ABN 91 124 752 745
ANNUAL REPORT 2019
Corporate Directory
GBM Resources Limited (GBM or the Company)
ASX Code
GBZ
Directors
Peter Thompson – Executive Chairman
Sunny Loh – Non-Executive Deputy Chairman
Neil Norris – Exploration Director – Executive
Peter Mullens - Non-Executive Director
Company Secretary
Kevin Hart
Registered & Principal Office
Suite 8, 7 The Esplanade
Mt Pleasant WA 6153
Australia
Telephone: +61 8 9316 9100
+61 8 9 315 5475
Facsimile:
Exploration Office
Unit 11, 21 High St.
Harcourt, Vic 3453
Australia
Telephone: +61 3 5470 5033
Postal Address
PO Box 658
Castlemaine Vic 3450
Website
www.gbmr.com.au
Auditor
HLB Mann Judd
Level 4, 130 Stirling Street
Perth WA 6000
Australia
Share Registry
Computershare Investor Services Pty Ltd
Level 11, 172 St Georges Terrace
Perth WA 6000
Stock Exchange
ASX Limited
Level 40, Central Park
152-158 St Georges Terrace
Perth WA 6000
Australia
Solicitors
Steinepreis Paganin – Lawyers and Consultants
Level 4, The Read Buildings
16 Milligan Street
Perth WA 6000
Australia
GBM Resources Annual Report 2019
Corporate Directory
Page 2
CONTENTS
1. Chairman’s Report
2. Our Vision – Our Values
3. Highlights in 2019
4. Company Project Snapshot
5. Review of Operations
6. Tenement Schedule
7. Annual Mineral Resource Statement
8. Sustainable Development
9. Directors’ Report
10. Auditor’s Independence Declaration
11. Consolidated Statement of Profit or Loss and Other Comprehensive income
12. Consolidated Statement of Financial Position
13. Consolidated Statement of Changes in Equity
14. Consolidated Statement of Cash Flows
15. Notes to the Financial Statements
16. Directors’ Declaration
17. Independent Auditor’s Report
18. ASX Additional Information
Contents
Page
4
5
6
7
8 - 17
18
19 - 22
23 - 24
25 - 31
32
33
34
35
36
37 - 62
63
64 - 67
68 - 69
GBM Resources Annual Report 2019
Page 3
Chairman’s Report
CHAIRMAN’S REPORT
Dear Fellow Shareholders
The confidence in GBM’s future has recently received a further boost with the strategic agreement to acquire
Millstream Resources Ltd (Millstream), which has the right to earn an initial 50% joint venture interest in the White
Dam Gold Operation (White Dam).
The opportunity to generate cash flow through heap leach production at White Dam, the improving market
sentiment for exploration/development companies and the historically high Australian gold price all provide the
Company with an excellent future climate to grow and develop.
The acquisition of Millstream also has the potential to support the Company’s working capital requirements and the
development of the Mount Coolon Gold Project.
The current gold price of approximately A$2,150 per ounce gold has increased significantly from the Mount Coolon
Gold Project Scoping Study assumption of A$1,667 per ounce. This A$483 per ounce increase potentially adds
another A$75 million in gold revenue which may enhance the viability of the 155,000 ounces of initial potential
production.
The exploration strategy remains to extend the current resource base in the Mount Coolon area with the objective
of building resources in excess of 2 million ounces of contained gold.
We have also continued into our eighth consecutive year with an excellent record of zero harm in safety and
environment. This is a credit to our people and an indication of the Company’s committed approach to operating in
a safe, sustainable, and socially and environmentally responsible manner.
The Board is also delighted with the recent appointment of Mr Peter Mullens as a Non-Executive Director. Mr
Mullens (B.SC, Geology, Fellow AUSIMM) has over 35 years’ experience in the mining industry from early exploration
through to project development and mine production. Peter has a strong history of success with junior exploration
companies over the last 20 years. His expertise in local and global capital markets, track record in building significant
value for early stage exploration companies and technical abilities will greatly add to the composition of the
Company’s Board.
On behalf of the Board, I would like to thank GBM shareholders and all our employees and contractors who have
made this a successful year and look forward to your continued support.
Yours sincerely
Peter Thompson
Executive Chairman
GBM Resources Annual Report 2019
Page 4
Our Vision – Our Values
OUR VISION
GBM Resources Limited is focused on delivering value to our shareholders through discovery,
acquisition and development of projects in key commodities of gold and copper in Australia.
OUR VALUES
We are committted to achieving our vision in a safe and responsible manner with the highest regard for the
environment and communiities in which we operate. The Board endorse the core values of GBM as summarised
below.
CORPORATE STRATEGY
Each year the Board review the Company’s strategy and the key drivers to unlock the potential of gold and copper-
gold exploration and development projects. These key drivers are summarised below:
Identify opportunities for early production and cashflow in deposits with potential for major resource
growth.
Focus on discovery of world-class gold and copper-gold deposits.
Continue to consolidate and improve the quality of GBM's highly prospective tenement holdings.
Apply a mineral systems approach to exploration.
Operate safely and effectively.
Maximise in-ground exploration expenditure.
GBM Resources Annual Report 2019
Page 5
Highlights for 2019
HIGHLIGHTS FOR 2019
GBM to Acquire 100% Interest in Millstream Resources Pty Ltd
Heads of Agreement (refer ASX announcement 16 October 2019) with Stibium Mining Pty Ltd (Stibium)
to acquire its subsidiary Millstream Resources Pty Ltd (Millstream) for consideration of 150 million fully
paid shares in the capital of GBM Resources Ltd.
Millstream has entered into a Non – binding Terms Sheet with Round Oak Minerals Pty Ltd (Round Oak)
which sets out the terms for Millstream to earn an initial 50% joint venture interest in the White Dam
Gold Operation (White Dam).
The Joint Venture interest provides GBM with the opportunity to generate cash flow through heap leach
gold production in the next 12 months and assess opportunities to restart mining in remnant open pits
and undeveloped resources at White Dam.
The Company believes that acquisition of Millstream has the potential to support its working capital
requirements and ongoing development of the MCGP.
Mount Coolon Gold Project, QLD
The Mount Coolon Gold Project (MCGP) scoping study demonstrated the potential economic viability of
mining the Koala, Glen Eva and Eugenia resources using a combination of Heap Leaching and CIL
processing (refer ASX announcement 4 December 2017).
The current A$2,150 per ounce gold price has increased significantly from the scoping study gold price
assumption of A$1,667 per ounce, which has potentially increased the viability of the LOM production of
155,000 ounces.
The Company continues to review potential investments option for the stand-alone development of the
MCGP.
Pan Pacific Copper Co Ltd – IOCG Joint Venture
Pan Pacific Copper Co Ltd committed to a $0.64M budget for the 12 month period to 31 March 2020.
Drill hole MMA015 at FC2 intersected strong sulphide mineralisation and IOCG-type alteration near the
base of the hole. Hole MMA015 returned a best intersection of 2 m @ 0.39 % Cu from 385 m downhole.
Magnetite alteration is increasing with depth.
Malmsbury Gold Project
The 104,000 ounce resource at the Leven Star Deposit has been reviewed and upgraded to satisfy the
requirements of JORC 2012.
The Inferred Mineral Resource estimate for the Leven Star Deposit totals 820,000 tonnes at an average
grade of 4.0 g/t Au containing 104,000 ounces.
The Leven Star Lode is one of many auriferous lodes within the contiguous Drummond North and
Belltopper Hill Goldfields.
Sustainable Development
GBM has been a signatory to the Mineral Council of Australia’s ‘Enduring Value: The Australian Minerals
Industry Framework for Sustainable Development’ since 2008 and reconfirmed this commitment again
in 2016. Our excellent record continues of zero LTI’s and environmental incidents this year – this is the
eighth year that GBM has achieved zero harm. This is a credit to our people and an indication of the
Company’s stringent and high safety and environment standards.
GBM Resources Annual Report 2019
Page 6
Company Snapshot
COMPANY SNAPSHOT
The Company holds a diversified portfolio of tenements – located in world-class gold and
copper regions in Australia.
GBM PROJECT LOCATIONS
QUEENSLAND
Mount Coolon Gold Mines
100% wholly-owned
Project area: 1,248km2 (granted)
Commodity: Epithermal and IRGS Gold
Resources: Totalling 330,500 ounces of gold
Mount Morgan
100% wholly-owned
Project area: 1,017km2,
Commodity: Gold and Copper-Gold Porphyry, VMS
Pan Pacific Copper Joint Venture Projects
47.1% owned by GBM
Project area: 918km2
Commodity: IOCG, ISCG
Mayfield
100% wholly-owned
Project area 91km2
Commodity: IOCG
VICTORIA
Brightlands
100% wholly-owned
Project area: 94 km2
Commodity: Defined Cu-U-Mo-REE-P
Resource: containing 108,000 t TREEYO ,97,000t Cu 14 M lbs U3O8
Malmsbury
100% wholly-owned
Project area: 6.7km2
Resource: containing 104,000 ozs gold
Yea
100% wholly-owned
Project area 25km2
GBM Resources Annual Report 2019
Page 7
Review of Operations
REVIEW OF OPERATIONS
GBM is committed to developing the Mount Coolon Gold Project (MCGP) in the under-explored
Drummond Basin epithermal gold province in Queensland. The Company has identified a number of other
deposits and high quality exploration targets which may be viewed as stranded assets which could be
consolidated into the MCGP.
The Company believes that the successful acquisition of Millstream and formation of the White Dam Joint
Venture may provide GBM with the opportunity to generate cash while assessing opportunities to restart
mining operations and explore other associated tenements.
The Company believes that acquisition of Millstream has the potential to support its working capital
requirements and ongoing development of the MCGP.
In addition, the Company in conjunction with our Joint Venture Partner, continues to explore for IOCG &
ISCG deposits in the North West Mineral Province.
In line with the Company’s vision, our exploration efforts are focussed on developing and expanding our
known resource and securing tenements and projects that improve the quality and potential of our highly
prospective tenement holdings within, Australia.
GBM tenements cover a total area greater than 3,200 square kilometres in seven major project areas in Queensland
and Victoria. Of this area, 66% is held within the flagship MCGP and the Joint Venture with CED (Pan Pacific Copper
Ltd).
Figures: Left, Location of GBM Gold and Copper projects in Queensland. Right, location of gold deposits, Drummond Basin and
GBM Gold Projects in Queensland.
The Company has also developed an exploration strategy to extend the current resource base in the Mount Coolon
area with the objective of building resources in excess of 2 million ounces of gold.
Subject to the Company fund raising initiatives GBM plans to step up activities in the 2020 financial year with a
focus of moving the Mount Coolon Gold Project toward gold production.
In conjunction with our Joint Venture Partner CED (PPC) a total of 2 diamond drill holes for 125 meters of mud
rotary drilling and 477 metres of diamond drilling and one additional 3D IP array, were completed on the Mount
Margaret Project during the year.
GBM Resources Annual Report 2019
Page 8
Review of Operations
MOUNT COOLON GOLD PROJECT (MCGP) (100% OWNED GBM)
The MCGP hosts a known resource (JORC2012) containing 330,500 ounces of gold in three separate, open pit
deposits. GBM has identified exploration upside in each of these deposits along with a number of exploration
prospects within the 1,248 square kilometre tenement package. The Company believes that the MCGP can provide
the basis for future consolidation of several known gold deposits within the region.
The MCGP is located within the Drummond Basin, one of Queensland’s most prolific gold provinces. The Basin’s
past production is more than 4.5 million ounces of gold and has a total known gold endowment in excess of 7.5
million ounces of gold. The Drummond Basin is an established gold mining region which has proven fertile for
discovery of epithermal and intrusive relation gold systems.
Mineralisation in the Drummond Basin is typified by low sulphidation epithermal style precious metal Deposits.
Examples include Pajingo (3.0Moz), Wirralie (1.1Moz), Yandan (0.6Moz) and Koala (0.36Moz). Epithermal
mineralisation is typified by very fine-grained gold, sometimes occurring in electrum, in quartz veins and or breccias.
These Deposits are variously interpreted to have formed in locally extensional jogs or bends of transform fault
systems.
The Project is located 250 km to the West of Mackay in North Queensland, the tenement package covers a total
area of over 1,200km2 and holds potential for further significant discoveries.
GBM completed a scoping study on the MCGP (refer ASX Release 4th of December 2017). This study demonstrates
that the redevelopment of the MCGP with its current resources has the potential to generate a strong positive cash
flow. Based on a gold price of A$1,667, the Scoping Study demonstrated the potential economic viability of mining
the Koala, Glen Eva and Eugenia resources using a combination of Heap Leaching and CIL processing. The Life of
Mine highlights summary is included in the table below.
Au Produced
Pre-Tax Cash Flow
Production Life
Pre-production and CIL/HL Plant Capital
Operating Cash Cost (C1)
AISC Cost (all-in-sustaining)
Oz
A$M
Years
A$M
A$/oz
A$/oz
155,000
60.5
5.5
25.2
909
1,020
The current gold price of A$2,150 per ounce gold has increased significantly from the scoping study gold price
assumption of A$1,667 per ounce, an increase of A$483 per ounce which potentially adds another $75million in
gold revenue and potentially increasing the viability of the LOM production of 155,000 ounces.
Of the gold production detailed in this study, 72% of Au is from Indicated Resources based on updated mineral
resources estimates for the Koala, Glen Eva and Eugenia Deposits. The Koala and Glen Eva deposits are on granted
mining leases. It is also significant that the resource areas remain open and are considered to hold high potential
to extend mine life. The Scoping Study was completed by independent consultants, Mining One Pty Ltd with input
from GBM and external consultants.
GBM Resources Annual Report 2019
Page 9
Review of Operations
Figure: Resources, exploration prospects and tenement locations in the Mount Coolon Gold Project.
Mt Coolon Mineral Resources
Project Location
Resource Category
Total
Cut-off
Measured
Indicated
Inferred
000' t
Au g/t Au ozs
000' t Au g/t
Au ozs
000' t Au g/t Au ozs
000' t Au g/t
Au ozs
Koala
Open Pit
Underground Extension
Tailings
Total
114
114
1.6
1.7
6,200
6,200
Eugenia Oxide
Sulphide
Total
Glen Eva Open Pit
Total
114
0.0
6,200
670
50
9
729
885
905
1,790
1,070
3,590
2.6
3.2
1.6
2.6
1.1
1.2
1.1
1.6
1.6
55,100
440
1.9
26,700
1,120
5,300
260
4
34,400
320
124
400
60,800
32,400
700
597
33,500
1,042
65,900
1,639
55,200
580
181,900
2,919
2.7
1.0
1.2
1.1
1.2
1.5
61,100
1,563
19,300
1,482
38,900
1,947
58,200
3,430
23,100
1,660
142,400
6,653
2.3
3.9
1.6
2.5
1.1
1.2
1.1
1.5
1.5
81,800
39,700
6,600
128,100
51,700
72,400
124,100
0.4
2.0
1
0.4
0.4
78,300
0.4
330,500
Table: November 2017 Resource Summary for the MCGP. Please note rounding (1,000’s tonnes, 100’s ounces, 0.1 g/t) may
cause minor variations to totals. For full details please refer to ASX release dated the 4th of December 2017.
Exploration
Two new exploration permits EPM26842 ‘Bungonunna’ and EPM26914 ‘Black Creek’ were granted during the year.
These permits greatly strengthen the existing tenure in providing more contiguous coverage of the highly
prospective eastern Drummond Basin. The MCGP now covers a total area of 1,248 square kilometres.
The Company considers that many highly prospective targets remain underexplored within the identified
mineralization corridors hosted within the project area.
GBM Resources Annual Report 2019
Page 10
Review of Operations
Figure: Resources, exploration prospects and tenement locations in the Mount Coolon Gold Project. Note that the
exploration Permit applications EPM26842 and EPM26914 were granted in August 2019, subsequent to the end of the
reporting period.
GBM Resources Annual Report 2019
Page 11
Review of Operations
GBM TO ACQUIRE 100% INTEREST IN MILLSTREAM
The Company announced, on 16 October 2019, the signing of a Heads of Agreement (“HoA”) with Stibium whereby
GBM has agreed to acquire a 100% interest in Millstream.
Stibium through its subsidiary Millstream can initially earn a 50% interest in the White Dam as part of an
unincorporated joint venture (Joint Venture).
The Company believes that the successful formation of the Joint Venture may provide GBM with the opportunity
to generate cash while assessing opportunities to restart mining operations to exploit remnant open pit
mineralisation, other previously defined mineralised zones at White Dam and explore other associated tenements.
The Option Agreement (defined below) will enable GBM to leverage the value of any discoveries with a fully
functioning gold heap leach – extraction plant.
The acquisition of Millstream has the potential to support its working capital requirements and ongoing
development of the Mt Coolon Gold Project.
The White Dam Gold Operation and Development Strategy
The White Dam Gold Operation is located in South Australia, approximately 100 km south-west of Broken Hill. It is
currently owned by Round Oak.
The White Dam Gold Operation is a heap leach project and since, 2010 has produced approximately 170,000 oz
gold from heap leaching of ~7.5 Mt of ore which has been mined from two open pits. Available reconciliation of
mining against resource estimates is good and indicates that a significant tonnage of mineralised material remains
to be mined from both the Hannaford and Vertigo open pits. While further work is required to confirm and quantify
in detail, this does appear to represent an opportunity to extend the mine life of the project. It is worth noting the
current gold price of around AUD$2,150 versus a price of AUD$1,650 at the time of the most recent mining in
2016/17.
Figure: Location map of the White Dam Gold Operation
GBM Resources Annual Report 2019
Page 12
Review of Operations
Figures: Existing Gold Recovery Plant
The White Dam Gold Operation includes the open pit mines, dump / heap leach, the gold extraction plant and
related infrastructure.
In summary the potential joint venture gives the opportunity for the Company to:
Improve gold recovery at the White Dam Gold Project with the SART Plant to be commissioned in 2020.
Brings an experienced operational team.
Provides the basis of an attractively priced acquisition.
The gold recovery plant has the ability to be relocated to the Mt Coolon Eugenia Heap Leaching Project to
support its possible development, should GBM exercise its option to acquire 100% of the project.
Provides significant exploration upside from extension of existing pits and exploration of identified structural
and geochemical targets for new gold discoveries.
CLONCURRY EXPLORATION & DEVELOPMENT Ltd (CED) JOINT VENTURE (GBM 47.1% Interest
at 30 June 2019)
The Joint Venture targets Iron Oxide Copper Gold (IOCG) and Iron Sulphide Copper Gold (ISCG) style systems in the
Mount ISA Region.
The Farm In/ Joint Venture with Pan Pacific Copper ltd (PPC) subsidiary Cloncurry Exploration and Development Pty
Ltd (CED) has operated since 2010. Project expenditure to date has been $16M exploring for Iron-Oxide-Copper-
Gold (IOCG) and more recently Iron-Sulphide-Copper-Gold (ISCG) style deposits in the Cloncurry Region of the North
West Mineral Province of Queensland.
GBM remains the manager of the Joint Venture and retains a free carried interest of 10% through to completion of
a bankable feasibility study. The JV includes the Mount Margaret West, Bungalien and Chumvale Breccia Projects
and have an approved budget of $0.64M for the year ending March 31st 2020.
Work in 2019 focussed on the FC2 Prospect. FC2 is a large (4 km2), structurally complex zone of elevated magnetic,
gravity and electrical response obscured by 50-60 m of cover sediments. The JV in previous field seasons has
completed detailed ground gravity, airborne magnetic and 2D/3D IP geophysical surveys, partial leach surface
geochemical sampling, and drilled three deep diamond scout holes to test coincident geophysical anomalies. Two
of the three holes (MMA007 and MMA010) tested the “Anomaly A” 3DIP/gravity/magnetic target, returning
anomalous copper mineralisation associated with intense magnetite and feldspar alteration.
GBM Resources Annual Report 2019
Page 13
Review of Operations
The host rock type, alteration, mineralisation and structural geometry intersected in previous JV drilling is
analogous to the Ernest Henry setting and showed the potential for the FC2 prospect to host a large IOCG copper-
gold deposit. A second 3DIP target defined in 2017, “Anomaly B”, was drill tested in the 2018 season along with
completion of the continuation of the 3DIP survey towards the southern margin of the prospect.
Drill hole MMA015 was completed in September at FC2 Anomaly B. The hole intersected intermediate volcanics of
probable andesitic composition from 57.2m downhole (top of basement) to the end of hole at 442.2 m. The
lithology is likely to be equivalent to the andesitic Fort Constantine Volcanics that are the main host of the Ernest
Henry deposit. Actinolite, magnetite, biotite, apatite and red feldspar alteration is patchy throughout the hole,
typically as vein and vein selvedge. The vein frequency increases over the last 100 m of the hole, reflected in the
increasing magnetic susceptibility readings (see section below).
Significant sulphide mineralisation (up to 10% pyrite, 0.5% chalcopyrite) occurs within a 2 metre, massive pyrite-
chalcopyrite-magnetite-actinolite-chlorite-carbonate-apatite vein from 385.2 to 387mDH. Assays for this interval
returned 2m @ 0.39 % Cu (refer ASX release 31 October 2018). See figure and core photo below. Minor pyrite (0.1-
0.3%) and rare chalcopyrite occurs elsewhere throughout the hole, typically associated with actinolite-magnetite
veins. Further testing of this anomaly and other structural positions within the FC-2 Anomaly are planned for the
2019 field season.
Figure: Drill hole MMA015. Massive pyrite-chalcopyrite-magnetite-actinolite-chlorite-carbonate-apatite vein (385.2-387mDH)
returned 2m @ 0.39 % Cu from 385 m downhole.
GBM Resources Annual Report 2019
Page 14
Review of Operations
Figure: Completed 3DIP Rx-Tx lines over south end of FC2 complex within Area 3. The recently completed Area 3 is the southern-
most pink polygon.
Figure: Tenement locations within the North West Mineral Province.
GBM Resources Annual Report 2019
Page 15
Review of Operations
MALMSBURY PROJECT, VICTORIA (100% OWNED GBM)
Intrusive Related Gold
The Malmsbury Project is located in the same region as the large, high grade Fosterville Gold
Mine. The Malmsbury Project has a known gold resource containing 104,000 ounces of gold at
an average grade of 4 g/t Au. The project has high order exploration targets with previous mining
to shallow depths that remain to be tested with modern exploration.
During the year the Leven Star resource was reviewed and upgraded to comply with requirements of the 2012
version of the JORC Code and current ASX guidance (refer ASX announcement 4 July 2019). The inferred resource
remains unchanged at 820,000 tonnes at an average grade of 4.0 g/t Au containing 104,000 ounces of gold at a cut-
off grade of 2.5 g/t Au.
This area hosts an inferred resource estimated to contain 104,000 ounces of gold and historical production from the
area totalled 91,000 ounces. Drilling by GBM has demonstrated that the characteristics of an IRGS persist to at least
1km depth in the project area. Reviews of structural and mineralogical characteristics of the mineralisation have
confirmed a number of key similarities with the large, high grade Fosterville Gold Mine which has produced over 2.0
million ounces of gold and has current published reserves and resources containing 4.8Mozs as is one of the largest
known gold systems in Eastern Australia. In addition, recently discovered mineralisation is among the highest grade
resources in the world today. The current resource at Malmsbury is hosted within a 450m section of a single
structure within the Drummond Goldfield which has an identified strike length in excess of 4 kilometres. The
resource remains open at depth and along strike.
Figure; Resources and past production of the Malmsbury Gold Project, Surface Plan (top) and Long Projection (bottom).
GBM Resources Annual Report 2019
Page 16
Review of Operations
YEA PROJECT, VICTORIA (100% OWNED GBM)
Intrusive Related Tungsten, Molybdenum and Gold
Monkey Gully Prospect is considered to be an under-explored IRGS with significant evidence of
Tungsten and Molybdenum mineralisation representing the upper levels of an IRGS system.
In April 2018 a Binding Terms Sheet was signed with Kennington Global Limited (KGL), a Hong Kong registered
company. Under the terms of the agreement, KGL has the right to acquire up to 80% of the Project by spending
A$600,000 with GBM retaining a 20% free carried interest to completion of a Bankable Feasibility Study.
A two day field trip to Monkey Gully was completed during September 2018 by NEDEX Pty Ltd (Nedex) on behalf of
Kennington Global Limited (KGL). During the visit the geological setting and style of mineralisation was reviewed
with the objective to design a preliminary drilling programme to test the zone of tungsten/molybdenum
mineralization. A subsequent data review was undertaken during the December Quarter and an initial drill
programme proposed.
Previous drilling by GBM intersected 17 metres averaging 0.19% W2O3 and 262 ppm Mo from 101 metres
downhole, including 8 metres averaging 0.34% W2O3 and 493ppm Mo. Review of previous exploration data has
also highlighted a number of significant geochemical and geophysical anomalies which represent targets for future
exploration.
Two target styles have been proposed at Monkey Gully; a near surface target of multiple close-spaced dykes and
dyke contacts and a deeper mineralised carapace over the tonalite source intrusion. Given the size of the central
magnetic high (2 kilometre x 0.8 kilometre) and the modelled association with a mineralised tonalite carapace,
the deep target has significant exploration potential for a large-tonnage W-Mo +- Au IRGS deposit.
Figure: Major goldfields and structural domains in Victoria showing the location of the Malmsbury Au Project and Yea W,Mo,Au
Project.
GBM Resources Annual Report 2019
Page 17
Tenement Schedule
GBM’S TENEMENT SCHEDULE
Project / Name
Tenement No. Owner
Manager
Interest
Interest
Status
Granted
Expiry
Application
Date
Approx
Area
31-Mar-19 30-Jun-19
(km2)
Victoria
Malmsbury
Drummond
Yea
Monkey Gully
Queensland
Mount Morgan (Project
Smelter Return
Limonite Hill
Mt Hoopbound
Limonite Hill East
Mt Victoria
Mountain Maid
Mt Morgan West
Mt Morgan East
Mt Morgan Central
Moonmera
Mount Usher
Project Area
Mount Isa Region
Mount Margaret (Project Status)
Mt Malakoff Ext
Cotswold
Dry Creek
Dry Creek Ext
Mt Marge
Corella
Tommy Creek
Middle Creek
Sigma
Project Area
Brightlands
Brightlands
Bungalien
Bungalien 2
The Brothers
Mayfield
Mayfield
Mt Coolon
Mt Coolon
Mt Coolon North
Mt Coolon East
Conway
Bulgonunna
Black Creek
RL6587
EL5293
EPM18366
EPM18811
EPM18812
EPM19288
EPM25177
EPM25678
EPM27096
EPM27097
EPM27098
EPM19849
ML100184
EPM16398
EPM16622
EPM18172
EPM18174
EPM19834
EPM25545
EPM25544
EPM27128
EPM27166
EPM14416
EPM18207
EPM25213
EPM19483
EPM15902
EPM25365
EPM25850
EPM7259
EPM26842
EPM26914
GBMR*1/Belltopper Hill GBMR
100%
100%
Application
15-11-2017
GBMR
GBMR
100%
100%
Granted
23-Mar-11 22-Mar-21
GBMR
GBMR
GBMR
GBMR
GBMR
GBMR
GBMR
GBMR
GBMR
GBMR*3
GBMR
GBMR
GBMR
GBMR
GBMR
GBMR
GBMR
GBMR
GBMR
GBMR
GBMR
GBMR
GBMR*2, 4 /Isa
GBMR
GBMR*2, 4 /Isa
GBMR
GBMR*2, 4/Isa
GBMR
GBMR*2, 4/Isa
GBMR
GBMR*4/Isa Tenements GBMR
GBMR*4/Isa Tenements GBMR
GBMR*4/Isa Tenements GBMR
GBMR
GBMR/Isa Tenements
GBMR
GBMR/Isa Tenements
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
47.1%
47.1%
47.1%
47.1%
47.1%
47.1%
47.1%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
47.0%
47.0%
47.0%
47.0%
47.0%
47.0%
47.0%
100%
100%
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Application
Application
Granted
Application
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Application
Application
21-Jun-12
21-Nov-12
26-Jul-12
31-Oct-13
26-Aug-14
09-Apr-15
28-Aug-19
20-Jun-21
20-Nov-19
25-Jul-21
30-Oct-20
25-Aug-21
08-Apr-21
27-Aug-19
12-Apr-13
11-Apr-21
18-Oct-20
19-Oct-10
29-Nov-22
30-Nov-12
12-Jul-21
13-Jul-12
24-Oct-20
25-Oct-11
04-Mar-13 03-Mar-21
20-Mar-15 19-Mar-21
10-Nov-20
11-Nov-14
01-Nov-18
01-Nov-18
03-Dec-18
02-Jan-19
GBMR*2/Isa Brightlands GBMR
100%
100%
Granted
5-Aug-05
4-Aug-21
GBMR*2/Isa Tenements GBMR
GBMR
GBMR/Isa Tenements
100%
100%
100%
100%
Granted
Granted
24-May-12 23-May-21
15-Oct-21
16-Oct-14
GBMR*2,/Isa Tenements GBMR
100%
100%
Granted
11-Mar-14 10-Mar-22
GBMR/MCGM
GBMR/MCGM
GBMR/MCGM
GBMR/MCGM
GBMR
GBMR
GBMR
GBMR
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
12-Jun-23
13-Jun-08
17-Sep-21
18-Sep-14
06-Sep-20
07-Sep-15
18-May-90 17-May-22
14-Aug-23
15-Aug-19
14-Aug-23
15-Aug-19
30-May-74 31-Jan-24
31-Jan-24
27-Jan-94
31-Jan-24
27-Jan-94
31-Jan-24
05-Dec-96
6.7
25
62
107
23
3
3
26
325
325
325
16
6
1017
78
16
163
23
3
46
33
35
287
683
94
120
7
91
299
85
176
39
325
325
0.71
0.05
0.98
1.30
1248
3292
ML 1029
ML 1085
ML 1086
ML 10227
GBMR/MCGM
GBMR/MCGM
GBMR/MCGM
GBMR/MCGM
Koala 1
Koala Camp
Koala Plant
Glen Eva
Project Area
TOTALS
Note
* 1 subject to a 2.5% net smelter royalty to vendors.
* 2 subject to a 2% net smelter royalty is payable to Newcrest Mining Ltd. On all or part of the tenement area.
* 3 subject to 1% smelter royaly and other conditions to Rio Tinto
GBMR
GBMR
GBMR
GBMR
100%
100%
100%
100%
100%
100%
100%
100%
Table: GBM Tenements summary table as at 22nd of October 2019.
The Company confirms that the form and context in which the Competent Persons findings are presented have not been
materially modified from the original market announcements.
The Company confirms that it is not aware of any new information or data that materially affects the information included
in the respective announcements and all material assumptions and technical parameters underpinning the resource
estimates with those announcements continue to apply and have not materially changed.
GBM Resources Annual Report 2019
Page 18
Annual Mineral Resources Statement
2019 ANNUAL MINERAL RESOURCES STATEMENT
The following Annual Statement of Mineral Resources statement reflects the Company’s mineral resources
(including wholly owned subsidiary companies) as at the 30th of June 2019.
For the purpose of preparing this Annual Statement of Mineral resources as at 30th of June 2019, GBM has
completed a review of each resource taking into account long term metal price, foreign exchange rates, cost
assumptions based on current industry trends and conditions, any changes that may affect the capability for these
resources to be exploited or which may result in material changes to cut-off grades and physical mining parameters.
It should be emphasised that this is a summary only and for further detail the reader is referred to the respective
ASX releases.
In relation to commodities key to GBM’s resource base the company holds the following views;
Operating costs in the industry have increased in the last 12 months but remain at levels lower than at the end
of the commodities boom. In particular, the availability and cost of labour, fuel and mining equipment remain
at reduced levels.
Gold price finished the year around its peak for the year of US$1,409 after starting the year at US$1,247 trading
in a range between US$1,178 and US$1,350. Forecasts appear to be closer to consensus than in previous with
most forecasting the price to increase further in the short to medium term. Importantly for GBM, the long-term
upward trend which has continued since 2006 in AUD gold prices appears to be continuing.
The copper price moved sideways for the year with commentators continuing to forecast copper to enter a
period of production shortfall in the long term putting upward pressure on prices. It should be remembered
that copper remains an important component of the technological revolution including new battery and motor
technology.
The REE market remains complex, however REE demand continues to grow and prices for almost all REE appears
to have stabilised with those REE metals deemed as critical experiencing increases during the last twelve
months. Uncertainty over the level and availability of REE production sourced from China has intensified
throughout the year as a result of US trade restriction and ongoing concern over illegal mining. This uncertainty
continues to support forecasts of a resultant supply shortage and price increases in the critical REE elements,
particularly Neodymium, in the medium to longer term.
The decline of the Australian dollar in relation to the US dollar continued throughout the year with the Australian
Dollar moving from 74.05C at the start of the year to 70.23 at June 30 2019. This trend has continued and at
the time of writing the Australian dollar is trading at US 67.32c. This decline in our currency is, in conjunction
with recovering metal prices resulting in significant improvement in the outlook for Australian ore deposits, gold
deposits in particular.
The company believes that, considering the outlook for commodity prices and other factors, there is a reasonable
expectation that resources at all projects will eventually support mining operations.
GBM Resources Annual Report 2019
Page 19
Annual Mineral Resources Statement
Mount Coolon Gold Project Resources
The Mount Coolon Project is located in the Drummond Basin in Queensland. Tenements and resources are
owned by 100% owned subsidiary, Mount Coolon Gold Mines Pty. Ltd.
Project Location
Resource Category
Total
Cut-off
Measured
Indicated
Inferred
000' t
Au g/t Au ozs
000' t Au g/t
Au ozs
000' t Au g/t Au ozs
000' t Au g/t
Au ozs
Koala
Open Pit
Underground Extension
Tailings
Total
114
114
1.6
1.7
6,200
6,200
Eugenia Oxide
Sulphide
Total
Glen Eva Open Pit
Total
114
0.0
6,200
670
50
9
729
885
905
1,790
1,070
3,590
2.6
3.2
1.6
2.6
1.1
1.2
1.1
1.6
1.6
55,100
440
1.9
26,700
1,120
5,300
260
4
34,400
320
124
400
60,800
32,400
700
597
33,500
1,042
65,900
1,639
55,200
580
181,900
2,919
2.7
1.0
1.2
1.1
1.2
1.5
61,100
1,563
19,300
1,482
38,900
1,947
58,200
3,430
23,100
1,660
142,400
6,653
2.3
3.9
1.6
2.5
1.1
1.2
1.1
1.5
1.5
81,800
39,700
6,600
128,100
51,700
72,400
124,100
0.4
2.0
1
0.4
0.4
78,300
0.4
330,500
Table: November 2017 Resource Summary for the MCGP. Please note rounding (1,000’s tonnes, 100’s ounces, 0.1 g/t) may
cause minor variations to totals. For full details please refer to ASX release dated the 4th of December 2017.
There have been no changes in the Mount Coolon resources since the last Annual Statement of Mineral Resources
as at 30 June 2018.
The company considers that any minor increases in mining and operating costs that may have occurred through
the year are greatly outweighed by the increase in gold price in Australia resulting from a favourable combination
of commodity price and currency movements.
The information in this report that relates to Koala and Glen Eva Mineral Resources is based on information compiled
by Kerrin Allwood, who is a Member of The Australasian Institute of Mining and Metallurgy and The Australasian
Institute of Geoscientists. Refer ASX announcement dated 4 December 2017.
The information in this report that relates to the Eugenia Mineral Resource is based on information compiled by
Scott McManus, who is a Member of The Australasian Institute of Mining and Metallurgy and The Australasian
Institute of Geoscientists. Refer ASX announcement dated 4 December 2017.
Malmsbury Gold Project Resources
The Malmsbury Gold Project is located within the Bendigo structural zone of Victoria. During the year this
resource was reviewed and upgraded to comply with the requirements of JORC 2012. This has not resulted in any
change to the reported resource. For details please refer to ASX release dated 4th of July 2019 (CP K Allwood). For
original release refer to ASX release dated 19th of January 2009 (CP K Allwood).
Resource
Tonnes
Au
Classification
(g/t)
Au
(ozs)
Cut Off
(g/t Au)
Inferred
820,000
4.0
104,000
2.5
There has been no change in the resource for the Malmsbury Project from the previous year other than the
reclassification to be reported under JORC 2012.
The information in this report that relates to Malmsbury Mineral Resource is based on information compiled by
Kerrin Allwood, who is a Member of The Australasian Institute of Mining and Metallurgy and The Australasian
Institute of Geoscientists.
GBM Resources Annual Report 2019
Page 20
Annual Mineral Resources Statement
Milo IOCG Project Resources
The Milo Deposit is located in the North West Mineral Province of Queensland. Details of the Milo resources are
detailed in ASX release dated 22nd of November 2012 (CP K. Allwood).
Milo - TREEYO Inferred Resource
tonnes
TREEYO
(ppm, t)
P2O5
(%, t)
(Mt)
LREEO
Dy2O3
Others
Er2O3
La2O3
Gd2O3
Eu2O3
Y2O3
Sm2O3
Nd2O3
Pr2O3
CeO2
(ppm, t)
(ppm, t)
(ppm, t)
(ppm, t)
(ppm, t)
(ppm, t)
(ppm, t)
(ppm, t)
(ppm, t)
(ppm, t)
HREEY
(ppm, t)
cutoff
(TREEYO
ppm)
Grades
300
176
620
0.75
260
150
80
24
12
4
10
52
8
5
9
Contained Metal
108,000
1,330,000
46,140
26,460
13,850
4,230
2,170
710
1,780
9,150
1,480
850
1,620
There has been no change to the Milo TREEYO resource estimate during the current reporting year.
Milo - Copper Equivalent Resource
Resource
Classification
cutoff
(CuEQ %)
tonnes
CuEQ
(%, t)
(Mt)
Au
Cu
Ag
Mo
Co
( ppm,
ozs)
(ppm, t)
( ppm,
ozs)
(ppm/ t)
(ppm/t)
U3O8
(ppm/
Mlbs)
Inferred
0.10
88.4
0.34
0.04
1090
1.63
65
130
72
Contained Metal
301,000
126,000
96,500
4,638,000
5,700
11,700
14.0
There has been no change to the copper equivalent resource estimate during the current reporting year.
The information in this report that relates to the Milo Mineral Resources is based on information compiled by Kerrin
Allwood, who is a Member of The Australasian Institute of Mining and Metallurgy and The Australasian Institute of
Geoscientists.
GBM Resources Annual Report 2019
Page 21
Annual Mineral Resources Statement
Explanatory Notes
* Copper Equivalent calculation represents the total metal value for each metal, multiplied by the conversion factor,
summed and expressed in equivalent copper percentage. These results are exploration results only and no allowance
is made for recovery losses that may occur should mining eventually result. However, it is the company’s opinion
that elements considered here have a reasonable potential to be recovered. It should also be noted that current
state and federal legislation may impact any potential future extraction of Uranium. Prices and conversion factors
used are summarised below, rounding errors may occur.
Commodity
Price
Units
unit value
unit
Conversion factor
(unit value/Cu % value)
copper
gold
cobalt
silver
uranium
molybdenum
6836
1212
40000
18
40
38000
US$/t
US$/oz
US$/t
$/oz
US$/lb
US$/t
68.36 US$/%
38.97 US$/ppm
0.04 US$/ppm
0.58 US$/ppm
0.08 US$/ppm
0.04 US$/ppm
1.0000
0.5700
0.0006
0.0085
0.0012
0.0006
The information in this Annual Mineral Resources Statement is based on and fairly represents information and
supporting documentation prepared by the competent persons named in the relevant sections of this report.
The information in this Annual Mineral Resources Statement as a whole that relates to Mineral Resources is based
on information compiled by Neil Norris, who is a Member of The Australasian Institute of Mining and Metallurgy.
Mr Norris is a holder of shares and options in the company and is a full-time employee of the company. Mr Norris
has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and
to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the
‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Norris consents
to the inclusion in the report of the matters based on his information in the form and context in which it appears.
GBM Resources Annual Report 2019
Page 22
Sustainable Development
Sustainable Development
While GBM’s field activities have been limited during this year, the Company remain committed to providing a
safe and healthy work environment for all of its employees, contractors, consultants and visitors at all sites. GBM
has been a signatory to the Mineral Council of Australia’s ‘Enduring Value: The Australian Minerals Industry
Framework for Sustainable Development’ since 2008 and reconfirmed this commitment again in 2016. Our
excellent record continues with zero LTI’s and environmental incidents again this year – this is the ninth
successive year that GBM has achieved zero harm.
This is a credit to our people and an indication of the Company’s stringent and high safety and environment
standards. Our aim is to operate in a safe and environmentally responsible manner meeting industry’s highest
standards. The Board, Management and Staff of GBM support and promote the Company’s Core Values (see Page
5) in all endeavours. We are committed to upholding the company key values which include developing strong
and lasting relationships with our employees, and with the communities in which we operate. The company is
committed to maintaining regular and open communication with the landholders and stakeholders in the areas
we operate.
Safety
GBM’s strong commitment to safety ensures that all employees, including employees of contractors, suppliers and
consultants, are fully instructed, trained and assessed in their activities by providing the facilities, equipment, tools,
procedures, safety programs and training for employees to carry out their assigned tasks in a safe and appropriate
manner.
The Company and our Staff are proud to achieve the results of zero LTI’s, MTI’s and Environmental Incidents, the
Company’s will strive to maintain and improve these high Safety and Environment standards.
Protection of the environment and the health and safety of its people remain at the core of GBM’s culture. The
company manages risk through the identification, elimination, monitoring and control of hazards, by implementing
procedures accordingly, whilst reviewing performance on a daily basis. GBM seeks continuous improvement in
safety and health performance by maintaining best practice procedures and taking into account evolving knowledge
and technology. GBM recognises the importance of communication and consultation with all staff and stakeholders
to foster a culture of commitment to health, safety and the environment by promoting healthy lifestyles through
appropriate awareness and training programs.
Community & Environment
GBM Resources is committed to monitoring and managing the environmental impacts of our activities to secure a
sustainable environmental future for communities surrounding our sites.
GBM continually strives to improve its environmental performance and complies with the environmental laws and
regulations as a minimum standard. GBM -proactively manages and assesses environmental risks on a site-specific
basis to achieve planned environmental outcomes.
GBM informs and consults with the community about its activities and projects on a regular basis.
During 2019 FY, GBM continued monitoring rehabilitation performance on the disturbed areas around the
Malmsbury Gold Project with inspection of drill sites from 2008 confirming that no lasting disturbance has occurred
and that native vegetation had recovered on these sites. At the Mount Coolon Project, results from the initial two
surveys confirms that rehabilitation completed by previous operators has been largely successful, however some
areas will require further remedial action and a rehabilitation strategy is being developed to ensure this is
completed to the highest standards. The company will continue to monitor this and to undertake minor remediation
and additional rehabilitation on areas where these surveys identify it is necessary.
GBM Resources Annual Report 2019
Page 23
Sustainable Development
Statistics / Achievements:
• No lost time injuries were sustained during
the 2018/19 field season.
• No medically treated injuries were sustained
during operations in 2018/19.
• No environmental incidents occurred during
the reporting period.
Figures: Drilling at Malmsbury in 2008 (L) and the drill site today rehabilitated.
.
GBM Resources Annual Report 2019
Page 24
Directors’ Report
The Directors present their report together with the consolidated financial statements for the Company and its
controlled entities (‘Group’) for the financial year ended 30 June 2019.
DIRECTORS
The names of Directors in office at any time during or since the end of the year are:
Peter Thompson – B.Bus, CPA, FCIS
Executive Chairman
Experience
Mr Thompson is a CPA qualified accountant and Fellow of Governance Institute of Australia. He has over 35 years
experience in the mining industry in Australia, UK and South America. He has held senior roles with several major
companies including Xstrata Plc, MIM Holdings Ltd and Mt Edon Gold Mines.
Since 2000, Mr Thompson has been involved in the development of various infrastructure projects, including mine
and refinery expansions and establishment of infrastructure including roads, rail, port and power utilities. Mr
Thompson was appointed as a non-executive director of Nova MSC Berhad, a Malaysian public company on 1 June
2017.
Mr Thompson has held no other directorships of listed companies in the last 3 years.
Mr Guan Huat (Sunny) Loh – B.Ba. MBA
Non-Executive Deputy Chairman (Appointed 6 December 2018)
Mr Loh’s expertise lies in corporate strategy, finance markets, investor relations and capital restructures. Mr Loh
holds a BBA from National University of Singapore and an MBA of Strategic Marketing from the University of Hull.
He is also an Associate of the Institute of Chartered Secretaries and Administrators.
Mr Loh has been appointed to the role of Deputy Chairperson. In this role he will further support the Board through
interaction with the Company’s overseas shareholder base, and via evaluation of additional funding and corporate
options to further develop and grow GBM. Mr Loh is a substantial shareholder in GBM. He has a long and supportive
relationship with the Company as both a shareholder and, previously, as a Non-Executive Director.
Mr Loh has not been a director of any other ASX listed company in the last 3 years.
Neil Norris – BSc(Hons), MAIMM, MAIG
Exploration Director - Executive
Experience
Mr. Norris is a geologist with over 25 years’ experience gained in Australia and overseas. Recently he was Group
Exploration Manager for Perseverance Corporation Limited and spent over ten years with Newmont Australia
Limited holding senior positions in both mining and exploration areas. A key achievement was his development of
the geological models which contributed to the discovery of the Phoenix ore body at Fosterville. Mr. Norris was also
involved in the discovery of the world class Cadia and Ridgeway deposits. Mr. Norris has a track record in the
successful identification of mineral deposits and his experience will greatly advance GBM’s exploration efforts.
Mr Norris has held no other directorships of listed companies in the last 3 years.
FORMER DIRECTOR
Hun Seng Tan - MBA
Non-Executive Director (Resigned 6 June 2019).
GBM Resources Annual Report 2019
Page 25
Directors’ Report
COMPANY SECRETARY
Mr Kevin Hart – B.Comm FCA
Mr Hart is a Chartered Accountant and was appointed to the position of Company Secretary on 3 February 2010.
He has over 30 years’ experience in accounting and the management and administration of public listed entities in
the mining and exploration industry.
He is currently a partner in an advisory firm which specialises in the provision of company secretarial services to
ASX listed entities.
MEETINGS OF DIRECTORS
During the financial year, the following meetings of Directors (including committees) were held:
P Thompson
S Loh
N Norris
H Tan
DIRECTORS’ MEETINGS
Number Eligible to Attend
14
12
14
13
Number Attended
14
12
14
13
PRINCIPAL ACTIVITIES
The principal activity of the Group during the financial year was exploration and undertaking scoping studies in
respect of its gold projects in Australia.
OPERATING AND FINANCIAL REVIEW
During the financial year the Group’s activities were focused on exploration and assessment of the development
potential at its wholly owned Mt Coolon Gold Project.
Operating Results
The net loss after income tax attributable to members of the Group for the financial year to 30 June 2019 amounted
to $4,239,459 (2018: $5,781,089). The prior year loss included an impairment charge of $325,951 in respect of the
change in value of investments to 30 June 2018. In addition, the Group has recognised $3,156,526 in respect of
exploration costs written off, impaired and expensed (2018: $4,388,934).
Financial Position
At the end of the financial year, the Group had $332,540 (2018: $351,438) in cash on hand and on deposit. Carried
forward exploration and evaluation expenditure was $9,644,180 (2018: $11,983,627).
During the prior year the Company disposed of its interest in Anchor Resources Pte Ltd (Anchor Resources), a
Company holding the Lubuk Mandi mining concession which is quoted on the Catalist Board of the Singapore Stock
Exchange (SGX).
EQUITY SECURITIES ON ISSUE
Ordinary fully paid shares
30 June 2019
1,090,596,975
Options over unissued shares
222,191,744
30 June 2018
863,566,975
203,391,744
Ordinary Fully Paid Shares
During the 2019 financial year the Company issued 47,030,000 ordinary fully paid shares at 0.5 cents per share
pursuant to a share purchase plan and 180,000,000 ordinary fully paid shares at 0.5 cents per share pursuant to a
share placement.
No shares have been issued since the end of the financial year.
GBM Resources Annual Report 2019
Page 26
Directors’ Report
EQUITY SECURITIES ON ISSUE
Options over Ordinary Shares
During the 2019 financial year the Company issued 18,800,000 unlisted options to employees pursuant to the terms
and conditions of the Company’s incentive option plan.
No options have been issued, vested, exercised or cancelled during or since the end of the financial year.
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
Other than as stated in the Operational and Financial Review section above, there were no other significant changes
in the state of affairs of the Group during the financial year, not otherwise disclosed in this Directors’ Report or in
the Review of Operations.
EVENTS SUBSEQUENT TO BALANCE DATE
Other than the following, there has not arisen in the interval between the end of the financial year and the date of
this report any item, transaction or event of a material and unusual nature likely, in the opinion of the Directors of
the Company to affect substantially the operations of the Group, the results of those operations or the state of
affairs of the Group in subsequent financial years:
• On 4 July 2019 the Company issued 350,000 convertible notes at a face value of $1 per note pursuant to
the convertible note funding agreement announced to ASX on 9 May 2019.
DIVIDENDS
No dividends were paid during the year and the Directors recommend that no dividends be paid or declared for the
financial year ended 30 June 2019.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS
Comments on expected results of the operations of the Company are included in this report under the Review of
Operations.
Disclosure of other information regarding likely developments in the operations of the Company in future financial
years and the expected results of those operations is likely to result in unreasonable prejudice to the Company.
Accordingly, this information has not been disclosed in this report.
ENVIRONMENTAL ISSUES
The Group holds participating interests in a number of exploration tenements. The various authorities granting such
tenements require the tenement holder to comply with the terms of the grant of the tenement and all directions
given to it under those terms of the tenement.
There have been no known breaches of the tenement conditions, and no such breaches have been notified by any
government agencies during the year ended 30 June 2019.
REMUNERATION REPORT (AUDITED)
The remuneration report is set out in the following manner:
Policies used to determine the nature and amount of remuneration
•
• Details of remuneration
•
Service agreements
•
Share based compensation
GBM Resources Annual Report 2019
Page 27
Directors’ Report
REMUNERATION REPORT (AUDITED)
Remuneration Policy
The Board of Directors is responsible for remuneration policies and the packages applicable to the Directors of the
Company. Whilst the broad remuneration policy is to ensure that packages offered properly reflect a person’s
duties and responsibilities and that remuneration is competitive and attracts, retains, and motivates people of the
highest quality, the Board has consciously been focused on conserving the Company’s funds to ensure the maximum
amount is spent on exploration, and this is reflected in the modest level of Director fees.
The policy of the Group is to offer competitive salary packages which provide incentive to Directors and executives
and are designed to reward and motivate. Total remuneration for all Non-Executive Directors was voted on by
shareholders, whereby it is not to exceed in aggregate $200,000 per annum. Non-Executive Directors receive fees
agreed on an annual basis by the Board.
At the date of this report, the Company had not entered into any remuneration packages with Directors or senior
executives which include performance-based components.
Details of Remuneration for Directors and Executive Officers
The remuneration of each Director of the Company and relevant executive officers (together known as Key
Management Personnel or KMP) are set out in the attached Table.
Remuneration levels are competitively set to attract and retain appropriately qualified and experienced Directors
and senior executives. The Board of Directors obtains independent advice when appropriate in reviewing
remuneration packages.
During the year, there were no senior executives who were employed by the Company for whom disclosure is
required.
2019
Short term
Post
Employment
Share
Based
Payments
Salary
and fees
Other
Super -
annuation
Options /
shares
Directors
P Thompson1
S Loh
N Norris1
H Tan
Total Directors
$
$
$
224,000
28,000
207,173
48,000
507,173
-
-
14,865
-
14,865
21,280
-
19,681
-
40,961
$
-
-
-
-
-
Total
$
245,280
28,000
241,719
48,000
562,999
Performance
Based
Payments as %
of
remuneration
%
-
-
-
-
-
Included in director remuneration in the table above for 2019 are amounts of $288,175 that were accrued for
payment as at 30 June 2019.
GBM Resources Annual Report 2019
Page 28
Directors’ Report
REMUNERATION REPORT (AUDITED)
Details of Remuneration for Directors and Executive Officers (Continued)
2018
Short term
Post
Employment
Share
Based
Payments
Salary
and fees
$
215,000
198,173
48,000
461,173
Other
$
-
8,176
-
8,176
Super -
annuation
Options /
shares
$
20,425
18,827
-
39,252
$
-
-
-
-
Total
$
235,435
225,176
48,000
508,601
Directors
P Thompson1
N Norris1
H Tan
Total Directors
Performance
Based
Payments as %
of
remuneration
%
-
-
-
-
Included in director remuneration in the table above for 2018 are amounts of $64,454 that were accrued for
payment as at 30 June 2018 and 30 June 2019.
1During the 2019 and 2018 financial years, total remuneration payable to the Executive Directors Peter Thompson
and Neil Norris continued to be paid on a temporarily reduced basis. This is a temporary measure to ensure that
the current strategies in place are achieved by the Company.
See disclosure relating to service agreements for further details of remuneration of executive directors.
Options Provided as Remuneration
During the years ended 30 June 2018 and 30 June 2019 no options have been granted and issued to KMP of the
Company.
No shares were issued to KMP of the Company in respect of the exercise of options previously granted as
remuneration.
Service Agreements
Remuneration and other terms of employment for the Executive Directors are set out in Service Agreements:
Peter Thompson – Executive Chairman
The service agreement expires 30 June 2020. Total remuneration under the contract of $300,000 per annum
inclusive of superannuation has been temporarily reduced to $245,280 per annum as part of the Company’s cost
reduction program. This reduced remuneration level will remain in place until otherwise decided by the Board.
The Service agreement contains certain provisions typically found in contracts of this nature. The Company may
terminate the Service Agreement without cause by providing nine months written notice to the individual or by
making a payment in lieu of notice. The Service Agreement may be terminated immediately in the case of serious
misconduct.
The Service Agreement is subject to annual review.
There is no specific cash bonus or other performance based compensation contemplated in the agreement. Long
term and short term incentives, may be awarded subject to Board discretion.
GBM Resources Annual Report 2019
Page 29
Directors’ Report
REMUNERATION REPORT (AUDITED)
Service Agreements (Continued)
Neil Norris - Exploration Director
The service agreement expires 30 June 2020. Total remuneration under the contract of $300,000 per annum
inclusive of superannuation has been temporarily reduced to $226,854 per annum as part of the Company’s cost
reduction program. This reduced remuneration level will remain in place until otherwise decided by the Board.
The Service agreement contains certain provisions typically found in contracts of this nature. The Company may
terminate the Service Agreement without cause by providing nine months written notice to the individual or by
making a payment in lieu of notice. The Service Agreement may be terminated immediately in the case of serious
misconduct.
The Service Agreement is subject to annual review.
There is no specific cash bonus or other performance based compensation contemplated in the agreement. Long
term and short term incentives, may be awarded subject to Board discretion.
Share Based Compensation
At the date of this report the Company has not entered into any agreements with KMP which include performance
based components. Options issued to Directors are approved by shareholders and were not the subject of an
agreement or issued subject to the satisfaction of a performance condition.
Options may be issued to provide an appropriate level of incentive using a cost effective means given the Company’s
size and stage of development.
DIRECTORS’ INTERESTS
The relevant interest of each Director in the ordinary shares and options issued by the Company as notified by the
Directors to the Australian Securities Exchange at the date of this report, is set out in the table below.
Ordinary shares
Director
P Thompson
S Loh
N Norris
H Tan
Options
Director
P Thompson
S Loh
N Norris
H Tan
Ordinary shares
held at 1 July
2018
11,200,000
60,811,1521
11,141,667
18,666,667
Movement during
the financial year
13,000,000
-
13,000,000
3,000,000
Ordinary Shares
held at 30 June
2019
24,200,000
60,811,152
24,141,667
21,666,6672
Ordinary shares
held at the date of
the Directors’
Report
24,200,000
60,811,152
24,141,667
-
Options held at 1
July 2018
2,800,000
23,983,1981
2,556,250
4,666,667
Movement during
the financial year
-
-
-
-
Options held at 30
June 2019
2,800,000
23,983,198
2,556,250
4,666,6672
Options held at the
date of the
Directors’ Report
2,800,000
23,983,198
2,556,250
-
1 Interests held on appointment as Director on 6 December 2018
2 Interests held on ceasing to be a Director on 6 June 2019.
GBM Resources Annual Report 2019
Page 30
Directors’ Report
REMUNERATION REPORT (AUDITED)
LOANS TO DIRECTORS AND EXECUTIVES
There were no loans entered into with Directors or executives during the financial year ended 30 June 2019.
OTHER TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL
Other than the above, there are no transactions with Directors, or Director related entities or associates.
End of Remuneration Report
INDEMNIFICATION AND INSURANCE OF OFFICERS AND AUDITORS
During the year, the Company paid an insurance premium to insure certain officers of the Company. The officers
of the Company covered by the insurance policy include the Directors named in this report.
The Directors and Officers Liability insurance provides cover against all costs and expenses that may be incurred in
defending civil or criminal proceedings that fall within the scope of the indemnity and that may be brought against
the officers in their capacity as officers of the Company. The insurance policy does not contain details of the
premium paid in respect of individual officers of the Company. Disclosure of the nature of the liability cover and
the amount of the premium is subject to a confidentiality clause under the insurance policy.
Other than the above, the Group has not, during or since the end of the financial year, given an indemnity or entered
an agreement to indemnify, or paid or agreed to pay insurance premiums for the Directors, officers or auditors of
the Company or the controlled entity.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings
on behalf of the Company, or to intervene in any proceedings to which the Company is a party, for the purpose of
taking responsibility on behalf of the Company for all or part of those proceedings.
No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under
section 237 of the Corporations Act 2001.
NON-AUDIT SERVICES
No non-audit services were provided by the external auditors in respect of the current or preceding financial year.
AUDITOR’S INDEPENDENCE DECLARATION
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001, is
set out on the following page.
Signed in accordance with a resolution of the Board of Directors.
Dated this 30th day of September 2019
PETER THOMPSON
Executive Chairman
GBM Resources Annual Report 2019
Page 31
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the consolidated financial report of GBM Resources Limited for the
year ended 30 June 2019, I declare that to the best of my knowledge and belief, there have been
no contraventions of:
a)
the auditor independence requirements of 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
30 September 2019
D I Buckley
Partner
GBM Resources Annual Report 2019
Page 32
Consolidated Statement of Profit or Loss and
Other Comprehensive Income
for the Year ended 30 June 2019
Note
Consolidated
2019
$
Interest income
Other revenue
Loss on sale of investments
Consulting and professional services
Corporate and project assessment costs
Depreciation
Employee benefits expense
Impairment expense – available for sale financial assets
Exploration expenditure written off and expensed
Exploration assets impairment expense
Travel expenses
Administration and other expenses
Loss before income tax
Income tax benefit
Loss for the year
Other comprehensive income
Total comprehensive loss for the year
Basic loss per share
Diluted loss per share
3a
3b
4
4
10
4
4
5
6
6
2018
$
7,381
89,309
(201,053)
(135,408)
(27,363)
(27,430)
(358,312)
(325,951)
(1,851,058)
(2,537,876)
(124,837)
(288,491)
5,332
148,513
-
(116,929)
(77,393)
(18,959)
(732,762)
-
(3,156,526)
-
(75,592)
(215,143)
(4,239,459)
(5,781,089)
-
-
(4,239,459)
(5,781,089)
-
-
(4,239,459)
(5,781,089)
Cents
(0.4)
(0.4)
Cents
(0.7)
(0.7)
The accompanying notes form part of these financial statements
GBM Resources Annual Report 2019
Page 33
Consolidated Statement of Financial Position
as at 30 June 2019
Note
Consolidated
2019
$
Current assets
Cash and cash equivalents
Trade and other receivables
Total Current Assets
Non-current assets
Trade and other receivables
Exploration and evaluation expenditure
Property, plant and equipment
Total Non-current Assets
TOTAL ASSETS
Current liabilities
Borrowings
Trade and other payables
Total Current Liabilities
Non-current liabilities
Provision for rehabilitation
Total Non-current Liabilities
TOTAL LIABILITIES
NET ASSETS
Equity
Issued capital
Option reserve
Accumulated losses
Share based payment reserve
TOTAL EQUITY
21
7
7
8
9
11
12
13
14
16
16
2018
$
351,438
47,060
398,498
746,488
11,983,627
92,101
332,540
7,298
339,838
802,021
9,644,180
73,141
10,519,342
12,822,216
10,859,180
13,220,714
350,000
711,944
1,061,944
754,258
754,258
-
430,566
430,566
706,907
706,907
1,816,202
1,137,473
9,042,978
12,083,241
32,915,823
610,175
(24,561,487)
78,467
31,795,094
610,175
(20,322,028)
-
9,042,978
12,083,241
The accompanying notes form part of these financial statements
GBM Resources Annual Report 2019
Page 34
Consolidated Statement of Changes in Equity
for the Year Ended 30 June 2019
Consolidated
Note
Issued capital
$
Option reserve
$
Accumulated
losses
$
Share based payment
reserve
$
Balance at 1 July 2017
Shares issued costs
Loss attributable to
members of the Company
Other comprehensive income
Total comprehensive loss for the year
Balance at 30 June 2018
Balance at 1 July 2018
Shares issued (net of costs)
Loss attributable to
members of the Company
Other comprehensive income
Total comprehensive loss for the year
Options issued as remuneration
14
16
14
16
31,801,764
(6,670)
610,175
-
-
-
-
-
-
-
(14,540,939)
-
(5,781,089)
-
(5,781,089)
31,795,094
610,175
(20,322,028)
31,795,094
1,120,729
610,175
-
-
-
-
-
-
-
-
-
(20,322,028)
-
(4,239,459)
-
(4,239,459)
-
Balance at 30 June 2019
32,915,823
610,175
(24,561,487)
The accompanying notes form part of these financial statements
GBM Resources Annual Report 2019
Page 35
-
-
-
-
-
-
-
-
-
-
-
78,467
78,467
Total
$
17,871,000
(6,670)
(5,781,089)
-
(5,781,089)
12,083,241
12,083,241
1,120,729
(4,239,459)
-
(4,239,459)
78,467
9,042,978
Consolidated Statement of Cash Flows
for the Year Ended 30 June 2019
Cash flows from operating activities
Interest received
Other income
JV management fee income
Payments to suppliers and employees
Note
Consolidated
2019
$
3,631
-
48,514
(847,289)
2018
$
7,297
5,563
72,456
(809,369)
Net cash flows (used in) operating activities
21(c)
(795,144)
(724,053)
Cash flows from investing activities
Payments for bonds and security deposits
Proceeds on disposal of bonds and security deposits
Proceeds on sale of available for sale investments
Funds provided by JV partner under Farm-in
agreement
Payments for exploration and evaluation, including
JV Farm-in spend
Proceeds on sale of exploration assets
Payments to acquire property, plant and equipment
(53,832)
-
-
528,505
(1,262,487)
100,000
-
(1,500)
10,000
2,203,563
603,799
(2,477,059)
-
(3,030)
Net cash flows provided by/(used in) investing activities
(687,814)
335,773
Cash flows from financing activities
Proceeds from the issue of shares
Share issue costs
Proceeds from issue of convertible notes
Net cash flows provided by financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at the beginning of the
financial year
Cash and cash equivalents at the end of the financial
year
21(a)
1,135,150
(21,090)
350,000
1,464,060
(18,898)
351,438
332,540
-
-
-
-
(388,280)
739,718
351,438
The accompanying notes form part of these financial statements
GBM Resources Annual Report 2019
Page 36
Notes to the Financial Statements
for the Year Ended 30 June 2019
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
GBM Resources Limited (‘the Company’) is a listed public company domiciled in Australia. The consolidated
financial report of the Company for the financial year ended 30 June 2019 comprises the Company and its
subsidiaries (together referred to as the ‘Group’).
The following is a summary of the material accounting policies adopted by the Group in the preparation of the
financial report. The accounting policies have been consistently applied, unless otherwise stated.
a) Basis of Preparation
The financial report is a general purpose financial report, which has been prepared in accordance with the
requirements of the Corporations Act 2001, and Australian Accounting Standards and Interpretations. The
financial report has also been prepared on an historical cost basis, unless otherwise stated. The financial report
is presented in Australian dollars. For the purpose of preparation of the consolidated financial statements the
Company is a for-profit entity.
Going Concern Basis for the Preparation of Financial Statements
The financial statements have been prepared on the going concern basis which contemplates the continuity of
normal business activities and the realisation of assets and discharge of liabilities in the normal course of
business. The ability of the Group to continue to adopt the going concern assumption will depend on future
successful capital raisings, the successful exploration and subsequent exploitation of the Group’s tenements
and/or sale of non-core assets.
As at 30 June 2019 the Group has cash assets of $332,540, and total current liabilities at that date amounting
to $1,061,944 (including employee leave liabilities of $191,239 and a convertible note liability of $350,000).
The loss for the 2019 financial year was $4,239,456 which included a total expense of $3,156,526 in respect of
exploration costs written off, expensed and impaired.
Subsequent to the end of the financial year the Company raised a further $350,000 pursuant to a convertible
note arrangement.
During the year ended 30 June 2019 the Group has been actively marketing a number of its exploration
projects, including the Mt Coolon gold assets, seeking funding or joint venture partners or outright sale
arrangements.
The Directors will continue to manage the Group’s activities with due regard to current and future funding
requirements. The directors reasonably expect that the Company will be able to raise sufficient capital to fund
the Group’s exploration and working capital requirements, and that the Group will be able to settle debts as
and when they become due and payable. On this basis, the Directors are therefore of the opinion that the use
of the going concern basis is appropriate in the circumstances.
Should the Company be unable to raise the required funding, there is a material uncertainty that may cast
significant doubt on whether the Company will be able to continue as a going concern and therefore, whether
it will be able to realise its assets and extinguish its liabilities in the normal course of business and at the
amounts stated in the financial report.
Adoption of New and Revised Standards - Changes in accounting policies on initial application of accounting
standards
In the year ended 30 June 2019, the Directors have reviewed all of the new and revised Standards and
Interpretations issued by the AASB that are relevant to the Group’s operations and effective for the current
annual reporting period. It has been determined by the Directors that there is no material impact of the new
and revised Standards and Interpretations on the Group’s business and, therefore, no change is necessary to
Group accounting policies. This includes an assessment of AASB15 and AASB9.
The Directors have also reviewed all new Standards and Interpretations that have been issued but are not yet
effective for the year ended 30 June 2019. As a result of this review the Directors have determined that there
is no material impact, of the new and revised Standards and Interpretations on the Group’s business and,
therefore, no change necessary to Group accounting policies, including an assessment of AASB 16.
GBM Resources Annual Report 2019
Page 37
Notes to the Financial Statements
for the Year Ended 30 June 2019
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
b) Statement of Compliance
The financial report was authorised for issue on 30 September 2019.
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,
comprising the financial statements and notes thereto, complies with International Financial Reporting
Standards (IFRS).
c) Principles of Consolidation
The consolidated financial statements comprise the financial statements of GBM Resources Limited and its
subsidiaries as at 30 June each year (the Group). The financial statements for the subsidiaries are prepared for
the same reporting period as the parent company, using consistent accounting policies.
In preparing the consolidated financial statements, all intercompany balances and transactions, income and
expenses and profit and losses resulting from intra-group transactions have been eliminated in full. Subsidiaries
are fully consolidated from the date on which control is transferred to the Group and cease to be consolidated
from the date on which the control is transferred out of the Group.
The acquisition of subsidiaries has been accounted for using the purchase method of accounting. The purchase
method of accounting involves allocating the cost of the business combination to the fair value of the assets
acquired and the liabilities and contingent liabilities assumed at the date of acquisition. Accordingly, the
consolidated financial statements include the results of subsidiaries for the period from their acquisition. Non-
controlling interests represent the portion of profit and loss and net assets in subsidiaries not held by the Group
and are presented separately in the consolidated statement of profit or loss and other comprehensive income
and within equity in the consolidated statement of financial position.
d) Revenue Recognition
Revenue is recognised to the extent that control has passed and it is probable that the economic benefits will
flow to the Group and the revenue can be reliably measured. The following specific recognition criteria must
also be met before revenue is recognised:
Interest Revenue
Interest revenue is recognised on a time proportionate basis that takes into account the effective yield on the
financial asset.
Management Fees
Revenue from farm-in management fees is recognised at the time the fees are invoiced for services rendered.
e)
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.
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:
• when the deferred income tax liability arises from the initial recognition of goodwill or of an asset or
liability in a transaction that is not a business combination and that, at the time of the transaction,
affects neither the accounting profit nor taxable profit or loss; or
• when the taxable temporary difference is associated with investments in subsidiaries, associates or
interests in joint ventures, and the timing of the reversal of the temporary difference can be
controlled and it is probable that the temporary difference will not reverse in the foreseeable future.
GBM Resources Annual Report 2019
Page 38
Notes to the Financial Statements
for the Year Ended 30 June 2019
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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 credits and unused tax losses
can be utilised, except:
• when 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
• when the deductible temporary difference is associated with investments in subsidiaries, associates
or interests in joint ventures, in which case a deferred tax asset is only recognised to the extent that
it is probable that the temporary difference will reverse in the foreseeable future and taxable profit
will be available against which the temporary difference 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 re-assessed at each balance 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 profit or loss.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off
current tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same
taxable entity and the same taxation authority.
f) Other Taxes
Revenues, expenses and assets are recognised net of the amount of GST except:
• when the GST incurred on a purchase of goods and services is not recoverable from the taxation
authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part
of the expense item as applicable; and
•
receivables and payables, which are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of
receivables or payables in the consolidated statement of financial position.
g) Financing Costs
Net financing costs comprise interest payable on borrowings calculated using the effective interest method.
Borrowing costs are expensed as incurred and included in net financing costs, where there is no qualifying
asset.
h) Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and
rewards of ownership to the lessee. All other leases are classified as operating leases.
Assets held under finance leases are initially recognised at their fair value or, if lower, the present value of the
minimum lease payments, each determined at the inception of the lease. The corresponding liability to the
lessor is included in the consolidated statement of financial position as a finance lease obligation.
Lease payments are apportioned between finance charges and reduction of the lease obligation so as to
achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged
directly against income, unless they are directly attributable to qualifying assets, in which case they are
capitalised in accordance with the general policy on borrowing costs – refer Note 1(g).
Finance leased assets are depreciated on a straight line basis over the estimated useful life of the asset.
GBM Resources Annual Report 2019
Page 39
Notes to the Financial Statements
for the Year Ended 30 June 2019
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Operating lease payments are recognised as an expense on a straight line basis over the lease term, except
where another systematic basis is more representative of the time pattern in which economic benefits from
the leased asset are consumed.
i) Cash and Cash Equivalents
Cash and short-term deposits in the consolidated statement of financial position comprise cash at bank and
in hand. Cash equivalents are short-term, highly liquid investments that are readily convertible to known
amounts of cash and which are subject to an insignificant risk of changes in value.
For the purposes of the consolidated statement of cash flows, cash and cash equivalents consist of cash and
cash equivalents as defined above, net of outstanding bank overdrafts.
j) Trade and Other Receivables
Trade receivables, which generally have 30–90 day terms, are recognised at fair value and then are
subsequently measured at amortised cost and carried at original invoice amount less an allowance for any
expected credit loss. The Group makes use of a simplified approach in accounting for trade and other
receivables as well as contract assets and records the loss allowance as lifetime expected credit losses. These
are the expected shortfalls in contractual cash flows, considering the potential for default at any point during
the life of the financial instrument. In calculating, the Group uses its historical experience, external indicators
and forward-looking information to calculate the expected credit losses using a provision matrix. The Group
assess impairment of trade receivables on a collective basis as they possess shared credit risk characteristics
they have been grouped based on the days past due. Bad debts are written off to the allowance when the
debt is considered uncollectible.
k) Plant and Equipment
Plant and equipment is stated at cost, less accumulated depreciation and any accumulated impairment losses.
Such cost includes the cost of replacing parts that are eligible for capitalisation when the cost of replacing the
parts is incurred. Similarly, when each major inspection is performed, its cost is recognised in the carrying
amount of the plant and equipment as a replacement only if it is eligible for capitalisation.
Depreciation is calculated on a straight-line basis over the estimated useful life of the assets as follows:
Property and improvements
Office furniture and equipment
Plant and equipment
Motor Vehicles
10 – 40 years
2.5 - 20 years
0 - 40 years
8 years
The assets' residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate,
at each financial year end.
(i) Impairment
The carrying values of plant and equipment are reviewed for impairment at each reporting date, with
recoverable amount being estimated when events or changes in circumstances indicate that the carrying value
may be impaired.
The recoverable amount of plant and equipment is the higher of fair value less costs to sell and value in use.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-
tax discount rate that reflects current market assessments of the time value of money and the risks specific
to the asset. For an asset that does not generate largely independent cash inflows, recoverable amount is
determined for the cash-generating unit to which the asset belongs, unless the asset's value in use can be
estimated to be close to its fair value.
An impairment exists when the carrying value of an asset or cash-generating units exceeds its estimated
recoverable amount. The asset or cash-generating unit is then written down to its recoverable amount.
GBM Resources Annual Report 2019
Page 40
Notes to the Financial Statements
for the Year Ended 30 June 2019
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(ii) De-recognition and Disposal
An item of property, plant and equipment is de-recognised upon disposal or when no further future economic
benefits are expected from its use or disposal.
Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal
proceeds and the carrying amount of the asset) is included in profit or loss in the year the asset is de-
recognised.
l)
Financial Instruments
Investments and other financial assets are initially measured at fair value. Transaction costs are included as
part of the initial measurement, except for financial assets at fair value through profit or loss. Such assets are
subsequently measured at either amortised cost or fair value depending on their classification. Classification is
determined based on both the business model within which such assets are held and the contractual cash flow
characteristics of the financial asset unless, an accounting mismatch is being avoided.
Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred
and the consolidated entity has transferred substantially all the risks and rewards of ownership. When there is
no reasonable expectation of recovering part or all of a financial asset, it's carrying value is written off.
Financial assets at fair value through profit or loss
Financial assets not measured at amortised cost or at fair value through other comprehensive income are
classified as financial assets at fair value through profit or loss. Typically, such financial assets will be either:
(i) held for trading, where they are acquired for the purpose of selling in the short-term with an intention of
making a profit, or a derivative; or
(ii) designated as such upon initial recognition where permitted. Fair value movements are recognised in
profit or loss.
Financial assets at fair value through other comprehensive income
Financial assets at fair value through other comprehensive income include equity investments which the
consolidated entity intends to hold for the foreseeable future and has irrevocably elected to classify them as
such upon initial recognition.
Impairment of financial assets
The consolidated entity recognises a loss allowance for expected credit losses on financial assets which are
either measured at amortised cost or fair value through other comprehensive income. The measurement of
the loss allowance depends upon the Group's assessment at the end of each reporting period as to whether
the financial instrument's credit risk has increased significantly since initial recognition, based on reasonable
and supportable information that is available, without undue cost or effort to obtain.
Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-month
expected credit loss allowance is estimated. This represents a portion of the asset's lifetime expected credit
losses that is attributable to a default event that is possible within the next 12 months. Where a financial asset
has become credit impaired or where it is determined that credit risk has increased significantly, the loss
allowance is based on the asset's lifetime expected credit losses. The amount of expected credit loss recognised
is measured on the basis of the probability weighted present value of anticipated cash shortfalls over the life
of the instrument discounted at the original effective interest rate.
For financial assets measured at fair value through other comprehensive income, the loss allowance is
recognised within other comprehensive income. In all other cases, the loss allowance is recognised in profit or
loss.
GBM Resources Annual Report 2019
Page 41
Notes to the Financial Statements
for the Year Ended 30 June 2019
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
m) 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:
(i)
(ii)
the rights to tenure of the area of interest are current; and
at least one of the following conditions is also met:
(a) the exploration and evaluation expenditures are expected to be recouped through successful
development and exploitation of the area of interest, or alternatively, by its sale; or
(b) exploration and evaluation activities in the area of interest have not at the reporting date reached a
stage which permits a reasonable assessment of the existence or otherwise of economically recoverable
reserves, and active and significant operations in, or in relation to, the area of interest 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 amortised 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.
n)
Impairment of Assets
The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any
such indication exists, or when annual impairment testing for an asset is required, the Group makes an
estimate of the asset’s recoverable amount. An asset’s recoverable amount is the higher of its fair value less
costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate
cash inflows that are largely independent of those from other assets or groups of assets and the asset's value
in use cannot be estimated to be close to its fair value. In such cases the asset is tested for impairment as part
of the cash-generating unit to which it belongs. When the carrying amount of an asset or cash-generating unit
exceeds its recoverable amount, the asset or cash-generating unit is considered impaired and is written down
to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the
asset. Impairment losses relating to continuing operations are recognised in those expense categories
consistent with the function of the impaired asset unless the asset is carried at re-valued amount (in which
case the impairment loss is treated as a re-valuation decrease).
An assessment is also made at each reporting date as to whether there is any indication that previously
recognised impairment losses may no longer exist or may have decreased. If such indication exists, the
recoverable amount is estimated. A previously recognised impairment loss is reversed only if there has been
a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss
was recognised. If that is the case the carrying amount of the asset is increased to its recoverable amount.
GBM Resources Annual Report 2019
Page 42
Notes to the Financial Statements
for the Year Ended 30 June 2019
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
That increased amount cannot exceed the carrying amount that would have been determined, net of
depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised
in profit or loss unless the asset is carried at re-valued amount, in which case the reversal is treated as a re-
valuation increase. After such a reversal the depreciation charge is adjusted in future periods to allocate the
asset’s revised carrying amount, less any residual value, on a systematic basis over its remaining useful life.
o) Trade and Other Payables
Trade payables and other payables are carried at amortised costs and represent liabilities for goods and
services provided to the Group prior to the end of the financial year that are unpaid and arise when the Group
becomes obliged to make future payments in respect of the purchase of these goods and services. Trade and
other payables are presented as current liabilities unless payment is not due within 12 months.
p)
Interest Bearing Liabilities
All loans and borrowings are initially recognised at the fair value of the consideration received less directly
attributable transaction costs. After
loans and borrowings are
subsequently measured at amortised cost using the effective interest method. Gains and losses are recognised
in profit or loss when the liabilities are de-recognised.
initial recognition,
interest-bearing
Where borrowings contain a conversion option and the number of shares to be issued is fixed the amount of
borrowing is initially recognised at fair value of a similar liability that does not have an equity conversion
option. The equity conversion feature is the residual. Subsequently the borrowing is measured at amortised
cost and the equity portion is not remeasured.
q) Employee Benefits
(i) Wages, Salaries, Annual Leave and Sick Leave
Liabilities for wages and salaries, including non-monetary benefits, annual leave and non-accumulating sick
leave expected to be settled within 12 months of the reporting date are recognised in other payables in respect
of employees’ services up to the reporting date. They are measured at the amounts expected to be paid when
the liabilities are settled. Liabilities for non-accumulating sick leave are recognised when the leave is taken and
are measured at the rates paid or payable.
(ii) Long Service Leave
The liability for long service leave is recognised in the provision for employee benefits and measured as the
present value of expected future payments to be made in respect of services provided by employees up to the
reporting date using the projected unit credit method. Consideration is given to expected future wage and
salary levels, experience of employee departures, and period of service. Expected future payments are
discounted using market yields at the reporting date on national government bonds with terms to maturity
and currencies that match, as closely as possible, the estimated future cash outflows.
r) Share Based Payments
Equity Settled Transactions:
The Group provides benefits to employees (including senior executives) of the Group in the form of share
based payments, whereby employees 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 of
the equity instruments at the date at which they are granted. The fair value of options is determined by using
a Black and Scholes model. Share rights are valued at the underlying market value of the ordinary shares over
which they are granted.
In valuing equity-settled transactions, no account is taken of any performance conditions, other than
conditions linked to the price of the shares of GBM Resources Limited (market conditions) if applicable.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over
the period in which the performance and/or service conditions are fulfilled, ending on the date on which the
relevant employees become fully entitled to the award (the vesting period).
GBM Resources Annual Report 2019
Page 43
Notes to the Financial Statements
for the Year Ended 30 June 2019
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date
reflects (i) the extent to which the vesting period has expired and (ii) the Group’s best estimate of the number
of equity instruments that will ultimately vest. No adjustment is made for the likelihood of market
performance conditions being met as the effect of these conditions is included in the determination of fair
value at grant date. The charge or credit to the consolidated statement of profit or loss and other
comprehensive income for a period represents the movement in cumulative expense recognised as at the
beginning and end of that period.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is only
conditional upon a market condition. If 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, the cumulative expense recognised in respect of that award is
transferred from its respective reserve to accumulated losses. 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
awards are treated as if they were a modification of the original award, as described in the previous
paragraph.
s) Share Capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or
options are shown in equity as a deduction, net of tax, from the proceeds.
t) Earnings Per Share
Basic earnings/loss per share ("EPS") is calculated by dividing the net profit or loss attributable to members
of the Company for the reporting period, after excluding any costs of servicing equity (other than ordinary
shares and converting preference shares classified as ordinary shares for EPS calculation purposes), by the
weighted average number of ordinary shares of the Company, adjusted for any bonus element.
Diluted EPS is calculated by dividing the basic EPS earnings, adjusted by the after tax effect of financing costs
associated with dilutive potential ordinary shares and the effect on revenues and expenses of conversion, by
the weighted average number of ordinary shares and potential dilutive ordinary shares, adjusted for any
bonus element.
u) Business Combinations
The acquisition method of accounting is used to account for all business combinations, including business
combinations involving entities or business under common control, regardless of whether equity instruments
or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the
fair value of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The
consideration transferred also includes the fair value of any contingent consideration arrangement and the
fair value of any pre-existing equity interest in the subsidiary. Acquisition-related costs are expensed as
incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business
combination are, with limited exceptions, measured initially at their fair values at the acquisition date. On
an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the acquiree either
at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net identifiable assets.
The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and
the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the Group’s
share of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair
value of the net identifiable assets of the subsidiary acquired and the measurement of all amounts has been
reviewed, the difference is recognised directly in profit or loss as a bargain purchase.
GBM Resources Annual Report 2019
Page 44
Notes to the Financial Statements
for the Year Ended 30 June 2019
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Where a business combination is achieved in stages, the Group’s previously held equity interest in the
acquiree is remeasured to fair value at the acquisition date (i.e. the date when the Group attains control) and
the resulting gain or loss, if any, is recognised in profit or loss. Amounts arising from interests in the acquiree
prior to the acquisition date that have previously been recognised in other comprehensive income are
reclassified to profit or loss where such treatment would be appropriate if that interest were disposed of.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which
the combination occurs, the Group reports provisional amounts for the items for which the accounting is
incomplete. These provisional amounts are adjusted during the measurement period (see above), or
additional assets or liabilities recognised, to reflect new information obtained about facts and circumstances
that existed as of the acquisition date that, if known, would have affected the amounts recognised as of that
date.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are
discounted to their present value as at the date of exchange. The discount rate used is the entity’s
incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an
independent financier under comparable terms and conditions.
Where the consideration transferred by the Group in a business combination includes assets or liabilities
resulting from a contingent consideration arrangement, the contingent consideration is measured at its
acquisition-date fair value. Changes in the fair value of the contingent consideration that qualify as
measurement period adjustments are adjusted retrospectively, with corresponding adjustments against
goodwill. Measurement period adjustments are adjustments that arise from additional information obtained
during the ‘measurement period’ (which cannot exceed one year from the acquisition date) about facts and
circumstances that existed at the acquisition date.
The subsequent accounting for changes in the fair value of contingent consideration that do not qualify as
measurement period adjustments depends on how the contingent consideration is classified. Contingent
consideration that is classified as equity is not remeasured at subsequent reporting dates and its subsequent
settlement is accounted for within equity. Contingent consideration that is classified as an asset or liability is
remeasured at subsequent reporting dates in accordance with AASB 9, or AASB 137 ‘Provisions, Contingent
Liabilities and Contingent Assets’, as appropriate, with the corresponding gain or loss being recognised in
profit or loss.
v) Provision for Restoration and Rehabilitation
A provision for restoration and rehabilitation is recognised when there is a present obligation as a result of
development activities undertaken, it is probable that an outflow of economic benefits will be required to
settle the obligation, and the amount of the provision can be measured reliably. The estimated future
obligations include the costs of abandoning sites, removing facilities and restoring the affected areas.
The provision for future restoration costs is the best estimate of the present value of the expenditure required
to settle the restoration obligation at the balance date. Future restoration costs are reviewed annually and
any changes in the estimate are reflected in the present value of the restoration provision at each balance
date.
The initial estimate of the restoration and rehabilitation provision is capitalised into the cost of the related
asset and amortised on the same basis as the related asset, unless the present obligation arises from the
production of inventory in the period, in which case the amount is included in the cost of production for the
period. Changes in the estimate of the provision for restoration and rehabilitation are treated in the same
manner, except that the unwinding of the effect of discounting on the provision is recognised as a finance
cost rather than being capitalised into the cost of the related asset.
GBM Resources Annual Report 2019
Page 45
Notes to the Financial Statements
for the Year Ended 30 June 2019
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
w) Parent Entity Financial Information
The financial information for the parent entity, GBM Resources Limited, disclosed in Note 29 has been
prepared on the same basis as the consolidated financial statements, except as set out below.
Investments in subsidiaries, associates and joint venture entities
Investments in subsidiaries, associates and joint venture entities are accounted for at cost in the parent
entity’s financial statements. Dividends received from associates are recognised in the parent entity’s profit
or loss, rather than being deducted from the carrying amount of these investments.
x) Critical Accounting Estimates and Judgements
Estimates and judgements are continually evaluated and are based on historical experience and other factors,
including expectations of future events that may have a financial impact on the Group and that are believed
to be reasonable under the circumstances.
Accounting for capitalised mineral exploration and evaluation expenditure
The Group’s accounting policy is stated at 1(m). A regular review is undertaken of each area of interest to
determine the reasonableness of continuing to carry forward costs in relation to that area of interest.
Share based payments
The Group uses independent advisors to assist in valuing share based payments.
Estimates and assumptions used in these valuations are disclosed in the notes in periods when these share
based payments are made.
GBM Resources Annual Report 2019
Page 46
Notes to the Financial Statements
for the Year Ended 30 June 2019
2. FINANCIAL RISK MANAGEMENT
The Group has exposure to a variety of risks arising from its use of financial instruments. This note presents
information about the Group’s exposure to the specific risks, and the policies and processes for measuring and
managing those risks. Further quantitative disclosures are included throughout this financial report. The Board of
Directors has overall responsibility for the risk management framework.
(a) Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails
to meet its contractual obligations, and arises principally from transactions with customers and investments.
Trade and other receivables
The current nature of the business activity does not result in trading receivables. The receivables that the
Group recognises through its normal course of business are short term in nature and the most significant (in
quantity) is the receivable from the Australian Taxation Office and interest receivable. The risk of non recovery
of receivables from this source is considered to be negligible.
Cash deposits
The Group’s primary banker is Commonwealth Bank. At balance date all operating accounts and funds held on
deposit are with this bank. The Directors believe any risk associated with the use of only one bank is mitigated
by its size and reputation. Except for this matter the Group currently has no significant concentrations of credit
risk.
(b) Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The
Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity
to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable
losses or risking damage to the Group’s reputation.
The Group manages its liquidity risk by monitoring its cash reserves and forecast spending. Management is
cognisant of the future demands for liquid finance resources to finance the Group’s current and future
operations, and consideration is given to the liquid assets available to the Group before commitment is made
to future expenditure or investment.
(c) Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity
prices will affect the Group’s income or the value of its holdings of financial instruments. The objective of market
risk management is to manage and control market risk exposures within acceptable parameters, while
optimising any return.
Currency risk
The Group is not exposed to any currency risk other than the respective functional currencies of each Company
within the Group, the Australian dollar (AUD).
Interest rate risk
The Group is not exposed to significant interest rate risk and no financial instruments are employed to mitigate
risk (Note 18 – Financial Instruments).
Equity price risk
The Group was not exposed to any material equity price risk during the financial year (Note 19 – Financial
Instruments).
GBM Resources Annual Report 2019
Page 47
Notes to the Financial Statements
for the Year Ended 30 June 2019
2. FINANCIAL RISK MANAGEMENT
(d) Capital management
The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence
and to sustain future development of the business. The Board of Directors monitors capital expenditure and
cash flows as mentioned in (b).
3. OTHER REVENUE AND OTHER GAINS/LOSSES
a) Other Revenue
Gain on disposal of exploration assets
Joint venture management fee
Other income
b) Gain/(loss) on sale of investments
Loss on disposal of available for sale financial
assets
4. EXPENSES
Employee expenses
Gross employee benefit expense:
Wages and salaries1
Directors’ fees
Superannuation expense1
Share based remuneration
Other employee costs
Less amount allocated to exploration
Net consolidated statement of profit or loss and
other comprehensive income employee benefit
expense
Note
Consolidated
2019
$
100,000
48,513
-
148,513
2018
$
-
72,456
16,853
89,309
-
-
(201,053)
(201,053)
866,966
76,000
71,923
78,467
24,636
1,117,992
(385,230)
840,726
48,000
79,834
-
71,932
1,040,492
(682,180)
732,762
358,312
1 Includes accrued salary expense of $263,173 (2018: $58,862) and accrued superannuation of $25,001
(2018: $5,592).
Depreciation expense:
Property and improvements
Office equipment and software
Site equipment
Motor vehicles
Exploration costs:
Unallocated exploration costs
Exploration costs written off
Impairment expense – exploration costs
GBM Resources Annual Report 2019
9
9
9
9
8
8
2,962
1,932
4,632
9,433
18,959
124,538
3,031,988
3,156,526
-
3,512
2,157
6,205
15,556
27,430
115,084
1,735,974
1,851,058
2,537,876
3,156,526
4,388,934
Page 48
Notes to the Financial Statements
for the Year Ended 30 June 2019
Consolidated
2019
$
2018
$
5.
INCOME TAX
a)
Income tax recognised in
profit or loss
The prima facie tax benefit on the operating
result is reconciled to the income tax provided
in the financial statements as follows:
Accounting
loss before
continuing operations
income tax from
Income tax benefit calculated at 27.5% (2018:
27.5%)
Impairment expense
Share based payments
Capital raising costs claimed
Exploration costs written off and impaired
Unused tax losses and temporary
differences not recognised as
deferred tax assets
tax
reported
(benefit)
Income
the
consolidated statement of profit or loss and
other comprehensive income
in
(4,239,459)
(5,781,089)
(1,165,851)
-
21,578
(33,141)
833,797
(1,589,799)
89,636
-
(33,557)
1,175,309
343,617
358,411
-
-
The tax rate used in the above reconciliation is the corporate tax rate of 27.5% payable by Australian corporate
entities on taxable profits under Australian tax law.
b) Unrecognised deferred tax assets and
liabilities
The following deferred tax assets and liabilities
have not been brought to account:
Unrecognised deferred tax
assets relate to:
Losses available for offset
against future taxable income
Capital raising costs
Accrued expenses and leave liabilities
Rehabilitation provisions
Unrecognised deferred tax liabilities relate to:
Exploration expenditure
8,598,138
37,858
149,564
207,421
8,992,981
8,265,125
67,034
63,487
194,399
8,590,045
(2,652,150)
(3,295,497)
Net unrecognised deferred tax asset
6,340,831
5,294,548
GBM Resources Annual Report 2019
Page 49
Notes to the Financial Statements
for the Year Ended 30 June 2019
5.
INCOME TAX (CONTINUED)
The deductible temporary differences and tax losses do not expire under current tax legislation. Potential
deferred tax assets attributable to tax losses carried forward have not been brought to account because the
Directors do not believe it is appropriate to regard realisation of the future tax benefit as probable.
The potential future income tax benefit will only be obtained if:
(i) the Group derives future assessable income of a nature and an amount sufficient to enable the benefit to
be realised in accordance with Division 170 of the Income Tax Assessment Act 1997;
(ii) the Group companies continue to comply with the conditions for deductibility imposed by the law; and
(iii) no changes in tax legislation adversely affect the Group in realising the benefits.
Consolidated
2019
$
2018
$
6. EARNINGS/(LOSS) PER SHARE
Loss used in calculation of earnings/(loss) per share
(4,239,459)
(5,781,089)
Basic and diluted loss per share
Cents
(0.4)
#
Cents
(0.7)
#
Weighted average number of shares used
calculation of earnings per share
in the
1,057,739,222
863,566,975
Options and performance share rights
Options and share rights to acquire ordinary shares granted by the Company and not exercised at the reporting
date have been included in the determination of diluted earnings per share to the extent to which they are
dilutive. There are no options on issue at 30 June 2019 that are considered to be dilutive.
7. TRADE AND OTHER RECEIVABLES
Current
GST recoverable
Other debtors
Non-current
Security and environmental bonds1
Consolidated
2019
$
2018
$
4,271
3,027
7,298
802,021
802,021
7,771
39,289
47,060
746,488
746,488
1 Included in non-current assets at 30 June 2019 is an amount of $762,829 (2018: $713,899) in respect of
security deposits paid to the Queensland State Government in respect of the exploration licences and
mining leases recognised on acquisition of Mt Coolon Gold Mines Pty Ltd.
There is no expected credit loss in relation to the trade and other receivables at the balance date.
GBM Resources Annual Report 2019
Page 50
Notes to the Financial Statements
for the Year Ended 30 June 2019
8.
EXPLORATION AND EVALUATION EXPENDITURE
Exploration and evaluation phase:
Capitalised costs at the start of the financial
year
Costs capitalised during the financial year
Capitalised costs written off during the
financial year1
Capitalised rehabilitation costs (note 13)
Impairment of exploration costs
Capitalised costs at the end of the financial year
Note
4
4
Consolidated
2019
$
2018
$
11,983,627
645,190
(3,031,988)
47,351
-
9,644,180
14,428,442
1,829,035
(1,735,974)
-
(2,537,876)
11,983,627
Ultimate recoupment of exploration and evaluation expenditure carried forward is dependent on successful
development and commercial exploitation or alternatively, sale of the respective areas.
1Capitalised costs written off during the year relate to areas of interest where substantive expenditure is neither
budgeted nor planned.
9.
PROPERTY, PLANT AND EQUIPMENT
Carrying values at 30 June:
Property and improvements:
Cost
Depreciation
Office equipment and software:
Cost
Depreciation
Site equipment and plant:
Cost
Depreciation
Motor vehicles:
Cost
Depreciation
193,117
(130,192)
62,925
176,223
(173,461)
2,762
134,910
(128,260)
6,650
130,633
(129,829)
804
193,117
(127,230)
65,887
176,223
(171,528)
4,695
221,124
(209,843)
11,821
161,638
(151,400)
10,238
Total
73,141
92,101
Reconciliation of movements:
Property and improvements:
Opening net book value
Depreciation
Closing net book value
4
65,887
(2,962)
62,925
69,399
(3,512)
65,887
GBM Resources Annual Report 2019
Page 51
Notes to the Financial Statements
for the Year Ended 30 June 2019
Note
Consolidated
2019
$
2018
$
9. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
Reconciliation of movements (Continued):
Office equipment and software:
Opening net book value
Cost of additions
Net book value of disposals
Depreciation
Closing net book value
Site equipment and plant:
Opening net book value
Net book value of disposals
Depreciation
Closing net book value
Motor vehicles:
Opening net book value
Net book value of disposals
Depreciation
Closing net book value
Total
10. AVAILABLE FOR SALE FINANCIAL ASSETS
4
4
4
4,695
-
-
(1,933)
2,762
11,821
(539)
(4,632)
6,650
10,238
-
(9,433)
804
73,141
3,822
3,030
-
(2,157)
4,695
17,486
-
(6,205)
11,821
25,794
-
(15,556)
10,238
92,101
Investment – Anchor Resources Limited
The Company sold its investment in Anchor Resources Ltd (Anchor), a Company quoted on the Catalist Board
of the Singapore Stock Exchange (SGX), during the comparative financial year.
The Group received the Anchor shares pursuant to a share swap agreement relating to its original shareholding
in Angka Alamjaya Sdn Bhd (AASB), which were vended into the Initial Public Offer of Anchor.
Prior to the completion of the share swap agreement, the Group accounted for its investment in AASB as an
associate using the equity method.
Balance at the start of the financial year
Carrying value of shares disposed during the
year
Impairment expense1
Carrying amount at the end of the financial year
-
-
-
-
2,655,492
(2,329,541)
(325,951)
-
1 The directors have reviewed the decline in value of the investment and have considered it to be significant and as
such it has been reclassified from equity to profit or loss.
The investment is within the level 1 fair value hierarchy.
The loss on sale during the comparative year in addition to the impairment loss was $420,528. Proceeds of
$1,909,013 were received on sale of the investment.
GBM Resources Annual Report 2019
Page 52
Notes to the Financial Statements
for the Year Ended 30 June 2019
Note
Consolidated
2019
$
2018
$
10. AVAILABLE FOR SALE FINANCIAL ASSETS (CONTINUED)
Investment – WCB Resources Limited
The investment relates to a holding in WCB Resources Limited (WCB), a Company quoted on the Venture Board
of the Toronto Stock Exchange (TSX:V). The shares were acquired by the Company at a deemed price of
CAD$0.05 per share in full settlement and satisfaction of a loan previously advanced to WCB by the Company.
During the comparative financial year, the Company received 13,500,000 ordinary fully paid shares in Kingston
Resources Limited (Kingston) following the merger of Kingston and WCB. During the financial year the Company
sold its entire investment in Kingston.
Balance at the start of the financial year
Carrying value of shares disposed in the
period
Carrying amount at the end of the financial year
-
-
-
75,075
(75,075)
-
The investment is within the level 1 fair value hierarchy.
On sale the Company received $294,550 and recognised a profit on sale of $219,475.
11. Borrowings
Current
Convertible note liability
350,000
-
The Company entered into a convertible note agreement during the 2019 financial year for funding of up to
$700,000. As at 30 June 2019, a total of $350,000 had been drawn pursuant to the facility. The convertible
notes pay interest at 10% per annum (paid quarterly) and have a 12-month term.
The face value of the notes are convertible at any time by the holder into fully paid ordinary shares in the
capital of the Company at a conversion price of $0.005. The conversion option has an immaterial fair value at
the balance date. The convertible notes are secured by way of a mortgage over the issued share capital of Mt
Coolon Gold Mines Pty Ltd which holds the Mt Coolon Gold Project. The carrying amount of the Mt Coolon
Gold Project at the balance date is approximately $7.8 million.
The convertible note is a level 2 financial instrument within the fair value hierarchy.
12. TRADE AND OTHER PAYABLES
Current
Unspent funds received from farm-in partner
Acquisition costs payable1
Trade creditors2
Sundry creditors and accruals3
Employee leave liabilities
112,779
12,500
39,014
356,412
191,239
711,944
93,923
12,500
83,704
74,033
166,406
430,566
1 Acquisition costs payable to Drummond Gold Limited pursuant to the acquisition of Mt Coolon Gold Mines
Pty Ltd.
2 Trade payables are non-interest bearing and are normally settled on 30 day terms.
3 Includes $352,629 accrued director remuneration (2018: $64,454).
GBM Resources Annual Report 2019
Page 53
Notes to the Financial Statements
for the Year Ended 30 June 2019
Note
Consolidated
2019
$
2018
$
13. PROVISIONS
Non-current
Rehabilitation provision1
754,258
706,907
1 An additional $47,351 provision for rehabilitation was recognised in the 2019 financial year following an
environmental approval assessment (Note 8).
Issue
price
2019
No.
2018
No.
2019
$
2018
$
14. ISSUED CAPITAL
Issued capital at the balance date
1,090,596,975
863,566,975
32,915,823
31,801,764
Movements in issued capital:
On issue at the start of the year
Share purchase plan
Share placement
Share issue costs
On issue at the end of the
reporting year
$0.005
$0.005
863,566,975
47,030,000
180,000,000
-
863,566,975
-
-
-
31,795,094
235,150
900,000
(14,421)
31,801,764
-
-
(6,670)
1,090,596,975
863,566,975
32,915,823
31,795,094
The Company’s shares are limited whereby the liability of its members is limited to the amount (if any) unpaid
on the shares respectively held by them. Ordinary shares entitle the holder to participate in dividends and the
proceeds on winding up of the Company in proportion to the number of and amounts paid on the shares held.
On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to
one vote, and upon a poll each share is entitled to one vote.
Ordinary shares have no par value. There is no limit to the authorised share capital of the Company.
Shares Subject to Restriction Agreement
At balance date there were no ordinary shares subject to any restrictions.
2019
No.
2018
No.
15. OPTIONS
Details of the Company’s Incentive Option Scheme are provided at Note 17.
(a)
Options over unissued shares
Options on issue at the balance date
222,191,744
203,391,744
Movements in options:
Options on issue at the start of the year
Options issued pursuant to the GBM Resources Incentive
Option Plan
203,391,7441
203,391,744
18,800,0002
-
Options on issue at the end of the reporting year
222,191,744
203,391,744
GBM Resources Annual Report 2019
Page 54
Notes to the Financial Statements
for the Year Ended 30 June 2019
15. OPTIONS (CONTINUED)
1 Listed options exercisable at 5 cents each and expiring 30 September 2019 issued pursuant to a non-
renounceable entitlement offer.
2 Unlisted options exercisable at 0.9 cents and expiring 31 January 2023 (refer note 17).
Note
Consolidated
2019
$
2018
$
16. RESERVES AND ACCUMULATED LOSSES
Option reservei
Opening balance
Change during the financial year
Closing balance
Accumulated losses
Opening balance
Net profit/(loss) attributable to the
members of the Company
Closing balance
Share based payments reserveii
Opening balance
Change during the financial year
Closing balance
610,175
-
610,175
-
610,175
610,175
(20,322,028)
(14,540,939)
(4,239,459)
(5,781,089)
(24,561,487)
(20,322,028)
-
78,467
78,467
-
-
-
i Option reserve
The option reserve represents the proceeds received on the issue of options.
ii Share based payments reserve
The share based payments reserve represents the fair value of vested equity instruments issued as
remuneration or consideration.
17. EMPLOYEE BENEFITS
Details of the Company’s performance right and share option plans, under which performance rights and
options are issuable to employees, directors and consultants are summarised below. Details of share rights and
options issued to Directors and executives are set out in the Remuneration Report that forms part of the
Directors’ Report.
Incentive Option Plan
The Company has a formal option plan for the issue of options to employees, directors and consultants, which
was last approved by shareholders at the Company’s Annual General Meeting on 28 October 2016. Options are
granted free of charge and are exercisable at a fixed price in accordance with the terms of the grant. Options
over unissued shares are issued under the terms of the Plan at the discretion of the Board.
There are 18,800,000 options on issue under the Incentive Option Plan at 30 June 2019 (2018: nil), which
have been valued as follows using the Black-Scholes valuation model:
Grant date Options issued Exercise price Expiry date
31 Jan 23
5 Feb 19
18,800,000
0.9 cents
GBM Resources Annual Report 2019
Volatility
112.8%
Interest rate
1.85%
Value $
$78,467
Page 55
Notes to the Financial Statements
for the Year Ended 30 June 2019
17. EMPLOYEE BENEFITS (CONTINUED)
Performance Rights Plan
The Company has a formal plan for the issue of performance share rights to employees, which was approved
by shareholders at the Company’s Annual General Meeting on 28 October 2016. Share rights are granted free
of charge and are exercisable into ordinary fully paid shares in accordance with the terms of the grant. Share
rights are issued to employees under the terms of the Plan at the discretion of the Board.
There are no share rights on issue under the Performance Rights Plan at 30 June 2019 (2018: nil).
18. SEGMENT REPORTING
Operating segments are identified and segment information disclosed, where appropriate, on the basis of
internal reports reviewed by the Company’s Board of Directors, being the Group’s Chief Operating Decision
Maker, as defined by AASB 8.
The Group has identified its operating segments based on the internal reports that are reviewed and used by
the Board of Directors in assessing performance and determining the allocation of resources. Reportable
segments disclosed are based on aggregating operating segments, where the segments have similar
characteristics.
The Group’s core activity is mineral exploration and resource development within Australia. There were no
separately reportable segments for the 2019 financial year.
During the 2018 financial year the Group recognised an investment in a company in Singapore (note 10).
The reportable segments for the comparative financial year are represented as follows:
30 June 2018
Revenue
Joint venture management fee
Gain/(loss) on disposal of available for sale financial
asset
Total segment revenue
Australia
$
Singapore
$
Consolidated
$
72,456
219,475
291,931
-
72,456
(420,528)
(420,528)
(201,053)
(128,597)
Segment net operating profit/(loss) after tax
(5,034,610)
(746,479)
(5,781,089)
Other revenue - unallocated
Depreciation
Exploration expenditure written off, expensed and
impaired
Segment assets
Capital expenditure during period
Other non-current assets acquired
Segment liabilities
Segment non-current assets
24,234
(27,430)
(4,388,934)
13,220,714
3,030
-
(1,137,473)
12,822,216
-
-
-
-
-
-
-
-
24,234
(27,430)
(4,388,934)
13,220,714
3,030
-
(1,137,473)
12,822,216
GBM Resources Annual Report 2019
Page 56
Notes to the Financial Statements
for the Year Ended 30 June 2019
19. FINANCIAL INSTRUMENTS
Credit risk
The Directors do not consider that the Group’s financial assets are subject to anything more than a negligible
level of credit risk, and as such no disclosures are made (note 2(a)).
Impairment losses
The Directors do not consider that any of the Group’s financial assets are subject to impairment at the reporting
date. No impairment expense or reversal of impairment charge has occurred during the reporting period.
Currency risk
The Group does not have any direct exposure to foreign currency risk, other than in respect of its impact on the
economy and commodity prices generally (note 2 (c)).
Liquidity risk
The following are the contractual maturities of financial liabilities, including estimated interest payments and
excluding the impact of netting agreements (note 2(b)):
Carrying
amount
$
Contractual
cash flows
$
6 months
or less
$
6-12
months 1-2 years
$
$
2-5years
$
Consolidated
30 June 2019
Borrowings
Trade and other payables
350,000
395,426
385,292
395,426
17,646
395,426
367,646
-
745,426
780,718
413,072
367,646
30 June 2018
Trade and other payables
157,237
157,237
157,237
157,237
157,237
157,237
-
-
More
than 5
years
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Interest rate risk
At the reporting date the interest profile of the Group’s interest-bearing financial instruments were:
Fixed rate instruments:
Financial liabilities
Variable rate instruments:
Financial assets
Consolidated
2019
$
(350,000)
(350,000)
332,540
332,540
2018
$
-
-
351,438
351,438
The Group is not materially exposed to interest rate risk on its variable rate investments.
GBM Resources Annual Report 2019
Page 57
Notes to the Financial Statements
for the Year Ended 30 June 2019
19. FINANCIAL INSTRUMENTS (CONTINUED)
Equity risk
The Group is no longer exposed to equity price risk, which arose through its holding of available for sale financial
assets, being the investments in shares in Anchor Resources Limited and WCB Resources Limited (see note 10
for details).
Fair values
Fair values versus carrying amounts
The carrying amounts of financial assets and liabilities not measured at fair value on a recurring basis, as
described in the consolidated statement of financial position represent their estimated net fair value.
20. COMMITMENTS
Exploration
(a)
The Group has certain obligations to perform minimum exploration work on mineral leases held. These obligations
may vary over time, depending on the Group’s exploration programmes and priorities. As at balance date, total
exploration expenditure commitments on tenements held by the Group have not been provided for in the financial
statements. These obligations are also subject to variations by farm-out arrangements or sale of the relevant
tenements.
Minimum expenditure requirements for the following 12 months on the Group’s exploration licences as at 30 June
2019, including licences subject to farm-in arrangements are approximately $1,821,500 (2018: $1,868,500).
(b)
Operating Lease Commitments
The Group has no operating lease commitments.
(c)
Contractual Commitment
The Group has no contractual commitments.
GBM Resources Annual Report 2019
Page 58
Notes to the Financial Statements
for the Year Ended 30 June 2019
21. NOTES TO THE STATEMENT OF CASH FLOWS
a) Cash and cash equivalents
Cash at bank and on hand
Bank at call cash account
Total cash and cash equivalents
b) Cash balances not available for use
Consolidated
2019
$
2018
$
326,403
6,137
332,540
242,425
109,013
351,438
Included in cash and cash equivalents are amounts pledged as guarantees for the following:
Corporate credit card facility
6,137
109,013
c) Reconciliation of Loss from Ordinary
Activities after Income Tax to Net Cash
Used in Operating Activities
Loss after income tax
Add (less) non-cash items:
Loss on sale of investments
Profit on sale of exploration assets
Impairment charge
Share based payments
Depreciation
Exploration expenditure written off,
expensed and impaired
Changes in assets and liabilities:
Increase/(decrease) in trade creditors and
accruals
(Increase)/decrease in sundry receivables
(4,239,459)
(5,781,089)
-
(100,000)
-
78,467
18,959
201,053
-
325,951
-
27,430
3,156,526
4,388,934
271,065
19,298
133,888
(20,220)
Net cash flow from operations
(795,144)
(724,053)
22. AUDITOR’S REMUNERATION
Amounts received or receivable by HLB Mann
Judd for:
-
Audit and review of financial reports
31,300
36,000
GBM Resources Annual Report 2019
Page 59
Notes to the Financial Statements
for the Year Ended 30 June 2019
23. CONTROLLED ENTITIES
a) Particulars in Relation to Ownership of Controlled Entities
Belltopper Hill Pty Ltd
Syndicated Resources Pty Ltd
Willaura Minerals Pty Ltd
Isa Brightlands Pty Ltd
Isa Tenements Pty Ltd
Koala Quarries Pty Ltd*
Mt Coolon Gold Mines Pty Ltd
*Formerly Bungalien Phosphate Pty Ltd
2019
%
2018
%
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Balances and transactions between the Company and its subsidiaries, which are related parties of the Company,
have been eliminated on consolidation and not disclosed in the note. Details of transactions between the Group
and other related parties are disclosed in note 25.
24. KEY MANAGEMENT PERSONNEL DISCLOSURES
a) Details of Key Management Personnel
The following were key management personnel of the Group at any time during the year and unless otherwise
stated were key management personnel for the entire year, unless otherwise stated.
Non-Executive Director
Hun Seng Tan – Non-Executive Director (resigned 6 June 2019)
Guan Huat Loh – Non-Executive Director (appointed 6 December 2018)
Executive Directors
Peter Thompson – Managing Director/Executive Chairman
Neil Norris – Exploration Director
Total remuneration paid to key management personnel during the year:
Short-term benefits
Post-employment benefits
Consolidated
2019
$
522,038
40,961
562,999
2018
$
469,349
39,252
508,601
Note, the above benefits for the 2019 financial year include amounts of $288,175 that were accrued for
payment as at 30 June 2019.
A total of $64,454 that was accrued for payment in the 2018 financial year is also accrued for payment as at
30 June 2019.
GBM Resources Annual Report 2019
Page 60
Notes to the Financial Statements
for the Year Ended 30 June 2019
24. KEY MANAGEMENT PERSONNEL DISCLOSURES (CONTINUED)
b) Other Transactions and Balances with Key Management Personnel
There are no other transactions with Directors, or Director related entities or associates, other than those
reported in note 24. As at 30 June 2019 an amount of $352,629 (2018: $64,454) has been accrued for payment
to Key Management Personnel in respect of remuneration.
25. RELATED PARTY TRANSACTIONS
Total amounts receivable and payable from entities in the wholly-owned group (see Note 22 for details of
controlled entities) at balance date:
Non-Current Receivables
Loans to controlled entities
Non-Current Payables
17,737,919
17,149,806
Loans from controlled entities
-
-
26. DIVIDENDS
There are no dividends paid or payable during the year ended 30 June 2019 or the 30 June 2018 comparative year.
27. EVENTS SUBSEQUENT TO BALANCE DATE
Other than the following, there has not arisen in the interval between the end of the financial year and the date of
this report any item, transaction or event of a material and unusual nature likely, in the opinion of the Directors of
the Company to affect substantially the operations of the Group, the results of those operations or the state of
affairs of the Group in subsequent financial years:
• On 4 July 2019 the Company issued 350,000 convertible notes at a face value of $1 per note pursuant to
the convertible note funding agreement announced to ASX on 9 May 2019.
28. CONTINGENCIES
Contingent liabilities
(i)
There were no material contingent liabilities not provided for in the financial statements of the Group as at 30
June 2019 or 30 June 2018.
(i) Native Title and Aboriginal Heritage
Native title claims have been made with respect to areas which include tenements in which the Group has an
interest. The Group is unable to determine the prospects for success or otherwise of the claims and, in any
event, whether or not and to what extent the claims may significantly affect the Group or its projects. Agreement
is being or has been reached with various native title claimants in relation to Aboriginal Heritage issues regarding
certain areas in which the Group has an interest.
(iii) Contingent assets
There were no material contingent assets as at 30 June 2019 or 30 June 2018.
GBM Resources Annual Report 2019
Page 61
Notes to the Financial Statements
for the Year Ended 30 June 2019
29. PARENT ENTITY INFORMATION
Financial position
Assets
Current assets
Non-current assets
Total Assets
Liabilities
Current liabilities
Non-current liabilities
Total Liabilities
NET ASSETS
Equity
Issued capital
Option reserve
Accumulated losses
Share based payment reserve
TOTAL EQUITY
Financial performance
Loss for the year
Other comprehensive income
2019
$
2018
$
337,463
9,767,711
430,735
12,083,324
10,105,174
12,514,059
(1,062,196)
-
(430,818)
-
(1,062,196)
(430,818)
9,042,978
12,083,241
32,915,823
610,175
(24,561,487)
78,467
31,795,094
610,175
(20,322,028)
-
9,042,978
12,083,241
(4,239,459)
-
(5,781,089)
-
Total comprehensive loss
(4,239,459)
(5,781,089)
Contingent liabilities
For full details of contingent liabilities see Note 28.
Commitments
For full details of commitments see Note 20.
GBM Resources Annual Report 2019
Page 62
Directors’ Declaration
1.
In the opinion of the Directors:
a)
the accompanying financial statements and notes 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 2019 and of its
performance for the year then ended; and
ii.
complying with Accounting Standards and Corporations Regulations 2001.
b)
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.
the financial statements and notes are in accordance with International Financial Reporting
Standards issued by the International Accounting Standards Board.
2.
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 2001 for the financial year ended 30 June 2019.
This declaration is made in accordance with a resolution of the Board of Directors.
PETER THOMPSON
Executive Chairman
Dated this 30th day of September 2019
GBM Resources Annual Report 2019
Page 63
INDEPENDENT AUDITOR’S REPORT
To the members of GBM Resources Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of GBM Resources Limited (“the Company”) and its controlled
entities (“the Group”), which comprises the consolidated statement of financial position as at 30
June 2019, the consolidated statement of profit or loss and other comprehensive income, the
consolidated statement of changes in equity and the consolidated statement of cash flows for the
year then ended, and notes to the financial statements, including a summary of significant
accounting policies, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the
Corporations Act 2001, including:
a)
giving a true and fair view of the Group’s financial position as at 30 June 2019 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.
Material uncertainty related to going concern
We draw attention to Note 1(a) in the financial report, which indicates that a material uncertainty
exists that may cast significant doubt on the Group’s ability to continue as a going concern. Our
opinion is not modified in respect of this matter.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance
in our audit of the financial report of the current period. These matters were addressed in the context
of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters. In addition to the matter described in the Material
uncertainty related to going concern section, we have determined the matters described below to
be the key audit matters to be communicated in our report.
GBM Resources Annual Report 2019
Page 64
Key Audit Matter
How our audit addressed the key audit
matter
Carrying value of exploration and evaluation
expenditure
Note 8 in the financial report
The Group has capitalised exploration and evaluation
expenditure of $9,644,180 as at 30 June 2019.
Our procedures included but were not
limited to the following:
Our audit procedures determined that the carrying
value of exploration and evaluation expenditure was a
key audit matter as it was an area which required the
most audit effort, required the most communication
with those charged with governance and was
determined to be of key importance to the users of the
financial statements.
- We obtained an understanding of
the key processes associated with
the
management’s
carrying value of exploration and
evaluation expenditure;
review of
- 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 substantiated a sample of
additions to exploration expenditure
during the year; and
- We examined the disclosures
made in the financial report.
Information other than the financial report and auditor’s report thereon
The directors are responsible for the other information. The other information comprises the
information included in the Group’s annual report for the year ended 30 June 2019 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.
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.
GBM Resources Annual Report 2019
Page 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.
GBM Resources Annual Report 2019
Page 66
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.
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 2019.
In our opinion, the Remuneration Report of GBM Resources Limited for the year ended 30 June
2019 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
30 September 2019
D I Buckley
Partner
GBM Resources Annual Report 2019
Page 67
ASX Additional Information
Pursuant to the Listing Rules of the Australian Securities Exchange Limited, the shareholder information set out
below was applicable as at 7 October 2019.
a. Distribution of Equity Securities
Range
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Quoted Shares (GBZ)
Number of Holders
59
67
118
388
299
Securities Held
13,428
255,159
1,045,309
16,146,819
1,073,136,260
931
1,090,596,975
There are 708 shareholders holding less than a marketable parcel of shares.
b. Substantial Shareholders
An extract of the Company’s register of Substantial Shareholders (who hold 5% or more of the issued capital) is set
out below:
Shareholder
Chew Leok Chuan
Longru Zheng
Guan Huat Loh
c. Twenty Largest Holders – Ordinary Shares (GBZ)
Shareholder
Citicorp Nominees Pty Ltd
BNP Paribas Nominees Pty Ltd
Longru Zheng
HSBC Custody Nominees (Australia) Limited
National Federal Capital Limited
Chew Leok Chuan
Weijun Chen
Li Rongzhi
Bikun Lin
Bradley Green
Superfine Nominees Pty Ltd
Richgroup Holdings International Pte Ltd
Leok Chuan Chew
Kok Yong Lim
De Gracie Nominees Pty Ltd
Choong Jun Yen
Chung Hoi Ching
Ou Hsin Hung
Neil Norris
Chen Yafeng
Total
GBM Resources Annual Report 2019
Shares Held % of Issued Capital
121,731,560
88,718,593
60,810,708
11.16%
8.13%
5.58%
Shares Held % of Issued Capital
20.29%
221,313,357
8.97%
97,841,777
8.13%
88,718,593
7.03%
76,663,066
4.58%
50,000,000
3.81%
41,598,226
3.62%
39,520,100
3.21%
35,000,000
2.96%
32,261,307
2.48%
27,000,000
2.22%
24,200,000
2.02%
22,000,000
1.83%
20,000,000
1.83%
20,000,000
1.43%
15,541,667
0.99%
10,750,000
0.92%
10,000,000
0.92%
10,000,000
0.79%
8,600,000
0.79%
8,600,000
78.82%
859,608,093
Page 68
ASX Additional Information
d. Unquoted Securities
There are 18,800,000 unlisted options on issue, exercisable at 0.9 cents each and expiring 31 January 2023, issued
pursuant to the Company’s Incentive Option Plan.
There are 750,000 convertible notes of issue at a face value of $1 per note. The notes are repayable on 31 May 2020
and convertible into ordinary fully paid shares at 0.5 cents per share.
e. Voting Rights
In accordance with the Company’s Constitution, voting rights in respect of ordinary shares are on a show of hands
whereby each member present in person or by proxy shall have one vote and upon a poll, each share will have one
vote.
f. Restricted Securities
There are no restricted securities.
GBM Resources Annual Report 2019
Page 69