, the estimated
future cash outflows.
Defined Contribution Superannuation Expense
Contributions to defined contribution superannuation plans are expensed in the period in which they are
incurred.
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 56
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 57
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(u) Share Based Payment Transactions
The Group recognises the fair value of options granted to Directors, employees and consultants as
remuneration as an expense on a pro-rata basis over the vesting period in the consolidated statement of
profit or loss and other comprehensive income with a corresponding adjustment to equity.
The Group provides benefits to employees (including Directors) of the Group in the form of share based
payment transactions, whereby employees render services in exchange for shares or rights over shares
(“equity-settled transactions”). The cost of these equity-settled transactions with employees (including
Directors) is measured by reference to fair value at the date they are granted. The fair value is determined
using the Black Scholes option pricing model.
(v)
Issued Capital
Issued and paid up capital is recognised at the fair value of the consideration received by the Group. Any
transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of
the share proceeds received.
(w) Critical Accounting Estimates and Judgments
In preparing the financial information, the Group has been required to make certain estimates and
assumptions concerning future occurrences. There is an inherent risk that the resulting accounting
estimates will not equate exactly with actual events and results.
(i)
Significant Accounting Judgements
In the process of applying the Group’s accounting policies, management has made the following
judgements, apart from those involving estimations, which have the most significant effect on the amounts
recognised in the financial statements:
Acquisition of Oracle Ridge Copper Mine
AASB 3 Business Combinations defines a business as being “an integrated set of activities and assets that
is capable of being conducted and managed for the purposes of providing a return in the form of dividends,
lower costs or other economic benefits directly to investors or other owners, members or participants.” A
business usually consists of inputs, processes and outputs. Inputs and processes are the essential
elements that have to be present in order to be classified as a business. Although a business usually has
outputs, outputs are not required for an integrated set of assets to qualify as a business.
In November 2019, the Group acquired an 80% share in the Oracle Ridge Copper Mine in Arizona in the
United States of America. Management have accounted for this transaction as an acquisition of assets and
not as a business combination since, at the date of acquisition, the Oracle Ridge Copper Mine did not have
the processes and outputs expected of an operating business.
Capitalisation of Operating Leases
Determination of lease term
In determining the lease term, management considers all facts and circumstances that create an economic
incentive to exercise an extension option, or not exercise a termination option. Extension options (or
periods after termination options) are only included in the lease term if the lease is reasonably certain to
be extended (or not terminated).
The lease term is reassessed if an option is actually exercised (or not exercised) or the Group becomes
obliged to exercise (or not exercise) it. The assessment of reasonable certainty is only revised if a significant
event or a significant change in circumstances occurs, which affects this assessment, and that is within the
control of the lessee.
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 58
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(u) Share Based Payment Transactions
The Group recognises the fair value of options granted to Directors, employees and consultants as
remuneration as an expense on a pro-rata basis over the vesting period in the consolidated statement of
profit or loss and other comprehensive income with a corresponding adjustment to equity.
The Group provides benefits to employees (including Directors) of the Group in the form of share based
payment transactions, whereby employees render services in exchange for shares or rights over shares
(“equity-settled transactions”). The cost of these equity-settled transactions with employees (including
Directors) is measured by reference to fair value at the date they are granted. The fair value is determined
using the Black Scholes option pricing model.
(v)
Issued Capital
the share proceeds received.
(w) Critical Accounting Estimates and Judgments
Issued and paid up capital is recognised at the fair value of the consideration received by the Group. Any
transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of
In preparing the financial information, the Group has been required to make certain estimates and
assumptions concerning future occurrences. There is an inherent risk that the resulting accounting
estimates will not equate exactly with actual events and results.
(i)
Significant Accounting Judgements
In the process of applying the Group’s accounting policies, management has made the following
judgements, apart from those involving estimations, which have the most significant effect on the amounts
recognised in the financial statements:
Acquisition of Oracle Ridge Copper Mine
AASB 3 Business Combinations defines a business as being “an integrated set of activities and assets that
is capable of being conducted and managed for the purposes of providing a return in the form of dividends,
lower costs or other economic benefits directly to investors or other owners, members or participants.” A
business usually consists of inputs, processes and outputs. Inputs and processes are the essential
elements that have to be present in order to be classified as a business. Although a business usually has
outputs, outputs are not required for an integrated set of assets to qualify as a business.
In November 2019, the Group acquired an 80% share in the Oracle Ridge Copper Mine in Arizona in the
United States of America. Management have accounted for this transaction as an acquisition of assets and
not as a business combination since, at the date of acquisition, the Oracle Ridge Copper Mine did not have
the processes and outputs expected of an operating business.
Capitalisation of Operating Leases
Determination of lease term
In determining the lease term, management considers all facts and circumstances that create an economic
incentive to exercise an extension option, or not exercise a termination option. Extension options (or
periods after termination options) are only included in the lease term if the lease is reasonably certain to
be extended (or not terminated).
The lease term is reassessed if an option is actually exercised (or not exercised) or the Group becomes
obliged to exercise (or not exercise) it. The assessment of reasonable certainty is only revised if a significant
event or a significant change in circumstances occurs, which affects this assessment, and that is within the
control of the lessee.
(i)
Significant Accounting Judgements (continued)
Determination of incremental borrowing rate
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily
determined, which is generally the case for leases in the Group, the lessee’s incremental borrowing rate is
used.
To determine the incremental borrowing rate, where possible recent third party financing received by the
individual lessee is used as a starting point and adjusted to reflect changes in financing conditions since
third party financing was received. If there was no recent third party financing agreement, a build-up
approach is used that starts with a risk-free interest rate adjusted for credit risk for the lessee and any
further relevant adjustments specific to the lease (such as term, country, currency and security).
(ii)
Significant Accounting Estimates and Assumptions
The carrying amount of certain assets and liabilities are often determined based on estimates and
assumptions of future events. The key estimates and assumptions that have a significant risk of causing a
material adjustment to the carrying amounts of certain assets and liabilities within the next annual
reporting period are:
Key Estimates – Impairment of Capitalised Exploration and Evaluation Expenditure
The future recoverability of capitalised exploration and evaluation expenditure is dependent on a number
of factors, including whether the Group decides to exploit the related lease itself or, if not, whether it
successfully recovers the related exploration and evaluation asset through sale.
Factors that could impact the future recoverability include the level of reserves and resources, future
technological changes, costs of drilling and production, production rates, future legal changes (including
changes to environmental restoration obligations) and changes to commodity prices.
Key Estimates – Share Based Payment Transactions
The Group 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. Fair values of share options are determined
using the Black Scholes option pricing model. Should the assumptions used in these calculations differ, the
amounts recognised could significantly change.
Key Assumptions – Oracle Ridge Mine Acquisition: Valuation of derivative liability
As part of the acquisition of the Oracle Ridge Copper Mine, a US$6,423,000 secured note was issued to
Vincere Resource Holdings LLC. Up to US$3,000,000 of the secured note can be converted into shares of
the Company upon the occurrence of various conversion trigger events at variable conversion prices. To
derive the fair value of the embedded derivative liability component of the secured note, a number of
assumptions have been made. These assumptions are outlined in note 13.
Key Judgement – Environmental Issues
Balances disclosed in the financial statements and notes thereto are not adjusted for any pending or
enacted environmental legislation. At the current stage of the Group’s development and its current
environmental impact, the Directors believe such treatment is reasonable and appropriate.
Key Judgement – COVID-19 pandemic
Judgement has been exercised in considering the impacts that the COVID-19 pandemic has had, or may
have, on the Group based on known information. Other than as addressed in specific notes, there does
not currently appear to be either any significant impact upon the financial statements or any significant
uncertainties with respect to events or conditions which may impact the Group unfavourably as at the
reporting date or subsequently as a result of the COVID-19 pandemic.
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 58
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 59
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(x) Fair Value of Assets and Liabilities
The Group is required to classify all assets and liabilities, measured at fair value, using a three level hierarchy
based on the lowest level of input that is significant to the entire fair value measurement, being Level 1:
Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at
the measurement date; Level 2: Inputs other than quoted prices included within Level 1 that are observable
for the asset or liability, either directly or indirectly; and Level 3: Unobservable inputs for the asset or liability.
Considerable judgement is required to determine what is significant to fair value and therefore which
category the asset or liability is placed in can be subjective.
The Group measures some of its assets and liabilities at fair value on either a recurring or non-recurring
basis, depending on the requirements of the applicable Accounting Standard.
Fair value is the price the Group would receive to sell an asset or would have to pay to transfer a liability in
an orderly unforced transaction between independent, knowledgeable and willing market participants at
the measurement date and is based on the fair value hierarchy.
(y) Government assistance and grants
Assistance received from the government by way of grant or other forms of assistance designed to provide
an economic benefit to the Group, is presented in the statement of financial position as deferred income,
in instances where the grant is related to assets. In all other cases, grant money is presented in the profit
and loss as other income. Grants are recognised when there is reasonable assurance that conditions will
be complied with and the grant will be received.
(z) Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of the parent entity,
excluding any costs of servicing equity other than ordinary shares, by the weighted average number of
ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares
issued during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to
take into account the after income tax effect of interest and other financing costs associated with dilutive
potential ordinary shares and the weighted average number of shares assumed to have been issued for
no consideration in relation to dilutive potential ordinary shares.
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 60
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
2.
RELATED PARTY TRANSACTIONS
(x) Fair Value of Assets and Liabilities
The Group is required to classify all assets and liabilities, measured at fair value, using a three level hierarchy
based on the lowest level of input that is significant to the entire fair value measurement, being Level 1:
Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at
the measurement date; Level 2: Inputs other than quoted prices included within Level 1 that are observable
for the asset or liability, either directly or indirectly; and Level 3: Unobservable inputs for the asset or liability.
Considerable judgement is required to determine what is significant to fair value and therefore which
category the asset or liability is placed in can be subjective.
The Group measures some of its assets and liabilities at fair value on either a recurring or non-recurring
basis, depending on the requirements of the applicable Accounting Standard.
Fair value is the price the Group would receive to sell an asset or would have to pay to transfer a liability in
an orderly unforced transaction between independent, knowledgeable and willing market participants at
the measurement date and is based on the fair value hierarchy.
(y) Government assistance and grants
Assistance received from the government by way of grant or other forms of assistance designed to provide
an economic benefit to the Group, is presented in the statement of financial position as deferred income,
in instances where the grant is related to assets. In all other cases, grant money is presented in the profit
and loss as other income. Grants are recognised when there is reasonable assurance that conditions will
be complied with and the grant will be received.
(z) Earnings per share
Basic earnings per share
issued during the financial year.
Diluted earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of the parent entity,
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
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.
Transactions between related parties are on commercial terms and conditions, no more favourable than those
available to other parties unless otherwise stated.
o
o
During the year, the Company entered into an unsecured loan agreement with a director related entity,
Quartz Mountain Mining Pty Ltd (Quartz Mountain) as trustee for the Bass Family Trust. The principal of
US$1,000,000 attracts interest at 2% per annum with the first three months being interest free. Interest
expense of US$8,474 (A$13,005) was recognised during the reporting period. Subsequent to the end of
the financial year, the Company reached agreement with Quartz Mountain to extend the maturity date of
the loan such that it is repayable on or before 31 December 2021. In addition, and subject to shareholder
approval, Quartz Mountain has agreed to accept 950,000 unlisted options exercisable at 20 cents each on
or before 1 July 2022 in lieu of interest.
The Company has entered into a lease agreement with Elk Mountain Mining Limited (“Elk”), an entity
associated with Mr Charles Bass, for the lease of the Company’s administration offices in Perth, Western
Australia. Total lease repayments of $85,847 were paid during the year, including interest of $35,402 and
lease principal repayments of $50,445. In the prior year, such payments were included in the statement
of profit or loss and other comprehensive income and totalled $86,590.
3.
REMUNERATION OF AUDITORS
Audit and review of the financial statements
Taxation services
Total
Year ended
30 June 2020
A$
29,000
5,620
34,620
Year ended
30 June 2019
A$
25,000
3,880
28,880
The auditor of Eagle Mountain Mining Limited is William Buck Audit (WA) Pty Ltd. During the reporting period a
related entity of William Buck Audit (WA) Pty Ltd provided non-audit services amounting to $5,620 (2019: $3,880)
to companies within the Eagle Mining Group.
4.
LOSS FROM ORDINARY ACTIVITIES
Included in the loss before income tax are the
following specific items of income/(expenses):
Gains on foreign exchange
Fair value gain on derivative liability
Interest paid/payable on borrowings
Interest paid/payable on leases
Share based payments expense
Movements in employee leave liabilities
Project assessment/due diligence costs
Year ended
30 June 2020
A$
Year ended
30 June 2019
A$
2,390
268,872
(196,556)
(50,725)
(248,723)
2,257
(196,260)
113,997
-
-
-
(45,494)
(59,391)
(30,402)
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 60
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 61
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
5.
INCOME TAX EXPENSE
Year ended 30 June
2020
A$
Year ended 30 June
2019
A$
-
-
-
-
(466,738)
(521,799)
466,738
521,799
-
-
Current tax:
Current income tax charge/(benefit)
Current income tax benefit not recognised
Deferred tax:
Relating to origination and reversal of timing
differences
Deferred tax benefit not recognised
(a)
The prima facie tax on loss from ordinary activities
before income tax is reconciled to the income tax
as follows:
Loss before tax
(4,368,936)
(6,890,466)
The prima facie tax on loss from ordinary activities
attributable to parent entity before income tax:
Prima facie tax (benefit) on loss from ordinary
activities before income tax at 27.5%
Add/(Less) tax effect of:
Exploration costs not deducted for tax
Non-deductible share based payments
Share issue costs deducted
Unrealised movement in fair value of financial
liabilities
Deferred tax asset not brought to account
Income tax attributable to entity
(b) Deferred tax – statement of financial position
Liabilities
Prepaid expenses
Accrued income
Assets
Accrued expenses
Employee leave liabilities
Revenue losses available to offset against future
taxable income
Deductible equity raising costs
(1,201,457)
(1,894,878)
747,198
68,399
(79,584)
(73,940)
539,384
-
25,165
-
25,165
-
16,204
1,140,039
212,863
1,369,106
1,646,348
12,511
(56,853)
-
292,872
-
9,803
-
9,803
11,941
16,333
679,937
178,695
886,906
Net deferred tax asset not recognised
1,343,941
877,103
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 62
Relating to origination and reversal of timing
(466,738)
(521,799)
Deferred tax benefit not recognised
466,738
521,799
Current tax:
Current income tax charge/(benefit)
Current income tax benefit not recognised
Deferred tax:
differences
as follows:
Loss before tax
(a)
The prima facie tax on loss from ordinary activities
before income tax is reconciled to the income tax
The prima facie tax on loss from ordinary activities
attributable to parent entity before income tax:
Prima facie tax (benefit) on loss from ordinary
Add/(Less) tax effect of:
Exploration costs not deducted for tax
Non-deductible share based payments
Share issue costs deducted
Unrealised movement in fair value of financial
liabilities
Deferred tax asset not brought to account
Income tax attributable to entity
(b) Deferred tax – statement of financial position
Liabilities
Prepaid expenses
Accrued income
Assets
Accrued expenses
Employee leave liabilities
Revenue losses available to offset against future
taxable income
Deductible equity raising costs
Year ended 30 June
Year ended 30 June
2020
A$
2019
A$
(4,368,936)
(6,890,466)
-
-
-
-
-
-
747,198
68,399
(79,584)
(73,940)
539,384
25,165
25,165
16,204
1,140,039
212,863
1,369,106
-
-
-
1,646,348
12,511
(56,853)
292,872
-
-
9,803
-
9,803
11,941
16,333
679,937
178,695
886,906
Net deferred tax asset not recognised
1,343,941
877,103
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
5.
INCOME TAX EXPENSE
5.
INCOME TAX EXPENSE (continued)
(c) Deferred tax – income statement
Liabilities
Prepaid expenses
Accrued income
Assets
Accrued expenses
Employee leave liabilities
Deductible equity raising costs
Increase in tax losses carried forward
Deferred tax benefit movement not recognised
Year ended 30
June 2020
A$
Year ended 30 June
2019
A$
(15,362)
-
(11,941)
(129)
34,068
460,102
466,738
(1,001)
3,447
11,941
16,333
(16,178)
507,257
521,799
The deferred tax benefit of tax losses not brought to account will only be obtained if:
(i)
The Company derives future assessable income of a nature and an amount sufficient to enable the benefit
from the tax losses to be realised;
The Company continues to comply with the conditions for deductibility imposed by tax legislation; and
No changes in tax legislation adversely affect the Company realising the benefit from the deduction of the losses.
(ii)
(iii)
activities before income tax at 27.5%
(1,201,457)
(1,894,878)
6.
CASH AND CASH EQUIVALENTS
Cash at bank
Deposits at call
Total
30 June 2020
A$
507,750
-
507,750
30 June 2019
A$
1,879,883
-
1,879,883
Included in cash at bank of $507,750 (2019: $1,879,883) are amounts held in US dollar denominated bank
accounts equivalent to $302,637 (2019: $229,270).
7.
TRADE AND OTHER RECEIVABLES
GST receivable
Accrued income and other receivables
Prepaid expenses and deposits
Total
30 June 2020
A$
30 June 2019
A$
2,961
43,839
91,509
138,309
2,725
16,253
35,648
54,626
The carrying amounts of trade and other receivables are assumed to approximate their fair values due to their
short-term nature.
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 62
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 63
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
8.
EXPLORATION AND EVALUATION EXPENDITURE
Movement during the year
Carrying value – beginning of year
Recognised on acquisition of Oracle Ridge Copper Mine (note 25)1
Effect of movement in foreign exchange rates
Carrying value – end of the year
30 June 2020
A$
30 June 2019
A$
1,164,027
9,281,112
(66,643)
1,104,495
-
59,532
10,378,496
1,164,027
1Capitalised exploration asset acquisition costs recognised on acquisition of the Oracle Ridge Copper Mine.
Exploration and evaluation expenditure is held by Wedgetail Operations LLC, which is an 80% owned US based
subsidiary of Wedgetail Holdings LLC, a wholly owned subsidiary in the Group.
Capitalised exploration and evaluation expenditure carried forward from the previous year represents the
exploration asset acquisition costs recognised on the acquisition of Silver Mountain Mining Pty Ltd.
The recoverability of the carrying amount of the exploration and evaluation assets is dependent upon successful
development and commercial exploitation, or alternatively, sale of the respective areas of interest.
9.
PROPERTY, PLANT AND EQUIPMENT
Leasehold
improve-
ments
A$
356,411
1,301
-
Office
equipment
and
furniture
A$
85,375
1,001
5,120
Field
equipment
and vehicles
Mine plant
and
equipment
Total
A$
216,084
A$
-
A$
657,870
5,998
20,436
28,736
78,298
980,785 1,064,203
Cost at the beginning of the year
Effect
of
movements
Additions
foreign
exchange
Cost at the end of the year
357,712
91,496
300,380
1,001,221 1,750,809
Accumulated depreciation at the
beginning of the year
Effect
foreign
of
movements
Depreciation charged in the year
Accumulated depreciation at the
end of the year
exchange
Net book value at the beginning of
the year
Net book value at the end of the
year
(109,807)
(43,402)
(69,337)
-
(222,546)
(12)
(166)
26
3,909
3,757
(80,108)
(24,270)
(48,665)
(113,343)
(266,386)
(189,927)
(67,838)
(117,976)
(109,434)
(485,175)
246,604
41,973
146,747
-
435,324
167,785
23,658
182,404
891,787 1,265,634
Assets with a net book value of A$72,352 (2019: A$54,201) held by Silver Mountain Mining Operations Inc. are
pledged as security in respect of vehicle loan liabilities (refer note 13).
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 64
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
8.
EXPLORATION AND EVALUATION EXPENDITURE
Movement during the year
Carrying value – beginning of year
Recognised on acquisition of Oracle Ridge Copper Mine (note 25)1
Effect of movement in foreign exchange rates
Carrying value – end of the year
30 June 2020
30 June 2019
A$
A$
1,164,027
9,281,112
(66,643)
1,104,495
-
59,532
10,378,496
1,164,027
1Capitalised exploration asset acquisition costs recognised on acquisition of the Oracle Ridge Copper Mine.
Exploration and evaluation expenditure is held by Wedgetail Operations LLC, which is an 80% owned US based
subsidiary of Wedgetail Holdings LLC, a wholly owned subsidiary in the Group.
Capitalised exploration and evaluation expenditure carried forward from the previous year represents the
exploration asset acquisition costs recognised on the acquisition of Silver Mountain Mining Pty Ltd.
The recoverability of the carrying amount of the exploration and evaluation assets is dependent upon successful
development and commercial exploitation, or alternatively, sale of the respective areas of interest.
9.
PROPERTY, PLANT AND EQUIPMENT
Cost at the beginning of the year
356,411
85,375
216,084
Cost at the end of the year
357,712
91,496
300,380
1,001,221 1,750,809
Leasehold
Office
Field
Mine plant
Total
improve-
equipment
equipment
and
ments
and
and vehicles
equipment
A$
1,301
-
furniture
A$
A$
A$
-
A$
657,870
1,001
5,120
5,998
20,436
28,736
78,298
980,785 1,064,203
(109,807)
(43,402)
(69,337)
-
(222,546)
(12)
(166)
26
3,909
3,757
(189,927)
(67,838)
(117,976)
(109,434)
(485,175)
Effect
of
foreign
exchange
movements
Additions
Accumulated depreciation at the
beginning of the year
Effect
of
foreign
exchange
movements
Accumulated depreciation at the
end of the year
Net book value at the beginning of
the year
year
Assets with a net book value of A$72,352 (2019: A$54,201) held by Silver Mountain Mining Operations Inc. are
pledged as security in respect of vehicle loan liabilities (refer note 13).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
10. RIGHT-OF-USE ASSET
Right-of-use assets at 1 July 2019 on adoption of AASB 16
Depreciation expense
Foreign currency differences
Total
30 June 2020
A$
30 June 2019
A$
322,131
(121,386)
7,748
208,493
-
-
-
-
The Group leases land and buildings for its offices in Perth, Australia and Arizona, United States of America under
agreements with terms of up to 5 years.
11. TRADE AND OTHER PAYABLES
Current
Trade creditors and accrued expenses
Other payables
Payroll liabilities
Total
30 June 2020
A$
30 June 2019
A$
30,508
70,478
78,458
179,444
173,713
1,496
49,439
224,648
The carrying amounts of trade and other payables are assumed to approximate their fair values due to their short-
term nature.
12. LEASE LIABILITIES
Current liability
Non-current liability
Total
Depreciation charged in the year
(80,108)
(24,270)
(48,665)
(113,343)
(266,386)
Movement in lease liabilities
246,604
41,973
146,747
-
435,324
Lease liabilities as at the end of the financial year
Recognised on 1 July 2019 on adoption of AASB 16
Principal repayments
Foreign currency differences
30 June 2020
A$
30 June 2019
A$
111,315
117,895
229,210
322,131
(100,590)
7,669
229,210
-
-
-
-
-
-
-
Net book value at the end of the
167,785
23,658
182,404
891,787 1,265,634
At the beginning of and during the financial year, the Group did not have any short term leases or leases of low
value assets.
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 64
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 65
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
13. BORROWINGS
Current
Vehicle loan amounts due within one year 1
Loan – Paycheck Protection Program 2
Loans from related parties 3
Non-Current
Loan – derivative liability
Loan – debt liability
Subtotal loan 4
Vehicle loan amounts due after one year
30 June 2020
A$
30 June 2019
A$
11,126
155,763
1,469,436
1,636,325
1,134,644
8,140,713
9,275,357
14,936
9,290,293
10,908
-
-
10,908
-
-
-
25,484
25,484
1 Vehicle loan amounts are secured over assets with a net book value of A$72,352 (2019: A$54,201) held by Silver
Mountain Mining Operations Inc. (refer note 9).
2 A wholly owned US subsidiary of the Company qualified for a US$106,900 loan under the US Government’s
Paycheck Protection Program, an initiative intended to incentivise employers to retain workers during the COVID
crisis. The loan can be forgiven on application substantiating the use of funds. The application for loan forgiveness
is expected to be submitted in the near future and the Company expects the loan to be forgiven in full. The loan
attracts interest at a rate of 1% per annum and will need to be repaid by 5 May 2022 should the loan or a portion
of the loan not be forgiven. Under the terms of the loan, all interest is deferred until 31 December 2020.
3 During the year, the Company entered into an unsecured loan agreement with a director related entity, Quartz
Mountain Mining Pty Ltd as trustee for the Bass Family Trust. The principal of US$1,000,000 attracts interest at 2%
per annum with the first three months being interest free. Interest expense of US$8,474 (A$13,005) was recognised
during the reporting period. Subsequent to the end of the financial year, the Company reached an agreement with
Quartz Mountain to extend the maturity date of the loan such that it is repayable on or before 31 December 2021.
4 During the year, the purchase of the Oracle Ridge Copper Mine was completed (see note 25). Under the terms of
the purchase agreement, Wedgetail Operations LLC, a subsidiary in which the Company has an 80% interest,
entered into a US$6,423,000 secured loan with Vincere Resource Holdings LLC. The loan is secured over all the
assets of Wedgetail Operations LLC, has a ten year term and accrues interest at 3.15% per annum for the first five
years with no interest accruing thereafter.
Under the terms of the agreement, the lender has the right to convert up to US$1,000,000 of the secured loan into
ordinary shares of the Company upon each of the following three conversion trigger events:
i.
ii.
iii.
The completion of a preliminary feasibility study;
A commitment is made to proceed with a bankable feasibility study; and
A commitment is made to commission the financing of the project as evidenced by a feasibility study
sufficient to obtain third party financing.
The terms of the agreement prevent the issue of ordinary shares to the lender where the cumulative amount of
shares held as a result of exercising the conversion rights would exceed 10% of the Company’s ordinary shares on
issue.
The conversion price of each conversion right held by the lender is an amount equal to a 20% discount to the 30
day volume weighted average price of the Company’s shares for the 30 days immediately after the date of public
announcement of the applicable conversion trigger event.
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 66
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
13. BORROWINGS
13. BORROWINGS (continued)
Current
Vehicle loan amounts due within one year 1
Loan – Paycheck Protection Program 2
Loans from related parties 3
Non-Current
Loan – derivative liability
Loan – debt liability
Subtotal loan 4
Vehicle loan amounts due after one year
30 June 2020
30 June 2019
A$
A$
11,126
155,763
1,469,436
1,636,325
1,134,644
8,140,713
9,275,357
14,936
9,290,293
10,908
10,908
-
-
-
-
-
25,484
25,484
1 Vehicle loan amounts are secured over assets with a net book value of A$72,352 (2019: A$54,201) held by Silver
Mountain Mining Operations Inc. (refer note 9).
2 A wholly owned US subsidiary of the Company qualified for a US$106,900 loan under the US Government’s
Paycheck Protection Program, an initiative intended to incentivise employers to retain workers during the COVID
crisis. The loan can be forgiven on application substantiating the use of funds. The application for loan forgiveness
is expected to be submitted in the near future and the Company expects the loan to be forgiven in full. The loan
attracts interest at a rate of 1% per annum and will need to be repaid by 5 May 2022 should the loan or a portion
of the loan not be forgiven. Under the terms of the loan, all interest is deferred until 31 December 2020.
3 During the year, the Company entered into an unsecured loan agreement with a director related entity, Quartz
Mountain Mining Pty Ltd as trustee for the Bass Family Trust. The principal of US$1,000,000 attracts interest at 2%
per annum with the first three months being interest free. Interest expense of US$8,474 (A$13,005) was recognised
during the reporting period. Subsequent to the end of the financial year, the Company reached an agreement with
Quartz Mountain to extend the maturity date of the loan such that it is repayable on or before 31 December 2021.
4 During the year, the purchase of the Oracle Ridge Copper Mine was completed (see note 25). Under the terms of
the purchase agreement, Wedgetail Operations LLC, a subsidiary in which the Company has an 80% interest,
entered into a US$6,423,000 secured loan with Vincere Resource Holdings LLC. The loan is secured over all the
assets of Wedgetail Operations LLC, has a ten year term and accrues interest at 3.15% per annum for the first five
years with no interest accruing thereafter.
Under the terms of the agreement, the lender has the right to convert up to US$1,000,000 of the secured loan into
ordinary shares of the Company upon each of the following three conversion trigger events:
The completion of a preliminary feasibility study;
A commitment is made to proceed with a bankable feasibility study; and
A commitment is made to commission the financing of the project as evidenced by a feasibility study
sufficient to obtain third party financing.
The terms of the agreement prevent the issue of ordinary shares to the lender where the cumulative amount of
shares held as a result of exercising the conversion rights would exceed 10% of the Company’s ordinary shares on
i.
ii.
iii.
issue.
The conversion price of each conversion right held by the lender is an amount equal to a 20% discount to the 30
day volume weighted average price of the Company’s shares for the 30 days immediately after the date of public
announcement of the applicable conversion trigger event.
The face value of US$6,423,000 is deemed to comprise of the value of the derivative liability (or conversion right),
with the residual being the debt liability component. The debt liability component of the secured loan is amortised
at each reporting period using the effective interest method. The derivative liability component is revalued at each
reporting date over the life of the secured loan.
Fair Value Measurement
The derivative liability component of the US$6,423,000 loan is measured or disclosed at fair value, using a three
level hierarchy, based on the lowest level of input that is significant to the entire fair value measurement. Refer to
accounting policy note 1(x) for a description of the three levels. The derivative liability has been categorised as Level
3 in the fair value hierarchy and the fair value at the end of the reporting period was A$1,134,644.
There were no transfers between levels during the financial year.
An independent valuation of the derivative liability has been undertaken at 30 June 2020 using a Monte Carlo
simulation model with the following assumptions:
Assumptions
Valuation date
Spot price (A$) 1
Exercise price 2
Risk free rate
Expected future volatility
Expiry date 3
Conversion Event 1
30 June 2020
$0.16
0.129
0.26%
100%
25 November 2022
Conversion Event 2
30 June 2020
$0.16
0.130
0.41%
100%
25 November 2023
Conversion Event 3
30 June 2020
$0.16
0.131
0.41%
100%
25 November 2024
1 The share price of an EM2 share traded on the ASX to market close on 30 June 2020.
2 Exercise price is equal to a 20% discount to the estimated volume weighted average price of the Company’s shares
for the 30 days immediately after the public announcement of the applicable conversion trigger event.
3 The expiry date is the estimated date on which the conversion right will be exercised, for each tranche of
conversion rights and is estimated from the date of the agreement.
Based on the above assumptions, the revaluation of the derivative liability resulted in a fair value gain of US$178,163
(A$268,872) which has been recognised through the profit and loss.
In relation to the restriction of conversion rights up to 10% of the ordinary shares on issue, the valuation is based
on the number of shares on issue at valuation date.
Reconciliation of movement in Level 3 derivative liability
30 June 2020
A$
30 June 2019
A$
Movement during the year
Balance at the start of the financial year
Fair value on acquisition
Gain recognised in profit or loss
Effect of movement in foreign exchange rates
Balance at the end of the financial year
-
1,365,785
(268,872)
37,731
1,134,644
-
-
-
-
-
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 66
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 67
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
13. BORROWINGS (continued)
Unobservable inputs for fair value measurement
In determining the fair value measurement of the derivative liability, certain observable inputs (for example the
share price and exercise price of the conversion rights) are used, together with unobservable inputs.
The unobservable inputs used in the valuation of the derivative liability are deemed to be:
1.
Issued capital – as the conversion rights are restricted to not more than 10% of the ordinary shares on issue,
any increase in issued shares may impact the number of conversion rights that can be exercised; and
2. Timing of the three milestones to be achieved (conversion trigger events).
Fair Value Measurement (continued)
The Level 3 unobservable inputs and sensitivity are as follows:
Unobservable Input
Change in input
Shares on Issue
+10%
Date of conversion trigger
event
+1 year
Sensitivity
An 10% increase in share capital will result in
an increase in fair value of approximately
$126,700
An increase of 1 year in achieving the first
and subsequent milestones will result in an
increase in fair value of approximately
$135,500
14. OPTIONS AND EQUITY BASED PAYMENTS
Options – Reconciliation of Movements
Options on issue at the beginning of the year
Offer options issued – entitlement offer1
Offer options exercised – entitlement offer1
Options cancelled on expiry – entitlement offer1
Options issued on exercise of offer options – entitlement offer1
Options cancelled on expiry of offer options – entitlement offer1
Options issued to employees2
Options issued attaching to entitlement offer securities3
Options cancelled on expiry – employee options
Options on issue at 30 June
30 June
2020
No.
23,801,315
-
-
-
-
(26,599)
3,950,000
-
(1,315,000)
26,409,716
30 June
2019
No.
16,000,000
23,125,000
(26,599)
(23,098,401)
26,599
-
2,130,000
5,644,716
-
23,801,315
1 The Company issued options at a price of 1 cent per option pursuant to an entitlement offer exercisable at 40
cents each expiring 15 December 2018. Upon exercise into shares the holder received a further option for each
share exercised at 80 cents each and expiring 12 months from issue.
2 Unlisted options issued to employees of the Company pursuant to the Company’s employee incentive plan.
3 Unlisted options issued to subscribers to the non-renounceable pro-rata entitlement offer of shares which closed
on 7 June 2019.
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 68
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
14. OPTIONS AND EQUITY BASED PAYMENTS (continued)
In determining the fair value measurement of the derivative liability, certain observable inputs (for example the
Option Capital – Reconciliation of Movements
Balance at the beginning of the year
Offer options issued – entitlement offer
Less: costs of option entitlement offer
Less: transfer to reserves on exercise/expiry of offer
options
Issue
Price
A$
$0.01
N/a
N/a
Options outstanding at the beginning
of the year
Options granted during the year
Options exercised during the year
Options cancelled and expired
unexercised during the year
Options outstanding at 30 June
2020
Weighted
Average
Exercise Price
(cents)
23.8
20.6
-
21.2
23.5
No.
23,801,315
3,950,000
-
(1,341,599)
26,409,716
30 June
2020
A$
4,500
-
-
30 June
2019
A$
4,500
231,250
(71,221)
-
(160,029)
4,500
4,500
2019
Weighted
Average
Exercise Price
(cents)
25.6
35.0
40.0
20.0
23.8
No.
16,000,000
30,926,315
(26,599)
(23,098,401)
23,801,315
Basis and Assumptions Used in the Valuation of Options
The options issued during the year were valued using the Black-Scholes option valuation methodology, using the
following inputs:
Date granted
30 August 2019
15 January 2020
17 January 2020
Number of
options
granted
1,800,000
1,500,000
650,000
Exercise
price
(cents)
20
21.5
20
Expiry date
1 July 2023
15 January 2023
7 October 2023
Risk free
interest
rate used
1.25%
0.79%
0.79%
Volatility
applied
100%
96%
96%
Value of
Options
$186,392
$135,450
$69,160
Historical volatility over the previous 12 months has been used as the expected share price volatility. An expense
of $89,106 has been recognised through the consolidated statement of profit or loss and other comprehensive
income for the year ended 30 June 2020 (2019: $27,242) in respect of the vesting of options during the year.
Weighted Average Contractual Life
The weighted average contractual life for unexercised options is 19.2 months (2019: 28.4 months).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
13. BORROWINGS (continued)
Unobservable inputs for fair value measurement
share price and exercise price of the conversion rights) are used, together with unobservable inputs.
The unobservable inputs used in the valuation of the derivative liability are deemed to be:
1.
Issued capital – as the conversion rights are restricted to not more than 10% of the ordinary shares on issue,
any increase in issued shares may impact the number of conversion rights that can be exercised; and
2. Timing of the three milestones to be achieved (conversion trigger events).
Fair Value Measurement (continued)
The Level 3 unobservable inputs and sensitivity are as follows:
Unobservable Input
Change in input
Sensitivity
Shares on Issue
+10%
an increase in fair value of approximately
An 10% increase in share capital will result in
$126,700
$135,500
An increase of 1 year in achieving the first
and subsequent milestones will result in an
increase in fair value of approximately
Date of conversion trigger
event
+1 year
14. OPTIONS AND EQUITY BASED PAYMENTS
Options – Reconciliation of Movements
Options on issue at the beginning of the year
Offer options issued – entitlement offer1
Offer options exercised – entitlement offer1
Options cancelled on expiry – entitlement offer1
Options issued on exercise of offer options – entitlement offer1
Options cancelled on expiry of offer options – entitlement offer1
Options issued to employees2
Options issued attaching to entitlement offer securities3
Options cancelled on expiry – employee options
Options on issue at 30 June
30 June
2020
No.
23,801,315
-
-
-
-
-
(26,599)
3,950,000
(1,315,000)
26,409,716
30 June
2019
No.
16,000,000
23,125,000
(26,599)
(23,098,401)
26,599
2,130,000
5,644,716
-
-
23,801,315
1 The Company issued options at a price of 1 cent per option pursuant to an entitlement offer exercisable at 40
cents each expiring 15 December 2018. Upon exercise into shares the holder received a further option for each
share exercised at 80 cents each and expiring 12 months from issue.
2 Unlisted options issued to employees of the Company pursuant to the Company’s employee incentive plan.
3 Unlisted options issued to subscribers to the non-renounceable pro-rata entitlement offer of shares which closed
on 7 June 2019.
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 68
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 69
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
14. OPTIONS AND EQUITY BASED PAYMENTS (continued)
Performance Rights
During the year ended 30 June 2020 the Company issued 150,000 performance rights on the following terms:
Number of
Performance Rights
150,000
Vesting Date
Expiry Date
15 April 2020
15 January 2024
Value of Performance
Rights
$24,750
The performance rights were granted on 15 January 2020 and valued at 16.5 cents per right based on the
determined underlying value of the Company’s shares. An expense of $24,750 has been recognised through the
consolidated statement of profit or loss and other comprehensive income for the year ended 30 June 2020 in
respect of the vesting of these rights during the period.
15.
ISSUED CAPITAL
Shares
Balance at the beginning of the year
Shares issued on exercise of
options
Shares issued on exercise of
performance rights
Entitlement issue shares issued
Less: share issue costs – cash *
Balance at 30 June
Issue
price
$0.40
$0.15
-
Year ended
30 June 2020
Year ended
30 June 2019
Shares
A$
Shares
A$
103,816,039 13,579,949
92,500,001
11,952,582
-
-
26,599
10,640
85,000
12,000,006
15,182
1,800,001
-
-
11,289,439
1,693,416
-
(72,867)
-
(76,689)
115,901,045 15,322,265
103,816,039
13,579,949
* No deferred tax asset has been recognised in respect of the share issue costs as at the date of the financial
report as it is not probable that it will be realised (refer note 5).
The Company is a public company limited by shares. The Company was incorporated in Perth, Western Australia.
The Company’s shares are limited whereby the liability of its members is limited to the amount (if any) unpaid on
the shares respectively held by them.
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. There is no limit to the authorised share capital of the Company.
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 70
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
14. OPTIONS AND EQUITY BASED PAYMENTS (continued)
16. RESERVES
Performance Rights
During the year ended 30 June 2020 the Company issued 150,000 performance rights on the following terms:
Number of
Vesting Date
Expiry Date
Value of Performance
Performance Rights
150,000
15 April 2020
15 January 2024
Rights
$24,750
The performance rights were granted on 15 January 2020 and valued at 16.5 cents per right based on the
determined underlying value of the Company’s shares. An expense of $24,750 has been recognised through the
consolidated statement of profit or loss and other comprehensive income for the year ended 30 June 2020 in
respect of the vesting of these rights during the period.
15.
ISSUED CAPITAL
Shares
Balance at the beginning of the year
Shares issued on exercise of
options
Shares issued on exercise of
performance rights
Entitlement issue shares issued
Less: share issue costs – cash *
Balance at 30 June
Issue
price
$0.40
$0.15
-
Year ended
30 June 2020
Year ended
30 June 2019
Shares
A$
Shares
A$
103,816,039 13,579,949
92,500,001
11,952,582
-
-
26,599
10,640
85,000
15,182
12,000,006
1,800,001
11,289,439
1,693,416
-
(72,867)
(76,689)
115,901,045 15,322,265
103,816,039
13,579,949
-
-
-
* No deferred tax asset has been recognised in respect of the share issue costs as at the date of the financial
report as it is not probable that it will be realised (refer note 5).
The Company is a public company limited by shares. The Company was incorporated in Perth, Western Australia.
The Company’s shares are limited whereby the liability of its members is limited to the amount (if any) unpaid on
the shares respectively held by them.
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. There is no limit to the authorised share capital of the Company.
Foreign currency translation reserve
Share based payments reserve
Common control reserve
Movements:
a)
Foreign currency translation reserve
Balance at the beginning of the year
Exchange gains for the year
Non-controlling interest in translation differences
Balance at 30 June
As at 30 June
2020
A$
As at 30 June
2019
A$
390,899
1,105,348
297,069
888,625
(3,014,276)
(3,014,276)
(1,518,029)
(1,828,582)
Year ended
30 June 2020
A$
Year ended
30 June 2019
A$
297,069
103,077
(9,247)
390,899
219,494
77,575
-
297,069
Foreign currency translation reserve
The foreign currency translation reserve records unrealised exchange gains and losses on translation of
controlled entities accounts during the year.
b)
Share based payments reserve
Balance at the beginning of the year
Fair value of options and performance rights issued during the year
Fair value of performance rights exercised during the year
Fair value of options cancelled during the year
Balance at 30 June
Year ended
30 June 2020
A$
Year ended
30 June 2019
A$
888,625
248,723
(15,182)
(16,818)
843,131
45,494
-
-
1,105,348
888,625
Share based payments reserve
The share based payments reserve has been used to recognise the fair value of options and performance
rights issued and vested but not exercised as at the end of the reporting year.
c)
Common control reserve
Balance at the beginning of the year
Common control transactions during the year
Year ended
30 June 2020
A$
Year ended
30 June 2019
A$
(3,014,276)
(3,014,276)
-
-
Balance at 30 June
Common control reserve
The amount recognised in the common control reserve represents the excess in fair value consideration
given, over the net assets acquired, on the acquisition of Silver Mountain Mining Pty Ltd from Silver
Mountain Mining Nominees Pty Ltd on 7 December 2017.
(3,014,276)
(3,014,276)
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 70
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 71
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
17. CASH FLOW INFORMATION
Reconciliation of cash flows from operating activities with loss after income
tax
Loss after income tax
Non-cash items included in profit or loss
Depreciation expense
Gains on foreign exchange
Fair value gain on derivative liability
Share based payment expense
Accrued interest expense
Changes in assets and liabilities:
(Increase)/decrease in receivables
(Increase)/decrease in prepayments
(Decrease)/increase in employee leave liabilities
(Decrease)/increase in accounts payable and accruals
(Increase)/decrease in accrued income
Year ended
30 June 2020
A$
Year ended
30 June 2019
A$
(4,368,936)
(6,890,466)
387,772
(2,390)
(268,872)
248,743
195,370
(27,822)
(55,861)
(468)
8,273
-
154,143
(113,997)
-
45,494
-
(8,040)
(1,878)
59,391
172,542
12,534
Net cash outflows from operating activities
(3,884,191)
(6,570,277)
18. SEGMENT INFORMATION
AASB 8 “Operating Segments” requires operating segments to be identified on the basis of internal reports about
components of the Group that are regularly reviewed by the chief operating decision maker in order to allocate
resources to the segment and to assess its performance.
The Group operates in one segment, being exploration for mineral resources. This is the basis on which internal
reports are provided to the Directors for assessing performance and determining the allocation of resources
within the Group.
Following the acquisition of Silver Mountain Mining Pty Ltd on 7 December 2017, the Group operates in Australia
and United States of America.
Information regarding the non-current assets by geographical location is reported below. No segment information
is provided for United States of America in relation to revenue and profit or loss for the year ended 30 June 2020
or year ended 30 June 2019.
Reconciliation of Non-Current Assets by Geographical Location
Australia
United States of America
30 June 2020
A$
30 June 2019
A$
329,533
11,656,035
11,985,568
225,536
1,503,916
1,729,452
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 72
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
17. CASH FLOW INFORMATION
19. SUBSEQUENT EVENTS
Reconciliation of cash flows from operating activities with loss after income
tax
Loss after income tax
Non-cash items included in profit or loss
Depreciation expense
Gains on foreign exchange
Fair value gain on derivative liability
Share based payment expense
Accrued interest expense
Changes in assets and liabilities:
(Increase)/decrease in receivables
(Increase)/decrease in prepayments
(Decrease)/increase in employee leave liabilities
(Decrease)/increase in accounts payable and accruals
(Increase)/decrease in accrued income
18. SEGMENT INFORMATION
Year ended
Year ended
30 June 2020
30 June 2019
A$
A$
(4,368,936)
(6,890,466)
387,772
(2,390)
(268,872)
248,743
195,370
(27,822)
(55,861)
(468)
8,273
-
154,143
(113,997)
45,494
-
-
(8,040)
(1,878)
59,391
172,542
12,534
AASB 8 “Operating Segments” requires operating segments to be identified on the basis of internal reports about
components of the Group that are regularly reviewed by the chief operating decision maker in order to allocate
resources to the segment and to assess its performance.
The Group operates in one segment, being exploration for mineral resources. This is the basis on which internal
reports are provided to the Directors for assessing performance and determining the allocation of resources
Information regarding the non-current assets by geographical location is reported below. No segment information
is provided for United States of America in relation to revenue and profit or loss for the year ended 30 June 2020
or year ended 30 June 2019.
Reconciliation of Non-Current Assets by Geographical Location
within the Group.
and United States of America.
Australia
United States of America
30 June 2020
30 June 2019
A$
A$
329,533
11,656,035
11,985,568
225,536
1,503,916
1,729,452
Subsequent to the end of the financial year, the Company completed a placement of 23,076,923 ordinary shares to
institutional and professional investors at an issue price of $0.13 per share, raising a total of $3.0 million (before
costs).
In August 2020, global drilling company Boart Longyear Limited, was appointed to undertake a maiden surface
diamond drilling program at the Oracle Ridge Copper Mine.
The impact of the COVID-19 pandemic is ongoing. The situation is dependent on measures imposed by the
Australian Government, United States government and other countries, such as maintaining social distancing
requirements, quarantine, travel restrictions and any economic stimulus that may be provided. It is not practicable
to estimate the potential impact, positive or negative, after the reporting date.
Other than as stated above, there has not arisen in the interval between the end of the financial year and the date
of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the Directors
of the Company to affect substantially the operations of the Group, the results of those operations or the state of
affairs of the Group in subsequent financial years.
20. KEY MANAGEMENT PERSONNEL
(a)
Directors and Key Management Personnel
Net cash outflows from operating activities
(3,884,191)
(6,570,277)
The following persons were Directors or Key Management Personnel of Eagle Mountain Mining Limited during the
financial year:
(i)
(ii)
(iii)
(iv)
Chairman – Non-Executive
Rick Crabb
Executive Director
Charles Bass, Managing Director
Non-Executive Director
Roger Port
Brett Rowe (as Alternate Director to Charles Bass)
Chief Executive Officer
Timothy Mason
Following the acquisition of Silver Mountain Mining Pty Ltd on 7 December 2017, the Group operates in Australia
There were no other persons employed by or contracted to the Company during the financial year, having
responsibility for planning, directing and controlling the activities of the Company, either directly or indirectly.
(b)
Key Management Personnel Compensation
A summary of total compensation paid to Key Management Personnel is as follows:
Total short term employment benefits
Total equity-based payments
Total post-employment benefits
Year ended
30 June 2020
A$
211,159
59,240
19,142
Year ended
30 June 2019
A$
136,986
-
13,014
289,541
150,000
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 72
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 73
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
21. CONTINGENT ASSETS AND LIABILITIES
The Group has an exploration service agreement with Dragon’s Deep Exploration, Inc., an Arizona corporation
(“Dragon”). Included in this agreement is a performance bonus payable to Dragon consisting of cash together with
shares in Eagle Mountain Mining Limited (shares at market price, escrowed as required by the appropriate
exchange) within 10 days of the events detailed below:
Criteria (Specifically related to the Silver Mountain Project)
Minimum of 24 holes completed by the Group with 70% success
within 24 months of first drilling1
Commencement of a preliminary feasibility study in respect of
any land covered by any mining claims or permits held by Silver
Mountain Mining LLC and located in Arizona, USA.2
Cash Bonus
Shares of
Value
US$50,000
US$150,000
US$100,000
US$200,000
1.
2.
Success defined as a minimum 40 gram-metre zone (Au equivalent) within each drill hole for 70% of non-
condemnation holes drilled.
The milestone satisfaction date is the date on which the Company announces to the Australian Securities
Exchange that it has commenced a pre-feasibility study on the relevant mining claims or permits. “Pre-
feasibility Study” is as defined in the Australian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves (2012 Edition).
Phase 1 drilling commenced at the Silver Mountain Project on 1 October 2018 and ended in early June 2019.
Based on the completed drilling, current exploration plans and drill advancement rate it is considered unlikely that
the first criterion listed above will be met. The Group does not currently foresee a preliminary feasibility study
covering the claims held by Silver Mountain Mining LLC commencing in the near future.
Other than the above, the Group has no contingent assets or liabilities outstanding at the end of the year.
22. COMMITMENTS
(a)
Exploration Expenditure
In order to maintain the current tenure status of its exploration assets, the Group has certain obligations
and minimum expenditure requirements with respect to unpatented claims and Arizona state exploration
permits located in Arizona in the United States of America, as follows:
Within 1 year
After 1 year but not more than 5 years
Total
30 June
2020
A$
464,192
1,943,611
2,407,803
30 June
2019
A$
161,685
728,892
890,577
(b)
Asset Acquisition
The Group has no commitments for asset acquisitions at 30 June 2020 or 30 June 2019.
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 74
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
21. CONTINGENT ASSETS AND LIABILITIES
23. FINANCIAL RISK MANAGEMENT
The Group has an exploration service agreement with Dragon’s Deep Exploration, Inc., an Arizona corporation
(“Dragon”). Included in this agreement is a performance bonus payable to Dragon consisting of cash together with
shares in Eagle Mountain Mining Limited (shares at market price, escrowed as required by the appropriate
exchange) within 10 days of the events detailed below:
Criteria (Specifically related to the Silver Mountain Project)
Minimum of 24 holes completed by the Group with 70% success
within 24 months of first drilling1
Commencement of a preliminary feasibility study in respect of
Cash Bonus
Shares of
Value
US$50,000
US$150,000
any land covered by any mining claims or permits held by Silver
US$100,000
US$200,000
Mountain Mining LLC and located in Arizona, USA.2
Success defined as a minimum 40 gram-metre zone (Au equivalent) within each drill hole for 70% of non-
1.
2.
condemnation holes drilled.
The milestone satisfaction date is the date on which the Company announces to the Australian Securities
Exchange that it has commenced a pre-feasibility study on the relevant mining claims or permits. “Pre-
feasibility Study” is as defined in the Australian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves (2012 Edition).
Phase 1 drilling commenced at the Silver Mountain Project on 1 October 2018 and ended in early June 2019.
Based on the completed drilling, current exploration plans and drill advancement rate it is considered unlikely that
the first criterion listed above will be met. The Group does not currently foresee a preliminary feasibility study
covering the claims held by Silver Mountain Mining LLC commencing in the near future.
Other than the above, the Group has no contingent assets or liabilities outstanding at the end of the year.
22. COMMITMENTS
(a)
Exploration Expenditure
In order to maintain the current tenure status of its exploration assets, the Group has certain obligations
and minimum expenditure requirements with respect to unpatented claims and Arizona state exploration
permits located in Arizona in the United States of America, as follows:
After 1 year but not more than 5 years
Within 1 year
Total
30 June
2020
A$
464,192
1,943,611
2,407,803
30 June
2019
A$
161,685
728,892
890,577
(b)
Asset Acquisition
The Group has no commitments for asset acquisitions at 30 June 2020 or 30 June 2019.
The Group has exposure to a variety of risks arising from its use of financial instruments. This note presents
information about the Company’s exposure to the specific risks, and the policies and processes for measuring and
managing those risks. The Board of Directors has the overall responsibility for the risk management framework
and has adopted a Risk Management Policy.
(a)
Credit Risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument
fails to meet its contractual obligations, and arises principally from transactions with customers and
investments.
(b)
(c)
Trade and Other Receivables
The nature of the business activity of the Group does not result in trading receivables. The receivables that
the Group does experience through its normal course of business are short term and the most significant
recurring by quantity is receivable from the Australian Taxation Office. The risk of non-recovery of
receivables from this source is considered to be negligible.
Cash Deposits
The Directors believe any risk associated with the use of predominantly one bank is addressed through the
use of at least an A-rated bank as a primary banker. Except for this matter the Group currently has no
significant concentrations of credit risk.
Liquidity Risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The
Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient
liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring
unacceptable losses or risking damage to the Group’s reputation.
The Group manages its liquidity risk by monitoring its cash reserves and forecast spending. Management
is cognisant of the future demands for liquid finance resources to finance the Company’s current and future
operations, and consideration is given to the liquid assets available to the Company before commitment is
made to future expenditure or investment.
Market Risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and
equity prices will affect the Group’s income or the value of its holdings of financial instruments. The
objective of market risk management is to manage and control market risk exposures within acceptable
parameters, while optimising any return.
Interest Rate Risk
The Group has cash assets which may be susceptible to fluctuations in changes in interest rates. Whilst the
Group requires the cash assets to be sufficiently liquid to cover any planned or unforeseen future
expenditure, which prevents the cash assets being committed to long term fixed interest arrangements,
the Group does mitigate potential interest rate risk by entering into short to medium term fixed interest
investments.
Equity Risk
The Group has no direct exposure to equity risk.
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 74
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 75
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
23. FINANCIAL RISK MANAGEMENT (continued)
Foreign Exchange Risk
The Group holds a portion of its cash assets in US dollar denominated bank accounts and bank deposits.
The Group is also significantly exposed to foreign exchange risk through transactions and arrangements in
respect of its US based operations.
Other than the above, the Group does not have any direct contact with foreign exchange fluctuations other
than their effect on the general economy.
The Group seeks to mitigate foreign exchange risk by considering capital requirements and foreign
exchange rates when undertaking treasury transactions, such as utilising US dollar denominated term
deposits.
24. FINANCIAL INSTRUMENTS
Credit Risk
The Directors do not consider that the Group’s financial assets are subject to anything more than a negligible level
of credit risk, and as such no disclosures are made (refer note 23(a)).
Impairment Losses
The Directors do not consider that any of the Group’s financial assets are subject to impairment at the reporting
date. No impairment expense or reversal of impairment charge has occurred during the financial year.
Interest Rate Risk
At the reporting date the interest profile of the Group’s interest-bearing financial instruments was:
Fixed rate instruments
Financial liabilities
Variable rate instruments
Financial assets
Carrying
amount ($)
2020
Carrying
amount ($)
2019
(10,926,618)
(36,392)
507,750
1,879,883
Cash Flow Sensitivity Analysis for Variable Rate Instruments
A change of 100 basis points in interest rates at the reporting date would have increased/(decreased) equity and
profit or loss by the amounts shown below. This analysis assumes that all other variables remain constant.
2020
Variable rate instruments
2019
Variable rate instruments
Profit or loss
1%
increase
1%
decrease
Equity
1%
increase
1%
decrease
5,077
(5,077)
5,077
(5,077)
18,799
(18,799)
18,799
(18,799)
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 76
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
23. FINANCIAL RISK MANAGEMENT (continued)
24. FINANCIAL INSTRUMENTS (continued)
Foreign Exchange Risk
The Group holds a portion of its cash assets in US dollar denominated bank accounts and bank deposits.
The Group is also significantly exposed to foreign exchange risk through transactions and arrangements in
respect of its US based operations.
Other than the above, the Group does not have any direct contact with foreign exchange fluctuations other
than their effect on the general economy.
The Group seeks to mitigate foreign exchange risk by considering capital requirements and foreign
exchange rates when undertaking treasury transactions, such as utilising US dollar denominated term
deposits.
24. FINANCIAL INSTRUMENTS
Credit Risk
Impairment Losses
Interest Rate Risk
The Directors do not consider that the Group’s financial assets are subject to anything more than a negligible level
of credit risk, and as such no disclosures are made (refer note 23(a)).
The Directors do not consider that any of the Group’s financial assets are subject to impairment at the reporting
date. No impairment expense or reversal of impairment charge has occurred during the financial year.
At the reporting date the interest profile of the Group’s interest-bearing financial instruments was:
Carrying
amount ($)
2020
Carrying
amount ($)
2019
(10,926,618)
(36,392)
507,750
1,879,883
Fixed rate instruments
Financial liabilities
Variable rate instruments
Financial assets
Cash Flow Sensitivity Analysis for Variable Rate Instruments
A change of 100 basis points in interest rates at the reporting date would have increased/(decreased) equity and
profit or loss by the amounts shown below. This analysis assumes that all other variables remain constant.
Profit or loss
1%
1%
Equity
1%
1%
increase
decrease
increase
decrease
2020
2019
Variable rate instruments
5,077
(5,077)
5,077
(5,077)
Variable rate instruments
18,799
(18,799)
18,799
(18,799)
Foreign Exchange Risk
At the reporting date the Australian dollar equivalent of amounts recognised by the Group in US dollars were as
follows:
Financial assets
Cash at bank
Deposits at call
Financial liabilities
Trade and other payables
Borrowings
Carrying
amount ($)
2020
Carrying
amount ($)
2019
302,637
-
302,637
(93,695)
(10,926,618)
229,270
-
229,270
(86,749)
(36,392)
(11,020,313)
(123,141)
Cash Flow Sensitivity Analysis for Foreign Exchange
A change in foreign exchange rates of 5% at the reporting date would have increased/(decreased) equity and profit
or loss by the amounts shown below. This analysis assumes that all other variables remain constant.
Profit or loss
Equity
5%
increase
5%
decrease
5%
increase
5%
decrease
2020
Financial assets
-
-
15,132
(15,132)
Financial liabilities
551,016
(551,016)
551,016
(551,016)
2019
Financial assets
-
-
11,464
(11,464)
Financial liabilities
6,157
(6,157)
6,157
(6,157)
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 76
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 77
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
24. FINANCIAL INSTRUMENTS (continued)
Liquidity Risk
The following are the contractual maturities of financial liabilities, including estimated interest payments and
excluding the impact of netting agreements (refer note 23(b)):
Carrying
amount
$
Contractual
cash flows
$
< 6
months
$
6-12
months
$
1-2 years
$
2-5
years
$
> 5 years
$
179,444
9,791,974
229,210
179,444
9,794,013
229,210
179,444
1,475,436
60,396
-
6,000
50,918
-
167,762
77,067
-
4,102
40,829
-
8,140,713
-
10,200,628
10,202,667
1,715,276
56,918
244,829
44,931
8,140,713
1,134,644
1,134,644
1,134,644
1,134,644
-
-
224,648
224,648
224,648
-
-
-
-
-
-
-
-
-
36,392
39,316
5,882
5,882
11,765
15,787
261,040
263,964
230,530
5,882
11,765
15,787
1,134,644
1,134,644
-
-
-
Consolidated
2020
Non-Derivatives
Trade and other
payables
Borrowings
Lease liabilities
Derivatives
Derivative
liability
2019
Trade and other
payables
Borrowings
Fair Values
Fair Values Versus Carrying Amounts
The fair values of financial assets and liabilities, together with the carrying amounts shown in the statement of
financial position are as follows:
Consolidated
2020
Carrying
amount
$
Fair value
$
507,750
(179,444)
(10,926,618)
(229,210)
507,750
(179,444)
(10,926,618)
(229,210)
(10,827,522)
(10,827,522)
Consolidated
2019
Carrying
amount
$
1,879,883
(224,648)
(36,392)
-
1,618,843
Fair value
$
1,879,883
(224,648)
(36,392)
-
1,618,843
Cash and cash equivalents
Trade and other payables
Borrowings
Lease liabilities
The Group’s policy for recognition of fair values is disclosed at note 1(x).
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 78
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
24. FINANCIAL INSTRUMENTS (continued)
Liquidity Risk
The following are the contractual maturities of financial liabilities, including estimated interest payments and
excluding the impact of netting agreements (refer note 23(b)):
Carrying
Contractual
< 6
6-12
1-2 years
> 5 years
Consolidated
amount
cash flows
months
months
$
$
$
$
$
2-5
years
$
2020
Non-Derivatives
Trade and other
payables
Borrowings
Derivatives
Derivative
liability
2019
Trade and other
payables
Borrowings
179,444
179,444
179,444
-
-
-
9,791,974
9,794,013
1,475,436
6,000
167,762
4,102
8,140,713
Lease liabilities
229,210
229,210
60,396
50,918
77,067
40,829
10,200,628
10,202,667
1,715,276
56,918
244,829
44,931
8,140,713
1,134,644
1,134,644
1,134,644
1,134,644
-
-
1,134,644
1,134,644
-
-
-
-
-
-
-
-
-
224,648
224,648
224,648
36,392
39,316
5,882
5,882
11,765
15,787
261,040
263,964
230,530
5,882
11,765
15,787
Fair Values
Fair Values Versus Carrying Amounts
financial position are as follows:
The fair values of financial assets and liabilities, together with the carrying amounts shown in the statement of
Consolidated
2020
Carrying
amount
$
Fair value
$
Consolidated
2019
Carrying
amount
$
1,879,883
(224,648)
(36,392)
-
Fair value
$
1,879,883
(224,648)
(36,392)
-
Cash and cash equivalents
Trade and other payables
Borrowings
Lease liabilities
507,750
(179,444)
507,750
(179,444)
(10,926,618)
(10,926,618)
(229,210)
(229,210)
The Group’s policy for recognition of fair values is disclosed at note 1(x).
(10,827,522)
(10,827,522)
1,618,843
1,618,843
$
-
-
-
-
-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
25. ACQUISITION OF ORACLE RIDGE COPPER MINE
In November 2019, the purchase of the Oracle Ridge Copper Mine in Arizona in the United States of America was
completed. The mine is held 100% within Wedgetail Operations LLC, which in turn is held 80% by Wedgetail
Holdings LLC, a wholly owned subsidiary of the Company. The non-controlling interest of 20% is held by Vincere
Resource Holdings LLC. Management have accounted for this transaction as an acquisition of assets and not as a
business combination since, at the date of acquisition, the Oracle Ridge Copper Mine did not have the processes
and outputs expected of an operating business.
The material transaction events in relation to the purchase are as follows:
• US$500,000 was paid by Eagle Mountain’s existing wholly owned Arizona subsidiary, Wedgetail Operations
LLC (“WTO”) as the purchase price for all assets of Oracle Ridge Mining LLC (“ORM”) to the Receiver for the
benefit of the sole secured creditor Vincere Resource Holdings LLC (“Vincere”);
•
Shares comprising a 20% interest in WTO were issued to Vincere;
• WTO assumed a 10 year note with Vincere for US$6,423,000 which is secured over the assets of WTO;
•
The Company will free-carry Vincere for the first US$5,000,000 of relevant expenditure on the Oracle Ridge
project;
• WTO assumed all ORM’s leases, easements and access agreements with third parties; and
•
An Operating Agreement was signed which appoints the Company’s wholly owned subsidiary Silver Mountain
Mining Operations Inc as Operator of WTO.
Consideration for the acquisition, at exchange rates applicable on the acquisition date, was:
Details
Cash – US$500,000
Shares – 20% Interest in Wedgetail Operations LLC US$125,000
Secured Loan – US$6,423,000 (refer note 13) 1
The assets acquired were:
Details
Property, plant and equipment
Capitalised exploration and evaluation expenditure
Fair value A$
735,618
183,905
9,449,757
10,369,280
Net asset value
A$
1,088,168
9,281,112
10,369,280
1 The Australian dollar amount of the secured loan is shown at acquisition date and differs from the balance shown
at note 13 which is translated at the prevailing exchange rate at 30 June 2020. In addition, the derivative liability
portion of the loan has been revalued to fair value at 30 June 2020.
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 78
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 79
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
26. CONTROLLED ENTITIES
Eagle Mountain Mining Limited is the ultimate parent entity of the Group.
The following were controlled entities at the end of the financial year and have been included in the consolidated
financial statements:
Name
Country of
Incorporation
Date
acquired/incorporated
Percentage
Interest Held
2020
Percentage
Interest Held
2019
Silver Mountain
Mining Pty Ltd
Silver Mountain
Mining LLC
Silver Mountain
Mining Operations Inc
Wedgetail Arizona Pty
Ltd
Wedgetail Holdings
LLC
Wedgetail Operations
LLC
Australia
7 December 2017
United States of
America
United States of
America
7 December 2017
18 January 2018
Australia
18 July 2019
United States of
America
United States of
America
25 June 2019
18 July 2019
100%
100%
100%
100%
100%
80%
100%
100%
100%
-
100%
-
Silver Mountain Mining LLC and Silver Mountain Mining Operations Inc are both 100% owned subsidiaries of Silver
Mountain Mining Pty Ltd.
Wedgetail Operations LLC is an 80% owned subsidiary of Wedgetail Holdings LLC, which in turn is a 100%
subsidiary of Wedgetail Arizona Pty Ltd.
The following amounts are payable by subsidiary companies to the parent company at the reporting date:
Name
Silver Mountain Mining Pty Ltd
Silver Mountain Mining LLC
Silver Mountain Mining Operations Inc
Wedgetail Holdings LLC
Amount due to
Eagle Mountain Mining Limited
2019
A$
69,727
528,472
7,082,555
-
2020
A$
69,727
528,472
8,670,459
1,909,877
The loans to subsidiary companies are non-interest bearing and the Directors of Eagle Mountain Mining Limited
do not intend to call for repayment within 12 months.
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 80
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
26. CONTROLLED ENTITIES
27. NON-CONTROLLING INTEREST
Eagle Mountain Mining Limited is the ultimate parent entity of the Group.
The following were controlled entities at the end of the financial year and have been included in the consolidated
financial statements:
Name
Country of
Date
Percentage
Percentage
Incorporation
acquired/incorporated
Interest Held
Interest Held
Australia
7 December 2017
Silver Mountain
Mining Pty Ltd
Silver Mountain
Mining LLC
United States of
America
Silver Mountain
United States of
Mining Operations Inc
America
Wedgetail Arizona Pty
Ltd
LLC
LLC
Wedgetail Holdings
United States of
Wedgetail Operations
United States of
America
America
7 December 2017
18 January 2018
25 June 2019
18 July 2019
Australia
18 July 2019
2020
100%
100%
100%
100%
100%
80%
2019
100%
100%
100%
100%
-
-
Silver Mountain Mining LLC and Silver Mountain Mining Operations Inc are both 100% owned subsidiaries of Silver
Mountain Mining Pty Ltd.
subsidiary of Wedgetail Arizona Pty Ltd.
Wedgetail Operations LLC is an 80% owned subsidiary of Wedgetail Holdings LLC, which in turn is a 100%
The following amounts are payable by subsidiary companies to the parent company at the reporting date:
Name
Silver Mountain Mining Pty Ltd
Silver Mountain Mining LLC
Silver Mountain Mining Operations Inc
Wedgetail Holdings LLC
Amount due to
Eagle Mountain Mining Limited
2020
A$
69,727
528,472
8,670,459
1,909,877
2019
A$
69,727
528,472
7,082,555
-
The loans to subsidiary companies are non-interest bearing and the Directors of Eagle Mountain Mining Limited
do not intend to call for repayment within 12 months.
Wedgetail Holdings LLC, a wholly owned subsidiary of the Company, holds an 80% interest in Wedgetail Operations
LLC with the non-controlling interest (NCI) of 20% being held by Vincere Resource Holdings LLC.
The following table summarises the information relating to Wedgetail Operations LLC that has a material NCI,
before any intra-group eliminations.
Summarised Statement of Financial Position
NCI Percentage
Assets
Current assets
Non-current assets
Total Assets
Liabilities
Current liabilities
Non-current liabilities
Total Liabilities
Net Assets
Summarised Statement of Profit and Loss and Other Comprehensive Income
Revenue
Loss before income tax
Other comprehensive income
Total comprehensive loss for the year
Loss allocated to NCI
Other comprehensive income allocated to NCI
Summarised Statement of Cash Flows
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Net decrease in cash and cash equivalents
30 June 2020
A$
20%
12,113
10,147,738
10,159,851
692,309
9,275,357
9,967,666
192,185
A$
-
(1,915,403)
46,236
(1,869,167)
(383,080)
9,247
A$
(1,158,696)
(754,569)
1,171,090
(742,175)
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 80
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 81
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
28. LOSS PER SHARE
Loss used in calculation of loss per share
Weighted average number of shares used in the calculation of loss
per share
Year Ended
30 June 2020
$(3,985,856)
Year Ended
30 June
2019
$(6,890,466)
108,321,041
92,947,012
Basic and diluted loss per share
(3.7 cents)
(7.4 cents)
Options and performance rights to acquire ordinary shares granted by the Company and not exercised at the
reporting date are included in the determination of diluted loss per share, to the extent that they are considered
dilutive.
There are 26,409,716 options and 245,000 performance rights on issue at 30 June 2020 (2019: 23,801,315 options
and 180,000 performance rights) that have not been considered in calculating diluted loss per share as they are
not considered to be dilutive to the reported loss.
29. PARENT ENTITY INFORMATION
Assets
Current assets
Non-current assets1
Total Assets
Liabilities
Current liabilities
Non-current liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Option capital
Reserves
Accumulated losses
Total Equity
Loss for the period1
Other comprehensive income
Total comprehensive loss for the period
Parent
30 June
2020
A$
Parent
30 June
2019
A$
226,699
2,981,224
1,567,069
1,950,849
3,207,923
3,517,918
1,662,667
117,895
174,388
-
1,780,562
174,388
1,427,361
3,343,530
15,322,265
4,500
1,105,348
(15,004,752)
13,579,949
4,500
888,625
(11,129,544)
1,427,361
3,343,530
(3,875,208)
-
(6,629,787)
-
(3,875,208)
(6,629,787)
1The Company has recognised a provision against the investment in subsidiary holdings to the extent that
parent company net assets exceed those of the Group.
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 82
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
28. LOSS PER SHARE
29. PARENT ENTITY INFORMATION (continued)
Year Ended
Year Ended
30 June 2020
30 June
2019
$(3,985,856)
$(6,890,466)
108,321,041
92,947,012
Loss used in calculation of loss per share
Weighted average number of shares used in the calculation of loss
per share
dilutive.
Basic and diluted loss per share
(3.7 cents)
(7.4 cents)
Options and performance rights to acquire ordinary shares granted by the Company and not exercised at the
reporting date are included in the determination of diluted loss per share, to the extent that they are considered
There are 26,409,716 options and 245,000 performance rights on issue at 30 June 2020 (2019: 23,801,315 options
and 180,000 performance rights) that have not been considered in calculating diluted loss per share as they are
not considered to be dilutive to the reported loss.
29. PARENT ENTITY INFORMATION
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity is the guarantor in relation to the US$6,423,000 loan from Vincere Resource Holdings LLC
(Vincere). In addition, the parent entity has entered into a Guarantee of Performance with Vincere under which
the parent entity guarantees the full and timely performance of the conversion obligations under the note with
Vincere. Refer to note 13..
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2020 and 30 June 2019.
Commitments
The parent had no exploration or capital commitments as at 30 June 2020 and 30 June 2019.
Accounting policies
The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in
note 1.
Assets
Current assets
Non-current assets1
Total Assets
Liabilities
Current liabilities
Non-current liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Option capital
Reserves
Accumulated losses
Total Equity
Loss for the period1
Other comprehensive income
Total comprehensive loss for the period
1The Company has recognised a provision against the investment in subsidiary holdings to the extent that
parent company net assets exceed those of the Group.
Parent
30 June
2020
A$
Parent
30 June
2019
A$
226,699
2,981,224
1,567,069
1,950,849
3,207,923
3,517,918
1,662,667
117,895
174,388
-
1,780,562
174,388
1,427,361
3,343,530
15,322,265
13,579,949
4,500
1,105,348
4,500
888,625
(15,004,752)
(11,129,544)
1,427,361
3,343,530
(3,875,208)
(6,629,787)
-
-
(3,875,208)
(6,629,787)
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 82
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 83
DIRECTORS’ DECLARATION
In the opinion of the Directors of Eagle Mountain Mining Limited (“the Company”)
(a)
the financial statements and notes set out on pages 45 to 83 are in accordance with the Corporations
Act 2001, including:
(i)
(ii)
complying with Accounting Standards and the Corporations Regulations 2001 and other
mandatory professional reporting requirements which, as stated in accounting policy note 1
to the financial statements, constitutes explicit and unreserved compliance with International
Financial Reporting Standards (IFRS); and
give a true and fair view of the financial position as at 30 June 2020 and of the performance
for the year ended on that date of the Group.
the remuneration disclosures that are contained in the Remuneration Report in the Directors’ Report
comply with Australian Accounting Standard AASB 124 Related Party Disclosures, The Corporations Act
2001 and the Corporations Regulations 2001.
there are reasonable grounds to believe that the Group will be able to pay its debts as and when they
become due and payable.
(b)
(c)
(d)
the financial statements comply with International Financial Reporting Standards as set out in note 1.
The Directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the
Chief Executive Officer and Chief Financial Officer for the financial year ended 30 June 2020.
This declaration is made in accordance with a resolution of the Directors.
Signed at Perth this 18th day of September 2020.
Rick Crabb
Chairman
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 84
DIRECTORS’ DECLARATION
In the opinion of the Directors of Eagle Mountain Mining Limited (“the Company”)
(a)
the financial statements and notes set out on pages 45 to 83 are in accordance with the Corporations
Act 2001, including:
(i)
complying with Accounting Standards and the Corporations Regulations 2001 and other
mandatory professional reporting requirements which, as stated in accounting policy note 1
to the financial statements, constitutes explicit and unreserved compliance with International
(ii)
give a true and fair view of the financial position as at 30 June 2020 and of the performance
Financial Reporting Standards (IFRS); and
for the year ended on that date of the Group.
(b)
the remuneration disclosures that are contained in the Remuneration Report in the Directors’ Report
comply with Australian Accounting Standard AASB 124 Related Party Disclosures, The Corporations Act
2001 and the Corporations Regulations 2001.
(c)
there are reasonable grounds to believe that the Group will be able to pay its debts as and when they
become due and payable.
(d)
the financial statements comply with International Financial Reporting Standards as set out in note 1.
The Directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the
Chief Executive Officer and Chief Financial Officer for the financial year ended 30 June 2020.
This declaration is made in accordance with a resolution of the Directors.
Signed at Perth this 18th day of September 2020.
Rick Crabb
Chairman
Independent auditor’s report
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 84
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 85
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 86
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 86
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 87
3643
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 88
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 88
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 89
ASX ADDITIONAL INFORMATION
Pursuant to the Listing Requirements of the Australian Securities Exchange, the shareholder information set
out below was applicable as at 6 October 2020.
A.
Distribution of Equity Securities
Analysis of numbers of shareholders by size of holding:
Ordinary Fully Paid Shares
Distribution
Number of shareholders
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
More than 100,000
Totals
16
80
110
359
152
717
Securities held
5,139
260,501
943,025
15,848,283
126,420,120
143,477,968
There are 19 shareholders holding less than a marketable parcel of ordinary shares.
B.
Substantial Shareholders
An extract of the Company’s Register of Substantial Shareholders (who hold 5% or more of the issued
capital) is set out below:
Holder of Relevant Interest
Silver Mountain Mining Nominee Pty Ltd
C.
Twenty Largest Shareholders
Issued Ordinary Shares
Number of shares % of shares
53,480,001
37.27%
The names of the twenty largest holders of quoted shares are listed below:
Shareholder Name
Silver Mountain Mining Nominee Pty Ltd
CS Third Nominees Pty Limited
Dr Salim Cassim
Mr Philip John Cawood
Aralad Management Pty Ltd
National Nominees Limited
UBS Nominees Pty Ltd
Maximus Flannery Pty Ltd
Citicorp Nominees Pty Limited
Snowball 3 Pty Ltd
HSBC Custody Nominees (Australia) Limited
BFB Holdings Pty Ltd
Equity Trustees Limited
Dahima Pty Ltd
Alitime Nominees Pty Ltd
Mr Nicolas Michael Watt
Mr Geoffrey John Fennell + Mrs Carmel Ann Fennell
Flue Holdings Pty Ltd
Mainview Holdings Pty Ltd
Kero Investments Pty Ltd
Total
Ordinary Shares - Quoted
Number of shares % of Shares
53,480,001
6,885,107
3,940,000
3,639,100
3,130,770
2,417,125
2,177,603
1,923,077
1,691,109
1,557,153
1,441,456
1,366,667
1,153,846
1,101,668
1,100,000
1,100,000
1,000,000
1,000,000
1,000,000
966,000
92,070,682
37.27%
4.80%
2.75%
2.54%
2.18%
1.68%
1.52%
1.34%
1.18%
1.08%
1.00%
0.95%
0.80%
0.77%
0.77%
0.77%
0.70%
0.70%
0.70%
0.67%
64.17%
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 90
ASX ADDITIONAL INFORMATION
ASX ADDITIONAL INFORMATION
Pursuant to the Listing Requirements of the Australian Securities Exchange, the shareholder information set
D.
Unquoted Securities
Options over Unissued Shares
Number
Options
4,500,0001
7,000,0002
815,0003
5,644,7164
1,800,0003
1,500,0003
650,0003
1,923,0775
1,923,0775
1,325,0003
375,0002
950,0006
28,405,870
of
Exercise Price
Expiry Date
Number of Holders
30 cents
20 cents
20 cents
20 cents
20 cents
21.5 cents
20 cents
20 cents
30 cents
20 cents
20 cents
20 cents
6 March 2021
15 January 2023
1 February 2023
31 July 2021
1 July 2023
15 January 2023
7 October 2023
30 June 2021
1 July 2022
1 July 2022
1 July 2022
1 July 2022
17
6
1
108
2
1
1
4
4
6
3
1
1 Options issued pursuant to the initial public offer prospectus
2 Options issued to directors, officers and employees
3 Options issued to employees pursuant to the Company’s Employee Incentive Plan
4 Options issued pursuant to a pro rata entitlement offer
5 Broker options
6 Options issued in lieu of loan interest expense
The names of the twenty largest holders of quoted shares are listed below:
Performance Rights
Number of Rights
Expiry Date
25,000
35,000
35,000
150,000
245,000
1 December 2027
1 July 2027
1 July 2028
1 July 2028
Number of
Holders
1
2
2
1
E.
Voting Rights
In accordance with the Company’s Constitution, voting rights in respect of ordinary shares are on a
show of hands whereby each member present in person or by proxy shall have one vote and upon a
poll, each share will have one vote.
There are no voting rights in respect of options or performance rights over unissued shares.
F.
Restricted Securities
There are no restricted securities on issue.
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 90
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 91
out below was applicable as at 6 October 2020.
A.
Distribution of Equity Securities
Analysis of numbers of shareholders by size of holding:
Ordinary Fully Paid Shares
Distribution
Number of shareholders
Securities held
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
More than 100,000
Totals
16
80
110
359
152
717
5,139
260,501
943,025
15,848,283
126,420,120
143,477,968
There are 19 shareholders holding less than a marketable parcel of ordinary shares.
An extract of the Company’s Register of Substantial Shareholders (who hold 5% or more of the issued
B.
Substantial Shareholders
capital) is set out below:
Holder of Relevant Interest
Silver Mountain Mining Nominee Pty Ltd
C.
Twenty Largest Shareholders
Shareholder Name
Silver Mountain Mining Nominee Pty Ltd
CS Third Nominees Pty Limited
HSBC Custody Nominees (Australia) Limited
Dr Salim Cassim
Mr Philip John Cawood
Aralad Management Pty Ltd
National Nominees Limited
UBS Nominees Pty Ltd
Maximus Flannery Pty Ltd
Citicorp Nominees Pty Limited
Snowball 3 Pty Ltd
BFB Holdings Pty Ltd
Equity Trustees Limited
Dahima Pty Ltd
Alitime Nominees Pty Ltd
Mr Nicolas Michael Watt
Flue Holdings Pty Ltd
Mainview Holdings Pty Ltd
Kero Investments Pty Ltd
Total
Mr Geoffrey John Fennell + Mrs Carmel Ann Fennell
Issued Ordinary Shares
Number of shares % of shares
53,480,001
37.27%
Ordinary Shares - Quoted
Number of shares % of Shares
53,480,001
37.27%
6,885,107
3,940,000
3,639,100
3,130,770
2,417,125
2,177,603
1,923,077
1,691,109
1,557,153
1,441,456
1,366,667
1,153,846
1,101,668
1,100,000
1,100,000
1,000,000
1,000,000
1,000,000
966,000
4.80%
2.75%
2.54%
2.18%
1.68%
1.52%
1.34%
1.18%
1.08%
1.00%
0.95%
0.80%
0.77%
0.77%
0.77%
0.70%
0.70%
0.70%
0.67%
92,070,682
64.17%
ASX ADDITIONAL INFORMATION
G.
Schedule of interests in mining tenements
Eagle Mountain mineral licences as at 6 October 2020 are all presently located in the State of Arizona,
United States of America.
Claim Reference
(Tenement)
SILVER MOUNTAIN PROJECT
Percentage held
Prospect &
Tenure type
Pacific Horizon
Patented Claims
(26 individual claims)
Unpatented Claims
(150 individual claims)
Empire, Copper Ash, Palestine, Buffalo, Little
Pittsburg, Austin, Wellington, Eagle, Number Ten,
Number Eleven, Number Twelve, Number Thirteen,
Noonday, South Noonday, Dudley, Comet, Alameda,
Virginia, Mars, Ashland, Oakland, Sunnyside, Cuprite,
Azurite, Yavapai and Jumbo
SMM#1-14, SMM#17-145, SMM#147, SMM#149,
SMM151,
SMM#159,
SMM#161
SMM#155,
SMM#157,
Exploration Permit
(1 individual permit)
008-012-0870
Scarlett
Unpatented Claims
(92 individual claims)
Exploration Permit
(2 individual permits)
Red Mule
Unpatented Claims
(98 individual claims)
Exploration Permit
(2 individual permits)
Rhyolite Target
Unpatented Claims
(70 individual claims)
Exploration Permit
(1 individual permit)
SCA#1-15, SCA#57-133
008-120868, 008-120869
SMM#146,
SMM#153,
SMM#162-207, SMM#210-212, SCA#16-56
SMM#148,
SMM#154,
SMM#150,
SMM#158,
SMM#152,
SMM#160,
008-120871, 008-120872
SMMSO#001
SMMSO#054; SMMSO#056; SMMSO#058 - 084
SMMSO#023
015;
-
-
048;
008-120101
100%
100%
100%
100%
100%
100%
100%
100%
100%
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 92
Eagle Mountain mineral licences as at 6 October 2020 are all presently located in the State of Arizona,
Prospect &
Tenure type
Claim Reference
(Tenement)
Percentage held
ASX ADDITIONAL INFORMATION
Patented Claims
(60 individual claims)
ORACLE RIDGE COPPER PROJECT
Parcel 1 (Roosevelt, Way-up, Homestake, Lone Pine,
Imperial and Hidden Treasure)
Parcel 2 (Eagle, York, Copper Peak and Golden Peak
No 2)
Parcel 3 (Grand Central Lode)
Parcel 4 (Tunnel Site, Major McKinley, Marble Peak,
Wedge, Giant, Copper Head, Centennial, General R E
Lee and Blizzard)
Parcel 5 (Oversight MS3461)
Parcel 6 (Daily No3, Daily No5, Sphinx, Roskruge,
Calumet, Edith, Daily Extension, Cave, Wedge No3,
Wedge No2 and Katherine)
Parcel 7 (Copper Princess, Apache Central and Daily
Tunnel Site)
Parcel 8 (Oversight MS3504)
Parcel 9 (Apex, Alabama, Bornite, Contact, Cuprite,
Epidote, Embersite, Garnet, Over the Top, Yellow
Copper, Valley, Apex No2, Keeney and Wilson)
Parcel 10 (Chalcopyrite and Peacock)
Parcel 11 (Daily Extension No2, Daily Extension No3,
Daily Extension No4)
Parcel 12 (H T Fraction)
Parcel 13 (Turkey)
Parcel 22 (Cochise)
Parcel 27 (Holly Terror)
Parcel 28 (Precious Metals)
That portion of Parcels 24 and 25 lying within: Apache,
Maricopa, Yavapai, Buster, Major, Greenlee
80%
Unpatented Claims
(50 individual claims)
Jody 1 – 20, Lorelei 1 – 7,
Olesya #1 – 23
80%
ASX ADDITIONAL INFORMATION
G.
Schedule of interests in mining tenements
United States of America.
Prospect &
Tenure type
Pacific Horizon
Claim Reference
(Tenement)
SILVER MOUNTAIN PROJECT
Percentage held
Empire, Copper Ash, Palestine, Buffalo, Little
Pittsburg, Austin, Wellington, Eagle, Number Ten,
100%
Patented Claims
Number Eleven, Number Twelve, Number Thirteen,
(26 individual claims)
Noonday, South Noonday, Dudley, Comet, Alameda,
Virginia, Mars, Ashland, Oakland, Sunnyside, Cuprite,
Azurite, Yavapai and Jumbo
Unpatented Claims
SMM#1-14, SMM#17-145, SMM#147, SMM#149,
100%
(150 individual claims)
SMM151,
SMM#155,
SMM#157,
SMM#159,
SMM#161
008-012-0870
SCA#1-15, SCA#57-133
008-120868, 008-120869
Exploration Permit
(1 individual permit)
Scarlett
Unpatented Claims
(92 individual claims)
Exploration Permit
(2 individual permits)
Red Mule
Unpatented Claims
(98 individual claims)
Exploration Permit
(2 individual permits)
Rhyolite Target
SMM#146,
SMM#148,
SMM#150,
SMM#152,
100%
SMM#153,
SMM#154,
SMM#158,
SMM#160,
SMM#162-207, SMM#210-212, SCA#16-56
008-120871, 008-120872
Unpatented Claims
SMMSO#001
-
015;
SMMSO#023
-
048;
100%
(70 individual claims)
SMMSO#054; SMMSO#056; SMMSO#058 - 084
Exploration Permit
(1 individual permit)
008-120101
100%
100%
100%
100%
100%
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 92
E A G L E M O U N T A I N M I N I N G | 2020 Annual Report 93
www.EAGLEMOUNTAIN.com.au