Focus Minerals Limited
ABN 56 005 470 799
Annual Report
For the year ended 31 December 2020
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
Corporate Directory
ABN 56 005 470 799
Directors
Dianfei Pei
Zhaoya Wang
Gerry Fahey
Rodney Johns
Zaiqian Zhang
Lingquan Kong
Chairman - Non-Executive, Non-Independent
Director - Executive
Director - Independent
Director – Independent (appointed 4th September 2020)
Director – Executive (resigned 9th October 2020)
Director – Executive (appointed 14th January 2021)
Company Secretary
Zaiqian Zhang (resigned 9th October 2020)
Nicholas Ong (appointed 19th October 2020)
Registered and Head Office
Level 2
159 Adelaide Terrace
East Perth WA 6004
PO Box 3233
East Perth WA 6892
Tel: +61 (0) 8 9215 7888
Fax: +61 (0) 8 9215 7889
Share Registry
Computershare Investor Services Pty Ltd
Level 11, 172 St Georges Terrace
Perth WA 6000
Auditor
RSM Australia Partners
Level 32 – Exchange Tower
2 The Esplanade
Perth WA 6000
Bankers
National Australia Bank
100 St Georges Terrace
Perth WA 6000
Solicitors
MinterEllison
Level 4, Allendale Square
77 St Georges Terrace, Perth, WA 6000
Bank of China Perth Branch
Ground Floor, 179 St Georges Terrace
Perth WA 6000
Stock Exchange Listing
Australian Securities Exchange (ASX)
ASX Symbol: FML
Industrial and Commercial Bank of China
Level 28, 44 St Georges Terrace
Perth WA 6000
Page | 2
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
Contents
Corporate Directory ................................................................................................................................. 2
Chairman’s Report ................................................................................................................................... 4
Operations Review .................................................................................................................................. 5
Ore Reserves and Mineral Resources Tables .................................................................................... 7
Directors’ Report .................................................................................................................................... 17
Auditors Independence Declaration................................................................................................... 32
Consolidated Financial Statements ................................................................................................... 33
Notes to Consolidated Financial Statements ................................................................................... 37
Directors’ Declaration ........................................................................................................................... 65
Independent Auditor’s Report ............................................................................................................. 66
Shareholder Information....................................................................................................................... 70
Interest in Mining Tenements .............................................................................................................. 72
Page | 3
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
Chairman’s Report
Dear Shareholders,
It gives me great pleasure to present to you the 2020 Annual Report for Focus Minerals Limited. I would like
to reflect on our many achievements over the past year as we continued to advance our goal to become the
next gold producer in Western Australia. Our achievements in 2020 have been significant and value-
enhancing, a credit to the Focus team particularly given the challenges faced by the Company, and the
mining industry in general, because of COVID-19.
During 2020, the Focus team delivered outstanding results from the Pre-Feasibility Study (PFS) for the
Coolgardie Gold Project (Coolgardie), which relied only on resources from the Greenfields, Brilliant and
Bonnie Vale deposits. The PFS declared a total Ore Reserve of 6.64mt @ 1.97g/t for 422koz of gold that
would support a six-year mine life based mostly on open pit operations averaging production of 63koz per
annum. Under the PFS, ore would be processed at the refurbished Three Mill Hill Plant at a projected
average production cost of A$1,282 per ounce. At an assumed gold price of A$2,200/oz, the PFS indicated a
project Net Present Value (NPV7.5%) for Coolgardie of A$183m and an Internal Rate of Return (IRR) of 71%1.
The PFS demonstrated the robustness of Coolgardie. Focus will continue to explore and assess other
deposits within the precinct such as the CNX and Alicia deposits, with an ambition to extend the mineral
resource and therefore the mine life and improve the project economics. The Board will also continue to
explore funding options for Coolgardie.
During 2020, we also materially advanced our Laverton Gold Project (Laverton). We expanded our
tenement footprint as well as completing an extensive exploration drilling program. In total, we completed
5,089m of reverse circulation (RC) and 12,261m of diamond drilling, which resulted in a 21% increase in
Laverton’s total mineral resources. The PFS for a Stage 1 development of Laverton was advanced in 2020
and finalised in early 2021. The Stage 1 PFS scenario included refurbishing the Barnicoat Mill and delivered
a pre-tax NPV5.0% of A$132M based on mining predominantly oxide and transition materials2. The scope of
the Stage 1 PFS only included five Laverton deposits. The focus in 2021 is to continue to convert more
resources into a JORC 2012-compliant mineral resource to significantly enhance the scale, economics and
value of Laverton.
The on-going success at our projects was strengthened during the year by a A$20 million working capital
loan facility provided by our major shareholder, Shandong Gold Group Co. Ltd (SD-Gold). The facility was a
sign of confidence and trust by SD-Gold in the Focus team’s ability to continue to deliver strong results for all
shareholders. The additional working capital allows Focus to advance Coolgardie by carrying out a Definitive
Feasibility Study at the same time as maintaining the pace of progress at Laverton.
On behalf of the Board of Directors of Focus Minerals, I thank all shareholders for your continued support and
patience as we systematically and diligently add value to our two highly prospective gold projects. As we move
forwards in 2021, I am confident the strategies and targets we have in place will drive Focus to achieve new
milestones on the road to our clear goal of bringing our two core projects into gold production.
Yours faithfully,
Dianfei Pei
Chairman of the Board
1 Refer ASX Announcement dated 22 September 2020
2 Refer ASX Announcement dated 11 March 2021
Page | 4
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
Operations Review
Overview
In 2020, Focus Minerals Ltd reported addition of 28.2MT @ 1.35g/t for 1.225Moz to its combined Laverton and
Coolgardie, Measured plus Indicated plus Inferred Mineral Resource Base.
Classification
Laverton and Coolgardie Total Measured
Laverton and Coolgardie Total Indicated
Laverton and Coolgardie Total Inferred
Laverton and Coolgardie Total Mineral Resource
Tonnage (Mt)
2.3
Au Grade (g/t)
2.16
Au Moz
0.16
60.6
33.2
96.1
1.79
2.32
1.98
3.49
2.48
6.13
These additions were delivered by targeted drilling and nine resource updates. In total, 29,558m of drilling
was completed comprising 45% Diamond Drilling and 55% RC drilling. Total drilling and resource related
expenditure was A $7.35M. This equates to resource additions at A $6.00/oz.
Total exploration spend was A $9.841M including: feasibility, tenement management, admin and heritage costs.
The Coolgardie PFS update was also completed in the reporting period delivering
• Undiscounted pre-tax value A $255M (gold price of A $2,200/oz)
• NPV A $183M (7.5% discount rate)
•
Internal rate of return IRR 71%
•
JORC 2012 Total Proved & Probable Ore Reserves at 6.64Mt @ 1.98g/t:
Classification
Proven Reserve
Tonnage (Mt)
1.48
Au Grade (g/t)
1.37
Probable Reserve
Total Ore Reserves
5.16
6.64
2.15
1.97
Au oz
65,500
356,500
422,000
• Low A $24M CAPEX mill refurbishment to 1.4Mtpa (duration 9 months)
• Maximum drawdown A $48M including $28M mill + tails lift CAPEX
• 6 years mostly open pit production for average 63 Koz/year
It is noted that the 2020 Coolgardie PFS update includes:
• 3 deposits from more than 20 significant deposits at Coolgardie.
• The combined Indicated Mineral Resources used for the PFS update comprise 7.51MT @ 2.56g/t
for 619Koz or 24% of the total Coolgardie Measured, Indicated and Inferred Mineral Resource Base
which comprises 34.8Mt @ 2.2g/t for 2.496Moz.
• Conversion rate from considered Indicated and Measured Mineral Resources to combined Proved
and Probable Ore Reserve was 68.2%
During the December quarter 2020 exploration drilling and resource evaluation continued at Coolgardie to
improve value and further de-risk the mining scenario documented by the 2020 Coolgardie PFS update.
The Laverton Stage 1 PFS was also significantly advanced for completion during the March quarter 2021.
Exploration
In 2020 Focus completed 59% of drill meters at the Laverton Project and the remainder at Coolgardie Project.
Focus reported five Mineral Resource updates to support the Laverton PFS. The Resource updates were
compiled for: Karridale, Burtville, Beasley Creek, Beasley Creek South and Wedge.
Page | 5
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
Laverton Gold Project 2020 Mineral Resource additions comprise:
Classification
Total Laverton Indicated Mineral Resource Increase
Total Laverton Inferred Mineral Resource Increase
Total Laverton 2020 Mineral Resource Addition
Tonnage (Mt) Au Grade (g/t) Au Koz
15.73
4.94
20.66
1.4
1.1
1.3
688
168
857
Three resource updates were compiled for: Greenfields, Brilliant and Bonnie Vale to support the Coolgardie
PFS update. In December, Focus completed a major resource re -evaluation of the CNX deposit at Coolgardie.
Coolgardie Gold Project 2020 Mineral Resource additions comprise:
Classification
Total Coolgardie Measured Mineral Resource Increase
Total Coolgardie Indicated Mineral Resource Increase
Total Coolgardie Inferred Mineral Resource Increase
Total Coolgardie 2020 Mineral Resource Addition
Tonnage (Mt) Au Grade (g/t) Au Koz
1.15
1.35
5.02
7.53
1.8
1.3
1.5
1.5
64
56
248
368
The top four reported significant intersections for the year (calculated using 0.5g/t cut off and up to 3m internal
dilution) come from resource drilling at Beasley Creek and Beasley Creek South and comprise:
• 20BSRD012 - 6.00m @ 31.06g/t from 32m (GxM 186)
• 20BSRD010 - 17.00m @ 9.28g/t from 168m (GxM 158)
• 20BSRD005 - 10.05m @ 9.13g/t from 252.25m (GxM 92)
• 20BSDD065 - 29.00m @ 2.5g/t from 214m (GxM 72)
Page | 6
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
Ore Reserves and Mineral Resources Tables
2019 / 2020 JORC 2012 Ore Reserves Comparison Table
2019 Reserves
2020 Reserves
Change
COOLGARDIE GOLD PROJECT
Tonnes Grade Au
Brilliant Project – Open Pit Reserve
Bonnie Vale Project - Underground
Greenfields Open Pit Reserve
Proven
Probable
Total
Proven
Probable
Total
Proven
Probable
Total
Total Proven
Total Coolgardie
Total Probable
Total Ore Reserves
Mt
-
-
0.625
0.625
1.016
1.016
1.641
1.641
g/t
-
-
6.16
6.16
1.45
1.45
3.24
3.24
Ounces
Tonnes Grade
Au g/t
'000t
-
-
-
3.72
3.72
123,700
0.86
123,700
0.86
47,100
1.48
0.58
47,100
2.06
170,800
170,800
1.48
5.16
6.64
-
1.58
1.58
5.26
5.26
1.37
1.24
1.34
1.38
2.15
1.98
Page | 7
Tonnes Grade
Au g/t
'000t
Ounces
-
188,000
188,000
145,500
145,500
65,500
-
3.72
3.72
0.24
0.24
1.48
23,000
-0.44
88,500
65,500
356,500
422,000
1.04
1.48
3.52
5.00
Ounces
-
188,000
188,000
21,800
21,800
65,500
-24,100
41,400
65,500
185,700
251,200
-
1.58
1.58
2.83
2.83
1.37
1.72
1.23
1.38
1.64
1.56
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
Mineral Resources Table
Coolgardie Gold Project
Coolgardie Surface Mineral Resources
Prospect
JORC
Classification
Tonnes
Grade
(g/t)
Ounces
Reporting
Cut-Off
Grade (g/t)
Alicia
JORC 2004
Indicated
JORC 2004
Inferred
JORC 2004
Total
Big Blow
JORC 2004
Indicated
JORC 2004
Inferred
JORC 2004
Total
Bird in Hand
JORC 2004
Indicated
JORC 2004
Inferred
JORC 2004
Total
Cookes
JORC 2004
Indicated
JORC 2004
Inferred
JORC 2004
Total
Cyanide
JORC 2004
Indicated
JORC 2004
Inferred
JORC 2004
Total
Dreadnought
JORC 2004
Indicated
JORC 2004
Inferred
JORC 2004
Total
Empress
JORC 2004
Indicated
JORC 2004
Inferred
JORC 2004
Total
JORC 2004
Inferred
JORC 2004
Inferred
Friendship
Griffiths
Happy Jack
JORC 2004
Indicated
JORC 2004
Inferred
JORC 2004
Total
Lady Charlotte
JORC 2004
Indicated
JORC 2004
Inferred
JORC 2004
Total
Perseverance
JORC 2004
Inferred
Tindals Pit
JORC 2004
Indicated
JORC 2004
Inferred
JORC 2004
Total
Undaunted
JORC 2004
Indicated
JORC 2004
Inferred
JORC 2004
Total
Page | 8
681,000
25,000
706,000
281,000
79,000
360,000
210,000
107,000
317,000
120,000
47,000
167,000
34,000
84,000
118,000
1,900,000
145,000
2,045,000
128,000
12,000
140,000
100,000
104,000
249,000
99,000
348,000
137,000
346,000
483,000
53,000
257,000
288,000
545,000
187,000
126,000
313,000
2.0
1.7
2.0
3.4
3.0
3.3
2.0
2.0
2.0
2.4
3.3
2.6
2.2
1.8
1.9
2.0
1.7
2.0
2.0
2.3
2.0
1.4
2.7
2.0
3.1
2.3
1.6
1.5
1.5
2.4
2.7
2.4
2.5
2.0
1.9
2.0
43,000
2,000
45,000
31,000
8,000
39,000
13,500
6,500
20,000
9,000
5,000
14,000
2,500
5,000
7,500
122,000
8,000
130,000
8,000
1,000
9,000
4,500
9,000
16,000
10,000
26,000
7,000
17,000
24,000
4,000
22,500
22,000
44,500
12,000
8,000
20,000
1.0
1.0
1.0
1.0
1.0
1.0
1.0
1.0
1.0
1.0
1.0
1.0
1.0
1.0
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
Prospect
JORC
Classification
Tonnes
Grade
(g/t)
Ounces
Reporting
Cut-Off
Grade (g/t)
Brilliant
JORC 2012
Indicated
JORC 2012
Inferred
JORC 2012
Total
CNX
JORC 2012
Inferred
Greenfields
JORC 2012
Measured
Hillside
Lindsays
JORC 2012
Indicated
JORC 2012
Total
JORC 2004
Inferred
JORC 2004
Indicated
JORC 2004
Inferred
JORC 2004
Total
King Solomon/
Queen Sheba
JORC 2004
Inferred
Lord Bob
JORC 2004
Inferred
Norris - Grosmont
JORC 2004
Inferred
5,706,000
771,000
6,477,000
2,599,000
1,148,000
1,515,000
2,663,000
437,000
4,350,000
1,490,000
5,840,000
1,400,000
820,000
1,620,000
2.1
2.0
2.1
1.5
1.8
1.5
1.6
4.4
1.7
1.6
1.7
2.0
1.6
2.4
0.5
0.7
0.8
1.0
1.0
1.0
0.8
1.0
392,500
50,000
442,500
123,000
64,500
74,500
139,000
62,000
238,000
77,000
315,000
90,000
42,000
127,000
64,500
991,500
681,000
Measured
Indicated
Inferred
1,148,000
1.75
15,755,000
1.96
10,752,000
1.97
27,655,000
1.95
1,737,000
Total
Total
Total
Total Coolgardie
Surface
Page | 9
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
Coolgardie Underground Mineral Resources
Prospect
JORC
Classification
Tonnes
Grade
(g/t)
Ounces
Reporting
Cut-Off
Grade (g/t)
Bird in Hand
JORC 2004
Indicated
JORC 2004
Inferred
JORC 2004
Total
Countess
JORC 2004
Measured
JORC 2004
Indicated
JORC 2004
Inferred
JORC 2004
Total
Cyanide
JORC 2004
Indicated
JORC 2004
Inferred
JORC 2004
Total
Empress
JORC 2004
Measured
JORC 2004
Indicated
JORC 2004
Inferred
JORC 2004
Total
Griffiths
JORC 2004
Inferred
Perseverance
JORC 2004
Measured
JORC 2004
Indicated
JORC 2004
Inferred
JORC 2004
Total
Tindals
JORC 2004
Measured
JORC 2004
Indicated
JORC 2004
Inferred
JORC 2004
Total
Brilliant
JORC 2012
Indicated
JORC 2012
Inferred
JORC 2012
Total
Quarry Reef
JORC 2012
Indicated
JORC 2012
Inferred
JORC 2012
Total
Measured
Indicated
Inferred
282,000
90,000
372,000
50,000
127,000
0
177,000
516,000
77,000
593,000
13,000
175,000
13,000
201,000
39,000
154,000
438,000
18,000
610,000
51,000
179,000
72,000
302,000
0
3,730,000
3,730,000
658,000
503,000
1,161,000
268,000
2,375,000
4,542,000
3.1
2.8
3.0
3.5
2.9
0.0
3.0
4.7
5.5
4.8
4.1
3.4
7.5
3.7
2.9
5.3
4.5
4.3
4.7
3.4
2.8
3.1
3.0
0.0
2.3
2.3
7.7
3.5
5.9
4.5
5.0
2.3
2.0
2.0
2.0
2.0
2.0
2.0
2.0
1.5
1.5
28,000
8,000
36,000
5,500
12,000
0
17,500
77,000
13,500
90,500
2,000
19,000
3,000
24,000
4,000
26,000
64,000
2,000
92,000
5,500
16,000
7,000
28,500
0
248,500
248,500
162,000
56,000
218,000
39,000
378,000
342,000
Total Coolgardie
Underground
7,185,000
3.3
759,000
Coolgardie Total Surface and Underground Mineral Resources
Classification
Total Measured Resource
Total Indicated Resource
Total Inferred Resource
TOTAL COOLGARDIE
Tonnes
1,416,000
18,130,000
15,294,000
34,840,000
Grade
(g/t)
2.3
2.3
2.1
2.2
Ounces
103,500
1,369,500
1,023,000
2,496,000
Page | 10
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
Mineral Resources Table
Laverton Gold Project
Laverton Surface Mineral Resources
Prospect
Admiral Hill
Barnicoat
Bells
Castaway
Grouse
Sickle
Burtville
Karridale
Craggiemore
Euro
Mary Mac
Mary Mac South
West Laverton
Apollo
Inuendo
Eclipse (Garden Well)
Gladiator North
Rumor
Beasley Creek
Page | 11
JORC
JORC 2004
JORC 2004
JORC 2004
JORC 2004
JORC 2004
JORC 2004
JORC 2004
JORC 2004
JORC 2004
JORC 2004
JORC 2004
JORC 2004
JORC 2004
JORC 2004
JORC 2004
JORC 2004
JORC 2004
JORC 2004
JORC 2004
JORC 2004
JORC 2004
JORC 2004
JORC 2012
JORC 2012
JORC 2012
JORC 2004
JORC 2004
JORC 2004
JORC 2004
JORC 2004
JORC 2004
JORC 2004
JORC 2004
JORC 2004
JORC 2004
JORC 2004
JORC 2004
JORC 2004
JORC 2004
JORC 2004
JORC 2004
JORC 2004
JORC 2004
JORC 2004
JORC 2004
JORC 2004
JORC 2004
JORC 2004
JORC 2004
JORC 2004
JORC 2004
JORC 2004
JORC 2004
JORC 2004
JORC 2004
JORC 2004
JORC 2004
JORC 2004
JORC 2012
JORC 2012
JORC 2012
Classification
Indicated
Inferred
Total
Indicated
Inferred
Total
Indicated
Inferred
Total
Indicated
Inferred
Total
Indicated
Inferred
Total
Measured
Indicated
Inferred
Total
Indicated
Inferred
Total
Indicated
Inferred
Total
Indicated
Inferred
Total
Indicated
Inferred
Total
Indicated
Inferred
Total
Indicated
Inferred
Total
Measured
Indicated
Inferred
Total
Measured
Indicated
Inferred
Total
Indicated
Inferred
Total
Measured
Indicated
Inferred
Total
Indicated
Inferred
Total
Indicated
Inferred
Total
Indicated
Inferred
Total
Tonnes
660,000
1,310,000
1,970,000
340,000
250,000
590,000
594,000
36,000
630,000
247,000
28,000
275,000
447,000
27,000
474,000
390,000
198,000
152,000
740,000
5,095,000
1,554,000
6,649,000
22,149,000
5,584,000
27,733,000
575,000
113,000
688,000
255,000
314,000
569,000
232,000
9,000
241,000
435,000
90,000
525,000
0
1,252,000
116,000
1,368,000
512,000
910,000
560,000
1,982,000
180,000
380,000
560,000
19,000
63,000
152,000
234,000
48,000
123,000
171,000
1,590,000
1,060,000
2,650,000
3,036,000
592,000
3,628,000
Grade
(g/t)
1.4
1.1
1.2
1.3
1.0
1.2
2.0
1.4
2.0
1.6
1.8
1.6
1.7
1.3
1.7
1.7
2.6
3.1
2.2
1.0
0.9
1.0
1.4
1.2
1.3
2.2
2.7
2.3
1.7
1.7
1.7
2.2
1.6
2.2
1.6
1.8
1.6
0.0
2.1
1.8
2.1
2.2
2.0
3.0
2.3
2.9
2.3
2.5
2.7
1.8
1.7
1.8
1.7
1.6
1.6
2.1
2.1
2.1
2.2
1.7
2.1
Contained
Ounces
Reporting
Cut-Off
Grade
(g/t)
30,000
46,000
76,000
14,000
8,000
22,000
38,000
2,000
40,000
13,000
2,000
15,000
24,000
1,000
25,000
21,000
16,000
15,000
52,000
159,000
47,000
206,000
968,500
219,000
1,187,500
40,000
10,000
50,000
14,000
17,000
31,000
16,000
1,000
17,000
22,000
5,000
27,000
0
84,500
6,500
91,000
36,000
59,000
54,000
149,000
17,000
28,000
45,000
2,000
4,000
8,000
14,000
3,000
6,000
9,000
107,000
72,000
179,000
215,500
31,500
247,000
0.8
0.5
0.5
1.0
1.0
1.0
0.6
0.6
1.0
1.0
1.0
1.0
1.0
0.8
1.0
0.8
1.0
1.0
0.6
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
Prospect
JORC
Classification
Tonnes
Grade
(g/t)
Contained
Ounces
Reporting
Cut-Off
Grade
(g/t)
Beasley Creek South
Telegraph
Wedge - Lancefield
North
South Lancefield
JORC 2012
JORC 2012
JORC 2012
JORC 2012
JORC 2012
JORC 2012
JORC 2012
JORC 2012
JORC 2012
JORC 2004
JORC 2004
JORC 2004
Indicated
Inferred
Total
Indicated
Inferred
Total
Indicated
Inferred
Total
Indicated
Inferred
Total
Measured
Indicated
Inferred
751,000
263,000
1,014,000
638,000
534,000
1,172,000
2,660,000
750,000
3,410,000
72,000
3,000
75,000
921,000
42,427,000
14,000,000
3.6
3.5
3.5
2.1
1.4
1.8
1.7
1.1
1.5
4.0
5.0
4.0
2.0
1.6
1.5
0.8
0.8
0.8
1.0
86,000
29,500
115,500
43,500
24,500
68,000
141,000
27,000
168,000
9,000
1,000
10,000
59,000
2,124,000
661,000
Total Laverton
Surface
57,348,000
1.5
2,844,000
Laverton Underground
Prospect
JORC
Classification
Tonnes
Grade
(g/t)
Contained
Ounces
Lancefield
Subtotal
Subtotal
Subtotal
Total Laverton
Underground
JORC 2012
Indicated
JORC 2012
Inferred
JORC 2012
Total
Measured
Indicated
Inferred
0
3,944,000
3,944,000
0
0
3,944,000
0.0
6.3
6.3
0.0
0.0
6.3
0
793,000
793,000
0
0
793,000
3,944,000
6.3
793,000
Reporting
Cut-Off
Grade
(g/t)
4.0
Classification
Total Measured Resource
Total Indicated Resource
Total Inferred Resource
TOTAL LAVERTON
TOTAL Laverton
Tonnes
921,000
42,427,000
17,944,000
61,292,000
Grade
(g/t)
2.0
1.6
2.5
1.8
Ounces
59,000
2,124,000
1,454,000
3,637,000
Page | 12
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
Mineral Resources Table – Comparison to Previous Year
Coolgardie Gold Project
Category Tonnes MT
Category Tonnes MT
2019
Grade
g/t
-
1.70
2.00
Cut
Off
1.0 g/t
Ounces
-
72,500
4,500
-
1,328,000
66,000
1,394,000
1.72
77,000
1.0 g/t
-
794,000
90,000
884,000
-
4,523,000
576,000
-
1.63
1.40
1.58
-
2.30
2.40
-
41,000
4,000
1.0 g/t
45,000
1.0 g/t
-
330,000
1.0 g/t
44,500
5,099,000
2.28
374,500
1.0 g/t
-
155,000
633,000
-
3.70
4.10
-
18,500
3.0 g/t
82,500
788,000
3.99
101,000
3.0 g/t
-
519,000
420,000
-
9.10
3.90
-
152,500
2.0 g/t
52,500
939,000
6.79
205,000
2.0 g/t
JORC
2012
JORC
2012
JORC
2012
JORC
2012
JORC
2012
JORC
2012
JORC
2012
JORC
2012
JORC
2012
JORC
2012
2020
Grade
g/t
1.8
1.5
-
Change
Ounces
64,500
74,500
-
Cut
Off
0.8 g/t
Tonnes MT
1148000
187000
-66,000
Grade
g/t
1.75
0.33
-2.00
Ounces
64500
2000
-4,500
Cut
Off
-0.2 g/t
1,148,000
1,515,000
-
2,663,000
1.62
139,000
0.8 g/t
1,269,000
1.52
62,000
-0.2 g/t
-
-
2,599,000
-
-
1.5
-
-
123,000
0.7 g/t
-
-794,000
2509000
-
-1.63
1.48
-
-41,000
119000
-0.3 g/t
2,599,000
1.47
123,000
0.7 g/t
1,715,000
1.41
78,000
-0.3 g/t
-
5,706,000
771,000
-
2.1
2.0
-
-
392,500
0.5 g/t
1183000
50,000
195000
-
1.64
0.88
-
62500
-0.5 g/t
5500
6,477,000
2.12
442,500
0.5 g/t
1,378,000
1.53
68,000
-0.5 g/t
-
0
3,730,000
-
0.0
2.3
-
0
-
1.5 g/t
-155000
248,500
3097000
-
3.71
1.67
-
-18500
-0.5 g/t
166000
3,730,000
2.07
248,500
1.5 g/t
2,942,000
1.56
147,500
-0.5 g/t
-
658,000
503,000
-
7.7
3.5
-
-
162,000
1.5 g/t
139000
56,000
83000
-
2.13
1.31
-
9500
3500
-0.5 g/t
1,161,000
5.84
218,000
1.5 g/t
222,000
1.82
13,000
-0.5 g/t
9,104,000
2.74
802,500
16,630,000
2.19
1,171,000
7,526,000
1.52
368,500
JORC
2004
JORC
2004
JORC
2004
JORC
2004
JORC
2004
JORC
2004
JORC
2004
JORC
2004
JORC
2012
JORC
2012
Measured
Indicated
Inferred
Measured
Indicated
Inferred
Greenfields
Total
Greenfields
CNX
Total CNX
Measured
Brilliant
Indicated
Inferred
Total Brilliant
Measured
Brilliant UG
Indicated
Inferred
Measured
Indicated
Inferred
Total Brilliant
UG
Bonnie Vale
Quarry Reef
UG
Total Bonnie
Vale Quarry
Reef UG
Total
Coolgardie
Resources
Updated
Page | 13
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
Laverton Gold Project
Category Tonnes MT
Category Tonnes MT
2019
Grade
g/t
-
1.40
1.80
Ounces
-
54,000
41,500
Cut
Off
0.8 g/t
-
1,207,000
708,000
1,915,000
1.55
95,500
0.8 g/t
-
14,406,000
2,326,000
-
1.39
1.32
-
644,000
98,500
0.6 g/t
16,732,000
1.38
742,500
0.6 g/t
-
2,016,000
645,000
-
2.41
1.71
-
156,500
35,500
0.8 g/t
2,661,000
2.24
192,000
0.8 g/t
-
335,000
127,000
-
2.50
2.40
-
27,000
10,000
0.8 g/t
462,000
2.49
37,000
0.8 g/t
-
-
-
-
-
-
-
-
-
-
-
-
NA
2020
Grade
g/t
-
1.0
0.9
Difference
Ounces
-
159,000
47,000
Cut
Off
0.6 g/t
Tonnes MT
-
3888000
846000
Grade
g/t
-
0.84
0.20
Ounces
-
105000
5500
Cut
Off
-0.2 g/t
-
5,095,000
1,554,000
6,649,000
0.96
206,000
0.6 g/t
4,734,000
0.73
110,500
-0.2 g/t
-
22,149,000
5,584,000
-
1.4
1.2
-
968,500
219,000
0.6 g/t
-
7743000
3258000
-
1.30
1.15
-
324500
120500
0.0 g/t
27,733,000
1.33
1,187,500
0.6 g/t
11,001,000
1.26
445,000
0.0 g/t
-
3,036,000
592,000
-
2.2
1.7
-
215,500
31,500
-
0.6 g/t
1020000
-53000
-
1.80
2.35
-
59000
-4000
-0.2 g/t
3,628,000
2.12
247,000
0.6 g/t
967,000
1.77
55,000
-0.2 g/t
-
751,000
263,000
-
3.6
3.5
-
86,000
29,500
0.8 g/t
-
416000
136000
-
4.41
4.46
-
59000
19500
0.0 g/t
1,014,000
3.54
115,500
0.8 g/t
552,000
4.42
78,500
0.0 g/t
-
2,660,000
750,000
-
1.7
1.1
-
141,000
27,000
0.8 g/t
-
2660000
750000
-
1.65
1.12
-
141000
27000
0.8 g/t
JORC
2012
JORC
2012
JORC
2012
JORC
2012
JORC
2012
JORC
2012
JORC
2012
JORC
2012
JORC
2012
NA
JORC
2012
3,410,000
1.53
168,000
0.8 g/t
3,410,000
1.53
168,000
0.8 g/t
21,770,000
1.52
1,067,000
42,434,000
1.41
1,924,000
20,664,000
1.29
857,000
Measured
Indicated
Inferred
Measured
Indicated
Inferred
Measured
Indicated
Inferred
Measured
Indicated
Inferred
Burtville
Burtville Tolal
Karridale
Total Karridale
Beasley Creek
Total Beasley
Creek
Beasley Creek
South
Total Beasley
Creek South
Wedge -
Lancefield
North
Measured
Indicated
Inferred
JORC
2004
JORC
2004
JORC
2012
JORC
2012
JORC
2012
JORC
2012
JORC
2012
JORC
2012
NA
Total Wedge -
Lancefield
North
Total Laverton
Resources
Updated
Page | 14
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
Competent Persons’ Statement
The Coolgardie Gold Project Ore Reserve estimates were undertaken by Dr David Trembath, an employee of Mining One Consultants. Dr Trembath is a member of The Australasian
Institute of Mining and Metallurgy with a chartered professional status in mining. Dr Trembath has sufficient experience that is relevant to the style of mineralisation and type of deposit under
consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves. Dr Trembath consents to the inclusion in this Annual Report of the matters based on the information complied by himself in the form and context in which it
appears.
The information in this announcement that relates to Exploration Results is based on information compiled by Mr Alex Aaltonen, who is a Member of the Australasian Institute of Mining and
Metallurgy (AusIMM). Mr Aaltonen is an employee of Focus Minerals Limited. Mr Aaltonen has sufficient experience that is relevant to the style of mineralisation and type of deposit under
consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves.
The Mineral Resource estimates for Brilliant, Bonnie Vale Quarry Reef, Greenfields, CNX, Beasley Creek South, Wedge – Lancefield North, and Karridale were undertaken by Ms Hannah
Kosovich, an employee of Focus Minerals. Ms Hannah Kosovich is a member of Australian Institute of Geoscientists and has sufficient experience to qualify as a Competent Person as
defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.
Mr Aaltonen and Ms Hannah Kosovich consent to the inclusion in the report of the matters based on the information in the form and context in which it appears.
The Burtville and Beasley Creek Mineral Resource estimates were undertaken by Mr Michael Job, who is a Fellow of the Australasian Institute of Mining and Metallurgy (FAusIMM). Mr Job
is an independent consultant employed by Cube Consulting. Mr Job has sufficient experience that is relevant to the style of mineralization and type of deposit under consideration and to
the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and
Ore Reserves.
Mr Job consents to the inclusion in the report of the matters based on the information in the form and context in which it appears.
The information in this Annual Report that relates to Minerals Resources is based on, and fairly represents, information compiled by Hannah Kosovich who is a member of the Australian
Institute of Geoscientists. Ms Kosovich is employed by Focus Minerals Limited and has sufficient experience that is relevant to the style of mineralisation and type of deposit under
consideration and to the activity which she is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves. Ms Kosovich consents to the inclusion in this report of the matters based on the information complied by herself in the form and context in which it
appears.
Focus Minerals confirms that to the best of its knowledge, Focus is not aware of any new information or data that materially affects the information included in the relevant market
announcements and, in the case of estimates of mineral resources or ore reserves, that all material assumptions and technical parameters underpinning the estimates in the relevant market
announcements continue to apply and have not materially changed.
Page | 15
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
Summary of Governance Arrangements and Internal Controls
Focus Minerals ensures that the Mineral Resources and Ore Reserve estimates are subject to governance arrangements and internal controls up to a corporate level within the company.
Internal and external reviews of the Mineral Resource estimation procedures and results are carried out. An external consultancy firm has been used to generate the ore reserves and was
subject to internal reviews within Mining One Consultants.
The General Manager – Exploration, is responsible for monitoring the planning, prioritisation and progress of exploratory and resource definition drilling programs across the company and
the estimation and reporting of resources. These definition activities are conducted within a framework of quality assurance and quality control protocols covering aspects including drill hole
location, sample collection, sample preparation and analysis as well as sample and data security.
Focus Minerals reports its Mineral Resources and Ore Reserves on an annual basis, in accordance with the Australasian Code for Reporting of Exploration Results, Minerals Resources
and Ore Reserves (the JORC code) 2004 and 2012 Edition. Mineral Resources are quoted inclusive of Ore Reserves. Competent Persons named by Focus Minerals are members of the
Australasian Institute of Mining and Metallurgy and/or the Australian Institute of Geoscientists and qualify as Competent Persons as defined in the JORC Code.
Page | 16
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
Directors’ Report
The Directors present their report on the Group comprising of Focus Minerals Limited – the parent company (referred to
as “the Company”) – and its subsidiaries (together referred to as “the Group” or “Focus” or “consolidated entity”) at the end
of, or during the year ended 31 December 2020.
Directors
The directors of the Company at any time during or since the end of the year and up to the date of this report, unless
otherwise indicated, are:
Name
Designation & Independence Status
Dianfei Pei
Chairman – Non-Executive, Non-Independent
Gerry Fahey
Director – Independent
Zhaoya Wang
Director – Executive
Rodney Johns***
Director – Independent
Lingquan Kong*
Director - Executive
Zaiqian Zhang**
Director – Executive
*Mr Kong was appointed as a Director on 14th January 2021.
**Mr Zhang resigned as a Director on 9th October 2020.
***Mr Johns appointed as a Director on 4 September 2020.
Details of the Directors’ qualifications, experience, special responsibilities, and details of directorships of other listed
companies can be found on pages 18 to 19 and in the remuneration report on pages 25 to 30.
Page | 17
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
Information on Directors, Officers and Senior Management
Directors
Designation &
Independence
Status
Dianfei Pei
Chairman
Appointed on
12 January 2016
Non-Executive
Non-Independent
Experience, Expertise & Qualifications
Mr Pei is a mining engineer with over 30 years of relevant experience.
He has been in several senior positions within Shandong Gold Group,
such as Resident Manager of Ling Long Mine and Chief Health and
Safety Inspector of the Group. Currently, he is the Deputy General
Manager of Shandong Gold Group.
Mr Pei has a Master’s degree in Mining Engineering at University of
Science and Technology Beijing.
Directorships of other ASX listed companies: None
Zhaoya Wang
Director
Appointed as Director
on 17 November 2017
Non-Executive
Non-Independent
Mr Wang is a mining engineer who began his career at Shandong
Gold in 1994. He has served various management positions in three
of Shandong Gold’s mine sites.
Executive since
19 July 2018
He has a Master’s degree in Project Management at Science and
Technology University of Shandong and a bachelor degree in
Mining at Inner Mongolia University of Science and Technology in
China.
Directorships of other ASX listed companies: None
Zaiqian Zhang
Director
Qualifications: CA, AGIS, ACIS, MSc, BSc (Hons)
Appointed as Director
on 24 November 2017
Executive
CFO
Appointed as Company
Secretary on 16 March
2018
Resigned 9th October
2020
Mr Zhang joined Focus Minerals Ltd in September 2013 as a Senior
Accountant. On 24 November 2017, he was promoted to Director and
Chief Financial Officer. He is a Chartered Accountant (Chartered
Accountants Australia and New Zealand) and a Chartered Secretary
(Governance Institute of Australia). He has a master’s degree in
Accounting and Finance and an Honours degree in Accounting for
Management from Aston University in Birmingham, UK.
Directorships of other ASX listed companies: None
Page | 18
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
Directors
Designation &
Independence
Status
Experience, Expertise & Qualifications
Gerry Fahey
Director
Qualifications: BSc (Hons) Geology, FAusIMM, MAIG, MAICD
Appointed on
18 April 2011
Independent
resource, mine development and
Mr Fahey is a geologist with over 40 years’ experience. He was chief
geologist for Delta Gold between 1992-2002 where he gained
extensive
feasibility study
experience on projects including Kanowna Belle and Sunrise in
Australia and Ngezi Platinum in Zimbabwe. Mr Fahey began his
career as a mine geologist in the Irish base-metals industry on
projects such as Tynagh, Avoca, and Tara Mines (Navan). On
migrating to Australia in 1988, he gained further operational
experience in Western Australia and the Northern Territory (Whim
Creek and Dominion Mining), prior to joining Delta Gold. He formed
FinOre Mining Consultants in 2005, which merged with CSA Global
in 2006 and is currently Principal Mining Geologist with CSA Global
specialising in mining geology, mine development and training.
Mr Fahey is a former member of the Joint Ore Reserve Committee
(JORC) and a former Board Member (Federal Councillor) of the
Australian Institute of Geoscientists (AIG).
Directorships of other ASX listed companies:
• Prospect Resources Limited
appointed July 2013, ongoing)
(Non-Executive Director:
Rod Johns
Director
Qualifications: BAppSc (Extractive Metallurgy)
Appointed on 4th
September 2020
Independent
Mr Johns has extensive experience in the WA gold sector, having
held senior positions at Delta Gold, Placer Dome, La Mancha
Resources and Echo Resources that included oversight and delivery
of growth strategies, new processing plants and mine optimisations.
In addition to his current role as a consultant to the WA mining sector,
Mr Johns was previously a Non-Executive Director of Beacon
Minerals Limited (ASX: BCN).
Lingquan Kong
Director
Qualifications: MEng (Mining Engineering)
Appointed on 14th
January 2021
Executive
Mr Kong joined Focus in September 2019 as the company’s Principal
Mining Engineer. Prior to joining Focus, Mr Kong spent five years as
a Director and General Manager at Vatukoula Gold Mines in Fiji,
focusing on long term mine planning, production management, cost
assessment and stakeholder relations. During his time at Focus
Minerals, he has been pivotal in managing the pre-feasibility studies
for Coolgardie and Laverton,
including mine planning and
engineering.
Directorships of other ASX listed companies:
• Cardinal Resources Limited (appointed 1st February 2021).
Cardinal Resources Limited was delisted from ASX on 8th
February 2021
Note: For director’s special responsibilities during the year ended 31 December 2020, please refer to the Remuneration
Report
Page | 19
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
Senior Management
Zhaoya Wang - Chief Executive Officer
Please refer to the directors’ section for information about Mr Wang.
Zaiqian Zhang - Chief Financial Officer, Company Secretary (Resigned 9th October 2020)
Please refer to the directors’ section for information about Mr Zhang.
Alex Aaltonen – General Manager Exploration
Qualifications: B.Sc Geology (Hons), MAUSIMM
Appointed: 19 February 2018
Mr Alex Aaltonen has more than 20 years of mining, resource development and exploration experience. He has worked in
geology management and leadership roles in Australia, Eastern Europe, Middle East, Asia and South America.
Mr Aaltonen has developed in depth experience in a broad range of deposit styles including gold, gold-copper-polymetallic,
IOCGU, uranium, vanadium-polymetallic, tin-tungsten and graphite. Mr Aaltonen has extensive experience in managing
and rejuvenating existing projects and or building teams and facilities for new projects.
Fengfan Sun – Chief Financial Officer
Qualifications: MBus (Financial Accounting) , CPA
Appointed: 1st December 2020
Mr Fengfan Sun has many years of invaluable experience in leading and developing successful finance teams in listed
and unlisted gold companies. He was employed by Focus as a senior accountant from June 2013 to February 2018 and
was appointed as Focus Limited’s Chief Financial Officer in December 2020. Fengfan is responsible for managing the
financial aspects of Focus’ strategy which includes financial planning and reporting, capital management, tax, treasury
and investor relations.
Interests in the Shares and Options of the Company and Related Bodies Corporate
At the date of this report, the direct and indirect interests of directors in the shares and options of the Company were:
Ordinary Shares
Options (Unlisted)
Gerry Fahey
Dianfei Pei*
Zhaoya Wang
Zaiqian Zhang
Rod Johns
Lingquan Kong (appointed 14th January 2021)
12,820
90,519,954
-
-
-
-
-
-
-
-
-
-
*Mr Pei holds shares in Focus Limited on behalf of Shandong Gold Mining International Limited for voting rights. In addition,
he holds an indirect interest in the Company through Shandong Gold International Mining Corporation Limited. Mr Pei is
an executive of Shandong Gold International Mining Corporation Limited.
Page | 20
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
Directors’ Meetings
The number of meetings of directors (including meetings of committees of directors) held during the year and the number
of meetings attended by each director was as follows:
Board
Audit and Risk
Committee
A
4
4
4
3
1
B
4
4
4
3
1
A
2
2
-
-
-
B
2
2
-
-
-
Remuneration
and Nominations
Committee
B
A
Technical
Committee
A
B
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Directors
Dianfei Pei
Gerry Fahey
Zhaoya Wang
Zaiqian Zhang
Rodney Johns
A – Number of meetings attended.
B – Number of meetings held during the time the director held office or was a member of the relevant committee during the year.
Capital Structure
Ordinary shares
As at the date of this report, the Company had on issue 182,748,565 fully paid ordinary shares.
Share Options
Options Issued
There were no options issued during the year ended 31 December 2020.
Options Exercised
There were no options exercised during the year ended 31 December 2020.
As at the date of this report, there are no unissued ordinary shares under options.
Principal Activities
The principal activity of the Company during the year was gold exploration in Western Australia.
Page | 21
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
Review of Operations
Overview
In 2020, Focus continued its positive momentum towards resuming gold production. During the year, the Company invested
$9.8 million (2019: $14.5 million) in its exploration programmes at the Coolgardie Gold Project (Coolgardie) and Laverton
Gold Project (Laverton) and delivered pleasing results at both projects.
Exploration
The Company’s exploration team completed another highly efficient year of mineral resource development and
exploration, with 79% of drill holes intersecting more than 0.5 g/t gold. Of 174 holes that intersected mineralisation
exceeding 0.5g/t Au, the average grade x width (GxM) at significant intersections (calculated using a 0.5g/t cut-off and up
to 3m internal dilution) was 7.9 GxM. Furthermore, many holes intersected multiple intersections delivering average
cumulative intersections of 24 GxM.
Resource Development Drilling
Resource development drilling during the year was conducted at:
Laverton: five reverse circulation (RC) holes and 15 RC pre-collars for 1,572m and 66 diamond (DD) holes plus 15 DD
tails for 4,077m.
Prospect
RC metres
DD metres
Beasley Creek
Beasley Creek South
Karridale
396m
1176m
-
Coolgardie: 91 RC holes for 8,854m and seven DD holes for 1066.5m.
RC metres
DD metres
3300m
1872m
2,412m
470m
288m
512m
Prospect
Alicia
Big Blow Little Blow
Brilliant
Brilliant North
Undaunted
CNX
Exploration Drilling
Exploration was completed at:
2,828m
711m
538m
291m
-
576m
-
-
199m
Laverton: 17 RC holes for 2,941m and three DD holes for 1,295m.
Prospect
RC metres
DD metres
Burtville North
Lake Carey
2,941m
-
-
1,295m
Coolgardie: 11 RC holes for 1,099m.
Prospect
RC metres
DD metres
Page | 22
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
Bayleys
Ada
Emu Hill
Jackpot
162m
193m
210m
534m
-
-
-
-
Mineral Resource Updates
Nine Mineral Resource updates were completed during 2020.
At Laverton, five Mineral Resource updates were completed for the following deposits:
• Beasley Creek;
• Beasley Creek South;
• Karridale;
• Burtville; and
• Wedge-Lancefield North.
The Laverton Mineral Resource updates cumulatively increased the total Indicated and Inferred Mineral Resource by
20.7MT @ 1.29 g/t Au for 857Koz to 42.4Mt @ 1.41g/t Au for 1.9Moz.
At Coolgardie, four Mineral Resource updates were completed for the following deposits:
• Brilliant;
• Greenfields;
• Bonnie Vale Quarry Lode; and
• CNX.
The Coolgardie Mineral Resource updates cumulatively increased total Measured, Indicated and Inferred Mineral
Resources by 7.53MT @ 1.52 g/t Au for 368Koz to 34.8Mt @ 2.2 g/t Au for 2.5Moz.
Funding
During the year, Focus obtained a $20 million loan facility with its major shareholder, Shandong Gold Group Co. Ltd. The
unsecured loan has a term of 3 years with an interest rate of 3.5% per annum. The cash injection will allow Focus to
further advance feasibility work at both Coolgardie and Laverton.
Settlement of Forfeiture Applications
During the year, the Company reached a settlement on 102 applications for forfeiture resulting in cash settlement payments
of A$580k as well as a write off related capitalised Exploration costs on the 13 transferred tenements totalling $2.3 million.
As a result, all the forfeiture applications against the Company have been dismissed.
Operating Result
The full-year loss after income tax for 2020 was $7.9 million (2019: loss of $2.1 million). The increase is largely due to write
off of tenements subject to forfeiture and related settlement payments. In addition, the 2019 result was inclusive of a $3.0
million sale proceeds on a portion of a tenement to FMR Investments Pty Ltd.
As at 31 December 2020, the Company has a cash balance (consisting of cash and cash equivalent and short-term
deposits) of $19.9 million (2019: $13.9 million).
Dividends
No dividends have been paid or provided in the year (2019: nil).
Significant Changes in the State of Affairs
Other than explained in the Review of Operations section above, there have been no significant changes in the state of
affairs of the Group to balance date.
Page | 23
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
Significant Events after Balance Date
On 14 January 2021, Lingquan Kong was appointed as Director of the Company. Mr Kong is the Company’s Principal
Mining Engineer.
The impact of the Coronavirus (COVID-19) pandemic is ongoing and while it has limited impact on the Group up to 31
December 2020, it is not practicable to estimate the potential impact, positive or negative, after the reporting date. The
situation is rapidly developing and is dependent on measures imposed by the Australian Government and other countries,
such as maintaining social distancing requirements, quarantine, travel restrictions and any economic stimulus that may be
provided.
Other than the above, there has not been any other matter or circumstance that has arisen after balance date that 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 periods.
Likely Developments and Expected Results
The Group has now entered an exploration only phase and it is not possible to predict likely developments and expected
results as these will be dependent upon exploration success and conversion of existing resources.
Environmental Regulations
The Group’s operations hold licences issued by the relevant regulatory authorities. These licences specify the limits and
regulate the management associated with the operations of the Group. At the date of this report the Group is not aware of
any breach of those environmental regulations which apply to the Group’s operations. The Group continues to comply with
its specified regulations.
Indemnification and Insurance of Directors and Officers
The company has indemnified the directors and executives of the company for costs incurred, in their capacity as a director
or executive, for which they may be held personally liable, except where there is a lack of good faith.
During the financial year, the company paid a premium in respect of a contract to insure the directors and executives of
the company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits
disclosure of the nature of the liability and the amount of the premium.
Indemnity and insurance of auditor
The company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the
company or any related entity against a liability incurred by the auditor.
During the financial year, the company has not paid a premium in respect of a contract to insure the auditor of the company
or any related entity.
Page | 24
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
Remuneration Report (Audited)
This report, prepared in accordance with the Corporations Act 2001, contains detailed information regarding the
remuneration arrangements for the Directors and Senior Executives who are the ‘key management personnel’ (KMP) of
the Company and the Group. The Board formed the view that the three most senior people in the organisation, being the
Chief Executive Officer (CEO), Chief Financial Officer, General Manager – Exploration are, in addition to the directors, the
only executives who satisfy the “key management personnel” criteria during the period. The tables disclosing remuneration
for this period and comparatives only include these KMPs.
The KMP for the year ended 31 December 2020 are listed in the table below:
Director
Dianfei Pei
Gerry Fahey
Zhaoya Wang
Zaiqian Zhang
Rod Johns
Capacity
Change during the Year
Non-Executive, Non-Independent
Independent
Director, Executive
Director, Executive
Independent
None
None
None
Resigned on 9th October 2020
Appointed on 4th September 2020
Current Executive
Capacity
Alex Aaltonen
Fengfan Sun
General Manager – Exploration
Chief Financial Officer
Change during the Year
None
Appointed 1st December 2020
Remuneration Objectives
It is the Company’s objective to provide maximum stakeholder benefit from the retention of a high-quality Board and
executive team by remunerating directors and key executives fairly and appropriately with reference to relevant
employment market conditions.
The expected outcomes of the remuneration structure are:
• Retaining and motivating key executives; and
• Attracting high quality management to the Company.
Remuneration and Nominations Committee Established
The Board is responsible for determining and reviewing compensation arrangements for the directors themselves and the
executive team. The Board has established a Remuneration and Nominations Committee, comprising all the non-executive
directors.
Members of the Remuneration and Nominations Committee during the year were:
• Gerry Fahey - Committee Chairman and,
• Dianfei Pei.
The Remuneration and Nominations Committee did not meet during the year.
Compensation of Key Management Personnel
Remuneration Structure
In accordance with best practice of the Corporate Governance Principles and Recommendations 3rd Edition, the
remuneration structures for non-executive directors and executive directors are separate and distinct.
Remuneration and Nominations Committee
The Remuneration and Nominations Committee assesses the appropriateness of the nature and amount of remuneration
of directors and senior executives on a periodic basis by reference to relevant employment market conditions with an
overall objective of ensuring maximum stakeholder benefit from the retention of a high quality Board and executive team,
subject to the following section relating to non-executive directors. The committee did not meet this year.
Page | 25
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
Non-Executive Director Remuneration
The Board seeks to set aggregate remuneration at a level that provides the Company with the ability to attract and retain
directors of the highest calibre, whilst incurring a cost that is acceptable to shareholders.
The amount of aggregate remuneration sought to be approved by shareholders and the manner in which it is apportioned
amongst directors is reviewed annually. The Board considers advice from external shareholders as well as the fees paid
to non-executive directors of comparable companies when undertaking the annual review process.
Each non-executive director receives a fee for being a director of the Company.
The Company introduced a retirement allowance in 2011 for the long-term service of Directors, tied solely to their current
Directors Fee at the time of retirement (Fixed Component). The application of the allowance was backdated to the time the
directors commenced in their role.
The allowance is as follows:
•
•
•
3 - 5 Years’ Service – 25% of annual fees on retirement
5 - 8 Years’ Service – 50% of annual fees on retirement
8+ Years’ Service – 100% of annual fees on retirement
During the year, no one was paid under this benefit. (2019: Nil).
The committees of the Board, as of the date of this report their Chair and members are presently as follows:
Board Member
Position
Audit & Risk
Technical
Remuneration and
Nominations
Dianfei Pei
Gerry Fahey
Chair
Non-Executive
Non-Independent
Director
Independent
Zhaoya Wang
Zaiqian Zhang
(resigned 9th October
2020)
Director
Executive
Director
Executive
Rod Johns (appointed
4th September 2020)
Director
Independent
Lingquan Kong
(appointed 14th
January 2021)
Director
Executive
C=Chairman, M=Member
The following fees have applied:
M
C
-
-
-
-
M
C
-
-
-
-
M
C
-
-
-
-
• Chairman of the Board
• Other non-executive directors
$80,000 per annum
$50,000 per annum
The compensation provided to the Directors in these circumstances is fixed, which reflects the time commitment and
responsibilities of their roles.
At present, the maximum aggregate remuneration of directors’ fees is $230,000 per annum of which $146,154 (2019:
$130,000) has been paid to the directors as fees during the year.
Page | 26
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
Voting and comments made at the company's 2020 Annual General Meeting ('AGM')
At the 2020 AGM, 82.1% of the votes received supported the adoption of the remuneration report for the year ended 31
December 2019. The Company did not receive any specific feedback at the AGM regarding its remuneration practices.
Senior Executive and Executive Director Remuneration
Remuneration primarily consists of fixed and performance-based remuneration where determined by the Remuneration
and Nominations Committee. The Company had established an equity-based scheme that will allow the executive team to
share in the success of Focus. Any issue of an equity component to executive directors is subject to the approval of
shareholders in general meeting and it is a policy of the current Board that Directors do not participate in equity-based
proposals.
Fixed Remuneration
Fixed remuneration is reviewed by the Remuneration and Nominations Committee. The process consists of a review of
relevant comparative remuneration in the market and internally and, where appropriate, external advice on policies and
practices. The Committee has access to external, independent advice where necessary.
Senior managers are given the opportunity to receive their fixed (primary) remuneration in a variety of forms including cash
and fringe benefits such as motor vehicles and expense payment plans. It is intended that the manner of payment chosen
will be optimal for the recipient without creating additional cost for the Group.
Performance Based Remuneration
For the year ended 31 December 2020, the Company did not set any KPIs.
During the year ended 31 December 2020, the Company awarded a $20,000 discretionary bonus to Alex Aaltonen and is
included as other short-term remuneration. No discretionary bonus was awarded during the 31 December 2019 year.
No options were issued during the year (2019: None). At this stage, no LTI programmes are in place.
Key Management Personnel Contracts
The key terms of the employment contracts for the key management personnel are summarised as follows:
Zhaoya Wang – Chief Executive Officer
Base Salary:
Other Benefits:
Term:
Termination:
$420,000 per annum plus superannuation guarantee
Apartment rent is covered by the Company
Permanent starting from 19 July 2018
Four weeks’ notice
Zaiqian Zhang – Chief Financial Officer and Company Secretary*
Base Salary:
Term:
Termination:
$294,000 per annum plus superannuation guarantee
Permanent starting from 24 November 2017
Four weeks’ notice
*Resigned 9th October 2020
Alex Aaltonen – General Manager – Exploration
Base Salary:
Term:
Termination:
$275,000 per annum plus superannuation guarantee
Permanent starting from 19 February 2018
Four weeks’ notice
Fengfan Sun – Chief Financial Officer
Base Salary:
Term:
Termination:
$250,000 per annum plus superannuation guarantee
Permanent starting from 1 December 2020
Four weeks’ notice
Page | 27
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
Remuneration Tables
Directors’ remuneration for the year ended 31 December 2020
Short-Term
Benefits
Post-Employment
Benefits
%
Salary
$
Fees
$
Other
$
Non
Monetary
benefits
$
Super-
annuation
$
Other
$
Total
$
Performance
Related
$
Directors
Dianfei Pei
Gerry Fahey
-
-
Zhaoya Wang
420,000
80,000
50,000
-
Rodney Johns
-
16,154
Former Directors
Zaiqian Zhang*
336,405
-
-
-
-
-
-
-
53,489
-
Total
756,405
146,154
53,489
-
4,750
39,900
1,535
21,699
67,884
-
-
-
-
-
-
80,000
54,750
513,389
17,688
358,105
1,023,932
*Zaiqian Zhang resigned on 9th October 2020. Salary shown includes termination benefits.
Directors’ remuneration for the year ended 31 December 2019
Short-Term
Benefits
Post-Employment
Benefits
-
-
-
-
-
-
%
Salary
$
Fees
$
Other
$
Non
Monetary
benefits
$
Super-
annuation
$
Other
$
Total
$
Performance
Related
$
Directors
Dianfei Pei
Gerry Fahey
Zhaoya Wang
Zaiqian Zhang
-
-
80,000
50,000
420,000
294,000
-
-
Total
714,000
130,000
-
-
-
-
-
-
-
53,878
-
53,878
-
4,750
39,900
27,930
72,580
-
-
-
-
-
80,000
54,750
513,778
321,930
970,458
-
-
-
-
-
Page | 28
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
Remuneration of the key management personnel for the year ended 31 December 2020
Short-Term
Benefits
Post-Employment
Benefits
Salary
$
Fees
$
Other
$
Non
Monetary
benefits $
Super-
annuation
$
Other
$
Total
$
%
Performance
Related
$
Current Executive
Alex Aaltonen
Fengfan Sun
237,967
20,833
-
-
20,000
-
-
-
22,607
1,979
-
-
280,574
22,813
7%
-
Remuneration of the key management personnel for the year ended 31 December 2019
Short-Term
Benefits
Post-Employment
Benefits
Salary
$
Fees
$
Other
$
Non
Monetary
benefits $
Super-
annuation
$
Other
$
Total
$
%
Performance
Related
$
Current Executive
Alex Aaltonen
234,217
-
-
-
22,481
-
256,698
-
Relationship between Remuneration and Focus Minerals’ Performance
The majority of salary is fixed while small portions of remuneration, such as bonus and share option, are linked to the
Company’s performance. Although there is some linkage to the Company’s performance, it is not closely aligned.
The following table shows key performance indicators for the Company over the last five reporting periods.
(Loss) / profit attributable
to the owners of Focus
Minerals Ltd (‘$000’s)
Basic earnings per share
(Cents per share)
Dividend declared
Share Price as at the end
of the year
$
$
2020
2019
2018
2017
Restated
2016
(7,858)
(2,063)
(4,207)
(6,194)
(3,184)
(4.3)
(1.13)
(2.30)
(3.39)
(1.74)
n/a
n/a
n/a
n/a
n/a
0.34
0.215
0.175
0.32
0.41
Transactions and Balances with Related Parties
Shandong Gold International Mining Corporation Limited is the major shareholder of Focus Minerals Limited. During 2020,
Shandong provided an unsecured loan facility to Focus Minerals Limited, totalling $20 million. Key terms of the facility
agreement are as follows:
•
•
Term: 3 years, principal payable at the end of the term
Interest: 3.5% per annum, payable quarterly in arrears
As at 31st December 2020, the balance of the loan payable to Shandong Gold was $20 million (2019: $nil). Total interest
expense for the year ended 31 December 2020 was $126,389 (2019:$nil). Amount of interest payable at reporting date is
$Nil (2019:$nil).
As at 31 December 2020, balance owing to Alex Aaltonen of $20,000 (2019:$nil).
In addition, there was a payment of director fees to Mr Pei. As at 31 December 2020, the account payable balance for his
director fees was nil (2019: $36,167). Details regarding Mr’s Pei’s director’s fees are set out in the Director’s Report.
Page | 29
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
All transactions were made on normal commercial terms and conditions and at market rates.
Additional disclosures relating to key management personnel
Shareholding
The number of shares in the company held during the financial year by each director and other members of key
management personnel of the consolidated entity, including their personally related parties, is set out below:
Ordinary shares
Gerry Fahey
Dianfei Pei*
Balance at
Received
Balance at
the start of
as part of
Disposals/
the end of
the year
remuneration
Additions
other
the year
12,820
90,519,954
90,532,774
-
-
-
-
-
-
-
-
-
12,820
90,519,954
90,532,774
*Mr Pei holds shares in Focus Limited on behalf of Shandong Gold Mining International Limited for voting rights. In addition,
he holds an indirect interest in the Company through Shandong Gold International Mining Corporation Limited. Mr Pei is
an executive of Shandong Gold International Mining Corporation Limited.
This is the end of remuneration report.
Page | 30
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
Proceedings on Behalf of the Company
Other than as disclosed in this report no person has applied for leave of Court to bring proceedings on behalf of the
Company or intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf
of the Company for all or any part of those proceedings.
No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under Section 237
of the Corporations Act 2001.
Non-Audit Services
Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year by the auditor
are outlined in note 22 to the financial statements.
The directors are satisfied that the provision of non-audit services during the financial year, by the auditor (or by another
person or firm on the auditor's behalf), is compatible with the general standard of independence for auditors imposed by
the Corporations Act 2001.
The directors are of the opinion that the services as disclosed in note 22 to the financial statements do not compromise the
external auditor's independence requirements of the Corporations Act 2001 for the following reasons:
●
all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity
of the auditor; and
none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code
of Ethics for Professional Accountants issued by the Accounting Professional and Ethical Standards Board, including
reviewing or auditing the auditor's own work, acting in a management or decision-making capacity for the company,
acting as advocate for the company or jointly sharing economic risks and rewards.
●
Officers of the Company Who are Former Partners of RSM
Australia Partners
There are no officers of the company who are former partners of RSM Australia Partners.
Auditor’s Independence Declaration
The auditor’s independence declaration for the year ended 31 December 2020 has been received and can be found on
page 32 of the Financial Report.
Rounding of Amounts
The Company is of a kind referred to in Instrument 2016/191, issued by the Australian Securities and Investments
Commission, relating to the ‘rounding off’ of amounts in the Directors’ Report. Amounts in the Directors’ Report have been
rounded off in accordance with that Instrument to the nearest thousand dollars, or in certain cases, to the nearest dollar.
Auditor
RSM Australia Partners continues in office in accordance with section 327 of the Corporations Act 2001.
This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations Act 2001.
On behalf of the directors
Dianfei Pei
Chairman of the Board
30 March 2021
Jinan, China
Page | 31
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
Auditors Independence Declaration
Page | 32
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
Consolidated Financial Statements
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2020
Consolidated
Revenue from continuing operations
Other Income
Employee expenses
Depreciation expenses
Finance costs
Loss on disposal of tenements
Care and maintenance costs
Corporate and other expenses
Loss Before Income Tax For the Year
Income Tax Expense
Loss After Income Tax For the Year
Notes
2(a)
2(b)
2(c)
2(c)
2(c)
2(c)
2(c)
4
Other Comprehensive Income for the year, Net of Tax
Total Comprehensive Loss For the Year
Total Comprehensive Loss Attributable to:
Owners of the Parent
Total Comprehensive Loss For the Year
Earnings per Share
Basic Loss per Share (Cents Per Share)
Diluted Loss per Share (Cents Per Share)
5
5
2020
$’000
199
234
(1,400)
(371)
(752)
(2,916)
(934)
(1,918)
(7,858)
-
(7,858)
-
(7,858)
(7,858)
(7,858)
(4.30)
(4.30)
2019
$’000
745
3,576
(1,256)
(523)
(744)
(1,026)
(975)
(1,860)
(2,063)
-
(2,063)
-
(2,063)
(2,063)
(2,063)
(1.13)
(1.13)
The accompanying notes form part of these financial statements.
Page | 33
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2020
Notes
Consolidated
31 December
2020
$’000
31 December
2019
$’000
Assets
Current Assets
Cash and Cash Equivalents
Short-term Deposits
Trade and Other Receivables
Total Current Assets
Non-Current Assets
Cash and Cash Equivalents -Restricted Cash
Inventories
Plant and Equipment
Right-of-use Assets
Exploration and Evaluation Assets
Total Non-Current Assets
Total Assets
Liabilities
Current Liabilities
Trade and Other Payables
Provisions
Lease Liabilities
Other Current Liabilities
Total Current Liabilities
Non-Current Liabilities
Provisions
Borrowing
Lease Liabilities
Total Non-Current Liabilities
Total Liabilities
Net Assets
Equity
Issued Capital
Reserves
Accumulated Losses
Total Equity
6
6
7
6
8
9
10
11
12
13
14
12
15
13
16(a)
16(c)
16(d)
7,795
12,096
252
20,143
13,803
1,291
804
30
94,377
110,305
130,448
749
250
25
101
1,125
29,012
20,000
-
49,012
50,137
80,311
427,167
(7,178)
(339,678)
80,311
13,935
-
253
14,188
13,869
1,293
905
145
85,899
102,111
116,299
682
280
122
-
1,084
27,012
-
34
27,046
28,130
88,169
427,167
(7,178)
(331,820)
88,169
The accompanying notes form part of these financial statements.
Page | 34
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2020
Issued
Capital
$’000
Accumulated
Losses
Reserves
$’000
$’000
Total
$’000
Balance as at 31 December 2018
427,167
(329,757)
(7,178)
90,232
Loss after income tax for the year
-
(2,063)
-
(2,063)
Balance as at 31 December 2019
427,167
(331,820)
(7,178)
88,169
Loss after income tax for the year
-
(7,858)
-
(7,858)
Balance as at 31 December 2020
427,167
(339,678)
(7,178)
80,311
The accompanying notes form part of these financial statements.
Page | 35
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2020
Cash Flows from Operating Activities
Payments to Suppliers and Employees (Including GST)
(3,639)
(4,415)
Notes
Consolidated
2020
$’000
2019
$’000
Royalties Paid
Payment of Performance & Other Bonds
Other Income
Interest Received
Settlement of Forfeiture Applications
Finance Costs
-
(30)
256
213
(580)
(280)
(3)
-
531
1,063
-
(206)
Net Cash Outflow from Operating Activities
6(ii)
(4,060)
(3,030)
Cash Flows from Investing Activities
Proceeds from Sale of Non-Current Assets
Acquisition of Plant and Equipment
Payment to Leases
(Increase)/Decrease in Short-term Deposits
Payments for Exploration Expenditure
-
(229)
(131)
(12,000)
(9,821)
1,878
(173)
178
25,053
(13,861)
Net Cash (Outflow)/ Inflow from Investing Activities
(22,181)
13,075
Cash Flows from Financing Activities
Proceeds from Borrowings
Repayment of Borrowings
Net Cash Inflow from Financing Activities
Net (Decrease)/Increase in Cash and Cash Equivalents
Cash and Cash Equivalents at the Beginning of the Year
Cash and Cash Equivalents at the End of the Year
6(i)
20,167
(66)
20,101
(6,140)
13,935
7,795
-
-
-
10,045
3,890
13,935
The accompanying notes form part of these financial statements.
Page | 36
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
Notes to Consolidated Financial Statements
Note 1: Summary of Significant Accounting Policies
The principal accounting policies adopted in the preparation of these consolidated financial statements are set out below.
These policies have been consistently applied to all the years presented, unless otherwise stated. The financial statements
are for the Group consisting of Focus Minerals Ltd (‘the parent entity’) and its subsidiaries (the ‘Group’).
(a) Basis of Preparation
The financial report is a general-purpose financial report, which has been prepared in accordance with Australian
Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian
Accounting Standards Board and the Corporations Act 2001.
The parent entity has applied the relief available to it under ASIC Corporations (Rounding in Financial/Directors’
Reports) Instrument 2016/191 and accordingly, amounts in the financial statements and directors’ report have been
rounded off to the nearest $1,000, or, in certain cases, to the nearest dollar.
The consolidated financial statements are presented in Australian dollars (AUD), which is also the functional currency
of the parent company.
The financial report covers the consolidated financial statements of Focus Minerals Ltd and controlled entities. Focus
Minerals Ltd is a for-profit, listed public company, incorporated and domiciled in Australia.
The financial report of Focus Minerals Ltd and controlled entities complies with Australian Accounting Standards.
Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with
International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
The financial report has been prepared on an accrual basis and is based on historical costs, modified, where applicable,
by the measurement at fair value of selected financial assets.
The financial information for the parent entity, Focus Minerals Ltd, disclosed in Note 20 has been prepared on the
same basis as the consolidated financial statements other than investments in subsidiaries, which are held at cost.
(b) Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the Chief Executive Officer.
(c) Principles of Consolidation
The consolidated financial statements incorporate the assets, liabilities and results of entities controlled by Focus
Minerals Ltd at the end of the reporting period and from time to time during the year. A controlled entity is any entity
over which Focus Minerals Limited has control of the entity, demonstrated by the Group’s exposure to, or rights to,
variable returns from its involvement with the entity and has the ability to affect those returns through its power to
direct the activities of the entity. In assessing the ability to control, the existence and effect of holdings of actual and
potential voting rights are also considered.
Where controlled entities have entered or left the Group during the year, the financial performance of those entities
are included only for the period of the year that they were controlled. A list of controlled entities is contained in Note
19 to the financial statements.
The acquisition method of accounting is used to account for business combinations by the Group (refer to Note 1(ae)).
In preparing the consolidated financial statements, all inter-group balances and transactions between entities in the
Group have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where
necessary to ensure consistency with those adopted by the parent entity.
Page | 37
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
(d) Revenue Recognition
Revenue is recognised for the major business activities as follows:
Revenue from contracts with customers: Revenue from contracts with customers is recognised when a customer
obtains control of the promised asset and the Group satisfies its performance obligations under the contract. Revenue
is allocated to each performance obligation. The Group considers the terms of the contract in determining the
transaction price. The transaction price is based upon the amount the entity expects to be entitled to in exchange for
the transferring of promised goods.
Interest Income: Interest revenue is recognised on a time proportionate basis that takes into account the effective yield
on the financial asset.
Dividends: Revenue is recognised when the Group’s right to receive the payment is established.
Rental Income: Rental income from mining leases is accounted for on a straight-line basis over the lease term.
Contingent rental income is recognised as income in the periods in which it is earned.
(e) Cash and Cash Equivalents
Cash and cash equivalents in the statement of financial position comprise cash at bank and in hand and short-term,
highly liquid deposits with an original maturity of three months or less. For the purposes of the statement of cash flows,
cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts.
(f) Trade and Other Receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective
interest method, less allowance for expected for credit losses. Trade receivables are generally due for settlement
within 30 days.
The Group has applied the simplified approach to measuring expected credit loses, which uses a lifetime expected
loss allowance. To measure the expected credit losses, trade receivables have been grouped based on days overdue.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
(g) Non-current assets held for sale
Non-current assets are classified as held for sale if their carrying amount will be recovered principally through a sale
transaction rather than through continuing use and a sale is considered highly probable. They are measured at the
lower of their carrying amount and fair value less costs to sell, except for assets such as deferred tax assets, assets
arising from employee benefits, financial assets and investment property that are carried at fair value and contractual
rights under insurance contracts, which are specifically exempt from this requirement.
An impairment loss is recognised for any initial or subsequent write-down of the asset to fair value less costs to sell.
A gain is recognised for any subsequent increases in fair value less costs to sell of an asset, but not in excess of any
cumulative impairment loss previously recognised. A gain or loss not previously recognised by the date of the sale of
the non-current asset is recognised at the date of derecognition.
Non-current assets are not depreciated or amortised while they are classified as held for sale. Interest and other
expenses attributable to the liabilities of a disposal group classified as held for sale continue to be recognised.
Non-current assets classified as held for sale are presented separately from the other assets in the statement of
financial position. The liabilities of a disposal group classified as held for sale are presented separately from other
liabilities in the statement of financial.
A discontinued operation is a component of the entity that has been disposed of or is classified as held for sale and
that represents a separate major line of business or geographical area of operations, is part of a single co-ordinated
plan to dispose of such a line of business or area of operations, or is a subsidiary acquired exclusively with a view to
resale. The results of discontinued operations are presented separately in the statement of profit or loss and other
comprehensive income.
(h) Inventories
Page | 38
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
Raw materials and stores, ore stockpiles and work in progress and finished gold stocks are physically measured or
estimated and valued at the lower of cost and net realisable value. Net realisable value less costs to sell is assessed
annually based on the amount estimated to be obtained from sale of the item of inventory in the normal course of
business, less any anticipated costs to be incurred prior to its sale.
Cost comprises direct materials, direct labour and an appropriate proportion of variable and fixed overhead
expenditure and depreciation and amortisation relating to mining activities, the latter being allocated on the basis of
normal operating capacity. Costs are assigned to individual items of inventory on the basis of weighted average costs.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of
completion and the estimated costs necessary to make the sale.
Inventories of consumable supplies and spare parts expected to be used in production are valued at the lower of
weighted average cost, which includes the cost of purchase as well as transportation and statutory charges, or net
realisable value. Any provision for obsolescence is determined by reference to specific stock items identified.
During the exploration and development phase, where the cost of extracting the ore exceeds the likely recoverable
amount, work in progress inventory is written down to net realisable value.
(i)
Impairment of Financial Assets
The accounting policy for impairment of financial assets is explained in note 1(k).
(j)
Income Tax
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered
from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are
enacted or substantively enacted by the reporting date.
Deferred income tax is provided on all temporary differences at the reporting date between the tax bases of assets
and liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences except:
• When the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a
transaction that is not a business combination and that, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss; or
• When the taxable temporary difference is associated with investments in subsidiaries, associates or interests in
joint ventures, and the timing of the reversal of the temporary difference can be controlled and it is probable that
the temporary difference will not reverse in the foreseeable future.
The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that
it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset
to be utilised.
Unrecognised deferred income tax assets attributable to income tax losses are reassessed at each reporting date and
are recognised to the extent that it has become probable that future taxable profits will be available to allow the deferred
tax asset to be recovered.
Determination of future taxable profits requires estimates and assumptions as to future events and outcomes, in
particular, whether successful development and commercial exploitation, or alternatively sale, of the respective areas
of interest will be achieved. This includes estimates and judgements about commodity prices, ore resources, exchange
rates, future capital requirements, future operational performance and the timing of estimated cash flows. Changes in
these estimates and assumptions could impact on the amount and probability of estimated taxable profits and
accordingly the recoverability of deferred tax assets.
Page | 39
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when
the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively
enacted at the reporting date.
Income taxes relating to items recognised directly in equity are recognised in equity and not in profit or loss.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax
assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the
same taxation authority.
Focus Minerals Ltd and its wholly-owned Australian controlled entities have implemented the tax consolidation
legislation. As a consequence, these entities are taxed as a single entity and the deferred tax assets and liabilities of
these entities are set off in the consolidated financial statements.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other
comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or
directly in equity, respectively.
(k) Financial Instruments
Financial assets
Classification:
The Group classifies its financial assets in the following measurement categories:
•
•
those to be measured subsequently at fair value, and
those to be measured at amortised cost.
The classification depends on whether the financial asset is an equity instrument or a debt instrument, the Group’s
business model for managing the financial assets and the contractual terms of the cash flows.
Measurement:
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at
fair value through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of the financial
asset. Transaction costs of financial assets carried at FVPL are expensed in profit or loss.
Equity instruments
The Group subsequently measures all equity investments at fair value. Where the Group’s management has elected
to present fair value gains and losses on equity investments which are not held for trading, in OCI, there is no
subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the investment.
Dividends from such investments continue to be recognised in profit or loss as other income when the Group’s right
to receive payments is established.
Changes in the fair value of financial assets at FVPL are recognised in other gains/(losses) in the statement of profit
or loss as applicable. Impairment losses (and reversal of impairment losses) on equity investments measured at
FVOCI are not reported separately from other changes in fair value.
Debt instruments
Subsequent measurement of debt instruments depends on the Group’s business model for managing the asset and
the cash flow characteristics of the asset. There are three measurement categories into which the Group classifies
its debt instruments:
• Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows represent
solely payments of principal and interest are measured at amortised cost. Interest income from these financial
assets is included in finance income using the effective interest rate method. Any gain or loss arising on
derecognition is recognised directly in profit or loss and presented in other gains/(losses), together with foreign
exchange gains and losses. Impairment losses are presented as separate line item in profit or loss.
•
FVPL: Assets that do not meet the criteria for amortised cost or FVOCI are measured at FVPL. A gain or loss on
a debt investment that is subsequently measured at FVPL is recognised in profit or loss and presented net within
Page | 40
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
other gains/(losses) in the period in which it arises.
•
FVOCI: Assets that are held for collection of contractual cash flows and for selling the financial assets, where the
assets’ cash flows represent solely payments of principal and interest, are measured at FVOCI. Movements in
the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest
revenue and foreign exchange gains and losses which are recognised in profit or loss. When the financial asset
is derecognised, the cumulative gain or loss previously recognised in OCI is reclassified from equity to profit or
loss and recognised in other gains/(losses). Interest income from these financial assets is included in finance
income using the effective interest rate method. Foreign exchange gains and losses are presented in other
gains/(losses) and impairment expenses are presented as separate line item in profit or loss.
Impairment:
The Group assesses, on a forward-looking basis, the expected credit losses associated with its debt instruments
carried at amortised cost and FVOCI. The impairment methodology applied depends on whether there has been a
significant increase in credit risk.
For trade receivables, the Group applies the simplified approach permitted by AASB 9, which requires expected
lifetime losses to be recognised from initial recognition of the receivables.
Financial liabilities
Financial liabilities held for trading are measured at FVPL, and all other financial liabilities are measured at amortised
cost.
(l) Goods and Services Tax (“GST”)
Revenues, expenses and assets are recognised net of the amount of GST except:
• When the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in
which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as
applicable; and
• Receivables and payables, which are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or
payables in the statement of financial position.
Cash flows are included in the statement of cash flow on a gross basis and the GST component of cash flows arising
from investing and financing activities, which is recoverable from, or payable to, the taxation authority, are classified
as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation
authority.
(m) Plant and Equipment
Plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses. Such
cost includes the cost of replacing parts that are eligible for capitalisation when the cost of replacing the parts is
incurred. Similarly, when each major inspection is performed, its cost is recognised in the carrying amount of the plant
and equipment as a replacement only if it is eligible for capitalisation.
Depreciation
Depreciation on mobile plant is calculated on a straight-line basis over the estimated useful life of the assets being 2
– 25 years.
Depreciation of underground assets is calculated on a unit of production basis over the period of the life of mine plan.
Depreciation of the mill treatment assets is calculated on a straight-line basis over the estimated useful life of the
assets, being 10 years.
Page | 41
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
The assets’ residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at the
end of each reporting period.
Impairment
The carrying values of plant and equipment are reviewed for impairment when events or changes in circumstances
indicate that the carrying value may be impaired. Where this is the case then the recoverable amount of this plant and
equipment is estimated.
The recoverable amount of plant and equipment is the higher of fair value less costs of disposal and value in use. In
assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time value of money and the risks specific to the asset.
For an asset that does not generate largely independent cash inflows, recoverable amount is determined for the cash-
generating unit to which the asset belongs, unless the asset’s value in use can be estimated to be close to its fair
value.
Impairment exists when the carrying value of an asset or cash-generating units exceeds its estimated recoverable
amount. The asset or cash-generating unit is then written down to its recoverable amount.
For plant and equipment, impairment losses are recognised in profit or loss.
De-Recognition and Disposal
An item of plant and equipment is derecognised upon disposal or when no further future economic benefits are
expected from its use or disposal.
Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds
and the carrying amount of the asset) is included in profit or loss in the year the asset is derecognised.
(n) Exploration and Evaluation Expenditure
Exploration and evaluation expenditure incurred by or on behalf of the Group is accumulated separately for each area
of interest. Such expenditure comprises direct costs and does not include general overheads or administrative
expenditure not having a specific nexus with a particular area of interest.
Exploration expenditure for each area of interest is carried forward as an asset provided the rights to tenure of the
area of interest are current and one of the following conditions is met:
• The exploration and evaluation expenditures are expected to be recouped through successful development and
exploitation of the area of interest, or alternatively, by its sale; or
• Exploration and evaluation 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 operations in, or in relation to, the area of interest is continuing.
Exploration expenditure is written off when it fails to meet at least one of the conditions outlined above or an area of
interest is abandoned.
Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the
carrying amount of an exploration and evaluation asset may exceed its recoverable amount, or when the cash
generating unit that exploration expenditure assets are a part of are tested for impairment. When facts and
circumstances suggest that the carrying amount exceeds the recoverable amount the impairment loss will be
measured and disclosed in accordance with AASB 136 Impairment of Assets.
When a decision is made to develop an area of interest, all carried forward exploration expenditure in relation to the
area of interest is transferred to Mine Properties and Development.
(o) Mine Properties and Development
Page | 42
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
Development expenditure represents the accumulated exploration, evaluation, land and development expenditure
incurred by or on behalf of the Group in relation to areas of interest in which mining of a mineral resource has
commenced.
When further development expenditure is incurred in respect of a mine property after commencement of production,
such expenditure is carried forward as part of the mine property only when substantial future economic benefits are
thereby established, otherwise such expenditure is classified as part of the cost of production.
In some circumstances, where conversion of resources into reserves is expected, some resources may be included.
Development and land expenditure still to be incurred in relation to the current reserves are included in the amortisation
calculation. Where the life of the assets is shorter than the mine life their costs are amortised based on the useful life
of the assets.
The estimated recoverable reserves and life of the mine and the remaining useful life of each class of asset is
reassessed at least annually. Where there is a change in the reserves/resources amortisation rates are
correspondingly adjusted.
(p) Stripping Costs in the Production Phase of a Surface Mine
Production stripping costs (also known as deferred mining costs) are to be capitalised as part of an asset if:
•
•
•
There is a probable future economic benefit that will be realised;
The costs can be reliably measured; and
The component of an ore body for which access has been improved can be identified.
The stripping activity asset shall be amortised on a systematic basis, over the expected useful life of the identified
component of the ore body that becomes more accessible as a result of the stripping activity.
(q) Trade and Other Payables
Trade and other payables are recognised originally at fair value and subsequently measured at amortised cost using
the effective interest rate method. Trade and other payables represent liabilities for goods and services provided to
the Group prior to the end of each reporting period that are unpaid and arise when the Group becomes obliged to
make future payments in respect of the purchase of goods and services. Trade and other payables are presented as
current liabilities unless payment is not due within 12 months from the reporting date.
(r) Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event,
it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a
reliable estimate can be made of the amount of the obligation.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects
the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is
recognised as a borrowing cost.
(s) Employee Benefits
Wages, Salaries and Annual Leave
Liabilities for wages and salaries, including non-monetary benefits, leave-in-lieu (“Toil”) and annual leave expected
to be settled within 12 months of the reporting date are recognised in other payables in respect of employees’ services
up to the reporting date. They are measured at the amounts expected to be paid when the liabilities are settled.
Liabilities for non-accumulating sick leave are recognised when the leave is taken and are measured at the rates paid
or payable.
Long Service Leave
The liability for long service leave is recognised in the provision for employee benefits and measured as the present
value of expected future payments to be made in respect of services provided by employees up to the reporting date
Page | 43
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience
of employee departures, and period of service.
Expected future payments are discounted using market yields at the reporting date on corporate bonds with terms to
maturity and currencies that match, as closely as possible, the estimated future cash outflows.
Termination Benefits
Termination benefits are payable when employment is terminated before the normal retirement date, or when an
employee accepts voluntary redundancy in exchange for these benefits. The Group recognises termination benefits
when it is demonstrably committed to either terminating the employment of current employees according to a detailed
formal plan without possibility of withdrawal or to providing termination benefits as a result of an offer made to
encourage voluntary redundancy. Benefits falling due more than 12 months after the end of the reporting period are
discounted to present value.
(t) Share-Based Payment Transactions
Equity Settled Transactions
The Group provides benefits to certain third parties and employees (including senior executives) in the form of share-
based payments. Third parties and employees render services to the Group in exchange for shares or rights over
shares (“equity-settled transaction”).
The cost of these equity-settled transactions with third parties and employees is measured by reference to the fair
value of the equity instruments at the date at which they are granted. The fair value is determined using an appropriate
model.
In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions linked
to the price of the shares of Focus Minerals Ltd (market conditions) if applicable.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period
in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant beneficiary
becomes fully entitled to the award (“vesting date”).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects
(i) the extent to which the vesting period has expired and (ii) the Group’s best estimate of the number of equity
instruments that will ultimately vest. No adjustment is made for the likelihood of market performance conditions being
met as the effect of these conditions is included in the determination of fair value at grant date. The profit or loss
charge or credit for a period represents the movement in cumulative expense recognised as at the beginning and
end of that period.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is only conditional
upon a market condition.
If an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense
not yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled
award and designated as a replacement award on the date that it is granted, the cancelled and new award are treated
as if they were a modification of the original award.
The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of earnings
per share (see Note 5).
(u) Issued Capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options
are shown in equity as a deduction, net of tax, from the proceeds.
(v) Restoration and Rehabilitation Costs
Page | 44
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it
is more likely than not that an outflow of resources will be required to settle the obligation and the amount can be
reliably estimated. The mining, extraction and processing activities of the Group give rise to obligations for site
restoration and rehabilitation. Restoration and rehabilitation obligations can include facility decommissioning and
dismantling, removal or treatment of waste materials, land rehabilitation and site restoration. Provisions for the cost of
each rehabilitation program are recognised at the time that environmental disturbance occurs.
Restoration and rehabilitation provisions are initially measured at the expected value of future cash flows required to
rehabilitate the relevant site, discounted to their present value. The judgements and estimates applied for the
estimation of the rehabilitation provisions are discussed in Note 1(z).
When provisions for restoration and rehabilitation are initially recognised, the corresponding cost is capitalised into
the cost of the related assets and is amortised using the units of production method over the life of the mine. The value
of the provision is progressively increased over time as the effect of discounting unwinds, creating an expense
recognised in finance costs.
At each reporting date the restoration and rehabilitation liability is re-measured to account for any new disturbance,
updated cost estimates, inflation, changes to the estimated reserves and lives of operations, new regulatory
requirements, environmental policies and revised discount rates. Changes to the restoration and rehabilitation liability
are added to or deducted from the related rehabilitation asset and amortised accordingly.
(w) Government Grants
Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant
will be received and the Group will comply with all attached conditions. Government grants relating to costs are
deferred and recognised in the profit or loss over the period necessary to match them with the costs that they are
intended to compensate. If the assets related to government grants have been fully impaired, amortised or depreciated,
the grant received is recorded in the statement of profit or loss as other income.
(x) Earnings per Share
Basic earnings per share is calculated as net result attributable to members of the parent, adjusted to exclude any
costs of servicing equity (other than dividends) and preference share dividends, divided by the weighted average
number of ordinary shares, adjusted for any bonus element.
Diluted earnings per share are calculated as net result attributable to members of the parent, adjusted for:
• Costs of servicing equity (other than dividends) and preference share dividends.
• The after-tax effect of dividends and interest associated with dilutive potential ordinary shares that have been
recognised as expenses; and
• Other non-discretionary changes in revenues or expenses during the period that would result from the dilution of
potential ordinary shares; divided by the weighted average number of ordinary shares and dilutive potential
ordinary shares, adjusted for any bonus element.
(y) Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in
presentation for the current financial year.
(z) Critical Accounting Estimates and Judgements
The directors evaluate estimates and judgements incorporated into the financial report based on historical knowledge
and best available current information. Estimates assume a reasonable expectation of future events and are based
on current trends and economic data, obtained both externally and within the Group.
• Reserves and Resources
Page | 45
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
In order to calculate Ore Reserves and Mineral Resources, estimates and assumptions are required about a range
of geological, technical and economic factors, including quantities, grades, production techniques, recovery rates,
production costs, transport costs, commodity demand, commodity prices and exchange rates. The Group
estimates Mineral Resources based on information compiled by Competent Persons (as defined in accordance
with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves as revised
in December 2004 (the 2004 JORC code) or, if updated or more recent, is reported in accordance with the
Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC 2012
Edition). Refer to pages 8 to 12 for which JORC code is used for which resources.
As economic assumptions used to estimate reserves change and as additional geological data is generated during
the course of operations, estimates of reserves and mineral resources may vary from period to period. Changes
in reported reserves and mineral resources may affect the Group’s financial results and financial position in a
number of ways, including the following:
Asset carrying values may be affected due to changes in estimated future cash flows;
Depreciation and amortisation charges in profit and loss may change where such charges are determined by the
units of production basis, or where the useful economic lives of assets change; and
Restoration and rehabilitation provision may be affected due to changes in the magnitude of future restoration
and rehabilitation expenditure.
• Exploration and Evaluation Expenditure
The Group’s accounting policy for exploration and evaluation expenditure results in expenditure being capitalised
for an area of interest where it is considered likely to be recoverable by future exploitation or sale or where the
activities have not reached a stage which permits a reasonable assessment of the existence of reserves. This
policy requires management to make certain estimates as to future events and circumstances, in particular
whether an economically viable extraction operation can be established. Any such estimates and assumptions
may change as new information becomes available. If, after having capitalised the expenditure under the policy,
a judgement is made that recovery of the expenditure is unlikely, the relevant capitalised amount will be written
off to profit and loss.
• Restoration and Rehabilitation Provision
The Group’s accounting policy for the recognition of restoration and rehabilitation provisions requires significant
estimates including the magnitude of possible works required for the removal of infrastructure and of rehabilitation
works, future cost of performing the work, the inflation and discount rates and the timing of cash flows. These
uncertainties may result in future actual expenditure differing from the amounts currently provided. When these
factors change or become known in the future, such differences will impact the mine rehabilitation provision in the
period in which they change or become known.
•
Impairment of Assets
The Group assesses each Cash-Generating Unit (CGU), to determine whether there is any indication of
impairment or reversal. Where an indicator of impairment or reversal exists, a formal estimate of the recoverable
amount is made, which is deemed as being the higher of the fair value less costs of disposal and value in use
calculated in accordance with accounting policy Note 1(n). These assessments require the use of estimates and
assumptions such as discount rates, exchange rate, commodity prices, gold multiple values, future operating
development and sustaining capital requirements and operating performance (including the magnitude and timing
of related cash flow).
(ab) Rounding
The company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and
Investments Commission, relating to ‘rounding-off’. Amounts in this report have been rounded off in accordance with
that Corporations Instrument to the nearest thousand dollars, or in certain cases, the nearest dollar.
Page | 46
For personal use only
Consolidated
2020
$’000
199
199
234
-
234
280
91
371
472
4
126
150
752
1,149
769
1,918
1,400
1,400
2,916
2,916
2019
$’000
745
745
190
3,386
3,576
425
98
523
560
23
161
744
1,022
838
1,860
1,256
1,256
1,026
1,026
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
Note 2: Revenues and Expenses
(a) Revenue from continuing operations
Interest income
Total revenue from continuing operations
(b) Other income
Sundry income
Sale and sublease of Mill
Total other income
(c) Expenses
Depreciation Expenses
Depreciation – Plant and equipment
Depreciation – Right-of-use assets
Total depreciation expenses
Finance Expenses
Interest provision – Asset Retirement Obligation
Interest expense paid/payable on lease liabilities
Interest expense paid/payable on long term borrowings
Other Finance Costs
Total finance expenses
Corporate and other expenses
Professional services and consulting fees
Corporate expense
Total corporate and other expenses
Employee Expenses
Total Employee Expenses
Total Employee Expenses
Loss on disposal of tenements
Exploration assets
Total loss on disposal of tenements
Page | 48
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
Note 3: Segment Reporting
All Focus Minerals Limited’s subsidiaries are wholly owned. The Group has three reportable segments, as described below,
which are the Group’s strategic business units. The business units are managed separately as they require differing
processes and skills. The Chief Executive Officer reviews internal management reports on each of these business units
on a monthly basis. Segment Financial Information for the year ended 31 December 2020 is presented below:
2020
Coolgardie
$’000
2020
Laverton
$’000
2020
Corporate
$’000
2020
Consolidated
$’000
Revenue from continuing operations
Other income
Depreciation
Employee expenses
Finance cost
Care and Maintenance Costs
Loss on disposal of tenements and
plant and equipment
Corporate and Other expenses
SEGMENTED LOSS BEFORE TAX
Income taxes
SEGMENTED LOSS
Current Assets
Non-Current Assets
- Restricted Cash
- Inventories
- Property, Plant & Equipment
- Right-of-Use Assets
- Exploration and Evaluation
TOTAL ASSETS
Current Liabilities
Other Non-Current Liabilities
TOTAL LIABILITIES
NET ASSETS
28
32
(276)
-
(234)
(440)
(2,545)
(91)
(3,526)
-
(3,526)
644
3,111
1,291
632
-
46,214
51,892
243
12,690
12,933
38,959
90
185
-
-
(384)
(494)
(371)
(343)
(1,317)
-
(1,317)
142
10,345
-
161
6
48,163
58,817
195
16,143
16,338
42,479
81
17
(95)
(1,400)
(134)
-
-
(1,484)
(3,015)
-
(3,015)
19,357
347
-
11
24
-
19,739
688
20,178
20,866
(1,127)
199
234
(371)
(1,400)
(752)
(934)
(2,916)
(1,918)
(7,858)
-
(7,858)
20,143
13,803
1,291
804
30
94,377
130,448
1,125
49,012
50,137
80,311
Page | 49
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
Segment Financial Information for the year ended 31 December 2019 is presented below:
2019
Coolgardie
$’000
2019
Laverton
$’000
2019
Corporate
$’000
2019
Consolidated
$’000
Revenue from continuing operations
Other income
Depreciation
Employee expenses
Finance cost
Care and Maintenance Costs
Loss on disposal of tenements and plant
and equipment
Corporate and Other expenses
SEGMENTED LOSS BEFORE TAX
Income taxes
SEGMENTED LOSS
Current Assets
Non-Current Assets
- Restricted Cash
- Inventories
- Property, Plant & Equipment
- Right-of-Use Assets
- Exploration and Evaluation
TOTAL ASSETS
Current Liabilities
Other Non-Current Liabilities
TOTAL LIABILITIES
NET ASSETS
.
73
3,443
(422)
-
(268)
(405)
(557)
(780)
1,084
-
1,084
1,775
3,177
1,293
692
-
44,280
51,217
220
10,943
11,163
40,054
277
133
-
-
(453)
(570)
(469)
(78)
(1,160)
-
(1,160)
73
10,345
-
204
23
41,619
52,264
321
15,872
16,193
36,071
395
-
(101)
(1,256)
(23)
-
-
(1,002)
(1,987)
-
(1,987)
12,340
347
-
9
122
-
12,818
543
231
774
12,044
745
3,576
(523)
(1,256)
(744)
(975)
(1,026)
(1,860)
(2,063)
-
(2,063)
14,188
13,869
1,293
905
145
85,899
116,299
1,084
27,046
28,130
88,169
Page | 50
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
Note 4: Income Tax
Consolidated
31 December
2020
$’000
31 December
2019
$’000
The prima facie income tax expense on pre-tax accounting loss
from operations reconciles to the income tax expense in the
financial statements as follows:
Accounting loss before tax
Tax at the statutory income tax rate of 30% (2019: 30%)
(7,858)
(2,358)
(2,063)
(619)
Tax effect of amount which we are not deductible/(taxable) in
calculating taxable income:
Other deductible expense
Fixed assets
Rehabilitation provision
Immediate deduction for exploration costs
Unrecognised tax losses
Unrecognised capital losses
Income tax expense/(benefit) recognised in profit or loss
(4,942)
(292)
607
(2,078)
4,347
-
-
(176)
(777)
136
(4,022)
5,458
-
-
The tax rate used in the above reconciliation is the corporate tax rate of 30% payable by Australian corporate entities on
taxable profits under Australian tax law. The Company has tax losses arising in Australia. The tax benefit of these losses
are available indefinitely for offset against future taxable profits of the companies in which the losses arose, subject to
ongoing conditions for deductibility being met.
Tax Consolidation
The Company and its 100% owned controlled entities have formed a tax consolidated group. Members of the Group
have entered into a tax sharing arrangement with effect from 30 June 2013 in order to allocate income tax expense to
the wholly owned controlled entities on pro-rata basis. The agreement provides for the allocation of income tax liabilities
between the entities should the head entity default on its tax payment obligations. At balance date, the possibility of
default is remote. The head entity of the tax consolidated group is Focus Minerals Ltd.
Tax Effect Accounting by Members of the Tax Consolidated Group
Members of the tax consolidated group have entered into a tax funding agreement with effect from 30 June 2013. The
tax funding agreement provides for the allocation of current taxes to members of the tax consolidated group. Deferred
taxes are allocated to members of the tax consolidated group in accordance with a group allocation approach which is
consistent with the principles of AASB 112 Income Taxes. The allocation of taxes under the tax funding agreement is
recognised as an increase/decrease in the controlled entities intercompany accounts with the tax consolidated group
head company, Focus Minerals Ltd.
Page | 51
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
Unrecognised deferred tax balances
A net deferred tax balance has not been recognised in respect to the following items.
Deferred tax assets unrecognised:
Other deductible expenses
Plant & equipment
Rehabilitation provision
Inventory
Tax losses (revenue in nature)
Capital losses
Exploration & evaluation expenditure
Total
Consolidated
31 December
2020
$’000
31 December
2019
$’000
552
320
8,650
445
148,855
4,338
(28,313)
134,847
124
1,225
8,069
445
144,569
4,338
(25,460)
133,310
The deductible temporary differences and tax losses do not expire under current tax legislation. Deferred tax assets have
not been recognised in respect of these items because it is not probable that future taxable profit will be available against
which the Company can utilise the benefits thereof.
Note 5: Earnings per Share
Basic earnings per share:
Total Basic EPS
Diluted earnings per share
Total Diluted EPS
Consolidated
2020
Cents per Share
2019
Cents per Share
(4.30)
(1.13)
(4.30)
(1.13)
Basic Earnings per share
Net loss used in the calculation of basic earnings per share
$000
(7,858)
$000
(2,063)
Weighted average number of ordinary shares for the purposes of basic
earnings per share
182,748,565
182,748,565
Adjustments for calculation of diluted earnings per share:
-
-
Weighted average number of ordinary shares for the purposes of diluted
earnings per share
182,748,565
182,748,565
Page | 52
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
Note 6: Cash, Cash Equivalents, Restricted Cash and Short-Term Deposits
Cash and cash equivalents
Current – Short-term deposits
Non- current – Restricted cash
Cash and cash equivalents
Consolidated
31 December
2020
$’000
31 December
2019
$’000
7,795
12,096
19,891
13,803
13,935
-
13,935
13,869
Cash at bank earns interest at floating rates based on daily deposit rates.
Cash deposits are made for varying periods up to three months, depending on the immediate cash requirements of the
Group, and earn interest at the respective commercial short-term deposit rates which is recognised as cash and cash
equivalents.
Short-term deposits
Short-term deposits have original maturity longer than three months and shorter than one year.
Restricted cash
Performance bonds have been issued by a bank on behalf of the Group in respect of Western Australian mining tenements.
The Group has indemnified the bank against any loss arising from the performance bonds and the indemnity is secured
against cash deposits. Those are recognised as restricted cash.
(i)
Reconciliation to Statement of Cashflows
For the purposes of the Statement of Cash Flows, cash and cash equivalents comprise cash on hand and at bank and
short-term deposits, net of secured short-term deposits. Cash and cash equivalents as shown in the Statement of Cash
Flows is:
Cash, cash equivalents, restricted cash and short-term deposits
Less: Short-term Deposit
Less: Restricted cash not available for use
Cash and cash equivalents as per statement of cash flows
Consolidated
2020
$’000
33,694
(12,096)
(13,803)
7,795
2019
$’000
27,804
-
(13,869)
13,935
Page | 53
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
(ii)
Reconciliation of Loss for the Year to Net Cash Flows from Operating Activities
Consolidated
2020
$’000
(7,858)
371
-
2,916
472
(30)
40
17
66
-
(54)
(4,060)
2019
$’000
(2,063)
523
(1,545)
1,026
538
-
241
(252)
(96)
(1,500)
98
(3,030)
Consolidated
31 December
2020
$’000
20
232
252
31 December
2019
$’000
34
219
253
Net loss for the year
Depreciation expense
Gain from disposal of non-current assets
Loss on disposal of tenements
Finance costs
(Increase)/decrease in assets:
Bonds
Current receivables
Other assets
Increase/(decrease) in liabilities
Current payables
Prepaid income
Provisions
Net cash used in operating activities
Note 7: Trade and Other Receivables
Interest receivable
Other receivables
Page | 54
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
Note 8: Plant and Equipment
Non-current
At 31 December 2019
Cost
Accumulated depreciation
Impairment loss
Net book amount
Year ended
31 December 2020
Opening net book amount
Additions
Depreciation expense
Depreciation expense capitalised
to Exploration
Assets disposed
Accumulated Depreciation on
disposals
Closing net book amount
At 31 December 2020
Cost
Accumulated depreciation
Impairment loss
Net book amount
Non-current
At 31 December 2018
Cost
Accumulated depreciation
Impairment loss
Net book amount
Year ended
31 December 2019
Opening net book amount
Additions
Depreciation expense
Depreciation expense capitalised
to Exploration
Assets held for sale
Closing net book amount
At 31 December 2019
Cost
Accumulated depreciation
Impairment loss
Net book amount
Furnitur
e &
fittings
$’000
Plant &
Equipmen
t
$’000
Mill assets
$’000
Motor
Vehicles
$’000
Assets
in
progress
$’000
1,278
(1,231)
(2)
45
6,985
(6,332)
(25)
628
32,294
(18,938)
(13,165)
191
45
10
(4)
(11)
-
-
40
628
8
(172)
(28)
(5)
5
436
191
-
(104)
-
(430)
430
87
1,288
(1,246)
(2)
40
6,988
(6,527)
(25)
436
31,864
(18,612)
(13,165)
87
532
(441)
(50)
41
41
-
-
(11)
-
-
30
532
(452)
(50)
30
-
-
-
-
-
211
-
-
-
-
211
211
-
-
211
Total
$’000
41,089
(26,942)
(13,242)
905
905
229
(280)
(50)
(435)
435
804
40,833
(26,837)
(13,242)
804
Furnitur
e &
fittings
$’000
Plant &
Equipmen
t
$’000
Mill assets
$’000
Motor
Vehicles
$’000
Assets in
progress
$’000
Total
$’000
867
(827)
(13)
27
27
30
(1)
(12)
1
45
727
(693)
(25)
9
9
143
(232)
(25)
733
628
1,363
(650)
(713)
-
-
-
(189)
-
380
191
1,278
(1,231)
(2)
45
6,985
(6,332)
(25)
628
32,294
(18,938)
(13,165)
191
143
(42)
(50)
51
51
-
-
(10)
-
41
532
(441)
(50)
41
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,100
(2,212)
(801)
87
87
173
(422)
(47)
1,114
905
41,089
(26,942)
(13,242)
905
Page | 55
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
Note 9: Right-of-use Assets
The Group leases land and buildings for its offices and storage under agreements for two – three years. In some cases,
the agreements have options to extend. The leases have various escalation clauses. On renewal, the terms of the leases
are renegotiated.
Right-of-use Assets:
At Cost*
Less: Accumulated Depreciation
Net Book Value
Consolidated
31 December
2020
$’000
31 December
2019
$’000
245
(215)
30
252
(107)
145
* Cost of Right-of-Use asset for the Perth office was adjusted during 2020. Original calculations include an additional rent
payment.
Note 10: Exploration and Evaluation Assets
Consolidated
31 December
2020
$’000
31 December
2019
$’000
Exploration and evaluation Expenditure – at cost
94,377
85,899
Movement Summary:
Carrying amount at beginning of the year
Add – exploration expenditure
Add – rehabilitation liability adjustment classified as Exploration
Add back – assets previously classified as held for sale
Less – disposal of asset previously classified as held for sale
Less – write-off of tenements allowed to lapse, dropped or sold
Carrying amount at end of the year
85,899
9,841
1,553
-
-
(2,916)
94,377
29,155
14,485
-
43,785
(500)
(1,026)
85,899
The value of the Group’s interest in exploration expenditure is dependent upon:
the continuance of the Group’s rights to tenure of the areas of interest;
-
the results of future exploration;
-
the recoupment of costs through successful development and exploitation of the areas of interest, or
-
alternatively, by their sale; and
no significant changes in laws and regulations that greatly impact the Group’s ability to maintain tenure.
-
Page | 56
For personal use only
Consolidated
31 December
2020
$’000
655
94
749
31 December
2019
$’000
540
142
682
Consolidated
31 December
2020
$’000
31 December
2019
$’000
280
(30)
250
187
93
280
Consolidated
31 December
2020
$’000
31 December
2019
$’000
203
(24)
179
26,809
1,552
472
-
28,833
29,012
198
5
203
15,533
229
332
10,715
26,809
27,012
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
Note 11: Trade and Other Payables
Trade payables
Payroll tax and other statutory liabilities
Note 12: Provisions
Current
Employee benefits
Balance at the beginning of the year
(Utilised) / Increase in provision during the year
Balance at the year end
Non-current
Employee benefits
Balance at the beginning of the year
(Utilised)/ Increase in provision during the year
Balance at the year end
Asset Retirement Obligation (“ARO”)
Balance at the beginning of the year
Additional provisions recognised
Unwinding discount
Liabilities previously associated with assets held for sale
Balance at the year end
Total
Page | 57
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
Note 13: Lease Liabilities
Current
Lease Liabilities
Non-current
Lease Liabilities
Note 14: Other Liabilities
Consolidated
31 December
2020
$’000
31 December
2019
$’000
25
-
122
34
Consolidated
31 December
2020
$'000
31 December
2019
$'000
Insurance – Premium Funding loan
101
-
Note 15: Borrowing
Consolidated
31 December
2020
$'000
31 December
2019
$'000
Related Party Loan
20,000
-
Refer to note 17 for further information on financial instruments.
During October 2020, the Group executed a $20 million loan facility agreement with Shandong Gold Group Co. Ltd ( its
major shareholder). The loan is payable in full after 3 years. Interest is payable quarterly in arrears at 3.5% per annum.
The loan is unsecured and was fully drawn down as at 31st December 2020.
Note 16: Issued Capital and Reserves
Authorised Capital
The Company does not have an Authorised Capital and there is no par value for ordinary shares.
(a) Ordinary shares
Issued capital
182,748,565
427,167
182,748,565 427,167
As at
31 December 2020
No. of
shares
$’000
As at
31 December 2019
No. of shares
$’000
Share Issue Details
There were no shares issued during the past two years.
Page | 58
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
Voting Entitlements
At each shareholder’s meeting each ordinary share is entitled to one vote on the calling of a poll, otherwise each
shareholder is entitled to one vote on a show of hands.
(b) Capital Management
Management controls the capital of the Group in order to ensure the Group can fund its operations; continue as a going
concern and ensure compliance with banking covenants. The Group’s debt and capital includes ordinary share capital and
financial liabilities supported by financial assets and cash and cash equivalents. There are no externally imposed capital
requirements. Management effectively manages the Group’s capital by assessing the Group’s financial risks, adjusting its
capital structure in response to changes in these risks and in the market. These responses include the management of
debt levels, distributions to shareholders and share issues.
(c) Reserves
Acquisition reserve
Consolidated
31 December
2020
$’000
31 December
2019
$’000
(7,178)
(7,178)
(7,178)
(7,178)
The acquisition reserve resulted from acquisition of Focus Minerals (Laverton) Pty Ltd.
(d) Reserves
Accumulated losses at beginning of the year
Net loss for the year
Accumulated losses at end of the year
(e) Dividends
Consolidated
31 December
2020
$’000
31 December
2019
$’000
(331,820)
(7,858)
(339,678)
(329,757)
(2,063)
(331,820)
No dividends have been paid or provided for during the year ended 31 December 2020 (2019: Nil).
(f) Options
Options Issued
No options were issued in the year ended 31 December 2020 (2019: Nil).
Options Exercised
There were no options exercised during the year (2019: Nil).
Options Lapsed
During the year ended 31 December 2020, there were no options expired (2019: Nil).
Options Outstanding
There were no options outstanding as at 31 December 2020. (2019: Nil).
Note 17: Financial Instruments
The Group’s financial instruments consist mainly of deposits with banks, local money market instruments, and short-term
investments, accounts receivable and payable, convertible notes and derivatives.
The main purpose of non-derivative financial instruments is to raise finance for group operations.
Page | 59
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
Derivatives are used by the Group from time to time for hedging purposes such as forward gold sales agreements. The
Group does not speculate in the trading of derivative instruments.
Treasury Risk Management
Risks are reviewed by the Audit and Risk Committee which consists of non-executive directors and senior staff by invitation.
This includes the analysis of financial risk exposure and to evaluate treasury management strategies in the context of the
most recent economic conditions and forecasts.
The committee’s overall risk management strategy seeks to assist the Group in meeting its financial targets, whilst
minimising potential adverse effects on financial performance.
The Audit and Risk Committee operates under policies approved by the board of directors. Risk management policies are
reviewed and approved by the Board on a regular basis. These include the use of hedging derivative instruments, credit
policies and future cash flow requirements.
Financial Risk Exposures and Management
The main risks the Group is exposed to through its financial instruments are market risk (including interest rate risk and
price risk), credit risk and liquidity risk.
Interest Rate Risk
The Group’s exposure to risks of changes in market interest rates relates primarily to the Group’s cash balances. The
Group’s long-term borrowing is maintained at fixed rate.
Credit Risk
The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date to recognised
financial assets, is the carrying amount, net of any provisions for impairment of those assets, as disclosed in the statement
of financial position and notes to the financial statements.
Credit risk is managed on a group basis and reviewed regularly by the finance department. It arises from exposures to
approved customers as well as deposits with financial institutions.
The Audit and Risk Committee monitors credit risk by actively assessing the rating quality and liquidity of counter parties:
• only approved banks and financial are utilised;
• all potential customers are rated for credit worthiness taking into account their size, market position and financial
standing.
The Group currently holds its cash and cash equivalents with various financial institutions, all of which hold a credit rating
of AA. The Group believes the credit risk exposure to these counterparties is manageable.
Credit risk for derivative financial instruments arises from the potential failure by counter-parties to the contract to meet
their obligations.
Liquidity Risk
The Group manages liquidity risk by monitoring forecast project and operating cash flows and ensuring that a minimum
level of uncommitted cash is available for immediate use and consists of cash on deposit and/or utilised borrowing facilities.
At the end of the year the Group held deposits at call of $13.9 million (December 2018: $26.9 million) that are expected to
readily generate cash inflows for managing liquidity risk.
Sensitivity Analysis
Interest Rate Analysis
At 31 December 2020, the Group had $13.8 million invested in security deposits and performance bonds and $19.9 million
in cash and cash equivalents and short-term deposits. A 1% increase in the interest rate would impact the interest earned
by $336,938. Interest rates on short term deposits are less than 1%, so a 1% decrease in the rate would reduce interest
earned to nil.
Maturities of Financial Liabilities
The table below analyses the Group’s financial liabilities into relevant maturity groupings based on their contractual
maturities for non-derivative financial liabilities.
Contractual maturities
of financial liabilities
Weighte
d
average
Less
than 6
months
6-12
mont
hs
Between 1
and 2
years
Between
2 and 5
years
Over
5
years
Remaining
contractual
maturities
Page | 60
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
interest
rate
At 31 December 2020
Non-derivatives
Trade payables
Related Party Loan
Premium Funding Loan
At 31 December 2019
Non-derivatives
Trade payables
$’000 $’000
$’000
$’000
$’000
$’000
-
3.5%
2.31%
749
-
101
-
682
-
-
-
-
-
-
-
-
-
20,000
-
-
-
-
-
-
749
20,000
101
682
Fair value of financial instruments
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.
Note 18: Commitments and Contingencies
Operating Mining tenement expenditure commitments
As at 31 December 2020, the Group has committed, under tenement landholding conditions, to spend a minimum of $3.1
million per annum (2019: $3.4 million).
For the Laverton tenements, the commitment for 2020 is $1.9 million (2019: $1.9 million).
For the Coolgardie tenements, the commitment for 2020 is $1.2 million (2019: $1.5 million).
Contingent Asset
On 18th September 2020, Focus Minerals Limited entered an agreement to terminate the Coolgardie Rare Metals Venture
with Lithium Australia NL. Under the terms of the agreement, Focus Minerals Limited agreed to transfer 3 prospecting
licenses in exchange for a conditional grant of royalty equal to 20% of the statutory royalty paid to the State of Western
Australia. As at balance date, the related mining lease application (as conversion of the prospecting licenses) has not been
granted, therefore the likelihood, amount and timing of receiving future royalties under the agreement is unknown. Because
the royalty income is not virtually certain, no asset has been recognised within these financial statements.
Contingent Liability
There are no contingent liabilities as at 31 December 2020 (2019: Nil).
Note 19: Controlled Entities
The consolidated financial statements include the financial statements of Focus Minerals Ltd and the subsidiaries listed
below:
Name
Country of
Incorporation
% Equity Interest
31 December
2020
31 December
2019
Focus Operation Pty Ltd
Focus Minerals (Laverton) Pty Ltd
Australia
Australia
100%
100%
100%
100%
Page | 61
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
Note 20: Parent Entity
Set out below is the supplementary information about the parent entity.
Results of the parent entity
Loss for the year
Other comprehensive income
Total comprehensive loss for the year
Financial position of parent entity at year end
Current assets
Total assets
Current Liabilities
Total liabilities
Total net asset
Total equity of parent entity comprising of:
Share capital
Option reserve
Accumulative losses
Total equity
Parent Entity
2020
$’000
(7,858)
-
(7,858)
19,356
101,179
689
20,869
80,310
2019
$’000
(2,063)
-
(2,063)
12,340
88,942
544
774
88,168
427,167
-
(346,857)
80,310
427,167
-
(338,999)
88,168
Contingent Liability
There are no contingent liabilities as at 31 December 2020 (31 December 2019: Nil).
Ultimate Controlling Entity
The ultimate controlling entity at 31 December 2020 and 2019 was Shandong Gold Group Co., Ltd which owned 49.53%
(31 December 2019: 49.53%) of the company’s shares.
Financial Support for controlled entities.
The parent entity, Focus Minerals Ltd is providing and will continue to provide financial support to all its controlled entities.
Mining tenement expenditure commitment
As at 31 December 2020, the parent company has committed, under tenement landholding conditions, to spend a minimum
of $1.2 million per annum (2019: $1.4 million).
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the Group, as disclosed in note 1, except for the
following:
●
●
●
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
Investments in joint ventures are accounted for at cost, less any impairment, in the parent entity.
Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt may be an
indicator of an impairment of the investment.
Page | 62
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
Note 21: Related Party Disclosure
Subsidiaries
Interests in subsidiaries are set out in Note 19.
Compensation
The aggregate compensation made to directors and other members of key management personnel of the consolidated
entity is set out below:
Short-term employee benefits
Post-employment benefits
2020
$
1,234,848
92,470
1,327,318
2019
$
1,132,094
95,061
1,227,156
Terms and Conditions of Transactions with Related Parties
Sales to and purchases from related parties are made in arm’s length transactions both at normal market prices and on
normal commercial terms.
Transactions and Balances with Related Parties
Shandong Gold International Mining Corporation Limited is the major shareholder of Focus Minerals Limited. During 2020,
Shandong provided an unsecured loan facility to Focus Minerals Limited, totalling $20 million. Key terms of the facility
agreement are as follows:
•
•
Term: 3 years, principal payable at the end of the term.
Interest: 3.5% per annum, payable quarterly in arrears.
As at 31st December 2020, the balance of the loan payable to Shandong Gold was $20 million. Total interest expense for
the year ended 31 December 2020 was $126,389 (2019:$nil). Amount of interest payable at reporting date is $Nil
(2019:$nil).
As at 31 December 2020, balance owing to Alex Aaltonen of $20,000 (2019:$nil).
In addition, there was a payment of director fees to Mr Pei. As at 31 December 2020, the account payable balance for his
director fees was nil (2019: $36,167). Details regarding Mr’s Pei’s director’s fees are set out in the Director’s Report.
Note 22: Auditors’ Remuneration
During the financial year the following fees were paid or payable for services provided by Accounting Firm RSM Australia,
the auditor of the company, its network firms and unrelated firms.
RSM Australia Partners - Audit and review of the financial statements
PwC - Audit and review of the financial statements
Other services
RSM Australia Pty Ltd - Tax Services
RSM Australia Pty Ltd - Tax Consulting
Total
Page | 63
2020
$000
56
-
14
20
90
2019
$000
51
11
14
-
76
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
Note 23: Significant Events after Balance Date
On 14 January 2021, Lingquan Kong was appointed as Director of the Company. Mr Kong is the Company’s Principal
Mining Engineer.
The impact of the Coronavirus (COVID-19) pandemic is ongoing and while it has limited impact on the Group up to 31
December 2020, it is not practicable to estimate the potential impact, positive or negative, after the reporting date. The
situation is rapidly developing and is dependent on measures imposed by the Australian Government and other countries,
such as maintaining social distancing requirements, quarantine, travel restrictions and any economic stimulus that may be
provided.
Other than the above, there has not been any other matter or circumstance that has arisen after balance date that 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 periods.
Page | 64
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
Directors’ Declaration
In the directors’ opinion:
●
●
●
●
the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the
Corporations Regulations 2001 and other mandatory professional reporting requirements;
the attached financial statements and notes comply with International Financial Reporting Standards as issued by
the International Accounting Standards Board as described in note 1 to the financial statements;
the attached financial statements and notes give a true and fair view of the Group's financial position as at 31
December 2020 and of its performance for the financial year ended on that date; and
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become
due and payable.
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the directors
Dianfei Pei
Chairman of the Board
30 March 2021
Jinan, Shandong, China
Page | 65
For personal use only Focus Minerals Ltd – Annual Report for the year end 31 December 2020
Independent Auditor’s Report
Page | 66
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
Page | 67
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
Page | 68
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
Page | 69
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
Shareholder Information
Additional information required by the Australian Securities Exchange Listing Rules and not disclosed elsewhere in this
report. The information was prepared based on share registry information processed up to 22 March 2021.
Range of Units
Range
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 Over
Rounding
Total
Total holders
1,301
1,889
456
545
82
Units
606,774
4,486,789
3,398,440
16,599,239
157,647,353
4,273
182,748,565
% Units
0.33
2.46
1.86
9.08
86.26
0.01
100.00
Unmarketable Parcels
Minimum $ 500.00 parcel at $ 0.325 per unit
Minimum Parcel Size
1,539
Holders
1,765
Units
1,189,218
Substantial Shareholders
As at 22 March 2021, the following had notified the Company as being substantial shareholders:
Shandong Gold International Mining Corporation Limited
JP Morgan Nominees Australia Pty Ltd
HSBC Custody Nominees (Australia) Ltd
90,519,954 ordinary shares
25,320,631 ordinary shares
10,080,018 ordinary shares
Voting Rights
All ordinary shares carry one vote per share without restriction. Options for ordinary shares do not carry any voting rights.
Statement of Quoted Securities
Quoted on the Australian Securities Exchange are 182,748,565 ordinary shares.
Twenty Largest Shareholders of Each Class of Quoted Securities
Ordinary Fully Paid Shares (ungrouped) as at 22 March 2021
Rank
Name
Units
% Units
1
2
3
4
5
6
7
8
9
SHANDONG GOLD INTERNATIONAL MINING CORPORATION
LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
STONE MINING LIMITED
CITICORP NOMINEES PTY LIMITED
KAHUNA CLOTHING AND TRADING CO PTY LTD
BNP PARIBAS NOMINEES PTY LTD SIX SIS LTD
BNP PARIBAS NOMINEES PTY LTD
MRS ETERNALINA ELLIS
10
SWISS TRADING OVERSEAS CORP
Page | 70
90,039,954
25,320,631
10,080,018
4,920,958
4,111,830
2,000,493
1,479,523
1,378,439
1,000,000
883,740
49.27
13.86
5.52
2.69
2.25
1.09
0.81
0.75
0.55
0.48
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
Rank
Name
Units
% Units
11
12
13
14
15
16
17
18
19
20
LAMERTON PTY LTD
MR GEORGE SCOTT MILLING + MRS STEPHANIE MAY
MILLING
EAU ROUGE PTY LIMITED
PETER ERMAN PTY LIMITED
MR DAVID DOSTAL
VALLUGA PTY LTD
ISANTI HOLDINGS P/L
MR CHRISTOPHER DAHL + MRS HAIDEE ELIZABETH
DAHL
GREEN TAVERN PTY LTD
RMAN COLBURN MAYNE
Totals: Top 20 holders of ORDINARY SHARES (Total)
Total Remaining Holders Balance
843,490
829,299
560,000
550,544
500,000
420,000
410,000
405,765
400,000
400,000
146,534,684
36,213,881
0.46
0.45
0.31
0.30
0.27
0.23
0.22
0.22
0.22
0.22
80.18
19.82
Page | 71
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
Interest in Mining Tenements
Coolgardie Gold Project - Focus Minerals Ltd and its 100% subsidiaries
State
Project
Tenement
Status
Interest
State
Project
Tenement
Status
Interest
Bayleys
M15/0150
Bayleys
M15/0630
Bayleys
M15/1434
Bayleys
M15/1788
Bayleys
P15/5717
Bayleys
P15/5995
Bayleys
P15/6254
Bayleys
P15/6256
Bonnie Vale
M15/0277
Bonnie Vale
M15/0365
Bonnie Vale
M15/0595
Bonnie Vale
M15/0662
Bonnie Vale
M15/0711
Bonnie Vale
M15/0770
Bonnie Vale
M15/0852
Bonnie Vale
M15/0857
Bonnie Vale
M15/0877
Bonnie Vale
M15/0981
Bonnie Vale
M15/1384
Bonnie Vale
M15/1444
Bonnie Vale
M15/1760
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
100%
WA
Infrastructure
L15/0090
100%
WA
Infrastructure
L15/0095
100%
WA
Infrastructure
L15/0096
100%
WA
Infrastructure
L15/0114
100%
WA
Infrastructure
L15/0116
100%
WA
Infrastructure
L15/0119
100%
WA
Infrastructure
L15/0122
100%
WA
Infrastructure
L15/0123
100%
WA
Infrastructure
L15/0126
100%
WA
Infrastructure
L15/0127
100%
WA
Infrastructure
L15/0130
100%
WA
Infrastructure
L15/0161
100%
WA
Infrastructure
L15/0164
100%
WA
Infrastructure
L15/0168
100%
WA
Infrastructure
L15/0169
100%
WA
Infrastructure
L15/0171
100%
WA
Infrastructure
L15/0172
100%
WA
Infrastructure
L15/0173
100%
WA
Infrastructure
L15/0174
100%
WA
Infrastructure
L15/0175
100%
WA
Infrastructure
L15/0177
Bonnie Vale
M15/1853
Pending
0%
WA
Infrastructure
L15/0179
Bonnie Vale
P15/5159
Bonnie Vale
P15/5702
Bonnie Vale
P15/5703
Bonnie Vale
P15/5704
Bonnie Vale
P15/5713
Bonnie Vale
P15/5714
Live
Live
Live
Live
Live
Live
100%
WA
Infrastructure
L15/0186
100%
WA
Infrastructure
L15/0193
100%
WA
Infrastructure
L15/0194
100%
WA
Infrastructure
L15/0200
100%
WA
Infrastructure
L15/0211
100%
WA
Infrastructure
L15/0283
Bonnie Vale
P15/6598
Pending
0%
WA
Infrastructure
L15/0294
Infrastructure
G15/0007
Live
100%
WA
Infrastructure
L15/0371
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Infrastructure
G15/0046
Pending
0%
WA
Infrastructure
L15/0403
Pending
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
0%
0%
0%
Infrastructure
L15/0027
Infrastructure
L15/0028
Infrastructure
L15/0034
Infrastructure
L15/0042
Infrastructure
L15/0051
Infrastructure
L15/0059
Infrastructure
L15/0063
Infrastructure
L15/0077
Infrastructure
L15/0078
Infrastructure
L15/0088
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
100%
WA
Infrastructure
L15/0405
Pending
100%
WA
Infrastructure
L15/0421
Pending
100%
WA
Lake Cowan
E15/0986
Live
100%
100%
WA
Lake Cowan
G15/0043
Pending
100%
WA
Lake Cowan
L15/0408
Pending
100%
WA
Lake Cowan
M15/1882
Pending
100%
WA
Londonderry
P15/5732
100%
WA
Londonderry
P15/5964
100%
WA
Londonderry
P15/5966
100%
WA
Londonderry
P15/5967
Live
Live
Live
Live
0%
0%
0%
100%
100%
100%
100%
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
Page | 72
For personal use only
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
State
Project
Tenement
Status
Interest
State
Project
Tenement
Status
Interest
Londonderry
P15/5968
Londonderry
P15/5969
Londonderry
P15/5970
Londonderry
P15/5971
Londonderry
P15/5972
Londonderry
P15/6118
Londonderry
P15/6119
Londonderry
P15/6120
Londonderry
P15/6121
Londonderry
P15/6122
Londonderry
P15/6123
Londonderry
P15/6176
Londonderry
P15/6177
Londonderry
P15/6178
Lord Bob
M15/0385
Lord Bob
M15/1789
Lord Bob
P15/5712
Lord Bob
P15/5731
Lord Bob
P15/5733
Lord Bob
P15/5735
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
100%
WA
Three Mile Hill
M15/1357
100%
WA
Three Mile Hill
M15/1358
100%
WA
Three Mile Hill
M15/1359
100%
WA
Three Mile Hill
M15/1432
100%
WA
Tindals
M15/0023
100%
WA
Tindals
M15/0237
100%
WA
Tindals
M15/0410
100%
WA
Tindals
M15/0411
100%
WA
Tindals
M15/0412
100%
WA
Tindals
M15/0646
100%
WA
Tindals
M15/0660
100%
WA
Tindals
M15/0675
100%
WA
Tindals
M15/0958
100%
WA
Tindals
M15/0966
100%
WA
Tindals
M15/1114
100%
WA
Tindals
M15/1262
100%
WA
Tindals
M15/1293
100%
WA
Tindals
M15/1294
100%
WA
Tindals
M15/1433
100%
WA
Tindals
M15/1461
Lord Bob
P15/5939
Pending
0%
WA
Tindals
P15/5949
Lord Bob
P15/6102
100%
WA
Tindals
P15/5987
100%
WA
Tindals
P15/6251
100%
WA
Tindals
P15/6252
100%
WA
Tindals
P15/6253
100%
WA
Tindals
P15/6257
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
0%
100%
WA
Tindals
P15/6333
Pending
100%
WA
Lepidolite Hill
M15/1874* i
Pending
Royalty Interest
100%
WA
Lepidolite Hill
P15/5574*
100%
WA
Lepidolite Hill
P15/5575*
100%
WA
Lepidolite Hill
P15/5739*
Live
Live
Live
Royalty Interest
Royalty Interest
Royalty Interest
100%
100%
100%
100%
100%
100%
M15/0384
M15/0515
M15/0761
M15/0791
M15/0871
M15/1153
M15/1422
M15/1793
P15/5730
P15/5734
P15/5736
P15/5756
P15/5807
P15/6002
P15/6033
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Norris
Norris
Norris
Norris
Norris
Norris
Norris
Norris
Norris
Norris
Norris
Norris
Norris
Norris
Norris
Norris
P15/6605
Pending
0%
WA
Three Mile Hill
M15/0154
WA
Three Mile Hill
M15/0636
WA
Three Mile Hill
M15/0645
WA
Three Mile Hill
M15/0781
WA
Three Mile Hill
M15/0827
WA
Three Mile Hill
M15/1341
Live
Live
Live
Live
Live
Live
100%
100%
100%
100%
100%
100%
Page | 73
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
Laverton Gold Project - Focus Minerals Ltd and its 100% subsidiaries
State
Project
Tenement Status
Interest
WA
Admiral Hill-Barnicoat E38/1864
Live
100%
WA
Admiral Hill-Barnicoat E38/3232*
Live
100%
WA
Admiral Hill-Barnicoat E38/3238*
Live
100%
WA
Admiral Hill-Barnicoat E38/3565* Pending
0%
WA
Admiral Hill-Barnicoat M38/0264
Live
WA
Admiral Hill-Barnicoat M38/0318
Live
WA
Admiral Hill-Barnicoat M38/0376
Live
WA
Admiral Hill-Barnicoat M38/0377
Live
100%
100%
100%
100%
WA
Admiral Hill-Barnicoat M38/0387
Live
100%
WA
Admiral Hill-Barnicoat M38/0401
Live
WA
Admiral Hill-Barnicoat M38/0507
Live
WA
Admiral Hill-Barnicoat M38/1032
Live
WA
Admiral Hill-Barnicoat M38/1042
Live
100%
100%
100%
100%
WA
Admiral Hill-Barnicoat P38/4519* Pending
0%
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
Burtville
Burtville
Burtville
Burtville
Burtville
Burtville
Burtville
Burtville
Burtville
Burtville
Burtville
E38/1642
E38/2032
E38/3050
E38/3051
Live
Live
Live
Live
E38/3088*
Live
E38/3217*
Live
100%
100%
100%
100%
100%
100%
M38/0008
Live
100%
M38/0073
Live
M38/0089
Live
M38/0261
Live
M38/1281
Live
91%
91%
100%
100%
Central Laverton
E38/3424*
Live
100%
Central Laverton
M38/0143
Live
Central Laverton
M38/0236
Live
Central Laverton
M38/0270
Live
Central Laverton
M38/0342
Live
Central Laverton
M38/0345
Live
Central Laverton
M38/0363
Live
100%
100%
100%
100%
100%
100%
Central Laverton
M38/0364
Live
100%
Central Laverton
M38/1187
Live
Central Laverton
P38/4163*
Live
Chatterbox
M38/0049
Live
Chatterbox
M38/0101
Live
100%
100%
100%
100%
Chatterbox
M38/0535
Live
100%
Chatterbox
M38/0693
Live
Infrastructure
G38/0020*
Live
Infrastructure
G38/0024*
Live
Infrastructure
G38/0025*
Live
100%
100%
100%
100%
State
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
Page | 74
Project
Tenement Status
Interest
Infrastructure
L38/0052*
Live
100%
Infrastructure
L38/0053*
Live
100%
Infrastructure
L38/0054*
Live
100%
Infrastructure
L38/0055*
Live
100%
Infrastructure
L38/0056*
Live
100%
Infrastructure
L38/0057*
Live
100%
Infrastructure
L38/0063*
Live
100%
Infrastructure
L38/0075*
Live
100%
Infrastructure
L38/0076*
Live
100%
Infrastructure
L38/0078*
Live
100%
Infrastructure
L38/0092*
Live
100%
Infrastructure
L38/0101*
Live
100%
Infrastructure
L38/0108*
Live
100%
Infrastructure
L38/0152*
Live
100%
Infrastructure
L38/0153*
Live
100%
Infrastructure
L38/0160*
Live
100%
Infrastructure
L38/0165*
Live
100%
Infrastructure
L38/0166*
Live
100%
Infrastructure
L38/0173*
Live
100%
Infrastructure
L38/0177*
Live
100%
Infrastructure
L38/0179*
Live
100%
Infrastructure
L38/0183*
Live
100%
Infrastructure
L38/0231*
Live
100%
Infrastructure
L38/0335* Pending
Infrastructure
L38/0336* Pending
Infrastructure
L38/0337* Pending
Infrastructure
L38/0338* Pending
Infrastructure
L38/0339* Pending
0%
0%
0%
0%
0%
Lake Carey
E38/2873*
Live
100%
Lake Carey
P38/4099*
Live
100%
Lake Carey
P38/4100*
Live
100%
Lake Carey
P38/4102*
Live
100%
Lancefield
E38/3186*
Live
100%
Lancefield
M38/0037
Live
100%
Lancefield
M38/0038
Live
100%
Lancefield
M38/0159
Live
100%
Lancefield
M38/0547*
Live
100%
Lancefield
M38/1272
Live
100%
Lancefield
P38/4347*
Live
100%
Lancefield
P38/4348*
Live
100%
Lancefield
P38/4349*
Live
100%
Prendergast
E38/1725
Live
100%
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
State
Project
Tenement Status
Interest
WA
WA
WA
WA
WA
Infrastructure
G38/0033*
Live
100%
Infrastructure
L38/0034*
Live
Prendergast
P38/4091
Live
100%
100%
Murrin Murrin
*M38/0425
Live
Au Rights
Murrin Murrin
*M38/0505
Live
Au Rights
State
WA
WA
Project
Tenement Status
Interest
Prendergast
E38/1869
Live
100%
Prendergast
E38/2862*
Live
100%
* see note within Royalty Agreements section for the Laverton Gold Project.
Tenement Abbreviations:
E
P
M
L
G
=
=
=
=
=
Exploration Licence
Prospecting Licence
Mining Lease
Miscellaneous Licence
General Purpose Licence
ROYALTY AGREEMENTS
Coolgardie Gold Project
The Parent Entity has entered into the following deeds of assignment for royalty agreements relating to the Coolgardie
Gold Project. The material terms of these royalty agreements are set out in the table below:
Tenements
Royalty
M15/645 (portion of)
$1.00/tonne crushed and treated
M15/660, M15/646, M15/1114, M15/1262,
P15/6251, P15/6252 & P15/6257
$0.25/tonne mined and treated (after 2,500,000 tonnes or ore have
been mined and treated)
M15/646 (portion of)
M15/781 & M15/827
M15/365, M15/662, M15/711, M15/770,
M15/852, M15/857, M15/981, M15/1384 &
M15/1760
2% of all future gold production
0.5% NSR
2.5% NSR
M15/660 (portion of), M15/646 (portion of),
M15/958 & M15/1114
$10/ounce gold produced (after first 100,000 ounces produced) &
3% NSR on all other metals
M15/958 (portion of)
M15/1357 & M15/1358
M15/1341 & M15/1359
M15/675
M15/237
M15/1461
E15/986
$0.75/dry tonne mined and treated &
$1.50/tonne mined and treated
1.5% NSR on gold & 1% NSR on all other metals
2.5% NSR on gold & 1% NSR on all other metals
$1/tonne mined and treated
1.5% NSR
$1.00/tonne mined and treated
2.5% NSR
P15/6254 (portion of)
$1.00/tonne mined and treated.
Page | 75
For personal use only
Focus Minerals Ltd – Annual Report for the year end 31 December 2020
ROYALTY AGREEMENTS Continued
Laverton Gold Project
The Parent Entity has entered into the following deeds of assignment for royalty agreements relating to the Laverton
Gold Project. The material terms of these royalty agreements are set out in the table below:
Tenements
M38/376 & M38/377
M38/143
Royalty
$1.50/BCM of ore mined between 100,000BCM and 850,000BCM
$10/ounce gold produced (after the first 50,000 ounces)
All tenements at Laverton owned by Focus
Minerals (Laverton) Ltd (all tenements listed in the
"Interest in Mining Tenements - Laverton Gold
Project" section above except those with an *)
2% NSR
M38/37, M38/38, M38/49, M38/101, M38/159,
M38/342, M38/363, M38/364, M38/535, M38/693,
M38/1272, E38/1642 & E38/1725
3% of the Gross Revenue for the relevant quarter, if Focus has
incurred, after the date of agreement and prior to the first production
date, at least $2,000,000 but not more than $4,000,000 in
Exploration Expenditure;
2.5% of the Gross Revenue for the relevant quarter, if Focus has
incurred, after the date of agreement and prior to the first production
date, at least $4,000,000 but not more than $6,000,000 in
Exploration Expenditure; or
2% of the Gross Revenue for the relevant quarter, if Focus has
incurred, after the date of agreement and prior to the first production
date, $6,000,000 or more in Exploration Expenditure.
$1.50/tonne of ore mined and treated after 100,000 tonnes &
$0.58/tonne ore mined and milled for first 500,000 tonnes,
$0.05/tonne of ore mined and milled thereafter
3% of the gross value of gold recovered
1.5% NSR
$0.75/tonne ore mined
M38/1042
M38/73
M38/1272
M38/693
E38/1642 (portion of), E38/2032 (portion of) &
E38/3051 (portion of)
1% gross value of gold produced
All tenements within a 50km radius of Laverton
Gold Plant Feed Bin.
A quarterly fee equal to the greater of 1.25% of annual tenement
fees or $2,500.
A quarterly mining fee relating to gold production from the tenements
in a calendar year, of:
•
•
•
•
•
0 – 50,000oz Au: 0.20% of total gross proceeds of the
relevant quarter;
50,001 – 100,000oz Au: 0.24% of the total gross proceeds
of the relevant quarter;
100,001 – 150,000oz Au: 0.28% of total gross proceeds of
the relevant quarter;
150,001 – 200,000oz Au: 0.33% of total gross proceeds of
the relevant quarter;
>200,000oz Au: 0.40% of total gross proceeds of the
relevant quarter.
Scholarship funds payable each calendar year in the amount of
$10,000 where the total annual gold production is less than
100,000oz, and $20,000 if the total annual gold production is greater
than 100,000oz.
i Agreement to transfer title as per deed of settlement announcement 18 September 2020. Transfer not yet registered.
Page | 76
For personal use only