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ABN 63 616 317 778
CONTENTS
CORPORATE DIRECTORY
DIRECTORS' REPORT
AUDITOR’S INDEPENDENCE DECLARATION
REVIEW OF OPERATIONS
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
CONSOLIDATED STATEMENT OF CASH FLOWS
NOTES TO THE CONSILIDATED FINANCIAL STATEMENTS
DIRECTORS’ DECLARATION
INDEPENDENT AUDITOR’S REPORT
SHAREHOLDER INFORMATION
ADDITIONAL INFORMATION
2
3
15
17
24
25
26
27
28
58
59
66
68
CORPORATE DIRECTORY
DIRECTORS
Mr Adrian Byass
Non-Executive Chairman
Mr Anthony James
Managing Director / Chief Executive Officer
Mr Alexander Molyneux
Non-Executive Director
Mr Stewart Howe
Non-Executive Director
Mr Neville Gardiner (appointed 20 October 2021)
Non-Executive Director
Mr Jonathan Downes (resigned 29 October 2021)
Non-Executive Director
COMPANY SECRETARY
Mr Stephen Brockhurst
CORPORATE OFFICE
Level 2, 1100 Hay Street, West Perth, WA 6005
PO Box 297, West Perth, WA 6872
Website: www.galenamining.com.au
REGISTERED OFFICE
Level 11, 216 St Georges Terrace, Perth WA 6000
SHARE REGISTRY
Automic Pty Ltd
Level 5, 191 St Georges Terrace, Perth WA 6000
AUDITORS
PKF Perth
Level 5, 35 Havelock Street, West Perth WA 6005
LEGAL ADVISORS
King & Wood Mallesons Steinepreis Paganin
Level 30, QV1 Building,
250 St Georges Terrace 16 Milligan Street
Perth WA 6000 Perth WA 6000
Level 4, The Read Buildings
STOCK EXCHANGE LISTING
ASX Code: G1A
COUNTRY OF INCORPORATION AND DOMICILE
Australia
Galena Mining Limited | Annual Report 2022 2
DIRECTORS’ REPORT
Your directors present the following report on Galena Mining Limited and its controlled entities (“Galena”, the
“Company” or “Group”) for the year ended 30 June 2022.
DIRECTORS
The names and details of the Company’s directors in office during the financial year and until the date of this report
are set out below. Directors were in office for this entire period unless otherwise stated.
Adrian Byass
Anthony James
Alexander Molyneux
Stewart Howe
Neville Gardiner
Jonathan Downes
Non-Executive Chairman
Managing Director / Chief Executive Officer
Non-Executive Director
Non-Executive Director
Non-Executive Director (appointed 20 October 2021)
Non-Executive Director (resigned 29 October 2021)
COMPANY SECRETARY
Stephen Brockhurst held office as Company Secretary since the start of the financial year until the date of this
report.
COMMITTEE ROLES AND MEMBERSHIP
The role of the audit and risk committee is to assist the Board in monitoring and reviewing any matters of significance
affecting financial reporting and compliance. The role of the remuneration committee is to assist the Board in
monitoring and reviewing any matters of significance affecting the remuneration of the Board and employees of the
Company.
Members acting on the committees of the Board during the year are set out below.
Audit and Risk Committee
Stewart Howe - Chairman
Neville Gardiner
Adrian Byass
PRINCIPAL ACTIVITIES
Remuneration Committee
Neville Gardiner - Chairman
Stewart Howe
Adrian Byass
Since listing on the ASX on 7 September 2017 the Company has continued to focus on development works at the
Abra Base Metals Mine (“Abra” or the “Project”), together with early-stage exploration works at Abra and other
mineral prospects within the Group’s portfolio.
OPERATING RESULTS
The Group incurred a loss for the financial year ended 30 June 2022 of $9,325,687 (2021: $3,903,440).
A detailed operating review of the Group is set out on pages 17 to 22 of this report under the section entitled
“Review of Operations”.
FINANCIAL POSITION
As at 30 June 2022 the Group had a cash balance of $48,219,668 (2021: $96,195,562) and a net asset position of
$126,668,961 (2021: $132,949,386).
DIVIDENDS PAID OR RECOMMENDED
No dividends have been paid, and the directors do not recommend the payment of a dividend for the financial year
ended 30 June 2022.
Galena Mining Limited | Annual Report 2022 3
DIRECTORS’ REPORT
CORPORATE GOVERNANCE STATEMENT
The Company has disclosed
www.galenamining.com.au.
its corporate governance statement on
the Company website at
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
In the opinion of the directors, there were no other significant changes in the state of affairs of the Group that
occurred during the year not otherwise disclosed in this report or in the financial report.
CORPORATE
As at the date of this report, the following shares and options were on issue.
Ordinary Shares
Fully Paid Ordinary Shares
Options
50 cents expiring on 26 March 2023
60 cents expiring on 26 March 2023
50 cents expiring on 17 April 2023
60 cents expiring on 17 April 2023
Performance Rights
No.
547,805,353
1,250,000
1,250,000
1,250,000
1,250,000
Performance rights expiring on 9 November 2023
Performance rights expiring on 13 August 2024
Performance rights expiring on 2 March 2027
9,000,000
2,000,000
7,500,000
Share Appreciation Rights
17 cents expiring on 21 January 2024
24 cents expiring on 1 September 2025
1,145,000
1,400,000
SIGNIFICANT EVENTS AFTER THE REPORTING PERIOD
On 26 July 2022, the Company accepted binding commitments for a placement of 137,200,000 new shares at an
issue price of $0.125 to raise $17.2 million before costs. The proceeds are to provide Abra a funding buffer during
the critical initial commissioning and ramp-up stages of the project. 71,400,000 of the shares issued under the
placement will fall within the Company’s 15% placement capacity under ASX listing Rule 7.1, with settlement
occurring on 3 August 2022. The remaining 65,800,000 shares to be issued under the placement are subject to
shareholder approval with the general meeting to be held on 13 September 2022.
The impact of the Coronavirus (“COVID-19”) pandemic is ongoing and while it has not significantly impacted the
consolidated entity up to 30 June 2022, it is not practicable to estimate the potential impact, positive or negative,
after the reporting date. Several measures have been implemented to protect employees and contractors working
on the Project, in line with recommended Government guidelines and procedures. Changes in Government
guidelines and / or general business operability because of the ongoing COVID-19 pandemic have the potential to
impact Abra and the Company. Such impacts could include (but are not limited to) delays to Project development
initiatives and / or the incurring of extra costs.
No matter or circumstance has arisen since the end of the audited period which significantly affected or may
significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group
in future financial periods.
Galena Mining Limited | Annual Report 2022 4
DIRECTORS’ REPORT
INFORMATION ON DIRECTORS
The names of directors who held office during or since the end of the financial year until the date of this report are
as follows. Directors were in office for this entire period unless otherwise stated.
Mr Adrian Byass, BSc Geol Hons, B Econ, FSEG and MAIG
Non-Executive Chairman
Mr Byass has over 25 years’ experience in the mining and minerals industry. This experience has principally been
gained through evaluation and development of mining projects for a range of base, precious and specialty metals
and bulk commodities. Due to his experience in resource estimation and professional association membership, Mr
Byass is a competent person for reporting to the ASX for certain minerals. Mr Byass has also gained experience
in corporate finance, capital raising, permitting and delivery of production-ready mining projects.
Mr Byass is a non-executive chairman of Kaiser Reef Limited (ASX: KAU), Infinity Lithium Corporation Limited
(ASX: INF), and non-executive director of Sarama Resources Limited (ASX: SRR).
Interest in Shares and Options
- 12,550,000 fully paid ordinary shares
- 220,000 share appreciation rights exercisable at $0.17 expiring on 21 January 2024
- 135,000 share appreciation rights exercisable at $0.24 expiring on 1 September 2025
Anthony James, BEng (Min) AWASM, FAusIMM
Managing Director / Chief Executive Officer
Mr James has over 30 years’ mine operating and project development experience predominantly in WA. He joined
Galena on 15 October 2018 as a non-executive director before becoming Managing Director / Chief Executive
Officer on 16 June 2021. Mr James has had previous experience at Managing Director level of three ASX listed
companies with two of those companies successfully guided through a merger and takeover process to the benefit
of the shareholders. He has strong mine operating background (examples being the Kanowna Belle Gold Mine and
the Black Swan Nickel Mine) and a strong feasibility study / mine development background (examples being the
Pillara Zinc/Lead Mine and the Trident/Higginsville Gold Mine).
Interest in Shares and Options
- 365,000 fully paid ordinary shares
- 220,000 share appreciation rights exercisable at $0.17 expiring on 21 January 2024
- 200,000 share appreciation rights exercisable at $0.24 expiring on 1 September 2025
- 7,500,000 performance rights which may convert into shares upon the achievement of various milestones
Alexander Molyneux, BEc, GradDipMinExplGeoSc
Non-Executive Director (previously an Executive Director until 30 June 2022)
Mr Molyneux is a metals and mining industry executive and financier with 20-years industry experience. He joined
Galena on 1 September 2018.
Prior to Galena, Mr Molyneux was CEO of Paladin Energy Limited (ASX: PDN) (2015 – 2018) one of the world’s
largest uranium companies, where he optimised its operating business and completed a US$700M successful
recapitalisation of the company and a re-listing on the ASX. Prior to that, Mr Molyneux spent approximately five-
years with Ivanhoe Mines Group and Ivanhoe Energy in various leadership capacities including as CEO and
Director of SouthGobi Resources Ltd. (TSX: SGQ) (2009 – 2012).
Mr Molyneux currently serves on a number of public company boards, including: Metalla Royalty & Streaming Ltd
(TSX-V / NYSE: MTA), Tempus Resources Ltd (ASX: TMR, TSX-V: TMRR) and Comet Resources Ltd (ASX:
CRL).
Galena Mining Limited | Annual Report 2022 5
DIRECTORS’ REPORT
INFORMATION ON DIRECTORS (continued)
Prior to his mining industry executive and director roles, Mr Molyneux was Managing Director, Head of Metals and
Mining Investment Banking, Asia Pacific for Citigroup. As a specialist resources investment banker, he spent
approximately 10-years providing investment banking services to natural resources companies. Mr Molyneux holds
a bachelor’s degree in Economics from Monash University and a Graduate Diploma in Mineral Exploration and
Geoscience from Curtin University (WA School of Mines).
Interest in Shares and Options
- 8,000,000 fully paid ordinary shares
- 9,000,000 contingent performance rights which may convert into shares upon the achievement of various
milestones
Stewart Howe, BE (Chem), ME (Mining), MAppFin, FAICD, FAusIMM
Non-Executive Director
Mr Howe brings over 40 years’ experience in the global resources industry including the last 20 years in mining.
He spent 6 years as Chief Development Officer of Zinifex Limited, one of the world’s largest miners and smelters
of lead/zinc, where he directed the spin-off of Zinifex’s smelters to create Nyrstar N.V. and restarted development
of Dugald River Mine now owned by MMG.
During the past 14 years Mr Howe has provided advisory roles to boards, private equity and financiers related to
restructuring and acquisition of mining assets in base metals and bulk commodities. Mr Howe is an experienced
director, currently serving as an executive director of ASX-listed Kaiser Reef Limited (ASX: KAU) and chairing the
board of Whittle Consulting Group.
Interest in Shares and Options
- 536,425 fully paid ordinary shares
- 135,000 share appreciation rights exercisable at $0.24 expiring on 1 September 2025
Neville Gardiner, BBus (Accounting & Business Law)
Non-Executive Director (appointed 20 October 2021)
Mr Gardiner has over 30 years’ experience in advising private and public sector clients. In 2011 Neville was a
founding partner of Torridon Partners, a leading independent corporate advisory firm based in Perth, Western
Australia.
Neville joined the Deloitte Partnership on 1 November 2016 when the Torridon Partners team merged with Deloitte.
His experience includes the five years to mid-2011 as Head of the Australian Natural Resources Team at Bank of
America Merrill Lynch and nine years with Macquarie Bank including responsibility for its Western Australian
Corporate Finance business and its Australian Oil and Gas Advisory business.
Prior to Macquarie, Neville specialised in Corporate Tax advice for eight years with Arthur Andersen. Neville’s
transaction experience details a strong history of public and private market mergers, acquisitions, divestments and
company financing over an extensive period. This experience includes the natural resources, agricultural and
energy sectors.
Interest in Shares and Options
- 100,000 fully paid ordinary shares
Jonathan Downes, BSc Geol, MAIG
Non-Executive Director (resigned 29 October 2021)
Mr Downes has over 25 years’ experience in the minerals industry and has worked in various geological and
corporate capacities. Experienced with nickel, gold and base metals, he has also been intimately involved with the
exploration process through to production.
Galena Mining Limited | Annual Report 2022 6
DIRECTORS’ REPORT
INFORMATION ON DIRECTORS (continued)
Mr Downes is on the board of several ASX-listed companies; he is currently an executive director of Kaiser Reef
Limited (ASX: KAU) and is a non-executive director of Kingwest Limited (ASX: KWR) and Corazon Mining Limited
(ASX: CZN).
Interest in Shares and Options - Balance as at the date of resignation.
- 14,762,950 fully paid ordinary shares
- 50,000 share appreciation rights exercisable at $0.17 expiring on 21 January 2024
INFORMATION ON OTHER MANAGEMENT
Troy Flannery BEng (Min), MAppFin, FCMMC
Chief Executive Officer of AMPL (resigned 20 August 2021)
Mr Flannery is a Mining Engineer with over 23 years’ experience in the mining industry including 7 years in
corporate and 16 years in senior mining engineering / project development roles. Mr Flannery has worked at
numerous mining companies, mining consultancies & contractors (including BHP, Newcrest, Xstrata, St Barbara
Mines & AMC Consultants). Prior to starting with Galena, Mr Flannery was employed as the Hanking Gold Group
Technical Services Manager, he was part of the corporate team that sold SXO for A$330M to Minjar Gold in April
2017. SXO was acquired as a care and maintenance project for A$23M in 2013 from St Barbara Mines.
Craig Barnes BCom, BAcc (Hons), CA
Chief Financial Officer
Mr Barnes is a chartered accountant with more than 25 years’ experience in senior finance and financial
management within the mining industry and previously the financial services industry. Mr Barnes has considerable
experience in project financing, mergers and acquisitions, joint ventures, treasury and implementation of
accounting controls and systems. He joined Galena on 12 August 2019.
Before joining Galena, Mr Barnes held the position of Chief Financial Officer of Paladin Energy Limited (ASX: PDN)
for more than 5 years and was part of the team that successfully completed the company’s capital restructuring in
2018. Prior to that, he was the Chief Financial Officer of DRDGOLD Limited (NYSE and JSE: DRD) and its affiliated
subsidiaries for more than 7 years where he played a key role in the successful transformation of the company
from an underground miner with two ultra-deep underground operations into a profitable tailings retreatment
business.
Stephen Brockhurst BCom
Company Secretary
Mr Brockhurst has 20 years’ experience in the finance and corporate advisory industry and has been responsible
for the preparation of the due diligence process and prospectuses on a number of initial public offers. His
experience includes corporate and capital structuring, corporate advisory and company secretarial services, capital
raising, ASX and ASIC compliance requirements.
Mr Brockhurst has served on the board and acted as Company Secretary for numerous ASX listed companies. He
is currently a Director of Nelson Resources Limited (ASX: NES), Locksley Resources Limited (ASX: LKY) and
Firetail Resources Limited (ASX: FTL) and Company Secretary of Kingwest Resources Limited, Kaiser Reef
Limited, Kingfisher Mining Ltd, Heavy Minerals Limited, Estrella Resources Limited and Nelson Resources Limited.
Galena Mining Limited | Annual Report 2022 7
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED)
The remuneration report, which forms part of the Directors' Report, outlines the remuneration arrangements in place
for key management personnel (“KMP”) who are defined as those persons having the authority and responsibility
for planning and directing the major activities of the Company, directly and indirectly, including any director (whether
executive or otherwise).
Remuneration Philosophy
The performance of the Company depends on the quality of the Company's Directors, executives and employees
and therefore the Company must attract, motivate and retain appropriately qualified industry personnel.
Remuneration policy
Remuneration levels for the executives are competitively set to attract the most qualified and experienced
candidates, taking into account prevailing market conditions and the individual's experience and qualifications.
The Remuneration and Nomination Committee is responsible for assisting the Board with determining and
reviewing remuneration arrangements for the executive and non-executive Directors.
The remuneration of Non-Executive Directors is not dependent on the satisfaction of performance conditions.
Remuneration and share based payments are issued to align Directors' interest with that of shareholders.
Non-Executive Directors Remuneration
All Non-Executive Directors are entitled to receive $67,500 per annum (exclusive of statutory superannuation) for
their roles as Directors of the Company. The Chairman receives $100,000 per annum (exclusive of statutory
superannuation).
The Company's Constitution provides that the remuneration of Non-Executive Directors will not be more than the
aggregate fixed sum determined by a general meeting. Before a determination is made by the Company in a general
meeting, the aggregate sum of fees payable by the Company to the Non-Executive Directors is a maximum of
$500,000 per annum. Summary details of remuneration of the Non-Executive Directors are provided in the table
below. The remuneration is not dependent on the satisfaction of a performance condition.
Directors are entitled to be paid reasonable travelling, accommodation and other expenses incurred in
consequence of their attendance at meetings of Directors and otherwise in the execution of their duties as Directors.
A Director may also be paid additional amounts as fees or as the Directors determine where a Director performs
extra services or makes any special exertions, which in the option of the Directors are outside the scope of the
ordinary duties of a Director.
Other Executives Remuneration
Mr Anthony James
Managing Director / Chief Executive Officer
Mr James’ engagement terms are governed by an Executive Employment Agreement. The terms of agreement
can be terminated by either party providing six months written notice. Mr James is entitled to receive a salary of
$450,000 per annum (exclusive of statutory superannuation). Subject to shareholder, ASIC and ASX approval (as
required), Mr James will be entitled to receive 7,500,000 performance rights, which will convert into shares upon
the achievement of various milestones expiring five years from their grant date.
Mr Alexander Molyneux
Non-Executive Director (previously an Executive Director until 30 June 2022)
Mr Molyneux’s engagement terms are governed by a Director Appointment Letter and a Consultant Appointment
Letter. The consultant engagement can be terminated by either party providing three months written notice. Mr
Molyneux is entitled to receive Director and Consulting Fees of US$10,000 per month. Mr Molyneux is also entitled
to receive 16,500,000 performance rights, which will convert into shares upon the achievement of various
milestones expiring on 9 November 2023.
Galena Mining Limited | Annual Report 2022 8
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED)
Mr Troy Flannery
Chief Executive Officer of AMPL (resigned 20 August 2021)
Mr Flannery’s employment conditions were governed by an Executive Employment Agreement. The terms of
agreement could be terminated by either party providing three months written notice. Mr Flannery was entitled to
receive a salary of $310,000 per annum (exclusive of statutory superannuation) from 1 January 2021.
Mr Flannery was also entitled to receive a bonus on the delivery of a positive Pre-Feasibility Study on the Abra
deposit delivered on time and on budget as defined in the Executive Employment Agreement. The bonus was
payable upon the adoption of and ASX release of completion of the Pre-feasibility Study with a positive NPV and
IRR, or determination of the Board to engage in a Feasibility Study on the Project based on the Pre-feasibility
Study. The bonus amount was either $75,000 cash or $82,500 in shares based on a 14-day VWAP, at the election
of Mr Flannery. The performance condition for the bonus was satisfied during the 2019 financial year and Mr
Flannery received 458,333 fully paid ordinary shares in the Company at a VWAP per share of $0.18.
Mr Craig Barnes
Chief Financial Officer
Mr Barnes’ employment conditions are governed by an Executive Employment Agreement. The terms of agreement
can be terminated by either party providing three months written notice. Mr Barnes is entitled to receive a salary of
$370,000 per annum (exclusive of statutory superannuation). Mr Barnes is also entitled to receive 2,000,000
performance rights, which will convert into shares upon the achievement of various milestones expiring on
13 August 2024.
Galena Mining Limited | Annual Report 2022 9
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED)
The remuneration for key management personnel of the Company during the 2022 and 2021 financial years was
as follows:
Short-term Benefits
Post-
employment
Benefits
Share-
based
Payments
Cash fees
and salary
$
STI
payments
$
Year
Termination
payments
$
Super-
annuation
$
Options /
Rights
(vii)
$
Total
$
Share-based
Payments as a
percentage of
Remuneration
%
Performance
Related
%
Non-Executive
Directors
Adrian Byass
Stewart Howe
Neville Gardiner (i)
2022
2021
2022
2021
2022
2021
Jonathan Downes (ii) 2022
2021
2022
2021
2022
2021
Sub-Total Non-
Executive Directors
Timothy Morrison (iii)
Executive Directors
Anthony James (iv)
2022
2021
Alexander Molyneux (v) 2022
2021
Sub-Total Executive 2022
2021
Directors
95,000
65,000
47,178
-
60,221
45,662
15,221
45,662
-
25,002
217,620
181,326
450,000
268,669
332,220
321,472
782,220
590,141
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Other KMP
Troy Flannery (vi)
Craig Barnes
51,667
2022
310,000
2021
360,000
2022
280,000
2021
411,667
Sub-Total Other KMP 2022
2021
590,000
2022 1,411,507
2021 1,361,467
TOTAL
-
-
-
125,000
-
125,000
-
125,000
205,680
-
-
-
205,680
-
205,680
-
-
-
4,718
-
6,022
4,338
1,522
4,338
-
-
12,262
8,676
23,568
5,938
-
-
23,568
5,938
5,892
21,694
23,568
21,694
29,460
43,388
65,290
58,002
-
18,206
-
-
-
18,206
-
-
-
-
-
36,412
95,000
83,206
51,896
-
66,243
68,206
16,743
50,000
-
25,002
229,882
226,414
779,506
305,938
301,578
26,971
832,624
500,404
634,185
955,657
806,342 1,612,130
661,156 1,257,235
263,239
-
453,066
121,372
571,488
187,920
561,418
134,724
187,920
834,727
256,096 1,014,484
994,262 2,676,739
953,664 2,498,133
-
21.88
-
-
-
26.69
-
-
-
-
39.25
8.94
60.10
66.36
-
26.79
32.88
24.00
-
-
-
-
-
-
-
-
-
-
39.25
-
60.10
66.36
-
-
32.88
24.00
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
Mr Gardiner was appointed as a Non-Executive Director on 20 October 2021.
Mr Downes resigned as a Non-Executive Director on 29 October 2021.
Mr Morrison resigned as a Non-Executive Director on 14 December 2020.
Mr James was appointed as Managing Director/Chief Operating Officer on 16 June 2021. Prior to this, Mr James
was a Non-Executive Director and his remuneration included fees for additional services provided to the Abra
Base Metals Project.
Mr Molyneux was replaced by Mr James as Managing Director/Chief Operating Officer on 16 June 2021. Mr
Molyneux will remain a Non-Executive Director with responsibility for corporate development initiatives and
strategic relationships.
Mr Flannery resigned on 20 August 2021.
The fair value of options or rights were calculated at grant date using the Black-Scholes option pricing model and
recognised over the vesting period. These amounts have not actually been paid during the year and the fair value
is not related to or indicative of the benefit (if any) that key management personnel may ultimately receive.
Galena Mining Limited | Annual Report 2022 10
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED)
Options and Rights Over Equity Instruments Granted as Compensation
Details of options and rights over ordinary shares in the Company that were granted as compensation to key
management personnel during the 2022 and 2021 financial years and details of options that have vested are as
follows:
Director/Key
Management
Personnel
Troy Flannery
Craig Barnes
Anthony James
Adrian Byass
Stewart Howe
Anthony James
KMP Shareholdings
Number
Granted
Grant Date
Fair Value
Exercise
Price
Expiry Date
Number
Vested
900,000
01/09/2020
200,000
01/09/2020
200,000
13/11/2020
135,000
13/11/2020
135,000
13/11/2020
7,500,000
02/03/2022
$0.13
$0.13
$0.13
$0.13
$0.13
$0.18
$0.24
01/09/2025
$0.24
01/09/2025
$0.24
01/09/2025
$0.24
01/09/2025
$0.24
01/09/2025
N/A
02/03/2027
Nil
66,667
66,667
45,000
45,000
Nil
The number of ordinary shares in Galena Mining Limited held by each KMP of the Company during the financial
year is as follows:
30 June 2022
Adrian Byass
Alexander Molyneux
Anthony James
Neville Gardiner (i)
Stewart Howe
Jonathan Downes (ii)
Troy Flannery (iii)
Balance at
beginning of
period
12,550,000
7,700,000
115,000
-
536,425
14,762,950
450,000
36,114,375
Issued on
exercise of
options
during the
period
-
-
-
-
-
-
-
-
Other
changes
during the
period
Balance at
end of
period
-
12,550,000
300,000
8,000,000
250,000
100,000
-
-
-
365,000
100,000
536,425
14,762,950
450,000
650,000
36,764,375
(i)
(ii)
Mr Gardiner was appointed as a Non-Executive Director on 20 October 2021.
Mr Downes resigned as a Non-Executive Director on 29 October 2021. Balance of Mr Downes' holdings as at the
date of resignation.
(iii)
Mr Flannery resigned on 20 August 2021. Balance of Mr Flannery's holdings as at the date of resignation.
Galena Mining Limited | Annual Report 2022 11
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED)
KMP Share Appreciation Rights Holdings
The number of share appreciation rights held during the year by each KMP of the Company is as follows:
30 June 2022
Balance at
beginning
of period
Granted
during
the period
Exercised
during the
period
Other
changes
during the
period
Balance
at end of
period
Vested
during
the
period
Vested and
exercisable
Vested and
unexercisable
Adrian Byass
Anthony James
Stewart Howe
355,000
420,000
135,000
Jonathan Downes (i)
50,000
-
-
-
-
-
-
-
-
-
-
-
-
355,000
100,000
265,000
420,000
121,667
286,667
135,000
50,000
45,000
12,500
Troy Flannery (ii)
1,200,000
-
(300,000)
(900,000)
-
300,000
45,000
50,000
-
Craig Barnes
200,000
-
-
-
200,000
66,667
66,667
2,360,000
-
(300,000)
(900,000)
1,160,000
645,834
713,333
(i)
(ii)
Mr Downes resigned as a Non-Executive Director on 29 October 2021. Balance of Mr Downes' holdings as at the
date of resignation.
Mr Flannery resigned on 20 August 2021. Balance of Mr Flannery's holdings as at the date of resignation.
KMP Performance Rights Holdings
The number of performance rights held during the year by each KMP of the Company is as follows:
-
-
-
-
-
-
-
30 June 2022
Alexander Molyneux
Balance at
beginning
of period
9,000,000
Granted
during
the
period
-
Anthony James
-
7,500,000
Craig Barnes
2,000,000
-
11,000,000
7,500,000
End of Remuneration Report
Exercised
during the
period
Other
changes
during the
period
Balance at
end of
period
9,000,000
7,500,000
2,000,000
-
-
-
- 18,500,000
Vested
during
the
period
-
-
-
-
Vested and
exercisable
-
Vested and
unexercisable
-
-
-
-
-
-
-
-
-
-
-
Galena Mining Limited | Annual Report 2022 12
DIRECTORS’ REPORT
MEETING OF DIRECTORS
During the period, 5 director’s meetings were held. Attendance by each director during the period were as follows:
Director’s Meetings
Number eligible to attend Director’s meetings attended
Mr Adrian Byass
Mr Alexander Molyneux
Mr Anthony James
Mr Stewart Howe
Mr Neville Gardiner
Mr Jonathan Downes
5
5
5
5
3
2
5
5
5
5
3
2
FUTURE DEVELOPMENTS, PROSPECTS AND BUSINESS STRATEGIES
Further information, other than as disclosed in this report, about likely developments in the operations of the
Company and the expected results of those operations in future periods has not been included in this report as
disclosure of this information would be likely to result in unreasonable prejudice to the Group.
ENVIRONMENTAL ISSUES
The operations and proposed activities of the Group are subject to State and Federal laws and regulations
concerning the environment. As with most exploration projects and mining operations, the Group’s activities are
expected to have an impact on the environment, particularly if advanced exploration or field development proceeds.
It is the Group’s intention to conduct its activities to the highest standard of environmental obligation, including
compliance with all environmental laws. In this regard, the Department of Minerals and Petroleum of Western
Australia from time to time, review the environmental bonds that are placed on permits. The Directors are not in a
position to state whether a review is imminent or whether the outcome of such a review would be detrimental to
the funding needs of the Group.
PROCEEDINGS ON BEHALF OF THE GROUP
No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in any
proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for
all or any part of those proceedings.
The Group was not a party to any such proceedings during the year.
INDEMNITY AND INSURANCE OF OFFICERS
The Company has indemnified the directors and executives of the Company for costs incurred, in their capacity as
a director or executive, for which they may be held personally liable, except when there is a lack of good faith.
During the financial year, the Company paid a premium in respect of a contract to insure the directors and
executives of the company against a liability to the extent permitted by the Corporations Act 2001. The contract of
insurance prohibits disclosure of the nature of the liability and the amount of the premium.
Galena Mining Limited | Annual Report 2022 13
DIRECTORS’ REPORT
INDEMNITY AND INSURANCE OF AUDITORS
The Company has not, during the financial year, indemnified or agreed to indemnify the auditor of the Company or
any related entity against a liability incurred by the auditor.
During the financial period, the Company has not paid a premium in respect of a contract to insure the auditor of
the company or any related entity.
NON-AUDIT SERVICES
The Board of Directors are satisfied that the provision of non-audit services during the year is compatible with the
general standard of independence for auditors imposed by the Corporations Act 2001.
The following fees were paid out to PKF Perth for non-audit services provided during the year ended 30 June 2022:
-Taxation compliance services
$27,500
AUDITOR’S INDEPENDENCE DECLARATION
Section 307C of the Corporations Act 2001 requires our auditors, PKF Perth, to provide the Directors of the
Company with an Independence Declaration in relation to the audit of the financial report. This Independence
Declaration is set out on page 15 and forms part of this Directors’ Report for the year ending 30 June 2022.
This report is signed in accordance with a resolution of the Board of Directors.
__________________
Adrian Byass
Chairman
Dated this 24th day of August 2022
Galena Mining Limited | Annual Report 2022 14
PKF Perth
AUDITOR’S INDEPENDENCE DECLARATION
TO THE DIRECTORS OF GALENA MINING LIMITED
In relation to our audit of the financial report of Galena Mining Limited for the year ended 30 June 2022, to the best of
my knowledge and belief, there have been no contraventions of the auditor independence requirements of the
Corporations Act 2001 or any applicable code of professional conduct.
PKF PERTH
SHANE CROSS
PARTNER
24 August 2022
WEST PERTH,
WESTERN AUSTRALIA
Level 4, 35 Havelock Street, West Perth, WA 6005
PO Box 609, West Perth, WA 6872
T: +61 8 9426 8999 F: +61 8 9426 8900 www.pkfperth.com.au
PKF Perth is a member firm of the PKF International Limited family of legally independent firms and does not accept any responsibility or liability for the actions
or inactions of any individual member or correspondent firm or firms.
Liability limited by a scheme approved under Professional Standards Legislation.
Galena Mining Limited | Annual Report 2022 15
REVIEW OF OPERATIONS
Galena Mining Limited | Annual Report 2022 16
REVIEW OF OPERATIONS
For the financial year, the Company’s focus remained the continued development of its Abra Base Metals Mine
(“Abra” or the “Project”), which is a globally significant lead-silver project located in the Gascoyne region of
Western Australia (between the towns of Newman and Meekatharra, approximately 110 kilometres from Sandfire’s
DeGrussa Project).
Map showing the Abra Project location.
Other than Abra, Galena holds a strategic package of exploration licences over the Jillawarra sub-basin that
comprises an elongated tenement package covering approximately 60 kilometres continuous strike length directly
to the west of Abra (“Jillawarra Prospects”) and continues to undertake exploration there.
Magnetic and gravity anomaly map showing the Abra Project and Jillawarra Project tenements with drill hole results and targets.
Galena Mining Limited | Annual Report 2022 17
REVIEW OF OPERATIONS
ABRA BASE METALS MINE (60% GALENA OWNED)
Abra comprises a granted Mining Lease, M52/0776 and is surrounded by the Exploration Licence E52/1455,
together with several co-located General Purpose and Miscellaneous Leases. The Project is 100% owned by
AMPL, which as at 30 June 2022 was 60% owned by Galena, with the remaining 40% owned by Toho (pursuant
to an Investment Agreement and Shareholders Agreement with Toho).
Abra is well located with the availability of key infrastructure and close access to water, public roads, existing mining
operations and the towns of Meekatharra and Newman. Lead-silver concentrate will be transported by road to the
port of Geraldton (or potentially Port Hedland) in the mid-west of Western Australia. Abra has received all the major
approvals required for construction, mining and production. First production of its high-value, high-grade lead-silver
concentrate is currently scheduled for the first quarter of 2023 calendar-year.
Project construction / development
During the financial year, Abra construction works continued, substantially increasing the construction works as
the year progressed. At 31 July 2022 Abra was 78% complete. Abra construction works conducted during the
financial year were comprised of site civil and earthworks, underground mine development, processing plant
construction and ongoing front-end engineering design and procurement, including:
Geotechnical drilling – In July 2021, five drill-holes were completed for geotechnical assessment of the proposed
raise bore locations for future underground ventilation requirements. In September 2021, a diamond drill hole was
completed from the portal location down the axis of the first 250 metres of proposed decline development,
geotechnical information from that hole was used to provide detailed information regarding expected ground
conditions during the initial decline development phase.
Procurement of plant long lead-time items – In August 2021, the Company announced placement of significant
orders for A$9 million of long lead-time items including the ball mill (CITIC HIC 2.5Mw 5.0m x 5.6m) and concentrate
filter (Ishigaki fully automated horizontal batch pressure filter). An additional A$3 million of plant long lead-time
procurement commitments were made, including crushers and flotation cells.
Underground Mining – On 5 October 2021 the mining contractor for Abra, Byrnecut Australia Pty Ltd (“Byrnecut”)
commenced operations associated with the development of the underground mine. As at 30 June 2022, total
development reached 1,699 metres consisting of 1,155 metres of decline development and 544 metres of other
lateral development. The decline reached 1,357mRL, 44 metres above the Abra orebody and 193 metres below
the surface.
In June 2022, the Mine decline development was delayed for 12 days when the west decline intercepted an un-
grouted diamond drill hole forcing an upgrade in the mine’s dewatering capacity. During the delay the mine installed
its primary ventilation fan on the surface and upgraded the underground power reticulation. Once this work was
completed, the hole was plugged, and mining resumed. A revised mining plan has been completed and put in place
to ensure that following this development delay, mining targets remain in line with the plant completion and
commissioning timeframe.
The underground drilling at Abra commenced in June 2022 after the mobilisation of the first Swick Mining Services
underground drill rig. A total of six drill holes were completed for 1,452 metres. These drill holes were designed to
confirm the mineralisation grade and thickness within the mining stopes planned to be mined during the first half of
the 2023 calendar year.
Processing plant and associated infrastructure works – On 5 November 2021, the Company announced that
GR Engineering Services Ltd. (“GR Engineering”), the engineering, procurement, and construction (“EPC”)
contractor for Abra’s processing plant had commenced on-site construction works with the installation of footings
and concrete works ongoing. At 31 July 2022, the processing plant engineering, procurement and construction
reached 85% completion. Actual on-site construction was approximately 78% complete, with the majority of
concrete work completed and structural steel installation at 72% complete. Plant construction work is progressing
into the mechanical, piping and electrical fit out stages.
Aerodrome and flight services – Construction was completed of Abra’s new 1.8-kilometre aerodrome on
12 December 2021, which provides significantly improved site access and logistical capacity for the life of the
Project, with the ability to land and handle small jets and turboprop aircraft with capacity of more than 70 seats.
AMPL entered an air charter services contract with Cobham Aviation Services Australia Pty Ltd (“Cobham”) and
commenced regular air services between Perth and Abra utilising Cobham’s modern 76-seat Q400 aircraft and
Perth terminal facilities.
Galena Mining Limited | Annual Report 2022 18
REVIEW OF OPERATIONS
Paste-fill plant – In February 2022 and March 2022, the previously procured second-hand paste-fill plant was
dismantled from its existing location at Higginsville Gold Mine, with some components transported to
GR Engineering facilities in Perth for refurbishment and others transported directly to Abra site. The Paste-fill plant
equipment refurbishment work has continued in Perth with structural steel surface coatings carried out on site.
Power plant – Pacific Energy Limited (“Pacific Energy” previously Contract Power) mobilised to Abra in February
2022 to commence construction of the 10MW natural gas fired power station and integrated 6MW solar array. At
30 June 2022 all of the 16,000 solar panels and the engine hall were installed.
Safety and environment
During the financial year, 374,008 employee and contractor work hours were recorded at Abra. During this time
Abra had six Restricted Work Injuries:
-
-
-
-
-
In October 2021, an underground employee received an eye injury.
In November 2021, a surface construction worker fractured his wrist falling from a safety step.
In January 2022, an underground contractor employee received a shoulder injury.
In May 2022, a concreting supervisor received a laceration to his upper thigh where he slipped and fell against
a protruding piece of formwork steel and he received some sutures to the wound.
In June 2022, there were two hand injuries, one occurred in a contractor’s workshop when a pump rotated out
of the vice and squashed the fitters right ring finger. The other occurred when a shed installer was adjusting
the tension on a roller door and they lost control of the tensioning tool, which spun around and struck their
right hand. Both resulted in corrective medical surgeries in Perth.
There were three environmental reportable incidences or exceedances that were recorded during the financial
year.
- One environmental incident was self-reported to the Department of Mines, Industry Regulation and Safety
during February 2022 relating to over-clearing at the airstrip location due to approximately 30,000m3 of reject
material being stockpiled on that location during airstrip construction activities.
Two other minor environmental incidents occurred because of a blown drum roller hydraulic hose and a
contractor’s portable toilet overflowing.
-
Heritage
The Nharnuwangga Wajarri and Ngarlawangga (“NWN”) people are recognised as the traditional owners of the
country where the Galena projects are located. The NWN people have granted Native Title for the area and the
Jidi Jidi Aboriginal Corporation (“JJAC”) is the group representing the NWN people.
Following Final Investment Decision (“FID”), JJAC received the first milestone payment of $200,000 in July 2021
and the second milestone payment of $250,000 was paid in November 2021 after the underground decline
commenced. The first annual Environment, Contracting and Training payment of $30,000, which is CPI indexed,
was paid in November 2021.
AMPL will continue to support the government funded Ranger program which covers the Collier Range National
Park and other conservation estate reserves within the NWN granted Native Title area. We are continuing to provide
accommodation for Ranger trainee field trips until such time that they establish their own base station facilities,
most likely on the Mulgul pastoral lease. We have recently proposed that AMPL would purchase seed for
rehabilitation collected by the Rangers from local native species. This may happen over the next few months if
conditions allow. AMPL has also offered to integrate any water monitoring initiatives the Rangers wish to undertake
into the monitoring program currently undertaken on the Abra mine site.
Galena Mining Limited | Annual Report 2022 19
REVIEW OF OPERATIONS
Abra JORC Mineral Resource Estimate
The April 2021 Mineral Resource Estimate (“MRE”) was prepared following receipt of final assay results on
completion of the 2020 Abra Drilling Program, which consisted of 57 diamond drill-holes (AB144 to AB200A) for a
total of 24,834 cumulative metres of diamond core drilling. The MRE has been completed by a third-party specialist
consultant, Optiro, which is independent of the Company.
The MRE was prepared assuming mining and processing can be economically undertaken using underground
mining methods and conventional flotation processing which is supported by Feasibility Study work previously
undertaken (see Galena ASX announcement of 22 July 2019).
The table below states the Abra April 2021 Resource at a 5.0% lead cut-off grade:
Abra JORC Mineral Resource estimate1, 2
Resource classification
Tonnes (Mt)
Lead grade (%)
Silver grade (g/t)
Measured
Indicated
Inferred
Total
Notes:
-
16.9
17.5
34.5
-
7.4
7.0
7.2
-
17
15
16
1. See Galena ASX announcement of 28 April 2021. Galena confirms that it not aware of any new information or data that
materially affects the information included in Galena’s ASX announcement of 28 April 2021 and confirms that all material
assumptions and technical parameters underpinning the resource estimates continue to apply and have not materially changed.
2. Calculated using ordinary kriging method and a 5.0% lead cut-off grade. Tonnages are rounded to the nearest 100,000t, lead
grades to one decimal place and silver to the nearest gram. Rounding errors may occur when using the above figures.
Commercial initiatives in support of Abra development – Toho Transaction
In April 2019, the Company executed definitive agreements with Toho setting out the terms for Toho’s investment
of $90 million in tranches for a 40% ownership interest in Galena’s previously wholly-owned subsidiary, AMPL (the
“Toho Transaction”). Key components of the Toho Transaction include:
•
Investment and investment structure – $90 million total investment to be made via the subscription of new
ordinary shares in AMPL such that Toho owns 40% of AMPL on completion of the full investment and
Galena retains 60%.
• Tranched payment – $20 million was paid on initial closing of the transaction in April 2019; $10 million was
paid in August 2019; and the remaining $60 million was received during the 2021 financial year after project
financing debt for the Project was confirmed (with all tranches combined taking Toho’s total ownership in
AMPL to 40%).
• Off-take –Toho has also entered into an off-take agreement with AMPL to purchase 40% of Abra’s high-
grade high-value lead-silver concentrate on arms-length, benchmark terms.
Commercial initiatives in support of Abra development – project financing debt
In November 2020, Galena put in place US$110 million in finalised debt facilities arranged by Taurus Funds
Management. The facilities include a US$100 million project finance facility (“Facility A”) plus a US$10 million cost
overrun or working capital facility (“Facility B”) (see Galena ASX announcement of 12 November 2020).
Facility A consists of a US$100 million, 69-month term loan primarily to fund capital expenditures for the
development of Abra. Key terms include:
• Fixed interest of 8.0% per annum on drawn amounts, payable quarterly in arrears.
• Arrangement fee of 2.5% (already paid) and commitment fee of 2.0% on undrawn amounts.
• 1.125% net smelter return royalty.
• No mandatory hedging.
• Early repayment allowed without penalty.
Facility B consists of a US$10 million loan to finance identified cost overruns on the Project in capital expenditure
and working capital. Fixed interest of 10.0% per annum will apply to amounts drawn under Facility B.
Galena Mining Limited | Annual Report 2022 20
REVIEW OF OPERATIONS
In June 2021, AMPL received the first drawdown under the Project Finance Facility in the amount of US$30 million.
In January 2022, the second drawdown of US$35 million was received and in June 2022, the third drawdown of
US$20 million was received leaving US$25 million undrawn under remaining facilities at the date of this report.
The Taurus Debt Facilities are secured against Abra Project assets and over the shares that each of Galena and
Toho own in AMPL, and additional drawdowns remain subject to satisfaction of customary conditions precedent.
Near-Project exploration
During the financial year, the interpretation of the downhole electromagnetic survey completed along the diamond
drill-hole AB195 at the Abra deposit was concluded with several conductive plates identified north and south of the
surveyed drill-hole. These plates have been identified as potential exploration drill targets.
The Company also announced the identification and ranking of the top six priority exploration targets within the
Abra joint venture outside of the Abra Base Metals Mine footprint. The targets are identified as Genie, Jasmine,
Lamplight, Sultan, Ale, and Bazaar.
A diamond drill-hole (424 metre down-hole depth) was completed at the Jasmine prospect approximately
2 kilometres northeast of the main Abra deposit, targeting a significant gravity and magnetic anomaly. The assay
results for the drill hole completed at Jasmine were reported with no significant lead mineralisation identified.
Additional holes are required at Jasmine to fully explore the area’s potential for Abra style mineralisation.
JILLAWARRA PROSPECTS (100% GALENA OWNED)
Galena’s Jillawarra prospects consist of Woodlands, Manganese Range, Quartzite Well and Copper Chert, which
comprise more than 60 kilometres of continuous strike to the west of Abra and reside within five granted Exploration
Licences, being: E52/1413; E52/3575; E52/3581; E52/3630; and E52/3823.
During the financial year, the Company announced the conclusion of the target review and ranking of Jillawarra
Project with the definition of seven high-priority targets: JHP31, 46-40, TP, Copper Chert, QWMR, Coolina and
Fencers prospects.
In December 2021, the Company completed a reconnaissance diamond drilling program targeting three of its
targets within the Woodlands Complex associated with the Jillawarra Project area. No base lead mineralisation
above 5% over 4 metre intervals were defined, however a summary of the most significant intercepts is shown
below.
•
•
3.3 m at 1.8% lead and 8g/t silver from 131.41 m in GWD004 (46-40 Prospect); and
2.4 m at 1.1% lead and 3g/t silver from 161 m in GWD004 (46-40 Prospect).
During the financial year, the Company completed an extensive electromagnetic survey across the Jillawarra
Project comprising the exploration licences E52/3581, E52/3630, E52/3823, and E 52/1413.
The electromagnetic survey consisted of a versatile time-domain electromagnetic (VTEMTM) Max system with Full-
Waveform processing. Measurements consisted of Vertical (Z) and In-line Horizontal (X&Y) components of the
EM fields using an induction coil and the aeromagnetic total field using a caesium magnetometer. The results of
the interpretation of the VTEM data have shown a total of 15 VTEM target areas which were ranked according to
their priority.
Galena Mining Limited | Annual Report 2022 21
REVIEW OF OPERATIONS
CORPORATE
A$17 million placement
On 26 July 2022, the Company accepted binding commitments for a placement of 137,200,000 new shares at an
issue price of $0.125 per share (“Placement Shares”), to raise $17.2 million before costs (“Placement”).
Proceeds from the Placement will be used to provide AMPL a temporary unsecured reserve facility (“URF”). The
URF will be $30 million, contributed $18 million by Galena and $12 million by the Company’s joint-venture partner
Toho. The URF will be made available during the critical commissioning and initial ramp-up stages of the Abra
mine, up until the Project Completion tests are satisfied under the Taurus Debt Facilities (anticipated to be 2H
CY2023). Its purpose will be to provide a working capital and cost buffer for AMPL to draw in the event of
unforeseen circumstances and costs such as weather-related road or port closures or other events. Any drawn
amounts will become unsecured shareholder loans to AMPL whilst undrawn amounts will be returned to each of
Galena and Toho in their respective 60:40 share.
71,400,000 of the shares issued under the Placement will fall within the Company’s 15% placement capacity under
ASX Listing Rule 7.1, with settlement occurring on Wednesday, 3 August 2022. The remaining 65,800,000 shares
to be issued under the Placement are subject to shareholder approval with the general meeting to be held on
13 September 2022.
The Placement was significantly oversubscribed and well supported mainly by existing stakeholders. The
Company’s largest shareholder and strategic investor Mr Timothy Andrew Roberts, subscribed for 35,318,665
Placement Shares for ~A$4.41 million.
Taurus, the provider of the Taurus Debt Facilities to AMPL and a key stakeholder in the ongoing success of the
Project, subscribed for 30,007,862 Placement Shares for ~A$3.75 million.
Impact of COVID-19
Abra is a fly-in-fly-out (“FIFO”) site in the Gascoyne Region of Western Australia, with flights to site originating from
Perth Airport in Perth. Several measures have been implemented to protect employees and contractors working
on the Project, in line with recommended Government guidelines and procedures.
Current procedures include site access pre-screening with personnel/visitors taking rapid antigen tests (“RAT”)
prior to flights to Abra, together with recommended isolation procedures for those that are already on site, who
receive non-negative RAT results. During the Quarter, 21 COVID-19 related isolations were required at Abra.
Changes in Government guidelines and / or general business operability because of the ongoing COVID-19
pandemic have the potential to impact Abra and the Company. Such impacts could include (but are not limited to)
delays to Project development initiatives and / or the incurring of extra costs.
The board of Galena continues to monitor the evolving COVID-19 situation and how it might impact the Company’s
operations and strategy.
Competent Persons’ Statement
The information in this report related to the Abra April 2021 Resource is based on work completed by Mr Angelo
Scopel BSc (Geol), MAIG, a fulltime employee of Galena Mining and Mr Mark Drabble B.App.Sci. (Geology), MAIG,
MAusIMM, Principal Consultant at Optiro Pty Ltd. Mr Scopel was responsible for data review and QAQC, and. Mr
Drabble was responsible for the development of the geological model, resource estimation, classification and
reporting. Mr Scopel and Mr Drabble have sufficient experience relevant to the style of mineralisation and type of
deposit under consideration and to the activity which they are undertaking to qualify as a Competent Person as
defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Exploration Targets,
Mineral Resources and Ore Reserves. Mr Scopel and Mr Drabble consent to the inclusion in the report of the
matters based on this information in the form and context in which it appears.
Galena Mining Limited | Annual Report 2022 22
REVIEW OF OPERATIONS
Galena Mining Limited | Annual Report 2022 23
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
For the year ended 30 June 2022
Revenue
Expenses
Note
2022
$
2021
$
7
194,774
516,035
Corporate and administration expenses
(664,172)
Depreciation and amortisation
11,18
(1,880,620)
(894,018)
(247,949)
Employee costs
Share-based payments
Exploration and evaluation expenditure
Foreign exchange loss
(1,362,614)
(1,311,295)
16
(994,262)
(1,079,083)
-
(4,553,563)
(62,056)
(647,241)
Loss before finance costs and income tax expense
(9,260,457)
(3,725,607)
Finance costs
Loss before income tax
Income tax expense
18, 22
(65,230)
(177,833)
(9,325,687)
(3,903,440)
8
-
-
Loss after income tax for the year
(9,325,687)
(3,903,440)
Other comprehensive income net of income tax
-
-
Total comprehensive loss for the year
(9,325,687)
(3,903,440)
Loss for the year attributable to:
Non-controlling interest
Members of the parent
Loss per share
Basic and diluted loss per share (cents per share)
4
9
(2,485,823)
(353,113)
(6,839,864)
(3,550,327)
(9,325,687)
(3,903,440)
(1.96)
(0.85)
The accompanying notes form part of these financial statements.
Galena Mining Limited | Annual Report 2022 24
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2022
ASSETS
Current Assets
Cash and cash equivalents
Trade and other receivables
Prepayments
Total current assets
Non-Current Assets
Exploration and evaluation expenditure
Plant and equipment
Right-of-use assets
Total non-current assets
TOTAL ASSETS
LIABILITIES
Current Liabilities
Trade and other payables
Lease liabilities
Provisions
Total current liabilities
Non-Current Liabilities
Lease liabilities
Provisions
Interest bearing loans and borrowings
Total non-current liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Share-based payment reserve
Consolidation reserve
Accumulated losses
Parent interest
Non-controlling interest
TOTAL EQUITY
Note
2022
$
2021
$
19
20
10
11
18
21
18
22
18
22
14
15
16
4
48,219,668
96,195,562
1,469,987
1,539,883
104,095
223,671
51,229,538
96,523,328
8,788,294
201,266,119
2,960,543
213,014,956
6,648,789
65,301,696
1,844,353
73,794,838
264,244,494
170,318,166
17,780,287
2,227,960
812,824
543,595
769,745
227,468
19,136,706
3,225,173
1,173,549
3,863,356
113,401,922
118,438,827
623,180
1,667,882
31,852,545
34,143,607
137,575,533
37,368,780
126,668,961
132,949,386
48,287,278
1,905,922
52,727,720
48,006,327
1,657,270
52,727,720
(20,890,227)
(14,566,022)
82,030,693
44,638,268
87,825,295
45,124,091
126,668,961
132,949,386
The accompanying notes form part of these financial statements.
Galena Mining Limited | Annual Report 2022 25
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2022
Balance at 1 July 2020
Loss for the year
Other comprehensive income
Total comprehensive loss
Transactions with owners directly recorded in equity:
Shares issued during the year
Share-based payments
Share issue costs
Partial disposal of interest in subsidiary (Note 4)
Issued capital Share-based
Note
payment
reserve
Consolidation
reserve
Accumulated
losses
Non-
controlling
interest
Total
$
$
$
$
$
34,854,887
1,248,187
26,071,954
(11,015,695)
4,932,970
56,092,303
-
-
13,831,500
-
-
-
-
409,083
(680,060)
-
-
-
-
-
-
-
-
26,655,766
(3,550,327)
(353,113)
(3,903,440)
-
-
-
(3,550,327)
(353,113)
(3,903,440)
-
-
-
-
-
-
-
13,831,500
409,083
(680,060)
40,544,234
67,200,000
Balance at 30 June 2021
48,006,327
1,657,270
52,727,720
(14,566,022)
45,124,091
132,949,386
Balance at 1 July 2021
Loss for the year
Other comprehensive income
Total comprehensive loss
Transactions with owners directly recorded in equity:
Shares issued during the year
Share-based payments
CBHWA share subscription
Balance at 30 June 2022
The accompanying notes form part of these financial statements.
48,006,327
1,657,270
52,727,720
(14,566,022)
45,124,091
132,949,386
-
-
-
-
280,951
-
-
(745,610)
994,262
-
-
-
-
-
-
(6,839,864)
(2,485,823)
(9,325,687)
-
-
-
(6,839,864)
(2,485,823)
(9,325,687)
515,659
-
-
-
-
51,000
994,262
2,000,000
2,000,000
48,287,278
1,905,922
52,727,720
(20,890,227)
44,638,268
126,668,961
Galena Mining Limited | Annual Report 2022 26
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 30 June 2022
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees
(6,517,781)
(1,481,064)
Note
2022
$
2021
$
Other income
Interest received
Interest paid
-
194,774
383,829
132,206
-
(132,931)
Net cash used in operating activities
19
(6,323,007)
(1,097,960)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of plant and equipment
Purchase of mine under construction
Exploration and evaluation expenditure
CBHWA share subscription in subsidiary
Proceeds from partial disposal of subsidiary
(26,086,512)
(121,331)
(85,520,739)
(14,439,458)
(2,123,022)
(8,232,028)
2,000,000
7,200,000
-
60,000,000
Net cash (used in) / provided by investing activities
(111,730,273)
44,407,183
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares
Transaction costs associated with issue of shares
Payments of lease liabilities
Proceeds from loans and borrowings
Borrowing costs paid
Net cash provided by financing activities
51,000
13,161,500
-
(1,051,344)
(680,060)
(501,393)
76,998,482
39,421,800
(5,920,752)
(7,569,255)
70,077,386
43,832,592
Net (decrease) / increase in cash held
(47,975,894)
87,141,815
Cash and cash equivalents at beginning of financial
period
96,195,562
9,053,747
Cash and cash equivalents at end of financial period
19
48,219,668
96,195,562
The accompanying notes form part of these financial statements.
Galena Mining Limited | Annual Report 2022 27
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
CORPORATE INFORMATION AND BASIS OF PREPARATION
NOTE 1:
NOTE 2:
NOTE 3:
CORPORATE INFORMATION
BASIS OF PREPARATION
GOING CONCERN
GROUP STRUCTURE
NOTE 4:
NOTE 5:
GROUP INFORMATION
TRANSACTIONS WITH RELATED PARTIES
RESULTS FOR THE YEAR
NOTE 6:
NOTE 7:
NOTE 8:
NOTE 9:
SEGMENT INFORMATION
REVENUE
INCOME TAX EXPENSE
EARNINGS PER SHARE
INVESTED CAPITAL
NOTE 10: EXPLORATION AND EVALUATION EXPENDITURE
NOTE 11: PLANT AND EQUIPMENT
NOTE 12: CAPITAL AND OTHER COMMITMENTS
CAPITAL AND DEBT STRUCTURE
NOTE 13: CAPITAL MANAGEMENT
NOTE 14:
INTEREST BEARING LOANS AND BORROWINGS
NOTE 15:
ISSUED CAPITAL
NOTE 16: SHARE-BASED PAYMENT RESERVE
NOTE 17:
FINANCIAL RISK MANAGEMENT
NOTE 18:
LEASES
WORKING CAPITAL
NOTE 19: CASH AND CASH EQUIVALENTS
NOTE 20:
NOTE 21:
OTHER
TRADE AND OTHER RECEIVABLES
TRADE AND OTHER PAYABLES
NOTE 22: PROVISIONS
NOTE 23: SHARE-BASED PAYMENTS
NOTE 24: CONTINGENT ASSETS AND LIABILITIES
NOTE 25: AUDITORS’ REMUNERATION
NOTE 26: SIGNIFICANT EVENTS AFTER REPORTING PERIOD
29
29
29
32
33
33
35
35
35
37
38
40
41
41
42
44
44
44
45
45
46
47
50
52
52
53
53
54
54
55
56
57
57
Galena Mining Limited | Annual Report 2022 28
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2022
CORPORATE INFORMATION AND BASIS OF PREPARATION
NOTE 1:
CORPORATE INFORMATION
Galena Mining Limited is a for profit company incorporated in Australia whose shares are publicly traded on the
Australian Stock Exchange (ASX). The consolidated financial statements of Galena Mining Limited and its
controlled entities (together referred to as “Galena”, the “Company”, the “Group” or the “Consolidated Entity”)
for the year ended 30 June 2022 were authorised for issue in accordance with a resolution of the directors on 24
August 2022.
The nature of the Group’s operations and principal activities are described in the Director’s report. Information on
the Group structure is provided in Note 4. Information on other related party relationships of the Group is provided
in Note 5.
NOTE 2:
BASIS OF PREPARATION
The consolidated financial statements are a general purpose financial report, which have been prepared in
accordance with the requirements of the Corporations Act 2001, Australian Accounting Standards and other
authoritative pronouncements of the Australian Accounting Standards Board. The financial report also complies
with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board
(IASB).
The financial statements have been prepared on an accruals basis and are based on historical costs, modified
where applicable, by the measurement at fair value of financial assets and financial liabilities.
The financial report is presented in Australian dollars and all values are rounded to the nearest dollar unless
otherwise stated.
The accounting policies adopted are consistent with those of the previous financial year and corresponding
reporting period except for the adoption of the new standards and amendments which became mandatory for the
first time this reporting period commencing 1 July 2021. The adoption of these standards and amendments did not
result in a material adjustment to the amounts or disclosures in the current or prior year. The Group has not early
adopted any other standard, interpretation or amendment that has been issued but is not yet effective.
a) Basis of consolidation
The consolidated financial statements comprise the financial statements of Galena Mining Limited and its controlled
entities as at 30 June 2022 (as outlined in Note 4).
Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the
investee and has the ability to affect those returns through its power over the investee. Specifically, the Group
controls an investee if and only if the Group has:
• Power over the investee (i.e., existing rights that give it the current ability to direct the relevant activities of the
investee);
• Exposure, or rights, to variable returns from its involvement with the investee; and
•
The ability to use its power over the investee to affect its returns.
When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all
relevant facts and circumstances in assessing whether it has power over an investee, including:
The contractual arrangement with the other vote holders of the investee;
•
• Rights arising from other contractual arrangements; and
The Group’s voting rights and potential voting rights.
•
Galena Mining Limited | Annual Report 2022 29
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2022
NOTE 2:
BASIS OF PREPARATION (continued)
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are
changes to one or more of the three elements of control. Consideration of a subsidiary begins when the Group
obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities,
income and
expenses of a subsidiary acquired or disposed of during the year and included in the statement of comprehensive
income from the date the Group contains control until the date the Group ceases to control the subsidiary.
Profit or loss and each component of the other comprehensive income (“OCI”) are attributed to the equity holders
of the parent of the Group and to the non-controlling interests, even if this results in the non-controlling interests
having a deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries to bring
their accounting policies into line with the Group’s accounting policies. All intra-group assets and liabilities, equity,
income, expenses and cash flows relating to a transaction between members of the Group are eliminated in full on
consolidation.
A change in ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction.
b) Foreign currencies
The Group’s consolidated financial statements are presented in Australian dollars, which is also the parent entity’s
functional currency and the Group’s presentation currency.
Transactions in foreign currencies are initially recorded by each entity in the Group at their respective functional
currency spot rates at the date the transaction first qualifies for recognition. Monetary assets and liabilities
denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting
date. All differences are taken to the statement of profit or loss and other comprehensive income. Non-monetary
items that are measured at historical cost in a foreign currency are translated using the exchange rates at the dates
of the initial transaction. Non-monetary items measured at fair value in a foreign currency are translated using the
exchange rates at the date when the fair value was determined.
c) Significant accounting adjustments, estimates and assumptions
The preparation of the Group’s consolidated financial statements requires management to make judgements,
estimates and assumptions that affect the reported amounts at the date of the consolidated financial statements.
Estimates and assumptions are continually evaluated and are based on management’s experience and other
factors, including expectations of future events that are believed to be reasonable under the circumstances.
Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to
the carrying amount of assets or liabilities affected in future periods.
In particular, the Group has identified a number of areas where significant judgements, estimates and assumptions
are required. Further information on each of these areas and how they impact the various accounting policies are
described and highlighted separately with the associated accounting policy note within the related note. If it does
not relate to a specific note it is outlined below:
i)
Coronavirus (“COVID-19”) pandemic
Judgement has been exercised in considering the impacts that the COVID-19 pandemic has had, or may
have, on the consolidated entity based on known information. This consideration extends to the nature of the
products and services offered, customers, supply chain, staffing and geographic regions in which the
consolidated entity operates. Other than as addressed in specific notes, there does not currently appear to be
either any significant impact upon the financial statements or any significant uncertainties with respect to
events or conditions which may impact the consolidated entity unfavourably as at the reporting date or
subsequently as a result of the COVID-19 pandemic.
d) Changes in accounting policies and disclosures
The Group has adopted all the new or amended Accounting Standards and Interpretations issued by the Australian
Accounting Standards Board (“AASB”) that are mandatory for the current reporting period. Any new or amended
Accounting Standards or Interpretations that are not yet mandatory have not been early adopted. The Group has
yet to assess the impact of these new or amended Accounting Standards and Interpretations.
Galena Mining Limited | Annual Report 2022 30
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2022
NOTE 2:
BASIS OF PREPARATION (continued)
e) Changes in accounting policies and disclosures (continued)
The following Australian Accounting Standards that have recently been issued or amended but are not yet effective
are relevant to the Group but have not been applied by the Group for the annual reporting period ending 30 June
2022:
AASB No.
Title
Application
date of
standard *
Application
date for
Group
AASB 2014-10 Amendments to AASs – Sale or Contributions of Assets between an
1 January 2025
1 July 2025
Investor and its Associate or Joint Venture
AASB 2020-1
Amendments to AASs – Classification of Liabilities as Current or Non-
current
1 January 2023
1 July 2023
AASB 2020-3
Amendments to AASs – Annual Improvements 2018-2020 and Other
Amendments
1 January 2022
1 July 2022
AASB 2020-6
Amendments to AASs – Classification of Liabilities as Current or Non-
current – Deferral of Effective Date
1 January 2022
1 July 2022
AASB 2021-2
Amendments to Australian Accounting Standards – Disclosure of
Accounting Policies and Definition of Accounting Estimates
1 January 2023
1 July 2023
AASB 2021-5
Amendments of AASs – Deferred Tax related to Assets and Liabilities
arising from a Single Transaction
1 January 2023
1 July 2023
AASB 2021-6
Amendments to Australian Accounting Standards – Disclosure of
Accounting Policies: Tier 2 and Other Australian Accounting Standards
1 January 2023
1 July 2023
AASB 2021-7c Amendments to Australian Accounting Standards – Effective Date of
1 January 2025
1 July 2025
Amendments to AASB 10 and AASB 128 and Editorial Corrections
[deferred AASB 10 and AASB 128 amendments in AASB 2014-10
apply]
* Annual reporting periods beginning after
f)
Fair Value Measurement
When an asset or liability, financial or non-financial is measured at fair value for recognition or disclosure purposes,
the fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date; and assumes that the transaction will take place
either; in the principal market; or in the absence of a principal market, in the most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or liability
assuming they act in their economic best interests. For non-financial assets, the fair value measurement is based
on its highest and best use. Valuation techniques that are appropriate in the circumstances and for which sufficient
data are available to measure fair value, are used, maximising the use of relevant observable inputs and minimising
the use of unobservable inputs.
Assets and liabilities measured at fair value are classified, into three levels, using a fair value hierarchy that reflects
the significance of the inputs used in making the measurements. Classifications are reviewed at each reporting
date and transfers between levels are determined based on a reassessment of the lowest level of input that is
significant to the fair value measurement.
For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is
either not available or when the valuation is deemed to be significant. External valuers are selected based on
market knowledge and reputation. Where there is a significant change in fair value of an asset or liability from one
period to another, an analysis is undertaken, which includes a verification of the major inputs applied in the latest
valuation and a comparison, where applicable, with external sources of data.
Galena Mining Limited | Annual Report 2022 31
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2022
NOTE 2:
BASIS OF PREPARATION (continued)
g) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST
incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part
of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the
statement of financial position are shown inclusive of GST.
Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component of
investing and financing activities, which are disclosed as operating cash flows.
h) Other accounting policies
Significant and other accounting policies that summarise the measurement basis used and are relevant in
understanding the financial statements are provided throughout the notes to the financial statements.
NOTE 3:
GOING CONCERN
The financial report has been prepared on the basis of accounting policies applicable to a going concern. This basis
presumes that funds will be available to finance future operations and that the realisation of assets and settlement
of liabilities, contingent obligations and commitments will occur in the ordinary course of business.
The Group incurred a loss for the period of $9,325,687 (2021: $3,903,440), net cash outflows from operating
activities of $6,323,007 (2021: $1,097,960) and net cash outflows from investing activities of $113,730,273 (2021:
inflows of $44,407,183). As at 30 June 2022, the Group had a net current asset surplus of $32,092,832 (2021:
$93,298,155), including cash and cash equivalents of $48,219,668 (2021: $96,195,562).
On 26 July 2022, the Company accepted binding commitments for a placement of 137,200,000 new shares at an
issue price of $0.125 to raise a $17.2 million before costs. The proceeds are to provide Abra a funding buffer during
the critical initial commissioning and ramp-up stages of the project. 71,400,000 of the shares issued under the
Placement will fall within the Company’s 15% placement capacity under ASX listing Rule 7.1, where settlement
occurred on 3 August 2022. The remaining 65,800,000 shares to be issued under the placement are subject to
shareholder approval with the general meeting to be held on 13 September 2022.
At the date of this report, the Directors are satisfied there are reasonable grounds to believe that, having regard to
the Group’s position and its available financing options, the Group will be able to meet its obligations as and when
they fall due.
In concluding this, the Directors have considered the Company’s liquidity position, any risks to future projected cash
flows and available funding. The economic outcomes associated with future projected cash flows are based on
certain assumptions made for commodity prices, foreign exchange rates, commissioning and ramp-up of
production, recovered grades, timing of concentrate sales and costs. Changes in such assumptions may have a
material impact on the economic outcomes, including the timing and quantum of estimated revenues and cash
flows.
The impact of the COVID-19 pandemic is ongoing and while it has not significantly impacted the Group up to 30
June 2022, it is not practicable to estimate the potential impact, positive or negative, after the reporting date. Several
measures have been implemented to protect employees and contractors working on the Project, in line with
recommended Government guidelines and procedures. Changes in Government guidelines and / or general
business operability because of the ongoing COVID-19 pandemic have the potential to impact Abra and the
Company. Such impacts could include (but are not limited to) delays to Project development initiatives and / or the
incurring of extra costs.
Galena Mining Limited | Annual Report 2022 32
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2022
GROUP STRUCTURE
This section provides information on the Group’s structure as well as related party transactions.
NOTE 4:
GROUP INFORMATION
Interest in controlled entities
The consolidated financial statements incorporate the assets, liabilities and the results of the following subsidiaries:
Name
Incorporation
Class of share
30 June 2022
30 June 2021
Country of
Equity holding
Abra Mining Pty Ltd
Australia
GML Marketing Pty Ltd Australia (i)
(i)
This entity currently has no activity.
Ordinary
Ordinary
Parent entity information
60%
100%
60%
100%
The accounting policies of the parent entity, which have been applied in determining the financial information shown
below, are the same as those applied in the consolidated financial statements.
Statement of Financial Position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Statement of Profit or Loss and other Comprehensive Income
Loss for the year
Other comprehensive income
Total comprehensive income
There are no material guarantees or capital commitments to be disclosed.
2022
$
2021
$
3,590,548
34,708,781
38,299,329
503,371
680,837
1,184,208
37,115,121
10,447,952
29,098,320
39,546,272
355,549
-
355,549
39,190,723
48,287,278
1,905,921
48,006,327
1,657,270
(13,078,078)
(10,472,874)
37,115,121
39,190,723
2022
$
(3,120,864)
-
2021
$
(3,026,735)
-
(3,120,864)
(3,026,735)
Galena Mining Limited | Annual Report 2022 33
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2022
NOTE 4:
GROUP INFORMATION (continued)
Proportion of equity interest held by non-controlling entity
Name
Country of
Incorporation
Non-controlling interest
30 June 2022
30 June 2021
Abra Mining Pty Ltd
Australia
40%
40%
On 12 April 2019, the Company completed a transaction with Toho to invest $90,000,000 in various tranches for a
40% joint-venture investment in AMPL. During FY2021, AMPL received the final tranche payment of $60,000,000
from Toho and an additional $7,200,000 which included funding for the 2020 Abra Drilling Program and issued new
shares to Galena and Toho’s wholly-owned subsidiary, CBHWA, such that AMPL is currently owned 60% by Galena
and 40% by CBHWA. During FY2022, AMPL received an additional $2,000,000 of funding from CBHWA. The
transactions have been accounted for as an equity transaction with a non-controlling interest in accordance with
AASB 10 Consolidated Financial Statements which specifies accounting for non-controlling interests, resulting in
the following:
Proceeds from the issue of new shares in AMPL to CBHWA
2,000,000
67,200,000
Net assets attributable to non-controlling interest
Increase in equity attributable to parent (i)
(i) Represented by an increase in the consolidation reserve.
AMPL’s Summarised Statement of Financial Position
-
-
(40,544,234)
26,655,766
2022
$
2021
$
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Total equity
Attributable to:
Equity holders of parent
Non-controlling interest
2022
$
42,687,416
205,363,815
2021
$
81,069,297
68,754,159
(18,697,572)
(2,869,625)
(117,757,990)
(34,143,605)
111,595,669
112,810,226
66,957,401
44,638,268
67,686,136
45,124,090
AMPL’s Summarised Statement of Profit or Loss and Other Comprehensive Income
Revenue
Expenses
Loss for the year
Other comprehensive income
Total comprehensive income
Attributable to non-controlling interest
Dividends paid to non-controlling interest
2022
$
142,640
(6,357,197)
(6,214,557)
-
(6,214,557)
(2,485,823)
-
2021
$
419,277
(1,302,060)
(882,783)
-
(882,783)
(353,113)
-
Galena Mining Limited | Annual Report 2022 34
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2022
NOTE 5:
TRANSACTIONS WITH RELATED PARTIES
Key Management Personnel
The totals of remuneration paid or due to be paid to the KMP of the Company during the year are as follows:
Short-term employment benefits
Post-employment benefits
Termination benefits
Share-based payments
Total Remuneration paid or due to be paid
2022
$
1,411,507
65,290
205,680
994,262
2,676,739
2021
$
1,486,467
58,002
-
953,664
2,498,133
Transactions between related parties are on commercial terms and conditions, no more favourable than those
available to other parties unless otherwise stated.
RESULTS FOR THE YEAR
This section provides additional information that is most relevance in explaining the Group’s performance during
the year.
NOTE 6:
SEGMENT INFORMATION
The Group has identified its operating segments based on the internal reports that are reviewed and used by the
board of directors (chief operating decision makers) in assessing performance and determining the allocation of
resources.
The Group is managed primarily on the basis of one geographical segment being Australia, and has the following
operating segments:
Segment Name
Description
Abra Mine
Exploration
The Abra Mine segment is a globally significant lead-silver project currently in
development and located in the Gascoyne region of Western Australia.
The Exploration segment which undertakes exploration and evaluation
activities in Western Australia.
Other Activities
The Other Activities segment which includes all corporate expenses that
cannot be directly attributed to the Group’s operating segments.
The accounting policies used by the Group in reporting segments internally are the same as those contained in the
financial statements and in the prior period.
Galena Mining Limited | Annual Report 2022 35
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2022
NOTE 6:
SEGMENT INFORMATION (continued)
Segment Results
Year ended 30 June 2022
Abra Mine
$
Exploration
$
Interest received
Other income
Revenue
Corporate and administration expenses
142,640
-
142,640
(54,759)
Depreciation and amortisation
(1,699,118)
Employee costs
Share-based payments
Exploration and evaluation expenditure
-
-
-
Foreign exchange loss
(4,551,968)
Loss before finance costs and income tax
(6,163,205)
Finance costs
Loss before income tax
Income tax expense
Net loss for the year
(51,352)
(6,214,557)
-
(6,214,557)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Other
Activities
$
Consolidated
$
52,134
194,774
-
-
52,134
194,774
(609,413)
(664,172)
(181,502)
(1,880,620)
(1,362,614)
(1,362,614)
(994,262)
(994,262)
-
-
(1,595)
(4,553,563)
(3,097,252)
(9,260,457)
(13,878)
(65,230)
(3,111,130)
(9,325,687)
-
-
(3,111,130)
(9,325,687)
Segment assets
245,843,527
8,788,294
9,612,673
264,244,494
Segment liabilities
136,414,123
-
1,161,410
137,575,533
Other segment information
Capital expenditure (i)
(127,053,232)
(2,139,505)
(238,075)
(129,430,812)
(i) Capital expenditure consists of additions to plant and equipment, mine under construction, lease assets and exploration
and evaluation assets.
Galena Mining Limited | Annual Report 2022 36
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2022
NOTE 6:
SEGMENT INFORMATION (continued)
Segment Results
Year ended 30 June 2021
Abra Mine
$
Exploration
$
Interest received
Other income
Revenue
Corporate and administration expenses
Depreciation and amortisation
Employee costs
Share-based payments
Exploration and evaluation expenditure
Foreign exchange loss
Loss before finance costs and income tax
Finance costs
52,948
366,329
419,277
(309,637)
(187,116)
-
-
-
(629,587)
(707,063)
(175,720)
Other
Activities
$
79,258
17,500
96,758
Consolidated
$
132,206
383,829
516,035
(584,381)
(894,018)
(60,833)
(247,949)
(1,311,295)
(1,311,295)
(1,079,083)
(1,079,083)
-
-
-
-
-
-
-
(62,056)
-
(62,056)
-
(17,654)
(647,241)
(62,056)
(2,956,488)
(3,725,607)
-
(2,113)
(177,833)
Loss before income tax
(882,783)
(62,056)
(2,958,601)
(3,903,440)
Income tax expense
Net loss for the year
-
-
-
-
(882,783)
(62,056)
(2,958,601)
(3,903,440)
Segment assets
125,437,476
29,407,830
15,472,860
170,318,166
Segment liabilities
37,013,230
-
355,550
37,368,780
Other segment information
Capital expenditure (i)
(15,062,182)
(8,232,028)
-
(23,294,210)
(i) Capital expenditure consists of additions to plant and equipment, mine under construction, lease assets and exploration
and evaluation assets.
NOTE 7:
REVENUE
Interest received
Other income
Total Revenue
Recognition and Measurement
Interest Revenue
2022
$
194,774
-
194,774
2021
$
132,206
383,829
516,035
Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial
assets. All revenue is stated net of the amount of goods and services tax (“GST”).
Galena Mining Limited | Annual Report 2022 37
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2022
NOTE 8:
INCOME TAX EXPENSE
a. Recognised in the income statement:
Current tax
Deferred tax
Income tax as reported in the statement of comprehensive income
b. Reconciliation of income tax expense to prima facie tax
payable:
Loss from ordinary activities before income tax expense
Prima facie tax benefit on loss from ordinary activities before
income tax at 30% (2021: 30%)
Increase in income tax due to:
- Non-assessable income
- Non-deductible expenses
-
Impact of change in corporate tax rate
- Changes in unrecognised temporary differences
- Unused tax losses not recognised
2022
$
-
-
-
2021
$
-
-
-
(9,325,687)
(3,903,440)
(2,797,706)
(1,171,032)
-
303,294
-
(1,269,305)
3,763,717
(109,899)
326,191
(1,136,803)
(1,300,314)
3,391,857
Income tax attributable to operating loss
-
-
The following deferred tax balances have not been recognised:
c. Deferred tax assets not recognised at 30% (2021: 30%)
Carry forward revenue and capital losses
28,114,873
22,920,777
Accruals
Capital raising costs
Unrealised foreign exchange loss
Other
Net deferred tax asset
120,604
304,125
-
4,469
113,058
310,253
125,129
713
28,544,071
23,469,930
The carry forward revenue losses are only available for offset subject to Galena Mining Limited and Abra Mining
Pty Ltd satisfying the carried-forward loss tests for deductibility such as the Continuity of Ownership Test and the
Similar Business Test.
d. Deferred tax liabilities not recognised at 30% (2021: 30%)
Exploration expenditure
Plant and equipment
Other
Net deferred tax liability
2,550,759
7,904,374
1,683,977
1,892,678
6,827,712
-
12,139,110
8,720,390
Potential deferred tax assets and liabilities attributable to tax losses and other temporary differences have not been
brought to account at 30 June 2022 because the directors do not believe it is appropriate to regard realisation of
the deferred tax assets as probable at this point in time. These benefits will only be obtained if:
•
•
the Company derives future assessable income of a nature and of an amount sufficient to enable the
benefit from the deductions for the expenditure to be realised; and
no changes in tax legislation adversely affect the Company in realising the benefit from the deductions for
the expenditure.
Galena Mining Limited | Annual Report 2022 38
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2022
NOTE 8:
INCOME TAX EXPENSE (continued)
Change in Corporate Tax Rate
As a result of the non-controlling ownership of Abra Mining Pty Ltd, Galena Mining Ltd and its subsidiaries should
not be considered a 'base rate entity' for income tax purposes and therefore not entitled to the reduced corporate
tax rate. The impact of this change in the corporate tax rate has been reflected in the unrecognised deferred tax
positions and the prima face income tax reconciliation.
Tax Consolidation
Galena Mining and its wholly owned Australian subsidiaries were part of an income tax consolidated group for the
entire financial year.
Recognition and Measurement
Current Income tax
The income tax expense (income) for the period comprises current income tax expense (income) and deferred tax
expense (income).
Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated using
applicable income tax rates enacted, or substantially enacted, as at reporting date. Current tax liabilities (assets)
are therefore measured at the amounts expected to be paid to (recovered from) the relevant taxation authority.
Deferred tax
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during
the period as well unused tax losses.
Current and deferred income tax expense (income) is charged or credited directly to equity instead of the profit or
loss when the tax relates to items that are credited or charged directly to equity.
Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases
of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets also result where
amounts have been fully expensed but future tax deductions are available. No deferred income tax will be
recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no
effect on accounting or taxable profit or loss.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that
it is probable that future taxable profit will be available against which the benefits of the deferred tax asset can be
utilised.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the
asset is realised or the liability is settled, based on tax rates enacted or substantively enacted at reporting date.
Their measurement also reflects the manner in which management expects to recover or settle the carrying amount
of the related asset or liability.
Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint
ventures, deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary
difference can be controlled and it is not probable that the reversal will occur in the foreseeable future.
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that
net settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred
tax assets and liabilities are offset where a legally enforceable right of set-off exists, the deferred tax assets and
liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different
taxable entities where it is intended that net settlement or simultaneous realisation and settlement of the respective
asset and liability will occur in future periods in which significant amounts of deferred tax assets or liabilities are
expected to be recovered or settled.
Galena Mining Limited | Annual Report 2022 39
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2022
NOTE 9:
EARNINGS PER SHARE
2022
2021
Cents per share
Cents per share
Basic and diluted loss per share
(1.96)
(0.85)
The loss and weighted average number of ordinary shares used in this
calculation of basic and diluted loss per share are as follows:
Loss
$
$
(9,325,687)
(3,903,440)
Number
Number
Weighted average number of ordinary shares for the purposes of basic
and diluted loss per share
476,354,394
459,723,161
As the Company is in a loss position the options outstanding at 30 June 2022 have no dilutive effects on the earnings
per share calculation.
Recognition and Measurement
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Galena Mining Limited,
excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary
shares, outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the
financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into
account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary
shares and the weighted average number of shares assumed to have been issued for no consideration in relation to
dilutive potential ordinary shares.
Galena Mining Limited | Annual Report 2022 40
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2022
INVESTED CAPITAL
This section provides additional information about how the Group invests and manages its capital.
NOTE 10:
EXPLORATION AND EVALUATION EXPENDITURE
Exploration expenditure capitalised
Exploration and evaluation asset acquisition
Exploration and evaluation costs incurred
A reconciliation of the carrying amount of exploration and evaluation
expenditure is set out below:
Carrying amount at the beginning of the year
Costs capitalised during the year
Transferred to mine properties
Carrying amount at the end of the year
Recognition and Measurement
2022
$
2021
$
3,674,086
5,114,208
8,788,294
3,674,086
2,974,703
6,648,789
6,648,789
2,139,505
21,175,802
8,232,028
-
(22,759,041)
8,788,294
6,648,789
Exploration and evaluation expenditure incurred is accumulated in respect of each identifiable area of interest.
These costs are only carried forward to the extent that they are expected to be recouped through the successful
development of the area or where activities in the area have not yet reached a stage that permits reasonable
assessment of the existence of economically recoverable reserves.
Accumulated costs in relation to an abandoned area are written off in full against profit in the period in which the
decision to abandon the area is made.
A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry
forward costs in relation to that area of interest.
Significant Judgements, Estimates and Assumptions
Exploration and evaluation expenditure has been capitalised on the basis that the consolidated entity will
commence commercial production in the future, from which time the costs will be amortised in proportion to the
depletion of the mineral resources.
Key judgements are applied in considering costs to be capitalised which includes determining expenditures directly
related to these activities and allocating overheads between those that are expensed and capitalised. In addition,
costs are only capitalised that are expected to be recovered either through successful development or sale of the
relevant mining interest. Factors that could impact the future commercial production at the mine include the level
of reserves and resources, future technology changes, which could impact the cost of mining, future legal changes
and changes in commodity prices. To the extent that capitalised costs are determined not to be recoverable in the
future, they will be written off in the period in which this determination is made.
Galena Mining Limited | Annual Report 2022 41
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2022
NOTE 11:
PLANT AND EQUIPMENT
Reconciliation of the carrying amounts for each class of plant and equipment is set out below.
2022
Rehabilitation
Asset
Plant and
Equipment
Mine Under
Construction
$
$
$
Total
$
Opening net carrying amount
1,622,978
117,972
63,560,746
65,301,696
Additions
Transfer from mine under
construction
Depreciation and amortisation
Change in rehabilitation
provision
238,074
134,948,121
135,186,195
25,409,809
(25,409,809)
-
(1,462,150)
2,240,378
-
-
-
(1,462,150)
2,240,378
Closing net carrying amount
3,863,356
24,303,705
173,099,058
201,266,119
At 30 June 2022
At cost
3,863,356
25,765,855
173,099,058
202,728,269
Accumulated depreciation
-
(1,462,150)
-
(1,462,150)
3,863,356
24,303,705
173,099,058
201,266,119
2021
Opening net carrying amount
Additions
Transfer from exploration
Depreciation and amortisation
Change in rehabilitation
provision
Disposals
Rehabilitation
Asset
Plant and
Equipment
Mine Under
Construction
$
$
Total
$
22,079
26,362,247
26,384,326
121,331
14,439,458
14,560,789
-
22,759,041
22,759,041
(25,438)
-
-
-
(25,438)
1,622,978
-
1,622,978
-
-
-
-
-
-
$
-
-
-
-
Closing net carrying amount
1,622,978
117,972
63,560,746
65,301,696
At 30 June 2021
At cost
1,622,978
167,219
63,560,746
65,350,943
Accumulated depreciation
-
(49,247)
-
(49,247)
1,622,978
117,972
63,560,746
65,301,696
Recognition and Measurement
Plant and Equipment
Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost
includes expenditure that is directly attributable to the acquisition of the items.
Depreciation is calculated on a units of production basis or straight-line to write off the net cost of each item of plant
and equipment over their expected useful lives. The residual values, useful lives and depreciation methods are
reviewed, and adjusted if appropriate, at each reporting date.
Galena Mining Limited | Annual Report 2022 42
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2022
NOTE 11:
PLANT AND EQUIPMENT (continued)
An item of plant and equipment is derecognised upon disposal or when there is no future economic benefit to the
Group. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss. Any
revaluation surplus reserve relating to the item disposed of is transferred directly to retained profits.
Mine Under Construction
Mine under construction includes expenditures incurred to develop new ore bodies to define further mineralisation
in existing ore bodies, to expand the capacity of a mine and to maintain production. Mine under construction also
includes costs transferred from exploration and evaluation phase once a final investment decision is made and
construction commences in the area of interest.
All expenditure on the construction, installation or completion of infrastructure facilities is capitalised in mine under
construction. After production starts, all assets included in mine under construction are then transferred to mine
properties. When a mine construction project moves into the production phase, the capitalisation of certain mine
construction costs ceases, and costs are either regarded as part of the cost of inventory or expensed, except for
costs which qualify for capitalisation relating to mining asset additions, improvements or new developments,
underground mine development or mineable reserve development. Restoration costs expected to be incurred are
provided for as part of development activities that give rise to the need for restoration.
Useful lives
The useful lives of assets are estimated as follows:
Category
Buildings
Plant and Equipment
Depreciation Method
20 years
2 to 15 years
Mine Under Construction
No depreciation
Mine Properties
Units of production over the life of mine
Right of Use Assets (note 18)
Straight line over the shorter of the lease term and life of the asset
Significant Judgements, Estimates and Assumptions
Estimation of useful lives of assets
The consolidated entity determines the estimated useful lives and related depreciation and amortisation charges
for its property, plant and equipment and finite life intangible assets. The useful lives could change significantly as
a result of technical innovations or some other event. The depreciation and amortisation charge will increase where
the useful lives are less than previously estimated lives, or technically obsolete or non-strategic assets that have
been abandoned or sold will be written off or written down.
Impairment of Property, Plant and Equipment and Mine Under Construction
The consolidated entity assesses impairment of non-financial assets at each reporting date by evaluating conditions
specific to the consolidated entity and to the particular asset that may lead to impairment. If an impairment trigger
exists, the recoverable amount of the asset is determined. This involves fair value less costs of disposal or value-
in-use calculations, which incorporate a number of key estimates and assumptions.
It is reasonably possible that the underlying metal price assumption may change which may then impact the
estimated life of mine determinant and may then require a material adjustment to the carrying value of mining plant
and equipment, mining infrastructure and mining development assets. Furthermore, the expected future cash flows
used to determine the value-in-use of these assets are inherently uncertain and could materially change over time.
They are significantly affected by a number of factors including reserves and production estimates, together with
economic factors such as metal spot prices, discount rates, estimates of costs to produce reserves and future
capital expenditure.
Galena Mining Limited | Annual Report 2022 43
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2022
NOTE 12:
CAPITAL AND OTHER COMMITMENTS
Commitments – leases not yet commenced
The Group has various lease contracts that have not yet commenced as at 30 June 2022. The future lease
payments for these non-cancellable lease contracts are A$5,171,082 within one year (2021: nil), A$24,865,424 in
one to five years (2021: nil), and A$3,234,354 above five years (2021: nil).
Expenditure commitments
Within one year
Between 1 and 5 years
Above 5 years
CAPITAL AND DEBT STRUCTURE
2022
$
51,273,301
14,910,868
42,898,719
2021
$
405,384
657,517
-
109,082,888
1,062,901
This section provides additional information about the Group’s business and management policies that the directors
consider is most relevant in understanding the business and management of the Group’s capital and debt structure.
NOTE 13:
CAPITAL MANAGEMENT
For the purpose of the Group’s capital management, capital includes issued capital and all other equity reserves
attributable to the equity holders of the parent. The primary objective of the Group’s capital management is to
ensure that it maintains a strong balance sheet and healthy capital ratios in order to support its business and
maximise shareholder value.
In order to achieve this overall objective, the Group’s capital management, amongst other things, aims to ensure
that it meets financial covenants attached to its interest-bearing loans and borrowings that form part of its capital
structure requirements. Breaches in the financial covenants without a waiver could permit the lender to immediately
call interest-bearing loans and borrowings. There have been no breaches in the financial covenants of any interest-
bearing loans and borrowings in the current or prior period.
The Group monitors capital using a gearing ratio, which is net debt divided by the aggregate of equity and net debt.
The Group includes in its net debt, interest-bearing loans and borrowings, lease liabilities, trade and other payables,
less cash and cash equivalents.
Interest-bearing loans and borrowings
Lease liabilities
Trade and other payables
Less cash and cash equivalents
Net debt
Equity
Capital and net debt
Gearing ratio
2022
$
2021
$
113,401,922
31,852,545
1,986,373
17,780,287
1,392,925
2,227,960
(48,219,668)
(96,195,562)
84,948,914
(60,722,132)
126,668,961
132,949,386
211,617,875
72,227,254
40%
N/A
Galena Mining Limited | Annual Report 2022 44
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2022
NOTE 14:
INTEREST BEARING LOANS AND BORROWINGS
Maturity
2022
$
2021
$
Non-Current
Secured US$110 million Taurus Debt Facilities (i)
June 2027
113,401,922
31,852,545
(i) Balance includes a foreign exchange loss of $4,550,894 at 30 June 2022 (2021: $602,433).
Secured US$110 million Taurus Debt Facilities
In November 2020, the Company put in place US$110 million in finalised debt facilities arranged by Taurus Funds
Management. The facilities include a US$100 million project finance facility (“Facility A”) plus a US$10 million cost
overrun or working capital facility (“Facility B”). As at 30 June 2022, a total of US$85 million has been drawn under
the Taurus Debt Facilities and US$25 million remains undrawn.
Facility A consists of a US$100 million, 69-month term loan primarily to fund capital expenditures for the
development of the Abra mine. Key terms include:
Fixed interest of 8.0% per annum on drawn amounts, payable quarterly in arrears.
•
• Arrangement fee of 2.5% and commitment fee of 2.0% on undrawn amounts.
•
• No mandatory hedging.
• Early repayment allowed without penalty.
1.125% net smelter return royalty.
Facility B consists of a US$10 million loan to finance identified cost overruns on the Project in capital expenditure
and working capital. Fixed interest of 10.0% per annum will apply to amounts drawn under Facility B. The Taurus
Debt Facilities are secured against Abra Project assets and over the shares that each of Galena and Toho own in
AMPL, and additional drawdowns remain subject to satisfaction of customary conditions precedent.
Recognition and Measurement
Interest bearing loans and borrowings are recognised initially at fair value, net of directly attributable transaction
costs incurred. Interest bearing loans and borrowings are subsequently stated at amortised cost and any difference
between the proceeds, net of transactions costs, and the redemption value is recognised in profit or loss over the
period of the borrowings using the effective interest method.
Interest bearing loans and borrowings are derecognised when the obligation specified in the contract is discharged,
cancelled or has expired. The difference between the carrying amount of the financial liability and the consideration
paid, including any non-cash assets, is recognised in profit or loss as finance costs.
Finance costs attributable to qualifying assets are capitalised as part of the asset and amortised over the life of the
loan. All other finance costs are expensed in the period in which they are incurred.
NOTE 15:
ISSUED CAPITAL
Movement in ordinary shares
Balance at beginning of period
Shares issued on 16 July 2020
2022
No.
2022
$
2021
No.
2021
$
476,105,353
48,006,327 403,205,353
34,854,887
-
-
57,150,000
12,001,500
Shares issued under share-based payments (ii)
300,000
280,951
15,750,000
1,830,000
Share issue costs
-
-
-
(680,060)
Balance at reporting date
476,405,343
48,287,278 476,105,353
48,006,327
(ii) The value recorded in issued capital on conversion of shares under share-based payments represents the original fair value
of the award in the share-based payment reserve that is transferred from the share-based payment reserve to issued capital
on exercise, as well as any consideration received on exercise.
Galena Mining Limited | Annual Report 2022 45
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2022
NOTE 15:
ISSUED CAPITAL (continued)
Recognition and Measurement
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.
Terms and conditions of issued capital
Ordinary shares participate in dividends and the proceeds on winding up of the Company in proportion to the
number of shares held. The fully paid ordinary shares have no par value.
At the shareholders’ meetings each ordinary share is entitled to one vote when a poll is called, otherwise each
shareholder has one vote on a show of hands.
Capital risk management
The Group objectives when managing capital are to safeguard its ability to continue as a going concern, so that it
may continue to provide returns for shareholders and benefits for other stakeholders.
The Group’s capital includes ordinary share capital and financial liabilities, supported by financial assets.
Due to the nature of the Group’s activities, being mine development and mineral exploration, it does not have ready
access to credit facilities, with the primary source of funding being equity raisings. Accordingly, the objective of the
Group’s capital risk management is to balance the current working capital position against the requirements of the
Group to meet mine development expenditure, exploration programmes and corporate overheads. This is achieved
by maintaining appropriate liquidity to meet anticipated operating requirements, with a view to initiating appropriate
capital raisings as required. The Group is not exposed to externally imposed capital requirements.
Cash and cash equivalents
Trade and other receivables
Trade and other payables
Working capital position
2022
$
2021
$
48,219,668
96,195,562
1,469,987
104,095
(17,780,287)
(2,227,960)
31,909,368
94,071,697
NOTE 16:
SHARE-BASED PAYMENT RESERVE
The share-based payment reserve records items recognised as expenses on valuation of employees’ and
consultants’ options.
Opening balance 1 July
Share-based payments vesting expense
Share-based payments issued
Closing balance 30 June
Refer to Note 23 for valuation technique and assumptions.
2022
$
1,657,270
994,262
(745,610)
2021
$
1,248,187
1,079,083
(670,000)
1,905,922
1,657,270
Galena Mining Limited | Annual Report 2022 46
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2022
NOTE 17:
FINANCIAL RISK MANAGEMENT
The Company’s financial instruments consist mainly of deposits with banks, accounts receivable and accounts
payable.
The Board of Directors has overall responsibility for the oversight and management of the Company’s exposure to
a variety of financial risks (including market risk, credit risk and liquidity risk).
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 Company’s income or the value of its holdings of financial instruments.
Interest Rate Risk
The Company manages interest rate risk by monitoring immediate and forecast cash requirements and ensuring
adequate cash reserves are maintained.
The following table illustrates sensitivities to the Consolidated Entity’s exposures to changes in interest rates and
equity prices. These sensitivities assume that the movement in a particular variable is independent of other
variables.
Year ended 30 June 2022
+/- 1% interest rate
Year ended 30 June 2021
+/- 1% interest rate
Fair value of financial instruments
Profit
$
Equity
$
+/- 482,197
+/- 482,197
+/- 961,956
+/- 961,956
Unless otherwise stated, the carrying amount of financial instruments reflects their fair value.
Credit risk
The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date to
recognised financial assets, is the carrying amount, net of any provisions for impairment of those assets, as
disclosed in the Statement of Financial Position and notes to the financial statements.
The Company has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient
collateral where appropriate, as a means of mitigating the risk of financial loss from defaults. The Company’s
exposure and the credit ratings of its counterparties are continuously monitored and the aggregate value of
transactions is spread amongst approved counterparties.
The Company does not have any collateral. Credit risk related to balances with banks and other financial institutions
is managed by the board. The board’s policy requires that surplus funds are only invested with counterparties with
a Standard & Poor’s rating of at least AA-. All the Company’s surplus funds are invested with AA Rated financial
institutions.
The Company does not have any material credit risk exposure to any single receivable or group of receivables
under financial instruments entered into by the Company.
Galena Mining Limited | Annual Report 2022 47
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2022
NOTE 17:
FINANCIAL RISK MANAGEMENT (continued)
Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The
Company’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 Company’s reputation.
The responsibility of liquidity risk management rests with the Board of Directors. The Company manages liquidity
risk by monitoring forecast cash flows and ensuring that adequate working capital is maintained. The Company’s
policy is to ensure that it has sufficient cash reserves to carry out its planned activities over the next 12 months.
The table below reflects an undiscounted contractual maturity analysis for financial liabilities and receivables.
Financial liability and financial asset maturity analysis
Weighted
Average
Interest Rate
1 year or less
$
Between
1 & 2 years
$
Between 2 &
5 years
$
Total
$
2022
Non-Derivatives
Financial Assets
Cash and cash equivalents
0.27%
Trade and other receivables
Financial Liabilities
Trade and other payables
Lease liabilities
Loans and borrowings
Net Financial Assets
-
-
4.80%
8.26%
48,219,668
1,469,987
(17,780,287)
-
-
-
-
-
48,219,668
1,469,987
-
(17,780,287)
(812,824)
(365,045)
(811,504)
(1,986,373)
-
(25,536,928)
(87,864,994)
(113,401,922)
31,096,544
(25,901,973)
(88,676,498)
(83,481,927)
Weighted
Average
Interest Rate
1 year or less
$
Between
1 & 2 years
$
Between 2 &
5 years
$
Total
$
2021
Non-Derivatives
Financial Assets
Cash and cash equivalents
0.61%
Trade and other receivables
Financial Liabilities
Trade and other payables
Lease liabilities
Loans and borrowings
Net Financial Assets
-
-
8.58%
8.00%
96,195,562
104,095
(2,227,960)
-
-
-
-
-
96,195,562
104,095
-
(2,227,960)
(769,745)
(545,525)
(77,655)
(1,392,925)
-
-
(31,852,545)
(31,852,545)
93,301,952
(545,525)
(31,930,200)
60,826,227
Galena Mining Limited | Annual Report 2022 48
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2022
NOTE 17:
FINANCIAL RISK MANAGEMENT (continued)
Recognition and Measurement
Financial Instruments
Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual provisions
to the instrument. For financial assets, this is equivalent to the date that the company commits itself to either the
purchase or sale of the asset.
Financial instruments are initially measured at fair value plus transactions costs except where the instrument is
classified ‘at fair value through profit or loss in which case transaction costs are expensed to profit or loss
immediately.
Classification and Subsequent Measurement
Financial instruments are subsequently measured at fair value, amortised cost using the effective interest
method, or cost.
Amortised cost is calculated as the amount at which the financial asset or financial liability is measured at initial
recognition less principal repayments and any reduction for impairment, and adjusted for any cumulative
amortization of the difference between that initial amount and the maturity amount calculated using the effective
interest method.
Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are
applied to determine the fair value for all unlisted securities, including recent arm’s length transactions,
reference to similar instruments and option pricing models.
The effective interest method is used to allocate interest income or interest expense over the relevant period
and is equivalent to the rate that discounts estimated future cash payments or receipts (including fees,
transaction costs and other premiums or discounts) over the expected life (or when this cannot be reliably
predicted, the contractual term) of the financial instruments to the net carrying amount of the financial asset or
financial liability. Revisions to expected future net cash flows will necessitate an ad justment to the carrying
amount with a consequential recognition of an income or expense item in profit or loss.
The Company does not designate any interests in subsidiaries, associates or joint venture entities as being
subject to the requirements of accounting standards specifically applicable to financial instruments.
(i)
Financial assets at fair value through profit or loss
Financial assets are classified at “fair value through profit or loss” when they are held for trading for the purpose of
short-term profit taking, derivatives not held for hedging purposes, or when they are designated as such to avoid
an accounting mismatch or to enable performance evaluation where a group of financial assets is managed by key
management personnel on a fair value basis in accordance with a documented risk management or investment
strategy. Such assets are subsequently measured at fair value with changes in carrying amount being included in
profit or loss.
(ii)
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted
in an active market and are subsequently measured at amortised cost.
Loans and receivables are included in current assets, where they are expected to mature within 12 months after
the end of the reporting period.
(iii)
Financial Liabilities
Non-derivative financial liabilities other than financial guarantees are subsequently measured at amortised cost.
Gains or losses are recognised in profit or loss through the amortisation process and when the financial liability is
derecognised.
Galena Mining Limited | Annual Report 2022 49
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2022
NOTE 18:
LEASES
The Group has lease contracts for site communication equipment, fuel storage equipment and for its corporate
office. The communication equipment has a three-year lease term and both the corporate office and fuel storage
equipment leases have a five-year lease term. The Group’s obligations under its leases are secured by the lessor’s
title to the leased assets.
Set out below are the carrying amounts of right-of-use assets recognised and the movements during the period:
Right-Of Use Assets
Communication Equipment
Balance at beginning of period
Additions
Depreciation expense
Balance at reporting date
Corporate Office
Balance at beginning of period
Additions
Depreciation expense
Balance at reporting date
Fuel Storage Equipment
Balance at beginning of period
Additions
Depreciation expense
Balance at reporting date
Total Right-Of-Use Assets
2022
$
2021
$
1,807,262
-
(197,414)
1,609,848
37,091
944,084
(147,234)
833,941
-
590,576
(73,822)
516,754
1,472,743
501,393
(166,874)
1,807,262
92,727
-
(55,636)
37,091
-
-
-
-
2,960,543
1,844,353
Set out below are the carrying amounts of lease liabilities and the movements during the period:
Lease Liabilities
Balance at beginning of period
Additions
Accretion of interest
Payments
Balance at reporting date
Current
Non-current
Depreciation expense for right-of use assets
Interest expense on lease liabilities
Total amount recognised in profit or loss
2022
$
1,392,925
1,534,658
110,134
(1,051,344)
1,986,373
812,824
1,173,549
418,470
110,134
528,604
2021
$
1,522,618
536,458
132,931
(799,082)
1,392,925
769,745
623,180
222,510
132,931
355,441
Galena Mining Limited | Annual Report 2022 50
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2022
NOTE 18:
LEASES (continued)
Recognition and Measurement
Right-of-Use Assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at
cost, which comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made
at or before the commencement date net of any lease incentives received, any initial direct costs incurred, and,
except where included in the cost of inventories, an estimate of costs expected to be incurred for dismantling and
removing the underlying asset, and restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated
useful life of the asset, whichever is the shorter. Where the Group expects to obtain ownership of the leased asset
at the end of the lease term, the depreciation is over its estimated useful life. Right-of use assets are subject to
impairment or adjusted for any remeasurement of lease liabilities.
The Group has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases
with terms of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to
profit or loss as incurred.
Lease Liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the
present value of the lease payments to be made over the term of the lease, discounted using the interest rate
implicit in the lease or, if that rate cannot be readily determined, the Group's incremental borrowing rate. Lease
payments comprise of fixed payments less any lease incentives receivable, variable lease payments that depend
on an index or a rate, amounts expected to be paid under residual value guarantees, exercise price of a purchase
option when the exercise of the option is reasonably certain to occur, and any anticipated termination penalties.
The variable lease payments that do not depend on an index or a rate are expensed in the period in which they are
incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are
remeasured if there is a change in the following: future lease payments arising from a change in an index or a rate
used; residual guarantee; lease term; certainty of a purchase option and termination penalties. When a lease liability
is remeasured, an adjustment is made to the corresponding right-of use asset, or to profit or loss if the carrying
amount of the right-of-use asset is fully written down.
Significant Judgements, Estimates and Assumptions
Lease term
The lease term is a significant component in the measurement of both the right-of-use asset and lease liability.
Judgement is exercised in determining whether there is reasonable certainty that an option to extend the lease or
purchase the underlying asset will be exercised, or an option to terminate the lease will not be exercised, when
ascertaining the periods to be included in the lease term. In determining the lease term, all facts and circumstances
that create an economical incentive to exercise an extension option, or not to exercise a termination option, are
considered at the lease commencement date. Factors considered may include the importance of the asset to the
consolidated entity's operations; comparison of terms and conditions to prevailing market rates; incurrence of
significant penalties; existence of significant leasehold improvements; and the costs and disruption to replace the
asset. The consolidated entity reassesses whether it is reasonably certain to exercise an extension option, or not
exercise a termination option, if there is a significant event or significant change in circumstances.
Incremental borrowing rate
Where the interest rate implicit in a lease cannot be readily determined, an incremental borrowing rate is estimated
to discount future lease payments to measure the present value of the lease liability at the lease commencement
date. Such a rate is based on what the consolidated entity estimates it would have to pay a third party to borrow
the funds necessary to obtain an asset of a similar value to the right-of-use asset, with similar terms, security and
economic environment.
Galena Mining Limited | Annual Report 2022 51
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2022
WORKING CAPITAL
This section provides additional information that the directors consider most relevant in understanding the
composition and management of the Group’s working capital.
NOTE 19:
CASH AND CASH EQUIVALENTS
Cash at bank
Term deposits at call
Total Cash and Cash Equivalents
2022
$
2021
$
48,194,668
96,170,562
25,000
25,000
48,219,668
96,195,562
Reconciliation to cash and cash equivalents at the end of the financial year
The above figure is reconciled to cash and cash equivalents at the end of the financial year as shown in the
statement of cash flows as follows:
Balance as above
Balance as per statement of cash flows
Recognition and Measurement
48,219,668
96,195,562
48,219,668
96,195,562
Cash and cash equivalents include cash on hand, deposits held at call with banks and other short-term highly liquid
investments with original maturities of 3 months or less.
Cash flow information
A reconciliation of cash flow from operating activities is as follows:
Reconciliation of Cash Flow from Operations with Loss after
Income Tax
Loss after income tax
Non-cash flows in loss:
Share-based payments
Depreciation and amortisation
Foreign exchange loss
Other non-cash items
Changes in assets and liabilities:
2022
$
2021
$
(9,325,687)
(3,903,440)
994,262
1,079,083
1,880,620
4,553,563
65,226
247,949
-
44,902
(1,832,016)
(2,531,506)
(Increase)/decrease in trade and other receivables
(Increase)/decrease in prepayments
(1,365,892)
(1,316,213)
345,009
688,846
Increase/(decrease) in interest bearing liabilities
-
(129,692)
Increase/(decrease) in trade payables and accruals
Increase/(decrease) in provisions
Cashflow from operating activities
(2,125,013)
316,127
426,644
102,739
(6,323,007)
(1,097,960)
Galena Mining Limited | Annual Report 2022 52
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2022
NOTE 19:
CASH AND CASH EQUIVALENTS (continued)
Changes in Liabilities arising from Financing Activities
Balance at 1 July 2020
Net cash provided by / (used in) financing activities
Acquisition of leases
Foreign exchange loss
Accretion of interest
Balance at 30 June 2021
Net cash provided by / (used in) financing activities
Acquisition of leases
Foreign exchange loss
Accretion of interest
Balance at 30 June 2022
NOTE 20:
TRADE AND OTHER RECEIVABLES
Current
GST receivable
Other trade receivables
Office lease guarantee
Interest Bearing
Loans and
Borrowings
-
31,250,112
-
602,433
Lease
Liabilities
1,522,618
(799,082)
536,458
-
-
132,931
31,852,545
1,392,925
76,998,483
(1,051,344)
-
1,534,658
4,550,894
-
-
110,134
113,401,922
1,986,373
2022
$
1,369,661
2,469
97,857
2021
$
71,430
2,512
30,153
Total Trade and Other Receivables
1,469,987
104,095
Recognition and Measurement
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the
effective interest method, less any allowance for expected credit losses. Trade receivables are generally due for
settlement within 30 days.
The Group has applied the simplified approach to measuring expected credit losses, which uses a lifetime expected
loss allowance. To measure the expected credit losses, trade receivables have been grouped based on days
overdue. Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
NOTE 21:
TRADE AND OTHER PAYABLES
2022
$
2021
$
Current
Sundry payables and accrued expenses
17,780,287
2,227,960
Recognition and Measurement
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial
year and which are unpaid. Due to their short-term nature they are measured at amortised cost and are not
discounted. The amounts are unsecured and are usually paid within 30 days of recognition.
Galena Mining Limited | Annual Report 2022 53
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2022
OTHER
This section provides additional information about various other disclosures including some disclosures that the
directors of the Group consider to be less significant to the users of the financial statements.
NOTE 22:
PROVISIONS
Current
2022
$
2021
$
Provisions for employee entitlements
543,595
227,468
Non-Current
Provision for mine rehabilitation
The movement in the provision for mine rehabilitation is set out
below:
Balance at beginning of period
Arising during the year
Unwinding of discount
Balance at reporting date
Recognition and Measurement
Provisions
3,863,356
1,667,882
1,667,882
2,240,378
(44,904)
3,863,356
-
1,622,978
44,904
1,667,882
Provisions are recognised when the Company has a legal or constructive obligation, as a result of past events, for
which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured.
Employee Benefits
Provision is made for the company’s liability for employee benefits arising from services rendered by employees to
balance date. Employee benefits that are expected to be settled within a 12 month period have been measured at
the amounts expected to be paid when the liability is settled, plus related on-costs. Employee benefits payable later
than 12 months have been measured at the present value of the estimated future cash outflows to be made for
those benefits.
Mine Rehabilitation
Provisions are made for the estimated cost of rehabilitation, restoration and dismantling relating to areas disturbed
during the mine’s construction up to the reporting date, but not yet rehabilitated. The provision has been made in
full for all the disturbed areas at the reporting date based on current estimates of costs to rehabilitate such areas,
discounted to their present value based on expected future cash flows. Changes in estimates are dealt with on a
prospective basis as they arise.
The provision is recognised as a liability with a corresponding asset included in property, plant and equipment (note
11). The corresponding asset is included only to the extent that it is probable that future economic benefits
associated with the restoration expenditure will flow to the entity, otherwise a corresponding expense is recognised
in the statement of profit and loss.
Galena Mining Limited | Annual Report 2022 54
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2022
NOTE 22:
PROVISIONS (continued)
At each reporting date, the rehabilitation liability is remeasured in line with changes in discount rates, and the
expected timing or amounts of the costs to be incurred. Mine rehabilitation provisions are adjusted for changes in
estimates. Adjustments to the estimates amount and timing of future rehabilitation and restoration cash flows are a
normal occurrence in light of the significant judgements and estimates involved. Changes in the liability relating to
mine rehabilitation are added to or deducted from the related asset, other than the unwinding of discount on
provisions, which is recognised as a finance cost in the statement of profit and loss.
Significant Judgements, Estimates and Assumptions
Employee benefits provision
The liability for employee benefits expected to be settled more than 12 months from the reporting date are
recognised and measured at the present value of the estimated future cash flows to be made in respect of all
employees at the reporting date. In determining the present value of the liability, estimates of attrition rates and pay
increases through promotion and inflation have been taken into account.
Rehabilitation provision
A provision has been made for the present value of anticipated costs for future rehabilitation of land explored or
mined. The consolidated entity's mining and exploration activities are subject to various laws and regulations
governing the protection of the environment. The consolidated entity recognises management's best estimate for
assets retirement obligations and site rehabilitations in the period in which they are incurred. Actual costs incurred
in the future periods could differ materially from the estimates. Additionally, future changes to environmental laws
and regulations, life of mine estimates and discount rates could affect the carrying amount of this provision.
NOTE 23:
SHARE-BASED PAYMENTS
Grant Date / entitlement
Number of
Instruments
Grant Date Fair value per
instrument $
Value $
Share Appreciation Rights
issued on 1 September 2020
exercisable on or before
1 September 2025 (iii)
Total value at 30 June 2021
Performance Rights issued on
2 March 2022 exercisable on
or before 2 March 2027 (ii)
Total value at 30 June 2022
2,500,000
01/09/2020
0.1349
337,144
7,500,000
02/03/2022
0.1751
1,313,600
337,144
1,313,600
The below inputs have been adjusted to ensure they are on a post-split basis.
(i) 2,500,000 Share Appreciation Rights issued as part of employment agreement have been calculated using
Black-Scholes option pricing model with the following inputs:
Expected volatility (%)
Risk free interest rate (%)
Weighted average expected life of options (years)
Expected dividends
Option exercise price ($)
Share price at grant date ($)
Fair value of option ($)
Expiry date
Performance Rights
Granted on
1 September 2020
70
0.38
2
Nil
Nil
0.25
0.1349
1 September 2025
Galena Mining Limited | Annual Report 2022 55
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2022
NOTE 23:
SHARE BASED PAYMENTS (CONTINUED)
(ii) 7,500,000 Performance Rights issued as part of Chief Executive Officer’s employment agreement have been
calculated using Black-Scholes option pricing model with the following inputs:
Expected volatility (%)
Risk free interest rate (%)
Weighted average expected life of options (years)
Expected dividends
Option exercise price ($)
Share price at grant date ($)
Fair value of option ($)
Expiry date
Performance Rights
Granted on
2 March 2022
60
1.75
5
Nil
Nil
0.215
0.1751
2 March 2027
Reconciliation of the number of Options, Performance Rights and Share Appreciation Rights
Opening balance at 1 July
Issued
Expired / lapsed
Exercised
Other changes
Closing balance 30 June
Recognition and Measurement
Equity-settled compensation
2022
Number
20,110,000
7,500,000
(1,265,000)
(300,000)
-
26,045,000
2021
Number
37,385,000
2,500,000
(4,025,000)
(15,750,000)
-
20,110,000
The Company operates equity-settled share-based payment employee share and option schemes. The fair value
of the equity to which employees become entitled is measured at grant date and recognised as an expense over
the vesting period, with a corresponding increase to an equity account. The fair value of shares is ascertained as
the market bid price. The fair value of options is ascertained using a Black –Scholes pricing model which
incorporates all market vesting conditions. The number of shares and options expected to vest is reviewed and
adjusted at the end of each reporting date such that the amount recognised for services received as consideration
for the equity instruments granted shall be based on the number of equity instruments that eventually vest.
Significant Judgements, Estimates and Assumptions
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the
equity instruments at the date at which they are granted. Significant judgement may be required in determining the
valuation technique adopted. The fair value of the options issued in the current period are determined by an internal
valuation using a Black-Scholes option pricing model. The assumptions detailed in this note are also judgemental.
For equity transactions with consultants and other employees, the fair value reflects the value attributable to
services where applicable. Where there is no quantifiable value of services the value of options is calculated using
the Black-Scholes option pricing model or in the case of share grants, the fair value of an ordinary share is utilised.
For instruments issued with market-based conditions, alternative valuation methodologies would be adopted.
NOTE 24:
CONTINGENT ASSETS AND LIABILITIES
In the opinion of the directors there were no contingent assets or liabilities as at 30 June 2022.
Galena Mining Limited | Annual Report 2022 56
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2022
NOTE 25:
AUDITORS’ REMUNERATION
Remuneration of the auditor of the parent entity for:
Auditing or reviewing the financial report of consolidated group
Reviewing the financial report of subsidiary
Tax compliance
2022
$
82,000
8,500
25,700
116,200
2021
$
79,950
7,500
8,950
96,400
NOTE 26:
SIGNIFICANT EVENTS AFTER REPORTING PERIOD
On 26 July 2022, the Company accepted binding commitments of a placement of 137,200,000 new shares at an
issue price of $0.125 to raise a $17.2 million before costs. The proceeds are to provide Abra a funding buffer during
the critical initial commissioning and ramp-up stages of the project. 71,400,000 of the shares issued under the
placement will fall within the Company’s 15% placement capacity under ASX listing Rule 7.1, where settlement
occurred on 3 August 2022. The remaining 65,800,000 shares to be issued under the placement are subject to
shareholder approval with the general meeting to be held on 13 September 2022.
The impact of the COVID-19 pandemic is ongoing and while it has not significantly impacted the consolidated entity
up to 30 June 2022, it is not practicable to estimate the potential impact, positive or negative, after the reporting date.
Several measures have been implemented to protect employees and contractors working on the Project, in line with
recommended Government guidelines and procedures. Changes in Government guidelines and / or general business
operability because of the ongoing COVID-19 pandemic have the potential to impact Abra and the Company. Such
impacts could include (but are not limited to) delays to Project development initiatives and / or the incurring of extra
costs.
No matter or circumstance has arisen since the end of the audited period which significantly affected or may
significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in
future financial periods.
Galena Mining Limited | Annual Report 2022 57
DIRECTORS’ DECLARATION
In accordance with a resolution of the directors of Galena Mining Limited, the directors of the company declare
that:
the financial statements, notes and the remuneration report in the Directors’ Report are in accordance with
1.
the Corporations Act 2001, including:
(i)
(ii)
giving a true and fair view of the financial position of the Consolidated Entity as at 30 June
2022 and of its performance, for the year ended on that date; and
complying with Australian Accounting Standards (including International Financial Reporting
Standards) and the Corporations Regulations 2001;
2.
in the directors' opinion there are reasonable grounds to believe that the company will be able to pay its
debts as and when they become due and payable;
This declaration has been made after receiving the declarations required to be made to the directors in accordance
with sections of 295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the Board of Directors.
Adrian Byass
Chairman
Perth, 24 August 2022
Galena Mining Limited | Annual Report 2022 58
PKF Perth
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
GALENA MINING LIMITED
Report on the Financial Report
Opinion
We have audited the accompanying financial report of Galena Mining Limited (the “Company”), which comprises
the consolidated statement of financial position as at 30 June 2022, 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, notes comprising a summary of significant accounting policies
and other explanatory information, and the Directors’ Declaration of the Company and the consolidated entity
comprising the Company and the entities it controlled at the year’s end or from time to time during the financial
year.
In our opinion the accompanying financial report of Galena Mining Limited is in accordance with the Corporations
Act 2001, including:
i) Giving a true and fair view of the consolidated entity’s financial position as at 30 June 2022 and of its
performance for the year ended on that date; and
ii) Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of
our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Independence
We are independent of the consolidated entity in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are
relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in
accordance with the Code.
Level 4, 35 Havelock Street, West Perth, WA 6005
PO Box 609, West Perth, WA 6872
T: +61 8 9426 8999 F: +61 8 9426 8900 www.pkfperth.com.au
PKF Perth is a member firm of the PKF International Limited family of legally independent firms and does not accept any responsibility or liability for the actions
or inactions of any individual member or correspondent firm or firms.
Liability limited by a scheme approved under Professional Standards Legislation.
Galena Mining Limited | Annual Report 2022 59
PKF Perth
Key Audit Matters
A key audit matter is a matter that, in our professional judgement, was of most significance in our audit of the
financial report of the current year. 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. For
each matter below, our description of how our audit addressed these matters is provided in that context
Carrying value of Capitalised Exploration Expenditure
Why significant
How our audit addressed the key audit matter
As at 30 June 2022 the carrying value of Exploration and
Evaluation assets is $8,788,294 (2021: $6,648,789), as
disclosed in Note 10. The increase is due to the exploration
activities undertaken in non-Abra tenements located in the
Jillawarra Project (drilling program).
The consolidated entity’s accounting policy in respect of
exploration and evaluation expenditure is outlined in Note
10. Estimates and judgments in relation to capitalised
exploration and evaluation expenditure is also detailed at
Note 10.
Significant judgement is required:
•
•
In determining whether
facts and circumstances
indicate that the exploration and evaluation expenditure
should be tested for impairment in accordance with
Australian Accounting Standard AASB 6 Exploration for
and Evaluation of Mineral Resources (“AASB 6”); and;
In determining
treatment of exploration and
evaluation expenditure in accordance with AASB 6, and
the consolidated entity’s accounting policy. In particular:
o whether the particular areas of interest meet the
the
recognition conditions for an asset; and
o which elements of exploration and evaluation
expenditures qualify for capitalisation for each area
of interest.
Our work included, but was not limited to, the following
procedures:
o
• Conducting a detailed review of management’s
assessment of impairment trigger events prepared in
accordance with AASB 6 including:
o assessing whether the rights to tenure of the
areas of interest remained current at reporting
date as well as confirming that rights to tenure
are expected to be renewed for tenements that
will expire in the near future;
holding discussions with the Directors and
management as to the status of ongoing
exploration programmes
the areas of
interest, as well as assessing if there was
evidence that a decision had been made to
discontinue activities in any specific areas of
interest; and
obtaining evidence of the consolidated entity’s
future intention, reviewing planned expenditure
and related work programmes.
for
o
• Considering whether exploration activities for the
areas of interest had reached a stage where a
reasonable assessment of economically recoverable
reserves existed;
testing, on a sample basis, exploration and
evaluation expenditure incurred during the year for
compliance with AASB 6 and the consolidated
entity’s accounting policy; and
•
• assessing
the appropriateness of
the
related
disclosures in Note 10.
Galena Mining Limited | Annual Report 2022 60
PKF Perth
Carrying value of Plant and Equipment
Why significant
How our audit addressed the key audit matter
As at 30 June 2022 the carrying value of Plant and Equipment
is $201,266,119 (2021: $65,301,696), as disclosed in Note 11.
The balance is comprised by:
-
Plant and Equipment - $24,303,705
(2021: $117,972)
- Mines under Construction - $173,099,058
(2021: $63,560,746)
- Rehabilitation Asset - $3,863,356
(2021: $1,622,978)
The consolidated entity’s accounting policy in respect of mine
development is outlined in Note 11. Estimates and judgments in
relation to capitalised expenditures related to mine under
construction is also detailed at Note 11.
There is a level of judgement applied in determining the
treatment of the mine asset in accordance with AASB 116
Property, Plant and Equipment and whether the asset is
impaired in accordance with AASB 136 Impairment of Assets.
Judgement is also required on the following:
• whether depreciation rates applied are appropriate;
• whether disclosure is appropriate; and
• whether the mine asset is impaired.
The evaluation of the recoverable amount of the mine asset
requires significant
the key
assumptions supporting the expected future cash flows of the
Abra Base Metal Project.
in determining
judgement
Our work included, but was not limited to, the
following procedures:
• Reviewing management’s
impairment model,
including consideration of inputs used in net
present value calculations;
• Reviewing management’s
assessment
of
impairment of the cash generating units;
• Reviewing competent persons report on the
mineable reserves and valuation, it’s congruence
with management’s assessment and
the
competence/ independence of the author;
• Ensuring valid mining licenses held and consider
impairment of assets for which no license is now
held;
• Ensure
financial
statements are accurate and that all estimates
and judgements made by management are
included therein, and
that disclosures within
the
• Assessing the appropriateness of the related
disclosures in Note 11.
Galena Mining Limited | Annual Report 2022 61
PKF Perth
Rehabilitation Provision
Why significant
How our audit addressed the key audit matter
As at 30 June 2022 the carrying value of Rehabilitation
Provision is $3,863,356 (2021: $1,667,881), as disclosed in
Note 22. The increase is due to the disturbance area
occurred in the mine site due to the development of the mine
site as well as the increase in the inflation rate.
The consolidated entity’s accounting policy in respect of
Rehabilitation Provision is outlined in Note 22. Estimates
and judgments in relation to this provision is also detailed at
Note 22.
Rehabilitation Provision is a key audit matter due to:
•
the level of complexity, judgement and assumptions
applied in determining the best estimate in accordance
with AASB 137 - Provisions, Contingent Liabilities and
Contingent Assets.
In particular, complexity, judgement and assumptions
around:
•
The closure costs estimate have been calculated based
on reasonable rates;
• Whether the discount rate used is appropriate;
• Whether the inflation rate used is appropriate;
• Whether facts and circumstances changed from the
prior year, such as Life of Mine.
Our work included, but was not limited to, the following
procedures:
• Obtained and reviewed the report prepared by
management in relation to the estimation of closure
costs;
• Obtained support documentation / information to
corroborate the rates used to calculate the closure
costs estimate;
• Reviewed
the
its
disturbance
reasonableness considering the construction works
performed up until the reporting date;
area
and
• Obtained and reviewed the qualifications and work
experience of the internal expert that has prepared
the estimation of the closure costs;
• Obtained and reviewed the net present value of the
provision to restore the mine site;
• Reperformed the rehabilitation provision calculations
using inflation and discount rates released by reliable
sources at 30 June 2022 (ie. Bank Reserve of
Australia);
• assessing
the appropriateness of
related
the
disclosures in Note 22.
Galena Mining Limited | Annual Report 2022 62
PKF Perth
Other Information
The Directors are responsible for the other information. The other information comprises the information included
in the consolidated entity’s annual report for the year ended 30 June 2022, 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, with the exception of the Remuneration Report.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of 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 consolidated entity’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the Directors either intend to liquidate the consolidated entity or to cease
operations, or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with 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 aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with Australian Auditing Standards, we exercise professional judgement and
maintain professional scepticism throughout the audit. 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
consolidated entity’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by the Directors.
Galena Mining Limited | Annual Report 2022 63
PKF Perth
• 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 consolidated entity’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 consolidated entity 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.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the consolidated entity to express an opinion on the group financial report. We are responsible
for the direction, supervision and performance of the group audit. We remain solely responsible for our audit
opinion.
We communicate with the Directors regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in internal control that we identify during our
audit.
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, actions taken to eliminate threats or safeguards applied.
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
We have audited the Remuneration Report included in the Directors’ Report for the year ended 30 June 2022.
In our opinion, the Remuneration Report of Galena Mining Limited for the year ended 30 June 2022, complies
with section 300A of the Corporations Act 2001.
Galena Mining Limited | Annual Report 2022 64
PKF Perth
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.
PKF PERTH
SHANE CROSS
AUDIT PARTNER
24 August 2022
WEST PERTH,
WESTERN AUSTRALIA
Galena Mining Limited | Annual Report 2022 65
SHAREHOLDER INFORMATION
The following additional information is required by the Australian Securities Exchange Ltd in respect of listed public
companies only. The information is current as at 11 August 2022.
1.
a.
(i)
b.
c.
Shareholding
Distribution of Shareholders
Ordinary share capital
- 547,805,353 fully paid shares held by 1,507 shareholders. All issued ordinary share carry one vote per
share and carry the rights to dividends.
Class of Equity Security
Category (size of holding)
Number of Holders
Fully Paid Ordinary Shares
1 - 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 – and over
60
317
202
610
318
1,507
5,383
1,008,868
1,637,719
24,828,292
520,325,091
547,805,353
The number of shareholdings held in less than marketable parcels is 288.
The Company had the following substantial shareholders listed in the holding company’s register at the
date of this report.
Fully Paid Ordinary Shares
Holder
Citicorp Nominees Pty Ltd
BNP Paribas Noms Pty Ltd
Bloomgold Investments Pty Ltd
Number
109,800,540
34,792,807
29,027,778
Unlisted Options exercisable at $0.50 on 26 March 2023
Holder
Citicorp Nominees Pty Ltd
Number
1,250,000
Unlisted Options exercisable at $0.60 on 26 March 2023
Holder
Citicorp Nominees Pty Ltd
Number
1,250,000
Unlisted Options exercisable at $0.50 on 17 April 2023
Holder
Citicorp Nominees Pty Ltd
Number
1,250,000
Unlisted Options exercisable at $0.60 on 17 April 2023
Holder
Citicorp Nominees Pty Ltd
Number
1,250,000
%
20.04
6.35
5.30
%
100.00
%
100.00
%
100.00
%
100.00
d.
Voting Rights
The voting rights attached to each class of equity security are as follows:
Ordinary shares
-
Each ordinary share is entitled to one vote when a poll is called, otherwise each member present at a
meeting or by proxy has one vote on a show of hands.
Galena Mining Limited | Annual Report 2022 66
SHAREHOLDER INFORMATION
e.
20 Largest holders of quoted equity securities (fully paid ordinary shares)
Name
Citicorp Nominees Pty Ltd
BNP Paribas Nominees Pty Ltd
Bloomgold Resources Pty Ltd
JP Morgan Nominees Australia Pty Ltd
Brazil Farming Pty Ltd
UBS Nominees Pty Ltd
Taurus Mining Finance Fund No 2 LP
HSBC Custody Nominees (Australia) Limited
Mr Connor Michael Maloney
1.
2.
3.
4.
5.
6.
7.
8.
9.
10. Zerrin Investments Pty Ltd
11. Netwealth Investments Limited
12. Mr Alexander Alan Molyneux
13. Navigator Australia Ltd
14
Anchorfield Pty Ltd
15. Kiandra Nominees Pty Ltd
15. Valiant Equity Management Pty Ltd
16. Est Mr John Mathias Clema
17. Tubechangers Pty Ltd
18. Silverlight Holdings Pty Ltd
19. Mr Glen Gordon
20. Silverlight Holdings Pty Ltd
Number Held Percentage %
109,800,540
20.04
34,792,807
29,027,778
20,773,656
20,927,328
18,716,654
15,754,127
13,075,615
11,622,869
9,000,000
8,666,981
8,000,000
7,764,188
7,600,000
6,500,000
6,500,000
5,800,000
5,754,681
5,458,000
5,000,000
5,000,000
6.35
5.30
3.79
3.82
3.42
2.88
2.39
2.12
1.64
1.58
1.46
1.42
1.39
1.19
1.19
1.06
1.05
1.00
0.91
0.91
2.
The Name of the Company Secretary is Mr Stephen Brockhurst.
3.
The address of the registered office and principal place of business in Australia is Level 11, 216 St Georges
Terrace, Perth WA 6000. Telephone (08) 9481 0389.
355,535,224
64.90
4. Registers of securities are held at the following address:
Automic Pty Ltd
Level 5, 191 St Georges Terrace, Perth WA 6000
5.
Stock Exchange Listing
Quotation has been granted for all the ordinary shares of the company on the Australian Securities Exchange
Limited.
6.
Restricted Securities
The Company has no restricted securities on issue as at the date of this report.
7.
Unquoted Securities
The Company has the following unquoted securities on issue as at the date of this report
-
-
-
-
-
-
-
-
-
1,250,000 options exercisable at $0.50 on or before 26 March 2023;
1,250,000 options exercisable at $0.60 on or before 26 March 2023;
1,250,000 options exercisable at $0.50 on or before 17 April 2023;
1,250,000 options exercisable at $0.60 on or before 17 April 2023;
9,000,000 performance rights expiring 9 November 2023;
2,000,000 performance rights expiring 13 August 2024;
7,500,000 performance rights expiring 2 March 2027;
1,145,000 share appreciation rights exercisable at $0.17 on or before 21 January 2024.
1,400,000 share appreciation rights exercisable at $0.24 on or before 1 September 2025.
Galena Mining Limited | Annual Report 2022 67
ADDITIONAL INFORMATION
Schedule of Tenements
Tenement
Project
Location
Registered holder
% Interest
E52/1413
Jillawarra
E52/3575
Jillawarra
E52/3581
Jillawarra
E52/3630
Jillawarra
E52/3823
Jillawarra
M52/0776
E52/1455
G52/0286
G52/0292
L52/0121
L52/0194
L52/0198
Abra
Abra
Abra
Abra
Abra
Abra
Abra
L52/0205
Teano
L52/0206
Erivilla
L52/0207
L52/0210
Teano
Teano
L52/0214
Three Rivers
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
Galena Mining Limited
Galena Mining Limited
Galena Mining Limited
Galena Mining Limited
Galena Mining Limited
Abra Mining Pty Ltd
Abra Mining Pty Ltd
Abra Mining Pty Ltd
Abra Mining Pty Ltd
Abra Mining Pty Ltd
Abra Mining Pty Ltd
Abra Mining Pty Ltd
Abra Mining Pty Ltd
Abra Mining Pty Ltd
Abra Mining Pty Ltd
Abra Mining Pty Ltd
Abra Mining Pty Ltd
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
The Company’s interest in the Abra Mining Pty Ltd tenements is held by virtue of its 60% equity holding in Abra
Mining Pty Ltd which in turn has a 100% interest in the tenements.
Galena Mining Limited | Annual Report 2022 68