Golden State Mining Limited
ABN 52 621 105 995
Annual Report
30 June 2023
1
Corporate Information
Directors
Mr. Michael Moore (Managing Director – appointed 15 August 2017)
Mr. Damien Kelly (Non-Executive Chairman – appointed 15 August 2017)
Mr. Greg Hancock (Non-Executive Director – appointed 6 April 2018)
Mr. Brenton Siggs (Non-Executive Director - appointed 10 August 2018)
Company Secretary
Mr. Marc Boudames
Registered Office and Principal Place of Business
Suite 15, 19-21, Outram Street
West Perth WA 6005
Australia
Telephone:
Email:
Website:
(+61 8) 6323 2384
info@gsmining.com.au
www.goldenstatemining.com.au
Share Register
Automic Group
Level 5, 126 Phillip Street
Sydney NSW 2000
Australia
Telephone: 1300 288 664
Facsimile:
+61 2 8583 3040
Stock Exchange Listing
Golden State Mining Limited is listed on the Australian Securities Exchange (ASX code: GSM)
Auditors
Stantons
Level 2, 40 Kings Park Road
West Perth WA 6005
Solicitors
EMK Lawyers
Suite 1
519 Stirling Highway
Cottesloe WA 6011
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30 June 2023
TABLE OF CONTENTS
Contents
Chairman’s Letter
Directors' Report
Auditor’s Independence Declaration
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Directors' Declaration
Independent Auditor’s Report
ASX Additional Information
Tenement list
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CHAIRMAN’S LETTER
Dear Fellow Shareholder,
The company’s June 2023 financial year has been another year of progressive, busy and disciplined action,
with multiple drilling programs, field work, regional targeting and corporate activity targeting gold, lithium and
base metals. We finished the year in a strong cash position, which was further enhanced following the end of
the financial year with the completion of the second tranche of a $2 million placement. The year also closed
with some excitement as we prepared to launch gold-lithium reverse-circulation (“RC”) and air-core (“AC”)
drilling programs over some of many gold, lithium and base metals target areas at Yule; and advanced towards
drill targeting at Paynes Find and Southern Cross East.
During the year we increased our ground position at Yule to around 766km² in one of Australia’s premier
mineral discovery provinces in the Mallina basin with nearby companies such as Pilbara Minerals, Azure
Minerals, Mineral Resources, De Grey Mining and more recently, Wildcat Resources.
We have always appreciated the potential that lies under cover in this under-explored region of the western
Pilbara. The nearby Hemi discovery by De Grey Mining (ASX code: “DEG” or “De Grey”) continues to
demonstrate the prospectivity of this new Australian gold province, with De Grey having recently increased the
JORC gold resources of its Mallina Gold Project to almost 12 million ounces1. It was, however, selected for
much more than just its gold potential. As one of Australia’s most significant new hard rock lithium discoveries,
the recent Andover lithium discovery by Azure Minerals Limited (ASX: AZS) only adds to the compelling,
underexplored potential of the West Pilbara, where our Yule project is well-placed.
The multi commodity nature of the host geology at many of our projects, including Yule, Paynes Find and
Southern Cross East, provides the company with strong exposure to gold, lithium and base metals.
Your team has been working diligently to optimise value for money whilst keeping our capital structure as tight
as possible in order to maximise potential shareholder returns from any major discovery. We are allocating
shareholder’s resources judiciously and pragmatically on scientifically-driven, evidence-based targeting and
exploration. Our seasoned, hands on, professional team have a can-do, diligent and nimble approach to
exploration … getting on with the job, sometimes in difficult conditions, where others have failed to do so.
RC drilling earlier in the year, together with structural interpretation and pathfinder geochemistry work indicated
the potential of the Nomad prospect (at Yule South, already a gold target) to host a lithium-ceasium-tantalum
(“LCT”) pegmatite source. After lengthy negotiations to acquire an interest in nearby, contiguous, tenure,
further heritage surveys and statutory approvals as well as the commissioning of land-based magnetic and
gravity surveys, we embarked on follow up RC and AC drilling shortly after the end of the financial year,
including first-pass AC drilling over the new tenure only a few months after inking the agreement. Further,
robust scientific work and diligent planning also set us up to drill other compelling gold, lithium and base metals
targets at Yule South, Yule North and Yule East soon after the end of the financial year. We await the assay
results with keen interest.
We have also generated extensive lithium and pathfinder geochemistry anomalies at our ~1300km2 Paynes
Find project, including a 2.5km target corridor which is a similar orientation to the neighbouring Mt. Edon
pegmatite field; and all this from first pass soil analysis over only 14% of the project area. Similar activities at
our 620km2 Southern Cross East project also generated significant areas of interest from gold and pathfinder
soil geochemistry anomalies, potentially associated with a nearby major structure, to be further explored and
tested.
1 Refer to DEG ASX announcement of 15 June 2023 (global gold mineral resource estimate of 278Mt @ 1.3g/t Au for 11.7Moz).
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CHAIRMAN’S LETTER
Other, early stage projects, which have the potential to evolve into significant, company-making projects, have
also been generated or advanced at negligible cost. We have made room for these by de-prioritising or
disposing of other projects where the potential risk/reward justifies it. Tenements were dropped at some
projects where our hypothesis for potential mineralization had been adequately tested or weighed up with
future challenges or obligations; and our Cue project was sold over two separate transactions for $230,000 in
cash and shares plus royalties – an ideal outcome for all parties.
On behalf of the board, I express thanks to our whole team – especially Mike Moore, our Managing Director,
Geoff Willetts, our Exploration Manager – and to you, our shareholders, for your continued interest and support.
We look forward to an exciting year ahead!
Yours faithfully,
Damien Kelly
Chairman
29 September 2023
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DIRECTORS’ REPORT
Your directors are pleased to present their report on the consolidated entity (referred to hereafter as the Group)
consisting of Golden State Mining Limited (the Company) and the entities it controlled at the end of, or during,
the year ended 30 June 2023.
DIRECTORS
The names and details of the Company's directors in office during the year and until the date of this report
follow. Each Director was in office for this entire period unless otherwise stated.
Names, qualifications, experience and special responsibilities
Michael Moore (B Eng (Hons) Mining Eng. ACSM MAusIMM MAICD) - Managing Director (Appointed 15
August 2017)
Mr Moore is a mining engineer from the Camborne School of Mines with over 20 years' operational and
executive management experience across a diverse range of commodities in Australia, Indonesia, West
Africa and Europe.
He has held senior and executive management roles with a number of companies including Rock Australia
Mining & Civil Pty Ltd, Carnegie Minerals PLC, Montezuma Mining Company Ltd (ASX:MZM) where he
served as CEO, and, more recently, as Non-Executive Director for Variscan Mines Ltd (ASX: VAR).
Mr Moore is a member of the Australian Institute of Company Directors and the Australian Institute of Mining
and Metallurgy. He is currently serving as Chairman of First Development Resources Limited (UK).
Damien Kelly (B.Com CPA GDip App.Fin. MBA) - Non-Executive Chairman (Appointed 15 August 2017)
Mr Kelly has broad corporate advisory and commercial experience spanning over 25 years. He provides
corporate advisory and corporate, transaction and project management as well as other professional services
to mainly listed companies and predominately in the natural resources sector. He has an MBA, Bachelor of
Commerce, a Graduate Diploma in Applied Finance and Investment and is a former officer in the armed
services, having graduated from the Royal Military College, Duntroon. He is also a member of CPA Australia.
Greg Hancock (BA Econs B.Ed (Hons) F.Fin) - Non-Executive Director (Appointed 6 April 2018)
Mr Hancock has over 25 years’ experience in capital markets practicing in the area of Corporate Finance. He
has extensive experience in both Australia and the United Kingdom through his close links to the stockbroking
and investment banking community. In this time, he has specialised in mining and natural resources and has
had a background in the finance and management of small companies.
He is Chairman of AusQuest Limited, BMG Resources Limited, Cobra Resources Plc Triangle Energy (Global)
Limited and Non-Executive Director of Group 6 Metals Limited.
Mr Hancock continues his close association with the capital markets in Australia and the United Kingdom
through his private company Hancock Corporate Investments Pty Ltd.
Brenton Siggs (B App Sc App Geol MAIG MSEG) - Non-Executive Director (Appointed 10 August 2018)
Mr Siggs has over 29 years’ experience in the Australian mineral resources industry and has held senior
exploration roles on a range of gold, nickel-cobalt, petroleum, coal, phosphate and potash brine projects. He
has been involved in all stages of regional and near-mine exploration project management, particularly in
Western Australia, from conceptual targeting and ground acquisition through to resource definition drilling
programs and mining geology.
Mr Siggs has worked in senior roles for Australian and international companies including Newcrest Mining Ltd.,
Inco Australia, Central Norseman Gold Corporation and VALE and most recently was Technical Director and
the Exploration Manager for Goldphyre Resources Limited.
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COMPANY SECRETARY / CHIEF FINANCIAL OFFICER
Marc Boudames (B.com CPA MAICD) - Appointed 6 April 2018
Mr Boudames is experienced in statutory financial reporting, taxation, ERP systems, business analytics,
corporate transactions, due diligence, mergers & acquisitions, finance, joint ventures and divestments. He
previously worked at RSM, as General Manager - Finance & Administration for ASX listed Redport Ltd and
Mega Uranium Ltd (Australia), a Canadian TSX listed mining and equity investment company focused on
global uranium properties and multi-mineral exploration. He has worked for multiple companies across various
industries including listed and public companies associated with the mining and oil & gas sectors such as Toro
Energy Ltd, WesTrac, CB&I and Spotless Group.
Interests in the shares and options of the Company and related bodies corporate
As at the date of signing this report, the relevant interests of the directors in the shares and options of Golden
State Mining Limited were:
Director
Ordinary Shares
Michael Moore
Damien Kelly
Greg Hancock
Brenton Siggs
2,650,656
2,130,470
250,000
1,095,185
Options over
Ordinary Shares
4,500,000
3,600,000
2,400,000
2,400,000
PRINCIPAL ACTIVITIES
During the financial year, the Group’s principal activities were mineral exploration, evaluation and investment
and to assess and pursue mineral property and processing acquisition opportunities.
DIVIDENDS
No dividends were paid or declared during the year. No recommendation for payment of dividends has been
made.
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DIRECTORS’ REPORT
GSM Annual Operations Report 2022-23
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DIRECTORS’ REPORT
Yule
Nomad lithium prospect and gold RC drilling program
Figure 1: Nomad prospect RC collar plan with caesium results
The first pass reverse circulation (“RC”) drilling program at the Nomad prospect consisted of 10 holes
(Figure 1) for a total advance of 1,478 metres (refer to ASX announcement dated 31 October 2022).
The program delivered robust lithium (Li), caesium (Cs), and rubidium (Rb) anomalies with high levels
of associated arsenic (As). The arsenic assay values show a distinct spatial association with
anomalous caesium values in drill samples from the northern part of the arsenic anomaly (Figure 1).
The occurrence of arsenic as an accessory mineral has been documented at major lithium pegmatite
deposits, i.e., the giant Greenbushes pegmatite (Partington et al., 1995) and at the Goulamina
deposit, Mali (Wilde et al., 2021). At Greenbushes, arsenic also forms a large ~4x1km anomaly within
surficial lateritic regolith (Smith et al., 1987). At Nomad, bedrock caesium values accompanying
arsenic form a strong SW-NE trend with a strong spatial association with the interpreted mafic
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basement units. This trend is interpreted as a lithological control on caesium distribution, rather than
just structural control.
Drill-hole logging and structural interpretation work (Figure 2) has indicated the presence of preferred
mafic host lithologies and a major antiform which is crosscut by faulting and a refolded fold hinge
zone. Given that a number of major lithium-caesium-tantalum (LCT) pegmatites occur within, or close
to, the core of major regionally mapped fold hinges – e.g., Wodgina, Mt. Cattlin and Tanco (Canada),–
and the analogous pathfinder geochemistry including arsenic as well as Li-Rb-Cs, the Nomad prospect
is enhanced as a setting for significant pegmatite-hosted lithium-caesium mineralisation.
Results
The significant RC assay results for the program are detailed below. Drillholes were routinely assayed
for gold over various composite intervals over the entirety of the hole. Selected intervals and the end
of hole were submitted for multi-element and rare earth element (REE) analysis.
RC hole 22GSYSRC0024 (Figure 2) was designed as a follow up hole to test anomalous gold
intersected in the first phase of air-core (AC) drilling (refer to ASX announcement dated 7 September
2020). This RC hole successfully intersected a similar interval of anomalous gold with 4 metres @
98ppb Au from 165 metres in an interpreted mafic porphyritic unit. This hole also intersected
significant intervals of highly anomalous caesium, lithium and arsenic. The best interval was 6 metres
@ 421ppm Cs & 88ppm Li along with 5290ppm (0.53%) As from 103 metres in a ferruginous saprock
hosted structure with oxidised micaceous fault gouge. These levels of caesium are considered highly
anomalous and encouraging.
Caesium is a very rare element in the earth’s crust (single ppm levels) and is less mobile than other
rare alkali elements (Li and Rb) in dispersion haloes. It is therefore considered to be a proximal vector
to a potential LCT pegmatite source. It is normally only concentrated to elevated levels in LCT granitic
pegmatites. The strongly anomalous caesium interval from 22GSYSRC0024 will be further
investigated mineralogically, to identify the caesium and arsenic mineral hosts.
Hole GSYSRC0028 was designed to test an interpreted geochemical trend identified from previous
air-core drilling with anomalous caesium intersections. This hole intersected 8 metres @ 95ppm Cs
from 120 metres and 2 metres @ 148ppm Cs from 160 metres at the end of hole. Both intersections
were associated with elevated lithium and high arsenic.
Conceptual Target L1
Three 240 metre spaced RC holes were drilled in this target area for a total advance of 480 metres.
Field logging recorded mainly granitic lithologies with some minor mafic xenolithic units. Drill results
are not considered significant.
Conceptual Target L2
Three holes were drilled at this target area for a total advance of 510 metres. Hole 22GSYSRC0025
recorded an encouraging 13-metre interval of anomalous lithium and arsenic hosted in a sheared
mafic unit between 93-106 metres. This hole also ended in anomalous lithium with 4 metres @
137ppm Li from 158 metres in a mafic unit. Hole 22GSYSRC0026 recorded 4 metres @ 154ppm Li,
95ppm Cs & 1180ppm As from 155 metres in a mafic unit and 3 metres @ 102ppm Cs and elevated
Li and As at the end of hole in an interpreted dolerite. Hole 22GSYSRC0027 recorded 4 metres @
61ppm Cs from 87 metres in an intermediate host and 4 metres @ 170ppm Li and 79ppm Cs from
143 metres in a mafic volcaniclastic rock.
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Conceptual Target L3
Previously announced results for this target area (refer to ASX announcement dated 15 March 2022)
recorded 3 metres @ 128ppm Li from 91m at the end of abandoned hole 22GSYSRC0020. Further
anomalous intervals include 8 metres @ 150ppm Li & 51ppm Cs from 59 metres and 8 metres @
137ppm Li from 75 metres. Hole 22GSYSRC0019 recorded an elevated interval of 12 metres @
90ppm Li from 33 metres
Conceptual Target L4
This lower priority target is scheduled for testing later during the next follow up RC drill program.
Figure 2: Nomad prospect plan showing solid rock & structural interpretation and
advanced target areas
New Lithium Target Areas identified
The principal objective of the drill program was to probe conceptual LCT pegmatite target areas in
relation to primary geochemical dispersion haloes identified from AC bedrock anomalies. An updated
bedrock and structural interpretation in association with additional geochemical analysis has now
identified three advanced target areas (Figure 2). These new targets are based on common areas of
overlap in lithium pathfinder element anomalism in combination with favourable structural positions
and preferred host lithologies.
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Target M1
The priority target is based upon the presence of the caesium values in 22GSYSRC0024, as well as
its favourable structural position in the core of an interpreted major antiform fold. Additionally,
significant interpreted faulting is also associated with this area, making it a ’damaged zone’ of host
rock that can preferentially accommodate later intrusions and serve to focus potentially mineralising
crustal fluids.
Target M2
This target is based on the overlapping Li-Cs-As anomalism on the western side of the major antiform
fold, close to an interpreted fold hinge zone. It also coincides with a major fault crosscutting the major
antiform fold.
Target M3
This target is based on anomalous Li-Rb-Cs intercepts within associated mafic schists across a major
shear zone to the south and west of the major antiform fold. This type of geological setting is also
considered a conceptual gold target.
Nomad prospect - Additional sampling
The company completed further field reconnaissance on site and collected additional samples from
reverse circulation (‘RC’) hole 22GSYSRC0024, which intersected 6 metres @ 440ppm Cs and
88ppm Li along with 5290ppm As from 103 metres (refer to ASX announcement dated 31 October
2022). These levels of caesium are considered highly anomalous and indicative of a proximal
pegmatite source.
Nomad Prospect Lithium Exploration Rights Acquired over E47/2692
The Nomad prospect has been a focal point for GSM’s lithium exploration at the Yule Project (refer to ASX
announcement dated 31 October 2022). Air-core drill programs and a follow up reverse circulation program
delineated a robust lithium (“Li”), caesium (“Cs”), and rubidium (“Rb”) bedrock anomaly with high levels of
associated arsenic over an approximate 2km of strike length. Lithium pegmatite pathfinder vectors, in combination
with a favourable mafic host rock and antiformal fold hinge structural interpretation, suggested that E47/2692
(Figure 3) represents an extension of GSM’s exploration model, adding another 3.5kms of prospective strike
length to explore.
The lithium pegmatite pathfinder vectors – which include up to 6m @ 421ppm Caesium – are very encouraging
as caesium is rare in the Earth’s crust (typically no more than 4ppm in most rocks) and are often confined to
an enrichment in rare metal pegmatites in this type of geological setting (refer to ASX announcement dated
31 October 2022).
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Figure 3: Nomad prospect summary plan showing new exploration ground on E47/2692
On 21 May 2023, the Company and its subsidiary (together and/or individually “GSM” for the purpose of this summary)
entered into a ‘Mineral Rights and Royalty Deed’ with the holder of exploration licence E47/2692 (Bradford Young)
pursuant to which Young granted exploration and other rights to GSM, the material terms of which are summarised as
follows:
Transaction Summary
Minimum Exploration Expenditure
GSM has agreed to spend at least $300,000 in exploration expenditure on the tenement within two years.
Mineral Rights
GSM is granted the right to explore for all minerals other than ‘bulk industrial products’ (sand, gravel, clay,
limestone and calcrete) and is permitted to lodge a mining lease application once it has met the Minimum
Exploration Expenditure, whilst Young maintains certain rights with respect to exploration and extraction of
bulk industrial products. GSM must lodge the application for a mining lease within three years, with the ability
to extend for a further two years if certain requirements are met.
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Consideration to Young
▪ $20,000 cash;
▪ a 2% net smelter return royalty (bulk industrial products excluded); and
▪ 2 million options in the Company exercisable at $0.05 each, expiring 21 May 2028, vesting over three
years on the earlier of:1
o
o
o
the grant of the first mining lease to be granted pursuant to the deed;
a ‘change of control’ of the Company;
the specified vesting dates, being, in respect of:
o
o
o
o
500,000 options, their date of issue;
500,000 options, 21 May 2024;
500,000 options, 21 May 2025; and
500,000 options, 21 May 2026.
1 If the deed is terminated other than by reason of a default by GSM, any options which are unvested at the time the deed
terminates will lapse unless the Company agrees otherwise.
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Figure 4: Yule project and Nomad prospect location in relation to Pilbara lithium and gold
deposits.
Nomad Prospect Geophysical Surveys
The company commissioned two geophysical surveys in June 2023 at the Nomad prospect (Figure 4 &
refer to ASX announcement dated 24 May 2023) to support planned air-core and RC drilling (which
commenced after the end of the financial year). A high-resolution drone magnetic survey was flown over
the entire Nomad prospect area (Figure 5) to better define internal structures within the overall antiformal
structure. In addition, a detailed ground gravity survey was conducted over the northern section of Nomad
with the aim of delineating any “gravity lows” which could be interpreted as pegmatite signatures when
compared to the surrounding mafic rock gravity signatures.
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Figure 5: Nomad prospect summary plan showing planned areas for geophysical surveys
Payne’s Find
GSM received notification of the successful grant of another exploration licence E59/2701 (Figure 6) at its
Payne’s Find project (refer to ASX announcement dated 4 April 2022). This tenement brought an additional
~100km2 of ground holding with approximately 22km strike length along a potential VMS style target corridor
on an interpreted granitoid/greenstone contact.
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Figure 6: Payne’s Find North location plan showing granted tenure
GSM completed an initial field reconnaissance trip over its granted tenure in the northern and central parts of
the project area. Activities included initial stakeholder consultation with supportive local pastoralists and
establishing access to all parts of the ground holding. Regolith assessment and geochemical sampling was
completed in areas elevated for gold in historic laterite sampling. Initial reconnaissance suggested historic
geochemical sampling methods may not have been effective.
Reconnaissance geochemical sampling
The Company completed its first phase reconnaissance geochemical sampling at Paynes Find during
November and December 2022 (refer to ASX announcement dated 22 December 2022). This work was based
on a regolith study and target generation using aeromagnetic interpretation. This early-stage work included
the collection of 19 rock chip samples and 704 soil samples (Figure 7) over priority areas of interpreted shallow
cover and stripped regolith profile with areas of sub-crop.
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Figure 7: Paynes Find geochemical sampling coverage.
Assay results from the rock chip sampling provided early encouragement with anomalous and elevated lithium
and associated pathfinders recorded in several samples. The rock chip sampling program targeted material
sourced from sub-cropping coarse grained K-feldspar rich granites and granitic pegmatites. Further
geochemical analysis indicates that several sample lithologies show evidence of potentially highly fractionated
granites and pegmatites. The most significant results were recorded from sample GSPF0514 (Figure 8), a
coarse-grained, porphyritic (K-feldspar bearing) pegmatite with 208 ppm Li, 851 ppm Rb and 40 ppm Cs
associated with elevated levels of tin, tantalum and tungsten. Sample GSPF0505 recorded 106 ppm Li and
548 ppm Rb also with elevated levels of tin, tantalum and tungsten. Summary statistical analysis of
multielement rock chip sample data shows a moderate to good correlation between Li, Cs, Rb, Y, Sn and W.
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Figure 8: Examples of Paynes Find rock chip samples: coarse-grained K-feldspar rich pegmatites.
Ultrafine soil assay results
The Company received and interpreted ultrafine soil assay results from its first phase regional
geochemical sampling at its Paynes Find project (refer to ASX announcement dated 8 March 2023).
683 soil samples were collected by independent contractors for analysis of the ultrafine fraction (<2µm)
over a number of regional grids (Figure 9 & 10) on 400m centres along 800m spaced, east-west
orientated lines. These grids were located over areas interpreted to encompass relatively shallow
regolith cover considered amenable to this sampling methodology and best suited to deliver any
potential basement response. The total sampling area completed up to this point represented only
14.4% of the granted tenure at the Paynes Find project.
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Figure 9: Geochemical anomalies and follow up areas at the Paynes Find Central
These selective areas do not include higher priority structural targets which are based on aeromagnetic
signatures with interpreted deeper cover where drill testing will be required.
A lithium pegmatite targeting exercise was completed by an independent geochemist using various
statistical grouping and levelling methods of the multi-element assay data. Statistical grouping used a
weighted sum methodology, calculated from known economic and selected supporting elements for
LCT pegmatite mineralisation styles. The levelling methods mitigated the effects of any assay batch
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variation and regolith control. The resultant >90th percentile sample population has highlighted areas
showing anomalous lithium (Li) values which are supported by other pathfinder elements including
beryllium (Be), caesium (Cs), niobium (Nb), rubidium (Rb), tin (Sn) & tantalum (Ta). The coherent
occurrences of elevated Li-Rb-Cs together is considered particularly significant as a regional indicator
for the presence of LCT pegmatite mineralisation. These group 1 alkali elements have a similar
chemistry in surficial environments and are known to occur together in a pegmatite related setting.
This process has identified 29 initial areas of interest which have been ranked in order of priority for
follow up work.
Figure 10: Geochemical anomalies and follow up areas at the Paynes Find North
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The highest priority area (Figure 11) for soil infill is located on the western side of the central tenement
area (E59/2679) within a 6.7km2 area of contiguous samples anomalous in lithium with supporting
elements including Cs, Rb & Ta along a 6km north-north-easterly trend. The highest lithium assay
recorded at this location was 217ppm in sample PFX0669 along with 16.5ppm Cs and 217ppm Rb.
Figure 11: Paynes Find Central anomalous lithium with supporting Cs and Rb values
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The second priority area (Figure 12) is located on the north-eastern end of the northern tenement
(E59/2660) over a 7.7 km2 area within an approximate 2.6kmx3.6km zone of contiguous lithium
anomalous samples supported by similar pathfinder elements. The highest lithium assay recorded at
this location was 158ppm in sample PFX0578 along with 23.9ppm Cs and 157ppm Rb.
Figure 12: Paynes Find North anomalous lithium with supporting Cs and Rb values
The remaining priority infill soil targets consist of clusters of lower priority areas of interest which will
be completed later in the year.
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Phase 2 follow up soil program
Assay results were received for a follow up soil program to define two potential target areas over
anomalous lithium and pathfinder results from the Phase 1 program (refer to ASX announcements
dated 8 March 2023 and 13 June 2023). At total 581 soil samples were collected on 200m centres
along 400m spaced, east-west orientated lines to infill previous anomalous soil sample locations.
A similar regolith levelling and weighted sum analysis methodology based on lithium values in
combination with supporting pathfinder elements has corroborated and refined Phase 1 results in both
priority infill areas. Results from the highest priority follow up area at Paynes Find Central (Figure 13)
have now delineated a ~2.5km north-northwest trending target zone. Encouragingly, this is the same
trend as the Mt. Edon pegmatites mapped approximately 6 kms to the west by Morella Corporation
(refer to ASX:1MC announcement dated 23 June 2022).
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Figure 13: Paynes Find Central infill weighted sum soil results (Inset 2) showing anomalous trend.
The second priority infill area at Paynes Find North (Figure 14) has divided the original anomalous area into
three separate target zones of various orientations. These target areas are located approximately 7kms
northwest of the historic ‘Wydgee’ beryl-columbite pegmatite mine workings which could indicate the presence
of more fractionated LCT pegmatites nearby.
Both target areas now require ground mapping and rock chipping where outcrop is available and potential drill
planning.
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Figure 14: Paynes Find North infill weighted sum soil results (Inset 1)
Four Mile Well
Phase Two Air-core Program
The Company received the assay results from the reconnaissance air-core drill program completed
in early July (refer to ASX announcement dated 18 August 2022). The program consisted of 27 holes
(Figure 15) for a total advance of 1,162 metres and was designed to assess concealed Archaean
terrain and basement below historic and recent anomalous soil geochemistry responses (refer to ASX
announcement dated 20 June 2022).
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Figure 15: Four Mile Well AC collar plan and significant results.
Gold intercepts considered anomalous were encountered in three of the holes. The most significant intercept
was recorded in hole 22GSFMAC0069 with 4 metres @ 224ppb Au from 16 metres in an interpreted porphyry
unit which coincides with a magnetic high, considered to be in a buried greenstone sequence. This
interpretation has now been confirmed with all holes drilled over the northwest magnetic trend encountering
greenstone units (Figure 16).
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DIRECTORS’ REPORT
Figure 16: Four Mile Well plan showing recorded greenstone locations and soil orientation lines
28
Golden State Mining Limited
30 JUNE 2023
DIRECTORS’ REPORT
Phase Three Air-core Program
Figure 17: Four Mile Well Plan showing phase three AC collar locations and previous results
The Company completed a reconnaissance AC drill program on tenement (E38/3632) at the Four Mile
Well Project near Laverton in Western Australia (refer to ASX announcement dated 30 March 2023).
The program consisted of 12 holes (Figure 17) for a total advance of 982 metres and was designed to
assess recent anomalous soil geochemistry responses (refer to ASX announcement dated 20 June
2022) and potentially concealed deformed Archaean terrain and basement.
Field drill logging recorded variable weathered granitic intrusive lithologies beneath extensive puggy
ferruginous (probably haematitc-goethitic) lateritic and kaolinitic-silica rich saprolitic clays. Minor
interpreted fine-grained, weakly schistose to massive equigranular mafic-ultramafic greenstone
lithologies were also intersected which coincide with gold in soil anomalism on the eastern side of the
reconnaissance drill line. Composite gold assay results showed no significant gold results or pathfinder
element trends recorded from multielement assays at the end of hole in this drilling.
The Company subsequently surrendered E 38/3282.
29
Golden State Mining Limited
30 JUNE 2023
DIRECTORS’ REPORT
Southern Cross East – gold project
Three exploration licences (Figure 18) located approximately 60km north-east of the well-endowed
gold mining camp of Southern Cross were granted in October 2022, for a total of 620km2. The granted
tenements include interpreted buried Archaean rocks within a favourable orogenic gold structural
setting. The project area has had negligible on-ground exploration. The structural setting is believed to
comprise a series of thrust faults dislocated by minor secondary dilational structures which are
prospective for orogenic gold mineralisation.
Figure 18: Southern Cross East Gold Project Location Plan
30
Golden State Mining Limited
30 JUNE 2023
DIRECTORS’ REPORT
First phase regional geochemical sampling
The Company received and interpreted ultrafine soil assay results from first phase regional geochemical
sampling at its Southern Cross East project (refer to ASX announcement dated 13 January 2023). 1,904 soil
samples were collected by independent contractors for analysis of the ultrafine fraction (<2µm) (Figure 6) on
400m centres along 800m spaced, east-west orientated lines with closer 200mx400m spacing over higher
magnetic signatures interpreted as buried greenstone. The sampling was located over areas interpreted to
encompass relatively shallow regolith cover considered amenable to this sampling methodology and best
suited to deliver any potential basement response.
A gold targeting exercise was completed by an independent consultant geochemist using various statistical
grouping and levelling methods of the multi-element assay data. The levelling methods mitigated the effects
of any assay batch variation and regolith control. Statistical grouping then used a weighted sum methodology,
calculated from known economic and selected supporting elements for gold mineralisation styles.
The resultant >90th percentile sample population has identified 32 initial areas of interest which have been
ranked in order of priority for follow up work (Figure 19). Two higher priority areas in proximity to structural
trends show anomalous low-level gold (Au) values supported by other pathfinder elements including silver
(Ag), arsenic (As), copper (Cu), nickel (Ni), antimony (Sb) & tungsten (W), which are considered particularly
significant. The coherent occurrences of these elements together with proximity to an interpreted major
structure and fault splay is suggestive of a gold mineralisation system nearby.
Follow up soil sampling commenced mid-June 2023 over the two priority target areas. Assay results for this
infill campaign were expected early September. The results and interpretation will then be incorporated with
field mapping work planned for September 2023 in preparation for potential drilling estimated to take place in
Q4.
In addition, 33 rock chip samples were collected from various outcrops in the project area. The majority of
these samples were granitic and collected from granite outcrops. However, litho-chemical classification by an
independent consultant geochemist indicates that although the majority of rock chips are generally weathered
felsic to intermediate rocks, some heavily weathered samples may be interpreted as containing some mafic
composition.
31
Golden State Mining Limited
30 JUNE 2023
DIRECTORS’ REPORT
Figure 19: Southern Cross East Project Plan showing phase 1 geochemical sample locations and results
32
Golden State Mining Limited
30 JUNE 2023
DIRECTORS’ REPORT
Murchison
Cuddingwarra and Big Bell South JV – 20% GSM
GSM retains 20% ownership in the projects after forming a joint venture (‘JV’) with Caprice Resources Limited.
Cue Project – Disposed of during the period (previously 100% GSM)
The Cue project was divested during the year, although the Company retains certain royalty interests. The
Company also restructured one of the key royalties covering key parts of this project earlier in the financial
year prior to the divestments.
Exploration activities during the year included historic drilling data compilation and targeting work. Field
activities during the quarter were predominantly focused on the rehabilitation of prior disturbances.
Cue Royalty Adjustment
In August 2022 the Company agreed to restructure the gold royalty payable in respect of its Cue project (refer
to ASX announcement dated 16 August 2022).
In consideration for restructuring the royalty, GSM issued the royalty holder (Western Mining Pty Ltd) with
592,885 GSM shares at an agreed price of 5.06 cents per share ($30,000 worth) plus 100,000 options
exercisable at $0.10 each, expiring 12 August 2024.
The previous royalty was a staged royalty of $50 per ounce of gold produced for the first 40,000 ounces, then
$15 per ounce up to 250,000 ounces, and $5 per ounce thereafter.
The new royalty is now payable at the rate of $25 per ounce for the first 40,000 ounces and $5 per ounce
thereafter. The reduced royalty enabled to Company to better position the Cue project for sale.
Divestment of Selected Cue Tenements to Victory Metals
In March 2023, the Company sold tenements P20/2345 and P20/2346 to Victory Metals Limited (VTM) (refer
to ASX announcement dated 28 March 2023). The tenements are located near VTM’s Cue ionic clay REE
discovery (Figure 20), where the system has demonstrated high ratios of heavy rare earth oxides and critical
magnet metals NdPr + DyTb.
In consideration for the acquisition:
• Victory issued GSM with 150,000 fully paid ordinary shares in the capital of Victory (disposed of
subsequent to the financial year);
• GSM was granted a 1.0% net smelter return royalty on the sale tenements, and
• GSM was granted 66,666 options in Victory with an exercise price of $0.30 per option and expiring 2
years from the date of grant.
33
Golden State Mining Limited
30 JUNE 2023
DIRECTORS’ REPORT
Figure 20: Map showing tenements P20/2345 and P20/2346 and the location of the Victory AC drill holes
with anomalous rare earth elements >200ppm and the wide distribution of highlighted assays (refer to
Victory ASX announcement dated 13 March 2023).
34
Golden State Mining Limited
30 JUNE 2023
DIRECTORS’ REPORT
Cue gold project sold for $200,000 cash and royalty
In April 2023, GSM sold its Cue project (refer to ASX announcement dated 26 April 2023), located in the
Murchison region of Western Australia (Figure 21), to Rock Solid Mining Services Pty Ltd (“Rock Solid”) for
$200,000 in cash and the following royalties.
• $15.00 per ounce payable on the first 60,000 ounces, and $5.00 per ounce thereafter, of gold produced
from the project tenements, and
• 2% net smelter return royalty on all minerals, other than gold, produced from the project tenements.
Figure 21: Map showing tenements at Cue held by Cue Consolidated Mining Pty Ltd (sold to Rock Solid).
35
Golden State Mining Limited
30 JUNE 2023
DIRECTORS’ REPORT
Yamarna – Ni +/-PGE & Cu project
Exploration licence (E38/3671) located 95km north-northeast of Laverton (Figure 22) captures ground located
on the same crustal feature as St George Mining’s (ASX:SGQ) Mt Alexander nickel sulphide deposit and was
considered an analogous geological setting for magmatic nickel +/-copper sulphide potential.
Figure 22: Yamarna Ni+/-PGA-Cu Project Location Plan
As seen at Mt Alexander, the interpreted host rocks at Yamarna (interpreted as granitic in nature) are
fractured and intruded by Proterozoic dykes and considered similar to the setting at Mt Alexander.
This project was subsequently reviewed and surrendered due in part to associated native title and
heritage challenges.
36
Golden State Mining Limited
30 JUNE 2023
DIRECTORS’ REPORT
Corporate
$2 million capital raise for WA lithium/gold projects
In May 2023, the Company successfully completed a bookbuild to raise $2 million in a placement to
sophisticated and professional investors through the issue of 74.1 million new fully paid ordinary shares at
an issue price of $0.027 each (“Placement”).
The issue of 27.25 million shares was not subject to shareholder approval, falling within the Company’s
placement capacity under ASX Listing Rule 7.1 (15,548,581 shares) and 7.1A (11,701,420 shares). These
shares were issued on 31 May 2023, raising $735,750 before costs.
The issue of 46,824,073 shares was subject to shareholder approval, which was approved at a general
meeting held (after the end of the year) on the 5 July 2023. These shares were subsequently issued on 11
July 2023, raising $1,264,250 before costs.
Plutus Capital acted as Lead Manager to the Placement.
Material Business Risks
This section outlines some of the key risks and uncertainties associated with the junior explorer’s consolidated
entity (referred to hereafter as the “Group”) consisting of Golden State Mining Limited (the “Company”) and
the entities it controlled at the end of, or during, the year ended 30 June 2023, that could impact the Group
and its ability to achieve its financial and operating objectives. It is not exhaustive.
Economic Risks and Future Funding
The Group does not currently generate any significant income from its ordinary business activities and will
likely require substantial further financing in the future for its business activities. There can be no assurance
that additional finance will be available when needed or, if available, the terms of the financing may not be
favourable to the Group and might involve substantial dilution to shareholders.
Access to, dependence on and dilution from capital raisings of the Group will be influenced by a variety of
company or industry specific conditions general economic and business conditions, including, stock market
conditions (including the Group’s prevailing share price), commodity prices, levels of consumer spending,
inflation, interest rates and exchange rates, commodity supply and demand, industrial disruption, access to
debt and capital markets and government fiscal, monetary and regulatory policies. Changes in general
economic conditions may result from many factors including government policy, international economic
conditions (China in particular), war, pandemics or natural disasters.
Reliance on Key Personnel
The Group is substantially reliant on the expertise and abilities of its key personnel in overseeing the day-to-
day operations of its projects. There can be no assurance that there will be no detrimental impact on the Group
if one or more of these employees cease their relationship with the Group;
Litigation Risk
The Group may in the course of business become involved in litigation and disputes, for example with
competing mining tenement holders or applicants, counterparties to contracts, government departments
affecting or overseeing the Group’s activities or proposed activities, service providers, customers or third
parties infringing the Group’s intellectual property rights. Any such litigation or dispute could involve significant
economic costs and damage to relationships with contractors, customers or other stakeholders. Such
outcomes may have an adverse impact on the Group’s business, reputation and financial performance.
37
Golden State Mining Limited
30 JUNE 2023
DIRECTORS’ REPORT
Exploration Risk
There is no assurance that exploration will be conducted effectively or result in any resource discovery on a
scale that makes development and production feasible. For this reason, the Group conservatively expenses
all exploration expenditure and investments in its consolidated financial statements. Exploration results that
include drill results on wide spacings may not be indicative of the occurrence of a mineral deposit. Such results
do not provide assurance that further work will establish sufficient grade, continuity, metallurgical
characteristics, and economic potential to be classed as a category of mineral resource. Potential quantities
and grades of drilling targets are conceptual in nature and, there has been insufficient exploration to define a
mineral resource, and it is uncertain if further exploration will result in the targets being delineated as mineral
resources.
Ground-disturbing exploration activities, such as drilling, also carry potentially serious risks of damage to or
interference with third party assets and infrastructure.
Environmental Risk
The Group has environmental risks and liabilities associated with its tenements which arise as a consequence
of its drilling programs or other activities. The Group's operations are subject to various environmental laws
and regulations under the relevant government's legislation. Non-compliance can potentially result in
significant risk, including potential forfeiture of mining tenure or significant claims of damages from third parties.
Occupational Health and Safety Risk
The Group strives to provide a safe workplace to minimise risk of harm to its contractors and employees. It
achieves this through its safety guidelines and systems, work health and safety procedures, safety culture,
training and emergency preparedness.
Native Title
In tenements where native title is claimed or determined, the ability of the Group to acquire valid mining tenure
may also be subject to compliance with the ‘right to negotiate’ and other processes under the Native Title Act.
Compliance with these processes can cause delays in obtaining a mining lease and does not guarantee that
it will be granted. Attaining a negotiated agreement with native title claimants or holders to facilitate the grant
of a valid mining lease can add significantly to the costs of any development or mining operation.
Aboriginal Heritage
The ability of the Group to conduct activities on exploration or mining tenements is subject to compliance with
laws protecting Aboriginal heritage. Conduct of site surveys to ensure compliance can be expensive and
subject to delays. If any Aboriginal sites are located within areas of proposed exploration, mining or other
activities, the Group’s ability to conduct those activities may be restricted and may also depend on obtaining
further regulatory approvals.
Tenement Obligations and Tenure Risks
Tenements in Western Australia are governed by the Mining Act 1978 (WA). Each tenement licence or lease
is for a specified term (which may be subject to renewal) and has minimum annual expenditure and reporting
commitments as well as conditions of grant, compulsory surrender, annual rent and other compliance
conditions. Failure to meet these expenditure, work, rental and reporting commitments as well as the relevant
conditions (including environmental rehabilitation obligations) may render the tenements subject to forfeiture
or result in the tenement holders being liable for penalties or fees.
There is no guarantee that current or future tenements and/or applications for tenements will be renewed,
approved or granted. Exploration licences in Western Australia are also generally required to surrender 40%
of the relevant licence area within the first six years (note that the Group’s Yule tenements E 70/3503, 3507
and 3508.were granted on 4 December 2017). In addition, any contractual obligations that are not complied
with when due could result in dilution or forfeiture of the Group’s interest in the projects.
Administrative and judicial interpretations of the law can also change from generally prevailing understandings,
which can put security of tenure at risk (for example, for procedural defects not previously thought to be
defective).
Special prospecting licences, which can also be applied for over granted tenure, have the potential to create
competing mineral interests.
38
Golden State Mining Limited
30 JUNE 2023
DIRECTORS’ REPORT
Tenement applications may also be subject to objections by other parties, in competition with other parties or
may otherwise be at risk of rejection. Potential investors should assume that all applications in which the Group
has an interest are or will be encroached by other competing applications or granted tenements, that they have
been or will be objected to by the relevant encroaching tenement holder or applicant, that further competing
applications may also be made in respect of the same areas and that the application will ultimately be rejected
in its entirety.
Cyber Risks
The Group and its agents (including its share registrar) are reliant on information technology for the effective
operation of its/their business. Any failure, unauthorised or erroneous use of the Group’s or its agent’s
information (including cyber data theft) and/or information systems may result in financial loss, disruption
or damage to its reputation.
END OF GSM ANNUAL OPERATIONS REPORT 2022-23
RESULTS OF OPERATIONS
Revenues and results
A summary of the Group’s revenues and results for the period is set out below:
Consolidated entity revenues and (loss)
June 2023
$
June 2022
$
Revenues
93,446
Results
(2,807,785)
Revenues
963,860
Results
(3,162,787)
SHARES
There were 144,264,205 fully paid ordinary shares outstanding as at 30 June 2023. On 11 July 2023,
46,824,073 shares were issued in the second tranche placement at 2.7c per share raising $1,264,250 (before
costs) after balance date.
As at the date of this report there are 191,088,278 fully paid ordinary shares outstanding.
OPTIONS
There were 18,050,000 options outstanding as at 30 June 2023, all of which are unlisted.
Number
Class
3,200,000 Unlisted options ($0.40 for GSM, Expire 30 Sep 2024)
2,950,000 Unlisted options ($0.60 for GSM, Expire 30 Sep 2024)
5,900,000 Unlisted options ($0.25 for GSM, Expire 15 Dec 2024)
100,000 Unlisted options ($0.10 for GSM, Expire 12 Aug 2024)
5,900,000 Unlisted options ($0.10 for GSM, Expire 20 Dec 2024)
Since the end of the financial year, 2,000,000 unlisted options ($0.06, Expire 26 Jun 2026) for part
consideration for Lead Manager services in respect of the capital raise were issued on 11 July 2023. In
addition, on 18 August 2023, 2,000,000 unlisted options ($0.05, Expire 21 May 2028) were issued for part
consideration for the acquisition of exploration rights adjacent to Nomad lithium prospect at the Yule project.
As at the date of this report there are 22,050,000 options outstanding.
39
Golden State Mining Limited
30 JUNE 2023
DIRECTORS’ REPORT
The number of Directors’ Meetings held during the year and the number of meetings attended by each Director
is as follows:
Director
Michael Moore
Damien Kelly
Greg Hancock
Brenton Siggs
Board meetings
Attended
Entitled to Attend
7
7
7
7
7
7
7
7
The full board discharged the functions of the audit, remuneration, risk and nomination committees regularly
and during the course of ordinary director meetings.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied for leave of court to bring proceedings on behalf of the company or intervene in any
proceedings to which the company is a party for the purpose of taking responsibility on behalf of the company
for all or any part of those proceedings. The company was not a party to any such proceedings during the
year.
CORPORATE STRUCTURE
Golden State Mining Limited is a company limited by shares that is incorporated and domiciled in Australia.
PERFORMANCE RIGHTS
There are nil performance rights on issue at the date of this report.
RISK MANAGEMENT
The board is responsible for ensuring that risks, and also opportunities, are identified on a timely basis and
that activities are aligned with the risks and opportunities identified by the board.
The board believes that it is crucial for all board members to be a part of this process, and, accordingly, all
board members form, and discharge the obligations of the risk management committee.
The board has a number of mechanisms in place to ensure that management's objectives and activities are
aligned with the risks identified by the board. These include implementation of board approved operating plans
and budgets and board monitoring of progress against these budgets.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
Other than as disclosed in this Annual Report, no significant changes in the state of affairs of the Group
occurred during the financial year.
SIGNIFICANT EVENTS AFTER THE BALANCE DATE
Since the reporting date, on 11 July 2023, the Company issued 46,824,073 shares at $0.027 per share raising
$1,264,250 in the second tranche placement following shareholder approval at the general meeting held on
5 July 2023; and 2,000,000 unlisted options exercisable at $0.06, expiring 26 Jun 2026, were also issued
following shareholder approval at the general meeting, to the Lead Manager for part consideration for services
in respect of the capital raise.
On 18 August 2023, 2,000,000 unlisted options exercisable at $0.05, expiring 21 May 2028, which were ratified
by shareholders at the general meeting, were issued as part consideration for the acquisition of exploration
rights adjacent to Nomad lithium prospect at the Yule project.
No other matter or circumstance has arisen since 30 June 2023, which has significantly affected, or may
significantly affect the operations of the Group, the result of those operations, or the state of affairs of the
Group in subsequent financial years.
40
Golden State Mining Limited
30 JUNE 2023
DIRECTORS’ REPORT
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
The Group intends to continue to undertake appropriate levels of exploration of its tenement portfolio, and to
seek new project opportunities.
Other than as set out above, 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 directors believe, on
reasonable grounds, that the inclusion of such information would be likely to result in unreasonable prejudice
to the Group.
ENVIRONMENTAL REGULATION AND PERFORMANCE
The Group is subject to environmental regulation in respect to its activities.
The Group aims to ensure the appropriate standard of environmental care is achieved, and in doing so, that it
is aware of and complies with all environmental legislation. The directors of the Company are not aware of any
significant breach of environmental legislation for the year under review.
REMUNERATION REPORT (AUDITED)
The information provided in this remuneration report has been audited as required by section 308(3C) of the
Corporations Act 2001.
Policy principles used/to be used to determine the nature and amount of remuneration.
Remuneration Policy
The remuneration policy of Golden State Mining Limited is designed to align key management personnel
objectives with shareholder and business objectives by providing a fixed remuneration component. The board
of Golden State Mining Limited believes the remuneration policy for the year under review was appropriate
and effective to attract and retain suitable key management personnel to run and manage the Group.
Consideration has been and will continue to be given to offering specific short and long term incentives
including, specifically, equity remuneration.
The remuneration policy, setting the terms and conditions for the executive directors and other senior
executives (if any), was developed by the board. In general, in respect of the year under review, executives
received a base salary (which was based on factors such as experience), superannuation and share-based
payments. The board will review executive packages as and when it considers it appropriate to do so in
accordance with its remuneration policy and by reference to the Group’s performance, executive performance
and comparable information from industry sectors and other listed companies in similar industries.
The board may exercise discretion in relation to approving incentives, bonuses and equity remuneration. The
policy is to reward executives for performance that results in long-term growth in shareholder wealth.
The executive directors and executives receive, where required by law, a superannuation guarantee
contribution required by the government of Australia, which was 10.5% for the 2023 financial year but are not
entitled to receive any other retirement benefits.
All remuneration paid to directors and executives is “valued” at the cost to the Group and expensed. Where
applicable, options granted as equity remuneration are ascribed a “fair value” in accordance with Australian
Accounting Standards.
The board’s policy is to remunerate non-executive directors at market rates for comparable companies for
time, commitment and responsibilities. The board determines payments to the non-executive directors and the
policy is to effect reviews of remuneration annually, based on market practice, duties and accountability. Fees
for non-executive directors are not linked to the performance of the Group. However, to align directors’ interests
with shareholder interests, the directors are encouraged to hold shares in the Company and are able to
participate in equity remuneration arrangements.
Company performance, shareholder wealth and key management personnel remuneration
There is no relationship between the financial performance of the Company for the current or previous financial
year and the remuneration of the key management personnel. Remuneration is set having regard to market
conditions and to encourage continued services of key management personnel.
41
Golden State Mining Limited
30 JUNE 2023
DIRECTORS’ REPORT
Use of remuneration consultants
No remuneration consultant made a remuneration recommendation in relation to any of the key management
personnel for the Group for the financial year.
Key management personnel of the Group
The Key Management Personnel (KMP) of the Group was comprised of all the board of directors mentioned
above and Mr Moore is the sole Executive Director.
Details of the remuneration of the directors and the key management personnel of the Group are set out in the
following tables:
2023
Short term
Post
Director
Base
Salary & Other Fees
$
Employment
Superannuation
$
Share-Based Payments
$
Total
$
Michael Moore
Damien Kelly
Greg Hancock
Brenton Siggs
Total
225,000
60,000
39,765
36,000
360,765
23,625
6,300
-
3,780
33,705
47,040
295,665
37,632
103,932
25,088
64,853
25,088
64,868
134,848
529,318
2022
Short term
Post
Director
Base
Salary & Other Fees
$
Employment
Superannuation
$
Share-Based Payments
$
Total
$
Michael Moore
Damien Kelly
Greg Hancock
Brenton Siggs
Total
225,000
60,000
39,600
36,000
360,600
22,500
6,000
-
3,600
32,100
75,854
323,354
60,683
126,683
40,456
80,056
40,456
80,056
217,449
610,149
42
Golden State Mining Limited
30 JUNE 2023
DIRECTORS’ REPORT
Written Service agreements
Michael Moore, Managing Director:
An employment agreement has been executed between the Company and Mr Moore. Material provisions of
the agreement were as follows for the financial year:
• Term of agreement – The contract has no fixed term. It may be terminated without reason by the
company by giving 3 months’ written notice or, at the Company’s election, payment of the 3 months’
notice period in lieu of notice. The Executive may terminate the employment without reason by giving
3 months written notice.
• Monthly package of $18,750 plus statutory superannuation.
Damien Kelly, Non-Executive Chairman:
• Term of agreement – Subject to retirement by rotation under the Company’s Constitution.
• Monthly package of $5,000 plus statutory superannuation (if applicable).
Brenton Siggs (Non-Executive Director) and Greg Hancock (Non-Executive Director):
• Term of agreement – Subject to retirement by rotation under the Company’s Constitution.
• Monthly package of $3,000 plus statutory superannuation (if applicable).
Share holdings
The relevant interest held during the financial year by each KMP, including their personally related parties, is
set out below. No shares were issued as compensation during the reporting period.
Fully paid ordinary shares
June 2023
Balance at start
of the period
Granted during the year
as compensation
Other
during the year
changes
Balance at end of
the period
Michael
Moore
Damien
Kelly
Greg
Hancock
Brenton
Siggs
Total
2,095,100
1,760,100
250,000
910,000
5,015,200
-
-
-
-
-
-
-
-
-
-
2,095,100
1,760,100
250,000
910,000
5,015,200
43
Golden State Mining Limited
30 JUNE 2023
DIRECTORS’ REPORT
Option holdings
The relevant interest in options over ordinary shares in the Company held during the financial year by each
director of Golden State Mining Limited and other key management personnel of the Group is set out below.
Unlisted options
30 June
2023
Michael
Moore
Damien
Kelly
Greg
Hancock
Brenton
Siggs
Total
Balance at
Granted as
Exercised Lapsed
Other
Balance at end
Vested and
Unvested
start of the
compensation
changes
of the year
exercisable
year
3,000,000
1,500,000
2,400,000
1,200,000
1,600,000
800,000
1,600,000
800,000
8,600,000
4,300,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4,500,000
4,500,000
3,600,000
3,600,000
2,400,000
2,400,000
2,400,000
2,400,000
12,900,000
12,900,000
-
-
-
-
-
Other equity-related KMP transactions
There have been no other transactions during the financial year involving equity instruments apart from those
described in the tables above relating to options, rights and shareholdings.
Loans to key management personnel
There were no loans to key management personnel during the year.
Other transactions with key management personnel
Transactions between related parties are on commercial terms and conditions no more favourable than those
available to third parties unless otherwise stated. Refer to note 23: Related Party Transactions.
INSURANCE OF DIRECTORS AND OFFICERS
During or since the financial year, in accordance with each director’s Deed of Indemnity, Insurance and Access
with Golden State Mining Limited, the Group has paid premiums insuring all the directors of Golden State
Mining Limited, to the extent permitted by law, against all liabilities incurred by the director acting directly or
indirectly as a director of the Company. The cover extends to legal costs incurred by the director in defending
proceedings, provided that the liabilities for which the director is to be insured do not arise out of conduct
involving a wilful breach of the director’s duty to the Company or a contravention of sections 182 or 183 of the
Corporations Act 2001.The total amount of Directors and Officers insurance premiums paid is $16,650 (2022:
$29,304).
The table below sets out summary information about the Group’s earnings and movements in
shareholder wealth for the two (2) years to 30 June 2023:
30 June 2023
$
30 June 2022
$
Other income
Net loss before tax
Net loss after tax
Share price at start of the year
Share price at end of the year
Basic/diluted loss per share (cents)
93,446
2,807,785
2,807,785
0.04
0.045
(2.36)
END OF REMUNERATION REPORT (AUDITED)
963,860
3,162,787
3,162,787
0.14
0.04
(3.59)
44
Golden State Mining Limited
30 JUNE 2023
DIRECTORS’ REPORT
NON-AUDIT SERVICES
Details of amounts paid or payable to the auditor for non-audit services provided during the year by the auditor
are outlined in note 17 to the financial statements.
In the event non-audit services are provided by Stantons, the Board has established precedence to ensure
that the provision of non-audit services is compatible with the general standard of independence for auditors
imposed by the Corporations Act 2001.These include:
• all non-audit services are reviewed and approved to ensure that they do not impact the integrity and
objectivity of the auditor; and
• non-audit services do not undermine the general principles relating to auditor independence as set out
in APES 110 ‘Code of Ethics for Professional Accountants’ issued by the Accounting Professional &
Ethical Standards Board, including reviewing or auditing the auditor’s own work, acting in a
management or decision-making capacity for the Company, acting as advocate for the Company or
jointly sharing economic risks and rewards.
AUDITOR’S INDEPENDENCE DECLARATION
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001
is set out on page 46.
Signed in accordance with a resolution of the Directors.
Michael Moore
Managing Director
29 September 2023
45
PO Box 1908
West Perth WA 6872
Australia
Level 2, 40 Kings Park Road
West Perth WA 6005
Australia
Tel: +61 8 9481 3188
Fax: +61 8 9321 1204
ABN: 84 144 581 519
www.stantons.com.au
29 September 2023
Board of Directors
Golden State Mining Limited
Suite 15, 19/21 Outram Street
WEST PERTH, WA 6005
Dear Directors
RE:
GOLDEN STATE MINING LIMITED
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following
declaration of independence to the directors of Golden State Mining Limited.
As Audit Director for the audit of the financial statements of Golden State Mining Limited for the year ended
30 June 2023, I declare that to the best of my knowledge and belief, there have been no contraventions
of:
(i)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(ii)
any applicable code of professional conduct in relation to the audit.
Yours sincerely
STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LTD
(An Authorised Audit Company)
Samir Tirodkar
Director
Liability limited by a scheme approved under Professional Standards Legislation
Stantons Is a member of the Russell
Bedford International network of firms
Golden State Mining Limited
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2023
REVENUE
Interest revenue
Other income
EXPENDITURE
Administration expense
Depreciation expense
Exploration and tenement expense written off
Share-based payments expense
Employee benefits expense
Gain/(Loss) on shares at FVTPL
Gain/(Loss) on sale of shares
Gain/(Loss) on sale of subsidiary
Year
30 June 2023
Year
30 June 2022
$
$
63,446
30,000
(531,538)
(25,560)
10,300
953,560
(450,685)
(40,764)
(1,680,379)
(2,262,591)
(212,925)
(749,434)
345,000
(431,110)
384,715
(298,360)
(736,747)
(337,500)
-
-
Notes
9
21
11
14a
14b
(LOSS) BEFORE INCOME TAX
(2,807,785)
(3,162,787)
Income tax benefit/(expense)
18
-
-
(LOSS) FOR THE YEAR ATTRIBUTABLE TO
MEMBERS OF GOLDEN STATE MINING
LIMITED
OTHER COMPREHENSIVE INCOME
Items that may be reclassified to profit or loss
(2,807,785)
(3,162,787)
-
-
Other comprehensive (loss) for the period, net of tax
(2,807,785)
(3,162,787)
TOTAL COMPREHENSIVE (LOSS) FOR THE
PERIOD ATTRIBUTABLE TO MEMBERS OF
GOLDEN STATE MINING LIMITED
(2,807,785)
(3,162,787)
Basic and diluted (loss) per share (cents)
22
(2.36)
(3.59)
The above consolidated statement of profit or loss and other comprehensive income should be read in
conjunction with the accompanying notes.
47
Golden State Mining Limited
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2023
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Accrued income
Prepayments
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Property, plant and equipment
Financial assets
TOTAL NON-CURRENT ASSSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Provisions
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Provisions
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
30 June
30 June
Notes
2023
$
2022
$
3
4
5
6
21
14a
7
8
8
2,069,602
3,736,729
40,689
5,500
6,719
74,114
4,853
33,701
2,122,510
3,849,397
43,740
37,500
81,240
72,832
212,500
285,332
2,203,750
4,134,729
369,146
176,512
545,658
274,787
133,407
408,194
-
-
188,864
188,864
545,658
597,058
1,658,092
3,537,671
10
10
13
13,836,862
13,150,506
1,910,096
1,668,246
(14,088,866)
(11,281,081)
1,658,092
3,537,671
The above consolidated statement of financial position should be read in conjunction with the accompanying
notes.
48
Golden State Mining Limited
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2023
Contributed
Equity
Reserves Accumulated Losses
Total
$
$
$
$
BALANCE AT 1 JULY 2021
10,760,747
1,369,886
(8,118,294)
4,012,339
Loss for the period
TOTAL COMPREHENSIVE INCOME
(LOSS)
TRANSACTIONS WITH OWNERS IN
THEIR CAPACITY AS OWNERS
-
-
-
(3,162,787)
(3,162,787)
-
(3,162,787)
(3,162,787)
Share-based payments
-
298,360
Proceeds from issue of shares
2,500,000
Royalties paid in shares
Liabilities paid in shares
Securities issue costs
42,707
10,195
(163,143)
-
-
-
-
-
-
-
-
-
298,360
2,500,000
42,707
10,195
(163,143)
BALANCE AT 30 JUNE 2022
13,150,506
1,668,246 (11,281,081)
3,537,671
BALANCE AT 1 JULY 2022
13,150,506
1,668,246
(11,281,081)
3,537,671
Loss for the period
TOTAL COMPREHENSIVE INCOME
(LOSS)
TRANSACTIONS WITH OWNERS IN
THEIR CAPACITY AS OWNERS
Share-based payments
Lead manager options
Proceeds from issue of shares
Cue royalty restructure paid in shares
30,000
Securities issue costs
(50,469)
-
-
-
(2,807,785)
(2,807,785)
-
(2,807,785)
(2,807,785)
-
212,925
(28,925)
735,750
28,925
-
-
-
-
-
-
-
-
212,925
-
735,750
30,000
(50,469)
BALANCE AT 30 JUNE 2023
13,836,862
1,910,096 (14,088,866)
1,658,092
The above consolidated statement of changes in equity should be read in conjunction with the accompanying
notes.
49
Golden State Mining Limited
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2023
CASH FLOWS FROM OPERATING ACTIVITIES
Other income
Interest received
Payments to suppliers and employees
Net cash (used in) operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Proceed from sale of projects
Proceeds from sale of subsidiary
Proceeds from sale of shares
Payments for plant and equipment
Net cash from investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of securities
Payment for costs of issue of securities
Net cash from financing activities
Notes
30 June 2023
$
30 June 2022
$
-
62,799
8,560
7,776
(2,733,480)
(3,362,958)
16
(2,670,681)
(3,346,622)
-
395,000
200,000
118,890
(617)
318,273
-
-
(24,559)
370,441
735,750
(50,469)
685,281
2,500,000
(163,143)
2,336,857
Net (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
(1,667,127)
(639,324)
3,736,729
4,376,053
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR
3
2,069,602
3,736,729
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes
50
Golden State Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted in the preparation of the financial statements are set out below. The
financial statements are for the Group consisting of Golden State Mining Limited and its subsidiaries. The
financial statements are presented in the Australian currency. Golden State Mining Limited is a public company
limited by shares incorporated and domiciled in Australia whose shares are publicly traded on the Australian
Securities Exchange. It is a “for profit” entity. The financial statements were authorised for issue by the directors
on 29 September 2023. The directors have the power to amend and reissue the financial statements.
(a) Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting
Standards and Interpretations issued by the Australian Accounting Standards Board and the Corporations Act
2001. Golden State Mining Limited is a for-profit entity for the purpose of preparing the financial statements.
The consolidated financial statements have been prepared on the basis of historical cost, except for certain
financial instruments that are measured at revalued amounts or fair values at the end of each reporting period,
as explained in the accounting policies below. Historical cost is generally based on the fair values of the
consideration given in exchange for goods and services.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date, regardless of whether that price is directly
observable or estimated using another valuation technique. In estimating the fair value of an asset or liability,
the Group takes into account the characteristics of the asset or liability at the measurement date. Fair value
for measurement and/or disclosure purposes in these consolidated financial statements is determined on such
a basis, except for share-based payment transactions that are within the scope of AASB 2 Share-based
Payment, leasing transactions that are within the scope of AASB 16 Leases, and measurements that have
some similarities to fair value but are not fair value, such as net realisable value in AASB 102 Inventories or
value in use in AASB 136 Impairment of Assets.
In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3 based
on the degree to which inputs to the fair value measurements are observable and the significance of the inputs
to the fair value measurement in its entirety, which are described as follows:
• Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that
the entity can access at the measurement date;
• Level 2 inputs are inputs, other than quoted prices included in Level 1, that are observable for the
asset or liability, either directly or indirectly; and
• Level 3 inputs are unobservable inputs for the asset or liability.
Going concern
The financial statements have been prepared on the going concern basis, which contemplates the continuity
of normal business activities and the realisation of assets and settlement of liabilities in the normal course of
business.
The Group has incurred a net loss after tax for the year ended 30 June 2023 of $2,807,785 (2022: loss of
$3,162,787) and had net cash outflows from operating activities of $2,670,681 (2022: $3,346,622). As at 30
June 2023 the Group had a working capital surplus of $1,576,852 (2022 surplus $3,441,203) and cash and
cash equivalents of $2,069,602 (2022: $3,736,729).
The ability of the entity to continue as a going concern is dependent on securing additional capital raising
activities to continue its operational and exploration activities.
51
Golden State Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Should the entity not be able to continue as a going concern, it may be required to realise its assets and
discharge its liabilities other than in the ordinary course of business, and at amounts that differ from those
stated in the financial statements and that the financial report does not include any adjustments relating to the
recoverability and classification of recorded asset amounts or liabilities that might be necessary should the
entity not continue as a going concern.
(i) Compliance with IFRS
The consolidated financial statements of the Golden State Mining Limited Group also comply with International
Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
(ii) New and amended standards adopted by the Group
The Group has considered the implications of new and amended Accounting Standards which have become
applicable for the current financial reporting period.
• AASB 2020-3: Amendments to Australian Accounting Standards – Annual Improvements 2018–
2020 and Other Amendments
The Entity adopted AASB 2020-3 which makes some small amendments to a number of standards
including the following: AASB 1, AASB 3, AASB 9, AASB 116, AASB 137 and AASB 141.
The adoption of the amendment did not have a material impact on the financial statements.
AASB 2021-7a: Amendments to Australian Accounting Standards – Effective Date of Amendments to
AASB 10 and AASB 128 and Editorial Corrections
AASB 2020-7a makes various editorial corrections to a number of standards effective for reporting periods
beginning on or after 1 January 2022. The adoption of the amendment did not have a material impact on
the financial statements.
New and Amended Accounting Policies Not Yet Adopted by the Group
• AASB 2020-1: Amendments to Australian Accounting Standards – Classification of Liabilities as Current
or Non-current
The amendment amends AASB 101 to clarify whether a liability should be presented as current or non-
current.
The Group plans on adopting the amendment for the reporting period ending 30 June 2024 along with
the adoption of AASB 2022-6. The amendment is not expected to have a material impact on the financial
statements once adopted.
• AASB 2022-6: Amendments to Australian Accounting Standards – Non-current Liabilities with Covenants
AASB 2022-6 amends AASB 101 to improve the information an entity provides in its financial statements
about liabilities arising from loan arrangements for which the entity’s right to defer settlement of those
liabilities for at least 12 months after the reporting period is subject to the entity complying with
conditions specified in the loan arrangement. It also amends an example in Practice Statement 2
regarding assessing whether information about covenants is material for disclosure.
The Group plans on adopting the amendment for the reporting period ending 30 June 2024. The
amendment is not expected to have a material impact on the financial statements once adopted.
• AASB 2021-2: Amendments to Australian Accounting Standards – Disclosure of Accounting Policies and
Definition of Accounting Estimates
The amendment amends AASB 7, AASB 101, AASB 108, AASB 134 and AASB Practice Statement 2.
These amendments arise from the issuance by the IASB of the following International Financial
Reporting Standards: Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice
Statement 2) and Definition of Accounting Estimates (Amendments to IAS 8).
The Group plans on adopting the amendment for the reporting period ending 30 June 2024. The impact
of the initial application is not yet known.
52
Golden State Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
• AASB 2021-5: Amendments to Australian Accounting Standards – Deferred Tax related to Assets and
Liabilities arising from a Single Transaction
The amendment amends the initial recognition exemption in AASB 112: Income Taxes such that it is not
applicable to leases and decommissioning obligations – transactions for which companies recognise
both an asset and liability and that give rise to equal taxable and deductible temporary differences.
The Group plans on adopting the amendment for the reporting period ending 30 June 2024. The impact
of the initial application is not yet known.
• AASB 2021-7b & c: Amendments to Australian Accounting Standards – Effective Date of Amendments
to AASB 10 and AASB 128 and Editorial Corrections
AASB 2021-7b makes various editorial corrections to AASB 17 Insurance Contracts which applies to
annual reporting periods beginning on or after 1 January 2023, with earlier application permitted.
AASB 2021-7c defers the mandatory effective date (application date) of amendments to AASB 10 and
AASB 128 that were originally made in AASB 2014-10: Amendments to Australian Accounting Standards
– Sale or Contribution of Assets between an Investor and its Associate or Joint Venture so that the
amendments are required to be applied for annual reporting periods beginning on or after 1 January
2025 instead of 1 January 2018.
The Group plans on adopting the amendments for the reporting periods ending 30 June 2024 and 30
June 2026. The impact of initial application is not yet known.
• AASB 2022-7: Editorial Corrections to Australian Accounting Standards and Repeal of Superseded and
Redundant Standards
AASB 2022-7 makes editorial corrections to the following standards: AASB 7, AASB 116, AASB 124,
AASB 128, AASB 134 and AASB as well as to AASB Practice Statement 2. It also formally repeals
superseded and redundant Australian Account Standards as set out in Schedules 1 and 2 to the
Standard.
The Group plans on adopting the amendments for the reporting period ending 30 June 2024. The
amendment is not expected to have a material impact on the financial statements once adopted.
(b) Principles of consolidation
(i) Subsidiaries
Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls
an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity
and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are
fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from
the date that control ceases.
The acquisition method of accounting is used to account for business combinations by the Group.
Intercompany transactions, balances and unrealised gains on transactions between Group companies are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment
of the transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure
consistency with the policies adopted by the Group.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated
statement of profit or loss and other comprehensive income, statement of changes in equity and statement of
financial position respectively.
(ii) Changes in ownership interests
The Group treats transactions with non-controlling interests that do not result in a loss of control as transactions
with equity owners of the Group. A change in ownership interest results in an adjustment between the carrying
amounts of the controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any
difference between the amount of the adjustment to non-controlling interests and any consideration paid or
received is recognised in a separate reserve within equity attributable to owners of Golden State Mining
Limited.
53
Golden State Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
When the Group ceases to have control, any retained interest in the entity is remeasured to its fair value with
the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the
purposes of subsequently accounting for the retained interest as an associate, jointly controlled entity or
financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of
that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may
mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss.
If the ownership interest in a jointly controlled entity or associate is reduced but joint control or significant
influence is retained, only a proportionate share of the amounts previously recognised in other comprehensive
income are reclassified to profit or loss where appropriate.
(c) Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision maker. The chief operating decision maker, who is responsible for allocating resources and
assessing performance of the operating segments, has been identified as the full board of Directors.
(d) Foreign currency translation
(i) Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of
the primary economic environment in which the entity operates (‘the functional currency’). The consolidated
financial statements are presented in Australian dollars, which is Golden State Mining Limited’s functional and
presentation currency.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing
at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such
transactions and from the translation at year end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in profit or loss. They are deferred in equity if they are
attributable to part of the net investment in a foreign operation.
(iii) Group companies
The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary
economy) that have a functional currency different from the presentation currency are translated into the
presentation currency as follows:
• assets and liabilities for each statement of financial position presented are translated at the closing
rate at the date of that statement of financial position;
•
income and expenses for each statement of profit and loss and other comprehensive income are
translated at average exchange rates (unless that is not a reasonable approximation of the cumulative
effect of the rates prevailing on the transaction dates, in which case income and expenses are
translated at the dates of the transactions); and
• all resulting exchange differences are recognised in other comprehensive income.
On consolidation, exchange differences arising from the translation of any net investment in foreign entities,
and of borrowings and other financial instruments designated as hedges of such investments, are recognised
in other comprehensive income. When a foreign operation is sold or any borrowings forming part of the net
investment are repaid, the associated exchange differences are reclassified to profit or loss, as part of the gain
or loss on sale.
54
Golden State Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
(e) Revenue recognition
The Group applies AASB 15 Revenue from Contracts with Customers. The Group does not have any revenue
from contracts with customers.
(i) Interest income
Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to
the Group and the amount of revenue can be measured reliably. Interest income is accrued on a time basis,
by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that
exactly discounts estimated future cash receipts though the expected life of the financial asset to that asset’s
net carrying amount on initial recognition.
(f) Income tax
The income tax expense or revenue for the year is the tax payable on the current year’s taxable income based
on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities
attributable to temporary differences and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at
the end of the reporting period in the countries where the Company’s subsidiaries and associates operate and
generate taxable income. Management periodically evaluates positions taken in tax returns with respect to
situations in which applicable tax regulation is subject to interpretation. It establishes provisions where
appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between
the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements.
However, the deferred income tax is not accounted for if it arises from initial recognition of an asset or liability
in a transaction other than a business combination that at the time of the transaction affects neither accounting
nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted
or substantially enacted by the reporting date and are expected to apply when the related deferred income tax
asset is realised or the deferred income tax liability is settled.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is
probable that future taxable amounts will be available to utilise those temporary differences and losses.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount
and tax bases of investments in controlled entities where the parent entity is able to control the timing of the
reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable
future.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets
and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and
tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on
a net basis, or to realise the asset and settle the liability simultaneously.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised
in other comprehensive income or directly in equity. In this case, the tax is also recognised in other
comprehensive income or directly in equity, respectively.
55
Golden State Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
(g) Impairment of assets
Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested
annually for impairment, or more frequently if events or changes in circumstances indicate that they might be
impaired. Other assets are reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which
the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an
asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are
grouped at the lowest levels for which there are separately identifiable cash inflows which are largely
independent of the cash inflows from other assets or groups of assets (cash-generating units). Non-financial
assets that suffered an impairment are reviewed for possible reversal of the impairment at the end of each
reporting period.
(h) Cash and cash equivalents
For statement of cash flows presentation purposes, cash and cash equivalents includes cash on hand,
deposits held at call with financial institutions, other short term highly liquid investments with original maturities
of three months or less that are readily convertible to known amounts of cash and which are subject to
insignificant risk of changes in value.
(i) Financial instruments (AASB 9)
Recognition, initial measurement and derecognition
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual
provisions of the financial instrument. Financial instruments (except for trade receivables) are measured
initially at fair value adjusted by transaction costs, except for those carried at ‘fair value through profit or loss’,
in which case transaction costs are expensed to profit or loss. Where available, quoted prices in an active
market are used to determine the fair value. In other circumstances, valuation techniques are adopted.
Subsequent measurement of financial assets and financial liabilities are described below.
Trade receivables are initially measured at the transaction price if the receivables do not contain a significant
financing component in accordance with AASB 15.
Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire,
or when the financial asset and all substantial risks and rewards are transferred. A financial liability is
derecognised when it is extinguished, discharged, cancelled or expired.
Classification and measurement
Financial assets
Except for those trade receivables that do not contain a significant financing component and are measured at
the transaction price in accordance with AASB 15, all financial assets are initially measured at fair value
adjusted for transaction costs (where applicable).
For the purpose of subsequent measurement, financial assets other than those designated and effective as
hedging instruments are classified into the following categories upon initial recognition:
• amortised cost;
•
•
fair value through other comprehensive income (FVOCI); and
fair value through profit or loss (FVPL).
Classifications are determined by both:
•
the contractual cash flow characteristics of the financial assets; and
56
Golden State Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
•
the Group’s business model for managing the financial asset.
Financial assets at amortised cost
Financial assets are measured at amortised cost if the assets meet with the following conditions (and are not
designated as FVPL);
•
•
they are held within a business model whose objective is to hold the financial assets and collect its
contractual cash flows; and
the contractual terms of the financial assets give rise to cash flows that are solely payments of principal
and interest on the principal amount outstanding.
After initial recognition, these are measured at amortised cost using the effective interest method. Discounting
is omitted where the effect of discounting is immaterial. The Group’s cash and cash equivalents, trade and
most other receivables fall into this category of financial instruments.
Financial assets at fair value through other comprehensive income (Equity instruments)
The Group measures debt instruments at fair value through OCI if both of the following conditions are met:
•
•
the contractual terms of the financial asset give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding; and
the financial asset is held within a business model with the objective of both holding to collect
contractual cash flows and selling the financial asset.
For debt instruments at fair value through OCI, interest income, foreign exchange revaluation and impairment
losses or reversals are recognised in the statement of profit or loss and computed in the same manner as for
financial assets measured at amortised cost. The remaining fair value changes are recognised in OCI.
Upon initial recognition, the Group can elect to classify irrevocably its equity investments as equity instruments
designated at fair value through OCI when they meet the definition of equity under AASB 132 Financial
Instruments: Presentation and are not held for trading.
Financial assets at fair value through profit or loss (FVPL)
Financial assets at fair value through profit or loss include financial assets held for trading, financial assets
designated upon initial recognition at fair value through profit or loss or financial assets mandatorily required
to be measured at fair value. Financial assets are classified as held for trading if they are acquired for the
purpose of selling or repurchasing in the near term.
Financial liabilities
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss,
loans and borrowings, payables or as derivatives designated as hedging instruments in an effective hedge, as
appropriate.
Financial liabilities are initially measured at fair value, and, where applicable, adjusted for transaction costs
unless the Group designated a financial liability at fair value through profit or loss.
Subsequently, financial liabilities are measured at amortised cost using the effective interest method except
for derivatives and financial liabilities designated at FVPL, which are carried subsequently at fair value with
gains or losses recognised in profit or loss.
All interest-related charges and, if applicable, gains and losses arising on changes in fair value are recognised
in profit or loss.
57
Golden State Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Impairment
The Group assesses on a forward-looking basis the expected credit loss associated with its debt instruments
carried at amortised cost and FVOCI. The impairment methodology applied depends on whether there has
been a significant increase in credit risk. For trade receivables, the Group applies the simplified approach
permitted by AASB, which requires expected lifetime losses to be recognised from initial recognition of the
receivables.
(j) Plant and equipment
All plant and equipment are stated at historical cost less depreciation. Historical cost includes expenditure that
is directly attributable to the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow to the
Group and the cost of the item can be measured reliably. The carrying amount of any component accounted
for as a separate asset is derecognised when replaced. All other repairs and maintenance are charged to the
statement of profit and loss and other comprehensive income during the reporting period in which they are
incurred.
Depreciation of plant and equipment is calculated using the prime cost method to allocate their cost or revalued
amounts, net of their residual values, over their estimated useful lives.
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying
amount is greater than its estimated recoverable amount (note 1(g)).
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are
included in the statement of profit and loss and other comprehensive income.
(k) Exploration and development expenditure
Exploration and evaluation costs are expensed as incurred. Acquisition expenditure incurred is accumulated
in respect of each identifiable area of interest. These costs are only carried forward to the extent that they are
expected to be recouped through the successful development of the area or where activities in the area have
not yet reached a stage that permits reasonable assessment of the existence of economically recoverable
reserves.
Accumulated costs in relation to an abandoned area are written off in full against profit in the year in which the
decision to abandon the area is made.
When production commences, the accumulated costs for the relevant area of interest are amortised over the
life of the area according to the rate of depletion of the economically recoverable reserves.
A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry
forward costs in relation to that area of interest.
Costs of site restoration are provided over the life of the facility from when exploration commences and are
included in the costs of that stage. Site restoration costs include the dismantling and removal of mining plant,
equipment and building structures, waste removal, and rehabilitation of the site in accordance with clauses of
the mining permits. Such costs have been determined using estimates of future costs, current legal
requirements and technology on an undiscounted basis.
Any changes in the estimates for the costs are accounted on a prospective basis in determining the costs of
site restoration, there is uncertainty regarding the nature and extent of the restoration due to community
expectations and future legislation. Accordingly, the costs have been determined on the basis that the
restoration will be completed within one year of abandoning the site.
58
Golden State Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
(l) Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the
financial year which are unpaid. The amounts are unsecured, non-interest bearing and are paid on normal
commercial terms.
(m) Employee benefits
Wages and salaries and annual leave
Liabilities for wages and salaries, including non-monetary benefits, and annual leave expected to be settled
within 12 months of the reporting date are recognised as current liabilities in respect of employees’ services
up to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled.
(n) Share-based payments
The Group may provide benefits to employees (including directors) of the Group, and to vendors and suppliers,
in the form of equity-based payment transactions, whereby employees render services, or where vendors sell
assets to the Group, in exchange for shares or rights over shares (‘equity-settled transactions’).
The cost of equity-settled transactions with employees is measured by reference to the “fair value”, not market
value. The “fair value” is determined in accordance with Australian Accounting Standards. In the case of share
options issued, in the absence of a reliable measure, AASB 2 Share Based Payments prescribes the approach
to be taken to determining the fair value. The Black-Scholes European Option Pricing Model is an industry
accepted method of valuing share options. Other models may be used.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over
the period in which the performance conditions are fulfilled (if applicable), ending on the date on which the
relevant employees become fully entitled to the award (‘vesting date’).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date
reflects (i) the extent to which the vesting period has expired and (ii) the number of options that, in the opinion
of the directors of the Group, will ultimately vest. This opinion is formed based on the best available information
at balance date. No adjustment is made for the likelihood of market performance conditions being met as the
effect of these conditions is included in the determination of fair value at grant date.
No expense is recognised for options that do not ultimately vest, except for options where vesting is conditional
upon a market condition.
Where an option is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not
yet recognised for the option is recognised immediately. However, if a new option is substituted for the
cancelled option, and designated as a replacement option on the date that it is granted, the cancelled and new
option are treated as a modification of the original option.
(o) Issued capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction,
net of tax, from the proceeds.
(p) Earnings per share
(i) Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to owners of the company, excluding
any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares
outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year.
59
Golden State Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
(ii) Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take
into account the after income tax effect of interest and other financing costs associated with dilutive potential
ordinary shares and the weighted average number of shares assumed to have been issued for no
consideration in relation to dilutive potential ordinary shares.
(q) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred
is not recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of
the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount
of GST recoverable from, or payable to, the taxation authority is included with other receivables or payables
in the statement of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or
financing activities which are recoverable from, or payable to the taxation authority, are presented as operating
cash flows.
(r) New accounting standards for application in future periods
There are a number of new accounting standards and interpretations issued by the AASB that are not yet
mandatorily applicable to the Group and have not been applied in preparing these consolidated financial
statements. The Group does not plan to adopt these standards early.
These standards are not expected to have a material impact on the Group in the current or future reporting
periods.
(s) Critical accounting judgements, estimates and assumptions
The preparation of these financial statements requires the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the process of applying the Group’s accounting policies.
The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates
are significant to the financial statements are:
Taxation
Balances disclosed in the financial statements and the notes thereto related to taxation are based on the best
estimates of the directors. These estimates take into account both the financial performance and position of
the Group as they pertain to current income taxation legislation, and the directors understanding thereof. No
adjustment has been made for pending or future taxation legislation. The current income tax position
represents that directors’ best estimate, pending an assessment by the Australian Taxation Office.
Share-based payments
Share-based payment transactions, in the form of options to acquire ordinary shares, are valued using the
Black-Scholes option or other recognised pricing model. Models use assumptions and estimates as inputs.
Whilst the Directors do not necessarily consider the result derived by the application of, say, the Black-Scholes
Option Pricing Model is in anyway representative of the market value of the share options issued, in the
absence of reliable measure for the same, AASB 2 Share Based Payments prescribes the fair value be
determined by applying a generally accepted valuation methodology. The Company has adopted the Black-
Scholes Option Pricing Model for presently relevant purposes. Other recognised models may be used.
60
Golden State Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Recovery of Deferred Tax assets
Judgment is required in determining whether deferred tax assets are recognised in the balance sheet. Deferred
tax assets, including those arising from un-utilised tax losses require management to assess the likelihood that
the Group will generate taxable earnings in future periods, in order to utilise recognised deferred tax assets.
Deferred tax assets will not be recognised until the Group is able to generate a net taxable income.
Estimates of future taxable income will be based on forecast cash flows from operations and the application of
existing tax laws in each jurisdiction. To the extent that future cash flows and taxable income differ significantly
from estimates, the ability of the Group to realise the net deferred tax assets recorded at the reporting date
could be impacted.
Additionally, future changes in tax laws in the jurisdictions in which the Group operates could limit the ability of
the Group to obtain tax deductions in future periods.
(t) Financial Risk Management
The Group’s activities expose it to a variety of financial risks: market risk (including currency risk, interest rate
risk and price risk), credit risk and liquidity risk. The Group’s overall risk management program includes
consideration of the unpredictability of financial markets and seeks to minimise potential adverse effects on
the financial performance of the Group in the context of the board’s judgement as to an acceptable balance as
between risk/reward in the context of the Company and all the prevailing circumstances.
Risk management is carried out by a risk management committee comprised of the full board of Directors as
the Group believes, given the circumstances of the Company, that it is crucial for all board members to be
involved in this process. Therefore, all Directors have responsibility for identifying, assessing, treating and
monitoring risks and reporting to the board on risk management.
(A) Market risk
(i) Foreign exchange risk
The Group is currently not exposed to foreign exchange risk.
(ii) Price risk
The Group is currently not exposed to foreign exchange risk.
(iii) Interest rate risk
The Group is exposed to movements in market interest rates on cash and cash equivalents. Exposure to
interest rate risk arises on financial assets and financial liabilities recognised at reporting date whereby a future
change in interest rates will affect future cash flows or the fair value of fixed rate financial instruments.
(B) Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial
loss to the Group. The Group has adopted a policy of only dealing with credit worthy counterparties as a means
of mitigating the risk of financial loss from activities.
The Group does not have any significant credit risk exposure to any single counterparty or any Group of
counterparties having similar characteristics. The credit risk on liquid funds is limited because the
counterparties are banks with high credit-ratings assigned by international credit-rating agencies.
The carrying amount of financial assets recorded in the financial statements, net of any allowances for losses,
represents the Group’s maximum exposure to credit risk.
61
Golden State Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
(C) Liquidity risk
The Group manages liquidity risk by continuously monitoring forecast and actual cash flows and ensuring
sufficient cash and marketable securities are available to meet the current and future commitments of the
Group. Debt and equity funding are options open to the Company. The board of Directors constantly monitor
the state of equity markets in conjunction with the Group’s current and future funding requirements, with a view
to ensuring the Group has adequate funds available.
The financial liabilities of the Group are confined to trade and other payables as disclosed in the statement of
financial position. All trade and other payables are non-interest bearing and due within 12 months of the
reporting date.
(D) Fair value measurements
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement
or for disclosure purposes. All financial assets and financial liabilities of the Group at the balance date are
recorded at amounts approximating their fair value.
The fair value of financial instruments traded in active markets is based on quoted market prices at the
reporting date. The quoted market price used for financial assets held by the Group is the current bid price.
The carrying value, less impairment provision, of trade receivables and payables are assumed to approximate
their fair values due to their short-term nature.
NOTE 2: SEGMENT INFORMATION
The Group has identified that it operates in only one segment based on the internal reports that are reviewed
and used by the board of directors (chief operating decision makers) in assessing performance and
determining the allocation of resources. The Group's principal activity is mineral exploration, evaluation and
investment.
NOTE 3: CASH AND CASH EQUIVALENTS
Cash at bank
Short-term deposits
Total
NOTE 4: TRADE AND OTHER RECEIVABLES
June 2023
$
June 2022
$
1,029,432
1,040,170
2,069,602
496,729
3,240,000
3,736,729
GST receivable
Total
June 2023
$
June 2022
$
40,689
40,689
74,114
74,114
62
Golden State Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTE 5: ACCRUED INCOME
Term deposits - interest income receivable
NOTE 6: PREPAYMENTS
Insurance
Legal expenses
Total
NOTE 7: TRADE AND OTHER PAYABLES
Current
Trade payables
Other payables and accruals
Total
June 2023
$
June 2022
$
5,500
4,853
June 2023
$
June 2022
$
6,719
-
6,719
8,333
25,368
33,701
June 2023
June 2022
$
$
171,699
197,447
369,146
136,041
138,746
274,787
June 2023
0-30 days
31-60 days
61-90 days
90+ days
Total
$
Trade payables
$171,699
$
-
$
-
$
-
$
$171,699
63
Golden State Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTE 8: PROVISIONS
Current
Provision for employee entitlements
Total Current
Non-current
Environmental rehabilitation provision
Total Non-current
Environmental rehabilitation
June 2023
June 2022
$
$
176,512
176,512
-
-
133,407
133,407
188,864
188,864
As at 30 June 2023, the Group had sold Cue Consolidated Mining Pty Ltd and no longer carries the estimated
cost provision of $188,864 for the environmental rehabilitation of the Cue Gold project tenements on its balance
sheet. The environmental rehabilitation cost relates to the pre-acquisition mine operation and closure plan by
Western Mining Pty Ltd.
NOTE 9: OTHER INCOME
Project sales (see details below)
Adaman entities dividend
Total
June 2023
June 2022
$
$
30,000
-
30,000
945,000
8,560
953,560
P20/2345 and P20/2346 tenements sales at Cue
During the year, the Group sold two Cue prospecting licences to Victory Metals Limited (P20/2345 and
P20/2346) in consideration for 150,000 Victory Metals Limited (ASX:VTM) fully paid ordinary shares valued at
$0.20 per share ($30,000), 66,666 unlisted options with an exercise price of $0.30 per option, expiring on 28
March 2025 and a 1.0% net smelter return royalty. The options have a nil book value.
Cuddingwarra and Big Bell South
During the 2022 financial year, the Group received the final $170,000 cash payment, 2,500,000 Caprice
Resources Limited (ASX:CRS) fully paid ordinary shares valued at $0.22 per share ($550,000) and 250,000
unlisted options with an exercise price of $0.25 per option, expiring on 2 August 2024. The options have a nil
book value.
Cue project sale
During the 2022 financial year, the Group received $225,000 in non-refundable cash payments from Cue
Revival in relation to the sale of the Cue project (since terminated; see also Note 19).
64
Golden State Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTE 10: EQUITY SECURITIES ISSUED
Issued Capital
June
2023
Shares
June
2023
$
June
2022
Shares
June
2022
$
Outstanding at the beginning of the year
116,421,319
13,150,506
82,748,358 10,760,747
Issues of ordinary shares
Fully paid shares issued – Placements
27,250,001
735,750
33,333,334
2,500,000
Fully paid shares issued – Cue Royalty restructure
592,885
30,000
Fully paid shares issued – Earthworks for drilling
Fully paid shares issued – Royalties
Lead Manager options cost
Transaction costs
-
-
-
-
-
-
(28,925)
(50,469)
-
81,554
258,073
-
-
-
10,195
42,707
-
(163,143)
Outstanding at the end of the period
144,264,205
13,836,862
116,421,319 13,150,506
As at 30 June 2023, the Company had 144,264,205 fully paid ordinary shares.
Capital risk management
The Group’s objectives when managing capital is to safeguard its ability to continue as a going concern and
to take advantage of organic and acquisitive mineral property opportunities, so that it may strive to provide
returns for shareholders and benefits for other stakeholders.
Debt and equity funding options are open to the Group. The working capital position of the Group at 30 June
2023 and 30 June 2022 are as follows:
June 2023
June 2022
$
$
Cash and cash equivalents
Trade and other receivables
Accrued income
Prepayments
Trade and other payables
Provisions
Working capital position
2,069,602
40,689
5,500
6,719
(369,146)
(176,512)
1,576,852
3,736,729
74,114
4,853
33,701
(274,787)
(133,407)
3,441,203
65
Golden State Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Reserves
June
2023
Number of
options
June
2023
$
June
2022
Number of
options
June
2022
$
Outstanding at the beginning of the year
16,972,560
1,668,246
17,372,560
1,369,886
Movements of options
Issued, exercisable at $0.60, expiring
30 September 2024 - Directors & employees
Issued, exercisable at $0.10, expiring
20 December 2024 - Directors & employees
Issued, exercisable at $0.10, expiring
12 August 2024 – Cue royalty restructure
Issued, exercisable at $0.05, expiring
21 May 2028 - Exploration rights acquisition
Issued, exercisable at $0.06, expiring
26 June 2026 – Lead manager
Issued, exercisable at $0.25, expiring
15 December 2024 - Directors & employees
-
-
5,900,000
94,483
100,000
1,457
26,443
28,925
-
-
-
-
-
-
-
-
139,360
-
-
-
-
90,542
5,900,000
159,000
Expiry of options
(4,922,560)
-
(6,300,000)
-
Outstanding at the end of the period
18,050,000
1,910,096
16,972,560
1,668,246
As at 30 June 2023, the Company had 18,050,000 unlisted options.
66
Golden State Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTE 11: SHARE-BASED PAYMENTS
The following table illustrates the number (No.) and weighted average exercise prices (WAEP) and movements
in share options issued as share based payments as at 30 June 2023.
Options
June
2023
No.
June
2023
WAEP
June
2022
No.
June
2022
WAEP
Outstanding
beginning of the year
at
the
16,972,560
$0.32
17,372,560
Granted during the period
6,000,000
$0.10
5,900,000
Exercised during the period
-
-
-
Expired during the period
(4,922,560)
$0.20
(6,300,000)
Outstanding at the end of the
period
Exercisable at the end of
the period
18,050,000
12,050,000
$0.28
$0.28
16,972,560
11,072,560
$0.33
$0.25
-
$0.27
$0.32
$0.36
The weighted average remaining contractual life for the share-based payment options as at 30 June 2023 is
1.39 years (2022: 1.88).
The weighted average exercise price for the share-based payment options as at 30 June 2023 is $0.28 (June
2022: $0.32).
Options issued during the current year:
On 18 August 2022, there were 100,000 unlisted options issued to as part consideration for restructuring the
Cue royalty which had a recognised value of $ 0.01457 per option based on a Black- Scholes model with the
following key inputs: interest free rate – 3.02%, volatility factor – 82% measured approximately 2 years prior
to grant date – 11 August 2022, days to expiry –732, spot share price - $0.052 and exercise price - $0.10. The
total fair value of the options is $1,457.
On 25 November 2022, there were 5,900,000 unlisted options granted to directors/employees which had a
recognised value of $0.01601 per option based on a Black-Scholes model with the following key inputs: interest
free rate – 3.21%, volatility factor – 80% measured approximately 2.07 years prior to grant date – 25 November
2022, days to expiry 756, spot share price - $0.055 and exercise price - $0.10. The total fair value of the options
is $94,483.
On 21 May 2023 (“Effective Date”), there were 2,000,000 unlisted options agreed to be granted to Bradford
Young with specified vesting dates. The recognised value of $0.02115 per option based on a Black-Scholes
model with the following key inputs: interest free rate – 3.34%, volatility factor – 93% measured approximately
5.01 years prior to grant date – 21 May 2023, days to expiry 1827, spot share price - $0.032 and exercise price
- $0.05. The total fair value of the options is $26,443 which was measured on the probability of vesting being:
• 500,000 options, their date of issue (100%) value $10,577;
• 500,000 options, the date being 12 months after the Effective Date (75%) value $7,933;
• 500,000 options, the date being 24 months after the Effective Date (50%) value $5,289, and
• 500,000 options, the date being 36 months after the Effective Date (25%) value $2,644.
The options were issued post year end.
67
Golden State Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
On 22 May 2023, there were 2,000,000 unlisted options agreed to be granted to the Lead Manager which had
a recognised value of $0.01446 per option based on a Black-Scholes model with the following key inputs:
interest free rate – 3.32%, volatility factor – 89% measured approximately 3 years prior to grant date – 22 May
2023, days to expiry 1131, spot share price - $0.032 and exercise price - $0.06. The total fair value of the
options is $28,925. The options were issued post year end.
On 26 November 2021, there were 5,900,000 unlisted options granted subject to a vesting condition that the
relevant director/employee remains an employee or officer of the Company until 31 October 2022, failing which
the options granted lapse, unless and to the extent the Board waives the vesting condition; which had a
recognised value of $ 0.04230 per option based on a Black-Scholes model with the following key inputs:
interest free rate – 0.75%, volatility factor –101% measured since the date of ASX listing on 8 November 2018,
grant date – 26 November 2021, days to expiry –1,115, spot share price - $0.097 and exercise price - $0.25.
The total fair value of the options is $249,541. The final vesting amount during the year was $90,542 in
accordance with the vesting period of the options.
In previous year options valuations Black-Scholes model was used for the valuation of share-based payments,
taking into account the terms and conditions upon which the options were granted. The expected life of the
options is based on historical data and is not necessarily indicative of exercise patterns that may occur. The
expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may
also not necessarily be the actual outcome.
No option holder has any right under the options to participate in any other share issue of the Company or any
other entity.
Recognised share-based payments expenses
Total expenses arising from share-based payment transactions recognised during the period as part of share-
based payment expense were as follows:
2023
2022
$
$
Operating expenditure
Options issued to directors, employees and
consultants
185,025
298,360
Options issued for Cue royalty restructure
1,457
Options granted for exploration rights at Yule Project
26,443
-
-
Total
212,925
298,360
NOTE 12: DIVIDENDS
No dividends were paid during the year and no recommendation is made as to the dividends (2022: Nil).
68
Golden State Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTE 13: ACCUMULATED LOSSES
Accumulated losses at the beginning of the financial year
Exercised/expired options (reserve transferred)
Net (loss) attributable to members of the company
Accumulated losses at the end of the financial year
NOTE 14a: FINANCIAL ASSETS
June 2023
$
(11,281,081)
-
June 2022
$
(8,118,294)
-
(2,807,785)
(3,162,787)
(14,088,866)
(11,281,081)
As at 30 June 2023, the Financial Assets comprise of 150,000 Victory Metals Limited (ASX:VTM) shares. The
shares were received as part consideration for the sale two Cue prospecting licences to Victory Metals Limited
(P20/2345 and P20/2346) (refer to note 9), at a fair value of $30,000 and were designated as financial
instruments at FVTPL. The fair value measurement for the financial assets of $37,500 has been categorised
as a Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities. $7,500 gain on
shares at FVTPL was recognised in the Consolidated Profit and Loss Statement.
During the year, the Group sold 2,500,000 Caprice Resources Limited (ASX:CRS) at an average price of
$0.0476 per share for a total of $118,890 (after costs). The shares were received as part consideration for the
sale of the Cuddingwarra and Big Bell South projects (refer to note 9), at a fair value of $550,000 and were
designated as financial instruments at FVTPL. $337,500 adjusted gain on shares at FVTPL was recognised in
the Consolidated Profit and Loss Statement and $431,110 was the realised loss on the sale of the shares.
NOTE 14b: GAIN/(LOSS) ON SALE OF SUBSIDIARY
In April 2023, GSM sold its wholly owned subsidiary Cue Consolidated Mining Pty Ltd (“CCM”) which held the
Cue Project located in the Murchison region of Western Australia, to Rock Solid Mining Services Pty Ltd (“Rock
Solid”) for $200,000 in cash and the following royalties.
• $15.00 per ounce payable on the first 60,000 ounces, and $5.00 per ounce thereafter, of gold produced
from the project tenements, and
• 2% net smelter return royalty on all minerals, other than gold, produced from the project tenements.
The gain on sale on CCM was calculated as follows:
Proceeds from sale of CCM
Total assets in CCM
Total liabilities in CCM
Gain on sale on CCM
$
200,000
(4,149)
188,864
384,715
69
Golden State Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTE 15: FINANCIAL RISK MANAGEMENT
The company's financial instruments consist mainly of deposits with banks, accounts receivable and payable.
The totals for each category of financial instruments, measured in accordance with AASB 139 as detailed in
the accounting policies to these financial statements are as follows:
2023
2022
Floating
Interest
Rate
$
Fixed
Interest
Rate
$
Non-
interest
bearing
$
Total
$
Floating
Interest
Rate
$
Fixed
Interest
Rate
$
Non-
interest
bearing
$
Total
$
916,123
1,040,170
113,309
2,069,602
350,433
3,240,000
146,296
3,736,729
-
-
-
-
40,689
40,689
5,500
5,500
-
-
-
-
74,114
74,114
4,853
4,853
916,123
1,040,170
159,498
2,115,791
350,433
3,240,000
225,263
3,815,696
4.06%
4.52%
0.65%
1.40%
-
-
-
-
369,146
369,146
369,146
369,146
-
-
-
-
274,787
274,787
274,787
274,787
Financial
Instruments
and
Financial
Assets
Cash and cash
equivalents
Trade
other
receivables
Accrued
Income
Total
financial
assets
Weighted
average
interest rate for
the year
Financial
liabilities
and
Trade
other payables
Total
financial
liabilities
Financial Risk Management Policies
The director's overall risk management strategy seeks to assist the company in meeting its financial targets,
whilst minimising potential adverse effects on financial performance.
Risk management policies are approved and reviewed by the Board of Directors on a regular basis. This
includes credit risk policies and future cash flow requirements.
The main purpose of non-derivative financial instruments is to raise finance for company operations.
The company does not have any derivative instruments as at 30 June 2023.
Sensitivity analysis
At reporting date, if interest rates had been 100 basis points higher or lower and all other variables were held
constant, the Company’s net loss would increase or decrease by approximately $20,696 (2022: $37,367) which
is attributable to the Group’s exposure to interest rates on its variable bank deposits
70
Golden State Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTE 16: RECONCILIATION OF LOSS AFTER TAX TO NET CASH OUTFLOW FROM
OPERATING ACTIVITIES
Profit/(Loss) after income tax
(2,807,785)
(3,162,787)
Consolidated
June 2023
June 2022
$
$
Non-cash flows in loss for the period
Depreciation
Share based payments
Gain on sale of subsidiary
Gain on shares at FVTPL
Liabilities settled in shares
Other income from sale of projects
Loss on sale of shares
Changes in assets and liabilities
(Increase) / Decrease in trade and other receivables
(Increase) / Decrease in accrued income
(Increase) / Decrease in prepayments
Increase / (Decrease) in trade and other payables
Increase / (Decrease) in provisions
25,560
212,925
(384,715)
(345,000)
-
-
431,110
33,426
(647)
26,982
94,358
43,105
40,764
298,360
-
337,500
52,902
(945,000)
-
(43,208)
(2,524)
(27,056)
51,879
52,548
Net cash (outflows) from operating activities
(2,670,681)
(3,346,622)
NOTE 17: REMUNERATION OF AUDITORS/ NON-AUDIT SERVICES
REMUNERATION OF AUDITORS
Audit of financial reports
NON-AUDIT SERVICES
Taxation (to associated entity)
$
39,500
2,954
$
37,000
3,381
2023
2022
71
Golden State Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTE 18: INCOME TAX EXPENSE
Consolidated
June 2023
$
June 2022
The components of income tax benefit comprise:
Current income tax benefit
Deferred income tax expense
Income tax expense reported in the consolidated statement of
comprehensive income
Income tax expense recognised in equity
Accounting Profit/(Loss) before income tax
At the statutory income tax rate of 25% (2022: 25%)
Other non-deductible expenditure for income tax purposes
Other adjustments
Unrecognised tax losses
Deferred tax assets
Carried forward revenue losses
Carried forward capital losses
Gross deferred tax asset
Offset against deferred tax liability
Unrecognised Tax Asset
(690,551)
-
(690,551)
(690,551)
(2,807,785)
(701,946)
(55,290)
66,685
690,551
3,075,143
107,778
3,182,921
-
3,182,921
$
(712,105)
-
(712,105)
(712,105)
(3,162,788)
(790,697)
158,965
(80,373)
712,105
2,507,370
-
2,507,370
-
2,507,370
There were no ‘Deferred tax liabilities’ as at 30 June 2023.
Tax loss not recognised
All unused tax losses were incurred in Australia. Potential deferred tax assets net of deferred tax liabilities
attributable to tax losses have not been brought to account because the Directors do not believe it is
appropriate to regard realisation of the future income tax benefits as probable as at the date of this report.
NOTE 19: CONTINGENCIES
In addition to statutory royalties generally applicable mineral production in Western Australia, certain
tenements which make up part of the Group’s Yule project is subject to private royalties in respect of minerals
produced from those tenements. These private royalties are described in section 11.2 of the Company’s IPO
prospectus dated 22 August 2018. During the year, the Group entered into a ‘Mineral Rights and Royalty Deed’
dated 21 May 2023 (“Effective Date”) with the holder of exploration licence E47/2692 (Bradford Young)
pursuant to which Bradford Young has granted exploration and other rights to GSM. The deed includes a 2%
net smelter return royalty (bulk industrial products excluded).
During the 30 June 2022 financial year, the Group entered into a binding agreement (since terminated) to sell
its Cue project to Cue Revival Pty Ltd (“Cue Revival”) and Cue Revival issued a statement of claim in the
District Court of Western Australia seeking $200,000 (in relation to amounts it had paid to GSM) plus costs.
During this reporting period, the Company filed a defence and counterclaim, and has since resolved all
outstanding matters in dispute with Cue Revival.
There are no other material contingent liabilities or contingent assets of the Group at the reporting date.
72
Golden State Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTE 20: COMMITMENTS FOR EXPENDITURE
Exploration Commitment
In order to maintain current rights of tenure to various tenements, the company is required to perform minimum
exploration work to meet the minimum expenditure requirements specified by Western Australia. These
obligations are expected to be fulfilled in the normal course of operations and are not provided for in the
financial report.
If the company decides to relinquish certain leases and/or does not meet these obligations, assets recognised
in the balance sheet may require review to determine the appropriateness of carrying values. The sale, transfer
or farm-out of exploration rights to third parties will reduce or extinguish these obligations.
The Group will be required to outlay approximately $1,375,680 (2022: $840,260) in the following financial year
to meet minimum expenditure requirements.
Operating Lease Commitment
The Company has not entered into a commercial property lease on its corporate office premises or any other
operating leases. Office rent is currently paid on a month-by-month basis.
NOTE 21: PROPERTY, PLANT AND EQUIPMENT
June 2023
$
June 2022
$
368,084
617
(268,200)
100,501
295,252
25,560
(264,051)
56,761
100,501
(56,761)
43,740
343,525
24,559
-
368,084
254,488
40,764
-
295,252
368,084
(295,252)
72,832
June 2022
June 2023
(2.36)
(2,807,785)
119,174,337
(3.59)
(3,162,787)
88,053,363
Property, Plant and Equipment at cost
Opening balance
Additions
Disposals
Closing balance
Accumulated depreciation
Opening balance
Depreciation for the year
Disposals
Closing balance
Summary
At cost
Accumulated depreciation
Net carrying amount
NOTE 22: BASIC AND DILUTED EARNINGS/(LOSS) PER SHARE
Basic and diluted (loss) per share (cents)
Profit/(Loss) attributable to members of Golden State Mining
Weighted average number of shares outstanding
73
Golden State Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTE 23: RELATED PARTY TRANSACTIONS AND KMP REMUNERATION
Transactions between related parties are on normal commercial terms and conditions no more favourable than
those available to other parties unless otherwise stated.
Brenton Siggs is a partner of Reefus Geology Services which provided $67,712 (excl. GST) (2022: $106,701)
for geological services undertaken with respect to the Group’s projects. As at 30 June 2023 the amount owing
to Reefus Geology Services was $12,914 (incl. GST).
Damien Kelly is a director of Western Tiger Corporate Advisors which provided $35,000 (excl. GST) (2022:
$40,000) for corporate consulting services. As at 30 June 2023 the amount owed to Western Tiger Corporate
Advisors was $22,000 (incl. GST).
The Key Management Personnel (KMP) of the Group was comprised of all the board of directors mentioned
above and Mr Moore is the sole Executive Director.
Details of the remuneration of the directors and the key management personnel of the Group are set out in the
following tables:
2023
Short term
Post
Director
Base
Salary & Other Fees
$
Employment
Superannuation
$
Share-Based Payments
$
Total
$
Michael Moore
Damien Kelly
Greg Hancock
Brenton Siggs
Total
225,000
60,000
39,765
36,000
360,765
23,625
6,300
-
3,780
33,705
47,040
295,665
37,632
103,932
25,088
64,853
25,088
64,868
134,848
529,318
2022
Short term
Post
Director
Base
Salary & Other Fees
$
Employment
Superannuation
$
Share-Based Payments
$
Total
$
Michael Moore
Damien Kelly
Greg Hancock
Brenton Siggs
Total
225,000
60,000
39,600
36,000
360,600
22,500
6,000
-
3,600
32,100
75,854
323,354
60,683
126,683
40,456
80,056
40,456
80,056
217,449
610,149
74
Golden State Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTE 24: EQUITY INSTRUMENTS DISCLOSURE - KEY MANAGEMENT PERSONNEL
The Number of shares in which the Directors and Key Management Personnel of the Company held a relevant
interest during the year ended 30 June 2023, including their personally related parties, is set out below:
Working Fully paid ordinary shares
June 2023
Michael Moore
Damien Kelly
Greg Hancock
Brenton Siggs
Total
Balance
at
start of the
period
2,095,100
1,760,100
250,000
910,000
5,015,200
Granted during the year as
compensation
Other
during the year
changes
Balance at end of
the period
-
-
-
-
-
-
-
-
-
-
2,095,100
1,760,100
250,000
910,000
5,015,200
The Number of options which the Directors and Key Management Personnel of the Company held a relevant
interest during the year ended 30 June 2023, including their personally related parties, is set out below:
Unlisted options
Balance
at start
of the
year
Granted as
compensation
Exercised Lapsed
Other
changes
Balance at
end of the
year
Vested and
exercisable
Unvested
30 June
2023
Michael
Moore
Damien
Kelly
Greg
Hancock
Brenton
Siggs
3,000,000
1,500,000
2,400,000
1,200,000
1,600,000
800,000
1,600,000
800,000
Total
8,600,000
4,300,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4,500,000
4,500,000
3,600,000
3,600,000
2,400,000
2,400,000
2,400,000
2,400,000
- 12,900,000
12,900,000
-
-
-
-
-
75
Golden State Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTE 25: GOLDEN STATE MINING LIMITED (THE PARENT ENTITY) INFORMATION
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
NET ASSETS
Contributed equity
Reserves
Accumulated losses
Total equity
Loss for the year
Other comprehensive income
Total comprehensive loss for the year
JUNE 2023
$
2,122,509
81,240
2,203,749
JUNE 2022
$
3,824,029
276,308
4,100,337
445,621
-
445,621
387,153
-
387,153
1,758,128
3,713,184
13,836,862
1,910,096
(13,988,830)
1,758,128
13,150,506
1,668,246
(11,105,568)
3,713,184
(2,883,263)
(3,208,922)
-
-
(2,883,263)
(3,208,922)
There were no guarantees, contingencies and subsequent events other than those disclosed elsewhere in the
report.
NOTE 26: CONTROLLED ENTITIES
Parent entity
Golden State Mining Limited
Subsidiaries
Cue Consolidated Mining Pty Ltd1
Crown Mining Pty Ltd
WA Minerals Pty Ltd
Reliance Minerals Pty Ltd
Charge Metals Pty Ltd
1 During the year the Company sold Cue Consolidated Mining Pty Ltd.
All members of the consolidated entity are incorporated in Australia.
Ownership interest
2023
2022
-
100%
100%
100%
100%
100%
100%
100%
100%
100%
76
Golden State Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTE 27: SUBSEQUENT EVENTS
Since the reporting date, on 11 July 2023, the Company issued 46,824,073 shares at $0.027 per share raising
$1,264,250 in the second tranche placement following shareholder approval at the general meeting held on 5
July 2023; and 2,000,000 unlisted options exercisable at $0.06, expiring 26 Jun 2026, were also issued
following shareholder approval at the general meeting, to the Lead Manager for part consideration for services
in respect of the capital raise.
On 18 August 2023, 2,000,000 unlisted options exercisable at $0.05, expiring 21 May 2028, which were ratified
by shareholders at the general meeting, were issued as part consideration for the acquisition of exploration
rights adjacent to Nomad lithium prospect at the Yule project.
No other matter or circumstance has arisen since 30 June 2023, which has significantly affected, or may
significantly affect the operations of the Group, the result of those operations, or the state of affairs of the
Group in subsequent financial years.
77
Golden State Mining Limited
DIRECTORS’ DECLARATION
1.
2.
3.
In the opinion of the Directors of Golden State Mining Limited:
(a)
The consolidated financial statements and notes, and the Remuneration Report in the
Directors’ Report are in accordance with the Corporations Act 2001, including:
(i)
Giving a true and fair view of the Group’s financial position as at 30 June 2023 and its
performance, for the financial year ended on that date, and
Complying with Australian Accounting Standards (including the Australian Accounting
Interpretations) and the Corporations Regulations 2001;
(ii)
(b)
There are reasonable grounds to believe that the Company will be able to pay its debts as
and when they become due and payable, and
The directors have been given the declarations required by section 295A of the Corporations Act 2001
from the Managing Director for the financial year ended 30 June 2023.
The financial report also complies with International Financial Reporting Standards as disclosed in
note 1(a) to the consolidated financial statements.
Signed in accordance with a resolution of the Directors.
Michael Moore
Managing Director
29 September 2023
78
PO Box 1908
West Perth WA 6872
Australia
Level 2, 40 Kings Park Road
West Perth WA 6005
Australia
Tel: +61 8 9481 3188
Fax: +61 8 9321 1204
ABN: 84 144 581 519
www.stantons.com.au
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
GOLDEN STATE MINING LIMITED
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Golden State Mining Limited (“the Company”), and its subsidiaries
(“the Group”), which comprises the consolidated statement of financial position as at 30 June 2023, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement of
changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the
financial statements, including a summary of significant accounting policies, and the directors' declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act
2001, including:
(i)
giving a true and fair view of the Group’s financial position as at 30 June 2023 and of its financial
performance for the year then ended; and
(ii)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Report
section of our report. We are independent of the Company in accordance with the auditor independence
requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional
and Ethical Standards Board's APES 110: Code of Ethics for Professional Accountants (the Code) that
are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical
responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the time
of this report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial report of the current period. These matters were addressed in the context of our audit
Liability limited by a scheme approved under Professional Standards Legislation
Stantons Is a member of the Russell
Bedford International network of firms
of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.
We have determined the matters described below to be Key Audit Matter to be communicated in our
report.
Key Audit Matters
How the matter was addressed in the audit
Measurement of Share-based payments
As disclosed in Note 11 of the financial report,
during the period the Company granted share
options to Directors, employees, lead manager and
external parties.
The Company prepared a valuation of share options
in accordance with its accounting policy and the
- Share-based
accounting standard AASB 2
Payment.
The valuation of options is considered to be a key
audit matter as it involved judgment in assessing the
fair value of the equity instruments granted, the
grant date, vesting conditions and vesting periods.
Inter alia, our audit procedures included the
following :
i. Obtaining an understanding of the underlying
transactions, reviewing agreements, minutes
of
and ASX
announcements;
the Board meetings
ii. Reviewing the inputs used in the valuation
models, the underlying assumptions used and
discussing with management the justification
for these inputs;
iii. Ensuring the mathematical accuracy of the
valuation model utilised;
iv. Assessing the allocation of the share-
based payment expense over
the
relevant vesting period; and
v. Assessing
whether
Company’s
disclosures met the requirements of the
accounting standards.
the
Key Audit Matters
How the matter was addressed in the audit
Deconsolidation of Subsidiary
As disclosed in Note 14b of the financial report, in
April 2023, the company sold its wholly owned
subsidiary Cue Consolidated Mining Pty Ltd
(“CCM”) which held the Cue Project located in the
Murchison region of Western Australia, to Rock
Solid Mining Services Pty Ltd for $200,000 in cash
and the following royalties.
▪
▪
$15.00 per ounce payable on the first
60,000 ounces, and $5.00 per ounce
thereafter, of gold produced from the project
tenements, and
2% net smelter return royalty on all
minerals, other than gold, produced from
the project tenements.
Effective 24 April 2023, the Group ceased to
consolidate CCM’s results within the Group’s
consolidated accounts. The group has also
recognized a gain on sale of this subsidiary
amounting
this
deconsolidation.
to $384,715 as a result of
2
Inter alia, our audit procedures included the
following :
i. Performed the audit of Cue Consolidated
Limited for the period ended 24 April 2023;
ii. Reviewed
documents
supporting
the
transaction such as:
• Board of Directors’ minutes of
meetings;
• Announcements made by the Group to
the ASX; and
• Signed agreements with the buyer
iii. Reviewed the deconsolidation workings to
ensure Cue Consolidated Limited has been
correctly deconsolidated and gain on sale
correctly reflected in the financial report ; and
i. Assessing
whether
Company’s
disclosures met the requirements of the
accounting standard AASB 10 Consolidated
Financial Statements.
the
to
We have determined the deconsolidation as key
audit matter due
the
deconsolidation process
to properly
exclude CCM as a subsidiary and the fact that this
transaction is material to the consolidated financial
statements for the year ended 30 June 2023.
the complexity of
required
Other Information
The directors are responsible for the other information. The other information comprises the information
included in the Group’s annual report for the year ended 30 June 2023 but does not include the financial
report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express
any form of assurance opinion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the financial report or
our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work
we have performed, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for
such internal control as the directors determine is necessary to enable the preparation of the financial
report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor's Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions
of users taken on the basis of this financial report.
As part of an audit in accordance with Australian Auditing Standards, we exercise professional judgement
and maintain professional scepticism throughout the audit. An audit involves performing procedures to
obtain audit evidence about the amounts and disclosures in the financial report.
3
The procedures selected depend on the auditor's judgement, including the assessment of the risks of
material misstatement of the financial report, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the entity's preparation of the financial
report that gives a true and fair view in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal
control.
The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness
of accounting estimates made by the Directors, as well as evaluating the overall presentation of the
financial report.
We conclude on the appropriateness of the Directors' use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions
that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that
a material uncertainty exists, we are required to draw attention in our auditor's report to the related
disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However,
future events or conditions may cause the Group to cease to continue as a going concern.
We evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events in a
manner that achieves fair presentation.
We obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are responsible for
the direction, supervision and performance of the group audit. We remain solely responsible for our audit
opinion.
We communicate with the Directors regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in Internal control that we identify
during our audit.
The Auditing Standards require that we comply with relevant ethical requirements relating to audit
engagements. We also provide the Directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters
that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the Directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore key audit matters.
We describe these matters in our auditor's report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such communication.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June
2023.
In our opinion, the Remuneration Report of Golden State Mining Limited for the year ended 30 June 2023
complies with section 300A of the Corporations Act 2001.
4
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an
opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing
Standards.
STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LTD
(An Authorised Audit Company)
Samir Tirodkar
Director
West Perth, Western Australia
29 September 2023
5
Golden State Mining Limited
ASX Additional Information
Additional information required by Australian Stock Exchange Ltd and not shown elsewhere in this report is as follows.
The information is current as at 8 September 2023.
(a) Distribution of equity securities: Analysis of numbers of equity security holders by size of holding:
0
1,001
5,001
10,001
100,001
- 1,000
- 5,000
- 10,000
- 100,000
and over
•
•
•
•
•
•
The number of shareholders
holding less than a marketable
parcel of shares are:
Number of holders
Number of shares
Ordinary shares
70
268
236
765
301
1,640
20,578
808,372
2,008,255
30,121,865
158,129,208
191,088,278
606 3,181,444
(b) Twenty largest shareholders of quoted ordinary shares
The names of the twenty largest holders of quoted ordinary shares are:
1 PERTH SELECT SEAFOODS PTY LTD
2 PURPLE STAR HOLDINGS PTY LTD
3 MR ANTANAS GUOGA
4 MR SCOTT ROBERT WEIR
5 CITICORP NOMINEES PTY LIMITED
6 MR STACEY HUBERT CARTER
7 MR NORMAN PAUL GREAVES
8 MR PAUL GREGORY BROWN & MRS JESSICA ORIWIA BROWN
9 DR MARTIN DRU DANIELS
10 MS CHUNYAN NIU
11 MR MICHAEL JAMES MOORE & MRS RUTH HEATHER MOORE
12 MR MARK FRANCALANZA
13 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
14 STOCKHILL NOMINEES PTY LTD
15 BRADFORD JOHN YOUNG
16 MR ANDREW JAMES VASARELLI
17 MS MAREE LOUISE CISERA
18 MR TIMOTHY STEWART CAMPBELL
19 MR SIMON ANDREW TESTER
20 BNP PARIBAS NOMINEES PTY LTD
Listed ordinary shares
Number of
shares
10,500,000
7,106,990
5,558,956
4,449,376
3,699,383
3,585,186
3,000,000
2,900,000
Percentage of
ordinary shares
5.49%
3.72%
2.91%
2.33%
1.94%
1.88%
1.57%
1.52%
2,797,349
2,727,139
2,650,656
2,300,000
2,110,670
1,900,000
1,851,852
1,750,000
1,550,503
1,500,000
1,500,000
1,298,282
1.46%
1.43%
1.39%
1.20%
1.10%
0.99%
0.97%
0.92%
0.81%
0.79%
0.79%
0.68%
64,736,342
33.89%
84
Golden State Mining Limited
(c) Substantial shareholders
The names of substantial shareholders who have notified the Company in accordance with section 671B of the
Corporations Act 2001 are:
Perth Select Seafoods Pty Ltd
(d) Voting rights
All fully paid ordinary shares carry one vote per share. All options have no voting rights.
Number of
Ordinary Shares
10,500,000
(e) Unquoted Securities
Class
Unlisted $0.40 Options, expiry 30 Sep 2024
Number of
Securities
3,200,000
Number
of
Holders
7
Unlisted $0.60 Options, expiry 30 Sep 2024
2,950,000
6
Unlisted $0.25 Options, expiry 15 Dec 2024
5,900,000
6
Unlisted $0.10 Options, expiry 12 Aug 2024
100,000
1
Unlisted $0.25 Options, expiry 15 Dec 2024
5,900,000
6
85
Holders of 20% or more of the class*
Holder Name
Mr Michael James
Moore & Mrs Ruth
Heather Moore
Mr Michael James
Moore & Mrs Ruth
Heather Moore
Mr Geoff Willetts &
Mrs Jill Willetts
Advanced Capital
Management Pty Ltd
Mr Michael James
Moore & Mrs Ruth
Heather Moore
Mr Geoff Willetts &
Mrs Jill Willetts
Advanced Capital
Management Pty Ltd
Western Mining Pty Ltd
Mr Michael James
Moore & Mrs Ruth
Heather Moore
Mr Geoff Willetts &
Mrs Jill Willetts
Number of
Securities
750,000
750,000
600,000
600,000
1,500,000
1,200,000
1,200,000
100,000
1,500,000
1,200,000
Golden State Mining Limited
Unlisted $0.06 Options, expiry 26 Jun 2026
2,000,000
1
Advanced Capital
Management Pty Ltd
1,200,000
Harshell Investments
Pty Ltd
2,000,000
Unlisted $0.05 Options, expiry 21 May 2028
2,000,000
1
Bradford John Young
2,000,000
(f) ASX Listing Rule 3.13.1
The Company advises, in accordance with ASX Listing Rule 3.13.1, that its Annual General Meeting (AGM; an item
of business at which will be the election of directors) is currently proposed to be held on 29 November 2023 and,
based on this proposed AGM date, in accordance with the Company’s constitution, the closing date for receipt of
valid nominations from persons wishing to be considered for election as a director at the AGM will be 18 October
2023.
86
Golden State Mining Limited
Table 1. As at 8 September 2023 the Company or its subsidiaries (“Group”) had a beneficial interest in the
following tenements:
Number
Holder
Status
Murchison Project – Cue
P 20/2374
WA Minerals Pty Ltd1
Murchison
Resources 80:20 JV
–
Caprice
E 21/192
E 21/193
P 20/2256
P 20/2257
P 20/2258
P 20/2259
P 20/2260
P 20/2261
P 20/2262
P 20/2263
P 20/2264
P 20/2265
P 20/2266
P 20/2267
P 20/2268
P 20/2269
P 20/2272
P 20/2273
P 20/2274
P 20/2275
P 20/2382
Yule Project
E 47/3503
E 47/3507
WA Minerals Pty Ltd1,2
WA Minerals Pty Ltd1,2
WA Minerals Pty Ltd1,2
WA Minerals Pty Ltd1,2
WA Minerals Pty Ltd1,2
WA Minerals Pty Ltd1,2
WA Minerals Pty Ltd1,2
WA Minerals Pty Ltd1,2
WA Minerals Pty Ltd1,2
WA Minerals Pty Ltd1,2
WA Minerals Pty Ltd1,2
WA Minerals Pty Ltd1,2
WA Minerals Pty Ltd1,2
WA Minerals Pty Ltd1,2
WA Minerals Pty Ltd1,2
WA Minerals Pty Ltd1,2
WA Minerals Pty Ltd1,2
WA Minerals Pty Ltd1,2
WA Minerals Pty Ltd1,2
WA Minerals Pty Ltd1,2
WA Minerals Pty Ltd1,2
Crown Mining Pty Ltd1
Crown Mining Pty Ltd1
87
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
E 47/3508
E 45/5570
E 47/4343
E47/4391
E47/4586
E47/4587
E 47/2692
Four Mile Well Project
E 38/3632
E 38/3633
Paynes Find Lithium Project
E 59/2660
E 59/2661
E 59/2662
E 59/2679
E 59/2680
E 59/2701
E 59/2824
Mount Magnet Project
E 58/614
E 59/2839
Southern Cross Gold Project
E 77/2896
E 77/2897
E 77/2898
Eucla Nickel Project
E 28/3175
E 28/3176
Ashburton
Project
E 08/3580
Base Metals
Golden State Mining Limited
Crown Mining Pty Ltd1
Crown Mining Pty Ltd1
Crown Mining Pty Ltd1
Crown Mining Pty Ltd1
Crown Mining Pty Ltd1
Crown Mining Pty Ltd1
YOUNG, Bradford John3
Crown Mining Pty Ltd1
Crown Mining Pty Ltd1
Charge Metals Pty Ltd1
Charge Metals Pty Ltd1
Charge Metals Pty Ltd1
Charge Metals Pty Ltd1
Charge Metals Pty Ltd1
Charge Metals Pty Ltd1
Charge Metals Pty Ltd1
Charge Metals Pty Ltd1
Charge Metals Pty Ltd1
Reliance Minerals Pty Ltd1
Reliance Minerals Pty Ltd1
Reliance Minerals Pty Ltd1
Reliance Minerals Pty Ltd1
Reliance Minerals Pty Ltd1
Live
Live
Live
Live
Pending
Pending
Live
Live
Live
Live
Live
Live
Live
Pending
Live
Pending
Pending
Pending
Live
Live
Live
Pending
Pending
Reliance Minerals Pty Ltd1
Pending
88
Golden State Mining Limited
Notes:
1. 100% subsidiary of GSM.
2. 80:20 JV with Caprice Resources Limited with 20% held by WA Minerals a 100% subsidiary of Golden
State Mining Limited.
3. Subject to exploration agreement
89