CORPORATE DIRECTORY
GOLD MOUNTAIN LIMITED
ABN 79 115 845 942
ASX: GMN
Directors
Share Register
Sin Pyng “Tony” Teng Managing Director
Boardroom Pty Limited
Syed Hizam Alsagoff Non-executive Director
Grosvenor Place, Level 12, 225 George Street,
Pay Chuan Paul “Paul” Lim Non-executive Director
SYDNEY NSW 2000,
GPO Box 3993, SYDNEY NSW 2001
Telephone: 1300 737 760
Facsimile: 1300 653 459
Solicitor
Bird & Bird Lawyers
Level 11, 68 Pitt Street
SYDNEY NSW 2000
Banker
Management
Tim Cameron Chief Executive Officer
Eric Kam Company Secretary &
Chief Financial Officer
Registered and Principal Office
Suite 2501, Level 25
31 Market Street
Telephone: +61 2 9261 1583
info@goldmountainltd.com.au
SYDNEY NSW 2000 Australia
Westpac Banking Corporation Limited
Australia and New Zealand Banking Group Limited
www.goldmountainltd.com.au
Auditor
KS Black & Co. Chartered Accountants
Level 1, 251 Elizabeth Street, SYDNEY NSW 2000
GOLD MOUNTAIN LIMITED ANNUAL REPORT
1
REPORT TO SHAREHOLDERS
Dear Shareholders,
year to 30 June 2020.
On behalf of the Board of Gold Mountain Limited, I am pleased to present to you our Annual Report for the
There have been unquestionably significant changes in the business of the Company during FY2020 since
the joining of new board members and the appointment of the Chief Executive Officer Tim Cameron, along
with a technical team of experts engaged in the Wabag Project operations.
During the year, the company concentrated on continued regional exploration programmes and the drill
testing of the Monoyal copper-molybdenum-gold porphyry prospect with five holes being drilled at that
prospect. The geochemistry interpretation along with core and other sampling results that drilling is on the
periphery of the main mineralised core of a large porphyry system. The Monoyal prospect is positioned to
become the major focus going forward.
Drilling was paused at Monoyal in April 2020 due to the COVID-19 challenges which impacted logistics and
helicopter availability to service an operating rig. With recent easing of certain restrictions in Papua New
Guinea, drilling at Monoyal is expected to resume this coming October 2020.
In the years ahead, the company will continue exploration within its Wabag tenements. In addition to
Monoyal, exploration commenced on the prospective Mt Wipi tenement in August 2020 will continue in
the FY2021 with the aim of identifying high quality targets for soil sampling, trenching and drill testing.
I extend my thanks to those shareholders that have continued to help fund the Company throughout the
year and in recent capital raise. I would also like to welcome new investors and shareholders to participate
in the coming new placement initiatives to support the continuing flagship development of the Monoyal
Prospect, Wabag Project in Papua New Guinea.
I would also like to thank my fellow directors Syed Hizam Alsagoff and Pay Chuan (Paul) Lim for their
support and encouragement in setting the Company on an exciting pathway to success.
To all shareholders of the Company, I thank you for your support and I genuinely believe Gold Mountain
Limited is at the beginning of a new growth momentum period and the next year will be one to look
forward to.
Tony Teng
Managing Director
Dated this 30th day of September 2020
GOLD MOUNTAIN LIMITED ANNUAL REPORT
2
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) ......................................................................................................................... 20
SCHEDULE OF TENEMENTS ......................................................................................................................................... 26
AUDITOR’S INDEPENDENCE DECLARATION ............................................................................................................... 27
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME .......................................................... 28
STATEMENT OF FINANCIAL POSITION ......................................................................................................................... 29
STATEMENT OF CHANGES IN EQUITY ......................................................................................................................... 30
STATEMENT OF CASHFLOWS ....................................................................................................................................... 31
NOTES TO THE FINANCIAL STATEMENTS ................................................................................................................... 32
DIRECTORS’ DECLARATION .......................................................................................................................................... 61
INDEPENDENT AUDITORS REPORT ............................................................................................................................. 62
ADDITIONAL SHAREHOLDER INFORMATION .............................................................................................................. 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 2020. 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.
Sin Pyng “Tony” Teng
Syed Hizam Alsagoff (appointed 2/9/2019)
Pay Chuan “Paul” Lim (appointed 14/10/2019)
Graham Kavanagh (resigned 14/10/2019)
Douglas Smith (ceased 23/8/2019)
Names, qualifications, experience and special responsibilities
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
700,000 ordinary shares
Options
17,143,333 ordinary shares (indirect interest)
4,166,667 unlisted options exercisable at $0.10 and expiring on 3 December 2020 (indirect
interest) (GMNAC)
interest) (GMNAC)
4,166,667 unlisted options exercisable at $0.15 and expiring on 3 December 2021 (indirect
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)
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
4,333,333 ordinary shares
Options
1,166,667 unlisted options exercisable at $0.15 and expiring on 28 August 2021 (GMNAC)
15,582,000 ordinary shares (indirect interest)
Directorships held
in
No directorships held of ASX listed entities in the past three years
other listed entities
GOLD MOUNTAIN LIMITED ANNUAL REPORT
4
Pay Chuan “Paul” Lim Non-Executive Director (appointed 14 October 2019)
Qualifications
B.S.E.E., M.Eng., PEPC, FIEM, PMP, ACPE, APEC Eng., IntPE(MY), AER
Experience
Paul Lim is an entrepreneur and a Chartered Professional Engineer of more than 20 years’
experience in multi-disciplinary organisations in the engineering industry; in power generation,
transmission, distribution and automation systems, and telecommunications.
He is the current Executive Director and Group Chief Executive Officer of Pestech International
Berhad, a global integrated electrical power technology company listed in the Kuala Lumpur
Stock Exchange (PEST:MK).
Interest in Shares and
30,000,000 ordinary shares
Options
20,000,000 ordinary shares (indirect interest)
15,000,000 unlisted options exercisable at $0.10 and expiring on 3 December 2020
15,000,000 unlisted options exercisable at $0.15 and expiring on 3 December 2021
Directorships held
in
No directorships held of ASX listed entities in the past three years
other listed entities
Graham Kavanagh
Non-Executive Chairman (appointed 5 June 2014, resigned 14 October 2019)
Douglas Smith
Director Exploration (appointed 29 December 2016, ceased 23 August 2019)
MANAGEMENT
Tim Cameron
Chief Executive Officer
operations.
Eric Kam
Company Secretary
Mr Cameron is an experienced mining executive with sound leadership, technical, corporate and financial skills underpinned
by a reputation of innovation, integrity and determination. Mr Cameron's expertise encompasses strategic direction,
acquisitions and business and project management. With experience in both domestic (Australia) and international (North
America and Asia) operations, he has played an integral part in several successful exploration and open cut mining
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 also on the board of several other companies. Mr Kam has had extensive experience
as Company Secretary in several public listed and unlisted companies.
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
Sin Pyng “Tony” Teng
700,000 ordinary shares
17,143,333 ordinary shares
4,166,667 unlisted options exercisable at $0.10
and expiring on 3 December 2020 (GMNAC)
4,166,667 unlisted options exercisable at $0.15
and expiring on 3 December 2021 (GMNAC)
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
15,582,000 ordinary shares
Pay Chuan “Paul” Lim
30,000,000 ordinary shares
20,000,000 ordinary shares
1,666,667 unlisted options exercisable
at $0.15 and expiring on 28 Aug 2021
(GMNAC)
15,000,000 unlisted options exercisable
at $0.10 and expiring on 3 December
2020 (GMNAC)
15,000,000 unlisted options exercisable
at $0.15 and expiring on 3 December
2021 (GMNAC)
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
Granted as
Exercise of
Other changes
Balance at
beginning of the
remuneration
Options during
during the
end of the
Year
during the Year
the Year
Year
Year
Issued on
30 June 2020
Sin Pyng “Tony” Teng
9,510,000
Syed Hizam Alsagoff
Pay Chuan “Paul” Lim
Graham Kavanagh
Douglas Smith
Tim Cameron
Total
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
8,333,333
17,843,333
19,915,333
19,915,333
50,000,000
50,000,000
-
-
9,510,000
-
78,248,666
87,758,666
-
-
-
6
GOLD MOUNTAIN LIMITED ANNUAL REPORT
Sin Pyng “Tony” Teng
9,410,000
100,000
9,510,000
30 June 2019
Graham Kavanagh
Douglas Smith
Balance at
Granted as
Exercise of
Other changes
Balance at
beginning of the
remuneration
Options during the
during the
end of the
Year
during the Year
Year
Year
Year
Issued on
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
9,410,000
100,000
9,510,000
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
Exercise of Options
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 2020
Balance at
beginning of
period
Granted as
remuneration
Options
exercised or
vested
Net change
Other
Balance at
end of period
Sin Pyng “Tony” Teng
9,000,000
Syed Hizam Alsagoff
Pay Chuan “Paul” Lim
Graham Kavanagh
Douglas Smith
Tim Cameron
-
-
-
2,500,000
5,000,000
Sin Pyng “Tony” Teng
9,000,000
Graham Kavanagh
Douglas Smith
Total
2,500,000
5,000,000
16,500,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,333,334
12,333,334
3,333,334
3,333,334
30,000,000
30,000,000
(2,500,000)
(5,000,000)
-
-
-
-
-
-
-
-
9,000,000
2,500,000
5,000,000
16,500,000
Total
16,500,000
29,166,678
45,666,668
30 June 2019
Balance at
beginning of
period
Granted as
remuneration
Options
exercised or
vested
Net change
Other
Balance at
end of period
GOLD MOUNTAIN LIMITED ANNUAL REPORT
7
Options on issue at the date of this report are:
Issue Date
Number
Expiry Date
Exercise price
ASX Code
Number of
holders
26 Sep 2017
2,000,000
26 Jul 2021
26 Sep 2017
7,800,000
26 Jul 2021
28 Feb 2019
10,148,462
01 Mar 2021
24 May 2019
7,138,461
27 May 2021
30 Aug 2019
9,866,669
28 Aug 2021
3 Dec 2019
31,616,667
3 Dec 2020
3 Dec 2019
56,616,667
3 Dec 2021
15 Mar 2020
7,911,539
16 Mar 2021
15 Mar 2020
12,911,539
16 Mar 2022
5 Jun 2020
8,666,154
5 Jun 2021
5 Jun 2020
11,131,539
5 Jun 2022
3 Jul 2020
5,911,924
3 Jul 2021
3 Jul 2020
23,411,924
3 Jul 2022
$0.154
$0.155
$0.15
$0.15
$0.15
$0.10
$0.15
$0.10
$0.15
$0.10
$0.15
$0.10
$0.15
2
6
6
13
11
16
20
5
6
5
6
4
5
GMNAD
GMNAE
GMNAC
GMNAC
GMNAC
GMNAC
GMNAC
GMNAC
GMNAC
GMNAF
GMNAG
GMNAC
GMNAC
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
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.
OPERATIONS REPORT
Principal Activities
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 2020 are:
30 June 2020
30 June 2019
30 June 2018
30 June 2017
30 June 2016
Cash and cash equivalents
1,835,586
54,070
2,985,066
2,693,337
1,189,947
Net assets
25,434,816
20,296,725
19,275,974
12,420,975
3,404,265
Revenue & financial income
105,844
48,529
119,426
32,874
3,178
Net loss after tax
(1,569,877)
(1,401,021)
(1,484,473)
(1,279,915)
(1,515,979)
EBITDAX
(1,569,877)
(1,401,021)
(1,257,241)
(840,424)
(1,351,697)
Share price at 30 June
Loss per share (cents)
$0.066
(0.25)
$0.066
(0.27)
$0.100
(0.32)
$0.086
(0.35)
$0.036
(0.69)
a)
Financial Performance
The net loss after tax of the Company for the financial year after tax amounted to $1,569,877 (2019: Loss $1,401,024).
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 and prevailing low interest on deposits have
decreased during the year, accordingly interest income has further decreased from $3,063 to $1,471 when compared
to the prior year. The Company also received $51,007 as rental income in FY 2020 (FY 2019: $43,134) from sub-
leasing unused office space at its Sydney CBD office. In addition, the Company received the Government support
during COVID-19 of Cash Boost and wages subsidy JobKeeper payments of $16,000 towards the end of FY 2020.
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
$15,868,988 at 30 June 2019 FY to $19,722,600 at 30 June 2020.
Personnel and external consulting requirements and legal and professional costs have increased in FY 2020 to
$176,777 (FY 2019 $128,079). There was an increase in public and investor relations expense from $322,838 in the
2019 FY to $495,545 in the FY 2020.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
9
b)
Financial Position
(2019: $15,868,988).
The Company’s main activity during the year was the investment of cash of $1,835,586 (2019: $54,070). The carrying
value of the exploration assets and the capitalised exploration assets increased by $3,853,612 or 24% to $19,722,600
The 30 June 2020 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 2020, the Company recorded a loss after tax of $1,569,877 (2019: Loss
$1,401,024) and had a net working capital deficit of $737,437 (30 June 2019: deficit of $873,113).
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.
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
c)
Economic
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.
m.
5.
Significant Changes in the State of Affairs
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
On 30 July 2019, the Company announced it had received commitments for a placement raising $2.5 million. The funds
from this placement were 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 sought 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 $0.06 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.
Director of the Company.
On 2 September 2019, the Company announced the appointment of Mr Syed Hizam Alsagoff as a Non-Executive
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 over the next 24 months.
On 9 October 2019, the Company announced that due to unforeseen delays in the process of obtaining regulatory
approvals, the Placement Investors who previously made commitments to participate in the placement as announced
on 4 March 2019, would not be able to complete the transaction and cancelled the subscription for the placement of
100 million shares at the issue price of $0.10 per share.
On 11 October 2019, the Company initiated an Investor Presentation with emphasis on the current status and the
continuing value creation through exploration at its flagship Wabag Project. The presentation unveiled a short-term
expenditure commitment for the pre-drilling and drilling phases of $4 million for expected completion in December 2019.
On 14 October 2019, the Company announced the resignation of Graham Kavanagh following his decision to retire
from the Board as Director and Chairman of the Company. Pay Chuan “Paul” Lim accepted the invitation to join the
Board as Non-executive Director of the Company.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
11
On 15 October 2019, the Company announced that after a successful capital raising, the Company commenced on a
1,250 m diamond drilling programme at the Mongae Northwest Cu-Mo porphyry prospect (referred to its local name as
the ‘Monoyal’ prospect). It was expected that the programme would take two months to complete with results to be
announced to the market.
On 24 October 2019, the Company lodged Appendix 3B for the issue of 8,400,000 new fully paid ordinary shares
(Shares) at an issue price of $0.06 per share. The issue of these Placement Shares raised a total of $504,000 to be
used for the purpose of general working capital supporting the next stage of planned exploration programme. The
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.
On 28 October 2019, the Company announced the appointment of Tim Cameron as its Chief Executive Officer along
with the key terms of appointment consistent with ASX Listing Rule 3.16.4.
On 14 October 2019, the Company announced the completion of the first hole drilled at the Monoyal Prospect targeted
at an area of anomalous copper geochemistry. This was followed by a further announcement on 21 November 2019
clarifying the visual results on the nature of sulphide mineral occurrences along with JORC Table 1.
On 2 December 2019, the Company lodged Appendix 3B for the issue of 24,833,333 new fully paid ordinary shares
along with 31,616,667 options exercisable at $0.10 within 12 months and 56,616,667 options exercisable at $0.15
within 24 months respectively from date of issue. The shares and options issued are consistent to the approved
resolutions by shareholders at the annual general meeting held on 28 November 2019.
On 28 January 2020, the Company advised that the nine-hole drill programme at Monoyal Prospect has resumed on
21 January 2020 and the third hole in the programme, MCD005 has reached down to the depth of 105.20 m.
On 13 February 2020, the Company announced the assay results of the first hole drilled at Monoyal Prospect, MCD003
to contain Cu mineralisation averaging 850 ppm Cu over a 500 m interval from surface with the best intercept 101 m
@ 0.14% Cu and 76 ppm Mo from 398 m. MCD003 has also indications to contain elevated Au and Ag.
On 19 February 2020, the Company announced the granting of EL2563 – Kompian to its subsidiary Abundance Valley
(PNG) Limited (100% owned by GMN). The new tenement covers an area of 225 km2. It has been granted for a two-
year period to 22 January 2022.
On 28 February 2020, the Company announced the assay results of the second diamond drill hole MCD004 which
showed to contain highly anomalous copper (to 0.45% Cu), gold (to 1.24 g/t Au) and molybdenum (to 0.28% Mo)
mineralisation with the best intercept recorded 124 m @ 0.12% Cu, 105 ppm Mo and 0.06 g/t Au, and from 125 m,
includes a zone of 12.4 m @ 0.19% Cu, 494 ppm Mo and o.28 g/t Au from 169.6 m, and within the 12.4 m zone is a
narrower high-grade interval which grades 8.4 m @ 0.23% Cu, 689 ppm Mo and 0.4 g/t Au.
On 16 March 2020, the Company announced the proposed issue of securities of 15,823,077 shares and 20,823,078
share options. The shares were issued under ASX Listing Rule 7.1A at issue price of $0.065 raising a total of
$1,028,500. The shares issued have an 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. Included in the total proposed share options, 5,000,000 options
exercisable at $0.15 within 24 months were issued to Promoters for the provision of services. The share options were
issued under ASX Listing Rule 7.1.
On 26 March 2020, the Company announced an introduction of a new performance-based option plan to align the
incentives of Directors and Management of the Company. As part of the remuneration package of the Chief Executive
Officer, Tim Cameron shall be entitled to 20 million performance options and the other three directors are entitled to 20
million performance in aggregate with an additional 5 million performance option to be allocated to Consultants. The
new Performance Options Plan and the issue of options to directors are subject to shareholders’ approval at a general
meeting.
On 8 April 2020, the Company announced a corporate update in response to the COVID-19 pandemic. The Company
has taken precautionary measures to ensure all its staff and consultants remain safe and where capable work from
home to minimise risk of infections. All non-essential travel has been cancelled and to adopt the use of teleconferencing
for meetings. The Company has also taken steps to scale down the level of exploration being undertaken on its Wabag
Project, to reduce discretionary spending and services of associated personnel, and to review existing data to optimise
its exploration programme once restrictions during the current crisis have been lifted.
On 14 April 2020, the Company provided an update of its drilling programme at the Monoyal Prospect. Initial
observations for the holes show strong indications of a porphyry system with core from hole MCD005 indicates higher
levels of fracturing and veining than observed in previous drill holes while hole MCD006 has shown highest level of
brecciation and alteration encountered in the drill programme. Chalcopyrite (copper sulphide) and molybdenum
mineralisation is also present in both holes on fracture surfaces and in discrete veins.
On 4 May 2020, the Company provided an update on drill hole MCD007 which drilling was suspended on 30 March
2020 when it reached a depth of 409 m due to COVID-19 related logistical issues. Initial observations of mineralisation,
alteration and fracture density indicate possibly to contain high levels of copper and or gold mineralisation intersect,
with its style of mineralisation similar to previous holes. Preliminary portable XRF results include a 21m interval
averaging 0.54% Cu, which contained a 2m interval recording of 1.54% Cu.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
12
On 22 May 2020, the Company provided an update on the ongoing exploration at the Monoyal Prospect. Recent heavy
rain and subsequent flooding has exposed fresh mineralised outcrop at the Monoyal Prospect in and around three
streams draining to the NW, revealing copper mineralisation in fractures, veins and as disseminations in the rock mass.
The additional mapping of Monoyal Prospect aided by the flooding event has resulted in a better understanding of the
prospect geology.
On 4 June 2020, the Company advised a funding update to have raised an additional $626,000 in the proposed
placement of shares. The total sum $1.12 million are raised by issue of shares at $0.065 per share with entitlement of
unlisted options of every two (2) shares issued, of one (1) share option exercisable at $0.10 within 12 months (10c-
Options) and another one (1) share option exercisable at $0.15 within 24 months (15c-Options) respectively from date
of issue. The proposed issue of securities shall include 2,465,385 15c-Options to various Introducers and Promoters
for their assistance in the placement services.
On 5 June 2020, the Company lodged the Proposed issue of securities along with Appendix 2A Application for quotation
of 17,332,308 shares. The total issue raised $1,126,600 for working capital purposes. In addition, 8,666,154 10c-
Options and 11,131,539 15c-Options were issued as entitlement of unlisted options related to the issued shares,
including 2,465,385 15c-Options allocation to the Introducers and Promoters.
On 5 June 2020, the Company advised that the core samples from the fifth hole MCD007 have arrived at the ALS
Laboratory in Townsville. The inevitable delays are due to challenges of getting samples out of the remote drilling site
at Monoyal, the impact of COVID-19 restrictions and the implementation of the State of Emergency in PNG that has
affected the transport and logistics network.
On 11 June 2020, the Company announced that Matt Liddy has agreed to join the Company as Advisor to provide his
expertise in corporate strategy & project development.
On 15 June 2020, the Company announced the appointment of a porphyry expert Phil Jones, a senior consultant to
assist with the delineation of the Monoyal porphyry target.
Review of Operations
Wabag Project - Papua New Guinea (PNG)
During the reporting period the Company continued exploration at its Wabag Project in Papua New Guinea. Exploration
activity was primarily focused on drilling the highly anomalous copper geochemistry identified by detailed soil sampling
and subsequent trenching which was completed on EL2306 in May 2019.
Between October 2019 and April 2020, GMN drilled five diamond holes (MCD003 to MCD007) for a total of 2,225 m at
the Monoyal prospect located within EL2306. The holes were drilled to depths of between 372m to 500m. All five holes
intersected anomalous copper and molybdenum over wide intervals with the mineralization confined to fracture
surfaces and minor veinlets. This has been interpreted that the initial five holes at Monoyal were drilled on the periphery
of the main mineralized core of a large porphyry system.
In addition to the drilling programme at Monoyal, GMN has also initiated soil sampling programs at Lombokai Creek,
which is located immediately north of the Monoyal prospect and it covers both EL’s 2306 and 2532. Highly anomalous
rock chip samples with skarn alteration characteristics have been collected from Lombokai Creek, these samples
contain elevated copper, gold and silver mineralization. Soil sampling also commenced in the postulated structural
corridor which links the Monoyal prospect to Sak Creek in EL1966. A summary of the sampling statistics for the various
exploration leases held by GMN and which comprise part of the Wabag Project is included as Table 1.
In October 2019, the Company attended a series of Wardens’ hearings for the renewal of tenements and for the grant
of one additional tenement to increase the area of the Company’s exploration grounds in this highly prospective region.
No objections were raised by the community who encouraged GMN to start or continue exploration on their land.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
13
Table 1: FY2020 Sample Statistics
EL Number
EL2306
EL2306
EL2306
EL2306
EL2306
EL1968
EL1968
EL1966
EL2532
Project
Monoyal
Monoyal
Monoyal
Monoyal
Lombokai /
Laialam
Crown Ridge
Crown Ridge
Sak Creek / K-
Lam
Mt Wipi
Sample Type
Drill samples
Trench samples
-80 mesh soil samples
-80 mesh soil samples
Rock samples
Rock samples
Rock samples
Rock samples
Rock samples
No. of Samples
2,124
342
257
339
7
249
13
273
11
Exploration Programme
The focus of exploration undertaken by the Company over the last twelve months has been the diamond drilling
programme at the Monoyal prospect, which is located in the north-east corner of EL2306. The aim of the drilling
programme was to test the strong copper in soil anomaly identified in FY2019. The drilling programme commenced in
Q2 of FY20 and comprised 5 diamond drill holes, MCD003 to MCD007, for 2,252m. Table 2 details the drill hole
parameters and the drill hole locations are presented in Figure 1.
The drilling successfully intersected wide intervals of anomalous copper and molybdenum mineralization over wide
intervals, with the mineralization primarily located on fracture surfaces and in minor veinlets. Highlights from the drilling
included 101m @ 0.11% Cu, 76ppm Mo and 0.03g/t Au from 398 m in MCD003 and 124 m @ 0.12% Cu, 105 ppm Mo
and 0.06 g/t Au, from 125 m in MCD004. om MCD003. Narrower high-grade zones were intersected in both holes, with
the highest intercept being recorded in MCD004 which returned a 12.40m intercept which assayed 0.19% Cu, 494ppm
Mo and 0.28 g/t Au from 169.60m.
is scheduled to restart in Q2 of FY21.
Drilling was paused in the fourth quarter for FY20 due to logistical issues associated with COVID-19 restrictions. Drilling
Table 2. Monoyal – Completed Drill Hole Parameters
Proposed
Hole ID
Easting
Northing
RL
Dip
Azimuth
Planned
Current
Depth (m)
Depth (m)
MCD003
810,142
9,419,803
MDC004
809,861
9,419,773
MCD005
809,733
9,419,965
MCD006
809,179
9,419,861
MCD007
810,141
9,419,670
1,737
1,654
1,574
1,609
1,735
450
475
400
400
400
500.50 EOH
450.20 EOH
372.20 EOH
419.40 EOH
409.60 EOH
-65
-60
-60
-60
-60
275
220
282
255
330
*coordinates in UTM (WGS 84) Zone 54S projection, # as of 30th March 2020
GOLD MOUNTAIN LIMITED ANNUAL REPORT
14
Figure 1: Monoyal Prospect EL2306
Table 3. Monoyal Drilling Programme - Significant Intercepts
Hole
Number
MCD003
MCD003
MCD004
MCD004
MCD005
MCD006
MCD007
From
(m)
11
398
1.50
125.00
65
281
170
30.00
To
(m)
84
499
249
127
288
202
Interval
(m)
73
101
28.50
124
62
7
32
Cu
(ppm)
0.106
0.112
0.12
0.120
1,267
2,006
1,006
Mo
(ppm)
105
31
76
6
91
5
49
Au
(g/t)
0.04
0.03
0.05
0.06
0.03
0.04
0.03
Ag
(g/t)
1.02
0.48
0.56
0.97
2.1
1.24
0.65
All intercepts calculated using 700 ppm Cu COG with 3 m internal dilution.
In addition to the drilling programme, regional exploration continued on EL2306. Ten rock chip samples (LMBK001 to
LMBK010) with distinct skarn characteristic and which are highly anomalous in gold, copper and silver were collected
from Lombokai Creek, which is located immediately north of the Monoyal Prospect. Seven of the ten samples assayed
over 0.10% Cu with one sample assaying 10.0% Cu, whilst gold to 1.36 g/t Au and silver to 73 g/t Ag were also recorded.
The rock chip locations are presented on Figure 2 and the results are presented in Table 2.
In FY21 the Mongae / Monoyal soil grid will be extended to the north and east to cover the Lombokai Creek area to
determine if a drillable target can be identified quickly. If a suitable target is identified, it will be tested while the drill rig
is working at the Monoyal Prospect.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
15
Figure 2. Lombokai Creek Rock chip Locations
Table 4. Rock Chip Results – Lombokai Creek
Rock Chip Description
Cu
(ppm)
1085
178
244
6350
Sample No.
Au
(ppm)
Ag
(ppm)
LMBK001
LMBK002
LMBK003
LMBK004
LMBK005
LMBK006
LMBK007
LMBK008
LMBK009
LMBK010
0.06
0.01
0.09
0.06
0.18
0.51
0.14
1.36
0.13
0.02
0.22
1.13
22.1
1.67
20.3
73.5
1.32
57.8
5.57
2.36
12 x 10cm vein, highly siliciecous vein hosting disseminated chalcopyrite and pyrite
Fine to medium grained tonalite with disseminated pyrite
1.40% Dull green calcareous diorite, rich outcrop with chalcopyrite and bornite
Fine to medium grained tonalite with disseminated pyrite and chalco
Grey brown, partially oxidized, calcareous pyritized outcrop sample
10.00% Black grey magnetite skarn, hosting chalcopyrite, bornite and chalcoite
279
Greyish brown, oxidized tonalite with qz-ser-py alteration, qz-py veining noted
5.91% Black grey magnetite skarn, hosting chalcopyrite, bornite and chalcoite
3900
Dull green calcereous diorite, rich outcrop with chalcopyrite and bornite
1395 White-grey fine grained tonalite, hosting cpy-mal-bn as fracture controlled
Sample
Type
Float
Float
Outcrop
Outcrop
Outcrop
Outcrop
Outcrop
Outcrop
Outcrop
Outcrop
Warden Hearings
and 2306 are pending.
Wardens Hearing for the renewal of four tenements and for the grant of one additional tenement were held in October
2019. The outcomes from the hearings have not been communicated to the Company in full, however the new tenement
EL 2632, Mt Wipi was granted in Q1 FY21 and EL1966 is with the minister pending grant. Tenements EL1967, 1968
GOLD MOUNTAIN LIMITED ANNUAL REPORT
16
Capital Raisings
and sophisticated investors.
During the financial year and until the date of signing this report, the Company completed seven placements to institutional
The first placement in FY 2020 was 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 with 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 have 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.
On 24 October 2019, the Company issued 8,400,000 shares (Placement Shares) at a price of $0.06 per share raising a
total of $504,000. 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.
The fourth placement on 2 December 2019 was the issue of 24,833,333 shares (Placement Shares) at $0.06 per share
along with 31,616,667 options exercisable at $0.10 within 12 months and 56,616,667 options exercisable at $0.15 within 24
months respectively from date of issue. The shares and options issued are consistent with the approved resolutions by
shareholders at the annual general meeting held on 28 November 2019.
On 16 March 2020, the issue of 15,823,077 shares (Placement Shares) at $0.065 per share along with 20,823,078 share
options raised a total of $1,028,500. The options were 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. Included were options issued to Promoters for provision of services,
5,000,000 options exercisable at $0.15 within 24 months.
On 5 June 2020, 17,332,308 shares were issued raised $1,126,600 for working capital purposes. In addition, 8,666,154
10c-Options and 11,131,539 15c-Options were issued as entitlement of unlisted options to the issued shares, including
2,465,385 15c-Options allocation to the Introducers and Promoters.
Most recent placement was on 3 July 2020 with the issue of 11,823,847 shares at $0.065 per share raised $768,550 for
working capital purposes. In addition, 5,911,924 10c-Options and 23,411,924 15c-Options were issued as entitlement of
unlisted options to the issued shares, including 17,500,000 15c-Options allocation to an Introducer and Promoter for past
services rendered.
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.
Capital Raising
Issue of shares
Issue of shares
Issue of shares
Issue of shares
Issue of shares
Issue of shares
Issue of shares
Total
Date
Shares Issued
Price
Amount Raised
30-08-2019
30-08-2019
04-09-2019
24-10-2019
16-03-2020
05-06-2020
03-07-2020
2,000,000
19,733,333
30,000,000
8,400,000
24,833,333
15,823,077
17,332,308
11,824,847
129,946,898
$0.065
$0.060
$0.060
$0.060
$0.060
$0.065
$0.065
$0.065
130,000
1,184,000
1,800,000
504,000
1,490,000
1,028,500
1,126,600
768,550
$8,031,650
Issue of shares approved at 2019 AGM
02-12-2019
GOLD MOUNTAIN LIMITED ANNUAL REPORT
17
Details of the Company’s Risk Management policies are contained within the Corporate Governance Statement.
Risk management
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 2 July 2020, the Company advised that it has further raised $760,000 via the continuing share placement program at
$0.065 per share to sophisticated investors. The share placement has accompanying entitlement of unlisted options for
every two (2) shares issued, of one (1) share option exercisable at $0.10 within 12 months (10c-Options) and another
one (1) share option exercisable at $0.15 within 24 months (15c-Options) respectively from date of issue. The Company’s
Chief Executive Officer Tim Cameron and the recently appointed Advisor Matt Liddy have both participated in the
placement giving support the ongoing drill program at the Monoyal Prospect.
On 3 July 2020, the Company lodged the Proposed issue of securities along with Appendix 2A Application for quotation
of +securities of 11,823,847 shares. The total issue raised $768,550 for working capital purposes. In addition, 5,911,924
10c-Options and 23,411,924 15c-Options were issued as entitlement of unlisted options to the issued shares, including
17,500,000 15c-Options allocation to an Introducer and Promoter for past services rendered.
On 17 July 2020, the Company announced the assay results of the fifth diamond hole MCD007 drilled at the Monoyal
Prospect. The results contain anomalous copper zones, gold and molybdenum mineralisation over 1m intervals with
best intercepts recorded 32m @ 0.10% Cu 49ppm Mo 0.03 g/t Au from 170m, 13m @ 0.13% Cu 63ppm Mo 0.04 g/t Au
from 176m, 3m @ 0.14% Cu 96ppm Mo 0.06 g/t Au from 285m and 3m @ 0.10% Cu 511ppm Mo 0.04 g/t Au.
On 28 July 2020, the Company provided an update in relation to its drilling program at Wabag and reported the assay
results of MCD005 and MCD006. Both holes intersected broad zones of elevated copper and molybdenum
mineralisation, with anomalous gold and silver values. MCD005 intersected a narrow fault breccia between 93m and
94m, which assayed 0.81% Cu 0.26% Mo 1,175ppm Ag and contained elevated Zn (955ppm Zn). Assay results to 0.66%
Cu 68 ppm Mo 0.26 g/t Au and 5.5 g/t Ag were recorded over 1m intervals in MCD006.
On 27 August 2020, the Company announced that the Mineral Resources Authority (MRA) has granted GMN 6768 (PNG)
Limited (100% owned subsidiary) the exploration licence EL2632 Mt. Wipi for a period of two years to 13 August 2022.
The tenement was granted after successful Warden’s hearing in October 2019.
On 15 September 2020, the Company announced that drilling at the Wabag Project is to resume in October 2020
following the easing of restrictions surrounding COVID-19. The focus in the drilling resumption will be testing Cu-Mo
porphyry system at depth.
On 23 September 2020, the Company reported the assay results of float and rock samples collected at the southern end
drainage areas of the newly granted EL2632 Mt Wipi tenement. The results from total of 28 samples are highly
encouraging with copper values ranging from 100ppm Cu to 9.64% Cu, gold from 0.01 g/t to 1.96 g/t Au and silver 0.14
g/t to 144 g/t Ag. Airborne magnetic data has also identified several targets with exploration programme to follow-up.
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
18
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 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 exercise
price of $0.10 expiring on 28/08/2020 and the other tranche of 9,866,669 options is at exercise price of $0.15 expiring
28/08/2021 with no vesting conditions.
On 2 December 2019, the Company granted 88,233,334 free unlisted options to participants related to the Share Placement
program including those placement shares issued previously of 30 August 2019 and 4 September 2019, with approval of
shareholders at the 2019 AGM. Participants of the Share Placement were entitled to one (1) option exercisable at $0.10
and another one (1) option exercisable at $0.15 within 12 months and 24 months from date of issue respectively for every
two (2) placement shares issued. A total of 63,233,334 options were granted in relation the placement shares issued. The
remaining balance of 25,000,000 options exercisable at $0.15 within 24 months were issued to the Promoters.
On 16 March 2020, the Company granted 20,823,078 free unlisted options to participants in the share placement of
15,823,077 shares on the same date in two separate tranches of options. One option tranche is at an exercise price of $0.10
expiring on 16 March 2021 and the other option tranche is at an exercise price of $0.15 expiring on 16 March 2022 with no
vesting conditions. The grant of 5,000,000 options exercisable at $0.15 expiring 16 March 2020 was made to a Promoter
for services rendered.
On 5 June 2020 the Company granted 19,797,693 free unlisted options to participants in the share placement of 17,332,308
shares on the same date in two separate tranches of options. One option tranche is at an exercise price of $0.10 expiring
on 5 June 2021 and the other option tranche is at an exercise price of $0.15 expiring 5 June 2022 with no vesting conditions.
Of the options of exercise price $0.15 expiry 5 June 2022, 2,465,385 options were granted to various promoters and
introducers for their services rendered.
On 3 July 2020 the Company granted 29,323,848 free unlisted options to participants in the share placement of 11,823,847
shares on the same date in two separate tranches of options. One option tranche is at an exercise price of $0.10 expiring
on 3 July 2021 and the other option tranche is at an exercise price of $0.15 expiring 3 July 2022 with no vesting conditions.
Of the options of exercise price $0.15 expiry 3 July 2022, 17,500,000 options were granted to a Promoter for past services
rendered.
The options must be exercised on or before the expiry date in cash.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
19
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 2020.
The following persons acted as Directors during or since the end of the financial year:
Sin Pyng “Tony” Teng
Syed Hizam Alsagoff (appointed 2/9/2019)
Pay Chuan “Paul” Lim (appointed 14/10/2019)
Graham Kavanagh (resigned 14/10/2019)
Douglas Smith (ceased 23/8/2019)
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:
Sin Pyng “Tony” Teng
Eric Kam
Tim Cameron (w.e.f. 25/10/2019)
Remuneration Philosophy
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
remuneration is separate and distinct.
In accordance with best practice Corporate Governance, the structure of Non-Executive Director and executive
GOLD MOUNTAIN LIMITED ANNUAL REPORT
20
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 2020 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 five most highly remunerated Company executives is detailed in Table 1.
Employment Contracts
During the year and to the date of this report there is one new employment contract with the Company.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
21
Remuneration of Directors and named executives
Table 1: Directors’ and named executives remuneration for the year ended 30 June 2020
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
22,000
Sin Pyng “Tony” Teng 2
114,000
Douglas Smith 3
Eric Kam 4
David Clark 5
Tim Cameron 6
Total
-
-
-
-
-
-
-
-
-
-
-
-
8,400
108,000
24,000
133,336
409,736
30,000
75,000
173,400
102,000
30,000
410,400
Graham Kavanagh 1
Sin Pyng “Tony” Teng 2
Douglas Smith 3
Eric Kam 4
David Clark 5
Total
-
-
-
-
-
-
-
-
-
-
-
-
1,710
-
-
-
-
1,710
285
285
-
-
-
570
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
22,000
115,710
8,400
108,000
24,000
133,336
-
411,446
30,000
75,285
173,685
102,000
30,000
410,970
0%
0%
0%
0%
0%
0%
-
0%
0%
0%
0%
0%
-
Table 2: 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
GOLD MOUNTAIN LIMITED ANNUAL REPORT
22
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.
6. Paid to Esplanade Consultancy ATF Voice Works 2 Trust for executive services of which Tim Cameron is related to the discretionary services management trust.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
23
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.
v.
vi.
ix.
x.
xi.
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.
iii.
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.
iv.
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.
vii.
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.
Options are granted under the plan for no consideration.
Each share options converts into one ordinary shares of Gold Mountain Limited.
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
24
Directors’ Meetings
Director
Sin Pyng “Tony” Teng
Syed Hizam Alsagoff
Pay Chuan “Paul” Lim
Graham Kavanagh
Douglas Smith
Auditor Independence
Non-Audit Services
The number of meetings of Directors (including meetings of committees of Directors) held during the year and the number
of meetings attended by each Director was as follows:
Board Meetings
Attended
Eligible to Attend
5
3
1
4
2
5
3
1
4
2
In addition, 12 circular resolutions were signed by the Board during the period.
Section 307C of the Corporations Act 2001 requires our auditors to provide the Directors of the Company with an
Independence Declaration in relation to the audit of the annual report. This Independence Declaration is set out on page
27, and forms part of this Directors’ report for the year ended 30 June 2020.
Details of amounts paid or payable to the auditor for non-audit services provided during the year by the auditor are outlined
in Note 22 to the financial statements. The Directors are satisfied that the provision of non-audit services is compatible with
the general standard of independence for auditors imposed by the Corporations Act 2001.
The Directors are of the opinion that the services do not compromise the auditor’s independence as all non-audit services
have been reviewed to ensure that they do not impact the integrity and objectivity of the auditor and none of the services
undermine the general principles relating to auditor independence.
Signed in accordance with a resolution of the Directors.
Tony Teng
Managing Director
Dated this 30th day of September 2020
GOLD MOUNTAIN LIMITED ANNUAL REPORT
25
SCHEDULE OF TENEMENTS
Holder
GMN Interest
Location
Area (km2)
EL No.
EL1966
Sak Creek
EL1967
Poket Creek
EL1968
Crown Ridge
EL2426
Keman
EL2430
Meriamanda
EL2522
Wapenamanda
EL2565
Londol
EL2306
Alakula
EL2563
Kompiam
EL2632
Mt Wipi
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)
Registration of
Enga Province, PNG
Limited / Abundance Valley
(PNG) Limited
Abundance Valley (PNG)
Limited
transfer
pending
100%
Enga Province, PNG
GMN 6768 (PNG) Limited
100%
Enga Province, PNG
Expiry
26/06/2019
(Renewal pending)
27/11/2019
(Renewal submitted)
27/11/2019
(Renewal submitted)
27/05/2020
(Renewal submitted)
27/05/2020
(Renewal submitted)
24/02/2021
26/05/2021
13/12/2019
(Renewal submitted
22/01/2022
13/8/2022-
103
103
103
48
154
839
535`
164
225
537
Figure 3 – Suite of tenements located at the Enga Province in Papua New Guinea
GOLD MOUNTAIN LIMITED ANNUAL REPORT
26
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2020
Other income
Administration costs
Depreciation and amortisation expense
Employment costs
Exploration expense
Impairments expense
Investor and public relations expense
Legal and professional costs
Other expenses
Income tax expense
Net loss for the period
Other comprehensive income
Foreign currency translation
Loss per share
Basic loss per share (cents)
Diluted loss per share (cents)
Loss before income tax expense
(1,569,877)
(1,401,021)
Attributable to the owners of Gold Mountain Limited
(1,569,877)
(1,401,021)
Total other comprehensive income for the year, net of tax
Total comprehensive loss for the period
Attributable to the owners of Gold Mountain Limited
(1,569,877)
(1,401,024)
The statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes.
Note
3
5
20
2020
$
2019
$
105,844
105,844
48,529
48,529
(568,558)
(488,078)
(210,785)
(127,000)
(41,710)
(62,280)
(45,528)
-
(20,000)
(405,545)
(322,838)
(176,777)
(128,079)
(226,819)
(301,275)
-
-
(3)
(3)
-
0
0
(0.25)
N/A
(0.27)
N/A
GOLD MOUNTAIN LIMITED ANNUAL REPORT
28
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2020
Note
2020
$
2019
$
Deferred exploration and evaluation expenditure
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Plant and equipment
Right of Use Asset
Intangibles
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
Non-controlling interest
TOTAL EQUITY
6
7
8
8
9
10
11
12
13
14
14
1,835,586
118,130
54,070
60,509
1,953,716
114,579
285,821
125,807
418,780
-
19,722,600
15,868,988
5,996,150
5,995,970
50,555
35,545
50,555
35,545
26,216,477
22,369,838
28,170,193
22,484,417
1,855,824
437,692
835,329
1,300,000
2,691,153
1,737,692
44,223
44,223
450,000
450,000
2,735,377
2,187,692
25,434,816
20,296,725
15
16
36,487,484
30,006,334
924,044
697,225
(11,976,814)
(10,406,897)
102
63
25,434,816
20,296,725
Total equity attributable to equity holders of the Company
25,434,816
20,296,662
The statement of financial position should be read in conjunction with the accompanying notes.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
29
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2020
Issued Capital
Reserves
Accumulated
Non
Total
$
$
$
$
Losses
Controlling
Interest
$
Balance at 1 July 2018
27,885,834
395,953
(9,005,876)
63
19,275,974
(1,401,021)
(1,401,021)
(3)
(1,401,021)
(1,401,024)
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
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)
-
-
-
-
-
-
-
-
2,247,300
(126,800)
-
301,275
2,120,500
301,275
7,263,100
(781,950)
-
226,819
6,481,150
226,819
-
-
-
-
-
-
-
-
-
-
-
-
Balance at 30 June 2019
30,006,334
697,225
(10,406,897)
63
20,296,725
Balance at 1 July 2019
30,006,334
697,225
(10,406,897)
63
20,296,725
(1,569,877)
(1,569,877)
(1,569,877)
(1,569,877)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,247,300
(126,800)
301,275
2,421,775
-
(3)
-
-
7,263,100
(781,950)
226,819
6,707,969
Balance at 30 June 2020
36,487,484
924,044
(11,976,774)
63
25,434,817
The statement of changes in equity should be read in conjunction with the accompanying notes.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
30
STATEMENT OF CASHFLOWS
FOR YEAR ENDED 30 JUNE 2020
Cash flows from operating activities
Payments to suppliers and employees
Interest received
Other receipts
Cash flows from investing activities
Payments for plant and equipment
Receipt of tenement security deposits
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
Net cash (used in) provided by operating activities
27
(1,442,923)
(742,709)
Payments for other investments
14
(300,000)
(450,000)
Payments for exploration and evaluation
9
(4,122,965)
(4,052,804)
Net cash (used in) provided by investing activities
(4,407,061)
(4,558,787)
Note
2020
$
2019
$
1,471
3,063
(1,511,401)
(801,000)
67,007
55,228
-
-
(55,983)
-
7,913,450
2,247,300
(781,950)
(126,800)
500,000
250,000
7,631,500
2,370,500
1,781,516
(2,930,996)
Cash and cash equivalents at beginning of financial year
54,070
2,985,066
Cash and cash equivalents at end of financial year
6
1,835,585
54,070
The statement of cashflows should be read in conjunction with the accompanying notes.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
31
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
This financial report includes the financial statements and notes of Gold Mountain Limited.
Number
Notes to the Financial Statements
Summary of significant accounting policies
Non-current assets – Deferred exploration and evaluation expenditure
1
2
3
4
5
6
7
8
9
10
11
12
13
14
16
17
18
19
20
21
22
23
24
25
26
27
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 – Intangible assets
Non-current assets – Investments
Non-current assets – Other assets
Current liabilities – Trade and other payables
Current and non-current liabilities – Other
Key management personnel compensation
Reserves
Share based payments
Related party disclosures
Loss per share
Financial Risk Management
Auditor’s remuneration
Parent Entity Information
Dividends
Events subsequent to reporting date
Controlled entities
Cash flow information
15
Contributed equity
GOLD MOUNTAIN LIMITED ANNUAL REPORT
32
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
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
liabilities
b.
Comparative Figures
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.
The Company did not have any joint arrangements at the start of the financial year.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
33
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 $2,250,000 were paid by the Company in FY
2017, FY 2018, FY 2019 and FY 2020. The remaining instalment costs of $750,000 has been extended and is
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.
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.
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
e.
Cash and Cash Equivalents
f.
Provisions
the reporting period.
g.
Trade and other payables
h.
Income Tax
expense (income).
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.
The income tax expense (revenue) for the year comprises current income tax expense (income) and deferred tax
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.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during
the year as well unused tax losses.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
34
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)
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
(b)
exploration and evaluation activities in the area of interest have not at the reporting date reached a
stage which permits a reasonable assessment of the existence or otherwise of economically
recoverable reserves, and active and significant operations in, or in relation to, the area of interest
are continuing.
Exploration and evaluation assets are initially measured at cost and include acquisition of rights to explore,
studies, exploratory drilling, trenching and sampling and associated activities and an allocation of depreciation
and amortised of assets used in exploration and evaluation activities. General and administrative costs are only
included in the measurement of exploration and evaluation costs where they are related directly to operational
activities in a particular area of interest.
Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the
carrying amount of an exploration and evaluation asset may exceed its recoverable amount. The recoverable
amount of the exploration and evaluation asset (for the cash generating unit(s) to which it has been allocated
being no larger than the relevant area of interest) is estimated to determine the extent of the impairment loss (if
any). Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the
revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not
exceed the carrying amount that would have been determined had no impairment loss been recognised for the
asset in previous years.
development.
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
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
35
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)
the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have
been recognised as expenses; and
(iii)
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.
Each class of plant and equipment is carried at cost or fair value as indicated less, where applicable, any
m.
Plant and Equipment
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
36
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.
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.
Leases (the Group as lessee)
At inception of a contract, the Group assesses if the contract contains or is a lease. If there is a lease present, a
right-of-use asset and a corresponding lease liability is recognised by the Group where the Group is a lessee.
However, all contracts that are classified as short-term leases (lease with remaining lease term of 12 months or
less) and leases of low-value assets are recognised as an operating expense on a straight-line basis over the
term of the lease.
Initially, the lease liability is measured at the present value of the lease payments still to be paid at the
commencement date. The lease payments are discounted at the interest rate implicit in the lease. If this rate
cannot be readily determined, the Group uses the incremental borrowing rate.
Lease payments included in the measurement of the lease liability are as follows:
fixed lease payments less any lease incentives;
–
–
–
–
–
–
variable lease payments that depend on an index or rate, initially measured using the index or rate at
the commencement date;
the amount expected to be payable by the lessee under residual value guarantees;
the exercise price of purchase options, if the lessee is reasonably certain to exercise the options;
lease payments under extension options if lessee is reasonably certain to exercise the options; and
payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to
terminate the lease.
Subsequently, the lease liability is measured by a reduction to the carrying amount of any payments made and
an increase to reflect any interest on the lease liability.
The right-of-use assets is an initial measurement of the corresponding lease liability less any incentives and initial
direct costs. Subsequently, the measurement is the cost less accumulated depreciation (and impairment if
applicable).
shortest.
underlying asset.
Right-of-use assets are depreciated over the lease term or useful life of the underlying asset whichever is the
Where a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the
Group anticipates to exercise a purchase option, the specific asset is depreciated over the useful life of the
GOLD MOUNTAIN LIMITED ANNUAL REPORT
37
h.
Financial Instruments
Initial recognition and measurement
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual
provisions to the instrument. For financial assets, this is the date that the Group commits itself to either the
purchase or sale of the asset (ie trade date accounting is adopted).
Financial instruments (except for trade receivables) 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. Where available, quoted prices in an active market are used to determine
fair value. In other circumstances, valuation techniques are adopted.
Trade receivables are initially measured at the transaction price if the trade receivables do not contain a significant
financing component or if the practical expedient was applied as specified in AASB 15.63.
Classification and subsequent measurement
Financial liabilities
Financial liabilities are subsequently measured at:
amortised cost; or
fair value through profit or loss.
–
–
–
–
–
–
–
–
A financial liability is measured at fair value through profit or loss if the financial liability is:
a contingent consideration of an acquirer in a business combination to which AASB 3: Business
Combinations applies;
held for trading; or
initially designated as at fair value through profit or loss.
All other financial liabilities are subsequently measured at amortised cost using the effective interest method.
The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating
interest expense in profit or loss over the relevant period.
The effective interest rate is the internal rate of return of the financial asset or liability, that is, it is the rate that
exactly discounts the estimated future cash flows through the expected life of the instrument to the net carrying
amount at initial recognition.
A financial liability is held for trading if it is:
incurred for the purpose of repurchasing or repaying in the near term;
part of a portfolio where there is an actual pattern of short-term profit taking; or
a derivative financial instrument (except for a derivative that is in a financial guarantee contract or a
derivative that is in an effective hedging relationship).
Any gains or losses arising on changes in fair value are recognised in profit or loss to the extent that they are not
part of a designated hedging relationship.
The change in fair value of the financial liability attributable to changes in the issuer's credit risk is taken to other
comprehensive income and is not subsequently reclassified to profit or loss. Instead, it is transferred to retained
earnings upon derecognition of the financial liability.
If taking the change in credit risk in other comprehensive income enlarges or creates an accounting mismatch,
then these gains or losses should be taken to profit or loss rather than other comprehensive income.
A financial liability cannot be reclassified.
Financial guarantee contracts
A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the
holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the
terms of a debt instrument.
Financial guarantee contracts are initially measured at fair value (and if not designated as at fair value through
profit or loss and do not arise from a transfer of a financial asset) and subsequently measured at the higher of:
–
the amount of loss allowance determined in accordance to AASB 9.3.25.3; and
GOLD MOUNTAIN LIMITED ANNUAL REPORT
38
–
the amount initially recognised less accumulative amount of income recognised in accordance with the
revenue recognition policies.
Financial asset
Financial assets are subsequently measured at:
amortised cost;
fair value through other comprehensive income; or
fair value through profit or loss
on the basis of the two primary criteria:
–
–
–
–
–
–
–
–
–
–
–
loss.
the contractual cash flow characteristics of the financial asset; and
the business model for managing the financial assets.
A financial asset is subsequently measured at amortised cost if it meets the following conditions:
the financial asset is managed solely to collect contractual cash flows; and
the contractual terms within the financial asset give rise to cash flows that are solely payments of principal
and interest on the principal amount outstanding on specified dates.
A financial asset is subsequently measured at fair value through other comprehensive income if it meets the
following conditions:
the contractual terms within the financial asset give rise to cash flows that are solely payments of principal
and interest on the principal amount outstanding on specified dates; and
the business model for managing the financial asset comprises both contractual cash flows collection
and the selling of the financial asset.
By default, all other financial assets that do not meet the conditions of amortised cost and the fair value through
other comprehensive income's measurement condition are subsequently measured at fair value through profit or
The Group initially designates a financial instrument as measured at fair value through profit or loss if:
it eliminates or significantly reduces a measurement or recognition inconsistency (often referred to as
“accounting mismatch”) that would otherwise arise from measuring assets or liabilities or recognising the
gains and losses on them on different bases;
it is in accordance to the documented risk management or investment strategy and information about
the groupings was documented appropriately, so as the performance of the financial liability that was
part of a group of financial liabilities or financial assets can be managed and evaluated consistently on
–
it is a hybrid contract that contains an embedded derivative that significantly modifies the cash flows
a fair value basis; and
otherwise required by the contract.
The initial designation of the financial instruments to measure at fair value through profit or loss is a one-time
option on initial classification and is irrevocable until the financial asset is derecognised.
At initial recognition, as long as the equity instrument is not held for trading or is not a contingent consideration
recognised by an acquirer in a business combination to which AASB 3 applies, the Group made an irrevocable
election to measure any subsequent changes in fair value of the equity instruments in other comprehensive
income, while the dividend revenue received on underlying equity instruments investments will still be recognised
Regular way purchases and sales of financial assets are recognised and derecognised at settlement date in
accordance with the Group's accounting policy.
Equity instruments
in profit or loss.
Derecognition
Derecognition refers to the removal of a previously recognised financial asset or financial liability from the
statement of financial position.
Derecognition of financial liabilities
A liability is derecognised when it is extinguished (ie when the obligation in the contract is discharged, cancelled
or expires). An exchange of an existing financial liability for a new one with substantially modified terms, or a
substantial modification to the terms of a financial liability, is treated as an extinguishment of the existing liability
and recognition of a new financial liability.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
39
The difference between the carrying amount of the financial liability derecognised and the consideration paid and
payable, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.
Derecognition of financial assets
A financial asset is derecognised when the holder's contractual rights to its cash flows expires, or the asset is
transferred in such a way that all the risks and rewards of ownership are substantially transferred.
All the following criteria need to be satisfied for the derecognition of a financial asset:
the right to receive cash flows from the asset has expired or been transferred;
all risk and rewards of ownership of the asset have been substantially transferred; and
the Group no longer controls the asset (ie it has no practical ability to make unilateral decisions to sell
the asset to a third party).
On derecognition of a financial asset measured at amortised cost, the difference between the asset's carrying
amount and the sum of the consideration received and receivable is recognised in profit or loss.
On derecognition of a debt instrument classified as fair value through other comprehensive income, the
cumulative gain or loss previously accumulated in the investment revaluation reserve is reclassified to profit or
On derecognition of an investment in equity which was elected to be classified under fair value through other
comprehensive income, the cumulative gain or loss previously accumulated in the investments revaluation
reserve is not reclassified to profit or loss, but is transferred to retained earnings.
loss.
Impairment
The Group recognises a loss allowance for expected credit losses on:
financial assets that are measured at amortised cost or fair value through other comprehensive income;
lease receivables;
contract assets (eg amount due from customers under contracts);
loan commitments that are not measured at fair value through profit or loss; and
financial guarantee contracts that are not measured at fair value through profit or loss.
Loss allowance is not recognised for:
financial assets measured at fair value through profit or loss; or
equity instruments measured at fair value through other comprehensive income.
Expected credit losses are the probability-weighted estimate of credit losses over the expected life of a financial
instrument. A credit loss is the difference between all contractual cash flows that are due and all cash flows
expected to be received, all discounted at the original effective interest rate of the financial instrument.
The Group use the following approaches to impairment, as applicable under AASB 9:
the general approach;
the simplified approach;
the purchased or originated credit impaired approach; and
low credit risk operational simplification.
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Under the general approach, at each reporting period, the Group assessed whether the financial instruments are
–
the credit risk of the financial instrument increased significantly since initial recognition, the Group
measured the loss allowance of the financial instruments at an amount equal to the lifetime expected
–
there was no significant increase in credit risk since initial recognition, the Group measured the loss
allowance for that financial instrument at an amount equal to 12-month expected credit losses.
General approach
credit impaired, and if:
credit losses; and
Simplified approach
The simplified approach does not require tracking of changes in credit risk at every reporting period, but instead
requires the recognition of lifetime expected credit loss at all times.
This approach is applicable to:
–
trade receivables or contract assets that results from transactions that are within the scope of AASB 15:
Revenue from Contracts with Customers, that contain a significant financing component; and
GOLD MOUNTAIN LIMITED ANNUAL REPORT
40
–
–
–
–
–
–
–
–
–
lease receivables.
In measuring the expected credit loss, a provision matrix for trade receivables was used taking into consideration
various data to get to an expected credit loss (ie diversity of its customer base, appropriate groupings of its
historical loss experience, etc).
Purchased or originated credit impaired approach
For a financial asset that is considered to be credit impaired (not on acquisition or originations), the Group
measured any change in its lifetime expected credit loss as the difference between the asset’s gross carrying
amount and the present value of estimated future cash flows discounted at the financial asset’s original effective
interest rate. Any adjustment is recognised in profit or loss as an impairment gain or loss.
Evidence of credit impairment includes:
significant financial difficulty of the issuer or borrower;
a breach of contract (eg default or past due event);
where a lender has granted to the borrower a concession, due to the borrower's financial difficulty, that
the lender would not otherwise consider;
it is probable the borrower will enter bankruptcy or other financial reorganisation; and
the disappearance of an active market for the financial asset because of financial difficulties.
Low credit risk operational simplification approach
If a financial asset is determined to have low credit risk at the initial reporting date, the Group assumed that the
credit risk has not increased significantly since initial recognition and, accordingly, can continue to recognise a
loss allowance of 12-month expected credit loss.
In order to make such determination that the financial asset has low credit risk, the Group applied its internal
credit risk ratings or other methodologies using a globally comparable definition of low credit risk.
A financial asset is considered to have low credit risk if:
there is a low risk of default by the borrower;
the borrower has strong capacity to meet its contractual cash flow obligations in the near term; and
adverse changes in economic and business conditions in the longer term, may, but not necessarily,
reduce the ability of the borrower to fulfil its contractual cash flow obligations.
A financial asset is not considered to carry low credit risk merely due to existence of collateral, or because a
borrower has a lower risk of default than the risk inherent in the financial assets, or lower than the credit risk of
the jurisdiction in which it operates.
Recognition of expected credit losses in financial statements
At each reporting date, the Group recognised the movement in the loss allowance as an impairment gain or loss
in the statement of profit or loss and other comprehensive income.
The carrying amount of financial assets measured at amortised cost includes the loss allowance relating to that
asset.
Assets measured at fair value through other comprehensive income are recognised at fair value with changes in
fair value recognised in other comprehensive income. The amount in relation to change in credit risk is transferred
from other comprehensive income to profit or loss at every reporting period.
For financial assets that are unrecognised (eg loan commitments yet to be drawn, financial guarantees), a
provision for loss allowance is created in the statement of financial position to recognise the loss allowance.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
41
i.
Impairment of Assets
At the end of each reporting period, the Group assesses whether there is any indication that an asset may be
impaired. The assessment will include considering external sources of information and internal sources of
information, including dividends received from subsidiaries, associates or joint ventures deemed to be out of pre-
acquisition profits. 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 of disposal 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: Property, Plant and Equipment).
Any impairment loss of a revalued asset is treated as a revaluation decrease in accordance with that other
Standard.
Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the
recoverable amount of the cash-generating unit to which the asset belongs.
Impairment testing is performed annually for goodwill, intangible assets with indefinite lives and intangible assets
not yet available for use.
When an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is
increased to the revised estimate of its recoverable amount, but so 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 (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit
or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment
loss is treated as a revaluation increase.
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
Key judgments
(i)
Exploration and evaluation expenditure
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.
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
GOLD MOUNTAIN LIMITED ANNUAL REPORT
42
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.
s.
Issued capital
t.
Segment reporting
u.
Associates
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.
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.
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.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
43
w.
Fair Value of Assets and Liabilities
Equity Instruments
the reporting date.
Trade and Other Receivables
The fair value of available-for-sale financial assets is determined by reference to their quoted closing bid price at
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 2020. 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
44
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 2020
Total
Australia
$
$
PNG
$
Total
$
June 2019
Australia
$
PNG
$
Total segment revenue
105,844
105,844
105,844
105,844
48,529
48,529
48,529
48,529
Net loss before income tax
(1,569,877)
(1,513,982)
(55,895)
(1,401,021)
(1,348,298)
(52,723)
-
-
-
-
(1,569,877)
(1,513,982)
(55,895)
(1,401,021)
(1,348,298)
(52,723)
-
-
-
-
-
-
REVENUE
Revenue
RESULTS
Income tax
Net loss
Assets
Liabilities
ASSETS AND LIABILITIES
28,170,193
11,237,409
16,852,987
22,484,417
149,407
22,335,010
2,735,377
1,697,934
1,037,443
2,187,692
417,783
1,769,909
NOTE 3: REVENUE AND OTHER INCOME
a. Revenue
Other income
Interest received 1
Rental income
Foreign exchange gains
Government grants and cash boost
Total other income
Total revenue
1 Interest received from:
Bank
2020
$
2019
$
1,471
51,007
37,366
16,000
3,063
43,134
2,332
-
105,844
48,529
105,844
48,529
1,471
3,063
GOLD MOUNTAIN LIMITED ANNUAL REPORT
45
NOTE 4: LOSS FOR THE YEAR
Loss before income tax includes the following specific expenses:
Consultants fees
Legal costs
Rental expense on operating leases
Significant expenses
—
—
—
a.
—
—
The following significant expense items are relevant in explaining the financial
performance:
Exploration expense
Impairments Write Off expense
-
-
6,045
20,000
2020
$
2019
$
171,675
169,750
69,520
17,846
16,969
101,533
NOTE 5: INCOME TAX EXPENSE
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%
(2019: 27.5%)
Add:
Tax effect of:
Less:
Tax effect of:
Other non-allowable items
Other deductible expenses
Future tax benefits not brought to account
Income tax attributable to the Company
2020
$
2019
$
(1,569,877)
(1,401,021)
(431,716)
(385,281)
108,652
141,031
108,652
141,031
(57,966)
(116,245)
381,030
360,495
-
-
The Company has tax losses arising in Australia of $9,032,513 (2019: $8,651,483) that are available indefinitely to offset
against future taxable profits.
out in Note 1(h) occur.
Deferred tax assets not brought to account, the benefits of which will only be realised if the conditions for deductibility set
GOLD MOUNTAIN LIMITED ANNUAL REPORT
46
NOTE 6: CASH AND CASH EQUIVALENTS
Cash at bank
Short-term bank deposits
2020
$
611,474
1,224,112
1,835,586
2019
$
12,243
41,827
54,070
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
1,835,586
54,070
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
Carrying amount at beginning of the year
Additions
Depreciation expense
Carrying amount at end of the year
Right of Use Asset
Depreciation expense
Carrying amount at end of the year
GOLD MOUNTAIN LIMITED ANNUAL REPORT
Reconciliation of the carrying amount of plant and equipment at the beginning
and end of the current and previous financial year:
2020
$
2019
$
-
118,130
118,130
-
60,509
60,509
2020
$
2019
$
604,978
614,278
(319,157)
(195,498)
285,821
418,780
418,780
489,797
(6,045)
55,983
(126,913)
(127,000)
285,821
418,780
209,679
(83,871)
125,807
-
-
-
47
NOTE 9: DEFERRED EXPLORATION AND EVALUATION EXPENDITURE
Assets in Development
Balance at the beginning of the year
Expenditure incurred
Impairment loss on existing tenements
Net carrying value
Expenditure incurred on acquisition of 70% interest in EL2306
2020
$
2019
$
15,868,988
11,816,184
3,853,612
4,052,804
-
-
-
-
19,722,600
15,868,988
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 2020, no impairment of exploration expense (2019: $nil 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
Additions
Disposals
Movement in foreign exchange
Carrying amount at 30 June 2020
Goodwill on acquisition
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 2019
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.
2020
$
2019
$
5,996,150
5,996,150
5,995,970
5,995,970
2020
$
-
-
180
2019
$
-
-
(6,763)
5,996,150
5,995,970
GOLD MOUNTAIN LIMITED ANNUAL REPORT
48
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
Shareholders loan and accrued interest
Unissued share liability
Rental deposit received
Current
Lease Liability
Borrowings
Instalment costs - EL2306
Total other current liabilities
Non-current
Lease Liability
Instalment costs - EL2306
Total other non-current liabilities
NOTE 14: OTHER CURRENT AND NON CURRENT LIABILITIES
2020
$
2019
$
50,555
50,555
50,555
50,555
2020
$
2019
$
35,545
35,545
35,545
35,545
2020
$
2019
$
419,494
364,200
4,299
45,892
754,081
650,350
27,600
27,600
1,855,824
437,692
2020
$
2019
$
85,329
-
250,000
750,000
1,050,000
835,329
1,300,000
44,223
-
450,000
44,223
450,000
-
-
-
-
GOLD MOUNTAIN LIMITED ANNUAL REPORT
49
Instalment costs - EL2306
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 $2,250,000 were paid by the Company in FY 2017, FY 2018, FY 2019
and FY 2020. The remaining instalment costs of $750,000 has been extended and is payable by 31 December 2020.
NOTE 15: CONTRIBUTED EQUITY
(a) Ordinary shares
Ordinary Shares, issued
Share issue costs
Total issued capital
2020
Number of
shares
2020
$
2019
Number of
shares
2019
$
667,838,577
39,061,510
549,716,526
31,798,410
(2,574,026)
36,487,484
(1,792,076)
30,006,334
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
Issue Price
$
shares
Date
Particulars
At 30 June 2018
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
515,142,680
27,885,834
30-06-19
Share issue costs
At 30 June 2019
549,716,526
30-08-19
Placement to professional and sophisticated investors
21,733,333
04-09-19
Placement to professional and sophisticated investors
30,000,000
24-10-19
Placement to professional and sophisticated investors
8,400,000
02-12-19
Placement to professional and sophisticated investors
24,833,333
16-03-20
Placement to professional and sophisticated investors
15,823,077
05-06-20
Placement to professional and sophisticated investors
17,332,308
30-06-20
Share Issue Costs
At 30 June 2020
(d) Capital Management
Information on options is included in Note 17: Share Based Payments.
(126,800)
30,006,334
1,314,000
1,800,000
504,000
1,490,000
1,028,500
1,126,600
(781,950)
667,838,577
36,487,484
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 2020 financial year.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
50
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,
There have been no changes in the strategy adopted by management to control the capital of the Company since the prior
budgeting and share issues.
year.
NOTE 16: RESERVES
Reserves
Foreign currency translation reserve
Share based payments reserve
Movements in the Foreign Currency Translation Reserve
At 1 July 2019
Foreign Currency Translation
At 30 June 2020
At 1 July 2019
Options expense amortised
At 30 June 2020
Movements in options over ordinary shares on issue
NOTE 17: SHARE BASED PAYMENTS
(a) Share-based payments
Expense arising from the grant of options
Total Share Based Payments
(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.
2020
2020
2019
Number
WAEP
Number
Outstanding at the beginning of the year
59,173,249
$0.173
85,837,300
Options granted during the year
158,735,605
$0.129
34,573,246
Options lapsed during the year
(21,938,461)
$0.235
(61,237,300)
Options exercised during the year
-
-
-
Outstanding at the end of the year
175,674,366
$0.133
59,173,249
$0.173
GOLD MOUNTAIN LIMITED ANNUAL REPORT
51
2020
$
(4)
924,048
924,044
(1)
(3)
(4)
697,229
226,819
924,048
2020
$
226,819
226,819
2019
$
(4)
697,229
697,225
(1)
(3)
(4)
395,954
301,275
697,229
2019
$
301,275
301,275
2019
WAEP
$0.176
$0.125
$0.150
-
(c) Options exercisable at reporting date
Unlisted options expiring 28 November 2019
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
Unlisted options expiring 28 August 2020
Unlisted options expiring 03 December 2020
Unlisted options expiring 04 June 2021
Unlisted options expiring 28 August 2021
Unlisted options expiring 03 December 2021
Unlisted options expiring 16 March 2022
Unlisted options expiring 05 June 2022
2020
Exercise
2019
Exercise
Number
Price
Number
Price
14,800,000
2,000,000
7,800,000
10,148,162
7,138,461
10,148,162
7,138,461
$0.300
$0.150
$0.150
$0.100
$0.100
$0.150
$0.150
2,000,000
7,800,000
$0.15
$0.15
-
-
10,148,162
7,138,461
9,866,669
7,911,539
8,666,154
9,866,669
56,616,667
12,911,539
11,131,539
$0.15
$0.15
$0.10
$0.10
$0.10
$0.10
$0.15
$0.15
$0.15
$0.15
Unlisted options expiring 03 December 2020
31,616,667
Exercisable at reporting date
175,674,366
59,173,246
(d) Options issued during the year
The maximum terms of options granted during the year are as follows:
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 exercise
price of $0.10 expiring on 28/08/2020 and the other tranche of 9,866,669 options is at exercise price of $0.15 expiring
28/08/2021 with no vesting conditions.
On 2 December 2019, the Company granted 88,233,334 free unlisted options to participants related to the Share Placement
program including those placement shares issued previously of 30 August 2019 and 4 September 2019, with approval of
shareholders at the 2019 AGM. Participants of the Share Placement were entitled to one (1) option exercisable at $0.10
and another one (1) option exercisable at $0.15 within 12 months and 24 months from date of issue respectively for every
two (2) placement shares issued. A total of 63,233,334 options were granted in relation the placement shares issued. The
remaining balance of 25,000,000 options exercisable at $0.15 within 24 months were issued to the Promoters.
On 16 March 2020, the Company granted 20,823,078 free unlisted options to participants in the share placement of
15,823,077 shares on the same date in two separate tranches of options. One option tranche is at an exercise price of
$0.10 expiring on 16 March 2021 and the other option tranche is at an exercise price of $0.15 expiring on 16 March 2022
with no vesting conditions. The grant of 5,000,000 options exercisable at $0.15 expiring 16 March 2020 was made to a
Promoter for services rendered.
On 5 June 2020 the Company granted 19,797,693 free unlisted options to participants in the share placement of 17,332,308
shares on the same date in two separate tranches of options. One option tranche is at an exercise price of $0.10 expiring
on 5 June 2021 and the other option tranche is at an exercise price of $0.15 expiring 5 June 2022 with no vesting conditions.
Of the options of exercise price $0.15 expiry 5 June 2022, 2,465,385 options were granted to various promoters and
introducers for their services rendered.
On 3 July 2020 the Company granted 29,323,848 free unlisted options to participants in the share placement of 11,823,847
shares on the same date in two separate tranches of options. One option tranche is at an exercise price of $0.10 expiring
on 3 July 2021 and the other option tranche is at an exercise price of $0.15 expiring 3 July 2022 with no vesting conditions.
Of the options of exercise price $0.15 expiry 3 July 2022, 17,500,000 options were granted to a Promoter for past services
rendered.
The options must be exercised on or before the expiry date in cash.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
52
(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 2020.
1
2
3
4
5
6
7
Financial year of grant
2018
2018
2019
2019
2020
2020
2020
ASX Code
Grant date
Expiry date
Option term
GMNAD
GMNAE
GMNAC
GMNAC
GMNAC
GMNAC
GMNAC
26 Sep 17
26 Sep 17
01 Mar 19
27 May 19
29 Aug 19
29 Aug 19
03 Dec 19
26 Jul 21
26 Jul 21
01 Mar 21
27 May 21
28 Aug 20
28 Aug 21
03 Dec 21
3.8 years
3.8 years
24 months
24 months
12 months
24 months
24 months
Number of options issued
2,000,000
7,800,000 10,148,462
7,138,461
9,866,669
9,866,669 56,616,667
Share price at grant date
Exercise price
Expected volatility
Expected dividends
$0.090
$0.150
68%
Nil
$0.090
$0.150
68%
Nil
$0.066
$0.150
68%
Nil
$0.058
$0.150
68%
Nil
$0.051
$0.100
68%
Nil
$0.051
$0.150
68%
Nil
$0.075
$0.150
68%
Nil
Risk-free interest rate
0.25%
0.25%
0.25%
0.25%
0.25%
0.25%
0.25%
Fair value
$8,125
$31,687
$16,975
$21,760
$6,115
$45,681
$357,018
Financial year of grant
2020
2020
8
9
10
2020
11
2020
12
2020
ASX Code
Grant date
Expiry date
Option term
GMNAC
GMNAC
GMNAC
GMNAF
GMNAG
03 Dec 19
15 Mar 20
15 Mar 20
05 Jun 20
05 Jun 20
03 Dec 20
16 Mar 21
16 Mar 22
05 Jun 21
05 Jun 22
12 months
12 months
24 months
12 months
24 months
Number of options issued 31,616,667
7,911,539 12,911,539
8,666,154 11,131,539
Share price at grant date
Exercise price
Expected volatility
Expected dividends
$0.075
$0.100
68%
Nil
$0.055
$0.100
68%
Nil
$0.055
$0.150
68%
Nil
$0.05
$0.05
$0.100
$0.150
68%
Nil
68%
Nil
Risk-free interest rate
0.25%
0.25%
0.25%
0.25%
0.25%
Fair value
$106,353
$49,432
$104,107
$72,026
$104,770
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
53
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:
Sin Pyng “Tony” Teng
Syed Hizam Alsagoff
(Appointed 2/9/2019)
Pay Chuan “Paul” Lim
(Appointed 14/10/2019)
Graham Kavanagh
(Appointed 5/6/2014, Resigned 14/10/2019)
Douglas Smith
(Appointed 29/12/2016, Ceased 23/8/2019)
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.
Corporate advisory fees paid to Dougnic Pty Ltd and Dougie Downunder as
Directors and Consulting Fees, entities associated with Mr Doug Smith.
c.
Amounts payable to related parties:
Trade and other payables:
8,800
45,892
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
GOLD MOUNTAIN LIMITED ANNUAL REPORT
2020
$
2019
$
22,000
30,000
96,000
72,000
8,400
180,369
8,800
-
-
8,800
2020
$
-
-
-
-
-
9,000
1,692
35,200
45,892
2019
$
404,400
570
-
6,000
410,970
54
2020
$
2019
$
NOTE 20: LOSS PER SHARE
a.
Basic Loss per share
I
ii.
iii.
Basic Loss (cents per share)
(0.25)
(0.27)
Net loss used to calculate basic loss per share
(1,569,877)
(1,401,021)
Weighted average number of ordinary shares outstanding during the year used in
calculating basic loss per share
618,561,268
523,468,830
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
55
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
mechanisms:
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
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
56
Interest rate sensitivity
At 30 June 2020, 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.
2020
$
18,356
(18,356)
2019
$
541
(541)
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
2020
2019
Floating
Interest
Rate
Non-
interest
bearing
Fixed
Interest
Rate
Total
2020
Floating
Interest
Rate
Non-
interest
bearing
Fixed
Interest
Rate
Total
2019
6 1,835,586
-
- 1,835,586
54,070
-
-
54,070
7
12
118,130
35,545
-
-
118,130
35,545
60,509
35,545
60,509
35,545
Total financial assets
1,835,586
153,675
- 1,989,594
54,070
96,054
150,124
Financial Assets
Cash and cash
equivalents
Trade and other
receivables
Other financial assets
Financial liabilities at amortised cost:
Financial Liabilities
- Trade and other payables 13
1,105,824 750,000 1,855,824
- Other financial liabilities
14
879,552
-
879,552
Total financial liabilities
1,985,376 750,000 2,735,376
437,692
250,000
687,692
437,692
250,000
687,692
Net Financial Assets
1,835,586
(1,831,701) 750,000
745,782
54,070
(591,638)
(537,568)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
NOTE 22: AUDITOR'S REMUNERATION
Remuneration of the auditor of the Company for:
Auditing or reviewing the financial statements
2020
$
2019
$
32,207
32,207
33,905
33,905
GOLD MOUNTAIN LIMITED ANNUAL REPORT
57
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.
2020
$
2019
$
1,953,716
114,579
26,216,477
22,369,983
28,170,193
22,484,562
2,691,153
987,692
44,223
1,200,000
2,753,377
2,187,692
25,434,816
20,296,870
36,487,484
30,006,334
924,044
697,229
(11,976,712)
(10,406,693)
25,434,816
20,296,870
(1,569,877)
(1,401,021)
-
-
(1,569,877)
(1,401,021)
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
Guarantees
Contingent liabilities
There are no contingent liabilities as at 30 June 2020.
Exploration licence expenditure requirements
There are no remuneration commitments apart from ongoing director and management fees incurred on a monthly basis.
Gold Mountain Limited did not commit to nor make guarantees of any form as at 30 June 2020.
The Company holds ten (10) exploration licences covering an area of about 2,811 sq km in the Enga province, Papua New
Guinea (collectively termed the Wabag Project). The expenditure commitment for the ensuing 12 months period over 2020-
2021 on the development and maintenance of these licences are in the order of PGK2.13 million (AUD830,000).
GOLD MOUNTAIN LIMITED ANNUAL REPORT
58
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 2 July 2020, the Company advised that it has further raised $760,000 via the continuing share placement program at
$0.065 per share to sophisticated investors. The share placement has accompanying entitlement of unlisted options for
every two (2) shares issued, of one (1) share option exercisable at $0.10 within 12 months (10c-Options) and another one
(1) share option exercisable at $0.15 within 24 months (15c-Options) respectively from date of issue. The Company’s Chief
Executive Officer Tim Cameron and the recently appointed Advisor Matt Liddy have both participated in the placement giving
support the ongoing drill program at the Monoyal Prospect.
On 3 July 2020, the Company lodged the Proposed issue of securities along with Appendix 2A Application for quotation of
+securities of 11,823,847 shares. The total issue raised $768,550 for working capital purposes. In addition, 5,911,924 10c-
Options and 23,411,924 15c-Options were issued as entitlement of unlisted options to the issued shares, including
17,500,000 15c-Options allocation to an Introducer and Promoter for past services rendered.
On 17 July 2020, the Company announced the assay results of the fifth diamond hole MCD007 drilled at the Monoyal
Prospect. The results contain anomalous copper zones, gold and molybdenum mineralisation over 1m intervals with best
intercepts recorded 32m @ 0.10% Cu 49ppm Mo 0.03 g/t Au from 170m, 13m @ 0.13% Cu 63ppm Mo 0.04 g/t Au from
176m, 3m @ 0.14% Cu 96ppm Mo 0.06 g/t Au from 285m and 3m @ 0.10% Cu 511ppm Mo 0.04 g/t Au.
On 28 July 2020, the Company provided an update in relation to its drilling program at Wabag and reported the assay results
of MCD005 and MCD006. Both holes intersected broad zones of elevated copper and molybdenum mineralisation, with
anomalous gold and silver values. MCD005 intersected a narrow fault breccia between 93m and 94m, which assayed 0.81%
Cu 0.26% Mo 1,175ppm Ag and contained elevated Zn (955ppm Zn). Assay results to 0.66% Cu 68 ppm Mo 0.26 g/t Au
and 5.5 g/t Ag were recorded over 1m intervals in MCD006.
On 27 August 2020, the Company announced that the Mineral Resources Authority (MRA) has granted GMN 6768 (PNG)
Limited (100% owned subsidiary) the exploration licence EL2632 Mt. Wipi for a period of two years to 13 August 2022. The
tenement was granted after successful Warden’s hearing in October 2019.
On 15 September 2020, the Company announced that drilling at the Wabag Project is to resume in October 2020 following
the easing of restrictions surrounding COVID-19. The focus in the drilling resumption will be testing Cu-Mo porphyry system
at depth.
On 23 September 2020, the Company reported the assay results of float and rock samples collected at the southern end
drainage areas of the newly granted EL2632 Mt Wipi tenement. The results from total of 28 samples are highly encouraging
with copper values ranging from 100ppm Cu to 9.64% Cu, gold from 0.01 g/t to 1.96 g/t Au and silver 0.14 g/t to 144 g/t Ag.
Airborne magnetic data has also identified several targets with exploration programme to follow-up.
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
59
Controlled Entities Consolidated
Country of Incorporation
Percentage Owned (%)
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.
Reconciliation of Net Cash (used in) provided by operating activities with Loss
NOTE 26: CONTROLLED ENTITIES
Subsidiaries of Gold Mountain Limited:
Viva No. 20 Limited
GMN 6768 (PNG) Limited
Viva Gold (PNG) Limited
Abundance Valley (PNG) Limited
NOTE 27: CASH FLOW INFORMATION
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
2020
$
2019
$
(1,569,877)
(1,401,021)
226,819
301,275
-
-
-
-
20,000
6,760
210,785
127,000
(Increase)/decrease in trade and other receivables
(108,176)
21,730
Increase/(decrease) in trade payables and other payables
(202,474)
181,547
Net Cash (used in) provided by operating activities
(1,442,923)
(742,709)
GOLD MOUNTAIN LIMITED ANNUAL REPORT
60
DIRECTORS’ DECLARATION
In the opinion of the Directors of Gold Mountain Limited (the Company):
1.
The financial statements and notes thereto, as set out on pages 28 to 60 are in accordance with the Corporations Act
2001 including:
a. giving a true and fair view of the Company’s financial position as at 30 June 2020 and of its performance
for the year then ended; and
b. complying with Accounting Standards and Corporations Regulations 2001; and
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due
2.
3.
and payable.
The financial statements and notes thereto are in accordance with International Financial Reporting Standards issued
by the International Accounting Standards Board.
This declaration has been made after receiving the declarations required to be made to the Directors in accordance with Section
295A of the Corporations Act 2001 for the financial year ended 30 June 2020.
This declaration is signed in accordance with a resolution of the Board of Directors.
Tony Teng
Managing Director
Dated this 30th day of September 2020
GOLD MOUNTAIN LIMITED ANNUAL REPORT
61
Independent Auditors
Report
GOLD MOUNTAIN LIMITED ANNUAL REPORT
62
ADDITIONAL SHAREHOLDER INFORMATION
AS AT 18 SEPTEMBER 2020
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
Citicorp Nominees Pty Limited
HSBC Custody Nominees (Australia) Limited
Substantial
Holding
102,465,570
50,704,900
% of Issued
Capital
15.076
7.460
2. Number of holders in each class of equity securities and the voting rights attached (as at 18 September 2020)
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.
Ordinary Shares
Options
There were thirteen (13) classes of options and 105 holders of options at 18 September 2020.
Option Code
Holders
Units
GMNAD - $0.15 expiry 26/7/2021
GMNAE - $0.15 expiry 26/7/2021
GMNAC – various
$0.10 expiry 3/7/2021
$0.10 expiry 16/3/2021
$0.10 expiry 3/12/2020
$0.15 expiry 16/3/2022
$0.15 expiry 28/8/2021
$0.15 expiry 27/5/2021
$0.15 expiry 1/3/2021
$0.15 expiry 3/12/2021
$0.15 expiry 3/7/2022
GMNAF - $0.10 expiry 5/6/2021
GMNAG - $0.15 expiry 5/6/2022
2
6
4
5
16
6
11
13
6
20
5
5
6
2,000,000
7,800,000
5,911,924
7,911,539
31,616,667
12,911,539
9,866,669
7,138,461
10,148,461
56,616,667
23,411,924
8,666,154
11.131,539
Total on Register
105
195,131,545
3. Distribution schedule of the number of holders in each class of equity security as at close of business
on 18 September 2020.
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
37
19
156
386
356
954
Units
6,062
69,716
1,432,046
16,446,813
661,707,787
679,662,424
% of Issued
Capital
< 0.01
0.01
0.21
2.42
97.36
100%
GOLD MOUNTAIN LIMITED ANNUAL REPORT
67
Marketable Parcel
There are 226 non-marketable parcels at 18 September 2020, representing 1,659,676 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 18 September 2020) is as follows:
Ordinary Shares Top 20 holders and percentage held
Shareholder
CITICORP NOMINEES PTY LIMITED
Holding
102,465,570
% of Issued
Capital
15.076%
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
50,704,900
7.460%
PAY CHUAN LIM
30,000,000
4.414%
THE SUMMIT HOTEL BONDI BEACH PTY LTD
26,875,694
3.954%
MR GAK SAN SEAH
17,450,770
2.568%
BNP PARIBAS NOMS PTY LTD
15,294,082
2.250%
10 RODBY HOLDINGS PTY LTD
11,343,333
1.669%
11 MR GHINAN MOHAMED SANI
10,171,667
1.497%
1
2
3
4
5
6
7
8
9
DOXY PTY LTD
RASHIDAH MOHD SANI
MS SIOW KWEE HENG
12 MR SUWEI CHEN
13 G H A DEVELOPMENT PTY LTD
14 MINPAX RESOURCES LIMITED
15 MR JIMMY CHENG HWEE TAY
16 MISS YOKE LAN GAN
DRP>
TOP 20 TOTAL
Other shareholders
TOTAL ISSUED CAPITAL
15,000,000
2.207%
13,350,000
1.964%
12,000,000
1.766%
9,910,000
1.458%
9,070,562
1.335%
9,000,000
1.324%
8,250,000
1.214%
8,050,000
1.184%
372,522,282
54.81%
307,140,142
45.19%
679,662,424
100%
17 CATHEDRAL FRONT PTY LTD
7,796,804
1.147%
18
ASLAN EQUITIES PTY LTD
5,481,490
0.807%
19 DR PETER ASLAN
5,177,341
0.762%
20
BNP PARIBAS NOMS PTY LTD