GALILEO MINING LTD
ANNUAL FINANCIAL REPORT
For the Year Ended 30 June 2021
GALILEO MINING LTD
ABN 70 104 114 132
CONTENTS
CHAIRMAN’S LETTER .................................................................................................................................................................... 3
DIRECTORS’ REPORT .................................................................................................................................................................... 4
AUDITOR’S INDEPENDENCE DECLARATION ................................................................................................................... 36
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME ................................................................................. 37
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ........................................................................................... 38
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ............................................................................................. 39
CONSOLIDATED STATEMENT OF CASH FLOWS ............................................................................................................ 40
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ...................................................................................... 41
DIRECTORS’ DECLARATION .................................................................................................................................................... 63
INDEPENDENT AUDITOR’S REPORT .................................................................................................................................... 64
CORPORATE GOVERNANCE ................................................................................................................................................... 68
ADDITIONAL ASX SHAREHOLDERS’ INFORMATION.................................................................................................... 69
TENEMENT SCHEDULE ............................................................................................................................................................. 72
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GALILEO MINING LTD
ABN 70 104 114 132
CHAIRMAN’S LETTER
Dear Shareholder,
FY2021 has been yet another significant year for Galileo Mining Ltd where we continued our aggressive
exploration campaign at the Fraser Range Nickel-Copper-Cobalt Project as well as ramped up exploration at
the Norseman Palladium-Nickel-Cobalt Project.
Over the period, we have completed two diamond drilling campaigns and an RC drilling campaign at Fraser
Range. Meanwhile, an initial 1,000 metre RC drilling campaign began post financial year end to test geophysical
models of Electromagnetic (EM) targets at the Delta Blues Prospect (DB 1 and DB 2).
Our ongoing EM survey work continued to develop a database of EM conductive zones across the project.
At Norseman, results from our continuing review of the project shows outstanding prospectivity for palladium
in the region. The existing drill results demonstrate the quality of the project and have provided the basis for a
new understanding of the mineralising processes, leading to the development of robust drill targets with the
potential for a significant palladium discovery. We will be aggressively pursuing this exceptional opportunity
going forward.
While we progress our exploration campaigns, it is important to note the impact COVID-19 has had and
continues to have on the junior exploration sector in terms of access to drill rigs and labour shortages as a
result of imposed travel restrictions into WA. Galileo has not been immune, with our latest Fraser Range drilling
campaign pushed back from June to August 2021. This initial campaign is now complete, and we are currently
planning a follow-up diamond drilling program. The design of this program will be finalised upon receipt of
assay results and downhole EM surveying.
Importantly, this delay has not impacted our resolve or our view that the Fraser Range remains a prime region
to explore and potentially find economic nickel mineralisation.
On the cash front, since the end of the period we have completed a successful capital raising of $6.5 million
and we are fully funded to accelerate our exploration campaigns at both the Fraser Range and Norseman
projects.
Lastly, I would like to thank our loyal shareholders for sticking with us over the past year. Our ambition to
discover economic deposits in the Fraser Range and Norseman regions remains as strong as ever and through
further exploration success we hope to make this a near-term reality.
Yours faithfully,
Brad Underwood
Chairman/Managing Director
GALILEO MINING LTD
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GALILEO MINING LTD
ABN 70 104 114 132
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2021
The directors present their report on the Company and the Group (consisting of the Company and the entities
it controlled during the period) for the financial year ended 30 June 2021.
DIRECTORS
The following directors have been in office since the start of the financial year to the date of this report unless
otherwise stated:
Brad Underwood (Managing Director and Chairman)
Noel O’Brien (Non-executive Director)
Mathew Whyte (Non-executive Director)
PRINCIPAL ACTIVITIES
The principal activity of the Group during the financial year was mineral exploration.
FINANCIAL RESULTS AND FINANCIAL POSITION
The net loss of the Group for the financial year ended 30 June 2021 after providing for income tax amounted
to $688,244 (2020: $912,561).
The Group has not reached a stage in its development where it is generating an operating profit. All the
Group’s efforts go into project exploration and evaluation.
At the end of the financial period the Group had cash on hand, including deposits of $5,395,503 (2020:
$8,697,061) and Net Assets of $19,238,440 (2020: $19,944,176).
DIVIDENDS
No dividends have been declared since the end of the previous financial year and no dividends have been
recommended by the directors.
REVIEW OF OPERATIONS
Galileo has two highly prospective West Australian resource and exploration projects being:
1) The Fraser Range Project with exploration tenements prospective for nickel-copper-cobalt deposits, and
2) The Norseman Project with exploration tenements prospective for palladium-nickel-cobalt deposits and
an existing JORC compliant cobalt-nickel resource.
During the financial year, the Group’s main activities were on exploration at the Fraser Range Project
through a series of drilling campaigns, electromagnetic (EM) surveying and other exploration activities.
Galileo also undertook target generation work at the Norseman project identifying significant intersections
of palladium from the Group’s existing drill hole database. Palladium and nickel sulphide exploration also
progressed at Norseman with multi-element assays received from 1,620 unique sample locations (1,726
assays in total).
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ABN 70 104 114 132
Figure 1: Galileo Mining’s Project Areas
Highlights of the Group’s activities during the year include:
Fraser Range Project (JV with Creasy Group)
Diamond drilling campaign1 confirms highly prospective nature of Lantern nickel sulphide prospect
Assay results:
o 22.66 metres @ 0.19% nickel & 0.14% copper from 132.67m, including:
o 5.95 metres @ 0.36% nickel & 0.29% copper from 134.82m
First occurrence of nickel and copper rich massive sulphides over 7cm section of drill core with assays
of:
o 4.6% nickel, 2.2% copper, 0.15% cobalt & 0.7 g/t palladium from 136.2m (LARC013D)
RC assay results2 expand nickel-copper footprint at the Lantern South prospect with:
o 41 metres @ 0.19% nickel & 0.14% copper from 55m (LARC0012) including
o 10 metres @ 0.26% nickel & 0.23% copper from 78m; and
o Anomalous gold (max 88ppb), platinum (75ppb) & palladium (max 88ppb) associated with
nickel and copper interval
Diamond drill hole3 completed at the Lantern South Prospect with zones of heavily disseminated
sulphide intercepted from 110.5m to 111.35m and from 169m to 171.3m
1 Refer to ASX announcement dated 28th October 2020
2 Refer to ASX announcement dated 29th September 2020
3 Refer to ASX announcement dated 16th March 2021
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Two diamond drill holes tested EM conductor at the Lantern East Prospect with source of the EM
conductor interpreted to be iron sulphide (pyrrhotite) on the edge of a large mafic intrusion
Modelling of EM targets at the Delta Blues Prospect shows two highly conductive targets4
o DB1 modelled as a single 800-metre-long body with conductivity of 11,000 Siemens
o DB2 modelled as a 460-metre-long body with conductivity of 3,300 Siemens
Approvals for diamond drilling at the Delta Blues nickel prospect in the Fraser Range received5
Ongoing EM surveying focussed along strike of the Lantern East and Lantern South prospects where
early drill results showed nickel-copper sulphides
Norseman Project (100% owned)
High palladium assay results identified in database of previous RC drilling beneath and adjacent to
existing cobalt resources6
35 RC drill holes with anomalous palladium greater than 0.4 g/t in regolith and 16 RC drill holes with
anomalous palladium greater than 0.2 g/t in fresh rock
Best palladium results from weathered rock;
o 48 metres @ 0.89 g/t Pd, 0.45 g/t Pt, 0.1 % Cu & 0.37% Ni from 3m (MTRC112) including
o 5 metres @ 2.1 g/t Pd, 1.4 g/t Pt, 0.13% Cu & 0.23% Ni from 31m
Best palladium results from fresh rock;
o 27 metres @ 0.58 g/t Pd, 0.12 g/t Pt, 0.13 % Cu & 0.18% Ni from 123m (MTRC096) including
o 3 metres @ 1.1 g/t Pd, 0.19 g/t Pt, 0.23% Cu & 0.26% Ni from 135m
Only two drill holes assayed for rhodium - prospective maximum grades of 0.36 g/t Rh in weathered
rock and 0.18 g/t in fresh rock
Multiple drill ready targets with over 5km of prospective strike length at Mt Thirsty and over 10km of
prospective strike length at Mission Sill
Nickel sulphide exploration at Norseman progressing well with multi-element assays received from
1,620 unique sample locations (1,726 assays in total) 7
Interpretation and evaluation of results is ongoing with a 52 element, raw geochemical data set for
each sample
Integration of new hyperspectral data with existing data sets expected to generate focus areas for
nickel targeting
Corporate
Well-funded to continue exploration with approximately $5.4 million in cash and deposits as at 30 June
2021 which was augmented by a successful capital raise of $6.5 million (before costs) post end of year.
Fraser Range Project
The Fraser Range Project covers exploration licences totalling 602 km2 in the Albany-Fraser Orogen. The
Albany-Fraser Orogen is dominated by the northeast-trending Fraser Zone, a suite of high-grade
metamorphic rocks that have a distinct geophysical signature in both aeromagnetic and gravity data. The
Fraser Zone comprises mainly metagabbroic rocks interlayered with sheets of granitic gneisses. Galileo’s
Fraser Range Project is located across two areas – the northern Kitchener zone which hosts the Group’s
Lantern and Delta Blues prospects and the southern Yardilla zone which holds the Empire Rose Prospect.
4 Refer to ASX announcement dated 8th February 2020
5 Refer to ASX announcement dated 4th May 2021
6 Refer to ASX announcement dated 17th May 2021
7 Refer to ASX announcement dated 13 January 2021
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ABN 70 104 114 132
Figure 2: Galileo Prospect Locations in the Fraser Range Nickel Belt
The project is well positioned within the nickel-copper bearing Fraser Range Zone, with the Nova Bollinger and
Silver Knight deposits located between the two Galileo-controlled areas. The location also offers excellent
access to infrastructure, with the main Eyre Highway immediately south of the Fraser Range Project area.
Lantern
Only a limited amount of drilling has been undertaken at the Lantern prospects with Galileo the first company
to explore the area for bedrock mineralisation. No previous nickel exploration has occurred on Galileo’s
northern Fraser Range tenure which provides the Group with a first mover advantage on a virgin greenfields
property in a new nickel belt.
Lantern South
At Lantern South, diamond drilling undertaken during the December 2020 Quarter intersected significant
sulphide mineralisation within hole LARC013D, which targeted disseminated sulphide mineralisation along
strike from previously reported RC drill hole LARC003. 23m of heavily disseminated, blebby and banded nickel-
copper sulphides in ultramafic host rock were intercepted in the diamond drill hole. Assays from this section
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GALILEO MINING LTD
ABN 70 104 114 132
averaged 0.19% nickel and 0.14% copper.
Of great importance was the intersection of a 7cm band of primary, massive sulphide (see Figure 3). This section
assayed 4.6% nickel, 2.2% copper and 0.15% cobalt and demonstrates the ability of the mineralising system at
the Lantern Prospect to create high grade nickel and copper sulphides.
Figure 3 – Disseminated, blebby and banded sulphide mineralisation in drill hole LARC013D (downhole
depth 135m to 138m, HQ core diameter 6.35cm)
In the March 2021 Quarter, one diamond drill hole was completed to check for mineralisation beneath RC drill
hole LARC012 and to establish a platform for down hole EM surveying. Two zones of heavily disseminated
sulphide were intercepted within drill hole LADD003 from 110.5m to 111.35m and from 169m to 171.3m.
(See Figure 4)
LADD003 intersected a multi-phased ultramafic unit within a gabbronorite host rock. Disseminated sulphides
(pyrrhotite-chalcopyrite-pentlandite) occur close to the contact zone between the ultramafic and the host rock.
Detailed structural and lithological logging of all drill core will provide valuable information to assist the
understanding of the occurrence and nature of the mineralisation.
This will greatly benefit future drill targeting at the Lantern Prospects and within Galileo tenements over the
surrounding area. Core will be submitted to the laboratory for assaying after the completion of logging
however handheld XRF readings did not identify nickel or copper at levels above those recorded from diamond
drilling at Lantern South in 2020.8 Please see Table 1 for drill log summary and Figure 5 for drill hole location.
Downhole EM surveying at the Lantern South and Lantern East prospects will be completed to look for off-
hole conductive targets that could represent significant accumulations of massive sulphides.
8 Refer to Galileo’s ASX announcement dated 28th October 2020
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GALILEO MINING LTD
ABN 70 104 114 132
Figure 4 –– Disseminated Sulphide in LADD003 at 170m (pyrrhotite with minor pentlandite/
chalcopyrite)
Table 1: LADD003 Drill Log Summary
From
(m)
0
51
80.4
110.5
111.35
114
169
171.3
To (m)
Comment
51
80.4
110.5
111.35 Olivine gabbronorite, heavily disseminated sulphide
Transported cover
Saprolite/weathered gabbronorite
Gabbronorite and leucogabbro
114
169
171.3
213.2
Olivine gabbronorite and pyroxenite
Gabbronorite
Gabbronorite, heavily disseminated sulphide
Ultramafic and gabbronorite
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GALILEO MINING LTD
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Figure 5 ––Lantern South Prospect Plan Showing Sulphide Target Zone and Drill Hole LADD003
Lantern East
Two diamond drill holes were completed at the Group’s Lantern East prospect during the March 2021 Quarter.
The drill holes targeted an EM anomaly on the margin of a major intrusive rock unit. Drillhole LADD001 tested
a Fixed Loop EM model and intersected a complex package of intrusive rock units on the margin of the
regionally large gabbronorite intrusion at approximately 210m downhole. No significant sulphides were
recorded in this drill hole. Drillhole LADD002 tested a Moving Loop EM model and intersected the same
complex package of intrusive rock units at the contact with the gabbronorite. Minor bands of pyrrhotite (iron
sulphide) were noted from 190m downhole which corresponded well with the modelled source of the EM
anomaly at this location. Although the structure and geology of the Lantern East prospect is compelling, the
sulphide recorded so far is pyrrhotite dominant and does not contain significant nickel or copper
mineralisation.
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GALILEO MINING LTD
ABN 70 104 114 132
Figure 6 –– Diamond Drilling at Galileo’s Lantern East Prospect
Figure 7 ––Completed Diamond Drill Holes at the Lantern East Prospect (Magnetic Background)
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Delta Blues
In April, Galileo reported on results from additional geophysical modelling at the Delta Blues nickel copper
prospect in the Fraser Range region of Western Australia. The priority EM conductor at the Delta Blues DB2
target was corroborated by an independent geophysicist with results from modelling demonstrating a robust
target. Modelled parameters fall within a range of 1,500 to 5,000 Siemens (conductive strength), with a strike
length between 350m and 500m, and a depth extent between 250m and 500m. Depth to the top of the
conductive source was estimated at between 125 and 185 metres below surface. All modelled parameters
indicate a sizeable conductive body that may be related to significant sulphide mineralisation. Interpretation
of gravity and magnetic data further supports the possibility that the target is associated with magmatic
sulphide mineralisation. Independent modelling of EM data from the DB2 target at the Delta Blues prospect
confirmed the location of the conductor within a range overlapping with the original modelling. Independent
review of EM data from the DB1 prospect confirmed the very high conductivity of the target model.
A component of this high conductivity is attributed to near surface/cover effects which limit the ability to model
the depth extent of the conductor. The modelled depth extent is restricted (25m to 40m – see Table 2) with the
result that a high conductivity is required to provide a best fitting scenario between the modelled response
and the observed field data. The proposed drill hole shown in Figure 8 will test the source of the anomaly.
Table 2 shows the updated parameters of the DB1 and DB2 models.
Table 2: Delta Blues modelled conductors
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GALILEO MINING LTD
ABN 70 104 114 132
Figure 8 ––Indicative Cross Section of Proposed Drilling at the Delta Blues DB1 Prospect
Figure 9 ––Indicative Cross Section of Proposed Drilling at the Delta Blues DB2 Prospect
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In May, Galileo received statutory approvals for diamond drilling at Delta Blues with 1,000 metres of drilling
planned for the initial program to test DB1 and DB2.
Several drill holes have been planned to test for mineralisation at DB2 due to the large scale of the target. It
is expected that at least two drill holes will be undertaken in the first round of drilling at this location.
One drill hole is planned at the DB1 target as a first test to determine the cause of the conductive anomaly and
to pinpoint the optimum position for potential mineralisation.
RC drilling was completed post end of the reporting period with semi massive sulphide intersected over bands
of two to three metres width in all three drill holes completed at the DB2 prospect. Sulphides were
predominantly pyrrhotite with minor chalcopyrite. Strike length of the sulphides at DB2 is a minimum of 210
metres with deeper diamond drilling required to determine the economic significance of the sulphide
occurrences.
One drill hole was completed post end of the reporting period at the DB1 prospect. This drill hole aimed to
determine the cause of the conductive anomaly with the top of the conductive source modelled to start
between 175m and 255m below surface. The RC drill hole was finished at 200m and while not intersecting
conductive material it did record nickel prospective intrusive rock units. Importantly, no graphite or sulphidic
sediments (false positives) were encountered. Follow up diamond drilling is required at DB1 to resolve the
cause of the conductive anomaly and to test for economic potential.
Norseman Project
While Galileo has been focused on developing its Fraser Range project, during the period the Group also
advanced exploration at its Norseman nickel-cobalt project, which occurs at the southern end of the Norseman-
Wiluna greenstone belt.
Nickel Exploration
During the period, Galileo received assay data from soil sampling undertaken to identify areas with
prospectivity for nickel sulphide mineralisation.
1,726 soil samples (1,620 unique sample locations) targeting areas with potential for nickel were collected and
analysed - see Table 3 for a summary of soil sampling assay results and Figure 10 for location/results of soil
sampling programs.
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Figure 10 – Soil Sampling Locations at the Norseman Project. Red Ellipses Show Outline of Soil Sampling
Programs
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Table 3: Summary of Soil Sampling Assay Results from the Norseman Project
Integration of soil sampling data with geophysical data, hyperspectral data, geological data, topographical
data, and satellite imagery is being undertaken to give the sample assays context and meaning. A specialist
remote sensing company was contracted to collect hyperspectral data and to integrate the new mineral
mapping information with existing data sets, including the recently received soil assays. Airborne data
collection has been completed while data interpretation utilising machine learning and Artificial Intelligence
(AI) software is ongoing.
A follow up exploration program will be devised upon the completion of all data integration and analysis.
Results from this target generation work will be utilised in the planning of drill programs scheduled for the
current field season.
Palladium Exploration
Target generation work conducted at the Norseman project identified significant intersections of palladium
from the Group’s existing drill hole database. Multiple drill ready targets were developed through geological
interpretation of the prospective contact zones which host palladium in association with copper sulphide
mineralisation.
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Figure 11 – Drill Section with Palladium Mineralisation and Target Zone at the Mt Thirsty Prospect9
9 Refer to Appendices in ASX announcement dated 17 May 2021 for details of anomalous palladium drill holes
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Table 4 – Key Palladium Intersections for the Norseman Project10
Table 5 – Key Rhodium Intersections for the Norseman Project6
Drilling completed in 2016 by Galileo beneath the cobalt-nickel laterite resource at Mt Thirsty intersected a
previously unrecognised zone of sulphide containing highly anomalous levels of palladium, platinum, copper,
and nickel (see section in Figure 11). This sulphide zone occurs within an ultramafic rock unit interpreted to be
an apophysis from the Mt Thirsty sill which itself is visible as a pronounced high in the magnetic map to the
east (Figure 13).
The stratigraphy at the drill hole location is flat and the sharp magnetic contact is believed to represent the
position at which the sill crosscuts stratigraphy. This contact between the intruding sill and the flat lying
stratigraphy is the prospective target zone with potential for higher grade mineralisation.
10 Refer to Appendices in ASX announcement dated 17 May 2021 for drill hole details
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The grade within the sulphide zone increases towards the east (Figure 11), supporting the idea that more
mineralisation occurs within the target zone. The prospective contact zone is easily traced to the north over
5km of strike and represents a substantial target. There is no record of any historic exploration for
palladium/platinum along this basal contact position.
Figure 12 – Plan View of Anomalous Palladium Drill Holes and Prospective Contact Zone at the Mt Thirsty
Prospect6
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Figure 13 – Magnetic Map (TMI) of Mt Thirsty Prospect showing over 5km of Prospective Contact Zone
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Figure 14 – Drill Section with Basement Palladium Mineralisation and Target Contact Zone at the Mission
Sill Prospect6
Galileo assay results are further supplemented by historical results. Drilling at the Mission Sill in the year 2000
by Anaconda Nickel was designed to investigate the development of nickel laterite resources in the area. Seven
drill holes in the original program intercepted anomalous palladium and platinum within the near surface
saprolite overlying the ultramafic component of the Mission Sill. Later drilling by Australian Gold Resources
(AGR) focussed on the platinum potential in fresh rock of the ultramafic unit. Subsequent drilling by Galileo
also concentrated on platinum intercepts within the ultramafic as well as drilling out the cobalt-nickel laterite
resource to JORC compliant resource standards.
The potential for palladium at the Mission Sill has now been recognised after a review of the data showed the
existence of significant thicknesses of disseminated sulphide mineralisation (up to 5% in patches) at the contact
between the ultramafic and mafic units of the Mission Sill. This contact position matches the location of multiple
zones of anomalous mineralisation up to 74 metres thick containing approximately 0.2g/t palladium (MTRC036,
Figure 14). The possibility of higher-grade mineralisation along this contact position is interpreted to be
considerable, especially where the geometry and relative exhumation of the sill changes along strike.
The prospective contact zone continues over 10km to the north with additional prospectivity to the south on
the southern flank of an offset ultramafic block (Figure 12). This southern block also contains a cobalt-nickel
laterite resource and was the subject of drilling by Galileo in 2018 to investigate the relationship between
Platinum Group Metals (PGMs) and cobalt in the regolith.11
11 Refer to ASX announcement dated 27th September 2018.
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This southern prospect contains the highest-grade palladium intercepted in weathered rock (MTRC112), and
the highest grades of rhodium in MSSD001. The contact zone between ultramafic and mafic units has not yet
been drilled at this location and is a priority target.
Two further drill ready targets occur on the Mission Sill where soil sampling completed late in 202012
highlighted two separate zones of anomalous palladium with maximum soil values of 0.31g/t Pd and 0.16g/t
Pd respectively (shown on Figure 16).
Figure 15 – Plan View of Anomalous Palladium Drill Holes and Prospective Contact Zone at the Mission Sill
Prospect
12 Refer to ASX announcement dated 13th January 2021.
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Figure 16 – Magnetic Map of the Mission Sill Prospect with over 10km of Prospective Contact Zone
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Occurrences of high-grade palladium up to 4.3 g/t have also been observed within fresh rock of the ultramafic
unit at Mission Sill (MTRC128, see section in Figure 14). This intersection was accompanied by a rhodium grade
of 0.18g/t and demonstrates the fertility of the host rock units. However, the focus for exploration is currently
on the ultramafic/mafic contact zones where sulphides occur in association with palladium. This is a similar
position to where mineralisation occurs at other known deposits such as the Lac des Iles palladium mine in
Canada and the Munni Muni platinum group metal deposit in Western Australia.
Planned work programs at the Norseman Project
• Assaying of existing pulps for rhodium and platinum group metals
• RC drilling of the known sulphide zones at the Mt Thirsty Sill and the Mission Sill
• 10,000 meters of Aircore drilling of the prospective contact zone along strike of the sulphide zones
at the Mission Sill and Mt Thirsty Sill
• Ongoing target generation work for nickel, copper and cobalt
OPERATIONS POST YEAR END
Fraser Range Project
RC drilling commenced at the Delta Blues prospect in August. The program of five drill holes for 1,000 metres
of drilling is designed to test the top of EM conductors at the DB1 and DB2 targets with EM anomalies at
both locations supported by positive interpretations of magnetic, gravity, and aircore drilling data. Follow up
diamond drilling is anticipated to test the deeper parts of the EM conductors with timing subject to rig
availability.
CORPORATE
As at 30 June 2021, the Group had cash and deposits of approximately $5.4 million.
In September 2021, Galileo has completed a successful capital raising of $6.5 million (before costs) by a
placement issuing 25 million shares at $0.26 per share. This puts the Group in a secure position during the
current period of economic uncertainty.
Risks to the Group due to the ongoing global COVID-19 health emergency continue to be monitored. The
Group’s cash position provides insulation to any longer-term unforeseen impacts to funding and operating
that may occur. All of Galileo’s projects are located in Western Australia and, although the future risk from
COVID-19 cannot be reliably estimated, the potential impact on Group’s operations over the next 12 months
does not appear significant.
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JORC Mineral Resource Estimates
Cut‐off
Cobalt %
MT THIRSTY SILL
0.06 %
Class
Tonnes Mt
Co
%
Tonnes
%
Ni
Tonnes
Indicated
Inferred
Total
MISSION SILL
0.06 %
Inferred
GOBLIN
0.06 %
Inferred
TOTAL JORC COMPLIANT RESOURCES
0.06 %
Total
10.5
2.0
12.5
7.7
4.9
0.12
0.11
0.11
12,100
2,200
14,300
0.58
0.51
0.57
60,800
10,200
71,100
0.11
8,200
0.45
35,000
0.08
4,100
0.36
16,400
25.1
0.11
26,600
0.49 122,500
Table 1 ‐ JORC Mineral Resource Estimates for the Norseman Cobalt Project (“Estimates”)
(refer to ASX “Prospectus” announcement dated May 25th 2018 and ASX announcement
dated 11th December 2018, accessible at http://www.galileomining.com.au/investors/asx‐
announcements/). Galileo confirms that all material assumptions and technical parameters
underpinning the Estimates continue to apply and have not materially changed).
Competent Person Statements
The information in this Table that relates to the Mt Thirsty Sill and Mission Sill Mineral Resource Estimates is
based on, and fairly represents, information and supporting documentation prepared by Michael Elias, who
is a Fellow of The Australasian Institute of Mining and Metallurgy. Mr. Elias is employed by CSA Global Pty
Ltd. Mr. Elias has sufficient experience which is relevant to the style of mineralisation and type of deposit
under consideration and to the activity he is undertaking to qualify as a competent person as defined in the
2012 Edition of the “Australasian Code for reporting of Exploration Results, Exploration Targets, Mineral
Resources and Ore Reserves”. Mr. Elias consents to the inclusion in this Table of the matters based on his
information in the form and context in which it appears.
The information in this Table that relates to the Goblin Mineral Resource Estimate, and the Exploration
Information in the Review of Operations and the information in this report that relates to exploration results,
is based on, and fairly represents, information and supporting documentation prepared by Mr Brad
Underwood, a Member of the Australasian Institute of Mining and Metallurgy, and a full time employee of
Galileo Mining Ltd. Mr Underwood has sufficient experience that is relevant to the styles of mineralisation
and types 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” (JORC Code). Mr Underwood consents to the inclusion in the Table of the
matters based on his information in the form and context in which it appears.
With regard to the Company’s ASX Announcements referenced in this report, the Company is not aware of
any new information or data that materially affects the information included in the Announcements.
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CAPITAL STRUCTURE
As at the date of this Director’s report the Company’s Capital structure is as follows:
Quoted Securities:
Number
Class
168,101,205
Ordinary Fully Paid Shares
Un-quoted Securities:
Number
Class
2,272,727
Unquoted Options exercisable at $0.44 expiring 29 April 2022
2,500,000
Unquoted Options exercisable at $0.52 expiring 15 September 2023
12,500,000
Class A Options exercisable at $0.20 expiring 31 January 2023
1,100,000
Performance Rights expiring 31 January 2023 subject to vesting conditions
SIGNIFICANT EVENTS AFTER THE BALANCE DATE
-
-
-
The impact of the Coronavirus (COVID-19) pandemic is ongoing and while it has not had a negative
financial impact for the Group up to 30 June 2021, 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.
On 6 August 2021 the Company announced that 100,000 Performance Rights had been cancelled
effective 23 July 2021 due to conditions not being met. Effective 5 August 2021, 100,000 Performance
Rights were issued in accordance with the terms and conditions of the Galileo Mining Ltd Employee
Incentive Plan as part of the Company’s employee equity incentive arrangements.
Subsequent to balance date the Company completed a capital raising (refer ASX announcement 8
September 2021) to raise $6.5 million (before costs) by way of a placement to institutions and
sophisticated investors (“Placement”). Settlement of the placement occurred on 15 September 2021
(refer ASX Announcement dated 15 September 2021) when the Company issued 25,000,000 at an issue
price of $0.26 per share.
As part of the fee for the lead manager to the Placement the Company also issued on 15 September
2,500,000 unquoted Options with an exercise price of $0.52 and an expiry date of 15 September 2023.
Other than the above, no other matters or circumstances have occurred subsequent to balance date that
have or may significantly affect the operations or state of affairs of the Group in subsequent financial years.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
The Group will continue its evaluation of its mineral projects and undertake generative work to identify and
acquire new resource projects and opportunities. Due to the nature of the business, the result is not
predictable.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
Other than reported above in the Review of Operations, there were no significant changes in the state of
affairs of the Group during the reporting period.
26
GALILEO MINING LTD
ABN 70 104 114 132
ENVIRONMENTAL REGULATIONS AND PERFORMANCE
The Group is required to carry out the exploration and evaluation of its mining tenements in accordance
with various State Government Acts and Regulations.
In regard to environmental considerations, the Group is required to obtain approval from various State
regulatory authorities before any exploration requiring ground disturbance, such as line clearing, drilling
programs and costeaning is carried out. It is normally a condition of such regulatory approval that any area
of ground disturbed during the Group’s activities is rehabilitated in accordance with various guidelines. The
Group conducts its exploration activities in an environmentally sensitive manner and is not aware of any
significant breaches of these guidelines.
INFORMATION ON DIRECTORS AND SECRETARIES
Current Directors
Brad Underwood – Managing Director (appointed 13 September 2017) and Chairman (effective from
26 December 2019)
Mr Underwood is a geologist with over 18 years’ experience in exploration, prospecting and mining. He has
been involved in nickel, gold, copper and cobalt discoveries and the development of numerous prospects
over a variety of commodities.
Between 2010 and 2018 Mr Underwood worked for prospector and mining entrepreneur Mark Creasy as
General Manager of several private companies. He has a wide range of skills including the strategic growth
and commercialisation of mineral assets at different stages of development.
Mr Underwood played a key role in the discovery of the Silver Knight nickel-copper-cobalt deposit in the
Fraser Range and the discovery of Galileo’s Mission Sill cobalt resources.
Mr Underwood has a Bachelor of Science in Geology and a Post Graduate Diploma in Geology from the
University of Auckland, and a Master of Science (Distinction) in Mineral Economics from Curtin University.
Brad has not held any other directorships of listed entities in the last 3 years.
Noel O’Brien –Non -Executive Director (appointed 6 February 2018)
Noel O’Brien is a metallurgist with wide international and corporate experience. After a career spanning 40
years in Australia and Africa he established Trinol Pty Ltd, a Perth based consultancy, to provide process and
project development services over a broad range of commodities.
Mr O’Brien has been actively involved with projects containing manganese, iron ore, gold, base metals, and
the battery metals including lithium, graphite and cobalt.
He has served on the board of a number of ASX listed companies over the past 9 years and is currently a
technical advisor to several listed companies with early to advanced stage projects.
Mr O’Brien has a Batchelor’s degree in Metallurgical Engineering from the University of Melbourne, an MBA
from the University of the Witwatersrand and is a Fellow of the AusIMM. Noel was a Non- executive Director
of: Mali Lithium (ASX: MLL) from 1 December 2017 to 6 April 2020; and Metals Tech Limited (ASX: MTC)
from 17 June 2019 to 6 July 2020.
Mr Mathew Whyte – Non-Executive Director (Appointed 26 December 2019) and Company Secretary
Mr Whyte is a CPA and a Chartered Secretary (FGIA FCG). He has over 25 years’ commercial experience in
the financial management, direction, and corporate governance of ASX listed companies.
Mr Whyte has held senior executive, company secretarial and directorship roles on a broad range of
Australian ASX listed entities with operations in Australia and overseas in the mining exploration, mining
services, power infrastructure and technology development industries. Mr Whyte was a Non-executive
director and Company Secretary of Aurora Labs Ltd (ASX: A3D) from 26 July 2017 to 26 February 2020.
27
GALILEO MINING LTD
ABN 70 104 114 132
DIRECTORS’ INTERESTS IN SHARES AND PERFORMANCE RIGHTS OF THE COMPANY
As at the date of this report, the interest of the directors in securities of Galileo Mining Ltd were:
Number of
Ordinary Shares
300,000
350,000
200,000
Options
10,000,000
2,500,000
Performance
Rights
-
-
-
400,000
Brad Underwood
Noel O’Brien
Mathew Whyte
DIRECTORS’ MEETINGS
The following table sets out the number of meetings of directors held during the year ended 30 June 2021
and the number of meetings attended by each director.
Brad Underwood
Noel O’Brien
Mathew Whyte
REMUNERATION REPORT (Audited)
Number Eligible to
Attend
11
11
11
Number Attended
11
11
11
The Directors of Galileo Mining Ltd present the Remuneration Report (‘the Report”) for the Group for the year
ended 30 June 2021 (“FY21”). This Report forms part of the Directors’ Report and has been audited as required
by section 300A of the Corporations Act 2001.
Key management personnel disclosed in this report
For the purposes of this Report, key management personnel (KMP) of the Group are defined as those persons
having authority and responsibility for planning, directing and controlling the major activities of the Group,
directly or indirectly, including a director (whether executive or otherwise) of the Company, and its
subsidiaries.
Details of key management personnel:
Brad Underwood (Managing Director/Chairman)
Noel O’Brien (Non-executive Director)
Mathew Whyte (Non-executive Director and Company Secretary)
Remuneration Philosophy
The performance of the Group depends upon the quality of its Directors and Executives. To prosper the Group
must attract, motivate and retain highly skilled directors and KMP.
To this end Galileo aims to reward executives with a level and mix of remuneration commensurate with their
position and responsibility so as to align the interests of executives with those of shareholders and to ensure
total remuneration is competitive by market standards.
Remuneration and nomination issues are handled at the full Board level. Due to the small number of directors
and KMP no separate committee has been established for this purpose.
Board members, as per groupings detailed below, are responsible for determining and reviewing
compensation arrangements.
In order to maintain good corporate governance, the Non-executive Directors assume responsibility for
determining and reviewing compensation arrangements for the Executive Directors of the Group. The
Executive Directors in turn are responsible for determining and reviewing the compensation arrangements
for the Non-executive Directors.
28
GALILEO MINING LTD
ABN 70 104 114 132
The assessment considers the appropriateness of the nature and amount of remuneration of KMPs on a
periodic basis by reference to relevant employment market conditions with the overall objective of ensuring
maximum stakeholder benefit from the retention of a high-quality Board and executive team.
Independent external advice is sought from remuneration consultants when required, however no advice has
been sought during the year ended 30 June 2021. The Corporate Governance Statement provides further
information on the Company’s remuneration governance.
Remuneration structure
In accordance with best practice corporate governance, the structure of Non-executive Director and Executive
Director’s remuneration is separate and distinct.
A. Non-executive Directors’ remuneration
Objective
The Board seeks to set aggregate remuneration at a level that provides the Group with the ability to attract
and retain directors of the highest calibre, whilst incurring a cost that is acceptable to shareholders.
Structure
The Board policy is to remunerate non-executive directors at commercial market rates for comparable
companies for their time, commitment and responsibilities.
On appointment to the Board, all non-executive directors sign a letter of appointment. The letter summarises
the Board policies and terms including remuneration, relevant to the office of director.
The constitution and the ASX Listing rules specify that the aggregate remuneration of non-executive directors
shall be determined from time to time by shareholders at general meeting.
Non-executive directors receive a fixed fee inclusive of superannuation contributions. Fees for non-executive
directors are not linked to the performance of the Group. Subject to approval by shareholders, Non-executive
directors’ remuneration may also include an incentive portion consisting of Options and Performance Rights,
which are granted for the same reasons and objectives and on the same terms as Options granted to Executive
Directors as outlined in Section B below. To this end Non-executive Directors are also entitled to participate
in Galileo’s Long Term Incentive Plan (LTI Plan).
The remuneration of Non-executive Directors for the year ended 30 June 2021 is detailed in the table in
Section C of this Report.
B. Executive Directors remuneration
Objective
The Group aims to reward Executive Directors with a level and mix of remuneration commensurate with their
position and responsibilities within the Group and so as to:
- Align the interests of Executive Directors with those of shareholders.
-
Link rewards with the strategic goals and performance of the Group
-
Ensure total remuneration is competitive by market standards.
Structure
In determining the level of remuneration paid to Executive Directors, the Board takes into account the
activities of the Group and available benchmarks.
An employment contract has been entered into with the Executive Director of Galileo. Details of this contract
are provided in Section D of this Report.
29
GALILEO MINING LTD
ABN 70 104 114 132
Remuneration consist of the following key elements:
-
- Variable Remuneration – Long Term Incentive (LTI).
Fixed remuneration
The proportion of fixed remuneration and variable remuneration is established for the Executive Director by
the Board. The table in Section C of this Report details the fixed and variable components (%) of the Executive
Directors of Galileo.
Fixed Remuneration
The level of fixed remuneration is set as a cash salary plus superannuation contributions so as to provide a
base level of remuneration which is both appropriate to the position and is competitive in the market.
Variable remuneration – Long Term Incentives (LTI)
Options
LTI grants to executives are delivered in the form of Options.
The table in Section C provides details of Options granted and the value of equity instruments granted,
exercised and lapsed during the year. Options were issued free of charge. Each option entitles the holder to
subscribe for one (1) fully paid ordinary share in Galileo upon the exercise of the option based on achieving
vesting conditions at a $0.20 exercise price. The terms and conditions including the service and performance
criteria that must be met are as follows:-
Each Option will only vest and become exercisable when the 60-day volume weighted average market price
(as defined in the Listing Rules) of Galileo’s quoted Shares first exceeds $0.60 per Share. Options not so
exercised shall automatically expire on the expiry date. Each Option entitles the holder to subscribe (in cash)
for one Share in the capital of Galileo. Each Share allotted as a result of the exercise of any Option will rank
in all respect pari passu with the existing Shares in the capital of Galileo on issue at the date of allotment.
Relationship between remuneration and the Group’s performance
As the Group is a listed exploration Group, measuring performance is difficult. The most meaningful measure
of internal performance is on goals that have an exploration focus.
In considering the Group’s performance and benefits for shareholder wealth, the Board have regard to the
following indices in respect of the current financial year and the previous financial years:
2021
2020
2019
Net Loss
688,244
912,561
1,097,116
Share price (as at year
end)
$0.275
$0.21
$0.135
30
GALILEO MINING LTD
ABN 70 104 114 132
C. Remuneration Details
Details of the nature and amount of each element of the remuneration of each KMP of the Group are shown
in the table below:
Short-term benefits
Share-based payments(1)
Post
employment
Super-
annuation
Long-term
benefits
Long
Service
Leave
$
$
$
$
Options
5,928
5,944
12,319
8,897
325,000
325,000
Salary &
fees
Non
monetary
benefits
$
Brad Underwood (Managing Director) – appointed 13 September 2017
2021
2020
Noel O’Brien (Non-Executive Director) – appointed 6 February 2018
2021
2020
Mathew Whyte (2) (Non-Executive Director) – appointed 26 December 2019
2021
2020
Simon Jenkins (Ex-Chairman) – appointed 13 September 2017, Deceased 24 December 2019
2021
2020
Total 2021
Total 2020
(66,500)
-
(66,500)
-
-
30,000
531,931
553,640
-
-
12,319
8,897
-
-
38,250
32,931
-
-
5,928
5,944
152,000
123,640
30,875
30,875
54,931
75,000
4,750
2,056
2,625
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Perfor-
mance
Rights
Total
$
Perform-
ance
Related
%
-
-
-
-
30,313
30,396
-
-
30,313
30,396
374,122
370,716
57,566
75,000
187,063
156,092
(66,500)
30,000
552,241
631,808
-
-
-
-
16.2
19.5
-
-
5.5
4.8
(1) Amounts recognised as Share Based Payments represent:
Options ‐ the non‐cash fair value of Class A Unquoted Options issued during FY 2018. Each Option is exercisable at $0.20 with 12,500,000
Options expiring on 31 January 2023 and 2,500,000 expired on 24 December 2020 without meeting exercise conditions. Options will only
vest and become exercisable when the 60‐day VWAP of the Company’s quoted shares first exceeds $0.60 per share. All Options were
released from escrow on 29 May 2020.
Performance Rights – the expensed non‐cash fair value of performance rights issued during FY 2018 free of charge (Refer Note 20(b)).
Each Performance Right entitles the holder to subscribe for one (1) fully paid ordinary share in the Company based on achieving vesting
conditions at a nil exercise price.
The terms and conditions including the service and performance criteria that must be met are as follows: ‐
(a)
volume weighted average market price (as defined in the ASX Listing Rules) of the Company’s quoted Shares first exceeds $1.00 per
Share (Vesting Condition).
(b) Maintain a minimum of 12 months continuous service with the Company.
(c)
employment with the Company is terminated for any reason before the Vesting Condition is met.
If a Good Leaver* and the Vesting Condition has been satisfied at the date of termination the Performance Rights may be
(d)
exercised within 20 Business Days of termination of employment or contracting (as applicable) with the Company. If a Bad Leaver* and
the Vesting Condition has been satisfied at the date of termination the Performance Rights will terminate.
*As defined in the Galileo Mining Ltd Employee Incentive Plan
Subject to the below paragraphs (b) to (d), each Performance Right will only vest and become exercisable when the 10 day
Each Performance Right will automatically be cancelled and will be redeemed by the Company for nil consideration if
(2) Mathew Whyte provided company secretarial services through his controlled entity Whypro Corporate Services ABN 53 844 654 790.
Payments for company secretarial services during FY 2021 totalled $102,000 (excluding superannuation) (2020: $102,000). Mr Whyte
also received a Non‐executive director fee of $50,000 (plus superannuation of $4,750) (2020: $21,640 (plus superannuation $2,056).
31
GALILEO MINING LTD
ABN 70 104 114 132
Unlisted Options Issued to KMP
No options were issued to KMP during, or since the end of, the current financial year ended 30 June 2021.
The following options over unissued ordinary shares are held by KMP as remuneration:
Class
Expiry date
Exercise
price
Date granted
Number of
options
Grant date
fair value
Vesting date
Unlisted
Options
31 Jan 2023
$0.20
6 Feb 2018
12,500,000
$0.0266
Based on
VWAP
Option holdings of key management personnel (unlisted options)
KMP
Balance at
beginning
of the year
Options
Granted
Options
expired
Net
change
other
Balance
at end of
the year
Vested at end of year
Exercisable
Not
exercisable
2021
B Underwood
N O’Brien
M Whyte
10,000,000
2,500,000
-
Total
12,500,000
-
-
-
-
KMP
Balance at
beginning
of the year
Options
Granted
Options
expired
2020
B Underwood
N O’Brien
M Whyte
S Jenkins
10,000,000
2,500,000
-
2,500,000
Total
15,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
10,000,000
2,500,000
-
-
12,500,000
-
-
-
-
Net
change
other
Balance
at end of
the year
Vested at end of year
Exercisable
Not
exercisable
-
-
-
(2,500,000)*
10,000,000
2,500,000
-
-
(2,500,000)
12,500,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
* 2,500,000 Options were cancelled on 24 December 2020 pursuant to their Terms and Conditions of issue
Performance Rights Issued to KMP
No performance rights were issued to KMP during, or since the end of, the current financial year ended 30
June 2021.
The following performance rights over unissued ordinary shares are held by KMP as remuneration:
Class
Expiry date
Exercise
price
Date granted
Number
Grant date
fair value
Expected Vesting
date
Performance
Rights
31 January
2023
Nil
29 June 2018
400,000
$0.365
30 June 2022
32
GALILEO MINING LTD
ABN 70 104 114 132
Performance Rights of key management personnel (unlisted options)
KMP
Balance at
beginning
of the year
Performance
Rights
Granted
Performance
Rights
expired
Net
change
other
Balance at
end of the
year
2021
M Whyte
400,000
Total
400,000
-
-
-
-
KMP Balance at
beginning
of the year
Performance
Rights
Granted
Performance
Rights
expired
Net
change
other
2020
M Whyte
400,000
Total
400,000
-
-
-
-
Shareholdings of key management personnel (ordinary shares)
-
-
-
-
Vested at end of year
Exercisable
Not
exercisable
-
-
-
-
Vested at end of year
Exercisable
Not
exercisable
400,000
400,000
Balance at
end of the
year
400,000
400,000
-
-
-
-
KMP
2021
B Underwood
N O’Brien
M Whyte
Total
KMP
2020
B Underwood
N O’Brien
M Whyte
S Jenkins
Balance at
beginning of
the year
Granted as
remuneration
Conversion of
Convertible
Notes
Net change
other
Balance at
end of the
year
300,000
-
200,000
500,000
-
-
-
-
-
-
-
-
Balance at
beginning of
the year
Granted as
remuneration
Conversion of
Convertible
Notes
Net change
other
300,000
-
200,000
500,000
-
-
-
-
-
-
-
-
-
(500,000)*
-
-
-
-
-
-
-
300,000
-
200,000
500,000
Balance at
end of the
year
300,000
-
200,000
-
Total
* Net change includes 500,000 Holding as at date ceased to be a director – 24/12/19
1,000,000
-
(500,000)
500,000
D. Service Agreements
Mr Brad Underwood – Managing Director and Chairman
Terms of Agreement – commenced as Managing Director on 6 February 2018, no fixed term, until
terminated by either party.
- Termination – 3 months by Mr Underwood and 6 months by Galileo.
- Salary: Fixed remuneration of $325,000 per annum plus superannuation for the year ended 30/6/2021.
Fixed remuneration of $360,000 per annum plus superannuation commencing from 1/7/2021 pursuant
to a deed of variation dated 24 June 2021.
33
GALILEO MINING LTD
ABN 70 104 114 132
E. Loans to key management personnel
There were no loans to key management personal during the financial year or the previous financial year.
F. Other KMP transactions
1. As at 30 June 2021, there was nil amount relating to outstanding directors’ fees payable to Trinol
Pty Ltd, a company of which Noel O’Brien is a director (30 June 2020: $6,875).
2. Whypro Corporate Services a business of which Mathew Whyte is principal, provided company
secretarial, corporate administration and CFO services to the Company totalling $102,000
(excluding GST) (30 June 2020: $102,000). As at 30 June 2021, $9,350 was payable to Whypro
Corporate Services.
End of Remuneration Report
SHARE OPTIONS
At the date of this report the unissued ordinary shares of the Company under option are as follows:
Date of
Expiry
31 Jan 23
29 Apr 22
24 Dec 20
Exercise
Price
$0.20
$0.44
$0.20
Held at
01 Jul 20
12,500,000
2,272,727
2,500,000
Issued
Exercised
-
-
-
-
-
-
Lapsed /
Cancelled
-
Held at
23 Sep 21
12,500,000
-
2,272,727
(2,500,000)
-
Option holders do not have any right, by virtue of the option, to participate in any share issue of the Company
or any related body corporate or in the issue of any other registered scheme.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied to any court pursuant to section 237 of the Corporations Act 2001 for leave to bring
proceedings on behalf of the Company or intervene in any proceedings to which the Company is a party for
the purpose of taking responsibility on behalf of the Company for all or any part of those proceedings. The
Company was not a party to any such proceedings during the year.
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
The Company has entered into a deed of indemnity with all existing directors and officers. Under the deed
the Company has undertaken, subject to the restrictions in the Corporations Act, to indemnify all existing
directors in certain circumstances whilst a director or officer and for 7 years after they have ceased to be a
director or officer.
During the year, the Company paid a premium to insure officers of the Group. The officers of the Group
covered by the insurance policy include all directors and the company secretary.
The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may
be brought against the officers in their capacity as officers of the Company, and any other payments arising
from liabilities incurred by the officers in connection with such proceedings, other than where such liabilities
arise out of conduct involving a wilful breach of duty by the officers or the improper use by the officers of
their position or of information to gain advantage for themselves or someone else to cause detriment to the
Group.
Details of the amount of the premium paid in respect of the insurance policies is not disclosed as such
disclosure is prohibited under the terms of the contract.
The Company has not otherwise, during or since the end of the financial year, except to the extent permitted
by law, indemnified or agreed to indemnify any current or former officer or auditor of the Group against a
liability incurred as such by an officer.
34
GALILEO MINING LTD
ABN 70 104 114 132
AUDIT COMMITTEE
The Group is not of a size nor are its financial affairs of such complexity to justify a separate audit committee
of the board of directors. All matters that might properly be dealt with by such a committee are the subject
of scrutiny at full board meetings.
AUDITOR INDEPENDENCE AND NON-AUDIT SERVICES
The Auditor’s Independence Declaration immediately follows this Report and forms part of this Report. The
Directors are satisfied as to the independence of the auditors.
During the financial year the entity’s auditor, HLB Mann Judd, did not provide other non-audit services (2020:
$Nil) (refer to note 21).
Signed in accordance with a resolution of directors.
For and on Behalf of the Board of Directors
Mr Brad Underwood
Managing Director
Perth, 23 September 2021
35
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the consolidated financial report of Galileo Mining Ltd for the year
ended 30 June 2021, I declare that, to the best of my knowledge and belief, there have been no
contraventions of:
(a)
the auditor independence requirements as set out in the Corporations Act 2001 in relation to
the audit; and
(b)
any applicable code of professional conduct in relation to the audit.
Perth, Western Australia
23 September 2021
D I Buckley
Partner
36
GALILEO MINING LTD
ABN 70 104 114 132
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2021
Notes
30 June 2021
$
30 June 2020
$
Other income
3
124,568
330,177
Employee benefits and director fees expense
Consulting fees
Share-based payment (expense)/reversal
Depreciation expense
Exploration & evaluation refund
Legal and audit expenses
Other expenses
(177,710)
(234,091)
17,492
(85,133)
14,920
(39,181)
(309,109)
(275,240)
(318,774)
(119,494)
(92,876)
26,440
(93,728)
(369,066)
Loss before income tax expense
(688,244)
(912,561)
Income tax expense
4
-
-
Net loss after income tax
(688,244)
(912,561)
Other comprehensive income
-
-
Total comprehensive loss for the year
(688,244)
(912,561)
Loss per share (cents per share)
Basic loss per share for the year
Diluted loss per share for the year
5
5
2021
¢
(0.48)
(0.48)
2020
¢
(0.73)
(0.73)
The above Consolidated Statement of Comprehensive Income is to be read in conjunction with the Notes to the
Consolidated Financial Statements.
37
GALILEO MINING LTD
ABN 70 104 114 132
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2021
Notes
30 June 2021
$
30 June 2020
$
ASSETS
Current Assets
Cash and cash equivalents
Cash on term deposits
Trade and other receivables
Other
Total Current Assets
Non-Current Assets
Property, plant and equipment
Right-of-use assets
Exploration and evaluation expenditure
Other assets
Total Non-Current Assets
TOTAL ASSETS
LIABILITIES
Current Liabilities
Trade and other payables
Lease Liabilities
Other Liabilities
Total Current Liabilities
Non-Current Liabilities
Other Liabilities
Total Non-Current Liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
17a
17a
6a
7a
8
9
10
7b
11
12
13a
13b
5,395,503
-
46,301
37,546
5,479,350
4,549
61,863
13,934,466
26,071
4,192,061
4,505,000
104,355
32,332
8,833,748
13,713
79,941
11,387,156
26,071
14,026,949
11,506,881
19,506,299
20,340,629
124,599
59,320
54,025
237,944
29,915
29,915
235,157
83,187
53,079
371,423
25,030
25,030
267,859
396,453
19,238,440
19,944,176
14
15
16
22,929,035
903,076
(4,593,671)
22,929,035
920,568
(3,905,427)
19,238,440
19,944,176
The above Consolidated Statement of Financial Position is to be read in conjunction with the Notes to the Consolidated
Financial Statements.
38
GALILEO MINING LTD
ABN 70 104 114 132
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2021
Issued
capital
$
Share based
payment
reserve
$
Accumulated
losses
Total
$
$
As at 1 July 2020
22,929,035
920,568
(3,905,427)
19,944,176
Loss for the year
Other comprehensive income
Total comprehensive loss for the year
Share based payments
Reversal of cancelled options from
reserve
Reversal of cancelled performance rights
from reserve
-
-
-
-
-
-
-
-
-
(688,244)
-
(688,244)
94,330
(66,500)
(45,322)
-
-
-
(688,244)
-
(688,244)
94,330
(66,500)
(45,322)
As at 30 June 2021
22,929,035
903,076
(4,593,671)
19,238,440
As at 1 July 2019
18,411,245
593,719
(3,048,917)
15,956,047
Loss for the year
Other comprehensive income
Total comprehensive loss for the year
Issue of shares
Transaction costs of share issue
Share based payments
Transfer cancelled performance rights
from reserve
-
-
-
-
-
-
5,000,000
(482,210)
-
-
-
-
382,900
(56,051)
(912,561)
-
(912,561)
-
-
-
56,051
(912,561)
-
(912,561)
5,000,000
(482,210)
382,900
-
As at 30 June 2020
22,929,035
920,568
(3,905,427)
19,944,176
The above Consolidated Statement of Changes in Equity is to be read in conjunction with the Notes to the Consolidated
Financial Statements.
39
GALILEO MINING LTD
ABN 70 104 114 132
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2021
Cash Flow from Operating Activities
Payments to suppliers and employees
Exploration and evaluation expenditure refund
Interest received
Other income
GST received/(paid)
Interest paid
Notes
30 June 2021
$
30 June 2020
$
(749,440)
14,920
38,710
93,075
50,838
(2,710)
(970,023)
-
78,630
246,813
(20,763)
(7,093)
Net cash (used in) operating activities
17b
(554,607)
(672,436)
Cash Flow from Investing Activities
Payments for exploration and evaluation expenditure
Payment for purchase of tenements
Payment for property, plant & equipment
Security deposit receipt
Receipts from/(payments for) term deposits
(2,665,192)
-
-
-
4,505,000
(2,418,962)
-
(6,730)
20,232
(505,000)
Net cash provided by/(used in) investing activities
1,839,808
(2,910,460)
Cash Flow from Financing Activities
Proceeds from issue of shares
Share issue costs
Lease payments
-
-
(81,759)
5,000,000
(218,804)
(76,695)
Net cash provided by/(used in) financing activities
(81,759)
4,704,501
Net increase in cash held
1,203,443
1,121,605
Cash at the beginning of the year
4,192,061
3,070,456
Cash at the end of the year
17a
5,395,503
4,192,061
The above Consolidated Statement of Cash Flows is to be read in conjunction with the Notes to the Consolidated Financial
Statements.
40
GALILEO MINING LTD
ABN 70 104 114 132
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
1. CORPORATE INFORMATION
The financial report of Galileo Mining Ltd for the year ended 30 June 2021 was authorised for issue in
accordance with a resolution of directors on 23 September 2021.
Galileo Mining Ltd is a company limited by shares incorporated in Australia whose shares are publicly
traded on the Australian Securities Exchange.
The address of the registered office is 13 Colin Street, West Perth WA 6005.
The Group’s principal activity during the year was mineral exploration. Major exploration activities
during the period are outlined in the Review of Operations as contained in the Directors’ Report.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of preparation
The financial report is a general purpose financial report, which has been prepared in accordance
with the requirements of the Corporations Act 2001, Australian Accounting Standards and other
authoritative pronouncements of the Australian Accounting Standards Board. The financial report
has also been prepared on a historical cost basis.
For the purpose of preparing the consolidated financial statements, the Group is a for-profit entity.
The financial report is presented in Australian dollars and the accounting policies below have been
consistently applied to all of the years presented unless otherwise stated. The financial report is
for the Group consisting of Galileo Mining Ltd and its subsidiaries.
(b) Basis of consolidation
The consolidated financial statements comprise the financial statements of Galileo Mining Ltd
(Galileo) and its subsidiaries as at 30 June 2021 (the Group).
Control is achieved when the Group is exposed, or has rights, to variable returns from its
involvement with the investee and has the ability to affect those returns through its power over
the investee. Specifically, the Group controls an investee if and only if the Group has:
Power over the investee (i.e. existing rights that give it the current ability to direct the
relevant activities of the investee);
Exposure, or rights, to variable returns from its involvement with the investee; and
The ability to use its power over the investee to affect its returns.
When the Group has less than a majority of the voting or similar rights of an investee, the Group
considers all relevant facts and circumstances in assessing whether it has power over an investee,
including:
The contractual arrangement with the other vote holders of the investee:
Rights arising from other contractual arrangements; and
The Group’s voting rights and potential voting rights.
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate
that there are changes to one or more of the three elements of control. Consolidation of a
subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group
loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or
disposed of during the year are included in the statement of comprehensive income from the date
the Group gains control until the date the Group ceases to control the subsidiary.
41
GALILEO MINING LTD
ABN 70 104 114 132
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
Profit or loss and each component of other comprehensive income (OCI) are attributed to the
equity holders of the parent of the Group and to the non-controlling interests, even if this results
in the non-controlling interests having a deficit balance. When necessary, adjustments are made
to the financial statements of subsidiaries to bring their accounting policies into line with the
Group’s accounting policies. All intra-group assets and liabilities, equity, income, expenses and
cash flows relating to transactions between members of the Group are eliminated in full on
consolidation.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as
an equity transaction. If the Group loses control over a subsidiary, it:
De-recognises the assets (including goodwill) and liabilities of the subsidiary
De-recognises the carrying amount of any non-controlling interests
De-recognises the cumulative translation differences recorded in equity
Recognises the fair value of the consideration received
Recognises the fair value of any investment retained
Recognises any surplus or deficit in profit or loss
Reclassifies the parent’s share of components previously recognised in OCI to profit or loss
or retained earnings, as appropriate, as would be required if the Group had directly disposed
of the related assets or liabilities
Business combinations are accounted for using the acquisition method.
(c) Compliance with IFRS
The financial report complies with Australian Accounting Standards, which include Australian
equivalents to International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures
that the financial report, compromising the financial statements and notes thereto, complies with
International Financial Reporting Standards.
(d) New Accounting Standards and Interpretations
Standards and Interpretations applicable to 30 June 2021
In the period ended 30 June 2021, the Directors have reviewed all of the new and revised
Standards and Interpretations issued by the AASB that are relevant to the Group and effective for
the current reporting period. As a result of this review the Directors have determined that there
is no material impact on the Group’s accounting policies.
Standards and Interpretations in issue not yet adopted
The Directors have also reviewed all of the new and revised Standards and Interpretations in issue
not yet adopted as at 30 June 2021. As a result of this review the Directors have determined that
there is no material impact of the Standards and Interpretations in issue not yet adopted on the
Group.
(e) Exploration and evaluation expenditure
Exploration and evaluation expenditures in relation to each separate area of interest are
recognised as an exploration and evaluation asset in the year in which they are incurred where the
following conditions are satisfied:
-
-
the rights to tenure of the area of interest are current; and
at least one of the following conditions is also met:
42
GALILEO MINING LTD
ABN 70 104 114 132
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
-
the exploration and evaluation expenditures are expected to be recouped through
successful development and exploration of the area of interest, or alternatively, by its sale;
or
- exploration and evaluation activities in the area of interest have not at the balance 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 are continuing.
Exploration and evaluation assets are initially measured at cost and include acquisition of rights to
explore, studies, exploratory drilling, trenching and sampling and associated activities and an
allocation of depreciation and amortisation of assets used in exploration and evaluation activities.
General and administrative costs are only included in the measurement of exploration and
evaluation costs where they are related directly to operational activities in a particular area of
interest.
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. The recoverable amount of the exploration and evaluation asset (for the cash
generating unit(s) to which it has been allocated being no larger than the relevant area of interest)
is estimated to determine the extent of the impairment loss (if any). Where an impairment loss
subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its
recoverable amount, but only to the extent that the increased carrying amount does not exceed
the carrying amount that would have been determined had no impairment loss been recognised
for the asset in previous years.
Where a decision has been made to proceed with development in respect of a particular area of
interest, the relevant exploration and evaluation asset is tested for impairment and the balance is
then reclassified to development.
(f) Plant and equipment
Plant and equipment is stated at cost less accumulated depreciation and any accumulated
impairment losses.
Depreciation is calculated on a straight-line basis over the estimated useful life of the asset as
follows:
Plant and equipment – 2 to 6 years
Impairment
The carrying values of plant and equipment are reviewed for impairment when events or changes
in circumstances indicate the carrying value may not be recoverable.
For an asset that does not generate largely independent cash inflows, the 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.
If any such indication exists and where the carrying values exceeds the estimated recoverable
amount, the assets or cash generating units are written down to their recoverable amount.
Disposal
An item of plant and equipment is derecognised upon disposal or when no further future
economic benefits are expected to arise from the continued use or disposal of the asset.
43
GALILEO MINING LTD
ABN 70 104 114 132
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
Any gain or loss arising on derecognition of the asset (calculated as the difference between the
net disposal proceeds and the carrying amount of the item) is included in profit or loss in the
period the item is derecognised.
(g) Trade and other receivables
Trade receivables are measured on initial recognition at fair value and are subsequently measured
at amortised cost using the effective interest rate method, less any allowance for impairment.
Trade receivables are generally due for settlement within periods ranging from 0 days to 30 days.
The Group has applied the simplified approach to measuring expected credit losses, which uses a
lifetime expected loss allowance. To measure the expected credit losses, trade receivables have
been grouped based on days overdue.
(h) Cash and cash equivalents
Cash and cash equivalents in the Statement of Financial Position comprise cash at bank and on
hand and short-term 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.
(i) 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.
Provisions are measured at the present value of management’s best estimate of the expenditure
required to settle the obligation at the balance date. If the effect of the time value of money is
material, provisions are discounted using a current pre-tax rate that reflect the time value of money
and the risks specific to the liability. The increase in the provision resulting from the passage of
time is recognised in finance costs.
(j) Other Income
Interest income
Interest income is recognised as interest accrues using the effective interest method. This is a
method of calculating the amortised cost of a financial asset and allocating the interest income
over the relevant period using the effective interest rate, which is the rate that exactly discounts
estimated future cash receipts through the expected life of the financial asset to the net carrying
amount of the financial asset.
Government grants
Grants that compensate the Group for expenses incurred are recognised as other income in the
Statement of Comprehensive Income on a systematic basis in the same periods in which the
related expenses are incurred.
(k) 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 balance date.
44
GALILEO MINING LTD
ABN 70 104 114 132
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
Deferred income tax is provided on all temporary differences at the balance 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 where 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, at the time of the
transaction, affects neither the accounting profit or taxable profit or loss; or
in respect of taxable temporary differences associated with investments in subsidiaries,
associates and interest in joint ventures, except where the timing of the reversal of the
temporary differences can be controlled and it is probable that the temporary differences will
not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward
of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will
be available against which the deductible temporary differences, and the carry–forward of unused
tax assets and unused tax losses can be utilised:
except where the deferred income tax asset relating to the deductible temporary difference
arises from the initial recognition of an asset or liability in a transaction that is not a business
combination and, at the time of the transaction, affects neither the accounting profit nor
taxable profit or loss; or
in respect of deductible temporary differences associated with investment in subsidiaries,
associates and interests in joint ventures, deferred tax assets are only recognised to the extent
that it is probable that the temporary differences will reverse in the foreseeable future and
taxable profit will be available against which the temporary differences can be utilised.
The carrying amount of deferred income tax assets is reviewed at each balance 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 are reassessed at each balance sheet date and are
recognised to the extent that it has become probable that future taxable profit will allow the
deferred tax asset to be recovered.
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 balance date.
Income taxes relating to items recognised directly in equity are recognised in equity and not in
the Statement of Comprehensive Income.
Deferred tax assets and 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.
(l) Other taxes
Revenues, expenses and assets are recognised net of the amount of GST except:
where 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 are stated with the amount of GST included.
45
GALILEO MINING LTD
ABN 70 104 114 132
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
The net amount of GST recoverable from, or payable to, the taxation authority is included as part
of the receivables or payables in the Statement of Financial Position.
Cash flows are included in the Statement of Cash Flows 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.
(m) Trade and other payables
Trade payables and other payables are initially measured at fair value and subsequently carried at
amortised cost and represent liabilities for goods and services provided to the Group prior to the
end of the financial year that are unpaid and arise when the Group becomes obliged to make
future payments in respect of the purchase of the goods and services.
Due to their short-term nature they are measured at amortised cost and are not discounted. The
amounts are unsecured and are usually paid with 30 days of recognition.
(n) Employee Entitlements
Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to
be settled wholly within 12 months after the end of the period in which the employees render the
related service are recognised in respect of employees services up to the end of the reporting
period and are measured at the amounts expected to be paid when the liabilities are settled.
Long Service Leave
The liability for long service leave is recognised 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. Consideration is given to expected future wage and salary levels, experience of employee
departures and periods of service. Based on the Company’s experience of employee departures, a
long service leave liability is only recognised once an employee has been employed by the
Company for a period of 5 years. Expected future payments are discounted using market yields at
the reporting date on national Government bonds with terms to maturity and currencies that
match, as closely as possible, the estimated future cash outflows.
(o) Contributed equity
Ordinary share capital is recognised at the fair value of the consideration received by the Group.
Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a
reduction of the share proceeds received.
(p) Earnings/Loss per share (EPS)
Basic EPS is calculated as net profit or loss attributable to members, adjusted to exclude costs of
servicing equity (other than dividends), divided by the weighted average number of ordinary
shares, adjusted for any bonus element.
Diluted EPS is calculated as net profit or loss attributable to members, adjusted for:
costs of servicing equity (other than dividends);
the after tax effect of dividend 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;
46
GALILEO MINING LTD
ABN 70 104 114 132
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
divided by the weighted average number or ordinary shares and dilutive potential ordinary shares,
adjusted for any bonus element.
(q) Share-based payment transactions
The Group provides benefits to employees (including directors and executives) of the Group and
to third parties in the form of share-based payment transactions, whereby employees and third
parties render services in exchange for shares or rights over shares (‘equity-settled transactions’).
The cost of these equity-settled transactions with employees is measured by reference to the fair
value at the date at which they are granted. The fair value is determined by using an appropriate
option pricing 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 Galileo Mining Ltd (‘market conditions’).
The cost of equity-settled transactions is recognised, together with a corresponding increase in
equity, over the period in which the performance conditions are fulfilled, ending on the date on
which the relevant employees become fully entitled to the award (‘vesting date’).
The cumulative expense recognised for equity-settled transactions at each reporting date until
vesting date reflects (i) the extent to which the vesting period has expired and (ii) the number of
awards that, in the opinion of the directors of the Company, will ultimately vest. This opinion is
formed based on the best available information at balance date. No adjustment is made for the
likelihood of market performance conditions being met as the effect of these conditions is
included in the determination of fair value at grant date.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting
is conditional upon a market condition.
Until an award has vested, any amounts recorded are contingent and will be adjusted if more or
fewer awards vest than were originally anticipated to do so. Any award subject to a market
condition is considered to vest irrespective of whether or not that market condition is fulfilled,
provided that all other conditions are satisfied.
If the terms of an equity-settled award are modified, as a minimum an expense is recognised as if
the terms had not been modified. In addition, an expense is recognised for any modification that
increases the total fair value of the share-based payment arrangement, or is otherwise beneficial
to the employee, as measured at the date of modification.
If an equity-settled award is cancelled, other than forfeiture, 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, as described in the previous paragraph.
The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the
computation of earnings/loss per share.
(r) Significant Accounting Judgements, Estimates and Assumptions
The carrying amounts of certain assets and liabilities are often determined based on estimates and
assumptions of future events. The key estimates and assumptions that have a significant risk of
causing a material adjustment to the carrying amounts of certain assets and liabilities with the next
annual reporting period are:
47
GALILEO MINING LTD
ABN 70 104 114 132
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
(i) Capitalised exploration and evaluation expenditure
The future recoverability of capitalised exploration and evaluation expenditure is dependent
on a number of factors, including whether the Group decides to exploit the related lease itself
or, if not, whether it successfully recovers the related exploration and evaluation asset through
sale.
Factors which could impact the future recoverability include the level of proved, probable and
inferred mineral resources, future technological changes which could impact the cost of mining,
future legal changes (including changes to environmental restoration obligations) and changes
to commodity prices.
To the extent that capitalised exploration and evaluation expenditure is determined not to be
recoverable in the future, this will reduce profits and net assets in the period in which this
determination is made.
In addition, exploration and evaluation expenditure, other than acquisition costs, is expensed
as incurred. Acquisition costs in relation to mineral tenements are capitalised and carried
forward provided the rights to tenure of the area of the interest are current and such costs are
expected to be recouped through successful development, or by sale, or where exploration and
evaluation activities have not, at balance date, reached a stage to allow a reasonable
assessment regarding the existence of economically recoverable reserves.
(ii) Income tax
Refer to Note 2(k) for the Group’s accounting policy in relation to recognition of income tax
balances.
3. OTHER INCOME
Interest revenue
Research and development rebate
Other income
Total other income
4. INCOME TAX EXPENSE
a) Tax Expense
Current tax expense
Deferred tax expense
Total income tax expense
2021
$
31,493
24,575
68,500
124,568
2020
$
83,363
191,791
55,023
330,177
-
-
-
-
-
-
48
GALILEO MINING LTD
ABN 70 104 114 132
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
b) Numerical reconciliation between tax expense and pre-tax net
loss
Net Loss from operations before income tax expense
2021
$
2020
$
(688,244)
(912,561)
Corporate tax rate applicable
30%
30%
Income tax benefit on above at applicable corporate rate
(206,473)
(273,768)
Increase in income tax due to tax effect of:
Share based payments
Expenses not deductible
Current year tax losses not recognised
Decrease in income tax expense due to:
Deductible capital raising costs
Non-assessable income
Income tax expense / (benefit)
Deferred tax assets and liabilities
-
-
291,638
(57,545)
(27,620)
-
35,848
348
367,654
(57,545)
(72,537)
-
c) Recognised deferred tax assets and liabilities
30%
30%
Deferred tax assets
Other provisions & accruals
Employee provisions
Tax losses
ROU Assets
Blackhole – Previously expensed
Set -off of deferred tax liabilities
Net deferred tax assets
Deferred tax liabilities
Exploration and evaluation assets
Unearned income
Prepayments
8,103
25,182
3,813,259
(763)
175
7,142
23,433
3,024,739
974
263
3,845,956
3,056,551
(3,845,956)
-
(3,056,551)
-
(3,845,648)
(308)
-
(3,053,455)
(2,473)
(623)
Gross deferred tax liabilities
(3,845,956)
(3,056,551)
Set-off of deferred tax assets
Net deferred tax liabilities
3,845,956
-
3,056,551
-
49
GALILEO MINING LTD
ABN 70 104 114 132
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
d) Unused tax losses and temporary differences for which no
deferred tax asset has been recognised
Deferred tax assets have not been recognised in respect of the
following using corporate tax rates of:
Deductible temporary difference
Tax Revenue Losses
2021
$
2020
$
30%
30%
84,113
1,284,362
141,659
1,009,671
Total Unrecognised deferred tax assets
1,368,475
1,151,330
The corporate tax rates on both recognised and unrecognised deferred tax assets and deferred tax liabilities have
been calculated with respect to the tax rate that is expected to apply in the year the deferred tax asset is realised
or the liability is settled.
5. LOSS PER SHARE
Loss per share (cents per share)
Basic loss per share for the year
Diluted loss per share for the year
The following reflects the loss used in the basic and diluted loss
per share computations.
(a) Loss used in calculating loss per share
2021
¢
(0.48)
(0.48)
2020
¢
(0.73)
(0.73)
2021
$
2020
$
For basic and diluted loss per share:
Net loss for the year attributable to ordinary shareholders of the
parent
(688,244)
(912,561)
As the Group generated losses for the financial years ended 30 June 2020 and 2021, all potential ordinary shares
on issue will not have a dilutionary effect and therefore no calculation of diluted earnings per share performed.
(b) Weighted average number of shares
For basic and diluted loss per share:
Weighted average number of ordinary shares
2021
Number
2020
Number
143,101,205
124,099,714
50
GALILEO MINING LTD
ABN 70 104 114 132
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
6. TRADE AND OTHER RECEIVABLES
(a) Current
Accrued interest
Net GST receivable
7. OTHER ASSETS
(a) Current
Cash deposited as security bond
Prepayments
(b) Non-current
Cash deposited for rental bond
8. PROPERTY, PLANT AND EQUIPMENT
At cost
Accumulated depreciation
Net carrying amount
Reconciliation
Reconciliation of the carrying amount of office furniture and
equipment at the beginning and end of the current financial year.
Office furniture and equipment
At 1 July net of accumulated depreciation
Acquisitions
Depreciation charge for the year
At 30 June net of accumulated depreciation
Field equipment
At 1 July net of accumulated depreciation
Acquisitions
Depreciation charge for the year
At 30 June net of accumulated depreciation
2021
$
2020
$
1,027
45,274
46,301
8,244
96,111
104,355
2,340
35,206
37,546
26,071
26,071
2,340
29,992
32,332
26,071
26,071
38,015
(33,466)
4,549
38,015
(24,302)
13,713
9,106
-
(6,051)
3,055
4,607
-
(3,112)
1,495
15,113
3,295
(9,302)
9,106
4,805
3,434
(3,632)
4,607
Total
4,549
13,713
51
GALILEO MINING LTD
ABN 70 104 114 132
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
9. RIGHT-OF-USE ASSETS
At cost
Accumulated depreciation
Net carrying amount
Reconciliation
Reconciliation of the carrying amount of right-of-use assets at the
beginning and end of the current financial year.
Right-of-use assets
At 1 July net of accumulated depreciation
Initial application of AASB16
Lease modification
Depreciation charge for the year
At 30 June net of accumulated depreciation
10. EXPLORATION AND EVALUATION EXPENDITURE
Costs carried forward in respect of:
Exploration and evaluation phase – at cost
Reconciliation
Opening balance
Acquisition of tenements
Incurred during the year
Total exploration and evaluation expenditure
2021
$
2020
$
217,773
(155,910)
61,863
159,882
(79,941)
79,941
79,941
-
57,891
(75,969)
61,863
-
159,882
-
(79,941)
79,941
13,934,466
11,387,156
11,387,156
-
2,547,310
13,934,466
9,003,810
-
2,383,346
11,387,156
The ultimate recoupment of the Group’s deferred mining tenements and exploration expenditure carried forward
in respect of areas of interest still in the exploration and/or evaluation phases is dependent on successful
development and commercial exploitation or, alternatively, sale of the respective areas.
11. TRADE AND OTHER PAYABLES
Current
Trade creditors
Other creditors
2021
$
2020
$
81,190
43,409
124,599
164,732
70,425
235,157
Trade and other payables are non-interest bearing and are normally settled on 30-day terms. Due to the short-term
nature of these payables, their carrying value is assumed to approximate their fair value.
12. LEASE LIABILITIES
Current
Lease Liabilities
52
2021
$
2020
$
59,320
83,187
GALILEO MINING LTD
ABN 70 104 114 132
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
13. OTHER LIABILITIES
(a) Current
Annual Leave
(b) Non-current
Long Service Leave provision
14. ISSUED CAPITAL
(a) Ordinary shares
Movements of ordinary shares
Shares on issue
Beginning of financial year
Add shares issued
- Placement
Less capital raising costs
2021
$
2020
$
54,025
53,079
29,915
25,030
22,929,035
22,929,035
2021
Number
2020
$
Number
$
143,101,205
22,929,035
120,373,932
18,411,245
-
-
-
-
22,727,273
-
5,000,000
(482,210)
As at the end of the financial year
143,101,205
22,929,035
143,101,205
22,929,035
(b) Terms & conditions of issued capital
Ordinary shares
Ordinary shares have the right to receive dividends as declared and, in the event of winding up the Company,
to participate in the proceeds from the sale of the surplus assets in proportion to the number of and amounts
paid up on shares held.
(c) Options
Unlisted options
The Company has the following unlisted options on issue:
- 12,500,000 options exercisable at $0.20 expiring on 31 January 2023.
Each option will only vest and become exercisable when the 60-day volume weighted average market price (as
defined in the Listing Rules) of the Company’s quoted Shares first exceeds $0.60 per Share. Options not so
exercised shall automatically expire on the expiry date. Each option entitles the holder to subscribe (in cash)
for one Share in the capital of the Company. Each Share allotted as a result of the exercise of any Option will
rank in all respect pari passu with the existing Shares in the capital of the Company on issue at the date of
allotment.
- 2,272,727 options exercisable at $0.44 expiring on 29 April 2022.
Each option entitles the holder to subscribe (in cash) for one Share in the capital of the Company. Each Share
allotted as a result of the exercise of any Option will rank in all respect pari passu with the existing Shares in
the capital of the Company on issue at the date of allotment. Options not exercised shall automatically expire
on the expiry date.
53
GALILEO MINING LTD
ABN 70 104 114 132
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
Performance Rights
The Company has 1,100,000 rights on issue, expiring on 31 January 2023.
Performance Rights were issued free of charge. Each Performance Right entitles the holder to subscribe for one
(1) fully paid ordinary share in the Company based on achieving vesting conditions at a nil exercise price. The
terms and conditions including the service and performance criteria that must be met are as follows: -
(a) Subject to the below paragraphs (b) to (d), each Performance Right will only vest and become exercisable
when the 10-day volume weighted average market price (as defined in the ASX Listing Rules) of the
Company’s quoted Shares first exceeds $1.00 per Share (Vesting Condition).
(b) Maintain a minimum of 12 months continuous service with the Company.
(c)
Each Performance Right will automatically be cancelled and will be redeemed by the Company for nil
consideration if employment with the Company is terminated for any reason before the Vesting Condition
is met.
If a Good Leaver* and the Vesting Condition has been satisfied at the date of termination the Performance
Rights may be exercised within 20 Business Days of termination of employment or contracting (as
applicable) with the Company. If a Bad Leaver* and the Vesting Condition has been satisfied at the date
of termination the Performance Rights will terminate.
(d)
*As defined in the Galileo Mining Ltd Employee Incentive Plan refer to:
http://www.galileomining.com.au/about-us/corporate-governance/
Each Performance Right, issued for nil consideration, entitles the participant to acquire one (1) fully paid ordinary
share, by way of issue of new Shares or transfer of existing Shares.
All Performance Rights that have not vested by the expiry date will automatically lapse and be forfeited.
15. RESERVES
Share-based payment reserve
Movement in share-based payment reserve
Balance at the beginning of the financial year
Share-based payments during the year
Reversal of cancelled options
Reversal of cancelled performance rights
2021
$
2020
$
903,076
920,568
920,568
94,330
(66,500)
(45,322)
593,719
382,900
(56,051)
-
Balance at the end of the financial year
903,076
920,568
Share-based payment reserve records the value of shares, share options and performance rights issued to
Galileo’s employees or others. Refer to Note 20 for further details.
16. ACCUMULATED LOSSES
Accumulated losses
Movement in accumulated losses:
Balance at the beginning of the financial year
Transfer from share-based payment reserve
Net loss for the year
2021
$
2020
$
(4,593,671)
(3,876,699)
(3,905,427)
-
(688,244)
(3,048,917)
56,051
(912,561)
Balance at the end of the financial year
(4,593,671)
(3,905,427)
54
GALILEO MINING LTD
ABN 70 104 114 132
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
17. STATEMENT OF CASH FLOWS
(a) Reconciliation of cash
Cash at bank and on hand
Short term deposits
2021
$
2020
$
33,665
5,361,838
51,257
4,140,804
Total cash and cash equivalents
5,395,503
4,192,061
Cash on term deposit (i)
-
4,505,000
(i) This relates to term deposits which have an original maturity of greater than three months.
(b) Reconciliation of net loss after tax to net
cash flows from operations:
Loss from ordinary activities after income tax
(688,244)
(912,561)
2021
$
2020
$
Adjustments for:
Depreciation
Employee share-based payment/(reversal)
Changes in assets and liabilities:
Increase in payables
Increase in provisions
(Increase)/Decrease in receivables
Increase in prepayments
85,133
(17,492)
92,876
119,494
7,324
5,831
58,055
(5,214)
11,302
24,305
(5,264)
(2,588)
Net cash used in operating activities
(544,607)
672,436
(c) Changes in liabilities arising from financing activities
Opening balance
Net cash used in financing activities
Lease liability recognised on the adoption of AASB 16
Lease liability recognised on modification of lease
Closing balance
(d) Non-cash financing & investing activities:
2021
$
2020
$
83,187
(81,759)
-
56,892
-
(76,695)
159,882
-
59,320
83,187
Non-cash financing activities for the year include the office lease extension of 12 months commencing June
2021 at an initial value of $57,892.
There were no non-cash investing activities in 2021. During the previous year the Company issued
2,272,727 unlisted options exercisable at $0.44 and expiring 29 April 2022 to Nascent Capital as part
payment for capital raised at a value of $263,406.
55
GALILEO MINING LTD
ABN 70 104 114 132
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
18. RELATED PARTY TRANSACTIONS
1)
Whypro Corporate Services a business of which Mathew Whyte is principal, provided company
secretarial, corporate administration and CFO services to the Company totalling $102,000 (excluding
GST) (30 June 2020: $102,000). As at 30 June 2021, $9,350 was payable to Whypro Corporate Services.
19. DIRECTORS AND KEY MANAGEMENT PERSONNEL
Compensation for Executive Directors and Key Management Personnel
Short-term benefits
Long-term benefits
Post-employment benefits
Share-based payments
2021
$
544,250
5,928
38,250
(36,187)
2020
$
562,537
5,944
32,931
30,396
Total compensation
552,241
631,808
20. SHARE-BASED PAYMENTS
(a) Options
No options were granted during the year.
The following table illustrates the number and weighted average exercise prices (WAEP) and movements in
share options during the year.
Outstanding at the beginning of the year
17,272,727
0.23
15,000,000
2021
2021
WAEP
2020
Number
$
Number
Granted during the year
Exercised during the year
Expired or Cancelled during the year
Outstanding at the end of the year
-
-
(2,500,000)
14,772,727
-
-
0.20
0.24
2,272,727
-
-
17,272,727
0.23
2020
WAEP
$
0.20
0.44
-
-
Exercisable at reporting date
2,272,727
0.44
2,272,727
0.44
(b) Performance Rights
During the period there were no performance rights granted to directors and officers. On 30 October 2020
the Company announced 500,000 unlisted performance rights were cancelled.
56
GALILEO MINING LTD
ABN 70 104 114 132
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
Movement of Performance Rights:
Outstanding at beginning of the year
Cancelled during the year
2021
Number
1,600,000
(500,000)
2020
Number
2,200,000
(600,000)
Outstanding at the end of the year
1,100,000
1,600,000
21. AUDITOR’S REMUNERATION
The auditor of Galileo Mining Ltd is
HLB Mann Judd
Amounts received or due and receivable by the auditors for:
- Auditing or reviewing accounts
The auditors received no other benefits.
22. EXPENDITURE COMMITMENTS
(a) Exploration expenditure commitments
2021
$
2020
$
29,509
29,509
26,650
26,650
The Group has certain obligations to perform minimum exploration work and to expend
minimum amounts of money on such work on mining tenements. These obligations may be
varied from time to time subject to approval and are expected to be fulfilled in the normal course
of the operations of the Group. These commitments have not been provided for in the financial
report. Due to the nature of the Group’s operations in exploring and evaluating areas of interest,
it is difficult to accurately forecast the nature and amount of future expenditure beyond the next
year. Expenditure may be reduced by seeking exemption from individual commitments, by
relinquishing of tenure or by new joint venture arrangements. Expenditure may be increased
when new tenements are granted or joint venture agreements amended. The minimum
expenditure commitment on the tenements is shown below.
Not later than one year
Later than one year and less than five years
2021
$
2020
$
863,080
3,772,320
806,180
3,385,720
4,635,400
4,191,900
57
GALILEO MINING LTD
ABN 70 104 114 132
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
23. FINANCIAL RISK MANAGEMENT
The Group’s principal financial instruments comprise cash and short-term deposits.
The Group has various other financial assets and liabilities such as trade receivables, and trade
payables, which arise directly from its operations and other activities.
Details of the significant accounting policies and methods adopted, including the criteria for
recognition, the basis of measurement and the basis on which income and expenses are recognised,
in respect of each class of financial asset, financial liability and equity instrument are disclosed in
Notes 2, 6, 11 and 13 to the financial statements.
The Group manages its exposure to a variety of financial risks: market risk (interest rate risk), credit
risk and liquidity risk in accordance with specific approved Group policies.
Primary responsibility for the identification and control of financial risks rests with the Board. The
Board reviews and agrees policies for managing each of the risks identified.
The Group uses different methods to measure and manage different types of risks to which it is
exposed. These include monitoring levels of exposure to interest rate risk and assessment of market
forecast for interest rate. The Group manages credit risk by only dealing with recognized,
creditworthy, third parties and liquidity risk is monitored through the development of future rolling
cash flow forecasts.
Interest rate risk
The Group’s current exposure to the risk of changes in market interest rates relate primarily to cash
assets rates and is managed by the Board approved investment policy. This policy defines maximum
exposures and credit ratings limits.
The following table summarises the impact of reasonably possible changes on interest rates for the
Group at 30 June 2021. The sensitivity is based on the assumption that interest rate changes by 100
basis points with all other variables held constant. The 100 basis points sensitivity is based on
reasonably possible changes over a financial year, using the observed range of actual historical rates
for the preceding 3 year period. The analysis is performed on the same basis for the comparative
period.
The Group’s exposure to interest rate risk arises from higher or lower interest income from cash and
cash equivalents. The Parent’s main interest rate risk arises from cash and cash equivalents and other
assets with variable interest rates.
30 June 2021
$
30 June 2020
$
5,395,503
-
4,192,061
4,505,000
53,955
(53,955)
41,921
(41,921)
Financial assets
Cash and cash equivalents
Term deposits
Impact on profit and equity
Post-tax gain/(loss)
100 bp increase
100 bp decrease
58
GALILEO MINING LTD
ABN 70 104 114 132
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
Credit risk
Credit risk arises in the event that counterparty will not meet its obligations under a financial
instrument leading to financial losses. The Group is exposed to credit risk from its operating
activities and financing activities including deposits with banks.
The credit risk control procedures adopted by the Group is to assess the credit quality of the
institution with whom funds are deposited or invested, taking into account its financial position and
past experiences. Investment limits are set in accordance with limits set by the Board of Directors
based on the counterparty credit rating. The limits are assigned to minimise concentration of risks
and mitigate financial loss through potential counterparty failure. The compliance with credit limits
is regularly monitored as part of day-to-day operations. Any credit concerns are highlighted to
senior management.
Credit quality of financial assets:
30 June 2021
S&P Credit rating
AAA
A1+
A1
A2
Unrated
Cash & cash equivalents ($)
Other Assets ($)
-
-
5,395,503
28,411
-
-
-
-
-
-
S&P Credit rating
AAA
A1+
A1
A2
Unrated
30 June 2020
Cash & cash equivalents ($)
Other Assets ($)
-
-
4,192,061
4,533,411
-
-
-
-
-
-
Alternatives for sourcing our future capital needs include the Group’s current cash position, future
operating cash flow, project debt financings and equity raisings. These alternatives are evaluated to
determine the optimal mix of capital resources for the Group’s capital needs.
Liquidity risk
The responsibility for liquidity risk management rests with the Board of Directors.
The Group manages liquidity risk by maintaining sufficient cash or credit facilities to meet the
operating requirements of the business and investing excess funds in highly liquid short term
investments. The Group’s liquidity needs can be met through a variety of sources, including: short
and long term borrowings and issue of equity instruments.
The following table details the Group’s non-derivative financial instruments according to their
contractual maturities. The amounts disclosed are based on contractual undiscounted cash flows.
Less than 6
$
6 months – 12
$
1-2 years
$
> 2 years
$
As at 30 June 2021
Trade and other receivables
1,027
As at 30 June 2020
Trade and other receivables
8,244
-
-
-
-
-
-
59
GALILEO MINING LTD
ABN 70 104 114 132
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
Capital risk management
Capital consists of total equity $19,238,440 (2020: $19,944,176).
When managing capital, management’s objective is to ensure the Company continues as a going
concern as well as to maintain optimal returns to shareholders and benefits for other stakeholders.
Management also aims to maintain a capital structure that ensures the lowest cost of capital
available to the entity.
In order to maintain or adjust the capital structure, the Company may adjust the amount of
dividends paid to shareholders, issue new shares, enter into joint ventures or sell assets.
The entity does not have a defined share buy-back plan.
No dividends were paid in 2020 and no dividend will be paid in 2021.
There is no current intention to incur debt funding on behalf of the Company as on-going
exploration expenditure will be funded via equity or joint ventures with other companies.
The Company is not subject to any externally imposed capital requirements.
24. EVENTS SUBSEQUENT TO BALANCE DATE
-
The impact of the Coronavirus (COVID-19) pandemic is ongoing and while it has not had a
negative financial impact for the Group up to 30 June 2021, 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.
- On 6 August 2021 the Company announced that 100,000 Performance Rights had been
cancelled effective 23 July 2021 due to conditions not being met. Effective 5 August 2021,
100,000 Performance Rights were issued in accordance with the terms and conditions of the
Galileo Mining Ltd Employee Incentive Plan as part of the Company’s employee equity incentive
arrangements.
-
Subsequent to the balance date the Company completed a capital raising (refer ASX
announcement 8 September 2021) to raise $6.5 million (before costs) by way of a placement
to institutions and sophisticated investors (“Placement”). Settlement of the placement occurred
on 15 September 2021 (refer ASX Announcement dated 16 September 2021) when the
Company issued 25,000,000 at an issue price of $0.26 per share.
As part of the fee for the lead manager to the Placement the Company also issued on 15
September 2,500,000 unquoted Options with an exercise price of $0.52 and an expiry date of
15/9/2023.
Other than the above, no other matters or circumstances have occurred subsequent to balance date
that have or may significantly affect the operations or state of affairs of the Group in subsequent
financial years.
60
GALILEO MINING LTD
ABN 70 104 114 132
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
25. EXPLORATION AGREEMENTS
Dunstan JV Agreement
On 22 January 2018, Mark Creasy and Dunstan Holdings Pty Ltd (ACN 009 686 691) (“Dunstan”)
entered into an agreement with the Company’s wholly owned subsidiary, FSZ Resources Pty Ltd
(ACN 622 898 882) (“FSZ”) (“Dunstan JV Agreement”). Mark Creasy was a director of the Company
from 18 March 2003 to 12 March 2018.
The Dunstan JV Agreement provides for three phases of collaboration on the exploration and mining
of Dunstan’s mining tenements E63/1539, E63/1623 and E63/2624 (“Dunstan Tenements”). First, the
Dunstan JV Agreement provided for the partial sale of Dunstan’s interest in the Dunstan Tenements
to FSZ (“Tenement Sale”), which was settled during the financial year ended 30 June 2018 by a
payment of $530,000 to Dunstan (of which $478,955 (plus GST) was paid in cash and $51,045 settled
by the issue of 510,455 fully paid ordinary shares at a deemed issue price of $0.10 per share). Second,
the Dunstan JV Agreement established an unincorporated joint venture between Dunstan and FSZ
for the exploration of the Dunstan Tenements and completion of a bankable feasibility study in
respect of all or part of the Dunstan Tenements (“Exploration Joint Venture”). Third, the Dunstan JV
Agreement regulates the manner in which the parties may determine their respective involvement
in any mining operations to implement a bankable feasibility study on all or part of the Dunstan
Tenements (“Mining Joint Venture”).
GSN JV Agreement
On 22 January 2018, Mark Creasy and Great Southern Nickel Pty Ltd (ACN 135 382 142) (“GSN”)
entered into an agreement with the Company’s wholly owned subsidiary, NSZ Resources Pty Ltd
(ACN 622 900 396) (“NSZ”) (“GSN JV Agreement”). Mark Creasy was a director of the Company from
18 March 2003 to 12 March 2018.
The GSN JV Agreement provides for three phases of collaboration on the exploration and mining
on GSN’s mining tenement E28/2064 (“GSN Tenement”). First, the GSN JV Agreement provided for
the partial sale of GSN’s interest in the GSN Tenement to NSZ (“Tenement Sale”), which was settled
during the financial year ended 30 June 2018 by a payment of $870,000 to GSN. Second, the GSN
JV Agreement established an unincorporated joint venture between GSN and NSZ for the
exploration of the GSN Tenement and completion of a bankable feasibility study in respect of all or
part of the GSN Tenement (“Exploration Joint Venture”). Third, the GSN JV Agreement regulates the
manner in which the parties may determine their respective involvement in any mining operations
to implement a bankable feasibility study on all or part of the GSN Tenement (“Mining Joint
Venture”).
26. SEGMENT INFORMATION
For management purposes, the Group is organised into one main business and geographic
segment, which involves exploration of mineral deposits. All of the Group’s activities are interrelated,
and discrete financial information is reported to the Board (Chief Operating Decision Makers) as a
single segment. Accordingly, all significant operating decisions are based upon analysis of the Group
as one segment. The financial results from the segment are equivalent to the financial statement of
the Group as a whole. The accounting policies used by the Group in reporting segment internally
are the same as those contained in Note 2 to the consolidated financial statements.
61
GALILEO MINING LTD
ABN 70 104 114 132
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
27. CONTROLLED ENTITIES
Name
Country of
Incorporation
Principal Activity
FSZ Resources Pty Ltd
NSZ Resources Pty Ltd
Norseman Resources Pty Ltd
Ganymede Resources Pty Ltd *
* Subsidiary incorporated 4 December 2020.
Australia
Australia
Australia
Australia
Mineral exploration
Mineral exploration
Mineral exploration
Mineral exploration
Beneficial Percentage
Interest Held By Group
2021
%
100
100
100
100
2020
%
100
100
100
-
28. PARENT ENTITY INFORMATION
Information relating to Galileo Mining Ltd
The immediate parent and ultimate controlling party of the Group is Galileo Mining Ltd. Interests
in subsidiaries are set out in Note 27.
Current Assets
Non-Current Assets
TOTAL ASSETS
Current Liabilities
Non-Current Liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
Loss of the parent entity
Total comprehensive loss of the parent
entity
2021
$
5,474,534
14,115,279
19,589,813
237,944
29,915
267,859
2020
$
8,833,748
11,532,194
20,365,942
371,422
25,031
396,453
19,321,954
19,969,489
22,929,035
903,076
(4,510,157)
19,321,954
(658,771)
(658,771)
22,929,035
920,568
(3,880,114)
19,694,489
(927,432)
(927,432)
The parent entity did not have any guarantees or contingent liabilities at balance date.
The accounting policies of the parent entity are consistent with those of the Group as disclosed in
Note 2, except for investment in subsidiaries, which are accounted for at cost.
29. GUARANTEES AND CONTINGENT LIABILITIES
The Group did not have any guarantees or contingent liabilities at balance date.
30. FINANCIAL INSTRUMENTS
The fair value of financial assets and financial liabilities approximates the carrying amount at balance
date.
62
GALILEO MINING LTD
ABN 70 104 114 132
DIRECTORS’ DECLARATION
FOR THE YEAR ENDED 30 JUNE 2021
In accordance with a resolution of the directors of Galileo Mining Ltd, we state that:
In the opinion of the directors:
(a) the financial statements and notes of the Group in pages 37 to 62 are in accordance with the
Corporations Act 2001, including:
(i) giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its
performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards (including the Australian Accounting
Interpretations) and Corporations Regulations 2001;
(b) the financial statements and notes also comply with International Financial Reporting Standards as
disclosed in Note 2 (c); and
(c) there are reasonable grounds to believe that the Company will be able to pay its debts as and when
they become due and payable.
This declaration has been made after receiving the declarations required to be made to the directors in
accordance with Section 295A of the Corporations Act for the year ended 30 June 2021.
For and on behalf of the Board of Directors.
Mr Brad Underwood
Managing Director
Perth, 23 September 2021
63
INDEPENDENT AUDITOR’S REPORT
To the members of Galileo Mining Ltd
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Galileo Mining Ltd (“the Company”) and its controlled entities
(“the Group”), which comprises the consolidated statement of financial position as at 30 June 2021,
the consolidated statement of comprehensive income, the consolidated statement of changes in
equity and the consolidated statement of cash flows for the year then ended, and notes to the
financial statements, including a summary of significant accounting policies, and the directors’
declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the
Corporations Act 2001, including:
a) giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its
financial performance for the year then ended; and
b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the
Financial Report section of our report. We are independent of the Group in accordance with the
auditor independence requirements of the Corporations Act 2001 and the ethical requirements of
the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (“the Code”) that are relevant to our audit of the financial report in
Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance
in our audit of the financial report of the current period. These matters were addressed in the context
of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters. We have determined the matters described below to
be the key audit matters to be communicated in our report.
64
Key Audit Matter
How our audit addressed the key audit
matter
Exploration and evaluation expenditure
Note 10 to the financial report
In accordance with AASB 6 Exploration for and
Evaluation of Mineral Resources, the Group
capitalises exploration and evaluation expenditure.
Our audit focussed on the Group’s assessment of the
carrying amount of the capitalised exploration and
evaluation expenditure asset, due to this asset being
the most significant asset of the Group.
Our procedures included but were not
limited to the following:
• We obtained an understanding of the
key processes associated with
management’s review of the carrying
value of the capitalised exploration
and evaluation expenditure asset;
• We
considered
the Directors’
assessment of potential indicators of
impairment;
• We obtained evidence that the Group
has current rights to tenure of its areas
of interest;
• We examined the exploration and
evaluation budget for the year ending
30 June 2022 and discussed with
management the nature of planned
ongoing activities.
Information other than the financial report and auditor’s report thereon
The directors are responsible for the other information. The other information comprises the
information included in the Group’s annual financial report for the year ended 30 June 2021 but
does not include the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives
a true and fair view in accordance with Australian Accounting Standards and the Corporations Act
2001 and for such internal control as the directors determine is necessary to enable the preparation
of the financial report that gives a true and fair view and is free from material misstatement, whether
due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group
to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the directors either intend to liquidate the Group
or to cease operations, or have no realistic alternative but to do so.
65
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with Australian Auditing Standards will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
-
Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
-
-
- Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Group’s ability to continue as a
going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditor’s report to the related disclosures in the financial report or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. However, future events or conditions
may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and
events in a manner that achieves fair presentation.
-
We communicate with the directors regarding, among other matters, the planned scope and timing
of the audit and significant audit findings, including any significant deficiencies in internal control
that we identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable,
related safeguards.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
66
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included within the directors’ report for the year ended
30 June 2021.
In our opinion, the Remuneration Report of Galileo Mining Limited for the year ended 30 June 2021
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted
in accordance with Australian Auditing Standards.
HLB Mann Judd
Chartered Accountants
Perth, Western Australia
23 September 2021
D I Buckley
Partner
67
GALILEO MINING LTD
ABN 70 104 114 132
CORPORATE GOVERNANCE STATEMENT
The Board is committed to achieving and demonstrating the highest standards of corporate governance.
As such Galileo Mining Ltd has adopted the fourth edition of the Corporate Governance Principles and
Recommendations which was released by the ASX Corporate Governance Council and became effective
for financial years beginning on or after 1 July 2020.
The Company’s Corporate Governance Statement for the financial year ending 30 June 2021 was approved
by the Board on 23 September 2021. The Corporate Governance Statement can be located on the
Company’s website http://www.galileomining.com.au/about-us/corporate-governance/
68
GALILEO MINING LTD
ABN 70 104 114 132
ADDITIONAL ASX SHAREHOLDERS’ INFORMATION (As at 16 September 2021)
The following additional information is required by the Australian Securities Exchange in respect of listed
public companies. As at 16 September 2021 there were 3,300 holders of Ordinary Fully Paid Shares.
VOTING RIGHTS
The voting rights attached to each class of equity security are as follows:
Ordinary shares: Each ordinary share is entitled to one vote when a poll is called, otherwise each
member present at a meeting or by proxy has one vote on a show of hands.
Unlisted Options and Performance Rights: Options and performance rights do not entitle the
holders to vote in respect of that equity instrument, nor participate in dividends, when declared,
until such time as the options are exercised or performance rights convert and subsequently
registered as ordinary shares.
20 LARGEST SHAREHOLDERS – ORDINARY SHARES AS AT 16 SEPTEMBER 2021
Holder Name
Holding %IC
Australian Gold Resources Pty Ltd
IGO Newsearch Pty Ltd
Citicorp Nominees Pty Ltd
Blakfyre Investments Pty Ltd
AJF Fabbro Pty Ltd
1
2
3
4
5
6 Mr Bernie Peter Johnson
Pindan Investments Pty Ltd
7
S3 Consortium Holdings Pty Ltd
8
9
BNP Paribas Nominees Pty Ltd
10 Mr Stephen John Lowe & Mrs Suzanne Lee Lowe
11 Blacktusk Pty Ltd
12 Cospiqua Pty Ltd
13 Shaw and Partners Limited
14 S3 Consortium Pty Ltd
15 Certane CT Pty Ltd
16 BNP Paribas Nominees Pty Ltd Six Sis Ltd
17 Northmead Holdings Pty Ltd
18 Mr Peter Piotr Mackow
19 Sunset Capital Management Pty Ltd
20 Mr Brenton Paul Gill
41,371,895
14,943,182
2,154,368
1,700,000
1,572,000
1,403,216
1,200,000
1,185,000
991,705
987,500
900,000
830,000
769,231
750,000
692,308
655,154
625,000
581,277
576,923
557,500
24.61
8.89
1.28
1.01
0.94
0.83
0.71
0.70
0.59
0.59
0.54
0.49
0.46
0.45
0.41
0.39
0.37
0.35
0.34
0.33
Totals
74,447,218
44.29
SUBSTANTIAL ORDINARY SHAREHOLDER AS AT 16 SEPTEMBER 2021
The names of the substantial shareholders who have notified the Company in accordance with section
671B of the Corporations Act 2001 are:
Mark Gareth Creasy, Australian Gold Resources Pty Ltd (ACN 006 712 956), and Dunstan Holdings
Pty Ltd (ACN 008 686 691): 41,371,895 Fully Paid Ordinary Shares (24.61%)
IGO Ltd (ACN 092 786 304): 14,943,182 Fully Paid Ordinary Shares (8.89%)
69
GALILEO MINING LTD
ABN 70 104 114 132
DISTRIBUTION OF ORDINARY SHAREHOLDER AS AT 16 SEPTEMBER 2021
Holding Range
Holders
Total Units
1 - 1,000
1,001 - 5,000
5,000 - 10,000
10,001 – 100,000
100,001 – and over
60
1,104
604
1,383
179
TOTALS 3,300
8,658
3,266,568
4,939,870
51,658,346
108,227,763
168,101,205
% Issued
Ordinary
Capital
0.01%
1.94%
2.94%
30.73%
64.38%
100.00%
Unmarketable Parcels – as at 16 September 2021 there were 232 holders with less than a marketable
parcel of shares.
ON MARKET BUY-BACK
There is no current on-market buy-back of shares.
UNQUOTED SECURITIES
As at 16 September 2021 the following unquoted securities are on issue:
12,500,000 Class A Director Options Expiring 31 January 2023 @ $0.20 - 2 Holders
Holders with more than 20%
Holder Name
Mr Richard Bradley Underwood
Mr Noel Mark O’Brien
Holding
10,000,000
2,5000,000
%
80.00%
20.00%
2,500,000 Broker Options Expiring 15 September 2023 @ $0.52 - 1 Holder
Holders with more than 20%
Holder Name
Inyati Fund Pty Ltd
Holding
2,5000,000
%
100.00%
2,272,727 Broker Options Expiring 29 April 2022 @ $0.44 - 7 Holders
Holders with more than 20%
Holder Name
3VL Pty Ltd
Mr Mark Jonathan Sandford
1,100,000 Performance Rights – 3 Holders
Holding
938,870
519,325
%
42.85%
22.85%
70
GALILEO MINING LTD
ABN 70 104 114 132
OTHER ASX ADDITIONAL INFORMATION
1.
Corporate Governance
The Company’s Corporate Governance Statement as at 30 June 2021 as approved by the Board can
be viewed at http://www.galileomining.com.au/about-us/corporate-governance/
2.
Company Secretary
The name of the Company Secretary is Mathew Whyte
3. Address and telephone details of the Company’s Registered Office
13 Colin Street, West Perth WA 6005 Telephone: +61 8 9463 0063
4. Address and telephone details of the office at which a registry of securities is kept
Automic Group
Level 2, 267 St Georges Terrace
PERTH WA 6000
Telephone: 1300 288 644 (within Australia)
+61 (0) 2 9698 5414 (International)
Web: www.automicgroup.com.au
5.
Review of Operations
A review of operations is contained in the Directors Report.
71
GALILEO MINING LTD
ABN 70 104 114 132
6.
Tenement Schedule (As at 16 September 2021)
Project
Tenement
reference
& Location
Interest at
beginning of
Quarter
Interest at
end of
Quarter
Nature of
Interest
As at end of
Quarter
NORSEMAN PROJECT
All tenements are in
Western Australia
E63/1041
E63/1764
P63/2053
P63/2105
P63/2106
P63/2107
P63/2108
P63/2109
P63/2110
P63/2111
P63/2112
P63/2113
P63/2114
P63/2115
P63/2116
P63/2117
P63/2118
P63/2123
P63/2136
P63/2137
M63/671
L63/83
L63/85
L63/86
L63/87
L63/88
FRASER RANGE
All tenements are in
PROJECT
Western Australia
E28/2064
E28/2912
E28/2949
E63/1539
E63/1623
E63/1624
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%
67%
100%
100%
67%
67%
67%
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%
67% NSZ(1)
100%
100%
67% FSZ(2)
67% FSZ(2)
67% FSZ(2)
Active
Active
Active
Active
Active
Active
Active
Active
Active
Active
Active
Active
Active
Active
Active
Active
Active
Active
Active
Active
Active
Active
Active
Active
Active
Active
Active
Active
Active
Active
Active
Active
(1) 67% owned by NSZ Resources Pty Ltd a wholly owned subsidiary of Galileo Mining, 33% Great Southern Nickel Pty Ltd (a Creasy Group Company).
(2) 67% owned by FSZ Resources Pty Ltd a wholly owned subsidiary of Galileo Mining, 33% Dunstan Holdings Pty Ltd (a Creasy Group Company).
72