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1
SUSTAINABILITY REPORTSPARTAN RESOURCES ANNUAL REPORT 20232023 Corporate Directory
Directors
Rowan Johnston
Simon Lawson
David Coyne
John Hodder
Hansjoerg Plaggemars
Company Secretary
Russell Hardwick
Non-Executive Chair
Managing Director and Chief Executive Officer
Non-Executive Director
Non-Executive Director
Non-Executive Director
Australian Business Number
57 139 522 900
Head and Registered Office
Level 1, 41-47 Colin Street
West Perth, Western Australia, 6005
PO Box 1449
West Perth, Western Australia, 6872
Telephone: +61 8 9481 3434
+61 8 9481 0411
Facsimile:
admin@spartan1.com.au
Email:
www.spartanresources.com.au
Website:
Share Registry
Automic
Level 5, 126 Phillip Street
Sydney, New South Wales, 2000
PO Box 5193
Sydney, New South Wales, 2001
Telephone: 1300 288 664 (Australia)
Facsimile:
Email:
Website:
+61 2 9698 5414 (International)
+61 2 8583 3040
hello@automicgroup.com.au
www.automicgroup.com.au
Auditor
Grant Thornton Audit Pty Ltd
Level 43 Central Park
152-158 St Georges Terrace
Perth, Western Australia, 6000
Telephone: +61 8 9480 2000
+61 8 9480 2050
Facsimile:
Stock Exchange Listing
The Company’s securities are listed on the Australian Securities Exchange (ASX).
ASX Code: SPR
Contents
Letter from the Chair of the Board
Sustainability Report
Mineral Resource Estimates and Ore Reserves
Corporate governance statement
Directors’ report
Auditor’s independence declaration
Independent auditor’s report
Directors’ declaration
Consolidated statement of comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the financial statements
ASX additional information
Tenement schedule
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Letter from the Chair of the Board
Dear Shareholders,
The 2023 financial year has been an extraordinary and transformational journey for Spartan Resources Limited (Spartan or the
Company).
While the first half of the year was dominated by operational and financial challenges at our flagship Dalgaranga gold mine in Western
Australia, we have since been able to engineer a remarkable turnaround for the Company – driven by a combination of ingenuity,
tenacity and exploration success.
Our fearless approach to overcoming challenges and adversity has allowed us to restructure and reposition the business, make one of
the most impressive new high-grade gold discoveries seen in recent times in the Western Australian gold sector, and put the Company
on a trajectory to achieve sustained success into the future.
In addition to a new name and brand, I am confident that Spartan has more fundamentally transformed its perception and position in
the ASX gold sector. This has ultimately been reflected in the significant increase in our market capitalisation in the second half which, at
the time of writing this report, was over $300 million.
The initial phase of the Company’s transformation commenced on 8 November 2022, when we made the difficult but necessary
decision to suspend mining and processing operations at the Dalgaranga Gold Project (Dalgaranga) and transition the Dalgaranga
processing plant to care and maintenance status. At the same time, we also placed the Company’s shares into voluntary suspension.
These decisions were made in light of untenable increases in the operating cost base at Dalgaranga and a sub-optimal operating
performance which was further impacted by industry-wide cost pressures including skills and labour shortages.
Whilst these decisions are never easy, and we are acutely aware of the impact on our operations team, I am proud that we moved
quickly and decisively to protect our cash balance and the value of our assets – including the 100%- owned 2.5Mtpa Dalgaranga
processing plant, a substantial resource base and the emerging high-grade Never Never gold discovery.
Following the suspension of operations, the Company worked rapidly to develop a new strategic operating plan for Dalgaranga based
on the transformational Never Never discovery, which lies immediately adjacent to the processing plant on the edge of the main
Gilbey’s open pit.
In February 2023, the Company unveiled a new 18-month exploration and strategic plan aimed at establishing a solid 5-year mine plan,
encompassing a blend of higher-grade ore sources with “baseload” ore feed capable of underpinning a sustainable production profile to
facilitate a production re-start decision. The key elements of this plan – which we have named the ‘365’ development strategy – were
to target:
A +300koz Ore Reserve at a grade exceeding 4.0g/t at Never Never;
A +600koz Mineral Resource at a grade exceeding 5.0g/t at Never Never; and
The development of a 5-year mine plan aimed at delivering gold production of 130-150koz per annum.
In parallel with the updated development strategy, the Company also secured a $50 million funding package, which included a $26.3
million equity raising, a $21.3 million investment from highly respected global resources private equity fund Tembo Capital, and a $2.5
million unsecured loan from existing major shareholder, Delphi. Delphi also contributed $5.8 million to the equity raising.
With these foundations in place, the Company forged ahead with an aggressive exploration campaign at Never Never that has well and
truly cemented the deposit’s exceptional credentials.
Over the course of the year, we have announced successive Resource updates at Never Never, with our latest update announced on 24
July totalling 721,200 ounces of contained gold at an exceptional head grade of 5.85 grams per tonne. This update – which successfully
ticked off one of the three key pillars of our ‘365’ development strategy – brings the total Mineral Resource base at Dalgaranga to 1.18
million ounces of contained gold and the company Resource base of 1.96 million ounces
In addition, our geology team has also undertaken a review of historical exploration data through the lens of the new style of
mineralisation identified at Never Never. This review has yielded a number of exceptional new targets in the near-mine environment.
We recently launched a 25,000m multi-rig surface drilling campaign at Dalgaranga, targeting the continued rapid growth in high-grade
gold resources within 2km of the processing plant. This drilling will aim to extend the existing Never Never Resource at depth, as well as
targeting significant new “look-alike” targets along strike to the south.
Given the learnings we have gained from Never Never – and our growing understanding of the structure and controls on high-grade
mineralisation within the district – we have very high hopes of Dalgaranga’s potential to deliver additional high-grade discoveries.
1
SPARTAN RESOURCES ANNUAL REPORT 2023 In light of the significant evolution in our corporate strategy over the past year, we recently secured shareholder approval to change the
Company’s name to “Spartan Resources Limited”. The Board believes the new name better reflects the Company’s nature – disciplined,
fearless and relentless – and provides an exciting opportunity to align the name with our new approach to taking the business forward.
As part of the name change, the Company has also changed its ASX ticker code to “SPR”.
On the corporate front, the multi-sourced $50 million funding package secured in February has provided the Company with a robust
balance sheet, with sufficient capital to underpin our planned exploration activities, care and maintenance costs and working capital
through to mid-2024. The Company ended the reporting period with cash and listed company investments totalling $35.3 million.
Mr John Hodder was appointed to the Board as a Non-Executive Director during the year as a nominee of Tembo Capital, bringing
over 30 years’ experience in the mining industry, funds management and private equity sectors. John has already made a valuable
contribution to the Spartan Board since his appointment.
We also took the pragmatic step of reducing Non-Executive Directors fees from 1 June 2023, enabling the Company to maximise
“money in the ground” as we continue to delineate and grow our Resource and Reserve base.
In closing, while the past financial year has delivered its fair share of hurdles, I have never been more excited about our future potential.
Building on the Never Never discovery, we now have an opportunity to build a project restart plan based on one of the highest-grade
gold deposits discovered in Australia in recent years. And importantly, we believe that we now have the keys to unlock similar
discoveries close by.
The Company’s growing Resource and Reserve base is supported by fully developed debt-free infrastructure, including an existing fit-
for-purpose processing plant that is being maintained in a high state of care and maintenance to facilitate a rapid operational restart.
This puts Spartan in a unique position in the Australian gold sector.
I would like to sincerely thank my fellow Board members for their wise counsel over the year and would particularly like to
acknowledge the exceptional leadership of our Managing Director, Simon Lawson, who has successfully guided the Company through
a very difficult period with great energy, passion and commitment. I would also like to thank our small but very hardworking team of
staff and contractors who have worked tirelessly over the year to deliver such positive outcomes.
And finally, I would like to thank all our shareholders – both new and long-term – who continue to support the Company and share
our enthusiasm about the path ahead.
I believe the coming year is set to be an immensely exciting period for Spartan Resources and I look forward to sharing it with you all.
Yours sincerely,
Rowan Johnston
Non-Executive Chair
2
SPARTAN RESOURCES ANNUAL REPORT 2023 Sustainability
Report
SPARTAN RESOURCES ANNUAL REPORT 2023 23
SUSTAINABILITY REPORTSPARTAN RESOURCES ANNUAL REPORT 2023 Contents
FY2023 HIGHLIGHTS
EXECUTIVE SUMMARY
OUR APPROACH TO SUSTAINABILITY
ENVIRONMENT
SOCIAL
GOVERNANCE
CLOSING STATEMENT
Page
5
6
7
9
14
16
18
SPARTAN RESOURCES ANNUAL REPORT 2023 4
3
SUSTAINABILITY REPORTSPARTAN RESOURCES ANNUAL REPORT 2023 FY2023 Highlights
Spartan's Sustainability Ambition
‘Delivering safe, responsible environmental and social outcomes while creating positive shareholder value.’
No material non
compliance.
John Hodder appointed to the
Board as Non-Executive Director
as the nominee of Tembo
Capital.
$50 million funding package
completed in March 2023
underpinning the Company’s
18-month exploration, technical
studies and "365" operationals
strategy activities.
Company Name Change to
Spartan Resources Limited,
signifying the team’s fearless
spirit.
Significant share price growth
since 9 March 2023, when the
Company recommenced trading
from $0.10 per share to $0.39 at
the date of signing of the Annual
Report.
0
No material non
compliances.
Transitioned safety to
Care and Maintenance.
Rehabilitation of exploration
and drilling.
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SPARTAN RESOURCES ANNUAL REPORT 2023SUSTAINABILITY REPORT Executive Summary
In 2022, Spartan Resources Limited (Spartan or the
Company) delivered its first Sustainability Report as part
of the 30 June 2022 Annual Report. Shortly, thereafter
in November 2022 the Company ceased mining and
processing operations at its Dalgaranga Gold Project
(Dalgaranga) and transitioned Dalgaranga to Care and
Maintenance (C&M). Since then, we have undergone a
transformational financial and operational restructure,
focusing on advanced exploration and technical / financial
study efforts to support a future decision to recommence
mining. The reset was designed to preserve the value of
Spartan’s existing extensive infrastructure whilst we grow
our resource and reserve base and develop a new and
sustainable operating plan.
We remain committed to transparency around our
sustainability performance. While a large part of the current
reporting period (FY23) has been about getting the business
back on a sustainable financial footing, we have maintained
our commitment to making sustainability disclosures
as part of our Annual Report. Where data presented in
this Sustainability Report reflects performance that has
materially changed from prior periods due to the C&M
status, this will be noted in the supporting text.
At Spartan, we aim to be a responsible miner and we
understand the impact that mining operations can have
on the environment and society. We are using this period
of C&M to consider initiatives and practices that will
minimise our environmental impacts and maximise our
social contributions as much as reasonably possible. This
involves efforts to minimise the environmental impact
of our exploration activities and nurture the well-being
of our workforce and communities whilst upholding
the highest standards of ethical governance towards all
our stakeholders. Striving for transparency and genuine
accountability, we are aiming to meticulously integrate ESG
principles across all elements of the business.
6
SUSTAINABILITY REPORTSPARTAN RESOURCES ANNUAL REPORT 2023 Our Approach to Sustainability
Our approach to ESG is rooted in a belief that
C&M period to focus our efforts on improving
Material Topics of Focus in FY23
respectful and sustainable conduct not only
data management, disclosure capabilities
safeguards our shared planet, but also enhances
and transparency around material topics in
the resilience and prosperity of our business
order to best communicate economic, social
over the long term. A core tenet of sustainability
and environmental considerations to our
is economic viability – we must be successful
stakeholders.
in fulfilling our commercial obligations as a
platform to successfully develop and implement
Our Core Values
Previous stakeholder assessment and internal
engagement during the reporting period has
informed the ESG topics that we believe are
material for FY23. After conducting a gap
analysis of data availability within the business
against the guidance of GRI and SASB, we
acknowledge the need to capture additional
data to transparently measure and disclose our
ESG performance.
further ESG initiatives. As such, our decision in
November 2022, to transition the Dalgaranga
site to C&M has allowed us to enter a detailed
planning phase to reset operations and work
towards recommencing operations with
an integrated economical and sustainable
approach across all activities.
In FY23, we continue to be guided by the
Global Reporting Initiative (GRI) as a framework
for measuring and disclosing our ESG
performance, supplemented by sector specific
metrics from the Sustainability Accounting
Standards Board (SASB). We have utilised this
Spartan’s ’s Core Values pillar ‘Putting HEARTS
into Mining’ through Honesty, Excellence,
Accountability, Resilience, Teamwork and Safety
Whilst performance data for some material
is key to who we are and how we interact with
topics may be distorted as a direct result of our
each other and our stakeholders.
Our focus on ESG aligns with, and is reflected
in, our Core Values.
Specifically, our Core Values will be linked to
sustainability primarily through ‘Accountability’
and ‘Excellence’, evident in our belief for
delivering safe, respectful environmental
and social outcomes while creating positive
shareholder value.
current phase of C&M, we recognise the need to
provide disclosure continuity. We aim to present
available data in this year’s Sustainability Report
along with commentary to explain significant
departures from multi-year trends. We also
aspire to substantially enhance data collection
methods as we work through this period of
C&M prior to a restart decision.
COMPANY VALUES PUTTING HEARTS INTO MINING
HONESTY
What you see is what
you get. We work with
integrity and respect.
SAFETY
Safety always, its the
way we work
around here
TEAMWORK
Our success relies on
effective communication
and collaboration.
EXCELLENCE
We strive for the best
outcomes in all aspects of
our business.
RESILIENCE
We face our challenges
and move forward
with determination and
perserverance.
ACCOUNTABILITY
We do what we say we
do. We own and take
responsibility for
our actions.
7
SPARTAN RESOURCES ANNUAL REPORT 2023SUSTAINABILITY REPORT Material topics identified for discussion:
Environment
Social
Governance
Energy, GHG & Climate Change
Other Air Emissions
Water & Effluents
Waste Management
Rights of Indigenous Peoples
Economic Value and Performance
Local and regional Communities
Board Governance
Closure and Rehabilitation
Occupational Health & Safety
Biodiversity
SPARTAN RESOURCES ANNUAL REPORT 2023 68
SUSTAINABILITY REPORTSPARTAN RESOURCES ANNUAL REPORT 2023 Environment
Spartan’s operations are divided into production
Due to the current C&M phase, our FY23 data
This year we produced a total of 28,551 MT
and brownfield exploration at Dalgaranga
shows a significant reduction in impacts on the
CO2-e Scope 1 emissions, comprising 28,068
(noting that processing operations ceased
environment across the range of metrics when
MT CO2-e at the Dalgaranga Mine and 483
at Dalgaranga in November 2022 with the
compared to prior periods. We acknowledge
MT CO2-e from our exploration activities. The
mine being placed on C&M) and exploration
that these figures are not representative of full-
scope 1 emissions included carbon dioxide
at several greenfield locations noted within
scale operations over a 12 month period.
(CO2), methane (CH4), nitrous oxide (N20) and
the Operations Review of the Annual Report.
Due to the differences in types of activities and
geography, activities at each location must
Energy & Greenhouse Gas (GHG) Emissions &
Climate Change
account for different water systems, flora,
GHG emission reporting is steered by the
fauna & ecosystems accordingly. Throughout
National Greenhouse Gas and Energy Reporting
this section, we will differentiate between our
Act (NGER Act) since 2019. To better understand
production and exploration data as the impact
the profile of our organisations’ GHG emissions
on the environment and opportunities for
footprint we have divided our inventory based
mitigation are substantially distinct.
The C&M phase at Dalgaranga is pivotal in
laying a robust foundation to mitigate potential
future impacts on natural capital and curb our
on Production and Exploration activities,
detailing activity-specific requirements. We
have been reporting our GHG emissions from
Dalgaranga under the NGER Act since 2019.
sulphur hexafluoride (SF6).
As our operations return to full production in
time, we will be assessing the effect of forward-
looking physical and transitional climate risks
on our operations. We recognise this as a
necessity in adapting our long-term operational
strategy to a changing climate and an economy
transitioning to a net zero carbon future. With
the imperative to reduce GHG emissions and
adopt more sustainable practices, at Spartan
we believe energy solutions will be a key
part of our restart decision. In future years,
contribution to climate change. By meticulously
In order to calculate our GHG emissions, we first
we may
look to
implement advanced
assessing our operational strategies and mine
calculate our energy consumption. Our main
technologies such as renewable energy
planning, we strengthen our commitment to
sources of energy consumption at Dalgaranga
sources, energy-efficient equipment, and
responsible resource extraction and sustainable
are from the use of liquified natural gas (LNG)
optimised
operational
processes,
to
practices. Through careful consideration of
for electricity generation, natural gas, and diesel.
significantly curtail our GHG emissions
environmental factors, we aim to chart a course
This accounted for 582,272 GJ of energy in
footprint.
that ensures resource efficiency and upholds
FY23. Energy consumption from exploration
our responsibility towards safeguarding the
activities comes primarily from diesel usage.
environment and mitigating climate change.
This accounted for 6,875 GJ of energy in FY23.
Table 1: Comparison of other GHG Emmissions and Energy Consumption
Production & Exploration
Energy & Air Emissions
ENERGY
Unit
FY19
FY20
FY21
FY22
FY23
Energy Consumption
GJ
1,360,781
1,304,351
1,382,438
1,361,669
589,147
GHG EMISSIONS
Gross direct (Scope 1)
GHG emissions
Gross Indirect (Scope 2)
GHG emissions
Metric Tonnes CO2e
73,778
67,757
70,286
68,377
28,551
Metric Tonnes CO2e
16
22
24
22
22
Total Emissions
Metric Tonnes CO2e
73,794
Emissions Intensity
Metric Tonnes CO2e/
oz
1.29
*Data reflects July-October FY23, the only months in FY23 for which there is production data.
67,757
0.93
70,311
0.91
68,399
0.96
28,573
1.57*
9
SPARTAN RESOURCES ANNUAL REPORT 2023SUSTAINABILITY REPORT Other Air Emissions
air emissions for the reporting period due to our
The table below shows data for our production
Spartan has been collecting air emissions
data since FY18. The transition to C&M since
November 2022 has substantially reduced our
limited operations. We expect air emissions to
activities at Dalgaranga. Our exploration activities
return to similar levels as FY22 once a restart
do not calculate other air emissions due to their
decision is made and operations recommence.
substantially smaller impact and no current
regulatory requirement to collect such data.
Table 2: Comparison of other Air Emmissions
Production & Exploration
Energy & Other Air Emissions
NOx
SOx
Persistent Organic Pollutants
(POP)
Volatile organic compounds
(VOC)
Hazardous air pollutants
(HAP)
Particulate matter (PM)
Mercury (Hg)
Lead (Pb)
CO
Unit
FY18
FY19
FY20
FY21
FY22
FY23
kg
kg
kg
kg
kg
kg
kg
kg
kg
146,304
558,080
448,224
449,095
404,832
168,680
94
0
370
0
306
0
308
0
272
0
113
0
12,563
42,924
34,428
35,048
31,454
13,106
1
6
4
6
5
2
6,904,256
23,447,470
22,382,510
20,934,963
19,298,376
8,040,990
1.31
0
3.60
0
3.39
0
3.19
0
2.99
0
1.00
0
71,097
255,281
236,741
247,618
200,418
83,508
Water and effluents
We are committed to minimising our reliance
•
Monthly water use tracking prevents
Water is a key resource for our operations as
well as for the ecosystems adjacent to our
operations. We manage our water supply in
accordance with our Department of Water and
Environmental Regulation (DWER) groundwater
licence and Spartan’s Groundwater Licence
Operating Strategy (GLOS).
on natural groundwater sources where possible
exceeding the groundwater license limit.
for operations and maximising our opportunities
Additionally, Spartan follows Health
to optimise water usage efficiency. To this end,
Department guidelines for potable water
we prioritise sources from mine dewatering and
monitoring and conducts a monthly
repurposed from tailings facilities over virgin
groundwater program, measuring bore
groundwater extraction. At Dalgaranga, our
depth, salinity, and pH for compliance.
main sources of water are:
Quarterly, samples are sent for detailed
Borefield: Spartan holds a groundwater
license allowing 5,500ML of annual
analysis as outlined in the GLOS.
•
The water withdrawn and collected served
extraction for mining. In FY23, we extracted
diverse purposes including:
Reporting on water impacts is commonly
•
disclosed as water withdrawal and discharge.
The difference between these two categories
provides us with our water consumption. In
addition to this, we measure the volumes of
water drawn from our tailings water recovery
system at Dalgaranga for re-use. This process
involves pumping tailings water back into the
742 ML of water for our mining needs.
Pit dewatering: Ground water sources
that must be removed from the mine
for operational and safety purposes. This
type of water accounted for 431 ML of our
reticulated system for reuse in the Dalgaranga
mining needs.
processing plant. Water drawn from the tailings
water recovery system is factored into our
total water consumption at Dalgaranga. See the
table 3 for the data and calculations.
Water consumption at our exploration sites is
not reported due to low levels of consumption
and no current regulatory requirement to
collect such data.
•
Tailings water recovery system: In order to
reduce groundwater consumption, we are
able to repurpose tailings water through a
decantation process. In FY23, we were able
to supply approximately 41.2% of our total
water use by decanting tailings water. This
source provided water supply of 822 ML.
o
o
o
o
Dust control
Drinking water and sanitation
facilities for employees
Ore processing
Exploration and Blast Hole
Drilling
10
SUSTAINABILITY REPORTSPARTAN RESOURCES ANNUAL REPORT 2023 Table 3: Comparison of Water Usage by Source Type
Sources of Water
Pit Dewatering
Borefield Abstraction
Total Water Withdrawal (Pit Dewatering + Borefield
Abstraction)
Total Water Discharged – septic system
Water Consumption (Withdrawal – Discharge)
Tailings Water Recovery System
Total Water Use (Withdrawal + Tailings Water Recovery
System)
Unit
ML
ML
ML
ML
ML
ML
ML
FY21
1,248
1,273
2,521
18
2,503
1,837
4,358
FY22
873
816
1,771
18
1,753
2,187
3,958
FY23
431
742
1,173
8
1,165
822
1,995
In FY23, 8ML of water was treated through our
attempts to reduce its consumption as much
Waste Management
wastewater septic system and then discharged
as possible.
Hazardous Waste
into the local environment, within specifications
permitted by our groundwater license.
During the reporting period, potentially acid
forming (PAF) waste rock material was identified.
Baseline water stress measures the ratio of
PAF has the potential to impact groundwater
total water withdrawals to available renewable
if not stored correctly. This material is being
surface and groundwater supplies. SASB
placed on the decommissioned Gilbey’s
requires the reporting of High (40–80% of
Tailings Storage Facility (TSF), where it will be
renewable sources of water) and Extremely
encapsulated in purpose built storage facilities
High (>80% of renewable sources of water)
to prevent acid or metalliferous drainage into
Baseline Water Stress. It recommends the use of
the groundwater.
the Water Risk Atlas to measure baseline water
stress in areas of operation.
The results of our monitoring programs show
that there has been no contamination of
Despite our production and exploration
groundwater or surface water from our mining
locations being in an area of high Overall Water
activities or storage of materials. During the
In our pursuit of responsible mining practices,
we acknowledge the critical importance of
addressing hazardous waste generation within
the gold mining industry. The main source of
hazardous waste in the gold mining industry
is from the use of cyanide. For environmental
and economic reasons, we minimise the use
of cyanide within operational parameters and
conduct decanting at the Tailings Storage
Facilities. This decanting reduces cyanide
consumption, preserves water, and reuses the
decanted water in our processing plant. We also
have an automated cyanide and oxygen dosing
system in operation during production which
Risk , the low demand and rural nature of the
reporting period there were no incidents of
optimises cyanide usage.
area mean that it is not considered a high water
non-compliance associated with water quality
stress location. Notwithstanding, Spartan is
permits, standards, and regulations.
mindful of the scarcity of the resource and
11
SPARTAN RESOURCES ANNUAL REPORT 2023SUSTAINABILITY REPORT Table 4: Hazardous Waste Generated and Recycled
Hazardous Waste
Hazardous waste generated (tailings)
Hazardous waste recycled (decanted water)
Unit
m3
m3
FY21
FY22
FY23
4,964,100
4,770,525
1,810,063
1,836,614
2,319,900
822,209
Production data (Dalgaranga) – no hazardous waste generated or recycled for exploration operations.
Tailings Storage Facilities (TSFs)
that surround mines. TSFs are only utilised
a maximum storage capacity of 5,561,111
TSFs are a key method of storage and treatment
of hazardous waste generated in the gold
mining industry. When designed properly, they
ensure that hazardous elements do not end
up in waterways, soil and pristine ecosystems
for operational mines as exploration projects
m3, of which 4,282,460 m3 is currently in use.
do not generate enough hazardous waste to
require this kind of facility.
We also have a decommissioned TSF,
near the Gilbey’s pit, which is no longer in
Spartan currently has one TSF in operation,
use for tailings, but is utilised as a storage cell
Golden Wings in-pit TSF at Dalgaranga with
for PAF spoil material.
Tailings Storage Facilities Management
Facility
name
Location
Ownership
Operational
Construction
Maximum
Status
Status
method
permitted
storage
capacity
Golden
Wings in-pit
TSF
Dalgaranga
site
100% owned On standby
In-pit
5,561,111 m3
Current
amount
of tailings
stored
4,258,2000
m3 slurry
Consequence
Date of
Classification
most recent
independent
technical
view
Very low
13/04/2023
Mineral waste
use in rehabilitation efforts. While the volume of
and early detection through groundwater
As part of our commitment to sustainable
mining practices, we prioritise the responsible
management of non-hazardous waste
generated by our operations. Waste rock or
overburden, a byproduct of our activities, is
stockpiled for potential re-processing and/or
rock waste generated in FY23 is low compared
sampling adjacent to the PAF storage cell for
to previous periods, we have continued our
detection of acid and metals leaching into the
approach to stockpile management that is
ground water. The PAF cell structure is audited
designed to minimise exposure of sulphide-
annually by an independent Geotechnical
bearing materials to air and water to prevent acid
consultant. No detection incidents were
generation. Spartan also undertakes monitoring
reported in FY23.
Table 5: Comparison of Mineral Waste Generated
Mineral Waste
Unit
FY21
FY22
FY23
Rock waste/Overburden generated
Metric Tonnes
8,982,820
6,188,000
2,578,300
Rehabilitation and land management
Spartan is currently primarily engaged in
exploration activities, with its Dalgaranga
process plant in a C&M phase. Exploration
has periodic rehabilitation for its work areas
and in FY23 rehabilitated a further 1ha. In FY23
no rehabilitation was undertaken for the
existing Dalgaranga production facility.
12
SUSTAINABILITY REPORTSPARTAN RESOURCES ANNUAL REPORT 2023 Table 6: Comparison of Rehabilitated Areas
Production data - Dalgaranga
Land owned / leased
Land disturbed
Land rehabilitated during the reporting period
Cumulative land rehabilitated
Exploration data
Land owned / leased
Land disturbed
Land rehabilitated during the reporting period
Cumulative land rehabilitated
Unit
ha
ha
ha
ha
Unit
ha
ha
ha
ha
CASE STUDY - CLIMATE
FY21
2,136
703
-
12
FY21
FY22
2,136
765
-
12
FY22
FY23
2,715
809
-
12
FY23
392,740
392,740
392,740
779
12
12
782
2
14
787
1
15
The mining industry is generally a large
mitigation are essential to the long-term
the productivity setback but also ensured
consumer of energy and consequently
sustainability of our business.
the attainment of our operational goals.
a generator of greenhouse gas (GHG)
emissions. Moreover, due to the nature and
location of our operations, we are aware
of the high climate-related risk potential
for our operations which may be further
exacerbated as the planet continues to
warm. Climate change is happening, and
we expect the physical and economic
consequence for Spartan to increase in
future years if left unaddressed. To this end,
our efforts towards climate adaptation and
An example of actions to prepare for
As this type of weather event may become
the potential consequences of climate
more frequent in the future, we will
change was in our response to flooding
take the learnings from this event to our
at Dalgaranga during March and April this
broader climate-related risk evaluation.
year. We strategically allocated resources to
We will be assessing the possible effects of
manage water drainage and diversion from
forward-looking physical and transitional
our exploration sites. In the aftermath of this
climate risks on our operations in FY24. We
event, as surface water gradually receded,
recognise this as a necessity in order to
we optimised our rig strategy, resulting in
adapt our long-term operational strategy
a notable increase in output. This proactive
to a changing climate.
approach not only mitigated the impact of
1113 SPARTAN RESOURCES ANNUAL REPORT 2023
SPARTAN RESOURCES ANNUAL REPORT 2023SUSTAINABILITY REPORT Social
Rights of Indigenous People
The Melville mining lease application area is
Local and Regional Communities
At Spartan, we aim to maintain a positive
covered by the Yamatji South Indigenous Land
The communities near our sites experience the
relationship with local First Nations People
Use Agreement (ILUA), with miscellaneous
most direct
social, environmental
and
and ensure we operate within the frameworks
licences associated variously with Wajarri
economic impacts of our businesses. By
agreed between Traditional Custodians and
Yamatji, Yamatji South and the Badimia people.
prioritising
local
procurement
and
Spartan.
Spartan engages with Traditional Custodians
across its tenement holding portfolio. Before
any ground disturbances occur, Traditional
Custodians are invited to inspect the proposed
ground disturbance area to ensure that Spartan’s
proposed activities are in line with cultural
heritage management plans (CHMP) and will
not lead to loss or destruction of artefacts or
culturally significant areas.
We ensure that necessary cultural heritage
contributing our share of taxes and royalties,
management activities are conducted on a
we aim to support these local communities.
timely basis and acknowledge the protection
During FY23, Spartan contributed $345,827 to
of cultural heritage as a key component of our
local community vendors in the Mt Magnet
licence to operate.
Region. Within the Western Australia region,
$7,885,127 was contributed to payroll tax,
Economic Value and Performance
WA royalties, tenement rent, shire rates,
Economic performance is core to our ability to
deliver operational and financial results and an
important element for our stakeholders. Our
aim is to deliver shared value through effective
MRF, and DMP Levy We aim to retain
economic value within the local communities
in which we operate, striving to hire as many
local workers as possible over FIFO
Currently, the Dalgaranga mining lease is not
partnerships while maintaining balance sheet
contractors.
part of any Native Title application or claims,
strength and flexibility to act on organic growth
however the mostly closely aligned group is
opportunities. FY23 has been primarily focused
Occupational Health and Safety
the Badimia people. We have been engaging
on the operational and financial restructure that
We believe everyone, every day should be able
with the Badimia people on cultural heritage
will ensure our financial sustainability into the
to go home without injury and without long-
surveys to inform our operational planning
future.
and potential compliance requirements, and
to explore opportunities for collaboration with
them moving forward.
The $50 million funding package completed
in March 2023 has ensured that Spartan
is fully funded to meet all drilling, studies
The Dalgaranga bore field tenure is within the
and associated cost requirements through
Wajarri Yamatji determined claim, with whom
to a restart decision in 2024.
term impact on their physical or mental health.
Workplace health and safety is built into
our culture and begins when a new
employee or
contractor
commences
working for Spartan.
we frequently work to conduct cultural heritage
surveys for site identification and avoidance.
STATE AND NATIONAL
ECONOMIES CONTRIBUTION
EMPLOYEE WAGES
AND BENEFITS
PAYMENTS TO
GOVERNMENT
PAYMENTS TO LOCAL
SUPPLIERS
$15.3 MILLION
$7.8 MILLION
$0.3 MILLION
SPARTAN RESOURCES ANNUAL REPORT 2023 1414
12
SUSTAINABILITY REPORTSPARTAN RESOURCES ANNUAL REPORT 2023 CASE STUDY - LOCAL COMMUNITY EMPLOYMENT
As a result of the operation being placed into
be not reasonably filled on a fly in and fly out
a pool of people that had the skills required
C&M, it became apparent that there was a
basis. Through discussions with the Badimia
to assist Spartan. A successful outcome for
need for ad-hoc labour to assist with many
people to explore opportunities to utilise
both parties occurred with Badimia people
tasks around the processing, administration
traditional custodians based in the proximal
assisting the C&M activities and plant
and accommodation facilities. This labour
communities to Dalgaranga (mostly Mount
shutdown at Dalgaranga.
was needed for short durations that could
Magnet), it became apparent that there was
New starter training begins with:
These training programs, with specific area
Frequency Rate’ (TRIFR). This metric enables a
The general induction which discusses
‘how we work around here’
Critical risk awareness
Risk control processes
Lifesaving behaviours
Fitness for work, alcohol screening
every day
Awareness of company values and
appropriate behaviours
inductions and competency development,
degree of comparison of performance within
ensure we set our new team members up for
the gold mining industry and broader industrial
success by using hazard reporting as a key tool
sectors. Frequency rates are calculated by the
in mitigating
risks and
implementing
number of incidents divided by hours worked,
controls that will help ensure the safety of
multiplied by 1,000,000. The Total Recordable
employees and other stakeholders.
Injury Frequency Rate (“TRIFR” 12-month rolling)
Day-to-day tasks are managed through
planning and preparation of the Job Hazard
Analyses (JHA) for operations, and competence
development of standard work instructions,
as well as presence of an on-site Safety
Committee.
for the Dalgaranga Gold Project at the end of
the FY23 June Quarter was 7.1, an increase
from 4.8 at the end of the FY23 March Quarter,
primarily due to a reduction in worked hours on
site compared to 12 months ago. The figure for
FY23 represents employee data only, while the
data for FY21 and FY22 is representative of site
Introduction to visual felt leadership
interactions
In compliance with the Department of Mines,
figures which includes contractors. There were
Industrial Regulation and Safety (DMIRS), we
2 recordable injuries for contractors FY2023.
use the metric of ‘Total Recordable Injury
0
2
-
l
u
J
0
2
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u
A
0
2
-
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S
0
2
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0
2
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v
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N
0
2
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1
2
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1
2
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b
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F
1
2
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1
2
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p
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1
2
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1
2
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1
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1
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1
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1
2
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1
2
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1
2
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D
2
2
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a
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2
2
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b
e
F
2
2
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r
a
M
2
2
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r
p
A
2
2
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y
a
M
2
2
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J
2
2
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l
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2
2
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g
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2
2
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p
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2
2
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c
O
2
2
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v
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N
2
2
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c
e
D
3
2
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n
a
J
3
2
-
b
e
F
3
2
-
r
a
M
3
2
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p
A
3
2
-
y
a
M
3
2
-
n
u
J
LTIFR 12 month moving av erage
TRIFR 12 month moving average
CASE STUDY - LOOKING AFTER OUR EMPLOYEES
Mental health is a key focus in our
employees were provided with both
Spartan is committed to sending everyone
organisation, with a concerted effort to
financial and wellbeing support over and
home safely every day. Working safely at
provide valuable mental health support
above the required National Standards
Dalgaranga is not optional - “It’s the way
to employees who may need it. This was
ensuring the transition was made as easy
we work around here. If we can’t do the job
particularly evident when operations ceased
as possible for all employees.
safely then we don’t do it.”
at Dalgaranga in November 2022. Affected
•
•
•
•
•
•
•
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0
15
SPARTAN RESOURCES ANNUAL REPORT 2023SUSTAINABILITY REPORT Governance
SPARTAN'S GOVERNANCE FRAMEWORK
BOARD
RENUMERATION
COMMITTEE
MD/CEO
ROLE
SUB-
COMMITEES
AUDIT & RISK
COMMITTEE
RENUMERATION
COMMITTEE
LEADERSHIP
TEAM
Board Governance
In May 2023, John Hodder, an experienced
visits by directors to the mining operations and
The Board of Spartan is responsible for setting
the standards for business ethics, governance
and compliance, relaying strong internal
and external messages of the company’s
integrity and reputation. The Board ensures
geologist and finance professional in the
exploration sites. Appropriate implementation
resources industry joined the Board in a non-
of controls and mitigation strategies are put in
executive director capacity representing
place, with policies and procedures updated
Spartan’s largest shareholder.
accordingly.
Spartan continues to be known as an honest
ESG Governance
and reputable gold mining and exploration
Whilst the Board maintains overall responsibility
company.
The Board is responsible for deciding the
nature and extent of the risks Spartan is
prepared to take to meet its objectives and for
monitoring the exposure to risk. They ensure
for the company’s corporate governance, ESG is
a shared responsibility across the company, with
the Executive Leadership Team and Department
Managers taking primary responsibility for ESG
performance and management.
appropriate controls are in place to mitigate
The Audit and Risk Committee’s (ARC) purpose
these risks, safeguard the assets and interests
is to assist the Board in fulfilling its corporate
of the company and to ensure the integrity of
governance and monitoring responsibilities,
reporting.
The Board is comprised of individuals from
diverse backgrounds bringing a variety of skill
sets to the governance and decision making
process of the Company.
a practical approach in which directors can
examine in larger detail Spartan’s exposure
to risk. Oversight of ESG by the committee
is achieved through regular reporting by
management, direct engagement with
management and employees, and periodic
Spartan’s ESG policy and framework is in the
early stages of development, with ESG risks
falling within the current risk management
system which is used as a tool to assist in
meeting ESG objectives, especially in the areas
of environmental and corporate governance.
As we approach a restart decision, we are
actively considering the requirement for an
ESG team, made up of key employees within
the business who will take primary responsibility
and management of all activities related to
advancing our Sustainability approach. This
may include data collection and evaluation,
climate-related risk management, aligning with
GRI/SASB recommendations, reporting and an
enhancement of the company’s Sustainability
Strategy.
16
SUSTAINABILITY REPORTSPARTAN RESOURCES ANNUAL REPORT 2023 Management
activities on its tenement holdings. Required
their particular area of work and minimising
Spartan seeks to maintain high standards of
ethics, legal and regulatory compliances which
aligns with our Core Values.
We aim to be compliant with all relevant laws
and regulations and seek to adhere to the ASX
Corporate Governance Council’s Corporate
Governance Principles and Recommendations
(4th Edition).
The company has developed policies and
procedures to facilitate the reporting of
unethical or unlawful behaviours including a
Whistleblower Policy and an Environmental
and Social Policy. These policies provide the
ability for anyone to report incidents through
an anonymous platform.
License to Operate
Spartan maintains all necessary licences and
permits required to conduct its operations and
seeks approval for additional permits as required
to enable the company to conduct exploration
permits are obtained from regulatory bodies in
adverse consequences for inherent risk.
advance of activities occurring. The company
engages external parties to audit and review its
environmental management practices.
Risk policies are regularly reviewed by the
Board to ensure continued effectiveness and
improvement; this system is used to identify
During FY23, there have been no material non-
risk and set in place action plans to mitigate the
compliances with any laws or regulations, with
effect of risk events should they occur. Spartan
no instances of bribery or corruption having
seeks to promote risk management culture that:
been reported or identified.
Risk Management
Risk is inherent in all aspects of a company’s
operations – at Spartan we are committed
to managing all levels of risk in an effective
manner for which the best outcomes are
derived for all involved stakeholders. Spartan’s
Risk Management Plan is regularly evaluated
and updated by senior management according
to evolving needs. It provides employees with
guidance related to risk analysis at each level
•
•
Considers all forms of risk in decision-
making.
Analyses and evaluates risk profiles at all
levels of operations in order to achieve the
best outcome for the company as a whole.
•
Retains ownership and accountability
for risk management at all levels of
the business and recognises that risk
management does not defer accountability
to others.
within our departments. All employees are
•
Encourages adherence and monitors
responsible for managing the risks related to
compliance with policies and procedures.
1517 SPARTAN RESOURCES ANNUAL REPORT 2023
SPARTAN RESOURCES ANNUAL REPORT 2023SUSTAINABILITY REPORT Closing Statement
This Sustainability Report aimed to transparently
report ESG considerations that both enhance the
resilience of our business and reflect our commitment
to respectful interactions with all our stakeholders as
well as the environment.
Guided by the international GRI standards, the
Sustainability Report outlines the organisational
challenges and successes we have faced during
our current operational landscape, an irregular
year for Spartan. The current financial year has
seen a focus on strategic, operational planning and
financial restructuring to continue our exploration
and technical / financial study efforts to support a
future decision to recommence mining, allowing us
the necessary time to adopt a model which provides
the re-distribution of resources and attention to
implement innovative solutions. With the investigation
of environmental initiatives during this planning
period, we strive to reduce any long-term effects on
the ecosystems in which we operate and significantly
reduce our carbon footprint.
Our ESG ambitions during and post the C&M period,
focus on improving data collection methods,
broadening targets and metrics, understanding and
improving ESG performance, and producing authentic
reports directed towards our stakeholders. Linked to
this, our Core Values are central to our operations -
Spartan ensures its employees are safe, collaborative
and honest creating a resilient and accountable
workforce focussed on achieving organisational
targets.
The capabilities of the team and prospects for our
future ambitions are encouraging - we are disciplined
in our strategy, fearless in our execution and confident
in our ability to succeed in this new chapter as Spartan
Resources Limited.
18
SUSTAINABILITY REPORTSPARTAN RESOURCES ANNUAL REPORT 2023 Mineral Resource Estimates and Ore Reserves
Governance
Reporting of Mineral Resource Estimates and Ore Reserves have been compiled in accordance with the 2012 Edition of the
Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code 2012), Chapter
5 of the ASX Listing Rules and ASX Guidance Note 31. The JORC Code 2012 is a set of minimum standards,
recommendations and guidelines for public reporting of Exploration Results, Mineral Resources and Ore Reserves, as defined
by the Joint Ore Reserves Committee (JORC).
Governance of the estimate of Spartan’s Mineral Resource Estimates and Ore Reserves is a key responsibility of the Executive
Management of the Company. The Managing Director and Chief Executive Officer of the Company oversees the reviews and
technical evaluations of the Mineral Resource Estimates and Ore Reserves.
The Company has governance processes in place to manage the Mineral Resource Estimates and Ore Reserves in
accordance with industry best practice.
All Mineral Resource and Ore Reserve estimates are prepared by qualified professionals in accordance with JORC Code
processes that ensure representative and unbiased samples are obtained with appropriate QA/QC practices in place.
Mineral Resource Estimates and Ore Reserves are periodically peer reviewed by external consultants and by the Company.
When an initial or maiden Mineral Resource Estimate is prepared for a deposit, the Company engages an independent
technical expert to conduct an independent review. The Company engaged an independent technical expert to review the
Mineral Resource Estimate updates to the Never Never Deposit in January 2023 and July 2023.
Mineral Resources
As defined in the JORC Code 2012, a Mineral Resource is a concentration or occurrence of solid material of economic interest
in or on the Earth’s crust in such form, grade (or quality), and quantity that there are reasonable prospects for eventual
economic extraction. The location, quantity, grade (or quality), continuity and other geological characteristics of a Mineral
Resource are known, estimated or interpreted from specific geological evidence and knowledge, including sampling. Mineral
Resources are subdivided, in order of increasing geological confidence, into Inferred, Indicated and Measured categories.
The Group’s Mineral Resources represent the estimated quantities of minerals that can potentially be commercially recovered
from the Group’s projects but which do not have demonstrated economic viability.
The Group’s Mineral Resource Estimate (MRE) was updated on three separate occasions during and post the 2023 financial
year. The latest update occurred in July 2023 (refer ASX release dated 24 July 2023), resulting in an updated Group Mineral
Resource Estimate of 38.51Mt at 1.6g/t Au for 1,964,000 contained gold ounces. As part of its annual update and review in
September 2022, the Group made the decision to change the cut-off grade at the Dalgaranga Gold Project from 0.25g/t Au to
0.50g/t Au which has since been carried forward in all subsequent MRE updates. The updated Group Mineral Resource
Estimate as at 24 July 2023 is presented below:
GROUP MINERAL RESOURCES
Category
Tonnes (Mt)
Grade (g/t)
Contained Metal (koz Au)
Measured
Indicated
Inferred
GRAND TOTAL
0.50
29.44
8.57
38.51
0.95
1.6
1.6
1.6
15.20
1,508.57
440.28
1,964.0
Group Mineral Resource Estimates (as at various dates and cut-off grades)
Following completion of the acquisition of Firefly Resources Limited (“Firefly”) in November 2021, the Group has commenced
reporting its Mineral Resource Estimates in two (2) distinct regions – i) Murchison Region, and ii) Gascoyne Region. The
Murchison Region comprises the Dalgaranga Gold Project (“DGP”) and the Yalgoo Gold Project (“YGP”). The Gascoyne
Region comprises the Glenburgh Gold Project (“GGP”) and Egerton Gold Project (“EGP”).
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
19
Mineral Resource Estimates and Ore Reserves
Mineral Resources – Murchison Region
Group Mineral Resource Estimates for the Murchison Region as at 24 July 2023 are 21.94Mt at 2.0 g/t Au for 1,426,900
ounces, and shown in the following table:
MURCHISON REGION
Category
Tonnes (Mt)
Grade (g/t)
Contained Metal (koz Au)
Measured
Indicated
Inferred
TOTAL
0.50
15.71
5.73
21.94
1.0
2.1
1.9
2.0
15.2
1,052.9
358.9
1,426.9
Note: “Murchison Region” Mineral Resource includes Dalgaranga Gold Project (DGP) and Yalgoo Gold Project (YGP). The DGP also includes
the Gilbey’s North – Never Never and Archie Rose mineral resources. Cut-off grades are 0.5g/t Au at DGP and 0.7g/t Au at YGP
Dalgaranga Mineral Resource Estimate
During the 2023 financial year, the Dalgaranga Mineral Resource Estimate was updated on three separate occasions:
September 2022 update
In September 2022, the Mineral Resource Estimate (MRE) for Dalgaranga was updated (refer to ASX announcement
released on 8 September 2022) to 14.93Mt at 1.23g/t Au for 590,100 ounces of contained gold. Dalgaranga comprises
the “Gilbey’s Complex” gold deposits (Gilbey’s Main, Gilbey’s East, Plymouth, Sly Fox and Gilbey’s South). Updates made
to the MRE for the Gilbey’s Complex include mining depletion through to 30 June 2022 and increase in cut-off grade from
0.25g/t Au to 0.50g/t Au. No material changes were made to the MRE for the Gilbey’s Complex resulting from new drilling
or geological information. On this date, the Group also reported an initial MRE for the Never Never deposit located
approximately 350 metres north of the Gilbey’s pit and less than 1,000 metres from the Dalgaranga process plant and a
maiden MRE for the Archie Rose deposit at Dalgaranga located approximately 9km from the Dalgaranga process plant.
January 2023 update
In January 2023, the Mineral Resource Estimate (MRE) for Dalgaranga was updated (refer to ASX announcement
released on 23 January 2023) to 14.90Mt at 1.6 g/t Au for 783,600 ounces of contained gold. Updates made to the MRE
include substantial resource growth at the Never Never deposit in terms of grade and ounces partially offset by mining
depletion at Dalgaranga during the six months ended 31 December 2022.
July 2023 update
In July 2023, the Mineral Resource Estimate (MRE) for Dalgaranga was updated (refer to ASX announcement released
on 24 July 2023) to 16.70Mt at 2.2 g/t Au for 1,183,300 ounces of contained gold. Updates made to the MRE are driven
solely by substantial resource growth at the Never Never deposit in terms of tonnes, grade and ounces.
The aggregate MRE for the Dalgaranga Gold Project as at 24 July 2023 comprising the Gilbey’s Complex, Never Never deposit
and the Archie Rose deposit is shown in the following table:
DALGARANGA GOLD PROJECT (DGP)
Category
Tonnes (Mt)
Grade (g/t)
Contained Metal (koz Au)
Measured
Indicated
Inferred
TOTAL
0.50
12.36
3.85
16.70
1.0
2.2
2.2
2.2
15.2
892.5
275.6
1,183.3
Note: DGP Mineral Resource statement for in-situ and surface stockpile resources above 0.5g/t Au
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
20
Mineral Resource Estimates and Ore Reserves
Yalgoo Mineral Resource
The Yalgoo Mineral Resource Estimate was updated and reported by the Group approximately one (1) month after the
acquisition of Firefly was completed (refer ASX announcement released on 6 December 2021). The updated Mineral Resource
Estimate for the Yalgoo Gold Project is 5.2Mt @ 1.5g/t Au for 243,600 ounces of contained gold. A total of 160,400 ounces of
gold (approximately 66% of the Mineral Resource) is contained in the Indicated category.
Category
Indicated
Inferred
TOTAL
YALGOO GOLD PROJECT (YGP)
Tonnes (Mt)
Grade (g/t)
Contained Metal (koz Au)
3.35
1.88
5.24
1.49
1.37
1.45
160.4
83.2
243.6
Note: YGP Mineral Resource statement for in-situ resources above 0.7g/t Au.
Mineral Resources - Gascoyne Region
Group Mineral Resource Estimates for the Gascoyne Region are 16.57Mt at 1.01g/t Au for 537,100 ounces, and shown in the
following table:
GASCOYNE REGION
Category
Tonnes (Mt)
Grade (g/t)
Contained Metal (koz Au)
Indicated
Inferred
TOTAL
13.73
2.84
16.57
1.03
0.89
1.01
455.7
81.4
537.1
Note: Gascoyne Region Total Mineral Resource statement for in-situ resources above 0.25g/t Au for open pit at Glenburgh, above 2.0 g/t Au
for underground at Glenburgh and above 0.7g/t Au for open pit at Egerton.
Glenburgh Mineral Resource
No revisions were made to the Glenburgh MRE during the year and they remain as reported in ASX announcement released
on 18 December 2020. No additional information came to light during the year to warrant a change in the MRE. The Mineral
Resource Estimate for the Glenburgh Project is 16.3Mt @ 1.0g/t Au for 510,100 ounces of contained gold. A total of 430,700
ounces of gold (approximately 85% of the Mineral Resource) is contained in the Indicated category.
GLENBURGH GOLD PROJECT (GGP)
Category
Tonnes (Mt)
Grade (g/t)
Contained Metal (koz Au)
Indicated
Inferred
TOTAL
13.50
2.80
16.30
1.0
0.9
1.0
430.7
79.4
510.1
Note: GGP Mineral Resource statement for in-situ resources above 0.25g/t Au for open pit and above 2.0g/t Au for underground.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
21
Mineral Resource Estimates and Ore Reserves
Mt Egerton - Hibernian Mineral Resource
Similar to the Glenburgh MRE, no revisions were made to the Mt Egerton (Hibernian deposit) MRE during the year and they
remain as reported in the ASX announcement released on 31 May 2021. The Hibernian deposit contains 0.3Mt @ 3.1g/t Au
for 27,000 ounces.
MT EGERTON GOLD PROJECT (EGP)
Category
Tonnes (Mt)
Grade (g/t)
Contained Metal (koz Au)
Indicated
Inferred
TOTAL
0.23
0.04
0.27
3.4
1.5
3.1
25.0
2.0
27.0
Note: EGP Mineral Resource statement for in-situ resources above 0.7g/t Au.
The Company is not aware of any new information or data that materially affects the information contained in the Group Mineral
Resources statement other than changes due to normal mining depletion at the Gilbey’s Complex during the period from 1
July 2023 to the date of this report.
Ore Reserves
As defined in the JORC Code 2012, an Ore Reserve is the economically mineable part of a Measured and/or Indicated Mineral
Resource. It includes diluting materials and allowances for losses, which may occur when the material is mined or extracted
and is defined by studies at Pre-Feasibility or Feasibility level, as appropriate, that include application of Modifying Factors
(considerations used to convert Mineral Resources to Ore Reserves). Such studies demonstrate that, at the time of reporting,
economic extraction could reasonably be justified.
Ore Reserves are sub-divided in order of increasing confidence into:
Probable Ore Reserves, the economically mineable part of an Indicated and, in some circumstances, a Measured Mineral
Resource; and
Proved Ore Reserves, the economically mineable part of a Measured Mineral Resource.
The Dalgaranga Gold Project Ore Reserve was updated in September 2022, refer ASX announcement dated 21 September
2022. Following the decision in November 2022 to suspend mining and processing operations and transition Dalgaranga to
care and maintenance, the previous Ore Reserve published by the Company on 21 September 2022 was withdrawn in its
entirety.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
22
Mineral Resource Estimates and Ore Reserves
Competent Persons Statement
As defined in the JORC Code 2012, a Competent Person is a minerals industry professional who is a Member or Fellow of
The Australasian Institute of Mining and Metallurgy, or of the Australian Institute of Geoscientists (or of a ‘Recognised
Professional Organisation’, as included in a list available on the JORC and ASX websites) and must have a minimum of five
years’ relevant experience in the style of mineralisation or type of deposit under consideration and in the activity that they are
undertaking.
The information in this report that relates to the Group Mineral Resource Estimates and Ore Reserves is based on information
compiled by Competent Persons, as named below.
Each Competent Person named below:
has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the
activity that was undertaken to qualify as a Competent Person as defined in the JORC Code 2012; and
consents to the inclusion in this report of the matters based on their information in the form and context in which it
appears.
Accountability Competent Person
Employer
Institute
Dalgaranga Gold Project (Exploration and Sampling)
Mr Monty Graham
Senior Exploration Geologist
Spartan Resources Limited
The Australasian Institute of Mining and Metallurgy
Member
Dalgaranga Gilbey’s Complex MRE
Mr Michael Job1,2
Principal Geologist/Geostatistician
Cube Consulting Pty Ltd
The Australasian Institute of Mining and Metallurgy
Fellow
and
Mr Michael Millad1,2
Director and
Principal Geologist/Geostatistician
Cube Consulting Pty Ltd
Australian Institute of Geoscientists
Member
Never Never MRE
Mr Nicholas Jolly
GM – Exploration and Business
Development
Spartan Resources Limited
Australian Institute of Geoscientists
Member
Archie Rose MRE
Mr Simon Lawson
Managing Director / CEO
Spartan Resources Limited
The Australasian Institute of Mining and Metallurgy
Member
Dalgaranga Ore Reserve
Mr Neil Rauert3
Senior Mining Engineer
Spartan Resources Limited
The Australasian Institute of Mining and Metallurgy
Fellow
Yalgoo MRE
Mr Simon Lawson
Managing Director /CEO
Spartan Resources Limited
The Australasian Institute of Mining and Metallurgy
Member
Glenburgh and Mt Egerton - Hibernian MRE
Mr Brian Fitzpatrick
Principal Geologist
Cube Consulting Pty Ltd
The Australasian Institute of Mining and Metallurgy
Member
1
2
3
Information compiled under the supervision of named Competent Person.
Information relating to the Mineral Resource for the Gilbey’s, Gilbey’s East, Gilbey’s South, Plymouth and Sly Fox deposits.
Information relating to the Ore Reserve for the Gilbey’s, Gilbey’s East, Gilbey’s South, Gilbey’s North, Never Never and Plymouth deposits.
The Company confirms that the form and context in which the Competent Person’s findings are presented have not been
materially modified from the original market announcements.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
23
Corporate governance statement
The Board of Spartan Resources Limited is committed to achieving and demonstrating the highest standards of Corporate
Governance. The Board is responsible to its shareholders for the performance of the Company and seeks to communicate
extensively with shareholders. The Board believes that sound Corporate Governance practices will assist in the creation of
shareholder wealth and provide accountability. In accordance with ASX Listing Rule 4.10.3, the Company has elected to
disclose its Corporate Governance policies and its compliance with them on its website, rather than in the Annual Report.
Accordingly, information about the Company's Corporate Governance practices is set out on the Company's website at
https://spartanresources.com.au/company-overview/corporate-governance/.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
24
Directors’ report
The Directors of Spartan Resources Limited (Spartan or the Company) present their report together with the financial
statements of the consolidated entity, being Spartan Resources Limited and its controlled entities (together, the Group), for
the year ended 30 June 2023.
Directors
The following persons were Directors of Spartan Resources Limited during the year and up to the date of this report unless
otherwise stated:
Rowan Johnston BSc (Mining Engineering)
Independent Non-Executive Chair
Appointed as Non-Executive Director on 5 August 2020, Interim Non-Executive Chair on 31 January 2022 and Non-Executive
Chair on 31 March 2022
Mr Johnston is a mining engineer with over 40 years’ resources industry experience, including 13 years’ experience as a
company director through executive and non-executive directorship roles. Mr Johnston has held various senior executive roles
in Australia and internationally, primarily in the gold sector, and has experience in feasibility studies, company formations,
construction, expansions and mergers.
Mr Johnston is the Executive Chairman of Kin Mining NL, and was previously Executive and Non-Executive Director of Bardoc
Gold and the Managing Director of Excelsior Gold Limited. Previous roles held by Mr Johnston include Acting Chief Executive
Officer and Executive Director of Operations for Mutiny Gold Limited, prior to its takeover by Doray Minerals Limited, and
Executive Director of Integra Mining Limited prior to its merger with Silver Lake Resources Limited.
Board committee membership:
Audit and Risk Committee; Remuneration Committee.
Other directorships of ASX listed entities in the past three years:
Non-Executive Director of PNX Metals Limited since April 2023
Executive Chairman of Kin Mining NL since August 2023 and Non-Executive Director from July 2022 to July 2023
Interim Non-Executive Chair of Wiluna Mining Corporation Limited since July 2022 and Non-Executive Director from
December 2021 to July 2022
Interests in shares and performance rights over shares of the Company: 400,000 shares; 3,000,000 performance rights
Simon Lawson MSc
Managing Director and Chief Executive Officer
Appointed 13 November 2021
Mr Lawson is a geoscientist with over 18 years’ experience in exploration, production and managerial roles. Prior to joining
the Company, Mr Lawson was Managing Director and Chief Executive Officer of Firefly Resources Limited, following a Chief
Geologist role at Superior Gold Inc.
Mr Lawson was a founding member of Northern Star Resources Limited, where he held senior geology roles, including
Principal Geologist, and was a member of the team which transformed the company from junior explorer to a major global
producer.
Board committee membership:
Nil.
Other directorships of ASX listed entities in the past three years:
Managing Director of Firefly Resources Limited from May 2018 to November 2021
Non-Executive Director of Firetail Resources Limited since June 2021 (listed on the ASX in April 2022)
Technical Director of Labyrinth Resources Limited since November 2021
Interests in shares and performance rights over shares of the Company: 3,927,234 shares; 18,000,000 performance rights
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
25
Directors’ report
Directors (continued)
David Coyne B.Com (Acct and Economics), CPA, GDIP (Applied Finance and Investment)
Non-Executive Director
Appointed as Company Secretary on 6 October 2020, as Finance Director on 18 November 2021 and transitioned to Non-
Executive Director on 1 April 2023
Executive employment agreement as Finance Director terminated on 1 April 2023 and resigned as Company Secretary on 1
August 2023
Mr Coyne has over 30 years‘ experience in the mining, and engineering and construction industries, both within Australia and
internationally. Prior to joining Spartan, Mr Coyne held senior executive positions with Australian listed companies Macmahon
Holdings Limited, VDM Group Limited, Peninsula Energy Limited and with unlisted global manganese miner Consolidated
Minerals. Over the past 15 years, Mr Coyne has been directly involved in a number of equity and debt raising transactions. Mr
Coyne has previously served as a Non-Executive Director of Peninsula Energy Limited and on the Board of BC Iron Limited,
where he also held the role of Chair of the Audit and Risk Committee.
Board committee membership:
Audit and Risk Committee (Chair).
Other directorships of ASX listed entities in the past three years:
Non-Executive Director of Peninsula Energy Limited from July 2020 to October 2021
Interests in shares and performance rights over shares of the Company: 115,287 shares; 7,258,546 performance rights
John Hodder BSc, MSc, BCom
Non-Executive Director
Appointed 12 May 2023
Mr Hodder is a geologist by background and an experienced resources executive with over 30 years‘ experience in the mining
industry specialising in funds management and private equity, most recently with Tembo Capital, a private equity resources
fund, where Mr Hodder is Managing Director and a founding principal.
Mr Hodder has significant company director experience having served as a Non-Executive Director on a number of private
and ASX-listed company boards in the resources sector. He currently serves as a Non-Executive Director of Strandline
Resources Limited and Genmin Limited.
Board committee membership:
Remuneration Committee (Chair).
Other directorships of ASX listed entities in the past three years:
Non-Executive Director of Strandline Resources Limited since 8 June 2016.
Non-Executive Director of Genmin Limited since 22 May 2014 and Non-Executive Chairman from 20 December 2018 to
10 March 2021.
Interests in shares and performance rights over shares of the Company: Nil shares; Nil performance rights
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
26
Directors’ report
Directors (continued)
Hansjoerg Plaggemars MBA
Non-Executive Director
Appointed 1 July 2021
Mr Plaggemars is an experienced company director specialising in corporate finance, corporate strategy and governance and
has served on the Board of Directors of various international listed and unlisted companies, in a variety of industries including
mining, agriculture, shipping, construction and investment. Mr Plaggemars has previously served on the Board of Deutsche
Balaton AG, and is the founder of Value Consult, a management consultancy firm.
Board committee membership:
Audit and Risk Committee; Remuneration Committee.
Other directorships of ASX listed entities in the past three years:
Non-Executive Director of Geopacific Resources Limited since July 2022
Non-Executive Director of Wiluna Mining Corporation Limited since July 2021
Non-Executive Director of PNX Metals Limited since November 2020
Non-Executive Director of Altech Batteries Limited since August 2020
Non-Executive Director of Azure Minerals Limited since November 2019
Non-Executive Director of South Harz Potash Limited from October 2019 to December 2022.
Non-Executive Director of Kin Mining NL since July 2019
Interests in shares and performance rights over shares of the Company: 16,916,667 shares; 3,000,000 performance rights
Company Secretary
Russell Hardwick BBus, (Acct) CPA, ACIS, GAICD
Company Secretary
Appointed 1 August 2023
Mr Hardwick is a Certified Practicing Accountant and Chartered Secretary, with over 20 years of experience in a variety of
private and public companies. Mr Hardwick has extensive experience in corporate secretarial, capital raising and commercial
management. He has held the positions of director or company secretary for AIM- and ASX-listed companies, as well as senior
executive positions within private companies. Mr Hardwick is a graduate of the Australian Institute of Company Directors
course and a member of the Governance Institute of Australia.
Prior to Mr Hardwick’s appointment, Mr Coyne served as Company Secretary for the Company. Please refer to Mr Coyne’s
biography in the ‘Directors’ section above.
Principal activities
Up until 8 November 2022, the principal activities of the Group were the production of gold from the Dalgaranga Gold Project
(Dalgaranga) and the exploration and evaluation of gold projects in Western Australia. On 8 November 2022, gold production
was suspended and Dalgaranga transitioned to a care and maintenance basis while the Company focuses on exploration and
resource growth, refer to the ‘Suspension of operations‘ section for more information.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
27
Directors’ report
Overview
Spartan is a gold exploration and development company. The Group holds assets and exploration tenements in the Murchison
and Gascoyne regions of Western Australia.
The Group’s current projects include:
gold exploration and evaluation at Dalgaranga including care and maintenance of the +2.5Mtpa processing plant;
gold exploration and evaluation at the Yalgoo Gold Project (Yalgoo); and
gold exploration and evaluation at the Glenburgh Gold Project (Glenburgh) and the Mt Egerton Gold Project (Mt Egerton).
Figure 1: Spartan project locations
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
28
Directors’ report
Group financial review
Financial performance
Gold sales revenue of $57.0 million (2022: $183.7 million) was generated from the sale of 22,202 ounces at an average gold
price of A$2,560 per ounce sold (2022: 71,479 ounces at an average price of A$2,569 per ounce). Revenue from the sale of
14,135 ounces of silver was $0.4 million (2022: $1.0 million; 31,697 ounces). The decrease in revenue compared to the prior
year is driven by a reduction in gold production as discussed in the ‘Operating review’ section below, as well as a marginal
decrease in the average realised gold price.
Total cost of sales inclusive of depreciation and amortisation was $64.8 million (2022: $208.4 million). The $143.6 million
movement in cost of sales is primarily driven by the suspension of mining and processing operations at Dalgaranga on 8
November 2022, a decrease in depreciation and amortisation expense due to the impairment of all mineral properties at 30
June 2022 and the write-off of the remaining unamortised capitalised deferred waste stripping costs related to Gilbey’s Stage
3 in the prior year.
During the year, the Company also incurred $11.2 million (2022: $nil) of costs related to the financial restructure of the
Company and transition of the Dalgaranga process plant and associated infrastructure to a care and maintenance state. Refer
to note 5 of the financial statements for details of the costs incurred. These costs are excluded from cost of sales referred to
above as they were incurred following, or as a result of, the decision to suspend operations and transition Dalgaranga to care
and maintenance.
Corporate expenses for the year totalled $5.4 million (2022: $7.3 million). The decrease is primarily due to the suspension of
mining and processing operations at Dalgaranga resulting in a reduction in corporate staff, directors’ fees and insurance costs.
The net consolidated loss of the Group for the year was $35.1 million (2022: $81.4 million). The change from the prior year is
driven by a range of factors including costs incurred as part of the financial restructure of the Company and transition of the
process plant at Dalgaranga to a care and maintenance state, lower ounces of gold produced and sold at a lower average
realised gold price, no mining costs capitalised to deferred waste during the current year partially offset by the suspension of
mining and processing operations at Dalgaranga in November 2022.
A tax expense of $nil has been recognised by the Group for the period (2022: $0.03 million expense). As at 30 June 2023, the
Group has total tax losses of $251.1 million. Refer to note 7 for further details on income tax.
The market value on the reporting date of the Group’s investments in ASX-listed Firetail Resources Limited (Firetail) and E79
Metals Limited (E79) was $0.8 million.
Gold price risk management
In July 2022, the Group entered into gold forward contracts with MKS PAMP, to partially insulate the Group from increasing
volatility in commodity markets. A total of 11,000 ounces of gold were hedged for delivery between July and December 2022
at an average price of A$2,555 per ounce.
On the announcement of the transition of the Dalgaranga operations to care and maintenance in November 2022, the then
remaining gold forwards were closed out as per the contractual requirements for an immaterial close out cost.
At the reporting date the Group had no contractual sale commitments for gold (30 June 2022: nil ounces).
Financial position
The Group held cash and cash equivalents of $34.6 million as at 30 June 2023 (2022: $30.9 million). The market value of
unsold gold on hand at 30 June 2023 was $nil (2022: $1.6 million) and the market value of investments in ASX-listed companies
was $0.8 million (2022: $2.7 million). The Group’s free cashflow generation reduced during the year as a result of lower ounces
sold, ongoing cost escalation within the Western Australian mining industry and transition of operations at Dalgaranga to a
care and maintenance basis.
The Group recorded cash outflows from operations of $23.1 million and from investing activities of $15.4 million, resulting in
cash outflow of $38.5 million for the year before financing activities (2022: $9.1 million inflow), reflecting lower production
following the suspension of operations at Dalgaranga in November 2022, partly offset by the deferral of certain creditor
payments that were subject to settlement negotiations. Financing activities resulted in an inflow of $42.2 million (2022: $1.7
million outflow) which reflected proceeds from the $50.0 million funding package completed in the second half of the year
offset by transaction related costs and lease liability payments.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
29
Directors’ report
Group financial review (continued)
As at 30 June 2023 the Group has a working capital surplus of $35.1 million (2022: $26.2 million surplus) which includes a
cash balance of $34.6 million. The significant improvement in working capital over the year is driven by the $50.0 million
funding package completed in March 2023, described further in the ‘Financial restructure’ section below. The Group has no
corporate or project finance debt at 30 June 2023, meaning that the Group’s balance sheet has been de-risked and is in a
robust position. Spartan now has sufficient funding to focus on its ‘365’ development strategy (Refer to the strategic operating
section plan section below for further information on the strategy).
Financial restructure
As part of the transition to care and maintenance and the delivery of an updated operating plan, in March 2023 the Company
completed a $50.0 million funding package for the implementation of its financial restructure. The key elements of the funding
package and financial restructure include:
A fully underwritten $26.3 million equity raising (Equity Raising), comprising the issue of approximately 263 million new
fully paid ordinary shares in the Company at an issue price of $0.10 per New Share (Offer Price). The Equity Raising
comprising:
An underwritten institutional placement of ~86 million New Shares to raise approximately $8.6 million (Placement);
and
An underwritten 1-for-2.42 pro-rata accelerated non-renounceable entitlement offer of ~176 million New Shares to
raise approximately $17.6 million (Entitlement Offer).
A new strategic investment by Tembo Capital Mining Fund III (Tembo Capital), a resources focused private equity fund,
of $21.3 million, structured in two tranches:
Tranche A: A $15.0 million secured loan mandatorily convertible to shares at an issue price of $0.10 per New Share
(which is the same as the Offer Price under the Entitlement Offer and Placement);
Tranche B: A $6.3 million secured loan mandatorily convertible to a 1.80% gross royalty on gold produced and sold
from wholly-owned Dalgaranga tenements and a 1.35% gross royalty on gold produced and sold from the remaining
wholly-owned tenements for which Spartan retains the gold rights to; and
Mandatory conversion of both Tranches A and B occurred on 24 April 2023, following shareholder approval on 18
April 2023.
As part of the strategic investment, Tembo Capital was granted a right to nominate one person to be appointed as a non-
executive director on the Board of Spartan and access certain information of Spartan, subject to Tembo Capital
maintaining an agreed holding in the Company’s shares.
An investment of $8.3 million from the Company’s then largest existing shareholder, Delphi Unternehmensberatung AG,
and its associates Deutsche Balaton AG, Sparta AG and 2invest AG, (Delphi), comprising:
Up to $5.8 million committed in the $26.3 million equity raising noted above.
A $2.5 million unsecured loan mandatorily convertible (upon shareholder approval) to a 0.7% gross royalty on gold
produced and sold from wholly-owned tenements at Dalgaranga and a 0.5% gross royalty on gold produced and
sold from the remaining wholly-owned tenements for which Spartan retains the gold rights to.
Mandatory conversion of the unsecured loan was approved by shareholders at an Extraordinary General Meeting (EGM)
held on 18 August 2023.
A full and final settlement of all amounts owing between Spartan and NRW Holdings Limited (NRW) (and their respective
group members) in respect of their existing contractual arrangements via an agreement entered into between the
Company, GNT Resources Pty Ltd, NRW and NRW Pty Ltd (NRW Settlement Agreement). The material terms of the
settlement included:
Payment of $2.0 million of the funding package proceeds in cash; and
The issue of 2.0 million worth of fully paid ordinary shares in Spartan at the Offer Price, following shareholder
approval received at the EGM held on 18 April 2023; and
Arrangements with certain other creditors of the Company to settle amounts, of up to $2.5 million, owed to the creditors
that were incurred prior to, or as a result of, the decision to suspend operations at Dalgaranga.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
30
Directors’ report
Operating review
Dalgaranga Gold Project
Overview
The Company’s flagship Dalgaranga Gold Project is located 475km north-east of Perth and approximately 65km north-west of
Mt Magnet in Western Australia. With a tenement area of around 500km2, the project covers the majority of the Dalgaranga
greenstone geological belt.
The project includes a fully developed gold mining operation, including carbon-in-leach processing facility, camp and airstrip
(currently on care and maintenance) and an extensive exploration land-holding with outstanding opportunities for new
discoveries. Between the first gold pour in May 2018 and the end of June 2023, over 300,000 ounces of gold have been
produced from Dalgaranga.
Suspension of operations
On 8 November 2022, the Company suspended open pit mining and ore processing operations at the Dalgaranga gold mine
and commenced the transition of the Dalgaranga process plant to a care and maintenance basis. The decision to suspend
operations was made in light of unsustainable increases in the operating cost base and a below-par operational performance
which was exacerbated by industry-wide pressures including personnel and skills shortages.
Since 8 November 2022, the Company has safely wound down its operations at Dalgaranga and transitioned the process plant
to a care and maintenance state under which the plant will be able to recommence operations on relatively short notice.
Strategic operating plan
Following the decision to place the Dalgaranga mining operations on care and maintenance in November 2022, the Company
has developed an updated operating plan focused on the transformational Never Never discovery, which is located
immediately adjacent to the Dalgaranga mill.
Following assessment of the outstanding exploration results to date, Spartan has developed an 18-month exploration and
strategic plan, the ‘365’ development strategy, targeting:
A +300koz Au Reserve at a grade exceeding 4.0g/t Au at Never Never;
A +600koz Au Resource at a grade exceeding 5.0g/t Au at Never Never; and
The development of a 5-year mine plan aimed at delivering 130-150koz per annum.
This updated strategy is centred around an aggressive exploration programme at Never Never, comprising extensive reserve
definition, resource expansion and near-mine exploration drilling targeting Never Never “look-alikes”.
Spartan is regularly updating the MRE at Never Never approximately every six months, with the objective of ultimately
delivering a maiden Never Never Ore Reserve, comprising both an open pit and underground component, in the first half of
2024.
In parallel with the Company’s planned exploration program, Spartan is progressing permitting and evaluation of the satellite
Yalgoo Gold Project, which is expected to provide an important source of ore feed to supplement the high-grade ore from
Never Never.
Operating performance
Mining operations were suspended on 8 November 2022 and processing of selected run-of-mine (ROM) stockpiles were
suspended during the second half of December 2022. In late October, prior to mining operations being suspended, open pit
mining commenced at the Never Never deposit, extracting near-surface laterite ore. This ore was blended with existing Gilbey’s
Main and Plymouth ROM stockpiles and processed during the December 2022 quarter.
1.1 million BCM of material was mined during the year, primarily from Stage 2 of the Gilbey’s Main Zone. 944,000 tonnes of
ore were mined at an average grade of 0.78g/t Au. The grade reflected increased mining dilution experienced during the year
due to constricted digging conditions in Stage 2 of the Gilbey’s Main Zone.
An aggregate of 924,000 tonnes were processed during the year at an average feed grade of 0.79g/t Au. Gross metallurgical
recovery was 84.6% which reflected the lower feed grade (due to increased mining dilution) and periodic suspension of
processing between 8 November 2022 and 31 December 2022 as the plant was completing final processing runs and being
prepared for a care and maintenance state.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
31
Directors’ report
Operating review (continued)
Gold production for the year was 21,009oz and 22,202oz of gold were sold at an average realised price of A$2,560/oz. The
Company did not have any outstanding gold hedges or forward contracts at the end of June 2023.
Due to the decision to suspend operations and transition the site to care and maintenance, reporting of unit costs has also
been suspended by the Company until operations recommence.
Low-grade stockpiles (material mined with a grade of 0.3g/t to 0.5g/t Au) are now 2,174,000 tonnes at an average grade of
0.35g/t Au, containing approximately 24,000 ounces of gold. The Company expects that these stockpiles will be useful blending
material with higher-grade ore upon the future recommencement of operations at Dalgaranga.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
32
Directors’ report
Operating review (continued)
Key operating indicators
Key operational information is summarised as follows:
Quarter
March
2022
June
2022
September
2022
December
2022
Financial year
2023
2022
Production summary
Unit
Mining
Total material movement
Waste1
Ore (volume)1
Ore (tonnage)1
Mined grade1
kbcm
kbcm
kbcm
kt
g/t Au
1,646
1,356
290
750
1.11
635
1.20
88.7
21,669
21,319
kt
g/t Au
%
Ounces
Ounces
Ounces
A$/oz
A$’000
21,260
2,586
54,987
879
573
306
822
0.80
667
0.89
85.7
16,298
16,597
16,882
2,620
44,227
738
497
241
647
0.82
619
0.81
85.8
13,905
13,560
13,950
2,548
35,538
362
242
119
297
0.71
305
0.75
82.6
7,104
7,951
1,099
739
360
944
0.78
924
0.79
84.6
21,009
21,511
6,412
5,149
1,264
3,403
0.85
2,650
0.96
86.9
71,153
71,575
8,180
2,577
21,076
22,129
2,558
56,613
71,479
2,569
183,655
A$/oz
A$/oz
A$/oz
A$/oz
A$/oz
A$/oz
A$/oz
A$/oz
A$/oz
1,140
1,429
1,683
472
304
549
76
771
199
1,917
2,054
2,653
65
112
33
67
244
32
46
395
42
2,127
2,396
3,135
2,134
2,399
3,179
1,347
527
152
2,026
61
134
28
2,250
2,346
Processing
Throughput
Feed grade
Recovery
Recovered gold
Poured fine gold
Revenue summary
Production sold
Average price
Gold sales revenue
Cost summary2
Mining (net)
Processing
Site support
Site cash cost
Royalties
Sustaining capital, leases
& exploration
Corporate allocation
AISC3
AIC4
Gold on hand5
Note: Discrepancies in totals are a result of rounding.
Ounces
885
600
132
-
-
600
1 During the September 2022 Quarter, the Company released its annual update to its Dalgaranga Mineral Resource Estimate and Ore
Reserves. In this update, the cut-off grade for both the Mineral Resource Estimate and Ore Reserves were increased from 0.3g/t Au to
0.5g/t Au. “Waste”, “Ore (volume)”, “Ore (tonnage)” and “Mined grade” are all reported based on a 0.5g/t Au cut-off from 1 July 2022. In
prior periods these items are reported based on a 0.3g/t Au cut-off and have not been restated.
2 Due to the decision on 8 November 2022 to suspend operations and commence the transition of the Dalgaranga operations to care and
maintenance, reporting of unit costs has been suspended by the Company until operations recommence.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
33
Directors’ report
Operating review (continued)
3 All-in sustaining cost (AISC) includes mining (net of deferred waste capitalised) and processing costs, site administration, net movement
in the value of site stockpiles, refining charges, sustaining exploration and capital, site rehabilitation, state government royalties and a
share of corporate overheads. Capitalised stripping costs and non-sustaining exploration and capital costs are not included. AISC is a non-
IFRS measure.
4 All-in cost (AIC) is the AISC plus deferred waste capitalised, plus non-sustaining exploration and capital costs. AIC is a non-IFRS measure.
5 Gold on hand as at period end.
Exploration projects – Murchison Region
Dalgaranga Gold Project
Dalgaranga comprises approximately 90% of the Dalgaranga greenstone belt. The Dalgaranga greenstone belt is a zoned
belt, the southern portion of the Dalgaranga Belt is gold dominated, while the layered mafic intrusives and felsic volcanics in
the northern domain are also prospective for Volcanic-Hosted Massive Sulphide base metals and pegmatite-related
mineralisation in addition to gold.
The 2023 financial year has been a year of investment in Dalgaranga’s future as part of a strategy aimed at identifying and
delineating future sources of higher-grade ore feed within a 5km radius of the Dalgaranga process, primarily focussed on
growing the exciting Never Never deposit located approximately 1km from the process plant and other previously under-drilled
prospects.
The Company spent $12.9 million on exploration and resource definition activity at Dalgaranga, predominantly on the Never
Never deposit.
45,498 metres of diamond, diamond tail and Reverse Circulation (“RC”) drilling was undertaken during the year at Dalgaranga,
with 32,487 metres drilled at Never Never, 11,053 metres at the Gilbey’s Complex, and 1,958 metres at the nearby regional
prospects Arc and Archie Rose.
Never Never
In February 2022, the Company announced the discovery of extensive shallow mineralisation immediately north of the Gilbey’s
Main Pit. The discovery was initially named “Gilbey’s North” and additional drilling resources, including a diamond rig were
mobilised to site during the months of February through to June 2022 to follow-up the success of the initial campaign. Results
from this drilling campaign as well as during the first quarter of the 2023 financial year, confirmed a high-grade western
extension to the Gilbey’s North prospect as well as consistent width and continuity. The two high-grade areas are collectively
known as the Never Never deposit.
Never Never represents a substantial high-grade lode system on the immediate western flank of what was originally known as
the Gilbey’s North prospect, located less than 1km from the 2.5Mtpa processing plant at Dalgaranga. The discovery was made
following a change in drilling orientation, resulting in the discovery of a new style of mineralisation that sits roughly at right
angles to the predominantly north-south orientation of most of the known deposits at Dalgaranga.
During the 2023 financial year, Spartan undertook a multi-faceted exploration program aimed at rapidly growing the initial
Mineral Resource Estimate (MRE) reported at the Never Never deposit on 8 September 2022.
Two surface drilling campaigns were conducted at Never Never in late 2022, and early 2023:
First drilling campaign in late 2022
The 2022 campaign included 65 drill holes for 12,609 metres predominantly on the shallow portion of the deposit, with
some holes extending at depth displaying an increase in gold endowment and open in all directions.
The updated MRE released in January 2023 demonstrated resource growth of 183% to 303,100 ounces, with grade
increasing 99% to 4.64g/t Au with 52% of ounces classified in the higher confidence Indicated category.
A JORC-compliant Exploration Target for Never Never was released in February 2023. Inclusive of the 303,100oz, the
calculated target was 600,000 to 1,000,000oz between 4.0Mt to 5.0Mt within an average grade range of 4.6g/t Au to 6.2g/t
Au.
Second drilling campaign in early 2023
A second surface drilling campaign was announced in March 2023 continuing to focus on growth at Never Never. Due to
ongoing success, the initial 10,000m campaign was extended to 61 drill holes for 19,716 metres.
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Directors’ report
Exploration projects – Murchison Region (continued)
Exceptional results were returned from lateral and depth extensions to Never Never, and the discovery of a new
mineralised horizon in the hanging wall of Never Never’s HG01 lode called the ‘Ink’ lode.
Drill results from this program provided further validation of the scale, significance and growth potential of the Never Never
discovery, with exceptional high-grade intercepts both within and outside of the January 2023 MRE envelope.
Following completion of this drilling program, an updated MRE was released on 24 July 2023. Refer to the ‘Mineral
Resource Estimates and Ore Reserves’ section of the Annual Report for further details.
Post the end of the financial year, the Company announced a 25,000m surface drilling campaign targeting extensions to
the Never Never deposit at depth.
Significant intercepts reported by the Company from Never Never during and after the end of the financial year include:
50.0m @ 6.46g/t Au from 144m, incl. 10m @ 23.7g/t Au (assays top-cut to 50g/t) – DGRC1186.
29.2m @ 11.09g/t Au from 449m, incl. 9.44m @ 22.26g/t Au – DGRC1183-DT (assays top-cut to 50g/t)
24.0m @ 6.32g/t Au from 343m, incl. 7m @ 14.69g/t Au – DGDH035
19.9m @ 8.12g/t Au from 451m, incl. 14.7m @ 10.46g/t Au – DGRC1204-DT
19.0m @ 6.49g/t Au from 471m, incl. 2m @ 29.57g/t Au – DGRC1218-DT
15.7m @ 13.51g/t Au from 216.3m, incl. 2.56m @ 34.14g/t Au and 5.27m @ 19.17g/t Au – DGRC1177-DT (assays top-
cut to 50g/t)
15.0m @ 11.96g/t Au from 291m, incl. 5.9m @ 17.19g/t Au – DGRC1199-DT
14.4m @ 9.09g/t Au from 333.1m, incl. 6.4m @ 13.64g/t Au – DGRC1191-DT
14.0m @ 9.16g/t Au from 414m incl. 5m @ 15.13g/t Au – DGRC1222-DT
13.0m @ 8.20g/t Au from 226m, incl. 6m @ 15.7g/t Au – DGRC1181
12.7m @ 6.40g/t Au from 380m, incl. 4.71m @ 16.16g/t Au – DGRC1178-DT
10.0m @ 2.9g/t Au from 214m – DGRC1180
8.6m @ 4.79g/t Au from 408m, incl. 3m @ 6.97g/t Au – DGRC1213-DT
Gilbey’s Complex
The Gilbey’s Complex comprises the Gilbey’s Main, Sly Fox and Plymouth deposits. During the financial year, 11,053 metres
were drilled at the Gilbey’s Complex testing high-grade shoots at the Gilbey’s East Footwall and Gilbey’s Main.
Drilling at the Gilbey’s East Footwall indicated narrow, but higher-grade stacked lodes, while drilling at Gilbey’s Main
successfully identified what is now known as the Four Pillars and West Winds prospects.
Post the end of the financial year, the Company reported significant high-grade potential at the Four Pillars and West Winds
prospects following reinterrogation of drilling completed in late 2022, prior to the decision to suspend mining and processing
operations at Dalgaranga.
Four Pillars
Striking westward into the hanging-wall of the Gilbey’s stratigraphy and situated at the northern end of the Gilbey’s Open Pit,
roughly 350m south of Never Never and situated southward of a major structural disruption to the Gilbey’s stratigraphy, this
target is supported by high-grade historic and recent resource drill results1 (see ASX:SPR announcement dated 12 December
2022), as well as historic grade control drilling and mine production reconciliation data.
A number of Mine Stope Optimiser (“MSO”) shapes were defined over parts of this prospect in the past. An MSO shape is
created by Mining Engineers as “potentially viable for mining” relative to the input assumptions used at the time. This prospect
is open along-strike and down-plunge and has the potential to be part of both a “re-shaped” Gilbey’s open-pit cutback scenario
as well as an underground resource and mining scenario.
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Directors’ report
Exploration projects – Murchison Region (continued)
West Winds
Also striking west into the hanging-wall of the Gilbey’s Open Pit sequence, approximately 200m south of and parallel to the
Four Pillars gold prospect, this target is also supported by historic resource drill assays, including some of the highest grade
drill assays ever seen at Dalgaranga, as well as grade control drilling and historic and more recent mine production
reconciliation data.
The mining of this high-grade prospect was the source of record gold production in the March 2022 Quarter2 (see ASX:SPR
announcement dated 7 April 2022). This prospect is open along-strike and down plunge and has the potential to be part of
both a “re-shaped” Gilbey’s open-pit cutback scenario as well as an underground resource and mining scenario.
The Gilbey’s Complex is currently undergoing an extensive MRE update, incorporating all drilling and mining data collected
since the previous update in 2022.
Significant intercepts reported by the Company from the Gilbey’s Complex after the end of the financial year include:
15.0m @ 11.64g/t Au from 224.00m (DGRC1161) – West Winds
8.0m @ 16.22g/t Au from 256.00m (DGRC1162) – West Winds
60.0m @ 2.35g/t Au from 141.00m (DGRC1173) – Four Pillars
32.0m @ 4.13g/t Au from 40.00m (DGRC1154) – Four Pillars
Dalgaranga regional exploration
In March 2023, a Sub-Audio Magnetics (SAM) ground-based survey was conducted over the Never Never Deposit and
surrounds to define replica zones for precision drill targeting. The primary objective was to define the Never Never geophysical
signature and image the surrounding structural architecture controlling high-grade gold mineralisation. The final interpretation
and target generation are pending.
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Directors’ report
Exploration projects – Murchison Region (continued)
Prior to receiving full results of the SAM survey and following the completion of the Never Never drilling campaign in early
calendar year 2023, 813 metres was drilled at the ARC prospect, 1km north-west of Never Never located on mining lease
M59/749. Results were still pending at 30 June 2023.
The Archie Rose Prospect had 1,142 metres drilled to test the geological model via two lines of drilling within the MRE footprint.
The prospect is located 9km north-west of the processing plant on tenement E59/2053. Results were broadly in line with the
geological model with samples also collected for preliminary metallurgical test work.
Significant results include:
10.0m @ 2.75g/t Au from 79.00m, 5.00m @ 2.79g/t from 139.00m and 3.00m @ 3.67g/t Au from 153.00m (DGRC1237)
Yalgoo Gold Project
In November 2021, the Group completed the acquisition of Firefly by way of Scheme of Arrangement. Shortly after the
completion of the acquisition and following the incorporation of the results of the additional drilling completed by Firefly prior
to the acquisition, in December 2021 the Company announced a 24% increase to Yalgoo gold resources. Indicated and
Inferred Resources at Yalgoo increased by 24% from the previous MRE prepared by Firefly to 5.238Mt at 1.45g/t Au for
243,613oz of gold.
The Yalgoo Gold Project is comprised of two deposits, namely the flagship Melville deposit and the Applecross deposit that is
adjacent to the northern end of the Melville deposit.
Melville Gold Deposit
Prior to the acquisition, Firefly completed six diamond drill-holes at Melville to provide samples for metallurgical test work and
geotechnical information to assist in open pit design.
Assay results received from the drilling reflected a number of shallow gold intersections.
Significant results include:
20m @ 2.1g/t Au from 57m including 8m @ 4.0g/t Au and 11.33m @ 1.4g/t Au from 85.67m
37m @ 1.4g/t Au from 10m, including 7m @ 4.3g/t Au from 39m
22.68m @ 1.0g/t Au from 39 and 11m @ 2.9g/t Au from 83m
During the year, the Company progressed a range of activities required to progress a Feasibility Study on Melville and for the
Mining Proposal and Mine Closure Plans to support a possible future commencement of mining at the Melville deposit.
Activities included metallurgical testwork, surface hydrological studies, waste rock characterisation studies, geotechnical
analysis, fauna and flora studies and road ore haulage studies.
As at the date of this report, the Group has slowed down the rate of progress on the aforementioned studies as the Never
Never deposit at Dalgaranga has taken priority as the next source of higher-grade ore.
Applecross Gold Deposit
The Applecross Gold Deposit consists of an Archaean lode-gold system intersecting an extensive structurally modified
Banded-Iron-Formation which has resulted in a broad gold deposit extending to depth and mineralised from surface. Given
the proximity of the Applecross deposit to the Melville deposit, Applecross may potentially be mined as an extension of future
mining at Melville.
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Directors’ report
Exploration projects – Non-Murchison Region
During the second half of the year, the Company undertook a full strategic review of all assets located outside of the Murchison
region. This resulted in the sale of Beebyn and expressions of interest in a number of other assets.
In light of the current volatility in global equity and commodity markets, the Company has elected to retain the Glenburgh /
Egerton assets for the foreseeable future.
Glenburgh Gold Project
The Glenburgh Gold Project (Glenburgh) with a tenement area of around 2,000km2, is located approximately 250km east of
Carnarvon in the southern Gascoyne region of Western Australia. The project consists of a gold mineralised shear system
hosted in interpreted remnants of Archean terrain in a Proterozoic mobile belt in a similar setting to the Tropicana Gold Mine.
The tenement holding for Glenburgh includes one mining lease as well as a number of exploration licenses.
A programme of 19 holes for 3,031 metres of RC drilling was completed at Zone 102, Zone 126, Hurricane, NE3 and Torino
Prospects was completed during the period. A Resource definition drilling program targeting known deposits is planned for the
2024 financial year.
Mt Egerton Gold Project
The Mt Egerton Gold Project (Egerton) consists of two granted mining leases and three exploration licences covering
approximately 200km² of the Lower Proterozoic Egerton inlier in the Gascoyne Region of Western Australia.
In July 2022, a program of 17 holes for 1,434 metres of RC drilling was completed at Egerton, targeting Gaffney’s Find
prospect. A soil sampling program is planned for the first half of the 2024 financial year.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
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Directors’ report
Significant changes in the state of affairs
On 8 September 2022, the Company released an updated Group Mineral Resource Estimate of 36.74Mt @ 1.16g/t Au for
1,370,800 ounces of contained gold including an initial Mineral Resource Estimate for the Never Never deposit at Dalgaranga
of 1.43Mt @ 2.32g/t Au for 107,200 ounces of contained gold.
On 21 September 2022, the Company released an updated Dalgaranga Ore Reserve Estimate of 2.04Mt @ 1.10g/t Au for
72,100 ounces of contained gold.
On 25 October 2022 final regulatory approval was obtained for commencement of open pit mining at the Never Never deposit,
the increase in the height of existing waste dumps and additional storage capacity for potentially acid forming waste rock.
On 8 November 2022, the Company announced the immediate suspension of mining and processing operations at
Dalgaranga, with the mill to be transitioned to operating on a temporary care and maintenance basis. The transition was
completed in January 2023 with the mill to be maintained in a state ready for resumption of production. Refer to note 5 for
more information on restructure costs.
On 23 January 2023, the Company released an updated Mineral Resource Estimate (MRE) in accordance with JORC Code
2012 for Dalgaranga, including a significant update to the MRE for the Never Never Gold deposit to 2.03Mt @ 4.64g/t Au for
303,100 ounces of contained gold with the Group MRE increasing to 37.71Mt @ 1.3g/t Au for 1,545,800 ounces of contained
gold. In this same release, the Company withdrew its Ore Reserve in its entirety.
On 27 February 2023, the Company announced it had entered into binding commitments for a $50.0 million funding package
to complete its financial restructure and provide sufficient funds to support the Company’s planned exploration activities, care
and maintenance costs and working capital through to mid-2024. The funding package comprised a fully underwritten $26.3
million equity raising, a $21.3 million strategic investment from Tembo Capital Mining Fund III (‘Tembo Capital) and a $2.5
million unsecured loan from the Company’s then largest existing shareholder Delphi. Refer to the ‘Financial restructure’ section
in the Directors’ Report for more information on the funding package.
On 27 February 2023, the Company also launched the institutional component of the pro-rata accelerated, non-renounceable
Entitlement Offer and Placement to sophisticated and professional investors.
On 1 March 2023 the Company confirmed successful completion of the Placement and Institutional Entitlement Offer with
$17.8 million in firm commitments received. The Placement comprised the issue of approximately 86 million New Shares, to
raise gross proceeds of approximately $8.6 million, and the Institutional Entitlement Offer comprised the issue of approximately
91 million New Shares, to raise gross proceeds of approximately $9.1 million. On 8 March 2023, the Company issued
approximately 177.3 million new shares pursuant to the Placement and Accelerated Institutional Entitlement Offer and received
gross proceeds of approximately $17.8 million.
On 1 March 2023, following the satisfaction of the conditions precedent, the Company also announced submission of the
utilisation request to draw down funds from the $21.3 million Tembo Capital Investment. The Company also submitted its
utilisation request to draw down the full amount of the $2.5m unsecured loan provided by Delphi. Funds drawn under both
facilities were received by the Company on 3 March 2023.
On 7 March 2023, the Group remitted approximately $4 million to creditors in accordance with binding agreements to settle
the cash component of all known claims and costs associated with the November 2022 decision to suspend operations and
transition Dalgaranga to care and maintenance.
On 9 March 2023, shares in the Company were reinstated to trading on ASX following a period of trading suspension of
approximately four months.
On 3 April 2023, the Company issued approximately 84.7 million new shares pursuant to the Accelerated Retail Entitlement
Offer and received gross proceeds of approximately $8.5 million.
On 18 April 2023, following shareholder approval, the Tembo Capital Facility was converted in two tranches, $15.0 million was
converted to 163 million fully paid ordinary shares in Spartan at $0.10 per share (Tranche A) and the remaining $6.3 million
(Tranche B) was converted to a royalty over all 100% owned tenements. Refer to the ‘Financial restructure’ section in the
Directors’ Report for more information on those tenements that the royalty will be applied to.
On 24 April 2023 20.0 million shares were issued to NRW as part settlement of amounts owed to NRW, and 162.8 million
shares were issued to Tembo Capital following conversion of debt to equity. Refer to note 19 for more information on the
Tembo Capital share issue.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
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Directors’ report
Dividends
No dividend has been paid or recommended for the current year.
Events occurring after the reporting date
On 24 July 2023, the Company released an updated Mineral Resource Estimate (MRE) of 3.83Mt @ 5.85g/t Au for 721,200
ounces of contained gold for the Never Never deposit, with the Group MRE increasing to 38.51Mt @ 1.6g/t Au for 1,964,000
ounces of contained gold.
On 18 August 2023, following shareholder approval for a replacement equity incentive plan, Classes D, E, F, and G
performance rights were cancelled and replaced with new performance rights, as a result of the inability to meet vesting
conditions due to the suspension of operations at Dalgaranga in November 2022.
On 24 August 2023, the Delphi unsecured loan facility was converted to a future gold royalty following shareholder approval
on 18 August 2023, with the unsecured loan considered fully repaid under the terms of the Delphi loan and royalty deed.
On 29 August 2023, following shareholder approval on 18 August 2023, the Company changed its name to Spartan Resources
Limited. The change of name marks the culmination of what has been a transformational period for the Company and signifies
the start of a new era of growth and success.
On 29 August 2023, as part of the Australian Gold Conference Corporate Presentation, the Company noted the decision to
defer development of the planned underground exploration drill drive due to cost escalation in the Western Australian mining
sector and better than anticipated surface drilling campaign performance so far in 2023 which resulted in an MRE with a
classification of 76% Indicated material at the Never Never deposit.
The Directors are not aware of any other matter or circumstance that has arisen since the end of the year which has significantly
affected, or may significantly affect, the operations of the Group, the results of those operations, or the state of affairs of the
Group, in future years.
Future developments
The Group is focussed on the execution of its ‘365’ development strategy announced in 27 February 2023, which includes a
12-18 month period of continued exploration and technical / financial study efforts to support a future decision to recommence
mining.
Environmental regulation
The Group is subject to significant environmental regulations under laws of the Commonwealth and State in respect of its
exploration, evaluation and development activities and its mining operations. The Group aspires to the highest standard of
environmental management and insists its staff and contractors maintain that standard. A significant environmental incident is
considered to be one that causes a major impact or impacts to land biodiversity, ecosystem services, water resources or air,
with effects lasting greater than one year.
During the year, the Group continued to regularly engage with relevant regulators regarding ongoing matters as part of normal
operations management.
Approval of the revision to the Dalgaranga Mining Proposal and Mine Closure Plan was received in late October 2022, allowing
the commencement of open pit mining at the Never Never deposit. The approval also allowed for the commencement of
construction of the GWTSF Lift, however this work was placed on hold in early November 2022.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
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Directors’ report
Meetings of Directors
The number of meetings held during the year by the Board of Directors (Board) and Board committees, and the number of
those meetings attended by each Director were:
Board meetings
Remuneration
Committee meetings
Audit and Risk
Committee meetings
Entitled to
attend1
Attended
Entitled to
attend1
Attended
Entitled to
attend1
Attended
R Johnston
S Lawson
D Coyne2
J Hodder 3
H Plaggemars
10
10
10
-
10
10
10
10
-
10
-
-
-
-
-
-
-
-
-
-
2
-
-
-
2
2
-
-
-
2
In addition to the above meetings a number of meetings were dealt with by circular resolution.
1
2 Mr D Coyne was transitioned to Non-Executive Director on 1 April 2023, following his appointment as Finance Director on 18 November
2021.
3 Mr J Hodder was appointed as Non-Executive Director on 12 May 2023.
Gender diversity
The Board of the Company is currently comprised of five male Directors and no female Directors (100% male). Within senior
executive positions of the Company, 75% of persons holding these positions are male and 25% are female. Senior executive
positions are those roles that are, or directly report to, the Managing Director and Chief Executive Officer, Chief Financial
Officer , General Manager – Exploration and Business Development, General Manager – Projects and Technical and General
Manager – Murchison Operations & Chief Geologist. Across the whole Group, 79% of employees are male and 21% are
female.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
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Directors’ report
Remuneration report (audited)
The Directors of the Company present the Remuneration report for Directors and other Key Management Personnel (KMP)
prepared in accordance with the Corporations Act 2001, the Corporations Regulations 2001 and applicable accounting
standards.
This Remuneration report is presented under the following sections:
Key management personnel
Remuneration governance
Remuneration policy and framework
Short and long term incentives
Details of remuneration
Service agreements
Share-based remuneration
Other information.
Key management personnel
The term KMP refers to those persons having authority and responsibility for planning, directing and controlling the major
activities of the Group, directly or indirectly, including any Director (whether executive or otherwise) of the Group, as defined
by AASB 124 Related Party Disclosures.
The Directors and other KMP of the Group during the year were:
Name
Position1
Term as KMP during the financial year
Directors
R Johnston
S Lawson
D Coyne2
J Hodder
Non-Executive Chair
Managing Director and Chief Executive Officer
Non-Executive Director and Company Secretary
Non-Executive Director
H Plaggemars
Non-Executive Director
Other KMP
D Baumgartel
Chief Operating Officer
T Magan
G Gadsby
N Jolly
C O’Brien
Chief Financial Officer
General Manager - Murchison Operations and
Chief Geologist
General Manager - Exploration and Development
Full year
Full year
Full year
Appointed 12 May 2023
Full year
Resigned 9 November 2022
Full year
Appointed 1 December 2022
Full year
General Manager - Projects and Technical Services Appointed 15 August 2022
1 At the reporting date or on the last day of designation as KMP.
2 Mr D Coyne transitioned to Non-Executive Director on 1 April 2023, following his appointments as Company Secretary on 6 October 2020
and Finance Director on 18 November 2021. The Finance Director role was made redundant effective 1 April 2023. Mr Coyne resigned as
Company Secretary effective 1 August 2023. Mr R Hardwick was appointed as Company Secretary on 1 August 2023.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
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Directors’ report
Remuneration report (audited) (continued)
Remuneration governance
The Board has an established Remuneration Committee which operates in accordance with its Charter as approved by the
Board and is responsible for determining and reviewing compensation arrangements for the Directors and the Executive team.
The Remuneration Committee is responsible for assessing the appropriateness of the nature and amount of remuneration on
a periodic basis by reference to recent employment market conditions with the overall objective of maximising shareholder
value. The payment of bonuses, equity-settled awards, and other incentive payments are reviewed by the Remuneration
Committee annually having regard to performance against expectations and market conditions as part of the review of
executive remuneration, and a recommendation is submitted to the Board for approval.
The Remuneration Committee may engage independent external remuneration consultants to provide advice on remuneration.
No external remuneration consultants were engaged by the Group during the year.
The Remuneration Committee is comprised of Mr John Hodder as Chair and Mr Rowan Johnston and Mr Hansjoerg
Plaggemars as Committee members.
Remuneration policy and framework
The principles of the Group’s executive remuneration policy are to ensure that remuneration packages properly reflect the
duties and responsibilities of Executives and are sufficient to attract, retain and motivate personnel of the requisite capabilities
and experience. The Board reviews principles governing the Group’s executive remuneration policy to ensure that these are
appropriately aligned with shareholder expectations and the objectives of the Group.
The preferred remuneration structure adopted by the Group consists of the following components:
fixed remuneration being annual salary and superannuation; and
variable at-risk incentive remuneration comprising:
short-term incentives, including bonuses; and
long-term incentives, including employee equity-settled awards.
During the 2023 financial year, the Group was again faced with the dual challenges of increased competition for skilled
personnel in the Western Australian resources sector and the decision to suspend mining and processing operations at the
Dalgaranga Gold Project in November 2022 and place the mine onto care and maintenance as a result of unsustainable
increases in the operating cost base and a below-par operational performance which was exacerbated by industry-wide
pressures including personnel and skills shortages.
To counter these challenges, the Group continued the quarterly retention bonus scheme implemented during the 2022 financial
year at a reduced rate for all Group employees, excluding the Managing Director / CEO and the Finance Director / Company
Secretary. The quarterly retention bonus applies for all four quarters during the 2023 and 2024 financial years. To be eligible
to receive a quarterly retention bonus, an employee, amongst other things, needs to remain employed by the Group on a
payment date and must not have submitted a resignation notice on or before a payment date.
This quarterly retention bonus replaced the previously implemented short-term incentive plan (STIP) for the 2023 and 2024
financial years. A decision will be made by the Board on whether or not to extend the quarterly retention bonus incentive once
an operational restart decision is made.
During the first half of the 2024 financial year, the Group granted Performance Rights to all Group employees. Vesting
conditions attached to the Performance Rights are intended to align part of employee remuneration to shareholder returns and
provide employees the opportunity to share in longer term value creation of the Company through part-ownership of the
Company. Grant of the Performance Rights with vesting condition hurdles replaced the previous annual long-term incentive
plan (LTIP) for the 2022, 2023 and 2024 financial years.
Short and long term incentives
Short-term incentives
Ordinarily, the Group would prefer to use short-term incentives (STIs) to incentivise members of KMP that are linked to defined
performance measures that are aligned to specific operational and strategic plan objectives. Performance measures would
typically involve the use of annual performance objectives, metrics, performance appraisals and Group values.
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Directors’ report
Remuneration report (audited) (continued)
For the financial year ended 30 June 2023, no specific operational and strategic plan objectives were used for STIs due to the
implementation of the quarterly retention incentive to counter skills shortages and increased competition for personnel, as well
as the decision to suspend mining and processing operations with immediate effect in November 2022 at the Dalgaranga Gold
Project (Dalgaranga) and transition Dalgaranga to care and maintenance.
STIP objective
The intent of the STIP is to incentivise achievement of key annual targets that are expected to contribute to the growth in
shareholder value and reward Executives for achieving those targets. Due to the nature of events during the financial year
ended 30 June 2023, specific STIP objectives were not established for KMP or other employees.
Retention incentive for all employees (excluding Executive Directors)
During the financial year, the Board continued with the quarterly retention incentive implemented during the 2022 financial
year, instead of the STIP for all employees with the exception of the Managing Director / Chief Executive Officer and the
Finance Director / Company Secretary. The quarterly retention incentive applies for the quarters ending 31 March, 30 June,
30 September and 31 December during the 2023 calendar year.
Eligible employees may receive 5% of their annual base salary each quarter as a retention bonus payment, which is 50% less
than the 10% of annual base salary provided to employees under the quarterly retention scheme implemented during the 2022
financial year. An employee commencing employment with the Group during a calendar quarter shall have their quarterly
retention incentive pro-rated, and must have completed at least one (1) full calendar month of employment with the Group. To
remain eligible on the payment date of each quarterly incentive, an employee must not have resigned, or submitted their notice
of resignation, on or before each payment date.
In making the decision to continue the quarterly retention incentive, the Board considered the following matters:
Increased competition for skilled resources in the Western Australian mining sector;
Increasing base salaries across the board for employees would create an ongoing salary cost increase, whereas
implementation of a quarterly retention scheme, without increasing base salaries, can be modified or even removed in
the future;
Use of a quarterly incentive could be more easily and rapidly adjusted to suit prevailing circumstances, whereas increases
in base salaries are institutionalised and extremely difficult to roll back;
Meaningful and definitive STIP targets that could be rolled out across the entire workforce were difficult to set due to
material changes in the Group’s operations, highlighted by the decision in November 2022 to transition Dalgaranga to
care and maintenance; and
The incentivisation amount needed to be at a level that was meaningful enough to discourage employees from accepting
alternate offers of employment that had higher rates of base salary.
Continuation of the quarterly retention incentive allowed the Company to retain key skilled personnel required during the
current care and maintenance period at Dalgaranga and to execute the Company’s ‘365’ development strategy. In addition,
where employees have left the Group, the retention incentive has proved to be a key factor in attracting replacement personnel
at a time when there is significant competition for skilled personnel within the resources sector, and the general economy as
a whole.
Those KMP and employees on the quarterly retention incentive are paid the incentive within 10 calendar days after the end of
each quarter.
STI performance measurement (Executive Directors)
As noted above, the quarterly retention incentive did not apply to the Executive Directors.
Other bonuses
Following completion of the $50.0 million funding package in March 2023, the Remuneration Committee assessed the
performance of the Finance Director / Company Secretary in light of the achievements made by the Group in securing the
$50.0 million funding package and considered the financial and operational challenges faced by the Group during the
preceding nine months ended 31 March 2023. The Remuneration Committee resolved to approve a discretionary cash-based
bonus amount of $50,000 (pre-tax) for the Finance Director / Company Secretary payable upon cessation of his executive
employment with the Company on 31 March 2023.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
44
Directors’ report
Remuneration report (audited) (continued)
Details of the STI awards and quarterly retention incentive paid to and/or payable to KMP for the current year, are as below:
KMP
S Lawson
D Coyne
D Baumgartel
T Magan
G Gadsby
N Jolly
C O’Brien
Maximum STI
opportunity1
%
STI
achieved2
%
STI
awarded3
$
40%
30%
30%
30%
20%
20%
30%
0%
20%
N/A
30%
23%
30%
24%
-
50,000
76,126
79,500
34,000
76,250
81,000
1 Maximum percentage of KMP’s base salary, excluding superannuation as specified in the contract of employment for each KMP member.
The percentage assigned to each KMP is dependent on the individual KMP’s role within the Group. The Board reserves the right to award
a higher percentage.
2 For D Coyne, the STI achieved percentage is based on the discretionary STI amount awarded by the Board. For D Baumgartel, the STI
achieved percentage is based on the September 2022 and December 2022 quarterly retention incentive amounts. For the rest of the KMPs,
the STI achieved percentage is based on the September 2022, December 2022, March 2023 and June 2023 quarterly retention incentive
amounts.
3 Award excludes compulsory superannuation contributions (if applicable).
Long-term incentives
The Board considers that long-term incentives (LTIs) should form a key component of total annual remuneration of Executives,
KMP and other eligible employees (collectively Eligible Participants), which can be achieved by setting a significant portion of
total annual remuneration ‘at risk’ to better align interests with those of shareholders to encourage the production of long-term
sustainable growth and to assist with retention.
The Board recognises that to preserve shareholder value it must operate a long-term remuneration structure which ensures
Eligible Participants are attracted, retained and motivated by the Group.
For the financial year ended 30 June 2023, the Group had in place an LTI structure that awarded performance rights (rights)
based on the outcome of performance rights’ hurdles aligned to activities that underpinned the Group’s longer term objectives.
Once awarded, the rights would automatically vest to the Eligible Participant in two equal tranches one and two years later.
The rights were issued for nil consideration and contain service and performance conditions. Any unvested rights lapse on the
date of cessation of employment, subject to the discretion of the Board and the terms of the Company’s SPR Equity Incentive
Plan Rules (Incentive plan).
During the financial year ended 30 June 2022, the Group awarded Eligible Participants rights based on three vesting
conditions, replacing the LTI structure used for the year ended 30 June 2021. Vesting conditions for the rights are aligned to
outcomes that are expected to result in increases in shareholder value.
Two of the three vesting hurdles upon which the 2022 financial year replacement LTI structure were based, related directly to
a Company engaged in the production of gold, with the third being linked to the share price of the Company. As a result of the
decision to suspend mining and processing operations with immediate effect at Dalgaranga and transition it to care and
maintenance in November 2022, two of the three vesting hurdles linked to a gold production company could no longer be met.
In order to re-align the Company’s equity incentive structure and to reflect the new strategy aimed at taking the Company
through to making a decision to restart mining operations and recommence gold production, at the Extraordinary General
Meeting (EGM) held on 18 August 2023, shareholders approved a replacement equity incentive scheme for employees and
Directors consisting of five tranches based on vesting hurdles related to the Company’s updated operational strategy. Previous
unvested performance rights from prior schemes were cancelled following shareholder approval on 18 August 2023.
LTIP objective
The intent of the LTIP is to support long-term business strategy and value creation, and reward sustained performance in
achieving long-term growth in shareholder value.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
45
Directors’ report
Remuneration report (audited) (continued)
LTI award
During the financial year ended 30 June 2023, an aggregate of 3,100,000 rights were granted to Eligible Participants, including
KMP.
The determination of the number of rights granted is based on the Eligible Participant’s role within the Group and the
contribution that they are expected to make toward achieving the longer-term objectives of the Group. The aggregate number,
by rights class and vesting conditions, are shown in the table below.
As a result of the decision to suspend mining and processing operations with immediate effect at Dalgaranga and transition it
to care and maintenance in November 2022, vesting hurdles linked to Class D and E below can no longer be met. Following
the approval of a replacement equity incentive scheme by shareholders on 18 August 2023, all performance rights awarded
in 2023 and 2022 under Classes D, E and F have been cancelled and replaced by the award of five tranches of performance
rights under the replacement equity incentive plan that is more closely aligned to the Company’s new strategy aimed at taking
the Company through to making a decision to restart mining operations and recommence gold production.
Class of right
Number
granted
Vesting condition1
Class D
1,033,330
Class E
1,033,330
Eligible Participants (excluding Executive Directors)
During the 3 year period commencing 13 November 2021 through to 12 November 2024,
the Class D rights shall vest when, during a rolling 12 month period, the weighted average
recovered grade of production from Dalgaranga is equal to or exceeds 0.8 grams per tonne
of gold.
Eligible Participants (excluding Executive Directors)
During the 3 year period commencing 13 November 2021 through to 12 November 2024,
the Class E rights shall vest when, during a rolling 12 month period, total production from
the Dalgaranga process plant exceeds 75,000 ounces of gold.
Class F
1,033,340
During the 3 year period commencing 13 November 2021 through to 12 November 2024,
the Class F rights shall vest when the Spartan share price is equal to or exceeds A$0.55
per share on a 30-day volume weighted average price basis.
1 Class D, E and F rights expire on 30 June 2033 and have been cancelled and replaced with new performance rights, following shareholder
approval on 18 August 2023 for a replacement equity incentive plan.
Details of rights granted as remuneration to KMP during the year are as follows:
2023
KMP
C O’Brien
Class of
right1
Grant date
Maximum LTI
opportunity2
%
Rights
granted
No.
Grant date
fair value
$/right
D
E
F
12 August 2022
12 August 2022
12 August 2022
30%
500,000
500,000
500,000
0.27
0.27
0.16
1 Class D, E and F rights were eligible to vest on or before 12 November 2024, expire on 30 June 2033 and have been cancelled and
replaced with new performance rights in September 2023, following shareholder approval on 18 August 2023 for a replacement equity
incentive plan.
2 Maximum LTI opportunity represents the maximum annual percentage contained in the employment contract for each Eligible Participant.
The Board retains discretion to award a higher percentage value in any one year if the award is intended to replace LTIs that may otherwise
be eligible for earning in subsequent years.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
46
Directors’ report
Remuneration report (audited) (continued)
Statutory performance indicators
The Company aims to align KMP remuneration to its strategic and business objectives and the creation of shareholder wealth.
The table below shows measures of the Group’s financial performance over the last five financial years as required by the
Corporations Act 2001. However, these are not necessarily consistent with the specific measures in determining the variable
amounts of remuneration to be awarded to KMP. As a consequence, there may not always be a direct correlation between the
statutory key performance indicators and the variable remuneration awarded.
Statutory key performance indicator
2023
2022
2021
2020
2019
Profit/(loss) per share (cents)1
Dividends (cents per share)
Net profit/(loss) ($’000)
Share price2
(6.5)
-
(23.9)
(22.8)
-
-
4.0
-
(371.0)
-
(35,136)
(81,378)
(44,130)
1,989
(107,105)
$0.175
$0.245
$0.300
$0.039
$0.039
1 Profit/(loss) per share has been restated for the years ended 30 June 2019 and 30 June 2020 to account for the effect of the 1-for-20 share
consolidation undertaken in the year ended 30 June 2021.
2 Closing share price at 30 June (or the last trading day immediately before) for the relevant year, other than for years ended 30 June 2019
and 30 June 2020, where the closing price is at the last trading day before suspension from official quotation on 3 June 2019, following the
voluntary appointment of Administrators on 2 June 2019.
Details of remuneration
Non-Executive Director remuneration
Non-Executive Directors are remunerated by fees determined by the Board within the aggregate Directors’ fee pool limit as
approved by shareholders, currently $450,000. Total Non-Executive Directors’ fees paid during the year was $306,810. In
setting the fees, account is taken of the responsibilities inherent in the stewardship of the Company and the demands made
of Directors in the discharge of their responsibilities. Advice is taken from independent consultancy sources where appropriate,
to ensure remuneration accords with market practice. The Group has largely adopted the ASX Corporate Governance
Principles and decided to remunerate its Non-Executive Directors on an ongoing basis with no accrual or entitlement to a
retirement benefit, save as for statutory superannuation contributions to Australian resident Non-Executive Directors.
On 1 June 2023, the annual fees to be paid to Non-Executive Directors was reduced. The base fee (before superannuation
contributions, if applicable) paid to the Non-Executive Chair was reduced from $140,000 per annum to $120,000 per annum,
a reduction of 14%. The base fee (before superannuation contributions, if applicable) paid to Non-Executive Directors was
reduced from $120,000 per annum to $70,000 per annum, a reduction of 42%.
In conjunction with the reductions in Non-Executive Director fees, a replacement equity incentive scheme applying to both
Directors and employees was approved by shareholders at the EGM held on 18 August 2023. The revised equity incentive
scheme is linked to major deliverables from the Company’s ‘365’ development strategy and aligns equity reward more closely
with appreciation in shareholder value.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
47
Directors’ report
Remuneration report (audited) (continued)
Details of the nature and amount of each element of remuneration of each Director and other KMP of the Group, measured in
accordance with Australian Accounting Standards, are presented in the table below:
2023
Directors
R Johnston
S Lawson
D Coyne6
J Hodder7
H Plaggemars
Other KMP
D Baumgartel8
T Magan
G Gadsby9
N Jolly
C O’Brien10
Short-term
employee benefits
Salary
and fees3
Non-
monetary
benefit
$
$
Bonus4
$
Long-term
employee
benefits
Post-
employment
benefits
Movement
in accrued
leave5
Super-
annuation
Share-based
payments1
Shares,
options and
performance
rights
Total
Performance
related2
$
$
$
$
%
138,333
375,000
572,285
12,285
115,833
1,213,736
369,042
267,500
148,750
252,212
334,510
1,372,014
2,585,750
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
14,525
-
152,858
29,533
27,000
497,539
929,072
50,000
(41,593)
18,750
776,627
1,376,069
-
-
-
-
-
-
-
-
12,285
115,833
50,000
(12,060)
60,275
1,274,166
2,586,117
76,126
(39,149)
21,404
870,106
1,297,529
79,500
23,541
27,000
146,891
544,432
34,000
(19,126)
15,619
61,832
241,075
76,250
81,000
6,506
27,232
146,916
509,116
29,842
27,500
136,188
609,040
346,876
1,614
118,755
1,361,933
3,201,192
396,876
(10,446)
179,030
2,636,099
5,787,309
-
54%
56%
-
-
67%
27%
26%
29%
22%
1 Share-based payments represent the fair value of granted shares, options and rights over the vesting period, recognised as an accounting
expense during the year.
2 Calculated as the total of ‘Bonus’ plus ‘Share-based payments’ divided by ‘Total’ remuneration, reflecting the percentage of at-risk
performance-tested remuneration. For KMP that have received quarterly retention incentives (D Baumgartel, G Gadsby, N Jolly, T Magan
and C O’Brien), the amount of the quarterly retention incentive included within ‘Bonus’ has been treated as not at risk for the purpose of
the percentage of at-risk performance-tested remuneration.
3 Salary and fees include eligible termination payments on cessation of employment with the Group.
4
Includes the retention incentive bonus earned during the year for D Baumgartel, G Gadsby, N Jolly, T Magan and C O’Brien. For further
information, refer to the ‘Retention incentive for all employees (excluding Executive Directors)’ section above in this Remuneration report.
For D Coyne, the bonus earned during the year is based on the discretionary STI amount awarded by the Board.
5 Benefits for movement in accrued leave represent the movements in the annual leave and long service leave provisions. Amounts are net
of leave taken, therefore they may be negative where KMP have taken more leave than accrued during the year, when accrued leave is
paid as part of final salary payments or when accrued long service leave is forfeited when an employee resigns before they reach the date
where they are entitled to take long service leave.
6 Mr D Coyne transitioned to Non-Executive Director on 1 April 2023 following his appointments as Company Secretary on 6 October 2020
and Finance Director on 18 November 2021. The Finance Director role was made redundant effective 1 April 2023. Mr Coyne was paid a
termination benefit of $242,893 in accordance with his employment agreement. Mr Coyne’s unvested performance rights held at the time
of termination vested upon contract termination. Mr Coyne resigned as Company Secretary effective 1 August 2023.
7 Mr J Hodder was appointed as a Non-Executive Director on 12 May 2023. Mr J Hodder does not receive any directors fees in his personal
capacity, the fees are paid directly to Tembo Capital Mining GP III Ltd.
8 The Chief Operating Officer role was made redundant effective 9 November 2022. Mr Baumgartel was paid a termination benefit of
$233,709 in accordance with his employment agreement.
9 Mr G Gadsby was appointed as General Manager - Murchison Operations and Chief Geologist on 1 December 2022.
10 Mr C O’Brien was appointed as General Manager - Projects and Technical Services on 15 August 2022.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
48
Directors’ report
Remuneration report (audited) (continued)
2022
Short-term
employee benefits
Long-term
employee
benefits
Post-
employment
benefits
Salary
and fees3
$
126,470
74,242
Non-
monetary
benefit
$
-
-
Movement
in accrued
leave5
$
-
-
Super-
annuation
$
12,647
7,424
Bonus4
$
-
-
Share-based
payments1
Shares,
options and
performance
rights
$
-
-
Total
Performance
related2
$
%
139,117
81,666
240,625
21,304
90,000
4,720
17,325
313,518
687,492
589,097
379,688
120,000
-
-
-
-
(39,968)
25,000
117,658
691,787
90,000
18,407
25,000
328,018
841,113
-
-
-
-
120,000
1,530,122
21,304
180,000
(16,841)
87,396
759,194
2,561,175
379,688
246,189
273,366
104,167
1,003,410
-
-
-
-
-
90,000
52,000
17,033
19,382
25,000
322,324
834,045
27,000
94,934
439,505
-
(69,512)
17,920
-
221,774
41,111
4,813
12,028
60,376
222,495
183,111
(28,284)
81,948
477,634
1,717,819
2,533,532
21,304
363,111
(45,125)
169,344
1,236,828
4,278,994
-
-
59%
17%
50%
-
39%
22%
-
27%
Directors
R Johnston6
G Bauk7
S Lawson8
R Hay9
D Coyne
H Plaggemars10
Other KMP
D Baumgartel
T Magan
J Goldsworthy11
N Jolly12
1 Share-based payments represent the fair value of granted shares, options and rights over the vesting period, recognised as an accounting
expense during the year.
2 Calculated as the total of ‘Bonus’ plus ‘Share-based payments’ divided by ‘Total’ remuneration, reflecting the percentage of at-risk
performance-tested remuneration. For KMP that received quarterly retention incentives (D Baumgartel, N Jolly and T Magan), the amount
of the quarterly retention incentive included within ‘Bonus’ has been treated as not at risk for the purpose of the percentage of at-risk
performance-tested remuneration.
3 Salary and fees include eligible termination payments on cessation of employment with the Group.
4
Includes the retention incentive bonus earned during the year for D Baumgartel, N Jolly and T Magan. For further information, refer to the
‘Retention incentive for all employees (excluding Executive Directors)’ section above in this Remuneration report.
5 Benefits for movement in accrued leave represent the movements in the annual leave and long service leave provisions. Amounts are net
of leave taken, therefore they may be negative where KMP have taken more leave than accrued during the year, when accrued leave is
paid as part of final salary payments or when accrued long service leave is forfeited when an employee resigns before they reach the date
where they are entitled to take long service leave.
6 Mr R Johnston was appointed as Non-Executive Director on 5 August 2020, as Interim Non-Executive Chair on 31 January 2022 and Non-
Executive Chair on 31 March 2022.
7 Mr G Bauk resigned on 31 January 2022.
8 Mr S Lawson was appointed as Non-Executive Director on 10 November 2021 and as Managing Director and Chief Executive Officer on
13 November 2021. Mr Lawson received a non-monetary benefit comprising a reportable fringe benefit relating to the provision of a
Company motor vehicle of $21,304 in accordance with his employment agreement.
9 Mr R Hay resigned on 13 November 2021. Mr Hay received equity-settled remuneration of $117,658 on 28 January 2022, following
shareholder approval on 20 January 2022. Mr Hay was paid a termination benefit of $350,000 comprised of $275,000 in accordance with
his employment agreement and an ex-gratia award of $75,000.
10 Mr H Plaggemars was appointed as a Non-Executive Director on 1 July 2021.
11 Mr J Goldsworthy resigned on 22 December 2021. Mr Goldsworthy was paid a termination benefit of $90,895 in accordance with his
employment agreement.
12 Mr N Jolly was appointed as General Manager - Business Development on 1 February 2022.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
49
Directors’ report
Remuneration report (audited) (continued)
Service agreements
Remuneration and other terms of employment for Executive Directors and other KMP are formalised in service agreements.
The major provisions of the agreements relating to remuneration as at the date of this report or on the last day of designation
as Executive Director and other KMP are presented below.
KMP
Position
Base salary1
Term of
agreement
Company and employee
notice period
S Lawson2
D Coyne3
Managing Director and Chief Executive Officer
$402,000 p.a.
Unspecified
Nine and three months
Finance Director and Company Secretary
$405,625 p.a.
Unspecified
Six and three months
D Baumgartel4 Chief Operating Officer
$405,625 p.a.
Unspecified
Six and three months
T Magan
Chief Financial Officer
$302,500 p.a.
Unspecified
Six and three months
G Gadsby5
General Manager - Murchison Operations and
Chief Geologist
$282,500 p.a.
Unspecified
Three and two months
N Jolly
General Manager - Exploration and Development
$290,000 p.a.
Unspecified
Three and two months
C O’Brien6
General Manager - Projects and Technical Services
$387,500 p.a.
Unspecified
Six and three months
Inclusive of superannuation entitlement.
1
2 Mr S Lawson has been supplied with a Company vehicle for the purposes of travelling to and from the Company’s corporate office, its
project sites and any other locations required to perform his duties under his employment agreement. Under the agreement the Company
bears the cost of the fringe benefits tax costs associated with the provision of the vehicle.
3 Mr D Coyne transitioned to Non-Executive Director on 1 April 2023, following his appointments as Company Secretary on 6 October 2020
and Finance Director on 18 November 2021. The Finance Director role was made redundant effective 1 April 2023. Mr Coyne resigned as
Company Secretary effective 1 August 2023.
4 The Chief Operating Officer role was made redundant on 9 November 2022.
5 Mr G Gadsby was appointed as General Manager - Murchison Operations and Chief Geologist on 1 December 2022.
6 Mr C O’Brien was appointed as General Manager - Projects and Technical Services on 15 August 2022.
Short-term incentives
Performance and retention bonuses
Refer to the ‘Short-term incentives’ section above in this Remuneration report for details of STI cash bonuses and quarterly
retention incentives awarded during the year.
Share-based remuneration
Long-term incentives
Long-term incentive plans were re-introduced during financial year ended 30 June 2021. At the EGM held on 18 August 2023,
shareholders approved a replacement equity incentive scheme for employees and directors.
Performance rights
Granted performance rights
Refer to the ‘Long-term incentives’ section above in this Remuneration report for details of LTI rights awards granted during
the year.
Rights are granted to eligible employees under the Company’s SPR Equity Incentive Plan Rules (Incentive plan) as part of
their remuneration. Each right entitles the employee to receive one fully paid ordinary share in the Company, for nil
consideration on exercise, after vesting.
The rights may contain performance conditions and/or service conditions that are required to be met in order for granted rights
to vest to employees. Refer to the ‘Long-term incentives’ section above in this Remuneration report for details of the vesting
conditions for each class of rights issued by the Company during the year.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
50
Directors’ report
Remuneration report (audited) (continued)
Rights may be exercised from the vesting date until expiry and are not transferrable. The employee may only exercise the
rights by submitting a written notice of exercise to the Board of Directors.
The rights refer to rights over ordinary shares in the Company, which are exercisable on a one-for-one basis under the terms
of the Incentive plan rules. The rights are provided at no cost to the recipients.
Unvested rights are forfeited within 30 days of cessation of the employee’s employment, subject to Board discretion. Rights
which have vested but not exercised lapse on their expiry date. The rights carry no dividend or voting rights and do not entitle
the holder to participate in any share issue of the Company other than on exercise of the right.
There has been no alteration of the terms and conditions of the above rights since grant date.
Unvested performance rights under Classes D, E, F and G awarded on 14 December 2021, 20 January 2022, 11 July 22 and
12 August 2022 were cancelled and replaced with new rights on 8 September 2023, following shareholder approval on 18
August 2023 for a replacement equity incentive plan.
The terms and conditions of outstanding rights over ordinary shares granted as compensation to KMP outstanding at the
reporting date are:
Grant date
26 March 20211
10 September 20211
14 December 20212
20 January 20223
11 July 20222
12 August 20222
Grant date
fair value
$/right
Exercise price
$
Vesting and
exercisable date(s)
Expiry date(s)
$0.525
$0.320
$0.273
$0.249
$0.228
$0.232
$nil
$nil
$nil
$nil
$nil
$nil
1 July 2022 /
1 January 2023
30 June 2032 /
31 December 2032
30 June 2022 / 2023
30 June 2032 / 2033
12 November 2024
12 November 2024
12 November 2024
12 November 2024
30 June 2033
30 June 2033
30 June 2033
30 June 2033
1 The rights contain a service condition, vesting in two equal tranches of 50% on each of the vesting dates listed.
2 The rights comprise three tranches. Tranches 1 and 2 contain non-market performance conditions, based on the delivery of a minimum
ore grade and total gold ounce production target at Dalgaranga over a rolling 12 month period. Tranche 3 contains a market condition
based on a 30-day VWAP share price target of $0.550. As a result of the inability to meet Tranches 1 and 2 due to the suspension of
operations at Dalgaranga in November 2022, these rights have been cancelled and replaced with new rights, following shareholder
approval on 18 August 2023 for a replacement equity incentive plan.
3 The rights comprise three tranches. Tranches 1 and 2 contain non-market performance conditions, based on the delivery of minimum ore
mining volumes at minimum grades on non-Gilbey’s deposits. Tranche 3 contains a market condition based on a 60-day VWAP share
price target of $0.600. As a result of the inability to meet Tranches 1 and 2 due to the suspension of operations at Dalgaranga in November
2022, these rights have been cancelled and replaced with new rights, following shareholder approval on 18 August 2023 for a replacement
equity incentive plan.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
51
Directors’ report
Remuneration report (audited) (continued)
Performance rights held by KMP
The rights held by KMP at the reporting date are summarised as follows:
Grant year:
2021
2022
2022
2022
2023
2023
Grant date:
26 Mar 2021
10 Sep 2021
14 Dec 20211
20 Jan 20221
22 Jul 20221
12 Aug 20221
Balance
KMP
S Lawson
D Coyne2
T Magan
G Gadsby
N Jolly
C O’Brien
-
-
200,000
308,546
-
-
6,000,000
3,750,000
-
-
-
-
89,114
1,500,000
150,552
500,000
-
-
1,500,000
-
-
-
-
-
-
-
-
500,000
-
-
-
-
-
-
-
6,000,000
4,258,546
1,589,114
1,150,552
1,500,000
1,500,000
1,500,000
1 As a result of the inability to meet the two of three vesting hurdles attached to these performance rights, due to the suspension of operations
at Dalgaranga in November 2022, these rights have been cancelled and replaced with new rights, following shareholder approval on 18
August 2023 for a replacement equity incentive plan.
2 As a result of Mr Coyne’s Finance Director role being made redundant effective 1 April 2023, all of the performance rights awarded to him
under the grant dates noted in the table vested on 1 April 2023.
The following table discloses details of movements in rights over ordinary shares in the Company held during the year by KMP
of the Group.
2023
KMP
Grant year
S Lawson
2022
D Coyne
2022
2021
D Baumgartel1
2022
2021
T Magan
2022
G Gadsby2
2023
2022
N Jolly
2022
C O’Brien
2023
Balance at
start of
year
Granted as
remuneration
Forfeited/
Net other
change
Balance at
end of
year
Exercised
Vested and
exercisable
Unvested
Vested
during the
year
No.
No.
No.
No.
No.
No.
No.
No.
At end of year
6,000,000
4,058,546
200,000
4,058,546
200,000
1,589,114
-
-
-
-
-
-
-
500,000
650,552
1,500,000
-
-
-
1,500,000
-
-
-
(4,058,546)
(200,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
6,000,000
-
6,000,000
-
4,058,546
4,058,546
200,000
200,000
-
-
-
-
-
-
-
-
3,904,273
200,000
3,904,273
200,000
1,589,114
89,114
1,500,000
44,557
500,000
650,552
-
500,000
-
150,552
500,000
75,276
1,500,000
-
1,500,000
1,500,000
-
1,500,000
-
-
1 Mr Baumgartel’s role was made redundant during the year.
2 Mr Gadsby held 1,150,552 rights prior to his appointment as General Manager - Murchison Operations and Chief Geologist on 1 December
2022.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
52
Directors’ report
Remuneration report (audited) (continued)
Exercised performance rights
4,258,546 performance rights granted as part of KMP remuneration were exercised in the current year.
Share options
No options were granted as remuneration to KMP during the current year, or were exercised in the current year. There were
no options held by KMP at the end of, or during, the current year.
Other information
Shares held by KMP
The following table discloses details of ordinary shares in the Company held during the year by KMP of the Group, including
their related parties.
2023
Directors
R Johnston
S Lawson
D Coyne
J Hodder
H Plaggemars2
Other KMP
D Baumgartel3
T Magan
G Gadsby
N Jolly
C O’Brien
Balance at
start of year
No.
Granted as
remuneration
No.
Share
purchase1
No.
Received on
exercise of
performance
rights
No.
Net other
change
No.
Balance at
end of year
No.
Balance held
nominally
No.
-
3,827,234
74,999
-
-
-
6,000
-
-
-
3,908,233
-
-
-
-
-
-
-
-
-
-
-
400,000
100,000
40,288
-
16,916,667
-
2,474
-
719,990
-
18,179,419
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
400,000
400,000
3,927,234
115,287
-
-
42,397
-
16,916,667
250,000
-
8,474
-
-
-
-
719,990
719,990
-
-
22,087,652
1,412,387
1 All shares were acquired through on-market purchases, participation in the Spartan Entitlements Offer or subscription under the placement
approved by Shareholders at the extraordinary meeting held on 18 April 2023.
2 2Invest AG, of which Mr Plaggemars is the sole Managing Director, holds 16,666,667 shares in the Company.
3 Mr Baumgartel’s role was made redundant during the year.
Other transactions with KMP
Mr S Lawson is a Director of Firetail Resources Limited (Firetail) and has the capacity to significantly influence decision making
of Firetail. The Company holds a 7.57% share interest in Firetail, on the same basis as other shareholders.
Transactions between the Group and Firetail during the year were based on normal commercial terms and conditions and are
considered to be trivial in nature.
There were no other transactions between the Company and KMP during the year.
Voting and comments made at the Company’s last Annual General Meeting
At the Company’s 2022 Annual General Meeting (AGM) 95.6% of the votes cast in relation to the resolution to adopt the 2022
Remuneration report were cast in favour of the resolution. The Company did not receive any specific feedback at the AGM on
its Remuneration report.
End of audited Remuneration report.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
53
Directors’ report
Shares under option
There are no unissued ordinary shares of the Group under options at the date of this report. No options were granted, and
there were no shares issued upon the exercise of options, during and since the end of the year.
Refer to the Remuneration report and note 28 for information on rights over unissued ordinary shares.
Indemnification and insurance of Officers
The Company has entered into deeds of indemnity, insurance and access with each Director and Executive Officer. Each
deed contains a right of access to certain books and records of the Group for a period of seven years after the Director or
Executive Officer ceases to hold office. This seven-year period is extended where certain proceedings or investigations
commence during the seven-year period but are not resolved until later.
Pursuant to the Company’s Constitution, the Group must indemnify Directors and Executive Officers on a full indemnity basis
and to the full extent permitted by law against all losses, liabilities, costs, charges and expenses incurred by those individuals
as Officers of the Group. Under the deeds of indemnity, insurance and access, the Company indemnifies each Director and
Executive Officer on a full indemnity basis and to the full extent permitted by law, against all losses or liabilities (including all
reasonable legal costs) incurred by the Director as an Officer of the Group.
On 22 July 2022 the Company paid an insurance premium to insure all of the Directors and Officers of the Group.
The liabilities insured include legal costs that may be incurred in defending civil or criminal proceedings that may be brought
against the Officers in their capacity as Officers of the Group, and any other payments arising from liabilities incurred by the
Officers in connection with such proceedings, other than where such liabilities arise out of conduct involving a wilful breach of
duty by the Officers or the improper use by the Officers of their position or of information to gain advantage for themselves or
someone else to cause detriment to the Group. Under the deeds of indemnity, insurance and access, the Company must
maintain such insurance for each Director and Executive Officer until a period of seven years after a Director or Executive
Officer ceases to hold office. This seven-year period is extended where certain proceedings or investigations commence during
the seven-year period but are not resolved until later.
Proceedings on behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf
of the Company, or to intervene in any proceedings to which the Company is a party for the purpose of taking responsibility
on behalf of the Company for all or part of those proceedings.
Non-audit services
The Company may decide to employ the auditor Grant Thornton Audit Pty Ltd and related entities on assignments additional
to their statutory audit duties where the auditor’s expertise and experience with the Company and/or the Group are important.
No non-audit services were provided to the Group by the Group’s auditor for the year ended 30 June 2023 (2022: $nil). Details
of the amounts paid or payable to the auditor for audit services provided during the year are disclosed in note 29.
Auditor’s independence declaration
A copy of the Auditor's independence declaration as required under section 307C of the Corporations Act 2001 is attached to
and forms part of this Directors’ report.
Rounding of amounts
The Company has relied on the relief provided by the ASIC Corporations (Rounding in Financial/Directors' Report) Instrument
2016/191, and therefore the amounts contained in the Directors’ report and the financial report have been rounded to the
nearest thousand dollars, unless otherwise stated.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
54
Directors’ report
This report is made in accordance with a resolution of the Directors.
Rowan Johnston
Non-Executive Chair
Perth
28 September 2023
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
55
Grant Thornton Audit Pty Ltd
Level 43 Central Park
152-158 St Georges Terrace
Perth WA 6000
PO Box 7757
Cloisters Square
Perth WA 6850
T +61 8 9480 2000
Auditor’s Independence Declaration
To the Directors of Spartan Resources Limited (formally Gascoyne Resources
Limited)
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit
of Spartan Resources Limited for the year ended 30 June 2023, I declare that, to the best of my knowledge and
belief, there have been:
a no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to
the audit; and
b no contraventions of any applicable code of professional conduct in relation to the audit.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
B P Steedman
Partner – Audit & Assurance
Perth, 28 September 2023
www.grantthornton.com.au
ACN-130 913 594
Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389 ACN 127 556 389.
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or
refers to one or more member firms, as the context requires. Grant Thornton Australia Limited is a member firm of Grant Thornton International Ltd (GTIL).
GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member
firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one
another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127
556 389 ACN 127 556 389 and its Australian subsidiaries and related entities. Liability limited by a scheme approved under Professional Standards
Legislation.
56
Independent Auditor’s Report
Grant Thornton Audit Pty Ltd
Level 43 Central Park
152-158 St Georges Terrace
Perth WA 6000
PO Box 7757
Cloisters Square
Perth WA 6850
T +61 8 9480 2000
To the Members of Spartan Resources Limited (formally Gascoyne
Resources Limited)
Report on the audit of the financial report
Opinion
We have audited the financial report of Spartan Resources 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, consolidated statement of
changes in equity and consolidated statement of cash flows for the year then ended, and notes to the
consolidated financial statements, including a summary of significant accounting policies, and the Directors’
declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act
2001, including:
a giving a true and fair view of the Group’s financial position as at 30 June 2023 and of its performance
for the year ended on that date; and
b complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section
of our report. We are independent of the Group in accordance with the auditor independence requirements
of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled
our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Material uncertainty related to going concern
We draw attention to Note 2 in the financial statements, which indicates that the Group recorded a net loss after
tax of $35.1 million, an operating cash outflow of $23.1 million and net cash outflow (before financing activities) of
$38.5 million. As stated in Note 2, these events or conditions, along with other matters as set forth in Note 2,
indicate that a material uncertainty exists that may cast doubt on the Group’s ability to continue as a going
concern. Our opinion is not modified in respect of this matter.
www.grantthornton.com.au
ACN-130 913 594
Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389 ACN 127 556 389.
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or
refers to one or more member firms, as the context requires. Grant Thornton Australia Limited is a member firm of Grant Thornton International Ltd (GTIL).
GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member
firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one
another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127
556 389 ACN 127 556 389 and its Australian subsidiaries and related entities. Liability limited by a scheme approved under Professional Standards
Legislation.
57
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial report of the current period. These matters were addressed in the context of our audit of the financial
report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these
matters.
In addition to the matter described in the Material uncertainty related to going concern section, we have
determined the matters described below to be the key audit matters to be communicated in our report.
Key audit matter
How our audit addressed the key audit matter
Borrowings and other financial liabilities – notes 17 and 12
Our procedures included, amongst others:
• Reviewing new agreements for key obligations
under the funding package;
• Considering the costs associated with obtaining the
funding package;
• Reviewing management’s assessment as to
whether the appropriate accounting treatment has
been applied;
• Obtaining the loan schedule, reviewing for unusual
items, ensure mathematical accuracy and agreeing
to the general ledger; and
• Assessing the appropriateness of the related
financial statement disclosures.
In February 2023, the Group completed its funding
package and was re-instated to the ASX. The funding
package comprised a $26.3 million equity raising, a
$21.3 million investment from Tembo Capital Mining
Fund III and a $2.5 million loan from Deutsche Balaton
Aktiengesellschaft (‘Delphi’).
The $21.3 million debt facility comprised of; (i) Tranche
A: $15.0 million secured loan with mandatory
conversion to fully paid ordinary shares at $0.10 per
share; and (ii) Tranche B: $6.3 million secured loan to
mandatorily conversion to a gold royalty, both of which
have been exercised by balance date.
The remaining $2.5 million unsecured loan is
mandatorily convertible upon shareholder approval to a
future gold royalty, which deems the loan as fully
repaid under the terms of the Delphi loan and royalty
deed. The balance remains outstanding as at balance
date.
This area is a key audit matter due to the significant
value of the transaction and the judgement involved in
determining the appropriate accounting treatment.
Restructure and transition to care and maintenance – note 5
During the year the Group was restructured which
involved the determination of:
• Employee redundancy payments;
•
Impairment of inventory;
• Creditor settlements;
•
•
•
Impairment of right-of-use assets;
Losses on settlement of gold forwards; and
Legal, consulting and other restructuring fees and
costs.
Included in the above restructuring costs was the
settlement of the NRW Holdings Limited liability which
resulted in a $7.1 million gain.
This is a key audit matter due to the significant value of
the transaction and the judgement involved in
determining the appropriate accounting treatment.
Our procedures included, amongst others:
• Reviewing terms sheets for material obligations;
• Reviewing policies and procedures related
to redundancy cost including the
relevant agreements, ensuring that correct
authorisations were in place, including the review of
board resolutions and approvals and evaluating
completeness and accuracy of the costs incurred;
• Evaluating controls over inventory, including
the valuation of obsolete and slow-moving stock;
• Agreeing the net gain of settlement against debt
obligation;
• Reviewing settlement of gold forwards, legal,
consulting and other transition fees and costs for
completeness and accuracy; and
• Assessing the appropriateness of the related
financial statement disclosures.
Grant Thornton Audit Pty Ltd
58
Exploration and evaluation– note 15
At 30 June 2023 the carrying value of exploration and
evaluation assets was $95.3 million.
In accordance with AASB 6 Exploration for and
Evaluation of Mineral Resources, the Group is required
to assess at each reporting date if there are any
triggers for impairment which may suggest the carrying
value is in excess of the recoverable value.
The process undertaken by management to assess
whether there are any impairment triggers in each area
of interest involves an element of management
judgement.
This area is a key audit matter due to the significant
judgement involved in determining the existence of
impairment triggers.
Our procedures included, amongst others:
• Obtaining the management reconciliation of
capitalised exploration and evaluation expenditure
and agreeing to the general ledger;
• Reviewing management’s area of interest
considerations against AASB 6;
• Conducting a detailed review of management’s
assessment of trigger events prepared in
accordance with AASB 6 including;
− Tracing projects to statutory registers,
exploration licenses and third-party confirmations
to determine whether a right of tenure existed;
− Enquiry of management regarding their
intentions to carry out exploration and evaluation
activity in the relevant exploration area, including
review of management’s budgeted expenditure;
− Understanding whether any data exists to
suggest that the carrying value of these
exploration and evaluation assets are unlikely to
be recovered through development or sale; and
• Assessing the appropriateness of the related
financial statement disclosures.
Information other than the financial report and auditor’s report thereon
The Directors are responsible for the other information. The other information comprises the information included
in the Group’s annual report for the year ended 30 June 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 we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors’ for the financial report
The Directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the Directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the Directors are responsible for assessing the Group’s ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the Directors either intend to liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
Grant Thornton Audit Pty Ltd
59
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and
Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar1_2020.pdf.This
description forms part of our auditor’s report.
Report on the remuneration report
Opinion on the remuneration report
We have audited the Remuneration Report included in the Directors’ report for the year ended 30 June
2023.
In our opinion, the Remuneration Report of Spartan Resources Limited, for the year ended 30 June 2023
complies with section 300A of the Corporations Act 2001.
Responsibilities
The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
B P Steedman
Partner – Audit & Assurance
Perth, 28 September 2023
Grant Thornton Audit Pty Ltd
60
Directors’ declaration
1
In the Directors’ opinion:
(a)
the consolidated financial statements and notes of Spartan Resources Limited and its controlled entities are in
accordance with the Corporations Act 2001, including:
(i)
(ii)
complying with Australian Accounting Standards, the Corporations Regulations 2001 and other mandatory
professional reporting requirements, and
giving a true and fair view of the Group’s financial position as at 30 June 2023 and of its performance for
the financial year ended on that date, and
(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.
2
Note 2 confirms that the consolidated financial statements comply with International Financial Reporting Standards as
issued by the International Accounting Standards Board.
The Directors have been given the declarations required by section 295A of the Corporations Act 2001 from the Chief
Executive Officer and Chief Financial Officer for the financial year ended 30 June 2023.
This declaration is made in accordance with a resolution of the Directors.
Rowan Johnston
Non-Executive Chair
Perth
28 September 2023
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
61
Consolidated statement of comprehensive income
For the year ended 30 June 2023
Revenue
Cost of sales
Gross loss
Other income
Impairment expense
Restructure and transition to care and maintenance
Other expenses
Operating loss
Finance income
Finance costs
Loss before income tax
Income tax expense
Loss for the year after income tax
Other comprehensive income
Items that will not be reclassified to profit or loss:
Changes in fair value of equity investments
Total other comprehensive (loss)/income
Total comprehensive loss for the year
Loss for the year after income tax attributable to:
Owners of the Company
Non-controlling interests
Total comprehensive loss for the year attributable to:
Owners of the Company
Non-controlling interests
Note
2023
$’000
2022
$’000
4
5
4
14
5
5
6
6
7
57,360
184,692
(64,843)
(208,397)
(7,483)
(23,705)
280
-
(11,237)
(11,975)
(30,415)
2,222
(47,699)
-
(9,032)
(78,214)
182
(4,903)
9
(3,145)
(35,136)
(81,350)
-
(28)
(35,136)
(81,378)
(616)
(616)
22
22
(35,752)
(81,356)
(35,136)
(81,378)
-
-
(35,136)
(81,378)
(35,752)
(81,356)
-
-
(35,752)
(81,356)
Loss per share
Basic (cents per share)
Diluted (cents per share)
This statement should be read in conjunction with the accompanying notes.
8
8
(6.5)
(6.5)
(23.9)
(23.9)
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
62
Consolidated statement of financial position
As at 30 June 2023
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Prepayments
Non-current assets
Mine properties, property, plant and equipment
Exploration and evaluation
Other financial assets
Total assets
Current liabilities
Trade and other payables
Borrowings and lease liabilities
Current tax liabilities
Provisions
Other financial liabilities
Non-current liabilities
Borrowings and lease liabilities
Provisions
Other financial liabilities
Total liabilities
Net assets
Equity
Share capital
Non-controlling interests
Reserves
Accumulated losses
Total equity
Note
2023
$’000
2022
$’000
9
10
11
13
15
12
16
17
7
18
12
17
18
12
19
19
19
34,553
753
4,701
1,519
41,526
32,723
95,341
1,191
129,255
170,781
2,760
2,998
-
717
-
30,862
1,509
15,985
1,874
50,230
31,803
84,782
3,127
119,712
169,942
12,366
3,228
28
3,695
4,718
6,475
24,035
11,472
52,198
6,300
69,970
76,445
94,336
8,309
47,309
4,833
60,451
84,486
85,456
367,188
324,496
1,520
1,455
1,479
2,076
(275,827)
(242,595)
94,336
85,456
This statement should be read in conjunction with the accompanying notes.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
63
Consolidated statement of changes in equity
For the year ended 30 June 2023
Share capital
$’000
Convertible
debt
$’000
Other
reserves
$’000
Accumulated
losses
$’000
Attributable
to owners of
the Company
$’000
Non-
controlling
interests
$’000
Total
$’000
At 1 July 2021
Loss for the year
Other comprehensive income
Total comprehensive
income/(loss) for the year
Convertible notes issue (net of
tax)
Convertible notes retirement
Movement in non-controlling
interests’ share of net assets
266,196
-
-
-
-
-
-
Shares issued during the year
59,045
Share issue costs (net of tax)
Share-based payments
At 30 June 2022
(745)
-
324,496
Loss for the year
Other comprehensive loss
Total comprehensive loss for the
year
Transfer to accumulated losses
Convertible debt issue (net of tax)
Convertible debt - conversion
Movement in non-controlling
interests’ share of net assets
Shares issued during the year
Share issue costs (net of tax)
Performance rights exercised
Share-based payments
At 30 June 2023
-
-
-
-
-
-
-
44,532
(2,490)
650
-
367,188
-
-
-
-
600
(600)
-
-
-
-
-
-
-
-
-
134
(134)
-
-
-
-
-
-
672
(160,330)
106,538
1,352
107,890
-
22
22
-
-
(127)
-
-
1,509
(81,378)
(81,378)
-
22
(81,378)
(81,356)
-
600
(887)
(1,487)
-
-
-
-
-
(81,378)
22
(81,356)
600
(1,487)
-
-
-
-
(127)
127
-
59,045
(745)
1,509
-
-
-
59,045
(745)
1,509
2,076
(242,595)
83,977
1,479
85,456
-
(35,136)
(35,136)
(616)
-
(616)
(616)
(35,136)
(35,752)
(1,844)
1,844
-
134
-
(888)
(1,022)
-
-
-
-
-
-
(35,136)
(616)
(35,752)
-
134
(1,022)
-
-
-
948
-
(41)
41
-
44,532
(2,490)
-
3,478
-
-
-
-
44,532
(2,490)
-
3,478
1,455
(275,827)
92,816
1,520
94,336
-
-
(41)
-
-
(1,598)
3,478
This statement should be read in conjunction with the accompanying notes.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
64
Consolidated statement of cash flows
For the year ended 30 June 2023
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Other revenue received
Finance charges paid
Interest received
Interest paid
Income tax (paid)/refund
Note
2023
$’000
2022
$’000
57,360
188,015
(79,511)
(160,680)
71
(1)
182
(1,137)
(28)
175
(51)
2
(2,270)
1
Net cash flows (used in)/from operating activities
9
(23,064)
25,192
Cash flows from investing activities
Payments for exploration and evaluation
Payments for mine properties, property, plant and equipment
Payments for equity investments
Payments for acquisition of assets, net of cash acquired
Proceeds from sale of property, plant and equipment
Proceeds from sale of mineral rights
Proceeds from sale of equity investments
Transfer from security deposits
Net cash flows used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Share issue costs
Proceeds from borrowings
Repayment of borrowings
Repayment of lease liabilities
Payments for borrowings transaction costs
Net cash flows from/(used in) financing activities
Net change in cash and cash equivalents
Cash and cash equivalents at 1 July
Cash and cash equivalents at 30 June
This statement should be read in conjunction with the accompanying notes.
(12,886)
(1,842)
-
(2,177)
25
50
1,420
-
(7,343)
(7,566)
(804)
(382)
16
-
-
17
(15,410)
(16,062)
26,250
(5,157)
23,750
-
(2,485)
(193)
42,165
3,691
30,862
34,553
16,660
(745)
20,000
(33,998)
(3,233)
(400)
(1,716)
7,414
23,448
30,862
9
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
65
Notes to the financial statements
Basis of preparation
Capital management
Financial performance
67
Reporting entity ........................................................................................................................................................... 67
Basis of preparation ..................................................................................................................................................... 67
70
Operating segments .................................................................................................................................................... 70
Revenue and other income ......................................................................................................................................... 71
Expenses ..................................................................................................................................................................... 73
Finance income and costs ........................................................................................................................................... 75
Income tax ................................................................................................................................................................... 76
Earnings per share ...................................................................................................................................................... 79
81
Cash and cash equivalents ......................................................................................................................................... 81
Trade and other receivables ........................................................................................................................................ 83
Inventories ................................................................................................................................................................... 83
Other financial assets and liabilities............................................................................................................................. 85
Mine properties, property, plant and equipment .......................................................................................................... 87
Impairment of non-current assets ................................................................................................................................ 91
Exploration and evaluation .......................................................................................................................................... 92
Trade and other payables ............................................................................................................................................ 94
Borrowings and lease liabilities ................................................................................................................................... 94
Provisions .................................................................................................................................................................... 98
Equity ........................................................................................................................................................................ 100
102
Financial risk management ........................................................................................................................................ 102
Capital risk management ........................................................................................................................................... 106
107
Commitments ............................................................................................................................................................ 107
Contingent assets and liabilities ................................................................................................................................ 108
Events occurring after the reporting date ................................................................................................................... 108
109
Asset acquisition ....................................................................................................................................................... 109
Interests in other entities ........................................................................................................................................... 109
Related party transactions ......................................................................................................................................... 110
Share-based payments ............................................................................................................................................. 110
Auditor’s remuneration .............................................................................................................................................. 113
Parent entity financial information ............................................................................................................................. 114
Summary of other significant accounting policies ...................................................................................................... 114
Risk management
Unrecognised items
Other information
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
66
Notes to the financial statements
This section includes the accounting policies, accounting estimates and judgements relating to the consolidated financial
statements of Spartan Resources Limited (Spartan or the Company) and its controlled entities (together, the Group). The
recognition and measurement principles of each accounting policy and the critical accounting estimates and judgements are
contained within the note for the financial item to which they relate. Accounting policies which are not specific to an individual
financial item are presented in note 31.
The financial report for the Group for the year ended 30 June 2023 was approved and authorised for issue by the Directors on
28 September 2023.
Basis of preparation
1 Reporting entity
Spartan Resources Limited is a listed public company, incorporated and operating in Australia. The address of its registered
office and its principal place of business is Level 1, 41-47 Colin Street, West Perth, Australia.
2 Basis of preparation
The financial report is a general purpose financial report that has been prepared in accordance with the Corporations Act 2001,
Australian Accounting Standards and other authoritative pronouncements of the Australian Accounting Standards Board
(AASB).
Spartan Resources Limited is a for-profit entity for the purpose of preparing financial statements.
Accounting policies
The principal accounting policies adopted in the preparation of the financial statements are described in the notes to the
financial statements. These policies have been applied consistently to all financial years presented, unless otherwise stated.
Compliance with IFRS
The financial statements of the Group also comply with International Financial Reporting Standards (IFRS) as issued by the
International Accounting Standards Board (IASB).
Historical cost convention
The financial statements have been prepared on a historical cost basis, except for certain financial assets and liabilities
(including derivative instruments) which are measured at fair value.
Functional and presentation currency
The financial statements are presented in Australian dollars which is the Group’s functional and presentation currency.
Accounting estimates and judgements
In the process of applying the Group’s accounting policies, management has made a number of judgements and applied
estimates of future events that affect the carrying amounts disclosed in these financial statements. Estimates and underlying
assumptions are based on historical experience, reasonable expectation of future events and other factors that are considered
relevant. Actual results may differ from these estimates.
The estimates and judgements are reviewed on an ongoing basis and are based on the latest available information. Revisions
to estimates are recognised in the period in which the estimate is revised and in any future period affected.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
67
Notes to the financial statements Basis of preparation
2 Basis of preparation (continued)
Accounting estimates and judgements which are material to the financial report are contained in the following notes:
Note
Item subject to estimates and judgement
7
Income tax
11
Inventories
Income tax provisions; Recognition of deferred tax assets
Inventory valuation; Net realisable value and classification of inventory
13 Mine properties, property, plant
and equipment
Mine properties under development; Mine properties; Deferred stripping costs;
Depreciation and amortisation; Units of production method; Mineral resources
and ore reserves estimates
14
Impairment of non-current assets Assessment of indicators of impairment; Assessment of asset or CGU
recoverable amounts
15
17
18
20
28
Exploration and evaluation
Recovery of capitalised expenditure
Borrowings and lease liabilities
Identifying a lease; Determining the lease term; Determining the incremental
borrowing rate
Provisions
Rehabilitation and mine closure
Financial risk management
Fair value measurement
Share-based payments
Valuation methodology
Going concern
The financial statements have been prepared on a going concern basis, which assumes the continuity of normal business
activities and the realisation of assets and the settlement of liabilities in the ordinary course of business.
For the year ended 30 June 2023 the Group recorded a net loss after tax of $35.1 million (2022: $81.4 million loss) that includes
a pre-tax non-cash impairment expense of $1.8 million (2022: $47.7 million), an operating cash outflow of $23.1 million (2022:
$25.2 million inflow) and net cash outflow (before financing activities) of $38.5 million (2022: $9.1 million net cash inflows).
The Group has a working capital surplus of $35.1 million as at 30 June 2023 (2022: $26.2 million surplus) which includes a
cash balance of $34.6 million. The increase in working capital from 30 June 2022 to 30 June 2023 is primarily driven by the
decision on 8 November 2022 to suspend operations and transition the Dalgaranga Gold Project (Dalgaranga) to care and
maintenance as a result of operating losses incurred during the period due to reduced gold production, labour shortages,
increased production costs and the completion of a $50.0 million funding package, the elements of which are described below.
The Group had investments in listed companies with a market value of approximately $0.8 million at 30 June 2023.
During the second half of the financial year, the Company completed a $50.0 million funding package in support of its financial
restructure, which involved the following key elements:
A fully underwritten $26.3 million equity raising at $0.10 per share consisting of:
An institutional placement (Placement) to raise approximately $8.6 million.
A 1-for-2.42 pro-rata accelerated non-renounceable entitlement offer (Entitlement Offer) to eligible shareholders to
raise approximately $17.6 million.
A new strategic investment by Tembo Capital, a leading private equity fund, of $21.3 million, structured in two tranches:
Tranche A: A $15.0 million secured loan that converted to shares at a conversion price of $0.10 per share following
shareholder approval at the EGM held on 18 April 2023.
Tranche B: A $6.3 million secured loan that converted to a 1.8% gross royalty on gold produced and sold from wholly-
owned tenements at Dalgaranga and a 1.35% gross royalty on gold produced and sold from the remaining wholly-
owned tenements for which Spartan retains the gold rights to, following shareholder approval of the conversion of
Tranche A at the EGM held on 18 April 2023.
An investment of $8.3 million from the Company’s largest existing shareholder at the time, including Delphi
Unternehmensberatung AG, and its associates Deutsche Balaton AG, Sparta AG and 2invest AG, (Delphi), comprising:
Up to $5.8 million committed to the $26.3 million equity raising noted above.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
68
Notes to the financial statements Basis of preparation
2 Basis of preparation (continued)
A $2.5 million unsecured loan that subsequent to year-end, converted to a 0.7% gross royalty on gold produced and
sold from wholly-owned tenements at Dalgaranga and a 0.5% gross royalty on gold produced and sold from the
remaining wholly-owned tenements for which Spartan retains the gold rights to, following shareholder approval for the
conversion to a royalty at the EGM held on 18 August 2023.
A full and final settlement of all amounts owing between Spartan and NRW Holdings Limited (NRW) (and their respective
group members) in respect of their existing arrangements.
In addition to the NRW Settlement Agreement, arrangements were agreed with certain other creditors of Spartan in relation
to amounts owing to those creditors and the treatment of certain contracts in light of the suspension of operations at
Dalgaranga. These binding agreements settled all known claims and amounts owing resulting from the decision to suspend
operations and transition Dalgaranga to care and maintenance.
Following the receipt of gross funds of $50.0 million by 4 April 2023 and completion of the financial restructure, the Directors
believe that the Company will have sufficient funds to satisfy short and medium term working capital requirements. It was the
objective of the Entitlement Offer, Placement, transactions with Tembo Capital and Delphi to provide sufficient funds for the
Company for an approximate period of 12-18 months to continue its exploration and technical / financial study efforts to support
a future decision to recommence mining. Should exploration results not be achieved as envisaged, costs increase or approvals
be delayed, the Company may need additional funds to achieve this objective.
At the end of the 12-18 month period, the Company is expected to require further financing to continue exploration activities
and/or to recommence operations at Dalgaranga.
The Directors believe the Company will be able to attract additional financing, due to the following key factors:
No corporate debt.
New high-grade Never Never deposit with a significant MRE of 3.83Mt at 5.85g/t Au for 721,200 ounces of contained gold,
open at depth and located within 1 km of established infrastructure.
Fully functional 2.5Mtpa processing plant and associated infrastructure currently maintained in a state for a rapid restart.
Debt and equity investors have shown appetite to fund high-grade mines in the current economic environment.
The Directors are satisfied that the going concern basis of preparation for the financial statements is appropriate. Based on
the factors above there is a material uncertainty that may cast doubt on the Group’s ability to continue as a going concern
If the Group is unable to continue as a going concern, it may be required to realise its assets and/or settle its liabilities other
than in the ordinary course of business and at amounts different from those stated in the financial report.
The financial report does not include adjustments to the recoverability and classification of recorded asset amounts nor to the
amounts and classification of liabilities that may be necessary should the Group not continue as a going concern.
Rounding of amounts
The Company has relied on the relief provided by the ASIC Corporations (Rounding in Financial/Directors' Report) Instrument
2016/191, and therefore the amounts contained in the financial report have been rounded to the nearest thousand dollars,
unless otherwise stated.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
69
Notes to the financial statements
Financial performance
This section of the notes to the financial statements provides information relevant to the financial results and performance of
the Group during the year, including the resultant tax position.
3 Operating segments
The Group’s operating segments are based on the internal management reports that are reviewed and used by the Managing
Director and Chief Executive Officer and the Executive team, identified together as the chief operating decision makers, in
assessing performance. The Group’s business is organised into two operating segments, being gold operations and the
exploration, evaluation and development of gold projects, all conducted within Western Australia.
The chief operating decision makers monitor the operating results of its segments separately for the purpose of making
decisions about resource allocation and performance assessment. Corporate expenditures supporting the business during the
period, adjustments and eliminations processed on consolidation and other items that cannot be directly attributed to the
reportable operating segments are identified as ‘Other’ balances. The Group has formed a tax consolidation group and
therefore tax balances have been included in the ‘Other’ grouping.
During the year to 30 June 2023, there have been no changes from prior periods in the measurement methods used to
determine operating segments and reported segment profit or loss.
The revenues and results generated by each of the Group’s operating segments are summarised as follows:
2023
Exploration,
evaluation
and
development
$’000
Gold
operations
$’000
Total
operations
$’000
Other
$’000
Total
$’000
External revenue
57,360
-
57,360
-
57,360
Segment loss before income tax
(22,591)
(75)
(22,666)
(12,470)
(35,136)
Segment loss includes the following adjustments:
Depreciation and amortisation
Impairment expense1
Exploration and evaluation expenditure write-off
Inventory movement and provision
Inventory write-off1
Rehabilitation and mine closure provision
movement
Net gain on settlement of NRW LPA2
Employee redundancy payments1
Settlement of key creditors and other transition
costs1
Legal and consultancy fees1
At 30 June 2023
Segment assets
Segment liabilities
(2,903)
(1,750)
(495)
(3,700)
(8,142)
(3,248)
7,070
(3,760)
(1,639)
(908)
(19,475)
(37)
-
(38)
-
-
-
-
-
-
-
(2,940)
(1,750)
(533)
(3,700)
(8,142)
(3,248)
7,070
(3,760)
(1,639)
(129)
-
-
-
-
-
-
(1,726)
(3,069)
(1,750)
(533)
(3,700)
(8,142)
(3,248)
7,070
(5,486)
-
(1,639)
(908)
(262)
(1,170)
(75)
(19,550)
(2,117)
(21,667)
52,041
246,718
41,170
20,332
93,211
77,570
170,781
267,050
(190,605)
76,445
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
70
Notes to the financial statements Financial performance
3 Operating segments (continued)
1 Costs related to the financial restructure and the transition of the Dalgaranga operations to a care and maintenance basis, refer to the
‘Restructure and transition to care and maintenance’ section in note 5.
2 Related to the full and final settlement of all amounts owing between Spartan and NRW Holdings Limited (NRW) in respect of their existing
arrangements comprising the liability payment arrangement (LPA) to settle pre-Administration debt (NRW Settlement Agreement), refer to
note 12.
2022
Exploration,
evaluation
and
development
$’000
Gold
operations
$’000
Total
operations
$’000
Other
$’000
Total
$’000
External revenue
184,692
-
184,692
-
184,692
Segment loss before income tax
(72,477)
(268)
(72,745)
(8,605)
(81,350)
Segment loss includes the following adjustments:
Depreciation and amortisation
Impairment expense
Deferred stripping costs capitalised
Deferred stripping costs write-off
Exploration and evaluation expenditure write-off
Inventory movement and provision
At 30 June 2022
Segment assets
Segment liabilities
(43,890)
(47,699)
6,049
(15,218)
-
2,738
(26)
(43,916)
(146)
-
-
-
(20)
-
(47,699)
6,049
(15,218)
(20)
2,738
-
-
-
-
-
(44,062)
(47,699)
6,049
(15,218)
(20)
2,738
(98,020)
(46)
(98,066)
(146)
(98,212)
73,355
242,234
39,138
19,332
112,493
57,449
169,942
261,566
(177,080)
84,486
4 Revenue and other income
Revenue
Gold sales
Silver sales
2023
$’000
2022
$’000
56,951
183,657
409
1,035
57,360
184,692
During the year, the Group sold gold and silver in the form of bullion to:
ABC Refinery (Australia) Pty Ltd; and
MKS PAMP, the Group’s former hedging facility provider (refer to note 22) .
Management of gold price risk
The Group uses derivative gold contracts to manage its exposure to gold price fluctuations.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
71
Notes to the financial statements Financial performance
4 Revenue and other income (continued)
During the year, the Group entered into and utilised gold forward sale contracts (gold forward contracts) to assist in managing
the price risk associated with a portion of its estimated future gold sales, refer note 22 for more information. Following the
announcement of the transition of the Dalgaranga operations to care and maintenance in November 2022, the gold forward
contracts were closed out as per the contractual requirements for an immaterial close out cost.
The sale price of gold bullion not sold into gold forward contracts is fixed on the date of sale, based on the Australian dollar
denominated gold spot price.
Recognition and measurement
Sales revenue is recognised when:
control of the goods has been transferred to the customer, which occurs when goods are delivered to the customer;
the customer has the significant risks and rewards of ownership through the ability to direct the use of and obtain
substantially all of the remaining benefits from the goods;
there is no unfulfilled obligation that could affect the customer’s acceptance of the goods; and
payment is due from the customer.
The amount of revenue recognised reflects the consideration to which the Group is, or expects to be, entitled in exchange for
the goods. Revenue is measured at the transaction price agreed under a sales contract.
Gold bullion and silver sales
Revenue from gold bullion and silver sales is recognised at the time of physical delivery on the settlement date, when control
of the goods passes to the customer, satisfying the sole performance obligation to deliver gold bullion and silver. For gold
bullion and silver sales, the transfer of control is generally at the point in time when gold bullion and silver is credited to the
metal account of the customer on the settlement date.
Other income
Fair value gain on remeasurement of NRW liability1
Gain on termination of lease
Net gain on sale of exploration interest
Net gain on settlement of convertible note2
Other income
2023
$’000
-
208
-
-
72
280
2022
$’000
266
-
786
351
819
2,222
1 Related to the fair value remeasurement of the NRW LPA to settle pre-Administration debt. The LPA was settled in full during the year with
NRW as part of the financial restructure, refer to note 12.
2 Refer to note 17 for details of the settlement of the convertible note.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
72
Notes to the financial statements Financial performance
5 Expenses
Cost of sales
Cash costs of production
Deferred stripping costs capitalised
Inventory movement
Inventory net realisable value provision
Depreciation and amortisation1
Royalties
Deferred stripping costs write-off2
Share-based payments
2023
$’000
2022
$’000
56,744
153,344
-
(2,932)
6,632
2,903
1,273
-
223
(6,049)
(385)
(2,353)
43,890
4,399
15,218
333
64,843
208,397
1 Depreciation and amortisation includes amortisation of previously capitalised deferred waste stripping costs. No depreciation and
amortisation was recognised for owned assets related to the Dalgaranga plant and associated mining infrastructure during the year as the
recovery amount was in excess of the carrying amount. Refer to note 13 for details on the Group’s accounting policy for depreciation and
amortisation.
2 Prior year balance is related to the write-off of the remaining unamortised capitalised deferred waste stripping costs due to the deferral of
mining activities at Gilbey’s Stage 3.
Cash costs of production
Cash costs of production includes ore and waste mining costs, processing costs and site administration and support costs.
Cash costs of production includes employee benefits expense of $7.2 million (2022: $13.5 million).
Net deferred stripping costs capitalised
Net deferred stripping costs capitalised represent costs incurred in the development and production phase of a mine and are
capitalised as part of the upfront cost of stripping overburden in order to access ore and are subsequently amortised over the
useful life of the ore body that access is provided to on a units-of-production basis. Where the waste to ore stripping ratio in a
period exceeds the stripping ratio for the life of that stage, the cost of waste movement beyond the average stripping ratio for
that stage is capitalised. The amount recognised in a period is the gross amount capitalised less amortisation of previously
capitalised amounts. Refer to note 13 for further details on the Group's accounting policy for deferred stripping costs.
Inventory movement
Inventory movement represents the movement in the inventory value of ore stockpiles, gold in circuit, gold on hand and
consumable stores. Refer to note 11 for further details on the Group's accounting policy for inventory.
Inventory net realisable value provision
Inventory must be carried at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the
ordinary course of business less estimated costs to complete processing and to make a sale. The net realisable value provision
equals the decrement between the net realisable value and the carrying amount before provision. Refer to note 11 for further
details on the Group's accounting policy for inventory.
Royalties
Royalties are payable based on the amount of gold produced from a mining tenement and are payable quarterly at a fixed rate
of 2.5% (2022: 2.5%) of the royalty value of gold sold. The royalty value of gold is the amount of gold produced during the
month multiplied by an average gold spot price for the month provided by the Government of Western Australia Department
of Mines, Industry Regulation and Safety.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
73
Notes to the financial statements Financial performance
5 Expenses (continued)
Restructure and transition to care and maintenance
The net financial impact of the gains and costs incurred during the year in relation to the restructure and the transition of the
Dalgaranga operations to a care and maintenance basis is reflected in the table below:
Expenses:
Employee redundancy payments1
Inventory write-off
Impairment expense2
Legal and consultancy fees
Settlement of key creditors and other transition costs
Loss on settlement of gold forwards
Offset by:
Net gain on settlement of NRW LPA
Net financial impact
2023
$’000
5,486
8,142
1,750
1,170
1,639
120
(7,070)
11,237
1 Employee redundancy payments include share-based payments expense of $1.5 million that relates to accelerated vesting of existing
performance rights for employees who were made redundant following the Company’s decision to transition the Dalgaranga operations to
care and maintenance.
2 Write-down of right-of-use assets identified during the annual impairment assessment. Refer to note 14 for more information.
Inventory write-off
Following the decision to transition the Dalgaranga operations to a care and maintenance basis in November 2022, processing
operations at Dalgaranga were wound down. At this time the remaining ore stockpiles that represented material with a grade
greater than 0.5g/t Au were written off as it was determined that the stockpiles were unlikely to be processed into a saleable
form and sold at a profit in the medium term.
Settlement of key creditors and other transition costs
Costs associated with the transition to care and maintenance included settlement of key creditors relating to final payment
obligations arising from key creditor negotiations, including a cash payment of $2.0 million to NRW (refer note 12) and other
transition costs directly related to the transition of the Dalgaranga processing plant to a care and maintenance basis.
Employee benefits expense
Salaries and wages
Superannuation
Share-based payments
Other employment costs
Amounts capitalised
2023
$’000
2022
$’000
15,672
15,921
1,335
3,478
865
21,350
(1,877)
19,473
1,485
1,568
955
19,929
(753)
19,176
Total employee benefits expense for the year includes redundancy costs of $5.5 million related to employees who were made
redundant following the Company’s decision to transition the Dalgaranga operations to care and maintenance.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
74
Notes to the financial statements Financial performance
5 Expenses (continued)
Other expenses
Corporate expenses
Put option expense1
Exploration and evaluation expenditure write-off2
Depreciation and amortisation
Rehabilitation and mine closure provision movement
Loss on disposal of property, plant and equipment
Loss on sale of mineral rights3
Loss on extinguishment of convertible debt4
Share-based payments
2023
$’000
2022
$’000
5,369
7,317
-
533
166
3,248
-
456
409
1,794
11,975
266
20
172
-
22
-
-
1,235
9,032
1 Relating to short-term put options purchased in the prior year to protect revenue, measured at cost.
2 Relates to capitalised expenditure on a discontinued resource definition programme at Dalgaranga written down to $nil.
3 Sale of Beebyn mineral rights to E79 Gold Mines Limited, refer to note 15.
4 Recognised on extinguishment of the Tembo Capital Tranche B secured loan, refer note 17.
6 Finance income and costs
Finance income
Interest income
Finance costs
Interest expense on borrowings
Interest expense on lease liabilities
Borrowing costs1
Unwinding of discount
2023
$’000
2022
$’000
182
9
1,156
687
1,284
1,776
4,903
1,841
784
68
452
3,145
1 Borrowing costs relates to Tembo Capital facility fees.
Recognition and measurement
Interest income and interest expense is accrued using the effective interest rate method.
Finance costs are expensed as incurred, except where costs relate to the financing of construction or development of qualifying
assets.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
75
Notes to the financial statements Financial performance
7
Income tax
The major components of income tax expense are:
Current income tax
Deferred income tax
Relating to origination and reversal of temporary differences
Deferred tax liability offset by deferred tax asset losses
Unrecognised / derecognition of deferred tax asset losses
Unrecognised deductible temporary differences
Income tax expense
Income tax expense
2023
$’000
2022
$’000
-
28
4,762
(23,817)
(13,823)
10,024
325
(7)
(963)
23,499
-
28
The current income tax expense recorded for the year is $nil (2022: $0.03 million expense). The prior year income tax expense
of $0.03 million relates to a subsidiary of Firefly Resources Limited prior to entry into the Spartan tax consolidated group. The
Group has paid this amount to the Australian Taxation Office in the current financial year. The Group remains in a cumulative
tax loss position for income tax purposes.
Reconciliation of income tax expense to prima facie tax
Accounting loss before income tax
Tax at the Australian tax rate of 30% (2022: 30%)
Tax effect of expenses not deductible for tax purposes:
Share-based payments
Entertainment expenditure
Fines and donations
Current tax liabilities
Other
Unrecognised / derecognition of deferred tax asset losses
Unrecognised deductible temporary differences
Income tax expense
2023
$’000
2022
$’000
(35,136)
(81,350)
(10,541)
(24,405)
538
4
4
-
934
10,024
370
2
5
28
536
(7)
(963)
23,499
-
28
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
76
Notes to the financial statements Financial performance
7
Income tax (continued)
Deferred tax
Recognised deferred tax balances
The movement for the year in the Group’s net deferred tax position is as follows:
Opening
balance
$’000
Recognised
in profit
or loss
$’000
Recognised
in equity
$’000
Over/(under)
provision
$’000
Recognised/
(Unrecognised)
$’000
Closing
balance
$’000
2023
Deferred tax assets
Tax losses
Capital raising costs
Mine properties, property, plant
and equipment
Provisions
-
13,823
2,070
8,352
1,451
(722)
(1,337)
674
-
747
-
-
11,591
(21,571)
1
(25)
-
-
-
-
3,843
2,096
6,990
2,125
11,873
12,438
747
11,567
(21,571)
15,054
Deferred tax liabilities
Exploration and evaluation
(11,794)
(3,456)
Financial assets and liabilities
Net deferred tax assets
(79)
(11,873)
-
79
(3,377)
9,061
-
-
-
196
-
196
-
-
-
(15,054)
-
(15,054)
747
11,763
(21,571)
2022
Deferred tax assets
Tax losses
Capital raising costs
Mine properties, property, plant
and equipment
Provisions
Deferred tax liabilities
Exploration and evaluation
Financial assets and liabilities
Net deferred tax assets
317
2,564
6,404
672
9,957
(9,572)
(385)
(9,957)
-
(324)
(682)
25,635
779
25,408
(2,222)
306
(1,916)
23,492
-
230
-
-
230
-
-
-
230
-
-
-
-
-
-
-
-
-
-
-
2,070
8,352
1,451
7
(42)
(23,687)
-
(23,722)
11,873
-
-
-
(23,722)
(11,794)
(79)
(11,873)
-
The Company and its wholly-owned Australian controlled entities have implemented the tax consolidation legislation.
Therefore, these entities are taxed as a single entity and the deferred tax assets and liabilities of these entities have been
offset in the consolidated financial statements.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
77
Notes to the financial statements Financial performance
7
Income tax (continued)
Unrecognised tax losses
Unrecognised tax losses
Potential tax benefit at 30% (2022: 30%)
2023
$’000
2022
$’000
251,131
166,418
75,339
49,925
In accordance with the Group’s policies for deferred taxes, a deferred tax asset is recognised only if it is probable that sufficient
future taxable income will be generated to offset against the asset.
Determination of future taxable profits requires estimates and assumptions as to future events and circumstances including
commodity prices, ore reserves, exchange rates, future capital requirements, future operational performance, the timing of
estimated cash flows and the ability to successfully develop and commercially exploit resources.
Tax legislation prescribes the rate at which tax losses transferred from entities joining a tax consolidation group can be applied
to taxable incomes and this rate is diluted by changes in ownership, including capital raisings.
At 30 June 2023 the Group has $251.1 million of tax losses available to be offset against future taxable income. A deferred
tax asset has not been recognised for tax losses at the reporting date due to the uncertainty of their recoverability in future
periods, because the period over which the losses can be applied to future taxable incomes and the period over which it is
forecast that these losses may be utilised, has extended beyond that which management considers prudent to support their
continued recognition for accounting purposes. These tax losses do not expire and can be used to reduce future tax profits
subject to relevant tax legislation associated with recoupment including the same business test and continuity of ownership
test.
Tax consolidation legislation
The Company and its wholly-owned Australian controlled entities have implemented the tax consolidation legislation and are
therefore taxed as a single entity. The head entity, Spartan Resources Limited, and the wholly-owned controlled entities in the
tax consolidated group continue to account for their own current and deferred tax amounts. These tax amounts are measured
as if each entity in the tax consolidated group continues to be a stand-alone taxpayer in its own right.
In addition to its own current and deferred tax amounts, the Company also recognises the current tax liabilities (or assets) and
the deferred tax assets arising from unused tax losses and unused tax credits assumed from wholly-owned controlled entities
in the tax consolidated group.
The entities have also entered into a tax funding agreement, under which the wholly-owned controlled entities:
fully compensate the Company for any current tax payable assumed; and
are compensated by the Company for any:
current tax receivable; and
deferred tax assets relating to unused tax losses or unused tax credits that are transferred to the Company under
the tax consolidation legislation.
The funding amounts are determined by reference to the amounts recognised in the wholly-owned controlled entities’ financial
statements.
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as current amounts
receivable from or payable to other entities in the Group.
Recognition and measurement
The income tax expense or credit recognised in profit or loss for the period comprises the tax payable on the current period’s
taxable income based on the applicable tax rate adjusted by changes in deferred tax assets and liabilities attributable to
temporary differences and to unused tax losses.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
78
Notes to the financial statements Financial performance
7
Income tax (continued)
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 which case the tax is recognised in other comprehensive income or directly in
equity, respectively.
Current and deferred tax assets and liabilities are offset:
when the Group has a legally enforceable right to offset; and
when the tax balances are related to taxes levied by the same tax authority and the Group intends to settle on a net
basis, or realise the asset and settle the liability simultaneously.
Current tax
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted
at the reporting date, including any adjustment to tax payable in respect of previous years.
Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation
is subject to interpretation. Provisions are established where appropriate on the basis of amounts expected to be paid to the
tax authorities.
Any research and development tax offset due to the Company, from the Australian Taxation Office, will be recognised in
current income tax expense when the amount to be received is known.
Deferred tax
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. Deferred income tax is determined
using tax rates and laws enacted or substantively enacted at the end of the reporting period and are expected to apply when
the related deferred income asset is realised or the deferred income tax liability is settled.
Deferred tax assets are recognised only if it is probable that future taxable amounts will be available to utilise those temporary
differences. Deferred tax liabilities are always provided for in full.
Accounting estimates and judgements
Income tax provisions
The Group is subject to income taxes in Australia. Significant judgement is required in determining the provision for income
taxes. There are certain transactions and calculations undertaken during the ordinary course of business for which the ultimate
taxation determination is uncertain. The Group estimates its tax liabilities based on its understanding of the tax law. Where the
final outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current
and deferred income tax assets and liabilities in the period in which such a determination is made.
Recognition of deferred tax assets
The Group recognises deferred tax assets, relating to carry forward tax losses and other unused tax credits, to the extent that
it is probable that there are sufficient taxable temporary differences (deferred tax liabilities), relating to the same taxation
authority, against which the losses and other unused tax credits can be utilised. Utilisation of the tax losses also depends upon
the ability of the Group to satisfy certain tests at the time the losses are recouped. Significant judgement is required to
determine the amount of deferred tax assets that can be recognised, based upon the likely timing and amount of future taxable
income, together with future tax planning strategies.
8 Earnings per share
Basic loss per share
Diluted loss per share
2023
2022
Cents per
share
Cents per
share
(6.5)
(6.5)
(23.9)
(23.9)
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
79
Notes to the financial statements Financial performance
8 Earnings per share (continued)
The earnings and weighted average number of ordinary shares used in the calculation of basic and diluted loss per share are
as follows:
Earnings used in calculating earnings per share
Loss after tax attributable to the owners of the Company
Weighted average number of ordinary shares used as the
denominator in calculating earnings per share
$’000
$’000
(35,136)
(81,378)
No. of shares No. of shares
537,176,091
340,279,690
Earnings per share is the amount of post-tax profit or loss attributable to each share.
Performance rights have not been included in the determination of diluted earnings per share as the Group was loss-making
and the effect on earnings per share would have been anti-dilutive.
Recognition and measurement
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 year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings by allowing for:
the post-tax effect of interest and other financing costs associated with dilutive potential ordinary shares; and
the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion
of all dilutive potential ordinary shares.
Potential ordinary shares
Employee share options and rights over ordinary shares in the Company are considered to be potential ordinary shares, and
are included in determining diluted earnings per share to the extent to which they are dilutive.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
80
Notes to the financial statements
Capital management
This section of the notes to the financial statements provides information on the assets used to generate the Group’s trading
performance and the resultant liabilities incurred, including working capital, long-term assets, liabilities arising from finance
activities, and equity.
9 Cash and cash equivalents
Cash at bank and on hand
Recognition and measurement
2023
$’000
2022
$’000
34,553
30,862
Cash and cash equivalents include cash on hand and deposits held at call with financial institutions and other short-term,
highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash
and which are subject to an insignificant risk of changes in value.
Reconciliation of cash flows
Reconciliation of cash flows from operating activities
Loss for the year after income tax
Adjustments
Depreciation and amortisation
Exploration and evaluation expenditure write-off
Deferred stripping costs write-off
Rehabilitation and mine closure provision movement
Impairment expense
Inventory write-off
Unwinding of discount
Share-based payments
Loss/(gain) on extinguishment of convertible debt
Finance costs
Income tax expense
Loss/(gain) on disposal of assets
Equity investments acquired
Net changes in operating assets and liabilities
Decrease in trade and other receivables
Decrease/(increase) in inventories
Decrease/(increase) in prepayments
Decrease in trade and other payables
Decrease in provisions
Net cash flows (used in)/from operating activities
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
2023
$’000
2022
$’000
(35,136)
(81,378)
3,069
533
44,062
20
-
15,218
3,248
1,750
8,142
1,776
3,478
409
-
-
248
-
739
2,069
1,235
(8,978)
(5,646)
(23,064)
-
47,699
-
452
1,686
(351)
313
28
(764)
(644)
4,192
(2,924)
(165)
(93)
(2,159)
25,192
81
Notes to the financial statements Capital management
9 Cash and cash equivalents (continued)
Non-cash transactions
Mine properties, property, plant and equipment includes $0.5 million (2022: $nil) of additional assets arising from lease
arrangements during the year.
The Group received shares as consideration for the sale of mineral rights during the year, refer note 15.
The Group equity-settled debt obligations due to Tembo Capital (refer note 17) and NRW (refer note 12) during the year. Refer
to note 19 for more information on the shares issued to Tembo Capital and NRW.
Change in liabilities arising from financing activities
Investec
finance
facility
$’000
13,537
-
(13,998)
(312)
773
-
-
-
-
-
-
-
-
-
-
-
Delphi
loan
facility
$’000
Tembo
Capital
facility
$’000
Convertible
note facility
$’000
Lease
liabilities
$’000
Total
$’000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,450
21,300
-
-
(222)
(2,106)
-
192
-
-
2,420
-
2,092
-
(21,286)
-
-
14,758
28,295
20,000
(20,000)
(1,576)
1,040
(943)
1,479
-
-
-
-
-
-
-
-
-
-
20,000
(3,233)
(37,231)
(783)
(2,671)
783
13
(1)
2,596
(930)
1,478
11,537
11,537
-
(1,949)
(684)
522
684
2,155
23,750
(1,949)
(3,012)
522
2,968
2,155
(215)
(21,501)
12,050
14,470
At 1 July 2021
Cash flows
Proceeds
Repayments
Interest and transaction costs
Non-cash movements
Interest and fees expense
Remeasurement1
Other movements2
At 30 June 2022
Cash flows
Proceeds
Repayments
Interest and transaction costs
Non-cash movements
Additions
Interest and fees expense
Remeasurement1
Other movements3
At 30 June 2023
1 Remeasurement arising from:
a. Convertible note facility in prior year: Fair value adjustment relating to the repurchase of the convertible note facility agreement (note
facility) in accordance with AASB 132 Financial Instruments: Presentation. Refer to note 17 in the Annual Report for the year ended 30
June 2022 for details of the repurchase of the note facility.
b. Lease liabilities: A change in the lease term and/or revised contractual payments.
2 Refer to note 17 in the Annual Report for the year ended 30 June 2022 for details of the remaining balances of the equity and embedded
derivative components on repurchase of the note facility during the prior year.
3 Refer to note 17 for information on the conversion of the Tembo Capital Tranche A and Tranche B secured loans to equity and future
royalty obligations, respectively.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
82
Notes to the financial statements Capital management
10 Trade and other receivables
Trade receivables
GST and fuel tax receivables
Other receivables
Recognition and measurement
Receivables
2023
$’000
50
699
4
753
2022
$’000
24
1,481
4
1,509
Receivables are recognised initially at fair value and subsequently measured at amortised cost, less loss allowance. The
carrying amounts of receivables are considered to be the same as their fair values, due to their short-term nature.
Trade receivables
Trade receivables are amounts due from customers for goods sold in the ordinary course of business. Trade receivables are
recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less loss
allowance.
The Group applies a simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance
for trade receivables classified at amortised cost. The expected credit loss on trade receivables is estimated by reference to
past default experience and credit rating, adjusted as appropriate for current observable data.
GST and Other receivables
As non-trade receivables mainly comprise balances due from the Australian Taxation Office, the Group’s exposure to credit
risk on non-trade receivables is limited.
11 Inventories
Ore stockpiles
Gold in circuit
Gold on hand
Consumable stores
2023
$’000
-
-
11
4,690
4,701
2022
$’000
8,314
1,997
1,543
4,131
15,985
Following the decision to transition the Dalgaranga operations to a care and maintenance basis in November 2022, processing
operations at Dalgaranga were wound down. At that time the remaining ore stockpiles that represented material with a grade
greater than 0.5g/t Au were written off as it was determined that the stockpiles were unlikely to be processed into a saleable
form and sold at a profit in the medium term.
Consumable stores at 30 June 2023 represent items purchased to maintain normal production levels prior to the decision to
place the Dalgaranga operations on care and maintenance. These items will either be utilised or sold in the short term.
Ore stockpiles represent material with a grade greater than 0.5g/t Au that, at the time of extraction, is expected to be processed
into a saleable form and sold at a profit. Lower grade ore stockpiles yet to be processed at Dalgaranga are not recognised in
inventories. Gold in circuit represents gold in the processing circuit that has not completed the production process, and is not
yet in a saleable form. Gold on hand represents the pre-refined saleable product before refining.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
83
Notes to the financial statements Capital management
11 Inventories (continued)
Consumable stores include diesel, grinding media, reagents and other consumables held for use in the production process or
maintenance of the operating plant and equipment.
Inventories are valued at the lower of cost and net realisable value. The Group’s ore stockpiles were written down to nil upon
the decision to transition into care and maintenance. At the reporting date, gold on hand is valued at net realisable value,
consumable stores are valued at cost (2022: ore stockpiles, gold in circuit and gold on hand at net realisable value, consumable
stores at cost).
Recognition and measurement
Ore stockpiles, gold in circuit and gold on hand are physically measured or estimated and valued at the lower of cost and net
realisable value. Cost is determined on a weighted average basis and comprises direct materials, direct labour, depreciation
and amortisation expense and an appropriate proportion of project overhead expenditure, the latter being allocated on the
basis of normal operating capacity.
Consumable stores are valued at weighted average cost, after appropriate provision for obsolete and slow-moving items.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and
estimated costs necessary to make the sale.
Accounting estimates and judgements
Inventory valuation
Accounting for inventory involves the use of judgements and estimates, particularly related to the measurement and valuation
of inventory on hand within the production process. Certain estimates, including expected metal recoveries and work in
progress volumes, are calculated by engineers using available industry, engineering and scientific data. Estimates used are
periodically reassessed by the Group after considering technical analysis and historical performance. Changes in estimates
are adjusted for on a prospective basis.
Net realisable value and classification of inventory
The assessment of the net realisable value and classification of inventory involves significant judgements and estimates in
relation to timing and cost of processing, commodity prices, recoveries and the likely timing of sale of the bullion produced. A
change in any of these assumptions will alter the estimated net realisable value and may therefore impact the carrying amount
of inventory.
The rest of this page has been left blank intentionally
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
84
Notes to the financial statements Capital management
12 Other financial assets and liabilities
Non-current assets
Term deposits
Equity investments
Current liabilities
NRW liability payment arrangement1
Non-current liabilities
NRW liability payment arrangement1
Future royalty obligation
2023
$’000
2022
$’000
407
784
1,191
-
-
6,300
6,300
407
2,720
3,127
4,718
4,833
-
4,833
1 These values represented the net present value of the NRW liability payment arrangement at 30 June 2022.
Term deposits
The Group holds cash in term deposits used as bank guarantees provided by the Group in favour of service providers for
credit card facilities, leased premises and road maintenance responsibilities. These bank guarantees are secured by blocked
deposits held by the grantor of the guarantee.
Equity investments
Firetail Resources Limited
E79 Gold Mines Limited
Capricorn Metals Limited1
2023
$’000
708
76
-
784
2022
$’000
1,641
-
1,079
2,720
1 On 29 June 2022 Spartan received shares to the value of $1.3 million in Capricorn Metals Limited (Capricorn) as initial consideration for
the sale of exploration interests. The Company disposed of its holding in Capricorn in November 2022.
E79 Gold Mines Limited
On 17 October 2022 the Company acquired 925,925 shares in E79 Gold Mines Limited as partial consideration for the sale of
gold and other mineral rights (excluding iron ore and ferrous minerals).
The fair value of the equity investment was categorised as level 1 at 17 October 2022 as the shares are listed.
Fair value classification
The equity investments were irrevocably designated at fair value through other comprehensive income (FVOCI) as they are
not held for trading and the Group intends to hold the investments long-term for strategic purposes.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
85
Notes to the financial statements Capital management
12 Other financial assets and liabilities (continued)
NRW liability payment arrangement
During the year ended 30 June 2020, the Group entered into an arrangement with NRW to settle the pre-Administration total
amount owing of $34.8 million including GST ($32.7 million excluding GST). The arrangement included entry into a liability
payment arrangement (LPA) for the remaining balance due after settlement of an upfront cash payment and conversion of
debt to equity.
As the LPA liability was not expected to be settled within 12 months, the liability was discounted to net present value using the
Group’s incremental borrowing rate as a discount rate. The amount of the fair value gain on remeasurement was disclosed as
other income (note 4). There was no interest payable on the LPA liability.
During the year all amounts owing between Spartan and NRW (and their respective group members) in respect of their existing
contractual arrangements were settled via an agreement entered into between the Company, GNT Resources Pty Ltd, NRW
and NRW Pty Ltd (NRW Settlement Agreement). The material terms of the settlement included a cash payment of $2.0 million
paid to NRW on 7 March 2023 and the issue to NRW of $2.0 million worth of fully paid ordinary shares in Spartan on 24 April
2023.
Future royalty obligation
Following shareholder approval of the conversion of Tranche A of the Tembo Capital facility on 18 April 2023, Tranche B of
the Tembo Capital facility equal to $6.3 million, was converted to a to a 1.8% gross royalty on gold produced and sold from
wholly-owned tenements at Dalgaranga and a 1.35% gross royalty on gold produced and sold from the remaining wholly-
owned tenements for which Spartan retains the gold rights to.
The royalty is payable to Tembo Capital upon the receipt of revenue from the sale of gold produced when production at
Dalgaranga and the Company’s other projects commences.
The royalty is secured by mining mortgages in favour of Tembo Capital over all the wholly owned tenements for which Spartan
retains the gold rights to.
Neither the recommencement of production at Dalgaranga or mining from Spartan’s remaining tenements are expected to
occur within the next 12 months.
After initial recognition at fair value less directly attributable transaction costs, the future royalty obligation is subsequently
measured at amortised cost.
Recognition and measurement
The Group classifies financial assets at amortised cost if the asset is held within a business model whose objective is to collect
the contractual cash flows, and the contractual terms give rise to cash flows that are solely payments of principal and interest.
Other financial liabilities, which are not measured at fair value through profit or loss, are measured at amortised cost using the
effective interest method.
Refer to note 20 for further details on accounting for financial assets and liabilities.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
86
Notes to the financial statements Capital management
13 Mine properties, property, plant and equipment
Right-of-use assets
Owned assets
Plant and
equipment
$’000
Property
$’000
Mine
properties
$’000
Plant and
equipment
$’000
Capital
work in
progress
$’000
Mine
properties
$’000
Total
$’000
Cost
At 1 July 2021
Additions
Acquisition of subsidiary
Disposals
Transfers between classes
22,057
415
-
-
-
-
-
-
-
-
423
13
-
-
-
85,417
1,423
242,705
352,440
-
167
(38)
502
497
25,569
26,079
167
-
(15,246)
(15,284)
-
-
(1,869)
1,367
-
At 30 June 2022
22,057
415
436
86,048
51
254,395
363,402
Accumulated depreciation,
amortisation and impairment
At 1 July 2021
Depreciation and amortisation
Impairment expense
Disposals
At 30 June 2022
Net book value
Cost
At 1 July 2022
Additions
Disposals
Remeasurement1
Transfers between classes
9,567
3,348
-
-
12,915
9,142
53
104
-
-
157
258
118
72
-
-
190
246
60,963
4,733
-
(27)
65,669
20,379
-
-
-
-
-
169,164
239,865
35,805
47,699
-
44,062
47,699
(27)
252,668
331,599
51
1,727
31,803
22,057
415
436
86,048
51
254,395
363,402
522
(298)
2,134
-
-
-
-
-
At 30 June 2023
24,415
415
Accumulated depreciation,
amortisation and impairment
At 1 July 2022
Depreciation and amortisation2
Impairment expense
Disposals
At 30 June 2023
Net book value
12,915
2,826
1,750
(298)
17,193
7,222
157
104
-
-
261
154
-
-
21
-
457
190
76
-
-
266
191
-
1,625
1,462
(25)
-
-
-
-
-
123
(1,675)
1,552
3,609
(323)
2,155
-
86,146
1
257,409
368,843
65,669
63
-
-
65,732
20,414
-
-
-
-
-
1
252,668
331,599
-
-
-
3,069
1,750
(298)
252,668
336,120
4,741
32,723
1 Remeasurement arising from a change in the lease term and/or revised contractual payments.
2 No depreciation and amortisation was recognised for owned assets related to the Dalgaranga plant and associated mining infrastructure
during the year as the recoverable amount was in excess of the carrying amount.
Mine properties, property, plant and equipment includes $0.5 million (2022: $nil) of additional assets arising from lease
arrangements during the year.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
87
Notes to the financial statements Capital management
13 Mine properties, property, plant and equipment (continued)
Recognition and measurement
Mine properties, property, plant and equipment is stated at cost less accumulated depreciation and amortisation and
accumulated impairment expenses.
Items of mine properties, property, plant and equipment are initially recognised at cost at the date of acquisition when it is
probable that future economic benefits associated with the asset will flow to the Group and the cost of the item can be reliably
measured. 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 where it is probable that future economic
benefits will flow to the Group and the cost of the item can be measured reliably.
The assets’ residual value and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. An
asset’s carrying amount is immediately written down to its recoverable amount if the asset’s carrying amount is greater than
its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount and are recognised in profit
or loss.
Mine properties under development
Mine properties under development (within mine properties) represents the costs incurred in preparing mines for production
and includes plant and equipment under construction and operating costs incurred before production commences.
Once production commences, these costs are transferred to property, plant and equipment and mine properties as appropriate,
and are depreciated and amortised using the units of production method based on the estimated economically recoverable
resource contained in the mine plan to be extracted to which they relate, or are written off if the mine property is abandoned.
Revenue from gold recovered from a mine before the mine is considered capable of operating in the manner intended by
management, and the associated production costs, are recognised through profit or loss.
Mine properties
Mine properties represent the accumulation of all pre-production expenditure incurred in relation to areas of interest for which
the technical feasibility and commercial viability of the extraction of mineral resources are demonstrable.
Production is deemed to commence when the mine assets are installed and ready for use in the location and condition
necessary for them to be capable of operating in the manner intended by management. These costs are capitalised to the
extent they are expected to be recouped through the successful exploitation of the related mining leases.
Mine properties include:
Capitalised expenditure in relation to exploration, evaluation, feasibility and acquisition costs incurred on projects for
which the technical feasibility and commercial viability of extracting a mineral resource are demonstrable.
The cost of rehabilitation and mine closure relating to assets reflected in mine properties.
Capitalised development and production stripping costs.
Pre-production operating costs previously accumulated and carried forward in mine properties under development,
transferred to mine properties in relation to areas of interest in which mining has now commenced.
Associated mine infrastructure including access roads, evaporation ponds, tailings facility and the airstrip.
Mining contractor mobilisation costs.
Mine properties are amortised on a units of production basis over the economically recoverable ore reserve contained in the
relevant mine plan.
When further development expenditure is incurred in respect of a mine property after the commencement of production, such
expenditure is carried forward as part of the mine property only when it is probable that the additional future economic benefits
associated with the expenditure will flow to the Group. Otherwise such expenditure is classified as part of the cost of production.
Right-of-use assets
Right-of-use (ROU) assets, representing the Group’s right to use an underlying leased asset for the lease term, are measured
at cost, less any accumulated depreciation and impairment, and adjusted for any remeasurement of lease liabilities. Refer to
note 17 for the Group’s lease accounting policy and the related accounting estimates and judgements.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
88
Notes to the financial statements Capital management
13 Mine properties, property, plant and equipment (continued)
Capital work in progress
Capital work in progress represents expenditure incurred on mine asset enhancement and sustainment projects which are
incomplete at the reporting date and are therefore not yet depreciated or amortised.
Deferred stripping costs
Stripping costs are incurred in both development and production phases during the removal of overburden and waste materials
in order to access the ore.
Development stripping costs
Overburden and other mine waste materials removed during the initial development of an open pit mine in order to access the
mineral deposit is referred to as development stripping. Costs directly attributable to development stripping, inclusive of an
allocation of relevant overhead expenditure, are capitalised in mine properties under development when future economic
benefits are probable.
Capitalisation of development stripping costs cease at the time that ore begins to be extracted from the mine. Development
stripping costs are amortised over the useful life of the ore body that access has been provided to on a units of production
basis, based on the estimated economically recoverable ore reserve contained in the mine plan to be extracted.
Production stripping costs
Production stripping commences when ore begins to be extracted from the mine and normally continues throughout the life of
a mine. The costs of production stripping are recognised as operating costs in profit or loss, when the current ratio of waste
material to ore extracted for a component of the ore body is below the expected stripping ratio of that component or production
stage.
When the ratio of waste to ore is not expected to be constant, production stripping costs are accounted for as follows:
All costs are initially charged to profit or loss as operating costs.
When the current ratio of waste to ore is greater than the estimated ratio of a component of the ore body, a portion of the
stripping costs, inclusive of an allocation of relevant site overhead expenditure, is capitalised to mine properties.
The capitalised stripping asset is amortised on a units of production basis (contained gold ounces mined) over the useful
life of the identified component of the ore body to which access has been improved.
The amount of production stripping costs capitalised or charged in a reporting period is determined so that the stripping
expense for the period reflects the estimated strip ratio of the economically recoverable ore reserve component over its relevant
life. Changes to the estimated waste to ore ratio of a component of the ore body are accounted for prospectively from the date
of change.
Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset are capitalised during
the period of time that is necessary to complete and prepare the asset for its intended use.
Depreciation and amortisation
Depreciation commences when an asset is in the location and condition necessary for it to be capable of operating in the
manner intended by management. Depreciation of assets is calculated using either the straight-line method or units of
production method to allocate the assets’ cost, net of residual values, over the estimated useful lives of the assets.
Mine-related plant and equipment is depreciated on a units of production basis, except for assets with a useful life less than
the life of mine, for which the straight-line method is applied. Non-mine-related plant and equipment is depreciated on a
straight-line basis. The depreciation rates used when applying the straight-line method vary between 10% to 33% per annum.
Mine properties are amortised on a units of production basis over the life of the estimated ore reserve of the mine.
Units of production method
Where the useful life of an asset is directly linked to the extraction of ore from a mine, the asset is depreciated using the units
of production method. The units of production method results in depreciation and amortisation charges proportional to the
depletion of the estimated ore reserve of the mine. The unit of account used in the calculation is ounces fine gold poured
except for deferred stripping costs that utilises contained gold ounces mined as the unit of account.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
89
Notes to the financial statements Capital management
13 Mine properties, property, plant and equipment (continued)
Accounting estimates and judgements
Mine properties under development
Development activities commence after a project is considered economically viable and a final investment decision has been
made to develop the asset. In determining economic viability, significant judgement is required in the estimates and
assumptions made, including future reserve estimates, existence of an accessible market, forecast prices and cash flows.
These estimates and assumptions may be subject to change.
Mine properties
The future recoverability of mine properties is dependent on the generation of sufficient future cash flows from operations or
through sale of the respective mine property assets. Factors that could impact the future recoverability of mine properties
include resource and reserve estimates, future technological changes, costs of drilling and production, production rates, future
legal changes, including changes to environmental restoration obligations, and changes to commodity prices and exchange
rates.
Deferred stripping costs
Significant accounting judgements and estimates are required when identifying components of an ore body and estimating
stripping ratios and ore reserves by component. Changes to estimates related to life-of-component waste-to-ore strip ratios
and the expected ore production from identified components are accounted for prospectively and may affect depreciation rates
and asset values.
Depreciation and amortisation
The estimation of useful lives, residual values and depreciation methods requires judgement and is reviewed annually, based
on the expected utilisation of the assets. Any changes to current estimations may affect prospective depreciation rates and
asset values.
Units of production method
The Group uses the units of production method when amortising mine properties and depreciating other mine-related assets,
which results in an amortisation or depreciation charge proportional to the depletion of the anticipated remaining ore reserve.
The annual assessment of an asset's economic life includes evaluation of its physical life limitations and current assessments
of economically recoverable ore reserves of the mine property at which it is located. These calculations require the use of
estimates and assumptions.
Mineral resources and ore reserves estimates
Estimates of economically recoverable quantities of mineral resources and ore reserves also include assumptions requiring
significant judgement as detailed in mineral resources and ore reserves statements. The Group estimates its mineral resources
and ore reserves in accordance with the 2012 edition of the Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves (the JORC Code 2012). The information on mineral resources and ore reserves was prepared
by Competent Persons as defined in the JORC Code 2012.
There are numerous uncertainties inherent in estimating mineral resources and ore reserves, and assumptions that are valid
at the time of estimation may change significantly when new information is available. Information obtained through infill drilling,
changes in the forecast prices of commodities, exchange rates, operating costs or recovery rates may change the economic
status of reserves and may ultimately result in the reserves being restated. Changes in reported reserve estimates can impact
the carrying amount of mine properties and related amortisation, exploration and evaluation expenditure, the rehabilitation and
mine closure provision, and the recognition of deferred tax assets.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
90
Notes to the financial statements Capital management
14 Impairment of non-current assets
Dalgaranga Gold Project
2023
$’000
2022
$’000
-
47,699
At each reporting date, the Group assesses whether there is an indication that an asset may be impaired. The assessment
will include the consideration of external and internal sources of information. If such an indication exists, an impairment test is
carried out on the cash-generating unit by comparing the recoverable amount of the asset, being the higher of the asset’s fair
value less costs to sell and value in use, to the asset’s carrying amount.
The Group completed its assessment of external and internal sources of information at 30 June 2023. The Group identified
the transition of the Dalgaranga operations to care and maintenance on 8 November 2023 to be an indicator of impairment.
The review identified that certain right-of-use assets at Dalgaranga were required to be impaired at this date. While the Group
would still have the assets on site and the lease liabilities would still exist, the Group would no longer obtain benefit from and
make no use of the assets during the care and maintenance period. As at 30 June 2023, the identified right-of-use assets were
impaired in full ($1.8 million).
At 30 June 2023, the Group determined that no impairment is required for the Dalgaranga processing plant and associated
infrastructure based on relevant market transactions during the current reporting period. The recoverable amount of the
processing plant and associated infrastructure at 30 June 2022 was estimated to be in the range of $23.0 million to $80.0
million based on the market transactions evaluated at that time. The Group considers this range to still be applicable at 30
June 2023 given the absence of any similar material market transactions during the reporting period. The recoverable amount
range noted above continues to be on the lower end of the industry and market range, therefore no further impairment of these
assets is required at 30 June 2023.
Recognition and measurement
At each reporting date, the Group reviews the carrying amounts of its assets to determine whether there is any indication that
those assets have been subject to an impairment expense, or reversal of impairment expense. If any such indication exists,
the recoverable amount of the asset is estimated in order to determine the extent if any, of the impairment expense or reversal.
Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount
of the cash-generating unit (CGU) to which the asset belongs. For impairment assessment purposes, assets are grouped at
the lowest levels for which there are largely independent cash inflows (CGUs). If the assets that originally formed a CGU do
not generate net cash inflows, the individual assets within the original CGU are individually assessed for impairment.
If the recoverable amount of an asset or CGU is estimated to be less than its carrying amount, the carrying amount of the
asset or CGU is reduced to its recoverable amount. An impairment expense is recognised immediately in profit or loss.
The recoverable amount of a CGU is the higher of its fair value less costs of disposal (FVLCD) and its value in use (VIU).
FVLCD is the best estimate of the amount obtainable from the sale of a CGU in an arm's length transaction between
knowledgeable willing parties, less the costs of disposal. This estimate is determined on the basis of best available market
information considering specific conditions. VIU is the present value of the future cash flows expected to be derived from the
CGU or group of CGUs. Cash flow projections are based on economic and regulatory assumptions and forecast trading
conditions prepared by management.
Where an impairment expense subsequently reverses, the carrying amount of the asset or CGU is increased to the revised
estimate of its recoverable amount, not to exceed the carrying amount that would have been determined had no impairment
expense been recognised for the asset or CGU in prior years. A reversal of an impairment expense is recognised immediately
in profit or loss.
Accounting estimates and judgements
Assessment of indicators of impairment
The assessment of indicators of impairment or impairment reversal requires significant management judgement. Indicators of
impairment may include unfavourable changes in market rates, indication of a decline in asset value, the anticipation of lower
than expected asset performance and significant adverse market, technological, economic or legal changes.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
91
Notes to the financial statements Capital management
14 Impairment of non-current assets (continued)
Assessment of asset or CGU recoverable amounts
The assessment of the recoverable amount of non-current assets involves significant judgements and estimates in relation to
the determination of estimated future cash flows expected to be derived from the assets’ use and the associated discounting
of those cash flows to the estimated present value. CGU recoverable amounts are subject to variability in key estimates and
assumptions which include ore reserves, commodity prices, currency exchange rates, discount rates, production profiles,
operating and sustaining capital costs and operating performance. The inputs to models used in these assessments are taken
from observable markets where possible, but where this is not feasible, management uses the best information available and
a degree of judgement is required in establishing recoverable amounts. Changes in assumptions used to estimate VIU or
FVLCD could affect the reported recoverable amounts of assets.
15 Exploration and evaluation
At 1 July
Expenditure incurred during the year
Sale of mineral rights
Sale of exploration interest
Acquisition of exploration asset
Expenditure reclassified to mine properties
Exploration and evaluation expenditure write-off
At 30 June
2023
$’000
2022
$’000
84,782
13,185
(631)
-
-
(1,462)
(533)
95,341
32,881
8,386
-
(446)
44,742
(761)
(20)
84,782
Exploration expenditure is incurred in the initial search for mineral deposits with economic potential or in the process of
obtaining more information about existing mineral deposits. Evaluation expenditures are the costs incurred to establish the
technical and commercial viability of developing identified mineral deposits.
There may exist, on the Group's exploration properties, areas subject to claim under native title or containing sacred sites or
sites of significance to Aboriginal people. As a result, exploration properties or areas within tenements may be subject to
exploration or mining restrictions.
As part of annual impairment testing, the Group’s currently held exploration and mining tenements were assessed for any
events or issues that would impact the Group’s ongoing ability to perform exploration and evaluation activities.
Sale of mineral rights
On 17 October 2022 the Company sold the gold and other mineral rights (excluding iron ore and ferrous mineral rights) of the
Beebyn tenement to E79 Gold Mines Limited (E79) for cash proceeds of $0.05 million and $0.1 million worth of E79 shares.
As E79 is now required to satisfy the annual commitments for the gold and other non-ferrous mineral rights for the three years
following the sale, it was determined that the Group has effectively discontinued gold exploration activities at Beebyn and
would not be able to recover the carrying amount of the tenement. Accordingly, the capitalised expenditure related to the
Beebyn tenement was written off in full.
Acquisition of exploration asset
On 10 November 2021 the Group acquired control of Firefly Resources Limited (Firefly). Significant exploration assets acquired
comprised of the Firefly Yalgoo Gold Project including the Melville mineral resource, and other exploration tenements within
the Yalgoo greenstone belt. Refer to note 25 for details of the acquisition.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
92
Notes to the financial statements Capital management
15 Exploration and evaluation (continued)
Recognition and measurement
Exploration and evaluation expenditure is capitalised and carried forward on an area of interest basis to the extent that rights
to tenure of the area of interest are current and either:
the expenditure is expected to be recouped through successful development and exploitation of the area of interest; or
activities in the area of interest have not, at the reporting date, reached a stage which permits a reasonable assessment
of the existence or otherwise of economically recoverable reserves, and active and significant exploration and evaluation
activities in, or in relation to, the area of interest are continuing.
No amortisation is charged during the exploration and evaluation phase.
Reclassification to mine properties
Once the technical feasibility and commercial viability of the extraction of mineral resources in an area of interest are
demonstrable and a management decision to invest further has been made, exploration and evaluation assets attributable to
that area of interest are first tested for impairment and then reclassified to mine properties under development, within mine
properties.
Impairment
Recoverability of the carrying amount of the exploration and evaluation assets is dependent on successful development and
commercial exploitation or through sale of the respective areas of interest.
Exploration and evaluation assets are tested for impairment when reclassified to mine properties under development, or
whenever facts or circumstances indicate impairment. An impairment expense is recognised for the amount by which the
exploration and evaluation assets’ carrying amount exceeds their recoverable amount. The recoverable amount is the higher
of the exploration and evaluation assets’ fair value less costs of disposal and their value in use.
Assets held for sale
Non-current assets are classified as held for sale if it is highly probable that their carrying amount will be recovered primarily
through sale rather than through continuing use, the asset is available for immediate sale in its present condition and
management is committed to the sale, which is expected to complete within one year, subject to regulatory requirements.
Assets classified as held for sale are measured at the lower of their carrying amount and fair value less costs to sell. Impairment
losses on initial classification and subsequent gains and losses on remeasurement are recognised through profit or loss.
Non-current assets classified as held for sale are presented separately as current assets in the consolidated statement of
financial position.
Accounting estimates and judgements
Recovery of capitalised expenditure
The Group has capitalised significant exploration and evaluation expenditure on the basis that such expenditure is expected
to be recouped through future successful development or through sale of the areas of interest concerned, or on the basis that
it is not yet possible to assess whether it will be recouped and activities are planned to enable that determination.
The future recoverability of capitalised exploration and evaluation expenditure is dependent on a number of factors, including
whether the Group decides to exploit the area of interest itself, or if not, whether it successfully recovers the asset through
sale.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
93
Notes to the financial statements Capital management
16 Trade and other payables
Trade payables
Employee benefits
2023
$’000
2,716
44
2,760
2022
$’000
12,363
3
12,366
Trade and other payables represent liabilities for goods and services provided to the Group prior to the end of the year which
are unpaid. These amounts are unsecured and are usually paid within 30 days of recognition or in accordance with the payment
terms agreed with the supplier.
Recognition and measurement
Trade and other payables are recognised initially at their fair value and subsequently measured at amortised cost using the
effective interest method. The carrying amounts of trade and other payables are considered to be the same as their fair values,
due to their short-term nature.
Trade and other payables are presented in current liabilities unless payment is not due within 12 months after the reporting
date.
17 Borrowings and lease liabilities
Current
Delphi loan facility
Lease liabilities
Non-current
Lease liabilities
2023
$’000
2022
$’000
2,420
578
2,998
-
3,228
3,228
11,472
8,309
Refer to note 9 for changes in borrowings and lease liabilities arising from financing activities.
Delphi loan facility
On 25 February 2023, the Company and Delphi entered into a loan and royalty deed, pursuant to which Delphi agreed to
provide a $2.45 million unsecured loan to the Company which was mandatorily convertible upon shareholder approval to a
future gold royalty over all 100% owned tenements. Interest was payable in arrears at a fixed rate of 15% over the one year
term.
On 24 August 2023, the loan was converted to a future gold royalty following shareholder approval on 18 August 2023, with
the unsecured loan considered fully repaid under the terms of the Delphi loan and royalty deed.
Lease liabilities
The Group leases power generating and storage facilities, plant and equipment, and property, for which contracts are typically
entered into for fixed periods and may include extension options.
Lease liabilities are secured with the rights to leased assets recognised in the financial statements reverting to the lessor in
the event of default.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
94
Notes to the financial statements Capital management
17 Borrowings and lease liabilities (continued)
Tembo Capital facility
On 25 February 2023, Tembo Capital Mining Fund III (Tembo Capital) made a $21.3 million capital investment in Spartan
comprising of a $15.0 million secured loan (Tranche A) to mandatorily convert to fully paid ordinary shares in Spartan at $0.10
per share on shareholder approval and a $6.3 million secured loan (Tranche B) to mandatorily convert to a future gold royalty
over all 100% owned tenements, upon conversion of Tranche A. On 24 April 2023, both Tranches were converted following
shareholder approval on 18 April 2023, with both Tranches considered fully repaid under the terms of the Tembo Capital
agreement. The security held by Tembo Capital over the Group’s assets was released upon conversion of Tranche A and
Tranche B.
Refer to note 12 for more information on the security in place for Tranche B of the Tembo Capital facility that converted to a
future gold royalty.
Following shareholder approval on 18 April 2023, an amount of $16.3 million, consisting of Tranche A of $15.0 million and the
establishment fee and redemption premium on the Tembo Capital facility of $1.3 million, was converted to equity.
Following the conversion of Tranche A, Tranche B was converted to a future gold royalty. The royalty is payable to Tembo
Capital upon the receipt of revenue from the sale of gold produced when production at Dalgaranga and the Company’s other
projects commences.
Neither the recommencement of production at Dalgaranga or mining from Spartan’s remaining tenements are expected to
occur in the next 12 months. Refer to note 12 for more information on the future royalty obligation.
Reconciliation of the movements in the Tembo capital facility during the year was as follows:
At 1 July 2022
Proceeds
Equity component
Interest and transactions costs paid
Interest and fees expense
Balance prior to conversion
Debt extinguished on conversion1
At 30 June 2023
$’000
-
21,300
(134)
(2,106)
2,092
21,152
(21,152)
-
1 Following conversion of Tranche A, the remaining equity deficit of $887,565 was transferred to accumulated losses as at 30 June 2023
and the loss on extinguishment and conversion of Tranche B of $409,173 was recognised in profit or loss.
Recognition and measurement
Borrowings are initially recognised at fair value of the consideration received, less directly attributable transaction costs. After
initial recognition, borrowings are subsequently measured at amortised cost using the effective interest method.
Borrowings are derecognised when the contractual obligations are discharged, cancelled or expire. Any difference between
the carrying amount of a derecognised liability and the consideration paid, including any non-cash assets transferred or
liabilities assumed, is recognised in profit or loss as other income or finance costs.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for
at least 12 months after the reporting period.
Borrowing costs
Borrowing costs, which do not meet the criteria for capitalisation, are expensed in the period in which they are incurred and
reported as finance costs in profit or loss.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
95
Notes to the financial statements Capital management
17 Borrowings and lease liabilities (continued)
Convertible debt
Compound financial instruments
Compound financial instruments contain both a liability and an equity component, the equity component representing the fair
value of the embedded conversion option to convert a fixed amount of liability into a fixed number of shares of the Company.
The fair value of the liability portion of the debt instrument is determined using a market interest rate for an equivalent non-
convertible debt instrument at the issue date. The liability component is subsequently recognised on an amortised cost basis
until extinguished on conversion or maturity of the debt instrument. The remainder of the debt instrument proceeds is allocated
to the conversion option and recognised in equity, net of income tax, and is not subsequently remeasured. Transaction costs
are allocated to the liability and equity components in proportion to the allocation of proceeds. On conversion, the liability is
reclassified to equity and no loss or gain is recognised.
Lease liabilities
Lease assessment
At inception of a contract, the Group assesses whether a contract is, or contains, a lease, by determining whether the contract
conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
Control is considered to exist if the Group has the right to obtain substantially all of the economic benefits from the use of an
explicitly or implicitly identified asset over which the supplier does not have a substantive substitution right, and the right to
direct the use of that asset throughout the period of use.
Initial recognition
Leases, other than short-term leases (12 months or less) and leases of low-value assets, are initially recognised as an ROU
asset and a corresponding lease liability at the commencement date, which is the date the leased asset is available for use by
the Group.
Lease liability measurement
Initial measurement
Lease liabilities are initially measured at the present value of lease payments to be made over the lease term, being the non-
cancellable period of the lease and any periods to be covered by the exercise of extension options and the non-exercise of
termination options.
The lease payments are discounted using the Group’s incremental borrowing rate (IBR). To determine the IBR, the Group
obtains external interest rate advice and adjusts the interest rates to reflect the lease conditions and the underlying asset.
Lease payments included in the measurement of the lease liabilities comprise:
fixed payments, including in-substance fixed payments, less any lease incentives receivable;
variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement
date;
amounts payable under residual value guarantees; and
payments arising from purchase, extension or termination options reasonably certain to be exercised by the Group.
Subsequent measurement and remeasurement
Lease liabilities are subsequently measured on an amortised cost basis using the effective interest method.
Lease liabilities are remeasured when there is a change in future lease payments arising from changes in the lease term; the
assessment of a purchase option; amounts payable under a residual guarantee; in-substance fixed payments; or a change in
an index or rate. A corresponding adjustment is recognised in the ROU asset, or in profit or loss if the carrying amount of the
ROU asset has been reduced to nil.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
96
Notes to the financial statements Capital management
17 Borrowings and lease liabilities (continued)
ROU assets
ROU assets, representing the Group’s right to use the underlying leased asset for the lease term, are measured at cost, less
any accumulated depreciation and impairment expenses, in accordance with the Group’s depreciation and impairment
accounting policies.
The initial cost of ROU assets includes:
the initial measurement of the related lease liabilities recognised;
any lease payments made on or before the commencement date, less any lease incentives received;
initial direct costs incurred; and
restoration cost estimates.
ROU assets are subsequently depreciated, over the shorter of the estimated useful life of the underlying asset and the lease
term.
Accounting estimates and judgements
Lease liabilities
The application of AASB 16 Leases requires judgements that affect the valuation of lease liabilities and ROU assets. The
critical judgements and areas of estimation uncertainty discussed below need to be considered when assessing leases:
Identifying a lease
Identifying whether a contract is, or contains, a lease involves the exercise of judgement about whether the contract depends
on a specified asset, the Group obtains substantially all of the economic benefits from the use of the asset and has the right
to direct the use of the asset; and the contract is perpetual or for a period of time over which the underlying assets are to be
used.
Determining the lease term
In determining the lease term, the Group considers all relevant factors that could provide an economic incentive to exercise
extension or termination options, the substance of the contract and whether any economic penalties exist when assessing the
contract term beyond the contractual non-cancellable period.
Determining the incremental borrowing rate
Where the Group cannot readily determine the interest rate implicit in the lease, it uses its IBR to measure lease liabilities. The
IBR is the rate of interest that the Group would have to pay to borrow over a similar term, and with a similar security, the funds
necessary to obtain an asset of a similar value to the ROU asset in a similar economic environment.
Therefore, as the IBR reflects what the Group would have to pay, estimation is required when no observable rates are available
or when observable rates need to be adjusted to reflect the terms and conditions of the lease.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
97
Notes to the financial statements Capital management
18 Provisions
Current
Employee benefits
Royalty payments
Non-current
Employee benefits
Rehabilitation and mine closure
Movements in the rehabilitation and mine closure provision during the year are as follows:
At 1 July
Expenditure on rehabilitation and closure activities
Reassessment of economic assumptions
Unwinding of discount
At 30 June
2023
$’000
2022
$’000
717
-
717
89
52,109
52,198
2,584
1,111
3,695
115
47,194
47,309
2023
$’000
2022
$’000
47,194
28,057
(109)
3,248
1,776
52,109
(74)
18,759
452
47,194
The Group completed a review of the rehabilitation and mine closure provision during the year, which resulted in an increase
of $3.2 million (2022: $18.8 million increase) to the provision.
Recognition and measurement
Provisions are recognised when the Group has a present legal or constructive obligation, it is probable that an outflow of
resources will be required to settle the obligation, and the amount can be reliably estimated.
Provisions are measured at the present value of management's best estimate of the expenditure required to settle the present
obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects
current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due
to the passage of time is recognised as a finance cost in profit or loss.
Employee benefits
The provision for employee benefits relates to the Group's liabilities for annual leave, long service leave and the short-term
incentive plan (STIP).
The current provision represents amounts for annual leave that are expected to be settled within 12 months of the end of the
period in which the employees render the service and is measured at the amounts expected to be paid when the liabilities are
settled.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
98
Notes to the financial statements Capital management
18 Provisions (continued)
The liability for long service leave not expected to vest within 12 months after the end of the period in which the employees
render the service is recognised in the non-current provision for employee benefits and is measured at the present value of
expected future payments to be made in respect of services provided up to the end of the reporting period. Consideration is
given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future
payments are discounted using market yields on high quality corporate bonds at the reporting date with terms and currencies
that match the estimated future cash outflows as closely as possible.
Where the Group does not have an unconditional right to defer settlement for any annual or long service leave owed, it is
classified as a current provision regardless of when the Group expects to realise the provision.
For details of the STIP, refer to the ‘Short-term incentives’ section of the Remuneration report.
Rehabilitation and mine closure
The Group has obligations to dismantle and remove certain items of mine properties, property, plant and equipment and to
restore and rehabilitate the land on which they sit.
A provision is recognised for the estimated cost of settling the rehabilitation and restoration obligations existing at the reporting
date, discounted to present value using high quality corporate bond market yields at the reporting date, that match the timing
of the estimated future cash outflows as closely as possible.
Where the obligation is related to an item of mine properties, property, plant and equipment, its cost includes the present value
of the estimated costs of dismantling and removing the asset and restoring the site on which it is located. The related
rehabilitation asset for Dalgaranga is included in mine properties. Costs that relate to obligations arising from waste created
by the production process are recognised as operating costs in the period in which they arise.
The discounted value reflects a combination of management's assessment of the nature and extent of the work required, the
future cost of performing the work required, the timing of cash flows and the discount rate. Over time, the discounted value is
increased for the change in present value based on the discount rates that reflect current market assessments and the risks
specific to the liability. This increase in the provision, being the periodic unwinding of the discount due to the passage of time,
is recognised as a finance cost in profit or loss.
The provision is reassessed at least annually. A change in any of the assumptions used to determine the provisions could
have a material impact on the carrying amount of the provision. Any change in the provision is reflected as an addition to, or
deduction from, the related rehabilitation asset in mine properties and amortised as appropriate.
Accounting estimates and judgements
Rehabilitation and mine closure
The provision recognised for rehabilitation and mine closure costs relating to Dalgaranga represents the discounted value of
the present obligation to restore, dismantle and rehabilitate certain items of mine properties, property, plant and equipment
and to rehabilitate the site.
As the discounted value reflects a combination of management's assessment of the nature and extent of the work required,
the future cost of performing the work required, the timing of cash flows and the discount rate, then changes to one or more
of these assumptions is likely to result in changes to the carrying amount of the provision and the related rehabilitation asset
and costs and may result in future actual expenditure differing from the amounts currently provided.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
99
Notes to the financial statements Capital management
19 Equity
Share capital
Fully paid ordinary shares
At 1 July
Performance rights exercised1
Placement2
Institutional Entitlement Offer3
Retail Entitlement Offer4
Placement - NRW 5
Convertible debt - Tembo Capital 6
Employee share scheme7
Acquisition of Firefly8
Employee remuneration - LTI award9
Private placement10
Share purchase plan11
Share issue costs
2023
2022
No. of shares
$’000
No. of shares
$’000
425,924,050
324,496
250,858,128
266,196
5,766,881
86,439,649
91,403,758
84,653,768
20,000,000
650
8,644
9,140
8,465
2,000
162,825,000
16,283
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(2,490)
184,836
118,895,126
452,532
50,000,000
5,533,428
-
-
-
-
-
-
-
59
42,208
118
15,000
1,660
(745)
At 30 June
877,013,106
367,188
425,924,050
324,496
1 Shares issued on exercise of vested employee performance rights, under the Company’s SPR Equity Incentive Plan Rules.
2
Institutional placement of 85,889,649 shares issued on 8 March 2023 and of 550,000 shares issued on 24 April 2023, at $0.10 per share.
3 Shares issued on completion of the institutional component of the accelerated non-renounceable entitlement offer at $0.10 per share, on
8 March 2023.
4 Shares issued on completion of the retail component of the accelerated non-renounceable entitlement offer at $0.10 per share on 3 April
2023.
5 Shares issued to NRW at $0.10 per share, at nil consideration, representing conversion of debt to equity as part settlement of obligations
owed to NRW, on 24 April 2023, following shareholder approval on 18 April 2023. Refer note 12.
6 Shares issued to Tembo Capital at $0.10 per share, at nil consideration, representing conversion of convertible debt to equity, on 24 April
2023, following shareholder approval on 18 April 2023. Refer note 17.
7 Shares issued under Employee Share Scheme on 10 September 2021.
8 Shares issued as purchase consideration for acquisition of Firefly on 10 November 2021, refer note 25.
9 Shares issued to former Managing Director and Chief Executive Officer Mr Richard Hay at $0.26 per share, at nil consideration, on 28
January 2022, following shareholder approval on 20 January 2022.
10 Private placement at $0.30 per share on 31 March 2022.
11 Share purchase plan at $0.30 per share on 22 April 2022.
Fully paid ordinary shares have no par value and entitle the holder to participate in dividends and the proceeds on winding up
of the Company in proportion to the number of and amounts paid on the shares held.
Every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share
is entitled to one vote. Ordinary shares have no par value.
Non-controlling interests
At 1 July
Non-controlling interests’ share of current year exploration expenditure
At 30 June
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
2023
$’000
1,479
41
1,520
2022
$’000
1,352
227
1,479
100
Notes to the financial statements Capital management
19 Equity (continued)
Under the contractual joint venture agreements giving rise to the non-controlling interests (NCI), the Company is required to
free carry the NCI by sole funding the joint venture operations until the earlier of the completion of a bankable feasibility study,
a decision to commence mining operations, or an election by the non-controlling joint venture partner to convert their respective
20% participation interest to a 2% net smelter return royalty.
Reserves
Convertible debt reserve
The convertible debt reserve comprises the equity component of convertible debt instruments (refer note 17), representing the
value of the conversion rights.
Other reserves
Equity
investments
reserve
$’000
Share-based
payments
reserve
$’000
Exploration
asset reserve
$’000
-
-
-
22
22
-
-
-
(616)
(170)
(764)
1,712
1,509
-
-
(1,040)
-
(127)
-
3,221
(1,167)
3,478
(1,598)
-
-
(1,674)
3,427
-
-
(41)
-
-
(1,208)
Total
$’000
672
1,509
(127)
22
2,076
3,478
(1,598)
(41)
(616)
(1,844)
1,455
At 1 July 2021
Share-based payments
Non-controlling interests’ share of current year exploration
expenditure
Changes in fair value of equity investments
At 30 June 2022
Share-based payments
Performance rights exercised
Non-controlling interests’ share of current year exploration
expenditure
Changes in fair value of equity investments
Transfer to accumulated losses
At 30 June 2023
Equity investments reserve
The equity investments reserve represents the cumulative net change in the fair value of equity investments measured at fair
value through other comprehensive income (FVOCI). The Group transfers amounts from this reserve to retained earnings
when the relevant equity investments are derecognised.
Share-based payments reserve
The share-based payments reserve recognises the fair value of equity-settled share-based payments provided to eligible
employees as part of their remuneration including options issued under the Company’s Employee Share Option Plan, and
performance rights issued under the Company’s SPR Equity Incentive Plan Rules.
Exploration asset reserve
The exploration asset reserve recognises exploration expenditure incurred on contractual joint venture tenements in proportion
to any non-controlling interest in the joint venture during the free carry/sole funding period.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
101
Notes to the financial statements
Risk management
This section of the notes to the financial statements provides information about the Group’s exposure to various risks, how
these risks could affect the Group’s financial position and performance, and how the Group manages these risks.
20 Financial risk management
The Group’s activities expose it to financial risks including market risk, liquidity risk and credit risk, arising from the financial
instruments held by the Group. The Board has overall responsibility for the establishment and oversight of a risk management
framework, through the Audit and Risk Committee, to ensure that financial activities are governed by policies and procedures
and that financial risks are identified, measured and managed in accordance with policies, to support the delivery of financial
targets while protecting future financial security. The Audit and Risk Committee is responsible for developing and monitoring
the Group’s risk management policies.
Financial assets and liabilities
The Group’s financial instruments are as below:
2023
Financial assets at amortised cost
Cash and cash equivalents
Trade and other receivables1
Term deposits
Financial assets at FVOCI2
Equity investments
Interest
bearing
- variable
$’000
Interest
bearing
- fixed
$’000
Non-interest
bearing
$’000
Total
$’000
34,553
54
407
4,545
30,000
-
407
8
54
-
-
-
-
-
784
784
Total financial assets
4,545
30,407
846
35,798
Financial liabilities at amortised cost
Trade and other payables1
Delphi loan facility
Lease liabilities
Other financial liabilities
Total financial liabilities
-
-
-
-
-
-
2,628
2,420
12,050
-
14,470
-
-
6,300
8,928
2,628
2,420
12,050
6,300
23,398
1 Excludes balances which do not meet the definition of financial instruments.
2 Fair value through other comprehensive income (FVOCI).
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
102
Notes to the financial statements Risk management
20 Financial risk management (continued)
2022
Interest
bearing
- variable
$’000
Interest
bearing
- fixed
$’000
Non-interest
bearing
$’000
Financial assets at amortised cost
Cash and cash equivalents
Trade and other receivables1
Term deposits
Financial assets at FVOCI2
Equity investments
30,851
-
-
-
Total
$’000
30,862
28
407
-
-
407
11
28
-
-
2,720
2,720
Total financial assets
30,851
407
2,759
34,017
Financial liabilities at amortised cost
Trade and other payables1
Lease liabilities
Other financial liabilities
Total financial liabilities
-
-
-
-
-
11,735
11,537
-
11,537
-
9,551
21,286
11,735
11,537
9,551
32,823
1 Excludes balances which do not meet the definition of financial instruments.
Recognition and measurement
Initial measurement
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the
financial instrument, and are measured initially at fair value adjusted by transaction costs, except for those carried at fair value
through profit or loss, which are measured initially at fair value.
Classification and subsequent measurement
Financial assets
Classification and measurement of financial assets are based on the business model in which they are managed and their
contractual cash flow characteristics. On initial recognition, financial assets, other than those designated and effective as
hedging instruments, are classified as measured at amortised cost using the effective interest method, fair value through other
comprehensive income (FVOCI) or, fair value through profit or loss (FVTPL).
Financial assets at amortised cost
A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:
it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
its contractual terms give rise to cash flows on specified dates that are solely payments of principal and interest on the
principal amount outstanding.
For financial assets subsequently measured at amortised cost, any interest income, impairment expenses, foreign exchange
gains and losses are recognised in profit or loss.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
103
Notes to the financial statements Risk management
20 Financial risk management (continued)
Financial assets at FVOCI - equity instruments
On initial recognition of an equity investment that is not held for trading, the Group may irrevocably elect to present subsequent
changes in the investment’s fair value in other comprehensive income (OCI). The election to classify equity investments as
equity instruments designated at FVOCI is made on an investment-by-investment basis.
Equity investments designated at FVOCI are subsequently measured at fair value. Dividends are recognised as income in
profit or loss unless the dividend represents a recovery of part of the cost of the investment. Other net gains and losses are
recognised in OCI and are not reclassified to profit or loss. On disposal of these equity investments, any related balance within
the equity investments reserve is reclassified to retained earnings. Equity investments designated at FVOCI are not subject to
impairment assessment.
Financial assets at FVTPL
Financial assets whose contractual cash flows are not solely payments of principal and interest, or are not classified as
measured at amortised cost or FVOCI, are measured at FVTPL. Derivative financial assets are measured at FVTPL.
For financial assets subsequently measured at FVTPL, net gains and losses, including any interest or dividend income, are
recognised in profit or loss.
Impairment of financial assets
The Group assesses, on a forward-looking basis, the expected credit losses associated with debt instruments measured at
amortised cost and FVOCI. The impairment methodology applied depends on whether there has been a significant increase
in credit risk.
Financial liabilities
Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as measured at
FVTPL if it is classified as held for trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities
at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognised in profit or loss.
Other financial liabilities are subsequently measured at amortised cost using the effective interest method.
Derecognition
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 of ownership are transferred.
Financial liabilities are derecognised when they are extinguished, discharged, cancelled or expire.
Any gain or loss on derecognition is recognised in profit or loss.
Accounting estimates and judgements
Fair value measurement
When the fair values of financial assets and financial liabilities cannot be measured based on quoted prices in active markets,
they are measured using valuation techniques including discounted cash flows (DCF). The inputs to DCF models are taken
from observable markets where possible, but where this is not feasible, management uses the best information available and
a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity
risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial
instruments.
Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in
market prices and arises from the Group’s exposure to movements in commodity prices, interest rates and foreign currency.
At the reporting date, the Group has minimal exposure to foreign currency risk as the Group’s operations are all located within
Australia and material transactions are denominated in Australian dollars, the Group’s functional currency.
The Group manages market risk through the use of derivatives, within the guidelines set by the Audit and Risk Committee.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
104
Notes to the financial statements Risk management
20 Financial risk management (continued)
Interest rate risk
Interest rate risk refers to the risk that the value of a financial instrument or cash flows associated with the instruments will
fluctuate due to changes in market interest rates.
The Group is typically exposed to interest rate risk on its outstanding borrowings and short-term cash deposits, as profiled in
the ‘Financial assets and liabilities’ analysis above. The Group’s main interest rate risk arises from the variable rates from
short-term cash deposits which exposes the Group to cash flow interest rate risk.
Interest rate sensitivity
A change in interest rates of +/- 1% (2022: +/- 1%), representing management’s assessment of the reasonably possible change
in short-term cash deposit interest rates, would have a favourable/adverse effect on profit before tax of $0.05 million (2022:
$0.3 million), assuming that all other factors remain constant.
Commodity price risk
The Group uses derivative commodity contracts to manage its exposure to commodity price fluctuations.
Gold price risk
The Group’s exposure to gold price fluctuations is managed by executing derivative gold contracts such as gold forward sales
commitments, or purchasing gold put options, all denominated in Australian dollars, refer to notes 4 and 22.
Oil price risk
The Group’s diesel fuel costs are exposed to the volatility in crude oil prices. To mitigate the risk of adverse movements in the
diesel fuel price, the Group may execute derivative fuel contracts such as diesel swap transaction contracts.
Liquidity risk
Liquidity risk is the risk that that the Group might be unable to meet its financial obligations as they fall due.
The Group manages liquidity risk by monitoring cash flows and ensuring that adequate levels of working capital are maintained.
Contractual maturities of financial liabilities, including estimated interest payments are as follows:
2023
Trade and other payables1
Delphi loan facility
Lease liabilities
Other financial liabilities
2022
Trade and other payables1
Lease liabilities
Other financial liabilities
Within 1
year
$’000
Between 1
and 2 years
$’000
Between 2
and 5 years
$’000
Later than 5
years
$’000
Total
contractual
cash flows
$’000
Carrying
amount
$’000
2,628
2,832
1,272
-
6,732
11,735
3,816
4,718
20,269
-
-
3,265
300
3,565
-
3,542
1,923
5,465
-
-
8,471
2,000
10,471
-
5,626
4,461
10,087
-
-
1,275
2,000
3,275
-
-
-
-
2,628
2,832
14,283
2000
21,743
11,735
12,984
11,102
35,821
2,628
2,420
12,050
6,300
23,398
11,735
11,537
9,551
32,823
1 Excludes balances which do not meet the definition of financial instruments.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
105
Notes to the financial statements Risk management
20 Financial risk management (continued)
Credit risk
Credit risk is the risk that a counterparty fails to discharge an obligation to the Group. Credit risk arises from cash and cash
equivalents, deposits with banks and financial institutions, as well as credit exposure to customers, including outstanding
receivables and committed transactions.
The Group limits its exposure to credit risk in relation to cash and cash equivalents and other financial assets by only dealing
with banks and financial institutions with acceptable credit ratings.
The carrying amount of financial assets represents the maximum credit exposure.
Fair value measurement
Fair value hierarchy
As prescribed under AASB 13 Fair Value Measurement, financial assets and financial liabilities measured at fair value in the
consolidated statement of financial position are grouped into three levels of a fair value hierarchy, which categorises the inputs
to valuation techniques used to measure fair value.
The valuation inputs are categorised as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly
(prices) or indirectly (derived from prices).
Level 3: Unobservable inputs for the asset or liability - inputs for the asset or liability that are not based on observable market
data.
Therefore Level 3 inputs include the highest level of estimation uncertainty.
The fair value of financial instruments that are not traded in active market (for example, over-the-counter derivatives) is
determined using valuation techniques.
These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on
entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included
in level 2.
For financial instruments that are carried at fair value on a recurring basis, the Group determines whether transfers have
occurred between levels in the hierarchy by reassessing categorisation, based on the lowest level input that is significant to
the fair value measurement as a whole, at the end of each reporting period.
Other than the equity investments referred to in note 12, there were no other financial assets and financial liabilities measured
and recognised at fair value on a recurring basis as at 30 June 2023 or 30 June 2022. The carrying amounts of financial assets
and liabilities recognised in the financial statements approximate their fair values.
21 Capital risk management
The Group's objectives when managing capital are to safeguard the ability to continue as a going concern, so that it can
continue to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to
reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may return capital to shareholders,
pay dividends to shareholders, issue new shares or sell assets.
The Group monitors the adequacy of capital by analysing cash flow forecasts.
The Group manages and adjusts the capital structure when funding is required.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
106
Notes to the financial statements
Unrecognised items
This section of the notes to the financial statements provides information about items not recognised in the financial
statements, as they do not satisfy recognition criteria, but which could affect the Group’s financial position and performance in
future.
22 Commitments
Exploration expenditure
Minimum exploration expenditure commitments due:
Within one year
Between one year and five years
Later than five years
2023
$’000
2022
$’000
1,909
4,188
3,233
9,330
2,328
5,701
3,066
11,095
In order to maintain current rights of tenure to exploration tenements, the Group is required to meet minimum expenditure
commitments required under the lease conditions. These expenditure obligations can be reduced by selective relinquishment
of exploration tenure or application for expenditure exemptions.
Capital expenditure
Group subsidiary GNT Resources Pty Ltd had no commitments for capital expenditures relating to Dalgaranga at the reporting
date that were not recognised as liabilities (2022: $0.1 million all due within one year).
Gold delivery commitments
In July 2022, the Group entered into gold forward contracts with MKS PAMP, to partially insulate the Group from increasing
volatility in commodity markets until the higher-grade Gilbey’s North deposit could be incorporated into the mine plan. A total
of 11,000 ounces of gold were hedged for delivery between July and December 2022 at an average price of A$2,555 per
ounce.
On the announcement of the transition of the Dalgaranga operations to care and maintenance in November 2022, the then
remaining gold forwards were closed out as per the contractual requirements for an immaterial close out cost.
At the reporting date the Group had no contractual sale commitments for gold (30 June 2022: nil ounces).
Recognition and measurement
Gold delivery commitments
The gold forward contracts are settled by the physical delivery of gold as per contract terms. These physical gold forward
contracts are considered a contract to sell a non-financial item and therefore do not fall within the scope of AASB 9 Financial
Instruments. Accordingly, no derivatives are recognised and the gold forward contracts are accounted for as sale contracts
with revenue recognised at the agreed price when the contractual commitment is met through physical delivery of gold.
The market value of the outstanding gold forward contracts varies over time as a result of changes in the market price of gold.
At each reporting date the Group calculates the fair value of outstanding gold forward contracts and discloses the fair value
as either a contingent asset or liability in the notes to the financial statements. The fair value represents the amount which
would be received (asset) or paid (liability) if the outstanding obligations were settled on the valuation date, in the event the
gold forward contracts were not settled by the physical delivery of gold.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
107
Notes to the financial statements Unrecognised items
23 Contingent assets and liabilities
Bank guarantees
The Group has provided bank guarantees in favour of service providers for credit card facilities, leased premises and road
maintenance responsibilities. The total of these guarantees at the reporting date was $0.4 million (2022: $0.4 million). The
bank guarantees are secured by blocked deposits held by the grantor of the guarantee. The deposit accounts are recognised
as other financial assets in the consolidated statement of financial position.
24 Events occurring after the reporting date
On 24 July 2023, the Company released an updated Mineral Resource Estimate (MRE) of 3.83Mt @ 5.85g/t Au for 721,200
ounces of contained gold for the Never Never deposit, with the Group MRE increasing to 38.51Mt @ 1.6g/t Au for 1,964,000
ounces of contained gold.
On 18 August 2023, following shareholder approval for a replacement equity incentive plan, Classes D, E, F, and G
performance rights were cancelled and replaced with new performance rights, as a result of the inability to meet vesting
conditions due to the suspension of operations at Dalgaranga in November 2022.
On 24 August 2023, the Delphi unsecured loan facility was converted to a future gold royalty following shareholder approval
on 18 August 2023, with the unsecured loan considered fully repaid under the terms of the Delphi loan and royalty deed.
On 29 August 2023, following shareholder approval on 18 August 2023, the Company changed its name to Spartan Resources
Limited. The change of name marks the culmination of what has been a transformational period for the Company and signifies
the start of a new era of growth and success.
On 29 August 2023, as part of the Australian Gold Conference Corporate Presentation, the Company noted the decision to
defer development of the planned underground exploration drill drive due to cost escalation in the Western Australian mining
sector and better than anticipated surface drilling campaign performance so far in 2023 which resulted in an MRE with a
classification of 76% Indicated material at the Never Never deposit.
The Directors are not aware of any other matter or circumstance that has arisen since the end of the year which has significantly
affected, or may significantly affect, the operations of the Group, the results of those operations, or the state of affairs of the
Group, in future years.
The rest of this page has been left blank intentionally
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
108
Notes to the financial statements
Other information
This section of the notes to the financial statements provides additional financial information, including information which is
not specifically related to individual financial items, and other disclosures which are required to comply with Australian
Accounting Standards and other regulatory pronouncements.
25 Asset acquisition
On 10 November 2021, Spartan acquired control of Firefly Resources Limited (Firefly), following implementation of the Scheme
of Arrangement (Scheme) relating to the merger of Spartan and Firefly. In accordance with the Scheme, Spartan acquired all
of the shares in Firefly and eligible Firefly shareholders were issued Scheme consideration of 0.34 new Spartan shares for
every Firefly share held.
The purchase consideration of $45.2 million comprised of ordinary shares issued of $42.2 million and acquisition costs of $3.0
million.
During the year final stamp duty of $2.1 million due on the transaction was paid.
Recognition and measurement
The fair value of the 118,895,126 ordinary shares issued to Firefly shareholders as purchase consideration was measured
with reference to the Spartan listed share price of $0.355 on 10 November 2021, the acquisition date.
The transaction was determined to be an asset acquisition, as the acquired assets did not meet the definition of a business
combination in accordance with AASB 3 Business Combinations.
The acquired assets and assumed liabilities were measured at their fair values at the acquisition date, and transaction costs
were included in the capitalised cost of the assets.
No goodwill arose on the asset acquisition and no deferred taxes were recognised on the acquired assets and assumed
liabilities, as the initial recognition exemption available under AASB 112 Income Taxes was applied.
26 Interests in other entities
Interests in subsidiaries
Subsidiary
Country of
incorporation
Ownership interest
2023
%
2022
%
Gascoyne Resources (WA) Pty Ltd
Dalgaranga Operations Pty Ltd
GNT Resources Pty Ltd
Egerton Exploration Pty Ltd
Dalgaranga Exploration Pty Ltd
Gascoyne (Ops Management) Pty Ltd
Firefly Resources Limited
Gascoyne Mumbakine Pty Ltd
Gascoyne Andy Well James Pty Ltd
Aurum Minerals Pty Ltd
Yalgoo Exploration Pty Ltd
Lightning Bug Resources Pty Ltd
Dalgaranga Joint Ventures1
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Unincorporated
1 Principal place of business is Perth, Western Australia.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
100
100
100
100
100
100
100
100
100
100
100
100
80
100
100
100
100
100
100
100
100
100
100
100
100
80
109
Notes to the financial statements Other information
26 Interests in other entities (continued)
Spartan is party to two contractual joint ventures to undertake mineral exploration on tenements that form part of Dalgaranga.
The joint venture entities are classified as subsidiaries of the Group in accordance with AASB 10 Consolidated Financial
Statements.
The Dalgaranga Joint Ventures’ activities include the exploration of the joint venture tenements for minerals and if successful,
to develop and mine minerals within the joint venture tenements. Under the terms of the agreements Spartan is required to
free carry the vendors’ participating interest in the joint ventures by sole funding the joint venture costs until the earlier of the
completion of a bankable feasibility study, a decision to commence mining operations, or an election by the non-controlling
joint venture partner to convert their respective 20% participation interest to a 2% net smelter return royalty. If an election is
made to convert the 20% participation interest to a net smelter royalty, the Group’s ownership interest in the respective joint
ventures’ net assets will increase to 100%.
27 Related party transactions
Key management personnel remuneration
Short-term employee benefits
Long-term employee benefits
Post-employment benefits
Share-based payments
2023
$
2022
$
2,982,626
2,917,947
(10,446)
179,030
(45,125)
169,344
2,636,099
1,236,828
5,787,309
4,278,994
Detailed KMP remuneration disclosures are provided in the ‘Remuneration report’ section of the Directors’ report.
Other transactions with key management personnel
Mr S Lawson is a Director of Firetail Resources Limited (Firetail) and has the capacity to significantly influence decision making
of Firetail. The Company holds a 7.57% share interest in Firetail, on the same basis as other shareholders.
Transactions between the Group and Firetail during the year were based on normal commercial terms and conditions and are
considered to be trivial in nature.
There were no other transactions between the Company and KMP during the year.
28 Share-based payments
Employee share-based remuneration
Benefits in the form of share-based remuneration are provided to employees via the Company’s incentive plans. The total of
share-based payments recognised in profit or loss during the year as part of employee benefits expense was $3,477,929
(2022: $1,568,252).
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
110
Notes to the financial statements Other information
28 Share-based payments (continued)
Employee performance rights
Employee performance rights
Outstanding at 1 July
Granted during the year1
Exercised during the year
Forfeited during the year
Outstanding at 30 June2
Exercisable at 30 June3
2023
2022
No. of rights
No. of rights
22,811,340
400,000
3,100,000
24,581,492
(5,766,881)
-
(475,663)
(2,170,152)
19,668,796
22,811,340
6,568,796
780,670
1
Includes performance rights (rights) granted and issued on 11 July 2022, following reallocation of 1,600,000 forfeited rights to new and
existing employees as permitted by the shareholder-approved ‘SPR Equity Incentive Plan Rules’ (Incentive plan). A grant date weighted
average fair value of $0.228 was assigned to the reallocated rights. The vesting date and the terms and conditions of the reallocated rights
remain the same as for the forfeited rights.
2 Class D, E, F and G rights expire on 30 June 2033 and have been cancelled and replaced with new performance rights, following
shareholder approval on 18 August 2023 for a replacement equity incentive plan.
3 Performance rights held by employees made redundant, following the Company’s decision to place the Dalgaranga operations on care
and maintenance, automatically vested as per the terms and conditions of the Incentive plan.
Employee performance rights plan
Eligible employees were entitled to obtain shares or rights to shares in the Company, under the Company’s SPR Equity
Incentive Plan Rules (Incentive plan) through the grant of performance rights (rights), as part of employee remuneration. Each
right entitles the employee to receive a fully paid ordinary share in the Company, for nil consideration on exercise, after vesting.
Employee rights do not carry any dividend or voting rights. All rights are equity-settled.
In accordance with the terms of the Incentive plan, rights may be exercised at any time from the vesting date to the date of
their expiry. Unvested rights are forfeited within 30 days of cessation of the employee’s employment, subject to Board
discretion.
Details of rights outstanding at the reporting date, including rights granted during the year, under the Incentive Plan are as
follows:
March
2021
August
2021
November
20211
December
20211
July
20221
August
20221
Number granted
Vested and exercisable
Exercised
Vesting conditions
Vesting period end date
Grant date
Expiry date(s)
Weighted average remaining
contractual life
Weighted average fair value
at grant date6
400,000
200,000
200,000
2,131,492
9,750,000
12,700,000
1,600,000
1,500,000
968,796
566,881
3,750,000
1,450,000
-
4,450,000
200,000
550,000
-
-
Service2
Service2
Performance3
Performance4
Performance4
Performance4
1 Jul 2022 /
1 Jan 2023
30 Jun 2022 /
2023
12 Nov 2024
12 Nov 2024
12 Nov 2024
12 Nov 2024
26 Mar 2021
10 Sep 2021
20 Jan 20225
14 Dec 2021
11 Jul 2022
12 Aug 2022
30 Jun 2032 /
31 Dec 2032
30 Jun 2032 /
2033
30 Jun 2033
30 Jun 2033
30 Jun 2033
30 Jun 2033
9.3 years
9.5 years
10.0 years
10.0 years
10.0 years
10.0 years
$0.525
$0.320
$0.2494
$0.273
$0.228
$0.232
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
111
Notes to the financial statements Other information
28 Share-based payments (continued)
1 Class D, E, F and G rights expire on 30 June 2033 and were cancelled on the 8 September 2023 and replaced with new performance
rights, following shareholder approval on 18 August 2023 for a replacement equity incentive plan.
2 The rights contain a service condition, vesting in two equal tranches on each of the vesting dates listed above.
3 The rights are comprised of three tranches. Tranches 1 and 2 contain non-market performance conditions, based on the delivery of
minimum ore mining volumes at minimum grades on non-Gilbey’s deposits. Tranche 3 contains a market condition based on a 60-day
VWAP share price target of $0.600. For further details of the vesting conditions, refer to the ‘LTI award’ section in the ‘Remuneration report’
section of the Directors’ report in the Annual Report for the year ended 30 June 2022.
4 The rights are comprised of three tranches. Tranches 1 and 2 contain non-market performance conditions, based on the delivery of a
minimum ore grade and total gold ounce production target at Dalgaranga over a rolling 12 month period. Tranche 3 contains a market
condition based on a 30-day VWAP share price target of $0.550. Class D, E, F and G rights expire on 30 June 2033 and have been
cancelled and replaced with new performance rights, following shareholder approval on 18 August 2023 for a replacement equity incentive
plan. For further details of the vesting conditions, refer to the ‘LTI award’ section in the ‘Remuneration report’ section of the Directors’ report
in the Annual Report for the year ended 30 June 2022.
5 The service period commenced on 13 November 2021 with an estimated fair value of $0.377 per right. Shareholder approval was obtained
on 20 January 2022 and the fair value was adjusted prospectively to reflect a grant date of 20 January 2022.
6 Refer to the ‘Fair value of rights granted’ section in this note.
Fair value of rights granted
March and August 2021 awards
The fair value assigned to each right at grant date was the underlying share price of the Company’s shares at the grant date,
as the rights contain a service condition only and there is no expectation of dividends being declared during the vesting period.
July and August 2022, November and December 2021 awards
The fair value of rights at grant date was independently determined using a combination of the Black Scholes (Tranches 1 and
2 non-market vesting conditions) and Monte Carlo simulation (Tranche 3 market based vesting condition) models.
The following model inputs were used in the measurement of the fair values at grant date during the year:
Share price at grant date
Exercise price
Expected volatility
Risk-free interest rate
Expected life
VWAP hurdle
Employee share options
Employee share options
Outstanding at 1 July
Expired during the year
Outstanding at 30 June
Exercisable at 30 June
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
July 2022
August 2022
$0.265
$nil
65%
3.169%
2.3 years
$0.55
$0.270
$nil
65%
3.174%
2.3 years
$0.55
2023
2022
No. of
options
Weighted
average
exercise
price
No. of
options
Weighted
average
exercise
price1
-
-
-
-
-
-
-
-
107,000
(107,000)
-
-
$7.40
$7.40
-
-
112
Notes to the financial statements Other information
28 Share-based payments (continued)
Employee share option plan
Eligible employees were entitled to purchase shares in the Company, under the Company’s Employee Share Option Plan
(ESOP). Employee share options do not carry any dividend or voting rights. All options are equity-settled.
In accordance with the terms of the ESOP, options may be exercised at any time from the vesting date to the date of their
expiry. Unvested options expire on the earlier of their expiry date or within 30 days of cessation of the employee’s employment,
subject to Board discretion.
Valuations of options may not necessarily represent the market price of the options at the date of valuation.
Recognition and measurement
Employee share-based payments
The fair value of equity-settled share-based payment awards (awards), measured at grant date, is recognised as an employee
benefits expense with a corresponding increase in equity, over the period that the employees become unconditionally entitled
to the awards (the vesting period), ending on the date on which the relevant employees become fully entitled to the award (the
vesting date). The total amount to be expensed is determined by reference to the fair value of the awards granted, which
includes any market performance conditions and the impact of any non-vesting conditions but excludes the impact of any
service and non-market performance vesting conditions, for example, profitability and revenue growth targets.
At each reporting date, the Company revises its estimate of the number of awards that are expected to become exercisable.
The employee benefits expense recognised each period includes the most recent estimate.
Upon the exercise of awards, the balance of the share-based payments reserve relating to those awards is transferred to
share capital.
Fair value of rights
The fair value of rights at grant date is determined using the most appropriate valuation model, taking into consideration the
terms and conditions upon which the rights were issued, including market and non-vesting conditions.
Fair value of options
The fair value of options at grant date is determined using a Black Scholes option pricing model that considers the exercise
price, term of the option, share price at grant date of the underlying share, expected price volatility of the underlying share,
expected dividend yield and the risk-free interest rate for the term of the option.
Accounting estimates and judgements
Valuation methodology
Management and external specialists use Black Scholes and Monte Carlo simulation pricing models to determine the fair
values of options and rights granted. Both the selection of the valuation methodology and various inputs to models are subject
to judgement.
29 Auditor’s remuneration
2023
$
2022
$
Audit and review of financial statements
212,500
142,550
The auditor of the parent entity Spartan Resources Limited is Grant Thornton Audit Pty Ltd.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
113
Notes to the financial statements Other information
30 Parent entity financial information
Summary financial information
The individual financial statements of Spartan Resources Limited, the parent entity, are summarised below:
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Issued capital
Equity investments reserve
Share-based payments reserve
Accumulated losses
Total equity
Financial performance
Loss for the year
2023
$’000
2022
$’000
34,758
69,943
104,701
3,978
6,387
10,365
94,336
367,188
(764)
3,427
12,598
78,198
90,796
5,140
200
5,340
85,456
324,496
22
3,221
(275,515)
(242,283)
94,336
85,456
(35,136)
(81,379)
Determining the parent entity financial information
The financial information for the parent entity has been prepared on the same basis as the consolidated financial statements,
except for tax consolidation legislation as referred to in note 7.
Contingent liabilities
Refer to note 23 for details of a bank guarantee given by the parent entity for leased premises.
Contractual commitments for the acquisition of property, plant and equipment
The parent entity had no contractual commitments for the acquisition of property, plant and equipment as at the reporting date
(2022: $nil).
31 Summary of other significant accounting policies
The Group’s accounting policies referred to in this financial report are consistent in all material respects with those applied in
the previous year. Significant accounting policies not already disclosed in the notes to the financial statements above are
presented in this note.
Principles of consolidation
Subsidiaries
The Group financial statements consolidate those of the parent company and all of its subsidiaries as at the reporting date. A
subsidiary is an entity that is controlled by the parent. The parent controls an entity if it is exposed, or has rights, to variable
returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
114
Notes to the financial statements Other information
31 Summary of other significant accounting policies (continued)
The consolidated financial statements are prepared using uniform accounting policies for each Group member and all Group
members have a 30 June reporting date.
The Group consolidates the assets, liabilities and results of a subsidiary from the date on which it first controls the entity. On
loss of control of a subsidiary the Group derecognises the assets and liabilities of the former subsidiary, and recognises any
investment it retains in its former subsidiary in accordance with the relevant accounting standard(s).
All transactions and balances between Group companies are eliminated on consolidation, including unrealised gains and
losses on transactions between Group entities. Amounts reported in the financial statements of subsidiaries have been
adjusted where necessary to ensure consistency with the accounting policies adopted by the Group.
A non-controlling interest is recognised in the consolidated statement of financial position within equity where an entity outside
of the Group has an ownership interest in a subsidiary or its net assets.
Joint ventures
A joint arrangement is an arrangement of which two or more parties have joint control. Joint control is the contractually agreed
sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous
consent of the parties sharing control.
A joint venture is a joint arrangement in which the parties have rights to the net assets of the arrangement. Investments in joint
ventures are recognised as an investment and are typically accounted for using the equity method of accounting. The
Dalgaranga Joint Ventures, refer to note 26, are classified as subsidiaries of the Group, based on the Group’s controlling
interest in the joint ventures.
Foreign currency transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of
the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation
at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or
loss.
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 consolidated
statement of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing transactions
which are recoverable from, or payable to the taxation authority, are presented as operating cash flows.
New and revised standards adopted by the Group
The Group has adopted all of the new and revised standards and interpretations issued by the Australian Accounting Standards
Board (AASB) that are relevant to its operations and effective for the current reporting period. The adoption of new and revised
standards and interpretations has had no effect on the amounts reported for prior periods.
There are no new standards and interpretations in issue which are mandatory for 30 June 2023 reporting periods that would
be expected to have a material impact on the Group in the current or future reporting periods and on foreseeable future
transactions.
Amendment to AASB 116 Property, Plant and Equipment - Proceeds before intended use
The Group adopted the amendment to AASB 116 Property, Plant and Equipment from 1 July 2022, which is effective for
financial periods beginning on or after 1 January 2022. This amendment prohibits an entity from deducting any proceeds
received from selling items produced while preparing an asset for its intended use from the cost of an item of property, plant
and equipment.
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
115
Notes to the financial statements Other information
31 Summary of other significant accounting policies (continued)
Following adoption of the amendment while preparing property, plant and equipment for its intended use, the Group recognises
the sales proceeds from selling items produced in the pre-production phase, and the related costs of producing those items,
in profit or loss, instead of recognising the amounts received in capitalised pre-production costs, which is now prohibited. The
Group measures the cost of producing the items applying the measurement requirements of AASB 102 Inventories.
Operating cash flows generated by mining operations in the pre-production phase are now presented in cash flows from
operating activities in the consolidated statement of cash flows.
The impact of adoption of this amendment is not considered to be material to the Group. The Group has amended the relevant
accounting policies to reflect this change in accounting treatment.
New and revised standards not yet adopted by the Group
The Group has not elected to early adopt any issued standards and interpretations which are not mandatory for 30 June 2023
reporting periods. All issued standards and interpretations relevant to the Group will be adopted on their effective date. These
standards are not expected to have a material impact on the Group in the current or future reporting periods and on foreseeable
future transactions.
AASB 2021-2 Amendments to Australian Accounting Standards - Disclosure of Accounting Policies and Definition of
Accounting Estimates (AASB 2021-2) is effective for financial periods beginning on or after 1 January 2023 and was adopted
by the Group on 1 July 2023.
AASB 2021-2 - Disclosure of Accounting Policies
AASB 2021-2 amends AASB 101 Presentation of Financial Statements and AASB Practice statement 2 Making Materiality
Judgements by requiring entities to disclose material accounting policies rather than significant accounting policies and
providing guidance on how entities apply the concept of materiality to accounting policy disclosure. Immaterial accounting
policy information does not need to be disclosed.
AASB 2021-2 - Definition of Accounting Estimates
AASB 2021-2 amends AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors by introducing a new
definition of accounting estimates and clarifying the distinction between changes in accounting estimates (applied
prospectively) and changes in accounting policies (generally applied retrospectively).
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SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
116
ASX additional information
The following information required by the ASX Listing Rules not disclosed elsewhere in this report is set out below and is
current as at 22 September 2023.
Corporate Governance Statement
The Company’s Corporate Governance Statement is set out at:
https://spartanresources.com.au/company-overview/corporate-governance/
Voting rights
Fully paid ordinary shares
On a show of hands, every holder of fully paid ordinary shares present at a meeting in person or by proxy shall have one vote
and upon a poll each share shall have one vote in accordance with the Company’s Constitution.
Performance rights
Performance rights hold no voting rights.
Distribution of shareholdings – ordinary fully paid shares (ASX:SPR)
Size of holding
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
Number of
shareholders
Number of
shares
% of
Issued capital
1,820
1,615
747
1,742
509,978
4,264,897
5,747,069
62,796,325
513
804,301,765
6,437
877,620,034
0.06
0.49
0.65
7.16
91.65
100.00
There were 1,998 holders of less than a marketable parcel of shares.
Distribution of unquoted equity securities – employee performance rights
Size of holding
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
Number of
rights
holders
Number of
rights
% of
Outstanding
rights
-
-
-
1
42
43
-
-
-
35,928
80,742,595
80,778,523
-
-
-
0.04
99.96
100.00
SPARTAN RESOURCES LIMITED | ANNUAL REPORT | 30 JUNE 2023
117
ASX additional information
Distribution of unquoted equity securities – employee performance rights class and number of holders
Security
Class A
Class B
Class C
Class D
Class E
Class F
Class G
Class H
Class I
Class J
Class K
Class L
Holders greater than 20% - Not applicable - Issued under Employee Incentive Scheme
Twenty largest shareholders
Rank
Shareholder
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Tembo Capital Holdings UK Limited
Deutsche Balaton
Citicorp Nominees Pty Limited
NRW Holdings Limited
HSBC Custody Nominees (Australia) Limited
BNP Paribas Nominees Pty Ltd
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