ANN UAL
REPORT2019
CORPORATE DIRECTORY
GOLD MOUNTAIN LIMITED
ABN 95 112 425 788
ASX: GMN
Directors
Share Register
Graham Kavanagh Non-Executive Chairman
Boardroom Pty Limited
Sin Pyng “Tony” Teng Managing Director
Syed Hizam Alsagoff Non-executive Director
Grosvenor Place, Level 12, 225 George Street,
SYDNEY NSW 2000,
GPO Box 3993, SYDNEY NSW 2001
Management
Eric Kam Company Secretary
David Clark Chief Financial Officer
Registered and Principal Office
Suite 2501, Level 25
31 Market Street
SYDNEY NSW 2000 Australia
Telephone: +61 2 9283 3880
info@goldmountainltd.com.au
www.goldmountainltd.com.au
Telephone: 1300 737 760
Facsimile: 1300 653 459
Solicitor
Bird & Bird Lawyers
Level 11, 68 Pitt Street
SYDNEY NSW 2000
Banker
Australia and New Zealand Banking Group Limited
Westpac Banking Corporation Limited
Auditor
KS Black & Co. Chartered Accountants
Level 1, 251 Elizabeth Street, SYDNEY NSW 2000
GOLD MOUNTAIN LIMITED ANNUAL REPORT
1
TABLE OF CONTENTS
CORPORATE DIRECTORY ............................................................................................................................................... 1
LETTER TO SHAREHOLDERS .......................................................................................................................................... 2
DIRECTORS’ REPORT ...................................................................................................................................................... 4
INTERESTS IN THE SHARES AND OPTIONS OF THE COMPANY ............................................................................ 6
OPERATIONS REPORT ................................................................................................................................................ 9
REMUNERATION REPORT (Audited) ......................................................................................................................... 19
SCHEDULE OF TENEMENTS ......................................................................................................................................... 25
AUDITOR’S INDEPENDENCE DECLARATION ............................................................................................................... 26
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME .......................................................... 27
STATEMENT OF FINANCIAL POSITION ......................................................................................................................... 28
STATEMENT OF CHANGES IN EQUITY ......................................................................................................................... 29
STATEMENT OF CASHFLOWS ....................................................................................................................................... 30
NOTES TO THE FINANCIAL STATEMENTS ................................................................................................................... 31
DIRECTORS’ DECLARATION .......................................................................................................................................... 55
INDEPENDENT AUDITORS REPORT ............................................................................................................................. 56
ADDITIONAL SHAREHOLDER INFORMATION .............................................................................................................. 62
PICTOGRAM ………………………………………………………………………………………………………………………...66
GOLD MOUNTAIN LIMITED ANNUAL REPORT
3
DIRECTORS’ REPORT
Your Directors submit the annual financial report of Gold Mountain Limited for the financial year ended 30 June 2019. In
order to comply with the provisions of the Corporations Act, the Directors’ report as follows:
KEY MANAGEMENT PERSONNEL DISCLOSURES
DIRECTORS
The names of Directors who held office during or since the end of the year and until the date of this report are as follows.
Directors were in office for this entire period unless otherwise stated.
Graham Kavanagh
Sin Pyng “Tony” Teng
Douglas Smith (ceased 23/8/2019)
Syed Hizam Alsagoff (appointed 2/9/2019)
Names, qualifications, experience and special responsibilities
Graham Kavanagh
Non-Executive Chairman
Qualifications
B Comm ASIA
Experience
Mr Kavanagh has an extensive background over more than 25 years in securities and fund
management, property investment and development as well as earlier experience in the
Department of Mines. He has held senior positions as securities analyst, general manager and
director in fund management and property investment.
Interest in Shares and
Options
1,500,000 unlisted options granted under the Employee Share Option Plan exercisable at $0.30
and expiring on 28 November 2019 (indirect interest) (GMNAB);
1,000,000 unlisted options exercisable at $0.15 subject to vesting conditions and expiring on 26
July 2021 (indirect interest) (GMNAD).
Directorships held
other listed entities
in
No directorships held of ASX listed entities in the past three years
Sin Pyng “Tony” Teng Managing Director
Qualifications
B. Econ. Dip. Fin. Mangt. CPA, FAICD, AFAIM
Experience
Mr Teng has had experience as a management consultant and with merger and acquisitions,
corporate restructuring and public company capital raising. He was co-founder and former
director of Coalworks Limited that was acquired by Whitehaven in 2012 in a $200m takeover bid.
Interest in Shares and
Options
700,000 ordinary shares
8,810,000 ordinary shares (indirect interest)
5,000,000 unlisted options granted under the Employee Share Option Plan exercisable at $0.30
and expiring on 28 November 2019 (indirect interest) (GMNAB)
1,000,000 unlisted options exercisable at $0.15 and expiring on 26 July 2021 subject to vesting
conditions (indirect interest) (GMNAD)
3,000,000 unlisted options granted under the Employee Share Option Plan exercisable at $0.15
and expiring on 26 July 2021 (indirect interest) (GMNAE)
GOLD MOUNTAIN LIMITED ANNUAL REPORT
4
Douglas Smith
Director Exploration (appointed 29 December 2016, ceased 23 August 2019)
Syed Hizam Alsagoff
Non-Executive Director (appointed 2 September 2019)
Qualifications
B.Sc (Finance/Economics)
Experience
Mr Alsagoff has extensive network and experience in investment and corporate strategies in Asia
and globally, of over 20 years’ experience in senior operational and corporate leadership roles in
diverse sector operations across several countries including distribution of industrial, electronic
components and satellite manufacturing, engineering, construction, property and infra-structure
development.
He is on the board of several public and private companies and currently serves as the Group
Chief Financial Officer with Cahya Mata Sarawak Berhad (CMS:MK).
Interest in Shares and
Options
4,333,333 ordinary shares
14,500,000 ordinary shares (indirect interest)
1,666,667 unlisted options exercisable at $0.10 and expiring on 28 August 2020
1,666,667 unlisted options exercisable at $0.15 and expiring on 28 August 2021
Directorships held
other listed entities
in
No directorships held of ASX listed entities in the past three years
MANAGEMENT
Eric Kam
Company Secretary
Qualifications: FCPA, FCMA, MBA, MAICD
Mr Kam has extensive experience in finance and operations management across diverse businesses and industries in
engineering, construction, mining & resources, technology, finance, marketing and distribution. He is involved in corporate
change and listing of companies, and is on the board of several other companies. Mr Kam has had extensive experience
as Company Secretary in several public listed and unlisted companies.
David Clark
Chief Financial Officer
Qualifications: CA, CPA, AGIS, B Comm. (UNSW), MBA Executive (AGSM), Registered Tax Agent
Mr Clark is a Chartered Accountant, Chartered Secretary and Registered Tax Agent of over twenty (20) years standing and
holds a Bachelor of Commerce degree from UNSW and a Master of Business of Administration (Executive) from the
Australian Graduate School of Management. Mr Clark is principal of D.W. Clark & Co., Chartered Accountant providing
corporate financial, taxation and secretarial services and advice to listed and unlisted companies in the mineral exploration
and oil and gas industries.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
5
INTERESTS IN THE SHARES AND OPTIONS OF THE COMPANY
DIRECTORS’ SHAREHOLDINGS
As at the date of this report, the interests of the Directors in the securities of Gold Mountain Limited are:
Director
Name
Shares and Options
Shares and Options
Direct
Indirect
Graham Kavanagh
Nil
Douglas Smith
Nil
1,500,000 unlisted options granted under the
Employee Share Option Plan exercisable at
Options $0.30 and expiring on 28 November
2019 (GMNAB).
1,000,000 unlisted options granted exercisable
at $0.15 subject to vesting conditions and
expiring on 26 July 2021 (GMNAD)
2,000,000 unlisted options granted under the
Employee Share Option Plan exercisable at
$0.30 and expiring on 28 November 2019
(GMNAB)
3,000,000 unlisted options granted under the
Employee Share Option Plan exercisable at
$0.15 and expiring on 26 July 2021 (direct
interest) (GMNAE)
Sin Pyng “Tony” Teng
700,000 ordinary shares
8,810,000 ordinary shares
5,000,000 unlisted options granted under the
Employee Share Option Plan exercisable at
$0.30 and expiring on 28 November 2019
(indirect interest) (GMNAB)
1,000,000 unlisted options exercisable at $0.15
subject to vesting conditions and expiring on 26
July 2021 (GMNAD)
3,000,000 unlisted options granted under the
Employee Share Option Plan exercisable at
$0.15 and expiring on 26 July 2021 (GMNAE)
Syed Hizam Alsagoff
4,333,333 ordinary shares
14,500,000 ordinary shares
1,666,667 unlisted options exercisable
at $0.10 and expiring on 28 Aug 2020
1,666,667 unlisted options exercisable
at $0.15 and expiring on 28 Aug 2021
Movement in equity instruments (other than options and rights)
Details of the movement in equity instruments (other than options and rights) held directly, indirectly or
beneficially by Directors and Key Management Personnel and their related parties are as follows:
Balance at
beginning of the
Year
Granted as
remuneration
during the Year
Issued on
Exercise of
Options during
the Year
Other changes
during the
Year
Balance at
end of the
Year
30 June 2019
Graham Kavanagh
-
Sin Pyng “Tony” Teng
9,410,000
Douglas Smith
Total
-
9,410,000
-
-
-
-
-
-
-
-
-
-
100,000
9,510,000
-
-
100,000
9,510,000
GOLD MOUNTAIN LIMITED ANNUAL REPORT
6
Balance at
beginning of the
Year
Granted as
remuneration
during the Year
Issued on
Exercise of
Options during the
Year
Other changes
during the
Year
Balance at
end of the
Year
30 June 2018
Graham Kavanagh
-
Sin Pyng “Tony” Teng
9,020,000
Douglas Smith
Total
-
9,020,000
-
-
-
-
-
-
-
-
-
-
390,000
9,410,000
-
-
390,000
9,410,000
Exercise of Options
No ordinary shares were issued by the Company during and/or since the end of the financial year as a result of the exercise
of options by Directors and Key Management Personnel and their related parties. There are no unpaid amounts on the
shares issued.
Options and Rights Holdings
Details of movements in options and rights held directly, indirectly or beneficially by Directors and Key Management
Personnel and their related parties are as follows:
30 June 2019
Balance at
beginning of
period
Granted as
remuneration
Options
exercised or
vested
Net change
Other
Balance at
end of period
Graham Kavanagh
2,500,000
Sin Pyng “Tony” Teng
9,000,000
Douglas Smith
5,000,000
Total
16,500,000
-
-
-
-
-
-
-
-
-
-
-
-
2,500,000
9,000,000
5,000,000
16,500,000
30 June 2018
Balance at
beginning of
period
Granted as
remuneration
Options
exercised or
vested
Net change
Other
Balance at
end of period
Graham Kavanagh
1,500,000
1,000,000
Sin Pyng “Tony” Teng
5,000,000
4,000,000
Douglas Smith
2,000,000
3,000,000
Total
8,500,000
8,000,000
-
-
-
-
-
-
-
-
2,500,000
9,000,000
5,000,000
16,500,000
GOLD MOUNTAIN LIMITED ANNUAL REPORT
7
Options on issue at the date of this report are:
Issue Date
Number
Expiry Date
Exercise price
Number of
holders
ASX Code
28 Nov 2016
14,800,000
28 Nov 2019
26 Sep 2017
2,000,000
26 Jul 2021
26 Sep 2017
7,800,000
26 Jul 2021
28 Feb 2019
10,148,162
01 Mar 2020
28 Feb 2019
10,158,162
01 Mar 2021
24 May 2019
7,138,461
27 May 2020
24 May 2019
7,138,461
27 May 2021
30 Aug 2019
9,866,669
28 Aug 2020
30 Aug 2019
9,866,669
28 Aug 2021
$0.303
$0.154
$0.155
$0.10
$0.15
$0.10
$0.15
$0.10
$0.15
9
2
6
6
6
13
13
10
10
GMNAB
GMNAD
GMNAE
-
-
-
-
-
-
GMNAB ESOP options are exercisable at $0.30 until expiry date 28/11/2019 and subject to the vending condition that the
Company’s share price must exceed $0.50 based on VWAP over a 5-day consecutive period.
GMNAD options are exercisable at $0.15 until expiry date 26/07/2021 and subject to vending condition that the total options
granted shall be vested over 3 periods of 12 months per period.
GMNAE ESOP options are exercisable at $0.15 until expiry date 26/07/2021 and subject to vending condition that the total options
granted shall be vested over 3 periods of 12 months per period.
Dividends
No dividends have been paid or declared since the start of the financial year and/or the Directors do not recommend the
payment of a dividend in respect of the financial year.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
8
OPERATIONS REPORT
Principal Activities
The principal activity of the Company during the financial period was to acquire, explore and develop areas that are highly
prospective for gold and other precious and base metals and minerals in Australia and Papua New Guinea.
Operating and Financial Review
(i)
Operations
Gold Mountain is an exploration company operating in Australia and Papua New Guinea to acquire, explore and develop
areas that are highly prospective for gold and other precious and base metals and minerals.
The Company creates value for shareholders, through exploration activities which develop and quantify mineral assets.
Once an asset has been developed and quantified within the framework of the JORC guidelines the Company may elect to
move to production, to extract and refine ore which will then be available for sale as a primary product.
The Company is actively exploring and developing the Wabag Gold Project in Papua New Guinea.
Please refer to the Review of Operations for more information on the status of the projects.
(ii)
Financial Performance & Financial Position
The financial results of the Company for the five (5) years to 30 June 2019 are:
30 June 2019
30 June 2018
30 June 2017
30 June 2016
30 June 2015
Cash and cash equivalents
54,070
2,985,066
2,693,337
1,189,947
759,938
Net assets
20,296,725
19,275,974
12,420,975
3,404,265
2,460,399
Revenue & financial income
48,529
119,426
32,874
3,178
5,046
Net loss after tax
(1,401,021)
(1,484,473)
(1,279,915)
(1,515,979)
(847,685)
EBITDAX
(1,401,021)
(1,257,241)
(840,424)
(1,351,697)
(659,879)
Share price at 30 June
Loss per share (cents)
$0.066
(0.27)
$0.100
(0.32)
$0.086
(0.35)
$0.036
(0.69)
$0.039
(0.57)
a)
Financial Performance
The net loss after tax of the Company for the financial year after tax amounted to $1,401,021 (2018: Loss $1,484,473).
The Company is creating value for shareholders through its exploration expenditure and currently has no revenue generating
operations. Revenue and financial income are generated from interest income from funds held on deposit and miscellaneous
income. As the average funds held on deposit have decreased during the year, accordingly interest income has decreased
from $25,400 to $3,063 when compared to the prior year. The Company also received $43,134 as rental income in FY 2019
(FY 2018: $51,792) from sub-leasing unused office space at its Sydney CBD office.
During the year, the operations relating to the Papua New Guinea gold project continued and expanded as the Company
undertook its exploration program, accordingly deferred exploration expenditure increased from $11,816,184 at 30 June
2018 FY to $15,868,988 at 30 June 2019.
Personnel and external consulting requirements and legal and professional costs remained constant. There was an increase
in public and investor relations expense from $240,944 in the 2018 FY to $322,838 in the FY 2019.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
9
b)
Financial Position
The Company’s main activity during the year was the investment of cash of $54,707 (2018: $2,985,066). The carrying value
of the exploration assets and the capitalised exploration assets increased by $4,052,804 or 34% to $15,868,988 (2018:
$11,816,184).
The 30 June 2019 financial report has been prepared on the going concern basis that contemplates the continuity of normal
business activities and the realisation of assets and extinguishment of liabilities in the ordinary course of business. For the
year ended 30 June 2019, the Company recorded a loss after tax of $1,401,021 (2018: Loss $1,484,473) and had a net
working capital deficit of $873,113 (30 June 2018: surplus of $2,061,160).
As the Company is an exploration and development entity, ongoing exploration and development activities are reliant on
future capital raisings. Based on these facts, the Directors consider the going concern basis of preparation to be appropriate
for this financial report.
(iii)
Business Strategies and Prospects for future financial years
The Company actively evaluates the prospects of each project as results from each program become available, these results
are available via the ASX platform for shareholders information. The Company then assesses the continued exploration
expenditure and further asset development. The Company will continue the evaluation of its mineral projects in the future
and undertake generative work to identify and acquire new resource projects.
There are specific risks associated with the activities of the Company and general risks which are largely beyond the control
of the Company and the Directors. The risks identified below, or other risk factors, may have a material impact on the future
financial performance of the Company and the market price of the Company’s shares.
a)
Operating Risks
The operations of the Company may be affected by various factors, including failure to locate or identify mineral deposits,
failure to achieve predicted grades in exploration and mining, operational and technical difficulties encountered in mining,
sovereign risk difficulties in commissioning and operating plant and equipment, mechanical failure or plant breakdown,
unanticipated metallurgical problems which may affect extraction costs, adverse weather conditions, industrial and
environmental accidents, industrial disputes and unexpected shortages or increases in the costs of consumables, spare
parts, plant and equipment.
b)
Environmental Risks
The operations and proposed activities of the Company are subject to the laws and regulations of Australia and Papua New
Guinea concerning the environment. As with most exploration projects and mining operations, the Company’s activities are
expected to have an impact on the environment, particularly if advanced exploration or mine development proceeds. It is
the Company’s intention to conduct its activities to the highest standard of environmental obligation, including compliance
with all environmental laws.
c)
Economic
General economic conditions, movements in interest and inflation rates and currency exchange rates may have an adverse
effect on the Company’s exploration, development and production activities, as well as on its ability to fund those activities.
d)
Market conditions
Share market conditions may affect the value of the Company’s quoted securities regardless of the Company’s operating
performance. Share market conditions are affected by many factors such as:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
general economic outlook;
introduction of tax reform or other new legislation;
interest rates and inflation rates;
changes in investor sentiment toward particular market sectors;
the demand for, and supply of, capital; and
terrorism or other hostilities.
The market price of securities can fall as well as rise and may be subject to varied and unpredictable influences on the
market for equities in general and resource exploration stocks in particular. Neither the Company nor the Directors warrant
the future performance of the Company or any return on an investment in the Company.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
10
e)
Additional requirements for capital
The Company’s capital requirements depend on numerous factors. Depending on the Company’s ability to generate income,
the Company will require further financing. Any additional equity financing will dilute shareholdings, and debt financing, if
available, may involve restrictions on financing and operating activities. If the Company is unable to obtain additional
financing as needed, it may be required to reduce the scope of its operations and scale back its exploration programs as
the case may be. There is however no guarantee that the Company will be able to secure any additional funding or be able
to secure funding on terms favourable to the Company.
f)
Speculative investment
The above list of risk factors ought not to be taken as exhaustive of the risks faced by the Company or by investors in the
Company. The above factors, and others not specifically referred to above, may in the future materially affect the financial
performance of the Company and the value of the Company’s shares. Potential investors should consider that the
investment in the Company is speculative and should consult their professional advisers before deciding whether to invest.
5.
Significant Changes in the State of Affairs
On 3 July 2018, the Company announced a helicopter-assisted drill program initiated for the large Mongae Creek (or Mongai
Creek) Porphyry Cu-Au System in EL2306. Abundant coarse gold is present in creeks within the Mongai Creek system and
gold has been panned from gossanous rocks. Copper mineralisation is located in outcrops. Reconnaissance mapping and
sampling in adjoining drainage systems is planned to determine the extent of the mineralisation.
On 12 and 13 July 2018, the Company announced the progress of its mineral exploration programs on the Crown Ridge
prospect in Enga Province, Papua New Guinea. The Company has completed a diamond drilling program of 19 drill-holes
totalling 3,761.8m, drilled between 14 October 2017 and 10 June 2018. The drilling targeted shallow conglomerate-hosted
free gold-platinum mineralisation (Target 1) and high-grade gold mineralisation hosted by structurally controlled quartz-
pyrite veins (Target 2). The Target 1 drill-holes were undertaken in conjunction with bulk sampling pits and aimed to define
a Mineral Resource for the shallow conglomerate material. The Company will release the laboratory analysis and test results
of the drill cores and the bulk pit samples as and when they become available. Assay results for the samples from the
remaining 26 pits have been received and logged into the LIMS system by ALS in Perth. The results are expected in mid to
late August 2018. However, the assays will require compilation and assessment against geological data before final results
can be released. This is not expected until at least December 2018.
On 24 July 2018, the Company announced the arrival of a custom-built mobile bulk sampling plant at Crown Ridge and is
undergoing commissioning. A helicopter-portable drill rig has also arrived on site at the Mongae Creek Au-Cu prospect with
diamond drilling starts this week. Assays are underway on Mongae Creek rock samples. An Excavator continues costeaning
at Crown Ridge, exploring for hard-rock source of large gold nuggets and coarse free gold found in shallow sampling
programmes to date. Regional heli-borne geophysical survey is planned to search for Porgera-style gold systems.
Metallurgical investigations on black sand pan concentrates will be undertaken to identify hosts of vanadium, titanium and
chrome.
On 7 August 2018, the Company announced the maiden diamond drill hole at Mongai Creek confirmed diagnostic
characteristics of a porphyry copper-gold system. Also noted that visible copper and molybdenite mineralisation was
observed in drill cones.
On 14 August 2018, the Company announced the finalisation of assembly and commissioning of large capacity mobile plant
for processing of coarse-gold and platinum bulk samples, and recovery heavy black sands to test titanium, vanadium and
chrome concentrations. The plant would improve processing time of infill and extensional pitting samples that form the basis
of the Mineral Resource estimation that is in progress.
On 28 August 2018, the Company announced the results for 35 rock chip samples from outcrop and float that confirmed the
potential for economic grades of copper and gold mineralisation at Mongai Creek. This is supported by a petrographic
report on test of samples from Mongai Creek which confirmed the expected diagnostics of porphyry copper-gold
mineralisation, hydrothermal alterations, porphyritic texture, and primary mineralogical compositions. It is complimented
with a maiden diamond drill-hole MCD001 completed at 521m down-hole below the mineralised outcrop with logging data
providing a first view at the 3D geological framework of the system.
On 8 October 2018, the Company announced assay results for its maiden drill hole MCD001 at Mongai Creek returning
encouraging results, with best results of 1m @ 243 g/t Ag, 0.8% Cu, 522 ppm Co, 0.4% Ni, and 0.7% W at 38m depth. A
high-resolution soil geochemical sampling programme had commenced at Mongai Creek, to delineate the structural and
geological framework prior to further drill targeting. The Company also noted Crown Ridge exploration was shifting focus to
the area most prospective for an epithermal hard-rock source of the abundant coarse and dendritic gold found in the
drainage system.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
11
On 15 November 2018, the Company announced all core data for hole MCD002 at Mongae Creek has been logged and
submitted for geochemical analysis. Early investigations show strong copper and polymetallic mineralisation and A-, B-, M-
and D-type porphyry veins. Veining, brecciation, and mineralisation are all of a higher tenor than the first hole MCD001. The
Company also announced that a newly-identified prospect, K-lam, to the NW of Mongae Creek, shows elevated copper
mineralisation, with up to 0.99% Cu intersected in a narrow vein within an altered diorite which outcrops in the stream over
a width of at least 30m.
On 30 November 2018, the Company announced Assay results for the second drill hole MCD002 at Mongae Creek returning
significant mineralised intervals of 55m @ 0.11% Cu from 103m; 49m @ 0.12% Cu from 165m, including 10m @ 0.22% Cu
from 183m; 10m @ 0.09% Cu from 228m; and 75m @ 0.10% Cu from 264m. These results are significantly better than
those for MCD001 and suggest that drilling is getting nearer the centre of the mineralised system.
On 5 February 2019, the Company announced that continual exploration shows high potential at key prospect areas
including the Crown Ridge, and the areas of planned exploration programs of trenching and soil auger at Mongae Creek,
soil grid at Sak Creek and sampling and mapping for K-Lam.
On 21 February 2019, the Company conducted an Investor Presentation to a group of sophisticated investors highlighting
the Wabag Project in Papua New Guinea, analogous as “prime real-estate in one of the world’s best mining belts”. The
presentation provided a snapshot of the exploration status and results of the Mongae Creek, Crown Ridge, Sak Creek and
K-Lam prospects and the exploration budget estimates for the period to the first Quarter of 2020.
On 27 February 2019, the Company requested a trading halt of the Company’s securities pending an announcement
concerning the finalisation of a material fundraising. The trading halt was effective as of the following trading day and to be
lifted upon the release of the announcement.
On 28 February 2019, the Company lodged Appendix 3B for the issue of 20,296,924 new fully paid ordinary shares
(Placement Shares) in the company along with 20,296,924 free unlisted options (Options). The Placement Shares issued
at $0.065 per share raised a total of $1,319,300.00 for the purpose of general working capital. The Placement Shares are
issued consistent to Resolution 3 – General Placement of Shares to Placement Investors as approved by Shareholders at
the last Annual General Meeting held on 30 November 2018. The Options are issued free of one (1) option at exercise price
$0.10 expiring 1/3/2020 and another one (1) option at exercise price $0.15 expiring 1/3/2021 for every two (2) issued
Placement Shares.
On 4 March 2019, the Company announced that it has secured commitments from a group of professional and sophisticated
investors (Placement Investors) to participate in the capital raising of the Company in the issue of 100 million shares along
with other equity securities entitlement that would meet GMN future funding requirements. At an issue price of $0.10 per
share, the Company would raise $10 million before issue costs. Subject to shareholder approval, the Company will issue
for every two (2) shares issued, the Placement Investors entitlement of one (1) share option exercisable at $0.10 within 12
months and another one (1) share option exercisable at $0.15 within 24 months respectively from date of issue (Placement
Options). These Placement Options shall provide the Company additional capital funding of $12.5 million pace over the
next 24 months. The funds raised would meet the working capital requirements of the Company for the next two (2) years
to support its planned exploration programs of the Wabag Project located in Papua New Guinea.
On 23 March 2019, the Company announced exploration results which included step-out soil sampling at Mongae Creek
returning five samples over 0.1% Cu with one sample recording 0.39% Cu in soil with the anomaly is still open. Coincident
Cu and Mo soil anomalies at Mongae Creek further support a porphyry model. Trenching would commence at Mongae
Creek in early April on main soil anomalies and new high-quality drill targets were expected by late May; Additional rock
chip sampling in the central part of the Sak Creek prospect returned rock chips to 23 g/t Au with a further 12 samples
assaying over 5 g/t Au; Soil-sampling program was completed at Sak Creek, with the first 187 samples showing a distinct
NW – SE striking feature similar to that observed in the Mongae Creek data; Additional geological mapping and rock-chip
sampling at Sak Creek has identified mineralisation south of the main target with rock-chip values to 4.24 g/t Au;
Furthermore, a geological reconnaissance program at the Laialam prospect completed in early February return rock chip
results up to 7.60 g/t Au.
On 9 April 2019, the Company announced a new tenement was granted over highly prospective ground and four of GMN’s
tenements which comprise the Wabag Project have been renewed for an additional 2-year period. The additional tenement
(EL2522) has been granted effectively doubling the area of prospective ground held by GMN. Furthermore, two additional
tenements (ELA2565 and ELA2563) are awaiting ministerial approval after being recommended for grant by the MRA.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
12
On 29 April 2019, the Company announced extensions to the Mongae Creek soil grid have identified a new copper anomaly
which is of much higher grade tenor than the previously announced. Copper-in-soil values include 12 samples higher than
0.2% Cu, with a spectacular high of 0.7% ppm Cu. The anomaly is in excess of 500 m wide and 500 m long (4.5 times larger
than previous anomaly is open to the NW. Trenching has commenced in this new area and follow-up drilling planned for the
second half of 2019.
On 24 May 2019, the Company lodged Appendix 3B for the issue of 14,276,923 new fully paid ordinary shares (Placement
Shares) in the company along with 14,276,922 free unlisted options (Options). The Placement Shares issued at $0.065 per
share raised a total of $928,000.00 for the purpose of general working capital. The Placement Shares are issued consistent
to the last placement of securities issued on 28 February 2019. The Options are issued free of one (1) option at exercise
price $0.10 expiring 27/05/2020 and another one (1) option at exercise price $0.15 expiring 27/5/2021 for every two (2)
issued Placement Shares.
On 1 July 2019, the Company advised that 61,237,300 Unlisted Options (Code: GMNAC) over fully paid ordinary shares in
the Company (exercise price $0.15) lapsed on 30 June 2019 in accordance with the terms of the options.
Review of Operations
Papua New Guinea Project
During the reporting period, the Company’s Wabag Project in Papua New Guinea concentrated on exploring for porphyry
copper-gold deposits. To this end, the Company completed two diamond drill holes for 876m at the Mongae Prospect, and
undertook close spaced soil sampling programs at Mongae and Mongae NW (EL2306), and at Sak Creek (EL1966) and
Crown Ridge (EL1968).
In addition to the soil programmes, rock chip sampling and stream sediment sampling was undertaken on EL1966, EL1967,
EL1968 and EL2306. A summary of the sampling statistics for the various exploration leases is included as Table 1, and
the location of each prospect is presented as Figure 1.
The exploration programme culminated into the definition of a zone of highly anomalous copper (Cu) in soil geochemistry
at the Mongae North West prospect which will be drilled in the fourth quarter of 2019.
Table 1: FY2019 Sample Statistics
EL Number
Project
Sample Type
No. Of
Samples
EL2306
EL1968
EL2306
EL1966
EL1967
EL1966
EL2306
EL1966
EL2306
Mongae Creek
Drill Samples
Crown Ridge
-80 mesh soil samples
Mongae
-80 mesh soil samples
Sak Creek
-80 mesh soil samples
Laialam
Sak Creek / K-Lam
Mongae
Sak Creek
Rock
Rock
Rock
Stream Sediments
Mongae Creek
Trench
877
249
806
604
21
48
68
30
735
At Crown Ridge, the Company completed a pitting programme in order to determine if an alluvial gold resource could be
delineated in and adjacent to the Timun River. Samples from the pitting programme were treated through a pilot plant which
was commission in October 2018. The processing plant was designed to obtain an estimate of the recoverable gold in the
pits and to determine if the gold in the alluvial deposits in the Timun River could be extracted economically.
In October 2018, the Company attended a series of Wardens’ hearings for the renewal of tenements and for the grant of
additional tenements to increase the area of the Company’s exploration grounds in this highly prospective region.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
13
Figure 1: Prospect Location Map
Exploration Programme
The focus of the exploration programmes undertaken by the Company over the last twelve months was the Mongae prospect
located in the north-east corner of EL2306. The aim of the exploration activities was to define drillable targets which could
be tested in fourth quarter of 2019.
In the third quarter of 2018, two diamond drill holes (MCD001 and MCD003) comprising 876m of drilling were drilled at the
Mongae Creek prospect. The two holes were designed to test an area of porphyry style alteration and mineralisation evident
in outcrop. The holes intersected wide zones of sub-economic copper mineralisation and petrology studies of the core
indicated that the holes had intersected alteration which is diagnostic of porphyry deposits.
Characteristics of porphyry copper-gold (Cu-Au) mineralisation were present throughout the two holes. The drill core from
both holes exhibited the extensive development of stock-working and sheeted quartz-pyrite veins within a porphyritic
tonalite, chalcopyrite, bornite, covellite and molybdenum (Mo) were observed in some veins. MCD002 was more intensively
GOLD MOUNTAIN LIMITED ANNUAL REPORT
14
mineralised than MCD001, with MCD002 recording intercepts of; 55m @ 0.11% Cu from 103m and 49m @ 0.12% Cu from
165m, including 10m @ 0.22% Cu from 183m.
Four soil sampling programmes were completed at the Mongae Creek and Mongae Creek Northwest prospects between
November 2018 and May 2019. A total of 807 samples were collected in this period which resulted in the delineation a
+500 m wide and 400 m long, copper in soil anomaly with a spot high of 0.71% Cu. This significant Cu-in-soil anomaly is
located approximately 600 m northwest of drill hole MCD002. The Cu-in-soil anomaly (Figure 2) is coincident with a Mo-
anomaly giving further confidence that a potential porphyry deposit is present at Mongae Creek. The Cu anomaly is still
open to the north-west and work on extending the soil grid further to the NW will commence in third quarter of 2019.
Figure 2: Mongae Creek and Mongae NW, Copper Soil Geochemistry
A trenching programme was completed at Mongae Creek and Mongae NW during May and June 2019. The aim of the
trenching was to test those areas where high Cu-in-soil anomalies had been identified, in order to define drill targets. A total
of five trenches were excavated; two at Mongae Creek and three at Mongae NW. A total of 733 m of trenches were
excavated. This work delineated a broad zone of >0.1% Cu that covers an area of 90,000 m2 with the best result obtained
from T4 (Mongae NW) which recorded a 142m intercept which assayed 0.20% Cu and 0.11 g/t Au.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
15
Alluvial Gold Resource Definition
In the third quarter of 2018, results from the shallow pitting program were reported. The pits were designed to assist in
the estimation of an alluvial resource at Crown Ridge. Assay results were variable, with the best result of 410 mg/m3
gold (Au) between 2.0–2.5 m depth being reported in pit CRP006, within a 3.0-m interval that averaged 235 mg/m3 Au.
All other intervals returned grades of below 100 mg/m3 Au.
A purpose-built, mobile bulk sampling plant for testing the nugget-bearing gold and platinum alluvial material was
delivered to Crown Ridge, and successfully commissioned in October 2018. The plant was commissioned to improve
the capacity and speed of processing bulk samples from the Crown Ridge project. The plant was used to process
samples from three 1 x 1m pits and one 5 x 5m pit. Concentrates from these pits were sent to a specialised laboratory
in Australia to measure the recovered gold grades.
Only one pit from this programme recorded economic levels of alluvial gold mineralisation, with the extent of the economic
alluvial resource being limited. It was concluded that the alluvial resource at Crown Ridge is of insufficient size and grade
to be processed economically.
Warden Hearings
Wardens Hearing for the renewal of six tenements and for the grant of an additional two tenements were held in October
2018. The outcomes from the hearings were communicated to the Company in mid-2019. Renewals for all the
tenements was approved and the two tenements under application were granted.
Capital Raisings
During the financial year and until the date of signing this report, the Company completed four placements to institutional
and sophisticated investors, the first in February 2019 following approval by shareholders at the 2018 AGM, the second in
May 2019, the third in August 2019 and the fourth in September 2019.
The issue of 20,296,923 shares on 28 February 2019 at a price of $0.065 per share raised a total of $1,319,300 and was
issued pursuant to Resolution 3 – General Placement of Shares to Placement Investors approved by Shareholders at the
Annual General Meeting held on 30 November 2018. In addition, the Company granted one option at exercise price $0.10
expiring 1/3/2020 and one option at exercise price $0.15 expiring 1/3/2021 for every two (2) issued placement shares issued.
The issue of 14,276,923 shares on 24 May 2019 at a price of $0.065 per share raised a total of $928,000 and was issued
using the Company’s available placement capacity under ASX Listing Rule 7.1. In addition, the Company granted one
option at exercise price $0.10 expiring 27/5/2020 and one option at exercise price $0.15 expiring 27/5/2021 for every two
(2) issued placement shares issued.
The issue of 2,000,000 and 19,733,333 shares on 30 August 2019 at a price of $0.065 and $0.060 per share respectively
raised a total $1,314,000. The 19,733,333 shares issued were part of the proposed share placement (Placement)
announced to the market on 31 July 2019. Consistent to the terms of the Placement, the Company granted one option at
exercise price $0.10 expiring 28/8/2020 and one option at exercise price $0.15 expiring 28/8/2021 for every two (2) shares
issued under the terms of Placement.
The issue of 30,000,000 shares on 4 September 2019 at a price of $0.06 per share raised a total $1,800,000 and represents
part of the proposed share placement announced to the market on 31 July 2019. The Placement Shares has the
accompanying entitlement of unlisted options for every two (2) Shares issued, of one (1) share option exercisable at $0.10
within 12 months and another one (1) share option exercisable at $0.15 within 24 months respectively from date of issue
(Placement Options). The Company expects to issue the Placement Options after the 2019 Annual General Meeting. The
Placement Options provides the Company with additional capital funding of $3,750,000 over the next 24 months.
The funds raised are to be used in support of its planned exploration programs of the Wabag Project located in Papua New
Guinea and general working capital requirements.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
16
Capital Raising
Date
Shares Issued
Price
Amount Raised
Issue of shares approved at 2018 AGM
28-02-2019
24-05-2019
30-08-2019
30-08-2019
04-09-2019
Issue of shares
Issue of shares
Issue of shares
Issue of shares
Total
Risk management
20,296,923
14,276,923
2,000,000
21,733,333
30,000,000
86,307,179
$0.065
$0.065
$0.065
$0.060
$0.060
1,319,300
928,000
130,000
1,184,000
1,800,000
$5,361,300
Details of the Company’s Risk Management policies are contained within the Corporate Governance Statement.
Corporate Governance
A statement disclosing the extent to which the Company has followed the best practice recommendations set by the ASX
Corporate Governance Council during the period is displayed on the Company’s website.
Subsequent events after balance date
On 8 July 2019, the Company announced an update to its exploration program at its flagship Wabag project in Papua
New Guinea, with the focus on Mongae Creek. Trench results at Mongae provide a strong case to drill high-quality
porphyry targets with significant intercepts including Mongae NW Trench 1 66 m @ 0.13% Cu and Mongae NW Trench 4
intercepted 154 m @ 0.19% Cu including 142 m @ 0.20% Cu and 0.11 ppm Au and and 13 m @ 0.44% Cu from 68 m.
On 30 July 2019, the Company announced it has received commitments for a placement raising $2.5 million. The funds
from this placement will be used to complete the initial diamond drilling programme at the Mongae NW prospect at the
Company’s Wabag Project in Papua New Guinea and for general working capital. For every Share issued to a subscriber
in the placement an unlisted option over a Share at no additional cost will also be issued. One half of the options issued
pursuant to the placement will have an expiry date of 12 months from the date of their issue, each with an exercise price of
$0.10 per option and the remaining half of the options will have an expiry date of 24 months from the date of their issue,
with an exercise price of $0.15 per option. The managing director, Mr Sin Pyng (Tony) Teng is proposing to participate in
the $2.5 million placement to the amount of $500,000.00. The Company expects to seek approval from holders of ordinary
securities for this placement and the placement to Mr Teng at its 2019 annual general meeting.
On 28 August 2019, the Company was in suspension under ASX Listing Rule 17.2, pending the appointment of sufficient
directors to comply with section 201A(2) of the Corporations Act 2001 (Cth).
On 30 August 2019, the Company lodged Appendix 3B for the issue of 21,733,333 new fully paid ordinary shares (Shares)
in the company along with 19,733,338 options (Options) for the placement of shares (Placement Shares) at an issue price
of $0.065 and $0.06 per share.
The issue of Shares raised a total of $1,314,000 for purpose of general working capital. The Placement Shares include
19,733,333 Shares with accompanying options of one (1) option at exercise price $0.10 expiring 28/8/2020 and one (1)
option at exercise price $0.15 expiring 28/8/2021 for every two (2) issued Placement Shares.
On 2 September 2019, the Company announced the appointment of Mr Syed Hizam Alsagoff as a Non-Executive Director
of the Company.
On 3 September 2019, the Company was reinstated for Official Quotation following the appointment of an additional director
meeting the minimum number of directors required under section 201A(2) of the Corporations Act 2001 (Cth).
On 4 September 2019, the Company lodged Appendix 3B for the issue of 30,000,000 new fully paid ordinary shares (Shares)
in the company for the placement of shares (Placement Shares) at a price of $0.06 per share. The sum of $1,800,000
raised represents part of the proposed share placement announced to the market on 31 July 2019. The Placement Shares
has accompanying entitlement of unlisted options for every two (2) Shares issued, of one (1) share option exercisable at
$0.10 within 12 months and another one (1) share option exercisable at $0.15 within 24 months respectively from date of
issue (Placement Options). The Company expects to issue the Placement Options after the 2019 Annual General Meeting.
The Placement Options shall provide the Company additional capital funding of $3,750,000 pace over the next 24 months.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
17
The announcement of the Appendix 3B lodgement further reiterated the participation and acknowledgement of an entity
related to managing director, Mr Tony Teng in the placement amount of $500,000, on the same terms of the placement offer
as previously announced by the Company. The issue of securities in shares and options to this entity will be subject to the
approval of the Company’s shareholders under ASX Listing Rule 10.11. The Company expects to seek approval from
shareholders at its next annual general meeting.
There has not been any other matter or circumstance that has arisen after balance date that has significantly affected, or
may significantly affect, the operations of the Company, the results of those operations, or the state of affairs of the Company
in future financial periods.
Environmental legislation
The Company is subject to significant environmental and monitoring requirements in respect of its natural resource
exploration activities. The Directors are not aware of any significant breaches of these requirements during the period.
Indemnification and insurance of Directors and Officers
The Company has agreed to indemnify all the Directors of the Company for any liabilities to another person (other than the
Company or related entity) that may arise from their position as Directors of the Company, except where the liability arises
out of conduct involving a lack of good faith.
During the financial year, GMN paid a premium in respect of a contract insuring the Directors and officers of the Company
against any liability incurred in the course of their duties 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.
Options
The maximum terms of options granted during the year and until the date of this report are as follows:
On 28 February 2019 the Company granted 20,296,924 free unlisted options to participants in the share placement of
20,296,923 shares on the same date in two separate tranches of options. One option tranche is at an exercise price of $0.10
expiring on 1 March 2020 and the other option tranche is at an exercise price of $0.15 expiring on 1 March 2021 with no
vesting conditions.
On 24 May 2019 the Company granted 14,276,922 free unlisted options to participants in the share placement of 14,276,923
shares on the same date in two separate tranches of options. One option tranche is at an exercise price of $0.10 expiring
on 27 May 2020 and the other option tranche is at an exercise price of $0.15 expiring 27 May 2021 with no vesting conditions.
On 30 August 2019 the Company granted 19,733,338 free unlisted options to participants in the share placement of
19,733,333 shares on the same date in two separate tranches of options. One tranche of 9,866,669 options is at an exercise
price of $0.10 expiring on 28/08/2020 and the other tranche of 9,866,669 options is at an exercise price of $0.15 expiring
28/08/2021 with no vesting conditions.
The options must be exercised on or before the expiry date in cash.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
18
REMUNERATION REPORT (AUDITED)
The Board, in consultation with the Remuneration Committee, is responsible for determining and reviewing compensation
arrangements for the directors and executive management. The Board assesses the appropriateness of the nature and
amount of remuneration of key personnel on an annual basis. In determining the amount and nature of officers’ packages,
the Board takes into consideration the Company’s financial and operational performance along with industry and market
conditions.
The Committee has the authority to retain any outside advisor at the expense of the Company, without the Board’s approval,
at any time and has the authority to determine any such advisor’s fees and other retention terms.
In setting corporate goals and objectives relevant to Senior Executives’ compensation, the Committee considers both short-
term and long-term compensation goals and the setting of criteria around this. In relation to setting Directors’ remuneration
the Committee looks at and considers comparative data from similar companies.
This report outlines the remuneration arrangements in place for Directors and Key Management Personnel of Gold Mountain
Limited (the “Company”) for the financial year ended 30 June 2019.
The following persons acted as Directors during or since the end of the financial year:
Graham Kavanagh
Sin Pyng “Tony” Teng
Douglas Smith
Syed Hizam Alsagoff (appointed 2/9/2019)
The term ‘Key Management Personnel’ is used in this remuneration report to refer to the following persons. Except as noted,
the named persons held their current position for the whole of the financial year and since the end of the financial year:
Graham Kavanagh
Sin Pyng “Tony” Teng
Douglas Smith
Remuneration Philosophy
Eric Kam
David Clark
The performance of the Company depends upon the quality of the Directors and executives. The philosophy of the Company
in determining remuneration levels is to:
set competitive remuneration packages to attract and retain high calibre employees;
link executive rewards to shareholder value creation; and
establish appropriate, demanding performance hurdles for variable executive remuneration
Remuneration Committee
The Remuneration Committee of the Board of Directors of the Company is responsible for determining and reviewing
compensation arrangements for the Directors and the Senior Management team.
The Remuneration Committee assesses the appropriateness of the nature and amount of remuneration of Directors and
senior executives on a periodic basis by reference to relevant employment market conditions with an overall objective of
ensuring maximum stakeholder benefit from the retention of a high quality Board and executive team.
Remuneration Structure
In accordance with best practice Corporate Governance, the structure of Non-Executive Director and executive
remuneration is separate and distinct.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
19
Non-Executive Director Remuneration
The Board seeks to set aggregate remuneration at a level that provides the Company with the ability to attract and retain
Directors of the highest calibre, whilst incurring a cost that is acceptable to shareholders.
Each Director is entitled to such remuneration from the Company as the Directors decide, but the total amount provided to
all non-executive directors must not exceed in aggregate the amount fixed by the Company in a general meeting. The
aggregate remuneration for all non-executive directors has been set at an amount of $300,000 per annum.
The ASX Listing Rules specify that the aggregate remuneration of Non-Executive Directors shall be determined from time
to time by a general meeting.
The amount of aggregate remuneration sought to be approved by shareholders and the manner in which it is apportioned
amongst Directors is reviewed annually. The Board considers advice from external shareholders as well as the fees paid
to Non-Executive Directors of comparable companies when undertaking the annual review process.
Each Director is entitled to receive a fee for being a Director of the Company.
The remuneration of Non-Executive Directors for the year ended 30 June 2019 is detailed in the Remuneration of Directors
and named executives section of this report on the following pages of this report.
Senior Manager and Executive Director Remuneration
Remuneration consists of fixed remuneration and Company options (as determined from time to time). In addition to the
Company employees and Directors, the Company has contracted key consultants on a contractual basis. These contracts
stipulate the remuneration to be paid to the consultants.
Fixed Remuneration
Fixed remuneration is reviewed annually by the Independent Directors’ Committee (which assumes the role of the
Remuneration Committee). The process consists of a review of relevant comparative remuneration in the market and
internally and, where appropriate, external advice on policies and practices. The Committee has access to external,
independent advice where necessary.
Fixed remuneration is paid in the form of cash payments.
The fixed remuneration component of the six most highly remunerated Company executives is detailed in Table 1.
Employment Contracts
During the year and to the date of this report there are no employment contracts with the Company.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
20
Remuneration of Directors and named executives
Table 1: Directors’ and named executives remuneration for the year ended 30 June 2019
Short-term employee benefits
Post-employment benefits
Equity
Other
Total
%
Salary &
Fees
Bonuses
Non- Monetary
Benefits
Super-
annuation
Prescribed
Benefits
Options
Shares
Deferred
Benefits
Performance
Related
Graham Kavanagh 1
Sin Pyng “Tony” Teng 2
Douglas Smith 3
Eric Kam 4
David Clark 5
Total
30,000
75,000
173,400
102,000
30,000
410,400
-
-
-
-
-
-
-
-
-
-
-
-
-
285
285
-
-
570
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
30,000
75,285
173,685
102,000
30,000
410,970
0%
0%
0%
0%
0%
-
Table 2: Directors’ and named executives remuneration for the year ended 30 June 2018
Short-term employee benefits
Post-employment benefits
Equity
Other
Total
%
Salary &
Fees
Bonuses
Non- Monetary
Benefits
Super-
annuation
Prescribed
Benefits
Options
Shares
Deferred
Benefits
Performance
Related
Graham Kavanagh 1
36,000
Sin Pyng “Tony” Teng 2
108,000
Douglas Smith 3
Eric Kam 4
David Clark 5
Total
232,000
108,000
36,000
520,000
-
-
-
-
-
-
-
-
-
-
-
-
-
1,140
1,140
-
-
2,280
-
-
-
-
-
-
35,524
35,524
-
-
-
71,048
-
-
-
-
-
-
-
-
-
-
-
-
71,524
144,664
233,140
108,000
36,000
593,328
0%
0%
0%
0%
0%
-
GOLD MOUNTAIN LIMITED ANNUAL REPORT
21
1. Paid to Drumcliffe Investments Pty Ltd for corporate advisory services of which Mr Kavanagh is a director and shareholder.
2. Paid to Rodby Holdings Pty Ltd for corporate advisory services of which Mr Teng is a director.
3. Paid to of Dougnic Pty Ltd for geological services which Mr Smith is a director and shareholder and Dougie Downunder which Mr Smith is principal.
4. Paid to Useful Ways Pty Ltd for corporate advisory services of which Mr Kam is a director and shareholder and Ekam Commercial of which Mr Kam is principal.
5. Paid to D.W. Clark & Co., Chartered Accountant for corporate advisory services of which Mr Clark is principal.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
22
Other Key Management Personnel Transactions
The Company has established the Gold Mountain Limited Employee Share Option Plan (ESOP) and a summary of the
terms and conditions of the Plan are set out below:
i.
ii.
iii.
iv.
v.
vi.
vii.
All employees (full time and part time) will be eligible to participate in the Plan.
Options are granted under the Plan at the discretion of the board and if permitted by the board, may be
issued to an employee’s nominee.
Each option is to subscribe for one ordinary share in the Company and will expire 5 years from its date of
issue. An option is exercisable at any time from its date of issue provided all relevant vesting conditions, if
applicable, have been met. Options will be issued free. The exercise price of options will be determined
by the board. The total number of shares the subject of options issued under the Plan, when aggregated
with issues during the previous 5 years pursuant to the Plan and any other employee share plan, must not
exceed 5% of the Company’s issued share capital.
If, prior to the expiry date of options, a person ceases to be an employee of the Company for any reason
other than retirement at age 60 or more (or such earlier age as the board permits), permanent
disability, redundancy or death, the options held by that person (or that person’s nominee)
automatically lapse on the first to occur of a) the expiry of the period of 30 days from the date of such
occurrence, and b) the expiry date. If a person dies, the options held by that person will be exercisable by
that person’s legal personal representative.
Options cannot be transferred other than to the legal personal representative of a deceased option holder.
The Company will not apply for official quotation of any options.
Shares issued as a result of the exercise of options will rank equally with the Company’s previously issued
shares.
viii. Option holders may only participate in new issues of securities by first exercising their options.
ix.
x.
xi.
Options are granted under the plan for no consideration.
Each share options converts into one ordinary shares of Gold Mountain Limited.
14,800,000 unlisted options granted on 29 August 2016 pursuant to the Company’s Employee Share Option
Plan have an exercise price of $0.30 and are subject to the following vesting conditions:
(1) The Company's underlying share price must exceed $0.50 based on volume weighted average price
(VWAP) over a 5 day consecutive period;
(2) The holder must be an actual consultant to or employee of the Company at the time of exercise of the
relevant Granted Options. In addition, the exercise of the Granted Options is subject to the following
conditions:
(3) The exercise period shall not commence until a date that is at least 12 months after the date of the
grant of the Granted Options to the holder; and
(4) a granted option expires 36 months after the date on which the relevant granted options were granted.
The unlisted options granted under the Employee Share Option Plan are exercisable at $0.30 expire on
28 November 2019.
xii.
7,800,000 unlisted options granted on 29 December 2017 pursuant to the Company’s Employee Share
Option Plan have an exercise price of $0.15 and are subject to the vending condition that the total granted
options shall be vested over 3 periods of 12 months per period. The unlisted options granted under the
Employee Share Option Plan are exercisable at $0.15 expire on 26 July 2021.
The Board may amend the terms and conditions of the plan subject to the requirements of the Listing Rules.
There have been no other transactions involving equity instruments other than those described in the tables above. For
details of other transactions with Key Management Personnel, refer to Note 18: Related Party Disclosures.
End of Remuneration Report.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
23
SCHEDULE OF TENEMENTS
EL No.
EL1966
Sak Creek
EL1967
Poket Creek
EL1968
Crown Ridge
EL2426
Keman
EL2430
Meriamanda
EL2522
Wapenamanda
EL2565
Londol
EL2306
Alakula/Kompian
Station
ELA2563
Kompiam
ELA2632
Mt Wipi
Holder
GMN Interest
Location
Area (km2)
Viva No.20 Limited
Viva No.20 Limited
Viva No.20 Limited
70%
70%
70%
Enga Province, PNG
Enga Province, PNG
Enga Province, PNG
GMN 6768 (PNG) Limited
100%
Enga Province, PNG
GMN 6768 (PNG) Limited
100%
Enga Province, PNG
GMN 6768 (PNG) Limited
100%
Enga Province, PNG
Viva Gold (PNG) Limited
100%
Enga Province, PNG
Khor Eng Hock & Sons (PNG)
Limited / Abundance Valley
(PNG) Limited
Abundance Valley (PNG)
Limited
Registration of
transfer
pending
Enga Province, PNG
Application
Enga Province, PNG
GMN 6768 (PNG) Limited
Application
Enga Province, PNG
103
103
103
48
154
841
537
164
226
537
Expiry
26/06/2019
(Renewal pending)
27/11/2019
(Renewal submitted)
27/11/2019
(Renewal submitted)
27/05/2020
27/05/2020
24/02/2021
26/05/2021
13/12/2019
-
-
Figure 1 – Suite of tenements located at the Enga Province in Papua New Guinea
GOLD MOUNTAIN LIMITED ANNUAL REPORT
25
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2019
Other income
Administration costs
Depreciation expense
Employment costs
Exploration expense
Impairments expense
Investor and public relations expense
Legal and professional costs
Other expenses
Note
3
2019
$
2018
$
48,529
48,529
119,426
119,426
(488,078)
(369,322)
(127,000)
(56,164)
(62,280)
(62,280)
9
-
(171,068)
(20,000)
-
(322,838)
(240,944)
(128,079)
(308,167)
(301,275)
(395,954)
Loss before income tax expense
(1,401,021)
(1,484,473)
Income tax expense
Net loss for the period
Attributable to the owners of Gold Mountain Limited
5
-
-
(1,401,021)
(1,484,473)
Other comprehensive income
Foreign currency translation
Total other comprehensive income for the year, net of tax
Total comprehensive loss for the period
Attributable to the owners of Gold Mountain Limited
Loss per share
Basic loss per share (cents)
Diluted loss per share (cents)
(3)
(3)
(1)
(1)
(1,401,024)
(1,484,474)
20
(0.27)
N/A
(0.32)
N/A
The statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
27
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2019
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Plant and equipment
Deferred exploration and evaluation expenditure
Intangible assets
Investments
Other assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
Other current liabilities
TOTAL CURRENT LIABILITIES
NON CURRENT LIABILITIES
Other non-current liabilities
TOTAL NON CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
Note
2019
$
2018
$
6
7
8
9
10
11
12
13
14
54,070
2,985,066
60,509
82,239
114,579
3,067,305
418,780
489,797
15,868,988
11,816,184
5,995,970
6,002,733
50,555
35,545
50,555
55,545
22,369,838
18,414,814
22,484,417
21,482,119
437,692
1,300,000
256,145
750,000
1,737,692
1,006,145
14
450,000
1,200,000
450,000
1,200,000
2,187,692
2,206,145
20,296,725
19,275,974
15
16
30,006,334
27,885,834
697,225
395,953
(10,406,897)
(9,005,876)
Total equity attributable to equity holders of the Company
20,296,662
19,275,911
Non-controlling interest
TOTAL EQUITY
63
63
20,296,725
19,275,974
The statement of financial position should be read in conjunction with the accompanying notes.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
28
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2019
Issued Capital
Reserves
Accumulated
Losses
Non
Controlling
Interest
Total
$
$
$
$
$
Balance at 1 July 2017
19,942,315
(7,521,403)
63
12,420,975
Comprehensive Income
Net loss for the period
Other comprehensive
income
Total comprehensive
income for the year
Transactions with owners
in their capacity as
owners
Issue of share capital
Share issue costs
Options expense
Total transactions with
owners in their capacity
as owners
-
-
(1)
(1,484,473)
-
(1)
(1,484,473)
-
-
8,266,569
(323,050)
-
-
-
395,954
7,943,519
395,953
-
-
-
-
-
-
-
-
-
-
-
(1,484,473)
(1)
(1,484,474)
8,266,569
(323,050)
395,954
8,339,472
Balance at 30 June 2018
27,885,834
395,953
(9,005,876)
63
19,275,974
Balance at 1 July 2018
27,885,834
395,953
(9,005,876)
63
19,275,974
Comprehensive Income
Net loss for the period
Other comprehensive
income
Total comprehensive
income for the year
Transactions with owners
in their capacity as
owners
Issue of share capital
Share issue costs
Options expense
Total transactions with
owners in their capacity
as owners
-
-
-
-
-
-
(3)
-
(1,401,021)
-
(3)
(1,401,021)
2,247,300
(126,800)
-
-
-
301,275
2,120,500
301,275
-
-
-
-
-
-
-
-
-
-
-
-
-
(1,401,021)
(3)
(1,401,024)
2,247,300
(126,800)
301,275
2,421,775
Balance at 30 June 2019
30,006,334
697,225
(10,406,897)
63
20,296,725
The statement of changes in equity should be read in conjunction with the accompanying notes.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
29
STATEMENT OF CASHFLOWS
FOR YEAR ENDED 30 JUNE 2019
Cash flows from operating activities
Interest received
Payments to suppliers and employees
Other receipts
Note
2019
$
2018
$
3,063
25,400
(801,000)
(825,903)
55,228
94,936
Net cash (used in) provided by operating activities
27
(742,709)
(705,567)
Cash flows from investing activities
Payments for plant and equipment
(55,983)
(407,996)
Payments for other investments
14
(450,000)
(750,000)
Receipt of tenement security deposits
-
10,000
Payments for exploration and evaluation
9
(4,052,804)
(3,598,227)
Net cash (used in) provided by investing activities
(4,558,787)
(4,746,223)
Cash flows from financing activities
Proceeds from issue of shares
Payments for share issue costs
Proceeds from borrowings
Net cash provided by (used in) financing activities
Net (decrease) / increase in cash
and cash equivalents
2,247,300
6,066,569
(126,800)
(323,050)
250,000
-
2,370,500
5,743,519
(2,930,996)
291,729
Cash and cash equivalents at beginning of financial year
2,985,066
2,693,337
Cash and cash equivalents at end of financial year
6
54,070
2,985,066
The statement of cashflows should be read in conjunction with the accompanying notes.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
30
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
This financial report includes the financial statements and notes of Gold Mountain Limited.
Number
Notes to the Financial Statements
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
Summary of significant accounting policies
Operating segments
Revenue & other income
Loss for the year
Income tax expense
Current assets - Cash and cash equivalents
Current assets - Trade and other receivables
Non-current assets – Plant and equipment
Non-current assets – Deferred exploration and evaluation expenditure
Non-current assets – Intangible assets
Non-current assets – Investments
Non-current assets – Other assets
Current liabilities – Trade and other payables
Current and non-current liabilities – Other
Contributed equity
Reserves
Share based payments
Related party disclosures
Key management personnel compensation
Loss per share
Financial Risk Management
Auditor’s remuneration
Parent Entity Information
Dividends
Events subsequent to reporting date
Controlled entities
Cash flow information
GOLD MOUNTAIN LIMITED ANNUAL REPORT
31
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES
a.
Basis of Preparation
The financial statements are general purpose financial statements that have been prepared in accordance with
Australian Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of
the Australian Accounting Standards Board (AASB) and the Corporations Act 2001.
Australian Accounting Standards set out accounting policies that the AASB has concluded would result in
financial statements containing relevant and reliable information about transactions, events and conditions.
Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply
with International Financial Reporting Standards as issued by the IASB. Material accounting policies adopted in
the preparation of these financial statements are presented below and have been consistently applied unless
otherwise stated.
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 selected non-current assets, financial assets and financial
liabilities
b.
Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in
presentation for the current financial year.
When the Company applies an accounting policy retrospectively, makes a retrospective restatement or
reclassifies items in its financial statements, financial statements as at the beginning of the earliest comparative
period will be disclosed.
c.
Principles of consolidation
Business combinations
For every business combination, the Company identifies the acquirer, which is the combining entity that obtains
control over the other combining entities. An investor controls an investee when it is exposed to, 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. In assessing control, the Company takes into consideration potential voting rights that are
currently exercisable. The acquisition date is the date on which control is transferred from the acquirer.
Interests in equity-accounted investees
The Company’s interests in equity-accounted investees comprise the interest in a joint venture. A joint venture is
a joint arrangement, whereby the Group and other parties have joint control and have rights to the net assets of
the arrangement. The interest in the joint venture is accounted for using the equity method. It is recognised initially
at cost, which includes transaction costs. Subsequent to initial recognition, the consolidated financial statements
include the Company’s share of the profit or loss and other comprehensive income of equity-accounted investees,
until the date on which significant influence or joint control ceases.
Joint arrangements
Under AASB 11, the Company has classified its interests in joint arrangements as either joint operations (if the
Group has rights to the assets, and obligations for the liabilities, relating to an arrangement) or joint ventures (if
the Group has rights only to the net assets of an arrangement).
When making this assessment, the Company considered the structure of the arrangements, the legal form of any
separate vehicles, the contractual terms of the arrangements and other facts and circumstances.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
32
The Company did not have any joint arrangements at the start of the financial year.
On 16 August 2016, the Company completed the acquisition of an additional 50% of the issued capital of Viva
No. 20 Limited (“Viva”) through the issue of 60,000,000 shares at $0.08 each to the Vendors. Simultaneously,
the Vendors issued 125 ordinary shares to GMN comprising 50% of the entire issued capital of Viva held by the
Vendors. On completion of this acquisition, the Company now holds a controlling interest of 70% in Viva.As a
result of the acquisition and in accordance with AASB 11, this new arrangement has been recognised on a
consolidated basis.
On 18 July 2017, the Company announced that it had entered a binding agreement for the acquisition of the
EL2306 Interest from the EL2306 Vendor for purchase price of $5,200,000 comprising 22 million Shares at a
notional price of $0.10 per Share and $3,000,000 in cash. The cash consideration of $3,000,000 is payable in
instalments. An exclusivity fee of $150,000 was also paid and capitalised as Deferred Expenditure in FY 2016.
On 19 February, 2018 the Company issued 22,000,000 shares at the issue price of $0.10 to raise $2,200,000 as
part consideration for the acquisition of a 70% interest in EL2306 as approved by Shareholders at the Annual
General Meeting held on 28 November 2017. Instalment costs of $1,500,000 were paid by the Company in FY
2017, FY 2018 and FY 2019. The remaining instalment costs of $1,500,000 is payable over 18 months with
$300,000 payable by 30 June 2020 and $1,200,000 payable by 31 December 2020. As a result of the acquisition
and in accordance with AASB 11, this new arrangement has been recognised as a joint arrangement. See Note
14 for further information.
d.
Impairment of Assets
At the end of each reporting period, the Company assesses whether there is any indication that an asset may be
impaired. The assessment will include the consideration of external and internal sources of information. If such
an indication exists, an impairment test is carried out on the asset by comparing the recoverable amount of the
asset, being the higher of the asset’s fair value less costs to sell and value in use, to the asset’s carrying amount.
Any excess of the asset’s carrying amount over its recoverable amount is recognised immediately in profit or
loss, unless the asset is carried at a revalued amount in accordance with another Standard (eg in accordance
with the revaluation model in AASB 116). Any impairment loss of a revalued asset is treated as a revaluation
decrease in accordance with that Standard.
Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the
recoverable amount of the cash-generating unit to which the asset belongs.
e.
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits available on demand with banks and other short-term
highly liquid investments with original maturities of three months or less.
f.
Provisions
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.
Provisions are measured using the best estimate of the amounts required to settle the obligation at the end of
the reporting period.
g.
Trade and other payables
Trade and other payables represent the liability outstanding at the end of the reporting period for goods and
services received by the Company during the reporting period which remain unpaid. The balance is recognised
as a current liability with the amounts normally paid within 30 days of recognition of the liability.
h.
Income Tax
The income tax expense (revenue) for the year comprises current income tax expense (income) and deferred tax
expense (income).
Current income tax expense charged to profit or loss is the tax payable on taxable income. Current tax liabilities
(assets) are measured at the amounts expected to be paid to (recovered from) the relevant taxation authority.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
33
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during
the year as well unused tax losses.
Current and deferred income tax expense (income) is charged or credited outside profit or loss when the tax
relates to items that are recognised outside profit or loss.
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 and their measurement also reflects the manner in which
management expects to recover or settle the carrying amount of the related asset or liability.
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.
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) a legally enforceable right of set-off exists; and (b) 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.
i.
Exploration and Development Expenditure
Exploration and evaluation expenditures in relation to each separate area of interest are recognised as an
exploration and evaluation asset in the year in which they are incurred where the following conditions are satisfied:
(i)
The rights to tenure of the area of interest are current; and
(ii)
at least one of the following conditions is also met:
(a)
(b)
the exploration and evaluation expenditures are expected to be recouped through successful
development and exploration of the area of interest, or alternatively, by its sale; or
exploration and evaluation activities in the area of interest have not at the reporting date reached a
stage which permits a reasonable assessment of the existence or otherwise of economically
recoverable reserves, and active and significant operations in, or in relation to, the area of interest
are continuing.
Exploration and evaluation assets are initially measured at cost and include acquisition of rights to explore,
studies, exploratory drilling, trenching and sampling and associated activities and an allocation of depreciation
and amortised of assets used in exploration and evaluation activities. General and administrative costs are only
included in the measurement of exploration and evaluation costs where they are related directly to operational
activities in a particular area of interest.
Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the
carrying amount of an exploration and evaluation asset may exceed its recoverable amount. The recoverable
amount of the exploration and evaluation asset (for the cash generating unit(s) to which it has been allocated
being no larger than the relevant area of interest) is estimated to determine the extent of the impairment loss (if
any). Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the
revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not
exceed the carrying amount that would have been determined had no impairment loss been recognised for the
asset in previous years.
Where a decision has been made to proceed with development in respect of a particular area of interest, the
relevant exploration and evaluation asset is tested for impairment and the balance is then reclassified to
development.
Costs of site restoration are provided over the life of the project from when exploration commences and are
included in the costs of that stage. Site restoration costs include the dismantling and removal of mining plant,
equipment and building structures, waste removal, and rehabilitation of the site in accordance with local laws and
regulations and clauses of the permits. Such costs have been determined using estimates of future costs, current
legal requirements and technology on an undiscounted basis.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
34
Any changes in the estimates for the costs are accounted on a prospective basis. In determining the costs of site
restoration, there is uncertainty regarding the nature and extent of the restoration due to community expectations
and future legislation. Accordingly the costs have been determined on the basis that the restoration will be
completed within one year of abandoning the site.
j.
Revenue and Other Income
Revenue is measured at the fair value of the consideration received or receivable. When the inflow of
consideration is deferred, it is treated as the provision of financing and is discounted at a rate of interest that is
generally accepted in the market for similar arrangements. The difference between the amount initially recognised
and the amount ultimately received is interest revenue.
All revenue is stated net of the amount of goods and services tax (GST).
k.
Earnings (Loss) per share
Basic earnings per share is calculated as net profit attributable to members of the parent, adjusted to exclude any
costs of servicing equity (other than dividends) divided by the weighted average number of ordinary shares,
adjusted for any bonus element.
Diluted earnings per share is calculated as net profit attributable to members, adjusted for:
(i)
costs of servicing equity (other than dividends);
(ii)
(iii)
the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have
been recognised as expenses; and
other non-discretionary changes in revenues or expenses during the period that would result from the
dilution of potential ordinary shares; divided by the weighted average number of ordinary shares and
dilutive potential ordinary shares, adjusted for any bonus element.
l.
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 Taxation Office (ATO).
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of
GST recoverable from, or payable to, the ATO is included with other receivables or payables in the statement of
financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing
activities which are recoverable from, or payable to, the ATO are presented as operating cash flows included in
receipts from customers or payments to suppliers.
m.
Plant and Equipment
Each class of plant and equipment is carried at cost or fair value as indicated less, where applicable, any
accumulated depreciation and impairment losses.
Plant and equipment
Plant and equipment are measured on the cost basis and therefore carried at cost less accumulated depreciation
and any accumulated impairment. In the event the carrying amount of plant and equipment is greater than the
estimated recoverable amount, the carrying amount is written down immediately to the estimated recoverable
amount and impairment losses are recognised either in profit or loss or as a revaluation decrease if the impairment
losses relate to a revalued asset. A formal assessment of recoverable amount is made when impairment
indicators are present.
The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the
recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net
cash flows that will be received from the asset’s employment and subsequent disposal. The expected net cash
flows have been discounted to their present values in determining recoverable amounts.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
35
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits associated with the item will flow to the Company and the
cost of the item can be measured reliably. All other repairs and maintenance are charged to the statement of profit
or loss and other comprehensive income during the financial period in which they are incurred.
Depreciation
The depreciable amount of all fixed assets is depreciated on a straight-line basis over the asset’s useful life to the
Company commencing from the time the asset is held ready for use.
The depreciation rates used for each class of depreciable assets are:
Class of Fixed Asset
Depreciation Rate
Plant and equipment
20%-32%
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting
period.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount
is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and
losses are included in the statement of profit or loss and other comprehensive income. When revalued assets are
sold, amounts included in the revaluation surplus relating to that asset are transferred to retained earnings.
n.
Financial Instruments
Recognition and initial measurement
Financial assets and financial liabilities are recognised when the Company 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 (ie trade date accounting is adopted).
Financial instruments are initially measured at fair value plus transaction 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
Finance instruments are subsequently measured at fair value, amortised cost using the effective interest rate
method, or cost.
Amortised cost is 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 amortisation of the
difference between that initial amount and the maturity amount calculated using the effective interest method.
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) through the expected life (or when this cannot be reliably predicted, the
contractual term) of the financial instrument to the net carrying amount of the financial asset or financial liability.
Revisions to expected future net cash flows will necessitate an adjustment to the carrying value with a
consequential recognition of an income or expense item in profit or loss.
(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 value being included in profit or loss.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
36
(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)
Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets that have fixed maturities and fixed or
determinable payments, and it is the Company’s intention to hold these investments to maturity. They are
subsequently measured at amortised cost.
Held-to-maturity investments are included in non-current assets where they are expected to mature within
12 months after the end of the reporting period. All other investments are classified as current assets.
(iv)
Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets that are either not suitable to be
classified into other categories of financial assets due to their nature, or they are designated as such by
management. They comprise investments in the equity of other entities where there is neither a fixed
maturity nor fixed or determinable payments.
They are subsequently measured at fair value with changes in such fair value (ie gains or losses) recognised
in other comprehensive income (except for impairment losses and foreign exchange gains and losses).
When the financial asset is derecognised, the cumulative gain or loss pertaining to that asset previously
recognised in other comprehensive income is reclassified into profit or loss.
Available-for-sale financial assets are included in non-current assets where they are expected to be sold
within 12 months after the end of the reporting period. All other financial assets are classified as current
assets.
(v)
Financial liabilities
Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised
cost.
Impairment
At the end of each reporting period, the Company assesses whether there is objective evidence that a financial
instrument has been impaired. In the case of available-for-sale financial instruments, a prolonged decline in the
value of the instrument is considered to determine whether an impairment has arisen. Impairment losses are
recognised in profit or loss. Also, any cumulative decline in fair value previously recognised in other comprehensive
income is reclassified to profit or loss at this point.
Derecognition
Financial assets are derecognised where the contractual rights to receipt of cash flows expire or the asset is
transferred to another party whereby the Company no longer has any significant continuing involvement in the risks
and benefits associated with the asset. Financial liabilities are derecognised where the related obligations are
discharged, cancelled or expired. The difference between the carrying value of the financial liability extinguished or
transferred to another party and the fair value of consideration paid, including the transfer of non-cash assets or
liabilities assumed, is recognised in profit or loss.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
37
o.
Employee Benefits
Provision is made for the Company’s liability for employee benefits arising from services rendered by employees to
the end of the reporting period. Employee benefits that are expected to be settled within one (1) year have been
measured at the amounts expected to be paid when the liability is settled. Employee benefits payable later than
one (1) year have been measured at the present value of the estimated future cash outflows to be made for those
benefits. In determining the liability, consideration is given to employee wages increases and the probability that
the employee may satisfy vesting requirements. Those cash flows are discounted using market yields on national
government bonds with terms to maturity that match the expected timing of cash flows.
p.
Rounding of Amounts
The parent entity has applied the relief available to it under ASIC Class Order 98/100 and accordingly, amounts in
the financial statements and directors’ report have been rounded off to the nearest one dollar ($1).
q.
Critical Accounting Estimates and Judgments
The directors evaluate estimates and judgments incorporated into the financial statements based on historical
knowledge and best available current information. Estimates assume a reasonable expectation of future events and
are based on current trends and economic data, obtained both externally and within the Company.
Key estimates
(i)
Impairment
The Company assesses impairment at the end of each reporting period by evaluating conditions and events
specific to the Company that may be indicative of impairment triggers. Recoverable amounts of relevant
assets are reassessed using value-in-use calculations which incorporate various key assumptions.
Key judgments
(i)
Exploration and evaluation expenditure
The Company capitalises expenditure relating to exploration and evaluation where it is considered likely to
be recoverable or where the activities have not reached a stage that permits a reasonable assessment of
the existence of reserves. While there are certain areas of interest from which no reserves have been
extracted, the directors are of the continued belief that such expenditure should not be written off since
feasibility studies in such areas have not yet concluded.
r.
Going concern
The financial statements have been prepared on the going concern basis, the validity of which depends upon the
positive cash position. The Company’s existing projections show that further funds will be required to be generated,
either by capital raisings, sales of assets or other initiatives, to enable the Company to fund its currently planned
activities for at least the next twelve months from the date of signing these financial statements. Should new
opportunities present that require additional funds the Directors will take action to reprioritise activities, dispose of
assets and or raise further funds.
Notwithstanding this issue, accordingly the Directors have prepared the financial statements of the Company on a
going concern basis. In arriving at this position, the Directors have considered the following pertinent matter:
-
Australian Accounting Standard, AASB 101 “Accounting Policies”, states that an entity shall prepare
financial statements on a going concern basis unless management either intends to liquidate the entity or to
cease trading, or has no realistic alternative but to do so.
In the Directors’ opinion, at the date of signing the financial report, there are reasonable grounds to believe that the
matters set out above will be achieved and therefore the financial statements have been prepared on a going
concern basis.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
38
s.
Issued capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options
are shown in equity as a deduction from the proceeds.
t.
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the Board of Directors of Gold Mountain Limited.
u.
Associates
Associates are entities over which the Company has significant influence but not control or joint control. Investments
in associates are accounted for using the equity method. Under the equity method, the share of the profits or losses
of the associate is recognised in profit or loss and the share of the movements in equity is recognised in other
comprehensive income. Investments in associates are carried in the statement of financial position at cost plus
post-acquisition changes in the Company’s share of net assets of the associates. Dividends received or receivable
from associates reduce the carrying amount of the investment.
When the Company’s share of losses in an associate equals or exceeds its interest in the associate, including any
unsecured long-term receivables, the consolidated entity does not recognise further losses, unless it has incurred
obligations or made payments on behalf of the associate.
v.
Joint Ventures
A joint venture is a contractual arrangement whereby two or more parties undertake an economic activity that is
subject to joint control. The Company’s interest in joint venture entities are accounted for using the proportionate
consolidation method of accounting. The Company recognises its interest in the assets that it controls and the
liabilities that it incurs and the expenses that it incurs and its share of the income that it earns from the sale of goods
or services by the joint venture, classified according to the nature of the assets, liabilities, income or expense.
Profits or losses on transactions establishing the joint venture entities and transactions with the joint venture are
eliminated to the extent of the Company’s ownership interest until such time as they are realised by the joint venture
entity on consumption or sale, unless they relate to an unrealised loss that provides evidence of the impairment of
an asset transferred.
The Company discontinues the use of proportionate consolidation from the date on which it ceases to have joint
control over a jointly controlled entity.
w.
Fair Value of Assets and Liabilities
Equity Instruments
The fair value of available-for-sale financial assets is determined by reference to their quoted closing bid price at
the reporting date.
Trade and Other Receivables
The fair value of trade and other receivables is estimated as the present value of future cash flows, discounted at
the market rate of interest at the reporting date. This fair value is determined for disclosure purposes. Due to the
short-term nature of other receivables, their carrying value is assumed to approximate their fair value.
Non-Derivative Financial Liabilities
Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal
and interest cash flows, discounted at the market rate of interest at the reporting date.
x.
New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet
mandatory, have not been early adopted by the Company for the annual reporting period ended 30 June 2019. The
Company’s assessment of the impact of these new or amended Accounting Standards and Interpretations are that
they will have no material effect.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
39
NOTE 2: OPERATING SEGMENTS
Segment Information
Identification of reportable segments
During the year, the Company operated principally in one business segment being mineral exploration and in two geographical
segments being Australia and Papua New Guinea.
The Company’s revenues and assets and liabilities according to geographical segments are shown below.
June 2019
Total
Australia
$
$
PNG
$
Total
$
June 2018
Australia
$
PNG
$
48,529
48,529
48,529
48,529
-
-
119,426
119,426
119,426
119,426
-
-
REVENUE
Revenue
Total segment revenue
RESULTS
Net loss before income tax
(1,401,021)
(1,348,298)
(52,723)
(1,484,473)
(1,381,637)
(102,836)
Income tax
Net loss
-
-
-
-
-
-
(1,401,021)
(1,348,298)
(52,723)
(1,484,473)
(1,381,637)
(102,836)
ASSETS AND LIABILITIES
Assets
Liabilities
22,484,417
149,407
22,335,010
21,482,119
2,795,323
18,686,796
2,187,692
417,783
1,769,909
2,206,145
121,226
2,084,919
NOTE 3: REVENUE AND OTHER INCOME
Note
2019
$
2018
$
a. Revenue
Other income
Interest received 1
Rental income
Foreign exchange gains
Total other income
Total revenue
1 Interest received from:
Bank
3,063
43,134
2,332
48,529
25,400
51,792
42,234
32,874
48,529
32,874
3,063
25,400
GOLD MOUNTAIN LIMITED ANNUAL REPORT
40
NOTE 4: LOSS FOR THE YEAR
Loss before income tax includes the following specific expenses:
—
—
—
a.
Consultants fees
Legal costs
Rental expense on operating leases
Significant expenses
The following significant expense items are relevant in explaining the financial
performance:
—
—
Exploration expense
Impairments expense
NOTE 5: INCOME TAX EXPENSE
2019
$
2018
$
169,750
170,200
16,969
28,862
101,533
100,373
-
171,068
20,000
-
2019
$
2018
$
The prima facie tax on the loss before income tax is reconciled to
income tax as follows:
Loss before income tax expense
Prima facie tax benefit on the loss before income tax at 27.5%
(2018: 27.5%)
(1,401,021)
(1,484,473)
(385,281)
(408,230)
Add:
Tax effect of:
Other non-allowable items
Less:
Tax effect of:
Other deductible expenses
Future tax benefits not brought to account
Income tax attributable to the Company
141,031
195,692
141,031
195,692
(116,245)
(84,579)
360,495
297,117
-
-
The Company has tax losses arising in Australia of $8,651,483 (2018: $7,340,591) that are available indefinitely to offset
against future taxable profits.
Deferred tax assets not brought to account, the benefits of which will only be realised if the conditions for deductibility set
out in Note 1(h) occur.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
41
NOTE 6: CASH AND CASH EQUIVALENTS
Cash at bank
Short-term bank deposits
2019
$
2018
$
12,243
136,973
41,827
2,848,093
54,070
2,985,066
Reconciliation of cash
Cash at the end of the financial year as shown in the statement of cash flows is
reconciled to items in the statement of financial position as follows:
Cash and cash equivalents
54,070
2,985,066
Cash at bank earns interest at floating rates based on daily bank deposit rates. Short-term deposits are made for varying
periods of between one day and three months, depending on the immediate cash requirements of the Company, and earn
interest at the respective short-term deposit rates.
NOTE 7: TRADE AND OTHER RECEIVABLES
Current
PNG Project Advance
Other receivables
Total current trade and other receivables
NOTE 8: PLANT AND EQUIPMENT
Plant and equipment – at cost
Accumulated depreciation
Reconciliation of the carrying amount of plant and equipment at the beginning
and end of the current and previous financial year:
Carrying amount at beginning of the year
Additions
Depreciation expense
Carrying amount at end of the year
2019
$
2018
$
-
60,509
60,509
8,566
73,673
82,239
2019
$
2018
$
614,278
558,295
(195,498)
(68,498)
418,780
489,797
489,797
108,620
55,983
437,341
(127,000)
(56,164)
418,780
489,797
GOLD MOUNTAIN LIMITED ANNUAL REPORT
42
NOTE 9: DEFERRED EXPLORATION AND EVALUATION EXPENDITURE
Assets in Development
Balance at the beginning of the year
Expenditure incurred
Expenditure incurred on acquisition of 70% interest in EL2306
Impairment loss on existing tenements
Net carrying value
2019
$
2018
$
11,816,184
3,038,522
4,052,804
3,578,730
-
-
5,350,000
(151,068)
15,868,988
11,816,184
Recoverability of the carrying amount of deferred exploration and evaluation expenditure is dependent on the successful
development and commercial exploitation or sale of the areas of interest. Management reassess the carrying value of the
Company’s tenements at each half year, or at a period other than that should there be an indication of impairment.
During the year to 30 June 2019, no impairment of exploration expense (2018: $171,068) was recognised. This impairment
of exploration expense refers to past costs incurred in maintaining the Company’s NSW exploration projects.
NOTE 10: INTANGIBLE ASSETS
Intangible assets
Goodwill on acquisition
Total intangible assets
2019
$
2018
$
5,995,970
5,995,970
6,002,733
6,002,733
Movements in Carrying Amounts
Movement in the carrying amounts for intangible assets between the beginning and the end of the current financial year:
Carrying amount at 30 June 2018
Additions
Disposals
Movement in foreign exchange
Carrying amount at 30 June 2019
Goodwill on acquisition
2019
$
2018
$
6,002,733
6,004,982
-
-
-
-
(6,763)
(2,249)
5,995,970
6,002,733
On 16 August 2016, the Company completed the acquisition of an additional 50% of the issued capital of Viva through the
issue of 60,000,000 shares at $0.08 each to the Vendors. Simultaneously, the Vendors issued 125 ordinary shares to
GMN comprising 50% of the entire issued capital of Viva held by the Vendors. On completion of this acquisition, the
Company now holds a controlling interest of 70% in Viva.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
43
NOTE 11: INVESTMENTS
Non-Current
Gold nuggets
NOTE 12: OTHER ASSETS
Non-Current
Security deposits
NOTE 13: TRADE AND OTHER PAYABLES
Current
Unsecured liabilities:
Trade payables and accrued expenses
Amounts payable to Director and related entities
Rental deposit received
NOTE 14: OTHER CURRENT AND NON CURRENT LIABILITIES
Current
Borrowings
Instalment costs - EL2306
Total other current liabilities
Non-current
Instalment costs - EL2306
Total other non-current liabilities
Instalment costs - EL2306
2019
$
2018
$
50,555
50,555
50,555
50,555
2019
$
2018
$
35,545
35,545
55,545
55,545
2019
$
2018
$
364,200
206,445
45,892
27,600
32,100
17,600
437,692
256,145
2019
$
2018
$
250,000
-
1,050,000
750,000
1,300,000
750,000
450,000
1,200,000
450,000
1,200,000
On 18 July 2017, the Company announced that it had entered a binding agreement for the acquisition of the EL2306 Interest
from the EL2306 Vendor for purchase price of $5,200,000 comprising 22 million Shares at a notional price of $0.10 per
Share and $3,000,000 in cash. The cash consideration of $3,000,000 is payable in instalments. An exclusivity fee of
$150,000 was also paid and capitalised as Deferred Expenditure in FY 2016. On 19 February, 2018 the Company issued
22,000,000 shares at the issue price of $0.10 to raise $2,200,000 as part consideration for the acquisition of a 70% interest
in EL2306 as approved by Shareholders at the Annual General Meeting held on 28 November 2017. Instalment costs of
$1,500,000 were paid by the Company in FY 2017, FY 2018 and FY 2019. The remaining instalment costs of $1,500,000
is payable over 18 months with $1,050,000 payable by 30 June 2020 and $450,000 payable by 31 December 2020.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
44
NOTE 15: CONTRIBUTED EQUITY
(a) Ordinary shares
Ordinary Shares, issued
Share issue costs
Total issued capital
2019
Number of
shares
2019
$
2018
Number of
shares
2018
$
549,716,526
31,798,410
515,142,680
29,551,110
(1,792,076)
30,006,334
(1,665,276)
27,885,834
Ordinary shares carry one vote per share and carry the rights to dividends.
Ordinary shares participate in dividends and the proceeds on winding-up of the parent entity in proportion to the number
of shares held.
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.
(b) Movements in ordinary shares on issue
Number of
shares
Issue Price
$
Date
Particulars
At 30 June 2017
413,302,165
19,942,315
09-08-17
Placement to professional and sophisticated investors
7,984,800
$0.100
798,480
06-10-17
Placement to professional and sophisticated investors
19,245,000
$0.100
1,924,500
06-10-17
Issue of shares on exercise of options
2,500,000
$0.055
137,500
29-11-17
Placement to professional and sophisticated investor
10,000,000
$0.100
1,000,000
22-01-18
Issue of shares on exercise of options
40,110,715
$0.055
2,206,089
19-02-18
Placement to acquire 70% of EL2306 (as approved at
2017 AGM and escrowed for 24 months)
22,000,000
$0.100
2,200,000
30-06-18
Share issue costs
At 30 June 2018
515,142,680
(323,050)
27,885,834
28-02-19
Placement to professional and sophisticated investors
20,296,923
$0.065
1,319,300
24-05-19
Placement to professional and sophisticated investors
14,276,923
$0.065
928,000
30-06-19
Share issue costs
At 30 June 2019
549,716,526
(126,800)
30,006,334
Information on options is included in Note 17: Share Based Payments.
(d) Capital Management
The Directors’ objectives when managing capital are to safeguard the Company’s ability to continue as a going concern, so
that they may continue to provide returns for shareholders and benefits for other stakeholders. The Group’s overall strategy
remains unchanged from the 2019 financial year.
The focus of the Company’s capital risk management is the current working capital position against the requirements of the
Company to meet exploration programs and corporate overheads. The Company’s strategy is to ensure appropriate liquidity
is maintained to meet anticipated operating requirements, with a view to initiating appropriate capital raisings as required.
The Company’s debt and capital includes ordinary share capital and financial liabilities, supported by financial assets.
There are no externally imposed capital requirements.
Management effectively manages the Company’s capital by assessing the Company’s financial risks and adjusting its capital
structure in response to changes in these risks and in the market. These responses include the management of debt levels,
budgeting and share issues.
There have been no changes in the strategy adopted by management to control the capital of the Company since the prior
year.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
45
NOTE 16: RESERVES
Reserves
Foreign currency translation reserve
Share based payments reserve
Movements in the Foreign Currency Translation Reserve
At 1 July 2018
Foreign Currency Translation
At 30 June 2019
Movements in options over ordinary shares on issue
At 1 July 2018
Options expense amortised
At 30 June 2019
NOTE 17: SHARE BASED PAYMENTS
(a) Share-based payments
Expense arising from the grant of options
Total Share Based Payments
2019
$
(4)
697,229
697,225
(1)
(3)
(4)
395,954
301,275
697,229
2019
$
301,275
301,275
2018
$
(1)
395,954
395,953
-
(1)
(1)
-
395,954
395,954
2018
$
395,954
395,954
(b) Movements in unlisted options
The following table details the number, weighted average exercise prices (WAEP) and movements in share options
issued as capital raising purposes, employment incentives or as payments to third parties for services during the year.
2019
2019
2018
2018
Number
WAEP
Number
WAEP
Outstanding at the beginning of the year
85,837,300
$0.176
72,033,115
Options granted during the year
34,573,246
$0.125
56,414,900
Options lapsed during the year
(61,237,300)
$0.150
-
Options exercised during the year
-
-
(42,610,715)
Outstanding at the end of the year
59,173,246
$0.173
85,837,300
$0.12
$0.15
-
$0.055
$0.176
(c) Options exercisable at reporting date
2019
Exercise
2018
Exercise
Number
Price
Number
Price
Unlisted options expiring 30 June 2019
-
-
61,237,300
Unlisted options expiring 28 November 2019
14,800,000
$0.300
14,800,000
Unlisted options expiring 26 July 2021
Unlisted options expiring 26 July 2021
Unlisted options expiring 01 March 2020
Unlisted options expiring 27 May 2020
Unlisted options expiring 01 March 2021
Unlisted options expiring 27 May 2021
Exercisable at reporting date
2,000,000
7,800,000
10,148,162
7,138,461
10,148,162
7,138,461
59,173,246
$0.150
$0.150
$0.100
$0.100
$0.150
$0.150
2,000,000
7,800,000
-
-
-
-
85,837,300
GOLD MOUNTAIN LIMITED ANNUAL REPORT
$0.150
$0.300
$0.150
$0.150
-
-
-
-
46
(d) Options issued during the year
The maximum terms of options granted during the year are as follows:
On 28 February 2019 the Company granted 20,296,924 free unlisted options to participants in the share placement of
20,296,923 shares on the same date on a one-for-one basis in two separate grant of options. One option is at an exercise
price of $0.10 expiring on 1 March 2020 and the other option is at an exercise price of $0.15 expiring on 1 March 2021 with
no vesting conditions.
On 24 May 2019 the Company granted 14,276,922 free unlisted options to participants in the share placement of 14,276,923
shares on the same date on a one-for-one basis in two separate grant of options. One option is at an exercise price of $0.10
expiring on 27 May 2020 and the other option is at an exercise price of $0.15 expiring 27 May 2021 with no vesting conditions.
The options must be exercised on or before the expiry date in cash.
(e) Fair value of unlisted options
The fair value of the options granted is estimated as at the date of grant using a Black-Scholes model taking into account the
terms and conditions upon which the options were granted. The following tables list the inputs to the model used for the year
ended 30 June 2019.
Financial year of grant
2017
2018
2018
2019
2019
2019
2019
ASX Code
Grant date
Expiry date
Option term
GMNAB
GMNAD
GMNAE
-
-
-
-
29 Aug 16
26 Sep 17
26 Sep 17
01 Mar 19
27 May 19
01 Mar 19
27 May 19
28 Nov 19
26 Jul 21
26 Jul 21
01 Mar 20
27 May 20
01 Mar 21
27 Mar 21
39 months
3.8 years
46 months
12 months
12 months
24 months
24 months
Number of options issued 14,800,000
2,000,000
7,800,000 10,148,162
7,138,461 10,148,162
7,138,461
Share price at grant date
Exercise price
Expected volatility
Expected dividends
$0.170
$0.300
68%
Nil
$0.090
$0.150
68%
Nil
$0.090
$0.150
68%
Nil
$0.066
$0.100
60%
Nil
$0.055
$0.100
60%
Nil
$0.066
$0.150
60%
Nil
$0.055
$0.150
60%
Nil
Risk-free interest rate
2.67%
2.75%
2.75%
1.74%
1.74%
1.23%
1.23%
Fair value
$Nil
$71,048
$Nil
$91,333
$91,333
$35,692
$42,831
GMNAB ESOP options are exercisable at $0.30 until expiry date 28/11/2019 and subject to the vending condition that the Company’s
share price must exceed $0.50 based on VWAP over a 5-day consecutive period.
GMNAD options are exercisable at $0.15 until expiry date 26/07/2021 and subject to vending condition that the total options granted
shall be vested over 3 periods of 12 months per period.
GMNAE ESOP options are exercisable at $0.15 until expiry date 26/07/2021 and subject to vending condition that the total options
granted shall be vested over 3 periods of 12 months per period.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
47
NOTE 18: RELATED PARTY DISCLOSURES
Related Parties
a.
The Company’s main related parties are as follows:
i.
Key management personnel:
Any person(s) having authority and responsibility for planning, directing and controlling the activities of the
Company, directly or indirectly, including any director (whether executive or otherwise), are considered key
management personnel.
The directors in office during the year were as follows:
Graham Kavanagh
Sin Pyng “Tony” Teng
Douglas Smith
Appointed 5 June 2014
Appointed 9 July 2014
Appointed 29 December 2016
(Ceased 23 August 2019)
For details of disclosures relating to key management personnel, refer to Key Management Personnel
disclosures Directors and Remuneration Report.
b.
Transactions with related parties:
Transactions between related parties are on normal commercial terms and conditions no more favourable than those
available to other parties unless otherwise stated.
The following transactions occurred with related parties:
i.
Other related parties:
Purchase of goods and services:
Corporate advisory fees paid to Drumcliff Investment Pty Ltd as Directors
Fees, an entity associated with Mr Graham Kavanagh.
Corporate advisory fees paid to Rodby Holdings Pty Ltd as Directors Fees
and Consulting Fees, an entity associated with Mr Sin Pyng “Tony” Teng.
2019
$
2018
$
30,000
36,000
72,000
108,000
Corporate advisory fees paid to Dougnic Pty Ltd and Dougie Downunder as
Directors and Consulting Fees, entities associated with Mr Doug Smith.
180,369
232,000
c.
Amounts payable to related parties:
Trade and other payables:
45,892
32,100
Amounts payable to Directors and related entities, as follows:
Directors fees
Reimbursement of expenses
Corporate advisory services
Total trade and other payable related party amounts
NOTE 19: KEY MANAGEMENT PERSONNEL COMPENSATION
Short-term employee benefits
Post-employment benefits
Share based payments
Non-Executive Directors Fees
Balance at the end of year
9,000
1,692
35,200
45,892
-
-
32,100
32,100
2019
$
2018
$
404,400
460,000
570
-
6,000
2,280
71,048
60,000
410,970
593,328
GOLD MOUNTAIN LIMITED ANNUAL REPORT
48
NOTE 20: LOSS PER SHARE
a.
Basic Loss per share
2019
$
2018
$
I
ii.
Basic Loss (cents per share)
(0.27)
(0.32)
Net loss used to calculate basic loss per share
(1,401,021)
(1,484,473)
Weighted average number of ordinary shares outstanding during the year used in
calculating basic loss per share
iii.
523,468,830
467,801,944
No.
No.
b.
Diluted loss per share
The Company’s potential ordinary shares, being its options granted, are not
considered dilutive as the conversion of these options would result in a decrease
in the net loss per share.
Not applicable Not applicable
NOTE 21: FINANCIAL RISK MANAGEMENT
The Company’s financial instruments consist mainly of deposits with banks, local money market instruments, short-term
investments, accounts receivable and payable, loans to and from related parties, bills and leases. The following table details
the expected maturities for the Company’s non-derivative financial assets. These have been drawn up based on undiscounted
contractual maturities of the financial assets including interest that will be earned on those assets except where the Company
anticipates that the cash flow will occur in a different period.
Financial Risk Management Policies
The Board has overall responsibility for the establishment and oversight of the risk management framework. The Board
reviews and agrees policies for managing each of these risks as summarised below. The Audit and Risk Committee (ARC)
has been delegated responsibility by the Board of Directors for, among other issues, monitoring and managing financial risk
exposures of the Company. The ARC monitors the Company’s financial risk management policies and exposures and
approves financial transactions within the scope of its authority. It also reviews the effectiveness of internal controls relating
to commodity price risk, counterparty credit risk, currency risk, financing risk and interest rate risk.
The ARC’s overall risk management strategy seeks to assist the Company in meeting its financial targets, while minimising
potential adverse effects on financial performance. Its functions include the review of the use of hedging derivative
instruments, credit risk policies and future cash flow requirements.
Specific Financial Risk Exposures and Management
The main risks the Company is exposed to through its financial instruments are credit risk, liquidity risk and market risk
consisting of interest rate risk. This note presents the information about the Company’s exposure to each of the above risks,
their objectives, policies and processes for measuring and managing risk, and the management of capital.
a.
Credit risk
Exposure to credit risk relating to financial assets arises from the potential non-performance by counterparties of
contract obligations that could lead to a financial loss to the Company.
Credit risk is managed through the maintenance of procedures (such procedures include the utilisation of systems for
the approval, granting and renewal of credit limits, regular monitoring of exposures against such limits and monitoring
of the financial stability of significant customers and counterparties), ensuring to the extent possible, that customers
and counterparties to transactions are of sound credit worthiness. Such monitoring is used in assessing receivables
for impairment. Depending on the division within the Company, credit terms are generally 14 to 30 days from the
invoice date.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
49
Risk is also minimised through investing surplus funds in financial institutions that maintain a high credit rating, or in
entities that the FRMC has otherwise cleared as being financially sound. Where the Company is unable to ascertain
a satisfactory credit risk profile in relation to a customer or counterparty, the risk may be further managed through title
retention clauses over goods or obtaining security by way of personal or commercial guarantees over assets of
sufficient value which can be claimed against in the event of any default.
Credit risk exposures
The maximum exposure to credit risk by class of recognised financial assets at the end of the reporting period excluding
the value of any collateral or other security held, is equivalent to the carrying value and classification of those financial
assets (net of any provisions) as presented in the statement of financial position.
The Company has no significant concentrations of credit risk with any single counterparty or company of
counterparties. Details with respect to credit risk of trade and other receivables are provided in Note 7.
Trade and other receivables that are neither past due nor impaired are considered to be of high credit quality.
b.
Liquidity risk
Liquidity risk arises from the possibility that the Company might encounter difficulty in settling its debts or otherwise
meeting its obligations related to financial liabilities. The Company manages this risk through the following
mechanisms:
preparing forward-looking cash flow analysis in relation to its operational, investing and financing activities;
using derivatives that are only traded in highly liquid markets;
monitoring undrawn credit facilities;
obtaining funding from a variety of sources;
maintaining a reputable credit profile;
managing credit risk related to financial assets;
only investing surplus cash with major financial institutions; and
comparing the maturity profile of financial liabilities with the realisation profile of financial assets.
Cash flows realised from financial assets reflect management’s expectation as to the timing of realisation. Actual
timing may therefore differ from that disclosed. The timing of cash flows presented in the table to settle financial
liabilities reflects the earliest contractual settlement dates and does not reflect management’s expectations that
banking facilities will be rolled forward.
c.
Market risk
Market risk is the risk that changes in market prices such as foreign exchange rates, interest rates and equity prices
will affect the Company’s income or value of the holdings of financial instruments. The Company is exposed to
movements in market interest rates on short term deposit. The policy is to monitor the interest rate yield curve out to
120 days to ensure a balance is maintained between the liquidity of cash assets and the interest rate return. The
Company does not have short or long term debt, and therefore this risk is minimal. The Company limits its exposure
to credit risk by only investing in liquid securities and only with counterparties that have acceptable credit ratings.
d.
Interest rate risk
Exposure to interest rate risk arises on financial assets and financial liabilities recognised at the end of the reporting
period whereby a future change in interest rates will affect future cash flows or the fair value of fixed rate financial
instruments. The Company is also exposed to earnings volatility on floating rate instruments. The Company is exposed
to interest rate risk as the Company deposits the bulk of its cash reserves in Term Deposits. The risk is managed by
the Company by maintaining an appropriate mix between short term and medium-term deposits. The Company’s
exposures to interest rate on financial assets and financial liabilities are detailed in the liquidity risk management
section of this note.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
50
Interest rate sensitivity
At 30 June 2019, the effect on loss and equity as a result of changes in the interest rate, with all other variable
remaining constant would be as follows:
Increase in interest rate by 1%
Decrease in interest rate by 1%
Interest rate risk is not material to the Company.
2019
$
2018
$
541
29,851
(541)
(29,851)
The totals for each category of financial instruments, measured in accordance with AASB 139 as detailed in the accounting policies to
these financial statements, are as follows:
Note
2019
2018
Floating
Interest
Rate
Non-
interest
bearing
Fixed
Interest
Rate
Total
2019
Floating
Interest
Rate
Non-
interest
bearing
Fixed
Interest
Rate
Total
2018
Financial Assets
Cash and cash
equivalents
Trade and other
receivables
Other financial assets
6
7
12
54,070
-
-
-
60,509
35,545
Total financial assets
54,070
96,054
Financial liabilities at amortised cost:
Financial Liabilities
- Trade and other payables 13
- Other financial liabilities
14
Total financial liabilities
-
-
-
437,692
250,000
687,692
-
-
-
-
-
-
-
54,070
2,985,066
-
- 2,985,066
60,509
35,545
-
-
82,239
55,545
-
-
82,239
55,545
150,124
2,985,066
137,784
- 3,122,850
437,692
250,000
687,692
-
-
-
238,545
-
238,545
-
-
-
238,545
-
238,545
Net Financial Assets
54,070
(591,638)
-
(537,568)
2,985,066
(100,761)
- 2,884,305
NOTE 22: AUDITOR'S REMUNERATION
Remuneration of the auditor of the Company for:
Auditing or reviewing the financial statements
2019
$
33,905
33,905
2018
$
34,585
34,585
GOLD MOUNTAIN LIMITED ANNUAL REPORT
51
NOTE 23: PARENT ENTITY INFORMATION
The following information relates to the parent entity, Gold Mountain Limited. The information presented has been prepared
using accounting policies that are consistent with those presented in Note 1.
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
FINANCIAL PERFORMANCE
Profit (loss) for the year
Other comprehensive income/(loss) for the year
Total comprehensive profit/(loss)
Remuneration Commitments
2019
$
2018
$
114,579
3,067,305
22,369,983
18,414,957
22,484,562
21,482,262
987,692
1,006,145
1,200,000
1,200,000
2,187,692
2,206,145
20,296,870
19,276,117
30,006,334
27,885,834
697,229
395,954
(10,406,693)
(9,005,671)
20,296,870
19,276,117
(1,401,021)
(1,484,473)
-
-
(1,401,021)
(1,484,473)
There are no remuneration commitments apart from ongoing director and management fees incurred on a monthly basis.
Guarantees
Gold Mountain Limited did not commit to nor make guarantees of any form as at 30 June 2019.
Contingent liabilities
There are no contingent liabilities as at 30 June 2019.
Exploration licence expenditure requirements
The Company holds eight (8) exploration licences covering an area of about 2,053 sq km in the Enga province, Papua New
Guinea (collectively termed the Wabag Project) and is required to incur PGK1.12 million (AUD500,000) minimum expenditure
per year on the development and maintenance on these licences.
The Company has also made applications for additional two (2) exploration licences in the areas surrounding the existing
tenements. Pending Warden’s Hearing, approval granting of these new exploration licenses which cover a total area of 765
sq.km. will incur additional expenditure commitments of PGK750,000 (AUD330,000) spread over two (2) years.
It is likely that the granting of new licences and changes in licence areas at renewal or expiry, will change the expenditure
commitment to the Company from time to time.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
52
NOTE 24: DIVIDENDS
The Directors of the Company have not declared any dividends for the year ended 30 June 2019.
NOTE 25: EVENTS SUBSEQUENT TO REPORTING DATE
On 8 July 2019, the Company announced an update to its exploration program at its flagship Wabag project in Papua New
Guinea, with the focus on Mongae Creek. Trench results at Mongae provide a strong case to drill high-quality porphyry targets
with significant intercepts including Mongae NW Trench 1 66 m @ 0.13% Cu and Mongae NW Trench 4 intercepted 154 m @
0.19% Cu including 142 m @ 0.20% Cu and 0.11 ppm Au and and 13 m @ 0.44% Cu from 68 m.
On 30 July 2019, the Company announced it has received commitments for a placement raising $2.5 million. The funds from
this placement will be used to complete the initial diamond drilling programme at the Mongae NW prospect at the Company’s
Wabag Project in Papua New Guinea and for general working capital. For every Share issued to a subscriber in the placement
an unlisted option over a Share at no additional cost will also be issued. One half of the options issued pursuant to the placement
will have an expiry date of 12 months from the date of their issue, each with an exercise price of $0.10 per option and the
remaining half of the options will have an expiry date of 24 months from the date of their issue, with an exercise price of $0.15
per option. The managing director, Mr Sin Pyng (Tony) Teng is proposing to participate in the $2.5 million placement to the
amount of $500,000.00. The Company expects to seek approval from holders of ordinary securities for this placement and the
placement to Mr Teng at its 2019 annual general meeting.
On 28 August 2019, the Company was in suspension under ASX Listing Rule 17.2, pending the appointment of sufficient
directors to comply with section 201A(2) of the Corporations Act 2001 (Cth).
On 30 August 2019, the Company lodged Appendix 3B for the issue of 21,733,333 new fully paid ordinary shares (Shares) in
the company along with 19,733,338 options (Options) for the placement of shares (Placement Shares) at an issue price of
$0.065 and $0.06 per share. The issue of Shares raised a total of $1,314,000 for purpose of general working capital. The
Placement Shares include 19,733,333 Shares with accompanying options of one (1) option at exercise price $0.10 expiring
28/8/2020 and one (1) option at exercise price $0.15 expiring 28/8/2021 for every two (2) issued Placement Shares.
On 2 September 2019, the Company announced the appointment of Mr Syed Hizam Alsagoff as a Non-Executive Director of
the Company.
On 3 September 2019, the Company was reinstated for Official Quotation following the appointment of an additional director
meeting the minimum number of directors required under section 201A(2) of the Corporations Act 2001 (Cth).
On 4 September 2019, the Company lodged Appendix 3B for the issue of 30,000,000 new fully paid ordinary shares (Shares)
in the company for the placement of shares (Placement Shares) at a price of $0.06 per share. The sum of $1,800,000 raised
represents part of the proposed share placement announced to the market on 31 July 2019. The Placement Shares has
accompanying entitlement of unlisted options for every two (2) Shares issued, of one (1) share option exercisable at $0.10 within
12 months and another one (1) share option exercisable at $0.15 within 24 months respectively from date of issue (Placement
Options). The Company expects to issue the Placement Options after the 2019 Annual General Meeting. The Placement
Options shall provide the Company additional capital funding of $3,750,000 pace over the next 24 months.
The announcement of the Appendix 3B lodgement further reiterated the participation and acknowledgement of an entity related
to managing director, Mr Tony Teng in the placement amount of $500,000, on the same terms of the placement offer as
previously announced by the Company. The issue of securities in shares and options to this entity will be subject to the approval
of the Company’s shareholders under ASX Listing Rule 10.11. The Company expects to seek approval from shareholders at
its next annual general meeting.
There has not been any other matter or circumstance that has arisen after balance date that has significantly affected, or may
significantly affect, the operations of the Company, the results of those operations, or the state of affairs of the Company in
future financial periods.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
53
NOTE 26: CONTROLLED ENTITIES
Controlled Entities Consolidated
Country of Incorporation
Percentage Owned (%)
Subsidiaries of Gold Mountain Limited:
Viva No. 20 Limited
GMN 6768 (PNG) Limited
Viva Gold (PNG) Limited
Abundance Valley (PNG) Limited
Papua New Guinea
Papua New Guinea
Papua New Guinea
Papua New Guinea
70%
100%
100%
100%
Unless otherwise stated, the subsidiary listed above has share capital consisting solely of ordinary shares, which are held
directly by the group, and the proportion of ownership interests held equals to the voting rights held by the group. The country
of incorporation or registration is also their principal place of business.
NOTE 27: CASH FLOW INFORMATION
Reconciliation of Net Cash (used in) provided by operating activities with Loss
after Income Tax
Loss
Non-cash flows in profit:
Options expense
Exploration expense
Impairments expense
Unrealised Foreign Exchange Loss
Depreciation expense
Changes in assets and liabilities
2019
$
2018
$
(1,401,021)
(1,484,473)
301,275
-
20,000
6,760
395,954
171,068
-
-
127,000
56,164
(Increase)/decrease in trade and other receivables
21,730
43,200
Increase/(decrease) in trade payables and other payables
181,547
112,520
Net Cash (used in) provided by operating activities
(742,709)
(705,567)
GOLD MOUNTAIN LIMITED ANNUAL REPORT
54
Independent Auditors
Report
GOLD MOUNTAIN LIMITED ANNUAL REPORT
56
SHAREHOLDER INFORMATION
GOLD MOUNTAIN LIMITED ANNUAL REPORT
61
ADDITIONAL SHAREHOLDER INFORMATION
AS AT 16 SEPTEMBER 2019
A.
Corporate Governance
A statement disclosing the extent to which the Company has followed the best practice recommendations set by the ASX
Corporate Governance Council during the period is contained within the Directors’ Report.
B.
Shareholding
1. Substantial Shareholders
Shareholders
1
2
HSBC Custody Nominees (Australia) Limited
Citicorp Nominees Pty Limited
Substantial
Holding
% of Issued
Capital
61,750,692
40,531,372
10.27
6.74
2. Number of holders in each class of equity securities and the voting rights attached (as at 16 September 2019)
Ordinary Shares
In accordance with the Company’s Constitution, on a show of hands every number present in person or by proxy or
attorney or duly authorised representative has one vote. On a poll every member present in person or by proxy or
attorney or duly authorised representative has one vote for every fully paid ordinary share held.
Options
There were nine (9) classes of options and 75 holders of options at 16 September 2019.
Option Code
GMNAB
GMNAD
GMNAE
GMNAC – various
$0.10 expiry 28/8/2020
$0.10 expiry 27/5/2020
$0.10 expiry 1/3/2020
$0.15 expiry 28/8/2021
$0.15 expiry 27/5/2021
$0.15 expiry 1/3/2021
Total on Register
Holders
Units
9
2
6
10
13
6
10
13
6
75
14,800,000
2,000,000
7,800,000
9,866,669
7,138,461
10,148,462
9,866,669
7,138,461
10,148,461
78,907,183
3. Distribution schedule of the number of holders in each class of equity security as at close of business
on 16 September 2019.
Ordinary Shares
Spread of Holdings
Holders
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001+
Total on Register
29
23
151
289
330
822
Units
3,692
85,791
1,375,718
12,820,903
587,163,755
601,449,859
% of Issued
Capital
< 0.01
< 0.02
0.23
2.13
97.62
100%
GOLD MOUNTAIN LIMITED ANNUAL REPORT
62
Marketable Parcel
There are 94 non-marketable parcels at 16 September 2019, representing 375,201 shares.
4. Twenty largest holders of each class of quoted equity security
The names of the twenty largest holders of each class of quoted security, the number of equity security each holds
and the percentage of capital each holds (as at 16 September 2019) is as follows:
Ordinary Shares Top 20 holders and percentage held
Shareholder
Holding
% of Issued
Capital
1
2
3
4
5
6
7
8
9
CITICORP NOMINEES PTY LIMITED
61,750,692
10.267%
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
40,531,372
6.739%
PAY CHUAN LIM
30,000,000
4.988%
THE SUMMIT HOTEL BONDI BEACH PTY LTD
20,475,694
3.404%
MR GAK SAN SEAH
17,450,770
2.901%
ASLAN EQUITIES PTY LTD
12,980,296
2.158%
RASHIDAH MOHD SANI
MS SIOW KWEE HENG
12,350,000
2.053%
12,000,000
1.995%
MR GHINAN MOHAMED SANI
10,266,667
1.707%
10 MR SUWEI CHEN
11 MS IRENE TENG
12
SIEW HONG KOH
9,910,000
1.648%
9,692,313
1.611%
9,606,360
1.597%
13 G H A DEVELOPMENT PTY LTD
9,070,562
1.508%
14 MINPAX RESOURCES LIMITED
9,000,000
1.496%
15 GHINAN MOHAMED SANI
16 MISS YOKE LAN GAN
17 MS TEN SOO LAN
18
KO CHU HONG
19 MS QIN ZHANG
20 DR PETER ASLAN
TOP 20 TOTAL
Other shareholders
TOTAL ISSUED CAPITAL
8,750,000
1.455%
8,050,000
1.338%
7,145,857
1.188%
6,950,000
1.156%
6,261,699
1.041%
5,177,341
0.861%
307,419,623
51.113%
294,030,236
48.887%
601,449,859
100%
GOLD MOUNTAIN LIMITED ANNUAL REPORT
63
5. Company Secretary
The name of the Company Secretary is Eric Kam.
Address and telephone details of the Company’s registered administrative office and principal place of business:
Suite 2501, Level 25
31 Market Street
SYDNEY NSW 2000 Australia
Telephone: +61 2 9283 3880
info@goldmountainltd.com.au
www.goldmountainltd.com.au
Address and telephone details of the office at which a registry of securities is kept:
Boardroom Pty Limited
Grosvenor Place, Level 12, 225 George Street, SYDNEY NSW 2000
GPO Box 3993, SYDNEY NSW 2001
Telephone: 1300 737 760 (In Australia)
+61 2 9290 9600 (International)
Facsimile: 1300 653 459
Stock exchange on which the Company’s securities are quoted:
The Company’s listed equity securities are quoted on the Australian Securities Exchange – code GMN.
Restricted Securities
There are restricted ordinary shares.
22,000,000 ordinary shares escrowed to 29 November 2019.
Options
Code
Number
Strike
Expiry
Restriction
GMNAB
14,800,000
$0.30
28 November 2019
ESOP Vesting VWAP $0.50
GMNAD
2,000,000
$0.15
26 July 2021
GMNAE
7,800,000
$0.15
26 July 2021
Vesting over 3 periods of 12
months per period
ESOP Vesting over 3 periods
of 12 months per period
GMNAC (Various)
9,866,669
9,866,669
7,138,461
7,138,461
10,148,462
10,148,462
$0.10
$0.15
$0.10
$0.15
$0.10
$0.15
28 August 2020
28 August 2021
27 May 2020
27 May 2021
1 March 2020
1 March 2021
N/A
N/A
N/A
Review of Operations
A review of operations is contained in the Directors’ Report on page 13 of this Annual Report.
Schedule of Tenements
The Company’s Schedule of Tenements is on page 25 of this Annual Report.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
64
[blank page]
GOLD MOUNTAIN LIMITED ANNUAL REPORT
65
The Front Cover Page
Pictogram
1. Arial view of Crown Ridge camp site
2. Regional exploration team at Sak Creek
with geologist Guy Guhyem (1st left) and
visiting consulting geologist Michael Leu
(centre)
3. Trenching at Mongae Creek with field
technician Junior Bob
4. Mineralised float – sample recovered
from Tomb Creek near Sak Creek
5. Transport helicopter at Crown Ridge
Heli-pad
6. Country Manager Bob Muio (2nd left)
with field assistants at Yakari Creek
(K-Lam Prospect) – background
outcrop of quartz-pyrite-chalcopyrite
sub-parallel veins
7. Rock chip - chalco-pyrite bearing rock
sample from Sak Creek Prospect
Front Cover Pictures
GOLD MOUNTAIN LIMITED ANNUAL REPORT
66
Annual Report 2019
Gold Mountain Limited