FOR THE YEAR ENDED 31 DECEMBER 2020
CONTENTS
CHAIRMAN’S REPORT
REVIEW OF OPERATIONS
ORE RESERVES AND MINERAL RESOURCES
DIRECTORS’ REPORT
REMUNERATION REPORT
AUDITOR’S INDEPENDENCE DECLARATION
INDEPENDENT AUDITOR’S REPORT
DIRECTORS’ DECLARATION
1
3
17
19
27
44
45
51
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
52
CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY
CONSOLIDATED STATEMENT OF CASH FLOWS
NOTES TO THE FINANCIAL STATEMENTS
SHAREHOLDER INFORMATION
TENEMENT DETAILS
54
55
56
57
108
112
CORPORATE DIRECTORY
Geopacific Resources Limited
Public listed Company (ASX Code: GPR) incorporated in New South Wales in 1986
Australian Business Number (ABN)
57 003 208 393
Directors & Secretary in Office
Ian Clyne
Non-Executive Chairman
Non-Executive Chairman
Colin Gilligan
Ian Murray
Non-Executive Chairman
Sir Charles Lepani Non-Executive Chairman
Matthew Smith
Chief Financial Officer
& Company Secretary
Company Secretary
Mike Meintjes
Registered Office
Level 1
278 Stirling Highway
Claremont WA 6010
Auditor
Ernst & Young
The Ernst & Young Building
11 Mounts Bay Road
Perth WA 6000
Share Registry
Boardroom Pty Ltd
Grosvenor Place
Level 12, 225 George Street
Sydney NSW 2000
Woodlark Registered Office
Level 6, PwC Haus
Harbour City,
Port Moresby, NCD
Papua New Guinea
appointed 29 July 2020
appointed 1 February 2021
Postal Address
PO Box 439
Claremont WA 6910
Banker
ANZ Banking Group Ltd
Corner of Hay Street & Outram Street
West Perth WA 6005
Stock Exchange
ASX Limited
Level 4, Central Park
152-158 St Georges Terrace
Perth WA 6000
ASX Code: GPR
CHAIRMAN’S REPORT
2020 can only be described as a year of challenges,
changes and positive progress for Geopacific Resources
Limited (Geopacific) and the Woodlark Gold Project.
The challenges mostly relate to COVID-19, how it would impact
the Woodlark Gold Project and Papua New Guinea (PNG)
generally. An early outcome resulted from our withdrawal
of Management off Woodlark Island after which we received
negative feedback on the quality of the initial phase of the
“Community Relocation Program”. Geopacific clearly failed
to understand and address local community concerns on
several aspects of the program and was at fault. Geopacific
accepted full responsibility for all shortcomings and
committed to the Community, Regulators and Government to
work with all stakeholders to find a positive outcome.
Due to COVID-19 travel restrictions, Geopacific was initially
unable to send a senior team to Woodlark Island or Port
Moresby. In response, we immediately recruited senior
PNG based Community Relationship Consultants who
travelled frequently to Woodlark Island to co-ordinate an
open, frank and productive dialogue with the impacted
Communities, Local & Milne Bay Governments, Regulators
and National PNG Government.
As Chairman I take this opportunity on congratulating the
Management Team and our PNG based Consultants who
did an outstanding job in resolving this extremely important
issue. This program culminated in the execution of a revised
Relocation Agreement with the Community, which has been
duly registered with the Mining Regulator. The significantly
enhanced houses are currently under construction and
receiving very positive community feedback.
In early June 2020, Mr Ron Heeks resigned as Geopacific’s
longstanding Managing Director. The Board continues to
acknowledge Mr Heeks positive contributions to Geopacific
and the Woodlark Gold Project.
As a result of this executive management “change” the Board
initiated a full technical review of all aspects of Geopacific’s
operations, project development planning, and project
execution preparedness. Mr Sim Lau, an experienced Senior
Executive with considerable sector expertise was contracted
to undertake this in-depth review and add resources as
required to ensure accuracy and completeness. Sim worked
with the Management Team to develop a detailed, integrated
and achievable “Project Execution Update” which was
completed in November 2020.
In July 2020, we recruited Mr Tim Richards as our new
CEO with an October 2020 commencement date. Tim
brings with him a wealth of operational experience with
6 years of recent PNG experience. Tim is highly regarded
by PNG Regulators and colleagues within the sector in
PNG. He understands the importance of working with the
local communities, Local and Provincial Governments,
Regulators and the National Government. Tim also
recognises the capacity and talent of Papua New Guineans
generally, and Woodlark Islanders specifically when given
the appropriate opportunities and training.
2020 ANNUAL REPORT
Tim also led our ongoing
engagement within PNG to
negotiate the Memorandum
of Agreement (MOA) with the
local landowners, Provincial
Government and National
Government at a stakeholder
meeting held in Alotau in October 2020. With the support
of Sir Charles Lepani, the MOA was agreed and signed at a
stakeholder level in 4 days.
Geopacific is now ready to build, subject to achieving full
funding and the Board views Tim’s performance to date as
extremely positive.
Sir Charles Lepani one of PNG’s most distinguished former
diplomats agreed to join the GPR Board in July 2020. Sir
Charles is a Senior Stateman in PNG who has worked with,
mentored or supported nearly every senior Papua New
Guinean - Parliamentarians, Government Senior Executive,
Business or Community Leader. Sir Charles was born in
the Trobriand Islands, Milne Bay Province (same Island
Group as Woodlark).
As Chairman I wish to acknowledge the significant
contributions of all the Directors:
• Mr Colin Gilligan has worked tirelessly with Tim and the
Project Review Team/Management Team, to ensure the
accuracy, completeness, and robustness of the Project
Execution Update.
Colin continues to support Tim and our team with the
development and negotiation of all key contracts.
• Mr Ian Murray as Chair of the Remuneration Committee
lead our very successful CEO Recruitment process and
continues to support the Board and Management with
the development of competitive short-term and long-
term Incentive Packages to ensure we attract, motivate
and retain an experienced, capable Management Team
committed to delivering a successful build, commissioning
and operation of the Woodlark Gold Project.
Ian is also Chairman of the Audit and Risk Committee.
• Sir Charles Lepani as the sole PNG based Board
Member has allowed Geopacific to work extremely
closely with PNG Regulators, Government, and Local
Communities on Woodlark Island. Sir Charles love of
the Milne Bay Province, and PNG has demonstrated
to all PNG stakeholders our commitment
to
delivering the Woodlark Gold Project. Sir Charles
leads our commitment to safeguarding the social
and environmental needs of the Woodlark Island
communities, and developing local employment and
business opportunities, technical education, community
health improvements and site safety initiatives.
1
CHAIRMAN’S REPORT
Throughout 2020 we have been focused on demonstrating
to the international debt and equity markets the viability,
readiness, and execution capability of Geopacific. The
Woodlark Gold Project simply deserves to get funded and
built, and continues to hold considerable upside potential
through exploration.
Following significant demand,
the Placement was
oversubscribed and Geopacific accepted $140 million of
subscriptions. The SPP closed in February and raised a
further $1.87 million. From an equity perspective Geopacific
is now fully funded, and once debt funding is finalised the
Woodlark Gold Project will be “Fully Funded”.
In October 2020, Sprott Resource Lending was selected as
our preferred Project Financier, and the terms of a US$100
million two-part facility were agreed, subject to final due
diligence processes and credit committee approval.
Sprott and Geopacific continue to work in good faith to
advance the technical and legal due diligence processes
and we believe that the funding will be concluded in Q2
2021.
Sprott Capital Partners and Petra Capital were appointed
Joint Lead Managers in November 2020 to strategise,
market
raising
execute Geopacific’s
and
requirements.
equity
Tim Richards, Ian Murray and myself with the support of
extremely capable teams from Sprott Capital and Petra
Capital initiated an aggressive and comprehensive round
of video marketing conferences over several weeks in
late November, early December 2020 to Australian and
internationally based shareholders and potential investors.
Based on extremely positive feedback and conducive market
conditions, the Board approved a two-tranche placement
(Placement) to raise $130 million from sophisticated and
professional investors. This was complemented by a Share
Purchase Plan (SPP) which was extended to eligible retail
shareholders.
To achieve these debt and equity funding outcomes, to
analyse and tabulate all the inputs in the Project Execution
Plan, run financial models, put together an Online Data-
room, negotiate with lawyers and advisors takes enormous
time and commitment, and attention to detail. I must
sincerely thank our Chief Financial Officer Matt Smith and
his team for their exceptional achievements and ongoing
efforts.
Finally, I would like to sincerely thank all our existing
Shareholders for their unwavering support.
To date the markets have not recognised the potential of this
Woodlark Gold Project both in terms of its base economics
and its exploration upside. Tim and his new Team have
the knowledge and expertise to build, commission and
operate a successful Woodlark Gold Project, they are fully
supported by the Board.
Geopacific is committed to delivering the Woodlark Gold
Project for the benefit of Shareholders and all Stakeholders.
Ian Clyne
Chairman
2
2020 ANNUAL REPORT REVIEW OF OPERATIONS
REVIEW OF OPERATIONS
The 2020 financial year was transformative for Geopacific
Resources Ltd (Geopacific or the Company; ASX:GPR) which
resulted in significant advancements across all key aspects
of the business designed to progress the Woodlark Gold
Project to a high level of execution readiness by the end of
2020. The formation of a high calibre Senior Management
Team, supported by a highly experienced Board now has
the Company well placed to deliver the Woodlark Gold
Project for the benefit of all stakeholders.
2020 Group Highlights
Successful $140 million
capital raise
A $140 million share placement (Placement) was finalised in February 2021 providing the
equity funding component of the development capital required for the Company’s Woodlark
Gold Project.
A further $1.87 million was raised via a Share Purchase Plan (SPP).
Significant Project
Funding Milestone
Sprott Private Resource Lending II L.P. (Sprott) was selected as preferred financier for the
development of the Woodlark Gold Project.
The Company is well advanced on a full funding solution.
Tim Richards was appointed as Chief Executive Officer (CEO) bringing a wealth of operational
experience in Papua New Guinea.
Restructured Board and
Management Team
Sir Charles Lepani was appointed as a Non-executive Director, Sir Charles Lepani is
a distinguished diplomat and advisor from the Trobriand Islands, Milne Bay Province in
Papua New Guinea.
Other key management roles were filled with highly experienced personnel.
Woodlark Project
Execution Update
Delivered
A technical review was initiated by the Board and undertaken by highly experienced team
culminating in the release of the Project Execution Update1 to the market
The Project Execution Update presents a compelling, shovel ready development project
with significant economic enhancements over the November 2018 Definitive Feasibility
Study (2018 DFS) 2 across key metrics including project payback, net present value (NPV)
and internal rate of return (IRR).
Advanced Detailed
Engineering Design
GR Engineering Services (GRES) continued to advance the process plant front end
engineering design (FEED), which was over 20% complete by year end.
Selection of Preferred
Key Contractors
Preferred suppliers were selected and the terms of all key contracts are being negotiated.
Communities Relocation
Program
Community concerns relating to the relocation housing were addressed in September
2020 quarter following upgrades to house designs and execution of a revised relocation
agreement
The Memorandum of Agreement (MoA) was agreed at stakeholder level in the December
2020 quarter, pending ratification of the Papua New Guinea (PNG) National Executive
Council.
Key Project Permits
in place
The Woodlark Mining Lease is in place and valid until 2034. An application for extension
of the construction and commissioning deadline was submitted in the September 2020
quarter and is pending approval.
The environment permit is in place including approval for the Deep Sea Tailing Placement
(DSTP).
1 Refer to the ASX announcement on 30 November 2020. All material assumptions underpinning the production target
and forecast financial information continue to apply and have not changed materially.
2 Refer to the ASX announcement on 7 November 2018.
3
2020 ANNUAL REPORT
REVIEW OF OPERATIONS
CORPORATE
Project Funding - $140 million Placement and SPP
Formation of High Calibre Senior Management Team
In December 2020, the Company announced a successful
$140 million Placement which was finalised in February
2021. The Placement was strongly supported by existing
institutional shareholders and was complemented
by significant demand from new major domestic and
international investors. The Placement was cornerstoned
by two of Geopacific’s substantial shareholders, Tembo and
DELPHI, and several leading domestic and international
institutions. In addition, there was strong support from
Sprott Resource Lending and its affiliates, along with
members of the Geopacific Board and Management.
This transformational capital raising will provide the equity
funding component of the development capital required for
the Company’s Woodlark Gold Project.
The Placement consisted of two tranches at an Issue Price
of $0.42 per share which comprised the issue of 333.3
million shares:
• Tranche 1: 43.7 million shares issued in December
2020 to raise $18.4 million pursuant to the Company’s
placement capacity under Listing Rule 7.1 and Listing
Rule 7.1A; and
• Tranche 2: 289.6 million shares issued in February 2021
to raise $121.6 million.
Tranche 2 of the Placement was subject to shareholder
approval under Listing Rules 7.1 and 10.11 which was
obtained in February 2021 at an Extraordinary General
Meeting of the Company.
The Company also extended an SPP offer to existing
eligible shareholders to acquire up to $30,000 worth of
Geopacific shares at $0.42 per share, the same price as the
Placement, with a cap of $10 million. The SPP Offer closed
on 10 February 2021 and raised a further $1.87 million
(4,461,821 Shares).
Sprott Selected as preferred financier
In October 2020, Geopacific announced the selection of
Sprott as its preferred financier for the development of the
Woodlark Gold Project. The Company entered into a period
of exclusivity with Sprott Resource Lending to finalise a
US$85 million Project Finance Facility and a US$15 million
Callable Gold Stream for development of the Woodlark
Gold Project. The Project Finance Facility and the Gold
Stream remain subject to usual conditions including Sprott
committee approval and final documentation (among other
things).
Sprott has been in discussions with the Company to fund
the development of the Woodlark Project since 2018. This
exclusivity arrangement with Sprott follows the positive
results of extensive technical due diligence on the Woodlark
Gold Project by Sprott and its advisors. Sprott’s ongoing
commitment to the Woodlark Gold Project provides strong
validation of robust project economics that have been
further enhanced by the strong gold price.
During the year, the Board and new CEO Mr Tim Richards
assembled a highly experienced Senior Management Team
with the capacity to deliver the Woodlark Gold Project.
In hiring key positions, emphasis was placed not only on
industry experience and technical skills but also experience
working in PNG. The following positions were filled during
the year.
Tim Richards - Chief Executive Officer
During October 2020, Tim Richards commenced his role
with Geopacific as CEO.
Mr Richards is a mining engineer with broad experience
in open pit mining ranging from scoping and feasibility
studies, site technical services, through to operations and
mine management.
Mr Richards has extensive mining experience both in
Australia and in the expatriate environment across PNG,
Europe, Africa, and the Caucasus. Mr Richards was most
recently General Manager Technical Services of St Barbara
Limited (St Barbara) and was General Manager Simberi
Operations in PNG from 2013 to 2019 for St Barbara Limited.
During this period, Mr Richards was instrumental in the
turnaround of the Simberi Gold Mine, delivering five record
years of gold production and cashflow performance.
Mr Richards replaced Mr Ron Heeks who stepped down
from his role as Managing Director & CEO in June 2020.
Sir Charles Lepani - Non-Executive Director
During July 2020, the Company appointed Sir Charles
Lepani, KBE, CBE, OBE, PHD (Hon) as a Non-Executive
Director. Sir Charles Lepani was born in the Trobriand
Islands, Milne Bay Province in PNG.
Sir Charles Lepani has over 40 years’ experience in both
the public and private sectors representing PNG as a Senior
Diplomat and Advisor with great success and distinction.
His most recent roles were High Commissioner of PNG in
Australia 2005-2017, and Director General of PNG APEC
2017-2018.
Sir Charles Lepani bought to the team a substantial degree
of insight, understanding and expertise in the following areas:
• PNG Policy formulation, especially in the Mining &
Petroleum Sectors;
• PNG Diplomatic and International Relations;
• Bi-lateral and Multilateral Development Assistance;
• Debt and Equity Capital Markets; and
• Papua New Guinea small and medium enterprise,
domestic and international supply chains.
Sir Charles Lepani has been an advisor and consultant
to successive PNG National Government Departments,
including the Prime Minister’s Department, Treasury,
Finance, and the Law and Justice Sector.
4
2020 ANNUAL REPORT REVIEW OF OPERATIONS
He has also worked alongside United Nations Development
Programme, United Nations Centre for Transnational
Corporations and Asian Development Bank.
He is a graduate of the University of Papua New Guinea
with an Arts Degree
(Economics), and a Fulbright
Scholarship recipient attending the John F Kennedy School
of Government at Harvard University, in Boston, United
States of America and graduating with a Masters of Public
Administration.
Susan Scheepers - General Manager People and
Performance
During the year Susan Scheepers was appointed as
General Manager People and Performance. Mrs Scheepers
is an accomplished, team orientated Human Resource
professional, providing strong leadership in a wide range
of human resource initiatives. She has extensive resources
industry experience with over 17 years’ experience with
major resource companies in site, corporate and offshore
roles.
Mrs Scheepers holds a Master of Business Administration
and a Bachelor of Business Administration in Human
Resources, she is also a qualified High School Teacher.
Prior to joining Geopacific, Mrs Scheepers was the Group
Human Resources Manager for St Barbara. During her
time with St Barbara she assisted with the turn-around of
the Simberi Gold Mine and implemented the Gender Smart
Safety Project. She is passionate about people development
and has established a team in PNG to upskill the local
workforce and community members.
Graeme Rapley - Project Director
During February 2021, Graeme Rapley was appointed
as Project Director for the Woodlark Gold Project. Mr
Rapley is a Civil Engineer with over 20 years’ experience in
Construction and Project Manager level roles.
Previous roles include Project Director for Centerra Gold at
the Oksut Project in Turkey, Project Manager for True Gold
at the Karma Mine in Burkina Faso, Project Manager for
the Sadiola Hill Mine in Mali and Project Manager for the
Tongon Gold Mine in Cote d’Ivoire.
Key Management Positions
To ensure a smooth transition into the construction phase
of the Woodlark Gold Project, the Company undertook
a recruitment campaign to fill key positions. The team
assembled have already commenced, with a number already
located on site. Positions filled include the following.
Table 1: Senior Management Positions Filled During the Year
Position
Responsibilities
Manager Mining
Manager Construction
Manager Environment
and Community
Responsible for the bulk earthworks and all mining, mobile equipment maintenance
and technical services.
Responsible for all engineering, plant and infrastructure construction as well as
maintenance areas other than mobile equipment maintenance.
Responsible for all site responsibilities in relation to Environment and Community.
Manager Contracts and
Procurement
Responsibility for development and management of all Owner’s contracts and
procurement packages for construction and operations.
Manager Project Controls
Responsible for the overall project program cost, schedule management, forecasting
and reporting.
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2020 ANNUAL REPORT REVIEW OF OPERATIONS
WOODLARK ISLAND, PNG
Background – Woodlark Gold Project
Geopacifi c and
its controlled entities (the Group or
Consolidated entity) is focused on developing and expanding
the 1.6Moz Woodlark Gold Project3.
The project is situated in the ‘pacifi c ring of fi re’ and
surrounded by world-class gold mines.
Two neighbouring mines, also located on islands, are
Newcrest Mining Limited’s Lihir containing 66 million
ounces of gold and St Barbara Limited’s Simberi containing
6 million ounces.
The 100% owned Woodlark Gold Project is located on
Woodlark Island in the Milne Bay Province of PNG.
In November 2020, the Company released a comprehensive
Project Execution Update4, marking a signifi cant step
forward in the development of the Woodlark Gold Project.
The document was the culmination of a multifaceted work
program which compiled information from all functional
disciplines associated with the construction and operation
of the Woodlark Gold Project.
3 For details relating to the Mineral Resource, refer to page 17 and PFS announcement released on 12 March 2018.
4 Refer to ASX announcement on 30 November 2020 titled ‘Project Execution Update”.
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2020 ANNUAL REPORT
REVIEW OF OPERATIONS
Project Execution Update
A key part of the Project Execution Update was the
revalidation of the 2018 DFS5 to ensure that project execution
strategies aligned with prevailing market conditions. The
Project Execution Update incorporated updated operating
assumptions resulting from a review of the resource
model, mine plan, mine contracting strategies and mine
pit optimisation and schedules. Amendments to the project
timeline were also incorporated to reflect delays caused by
the COVID-19 pandemic.
The Project Execution Update identified significant economic
enhancements over the 2018 DFS with improvements
across key metrics including project payback, NPV and IRR.
Table 2: Financial Metrics Comparison6
Financial Metrics - Post-tax
Unit
2018 DFS
Free Cashflow (post-tax)
NPV @ 8%
IRR
Project Paybackt
A$ Million (M)
A$ Million (M)
%
Years
344
197
29%
2.2
Execution
Update
575
347
34%
1.8
Variance
231 67%
150 76%
5% 18%
0.4 18%
Project Execution Strategy
The project execution strategy was reviewed by the
Company during 2019 and 2020 taking into consideration
the project schedule, the Company’s capability to manage
and mitigate the construction and operational risks and the
overall allocation of risk across the project.
An Engineering Procurement and Construct (EPC) contract
model was identified as the preferred approach for the
design, supply and construction of the process plant
and associated facilities, whilst the design, supply and
construction of the infrastructure facilities will be managed
by the Owner’s team.
To mitigate the risk of building and developing a mining
operations team, a mining execution strategy was
developed that utilises a contract miner to carry out load
and haul activities during the pre-strip period and for the
first three years of operation, before transitioning to owner
operating for the remainder of the mine life.
A similar contracting approach has been adopted for the
drilling works associated with grade control, blasting and
exploration, with Woodlark Gold Project personnel limited
to technical services and oversight.
5 Refer to ASX announcement on 7 November 2018 titled “Woodlark DFS confirms high margin development project”.
6
The 2018 DFS was based on a gold price of $1,650/oz and the Project Execution Update was based on a gold price of $2,200/oz.
7
2020 ANNUAL REPORT REVIEW OF OPERATIONS
Project Execution Update Findings
In November 2020, the Company released the Project
Execution Update which demonstrated that the Woodlark
Gold Project represents a compelling, shovel ready
development project with an experienced Board and
Management Team capable of delivering the Woodlark
Gold Project for the benefit of all stakeholders.
The Project Execution Update was based on a robust
financial model underpinned by costs provided by reputable
and experienced contractors.
Table 3: Execution Update Highlights
KEY WOODLARK GOLD PROJECT METRICS
High Margin
Rapid Project Payback
Average All-in Sustaining Costs (AISC) of $1,239/oz (US$904/oz) providing 43%
margin at $2,200/oz (US$1,606/oz).
Near surface mineralisation and low strip ratio in the early production years
to facilitate strong up-front cashflow profile resulting in a rapid post-tax project
payback period of 1.8 years.
+1 Moz of gold in Ore Reserves
+1 million ounce mine plan underpinned by Measured and Indicated Ore Reserves.
+10 Year Project
Current Ore Reserves provides 13 years of process plant feed – while the project
remains heavily leveraged to further exploration success across the under explored
substantial and highly prospective tenement package.
Simple Mining and Process Route Conventional open pit mining of near surface mineralisation and proven industry
Shovel Ready
standard 2.4 Mtpa carbon in leach (CIL) gold process plant.
Geopacific is poised to develop, with all key project permits in place, preferred
project financier selected, community commitment acknowledged and execution
readiness beyond industry norms.
The updated capital cost estimate of A$254.8 million7 (US$186 million) is reflective of
the advanced stage of execution readiness and Geopacific’s increased commitment
to support community development which is imperative to the success of the
Woodlark Gold Project.
Untapped Exploration Potential
Three phase exploration strategy developed to target high value opportunities.
Economics highly leveraged to further exploration success.
7
Establishment capital estimate completed to a -2%/+8% level of accuracy.
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2020 ANNUAL REPORT REVIEW OF OPERATIONS
Project Execution Update - Key Information Summary
The key production metrics, financial model inputs and Woodlark Gold Project economic outputs associated with the
Project Execution Update are summarised below.
Table 4: Key information summary
Unit
(x)
(kt)
(kt)
(g/t Au)
(koz Au)
(kt)
(g/t Au)
(%)
(koz Au)
Unit
/oz Au
A$ : US$
/t mined
/t processed
/t processed
Million (M)
Million (M)
Million (M)
Million (M)
Million (M)
/oz Au
/oz Au
/oz Au
/oz Au
/oz Au
/oz Au
/oz Au
/oz Au
/oz Au
OPERATIONAL PHYSICALS
Strip Ratio
Total Material Mined
Ore Mined
Grade Mined
Contained Gold
Ore Processed
Grade
Recovery
Gold Produced
KEY INPUTS
Gold Price
Foreign Exchange
Mining Cost
Processing Cost
General & Admin Cost
CASHFLOW*
Cashflow from Operations (inc. pre-strip)
Less: Capital Expenditure (excl. pre-strip)
Free Cashflow (Pre-tax)
Less: income Tax (at 30%)
Free Cashflow (Post-tax)
* Represents 100% of the Woodlark Gold Project
UNIT COSTS - C1 & AISC
Mining
Processing
G&A
Refining Costs
Total C1 Costs
Royalties (at 2.5%)
Sustaining Capital
Corporate Overheads
Total AISC
FINANCIAL METRICS - POST-TAX**
NPV @ 8%
IRR
Project Payback (Years)
** Represents 100% of the Woodlark Gold Project
Life of Mine
4.1
156,694
30,848
1.11
1,099
30,848
1.11
89.2%
980
US$
1,606
1.37
2.14
9.93
5.23
US$
727
(196)
530
(111)
420
US$
325
312
164
5
807
40
28
29
904
US$ M
253
34%
1.8
A$
2,200
0.73
2.94
13.60
7.16
A$
995
(269)
727
(152)
575
A$
446
428
225
7
1,106
55
38
40
1,239
A$ M
347
34%
1.8
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2020 ANNUAL REPORT REVIEW OF OPERATIONS
Table 5: Key Milestones from Preliminary Project Execution Schedule
Key Indicative Milestones
Date
Commence construction of process plant and infrastructure
June 2021 Quarter
Commence mine pre-strip and haul road construction
December 2021 Quarter
Power plant complete and permanent power supply available
June 2022 Quarter
Complete DSTP facilities
Commence commissioning and plant start up
Commence fi rst gold production
September 2022 Quarter
September 2022 Quarter
End December 2022 Quarter
Implementation of Project Cost Control System
A project cost control system for managing and reporting
against
the construction budget was selected and
implemented during the year. The selected software,
CMS – Construction Management System supplied by GTS
Software Pty Ltd is an industry recognised software with
the primary function of providing accurate cost forecast and
project progress to project cost control and management
decision making.
Integrated Project Management Schedule
To ensure that Geopacifi c successfully achieves the key
milestones required to move the Woodlark Gold Project
into production, alignment throughout the organisation
is crucial. In order to maintain a disciplined approach to
project execution, an Integrated Project Management
Schedule (IPMS) was developed during the year.
The IPMS is an invaluable tool in guiding the focus and
efforts of the project execution team and the wider
organisation. The Company has a clear line of sight on
critical path activities that impact key milestones required
to commence targeted fi rst gold production at end of
December 2022 quarter.
A high-level indicative schedule outlining key project
milestones was prepared during the year. It is based on
the assumption that the COVID-19 border closures and
travel restrictions in place at 31 December 2020 remain
unchanged. Any adverse change to the restriction in Papua
New Guinea and/or Australia may impact this indicative
schedule.
Front End Engineering Design (FEED)
In 2019, following a rigorous evaluation process a
conditional letter of intent was issued to GRES for the
construction of the Woodlark Gold Project’s 2.4 Mtpa CIL
process plant. During 2020, GRES progressed the FEED,
fi nalising the plant layout and continuing progress on the
process plant model, producing process fl ow diagrams,
piping and instrumentation diagrams and fi nalising the
process design criteria.
By the end of the year, GRES had completed 20% of the
process plant engineering design.
Figure 1: Elution and Gold Room Area
2020 ANNUAL REPORT
10
REVIEW OF OPERATIONS
During the March 2020 quarter, geotechnical test work
was completed at the Woodlark Gold Project indicating
that ground improvement work would be required prior
to the commencement of plant site construction. Data
gathered from the geotechnical drilling program was used
in a ground improvement study which was completed by
internationally recognised Knight Piésold and formed the
basis of a comprehensive ground improvement solution
developed in conjunction with GRES.
Development of a contract and procurement plan
and strategy
A project contracting strategy was developed during the
year aligning with the IPMS to ensure that the Company
was well placed to engage third party services providers as
and when the project required. The following contracts are
currently in place in relation to the Woodlark Gold Project.
A project procurement strategy was also developed during
the year to identify long lead critical path items, while
GRES commenced procurement of vendor data to progress
design of the process plant.
Work Scope
FEED design
Bulk Earthworks
Ground Improvement Design
Wharf Design
Table 6: Contracts Awarded
Contract Awarded
GRES
HBS Machinery (HBS)
Knight Piésold
Madsen Giersing
Table 7: Preferred Suppliers selected
Work Scope
Preferred Supplier
Award Date*
Woodlark Power Station
Contract Power Australia Pty Ltd
June 2021 Quarter
Engineering, Procurement and Construction (EPC)
GRES
June 2021 Quarter
Mining Services
(load and haul activities during the pre-strip period
and for the first three years of operation)
HBS
June 2021 Quarter
Drilling Services
(grade control, blasting and exploration)
Permanent Camp
*Estimated award dates
Quest Exploration Drilling
June 2021 Quarter
Pacific Rim Constructors Limited
March 2021 Quarter
Woodlark Gold Project Site Works
COVID-19
As 2020 commenced, two major contractors were executing
work programs on site.
HBS was on site building and repairing road infrastructure
and undertaking bulk earthworks operations at the plant
site in preparation for the process plant build, while Rhodes
(PNG) Limited (Rhodes) was onsite overseeing a local team
to build the necessary housing and infrastructure required
to enable the relocation of the existing communities.
Late in the March 2020 quarter, the COVID-19 pandemic
forced the Company to implement a COVID-19 management
plan. The management plan was designed to ensure the
health and safety of all Geopacific staff and contractors
as well mitigate the risk of COVID-19 being introduced to
Woodlark Island.
As part of the management plan, earthworks were
temporarily put on hold and a notice of suspension
was issued to HBS. All HBS staff were repatriated from
Woodlark Island to ensure a safe passage to their point of
hire. In late September 2020, HBS was able to remobilise
personnel and equipment to the island and continue
executing their work program, albeit with all incoming staff
and contractors subject to strict COVID-19 safety protocols.
The Woodlark Island community relocation program continued
throughout the year with Rhodes personnel who were on
Woodlark Island prior to the COVID-19 outbreak, supported
by labour from the local Woodlark Island community.
The Board and Senior Management Team continues to
monitor the COVID-19 pandemic so that it can respond in
the best interests of the various stakeholders associated
with the project.
11
2020 ANNUAL REPORT REVIEW OF OPERATIONS
Communities Relocation Program – Woodlark
An important aspect of the Woodlark Gold Project is the
relocation of the Kulumadau community. This small
community is the most culturally diverse on Woodlark
Island as it consists of the relatives of the previous mine
workers who moved to the area in the late 1800’s to mine
the small underground operation located at Kulumadau.
Construction of the relocation houses commenced in the
March 2020 quarter with the materials for the houses
shipped in bulk via barge from Lae. Bulk shipping as a
logistical solution is both simple and cost effective and is a
significant advantage for island-based projects in contrast
to operations in the highlands. Use of local labour was
prioritised not only to ensure that the primary stakeholders
in the project receive tangible benefits, but to promote
“ownership” of the build process and resultant dwellings,
with upskilling of the local community developing skills
locally which will allow the community to maintain and
expand houses in the future.
In June 2020, Geopacific undertook a comprehensive
review of the Woodlark Island communities relocation
program. Whilst extensive community consultation had
been undertaken over a period of approximately ten
years, a number of community concerns were raised once
construction commenced which were primarily focussed
on the design of the smaller dwellings.
Following community
feedback and after extensive
consultation with all stakeholders, the house designs were
revised. The fundamental change was that the minimum
house size was increased to three bedrooms, while other
modifications included elevating all houses to allow for
future expansion and the addition of a separate cook
house for each dwelling. Upon review by all stakeholders,
including the community, regulator and government
officials the substantially improved relocation package was
approved and ratified as a registered relocation agreement
under the auspices of the Mineral Resources Authority
formalised
(MRA). Registration of these documents
Figure 2: Three room deluxe house
community acceptance and allowed the relocation program
to move forward with Government support.
Construction of the redesigned houses commenced in
late September 2020 following a period of extensive social
and community engagement completed by a specialist
consultant and the on-site Community Affairs team and
by the end of December 2020 construction had fully re-
commenced on the houses and community facilities.
Pre-Construction Works
By the end of December 2020, approximately 60% of the
plant site area had been cleared. The clearing allowed
Knight Piésold to complete a geotechnical drilling program
which was used to facilitate the design of the foundations
of the 2.4 Mtpa gold process plant.
Land clearing activities in preparation for the construction
of community relocation houses continued in 2020. At the
end of December 2020, 131 housing sites had been cleared.
In addition to the house clearing, ground preparation works
were completed at the new community school site and on
the community church site.
Figure 3: Plant site Land Clearing
12
2020 ANNUAL REPORT REVIEW OF OPERATIONS
Figure 4: Construction of Road Infrastructure
The construction of new roads, repair of existing roads,
and construction of a wharf causeway continued during the
year. The wharf road is being constructed to considerably
shorten the distance from the new wharf location to the
plant site. Investment in this new road infrastructure will
reduce the disturbance to the local residents and will leave
the existing wharf available for community use.
By the end of the year over 6.2 kilometres of road clearing
had been completed.
A key focus during the year was the development and
implementation of a new health and safety management
system which included:
• Board endorsement of an updated Health and Safety
Policy;
• Roll out of a new site induction and Health and Safety
training program;
• Appointment of a Health and Safety Manager
(commencing in April 2021); and
Occupational Health and Safety
• Appointment of a Senior Site Safety Officer (commenced
it
the Woodlark Gold Project advances
towards
As
construction,
is crucial that safety management
processes and procedures on site appropriately reflect the
level and type of activity on site that the next phase of the
Woodlark Gold Project will bring.
in January 2021).
Figure 5 and 6: Community Health and Safety Programs
13
2020 ANNUAL REPORT REVIEW OF OPERATIONS
Woodlark Gold Project Permits
Memorandum of Agreement (MoA)
In October 2020, an updated MoA was initialled by the
Woodlark Gold Project area landowners, the National,
Provincial and Local Level Governments and Woodlark
Mining Limited. The MoA is designed to define the distribution
of project royalties once production commences, and
outlines the commitments of all stakeholders to ensure
that the economic benefits flow to the people of Woodlark
Island and the broader region, including employment and
business opportunities and appropriate management of
environmental and social impacts.
Figure 7: CEO Tim Richards meets with stakeholder leaders to agree the Memorandum of Agreement - October 2020
Mining License
Environmental Permit
The Woodlark Gold Project is well advanced from a
permitting perspective, with mining permits in place. In
August 2020, an application was submitted to the MRA
seeking an extension to Condition 7 of the Woodlark Mining
Lease which specified that construction and commissioning
must be completed by January 2021 and construction and
commissioning of the process plant by July 2022.
The extension was sought as a result of the uncertainties
caused by COVID-19 and related travel and supply
restrictions
the development schedule
Management are confident that the
requirements.
extension will be approved in a reasonable time frame.
to extend
Environmental approval for the Woodlark Gold Project was
granted in 2014 with a validity of 20 years. Geopacific has
developed strong working relationships with Papua New
Guinea Authorities, which continue to express their support
for the development of the Woodlark Gold Project.
in the Environment Permit
Geopacific submitted an application to amend a number
of conditions
including
improvements made in relation to reduced land clearing
requirements and water management strategies. These
amendments were approved and the amended Environment
Permit was issued in May 2020.
14
2020 ANNUAL REPORT REVIEW OF OPERATIONS
Figure 8: Geopacific Enjoys and Active and Strong Relationship with the Local Community
Community Relations
Extensive and ongoing community engagement has taken
place over a number of years to ensure familiarity and
understanding of potential impacts and benefits of the
Woodlark Gold Project on the local community.
Geopacific enjoys an active and strong relationship
with the communities living on Woodlark Island and is
committed to maximising local training and employment
as well as local business development. An extensive survey
commenced in the June 2021 quarter to provide valuable
information around the existing skill set and potential of
the local workforce, while specialist Papua New Guinea
based consultants have been engaged to assist and
provide training to local landowners in relation to business
establishment, management and governance.
OTHER PROJECT ACTIVITIES
Kou Sa Project, Cambodia
In January 2015, the Company’s subsidiary, Royal Australia
Resources Ltd, entered into an agreement to acquire 100%
of the issued capital of Golden Resource Development Co
Ltd (the Kou Sa Project) for US$14 million. US$7.7 million
of the acquisition price was paid as required under the
agreement.
An amendment to the original agreement was executed
in September 2016 which revised the acquisition payment
schedule for the remaining US$6.3 million. The amendment
resulted in the remaining acquisition payments being due
for payment as follows:
• US$1.575 million due at completion of a bankable
feasibility study for the Kou Sa Project, or by 21
September 2019, whichever is earlier; and
• US$4.725 million to be paid in equal instalments over
three years following payment of the above US$1.575
million.
The Group have been in negotiation with the vendors of the
Kou Sa Project during 2019 and 2020 to restructure the
deferred consideration payments. No mutually satisfactory
resolution could be agreed and a termination notice was
subsequently received from the vendors in December
2020. On receipt of the termination notice, management
concluded that it no longer controlled the Kou Sa Project
assets and they were, therefore, derecognised. On that
basis, the related deferred consideration payable was also
treated as extinguished.
As a result, the Group has reflected the derecognition of the
Kou Sa project assets and related deferred consideration
liability in the reporting period ended 31 December 2020
which resulted in a gain on derecognition of $1,884,834, as
detailed in Note 6. This gain included recognising a final
settlement of US$0.5 million payable to the vendors under
the termination provisions of the original agreement to
acquire the Kou Sa project.
Fijian Gold and Copper Projects, Fiji
All licences associated with the exploration projects in
Fiji have been relinquished and the Group commenced
a process of recovering the bonds associated with the
exploraion licences. The office in Fiji has been closed and
Geopacific is investigating options to wind up the Fijian
entities.
15
2020 ANNUAL REPORT REVIEW OF OPERATIONS
Financial Review
The Group recorded a net loss after tax for the year ended
31 December 2020 of $4,567,311 (2019: 7,337,714). This
included $208,345 (2019: $1,501,751) of exploration costs
that were expensed for the period.
At 31 December 2020, the Group’s total assets were
$85,690,886 (2019: $80,518,692) and net assets were
$78,500,958 (2019: $70,478,375). The increase in the
Group’s total assets and net assets relates to expenditure
on mine property development during the the 2020 year.
Loss After Tax
Loss Per Share (Cents)1
Table 8: Key Financial Metrics
2016
$
2017
$
2018
$
2019
$
2020
$
(4,144,977)
(4,042,911)
(53,750,659)
(7,337,714)
(4,567,311)
(0.45)
(0.27)
(2.49)
(6.43)
(2.59)
Cash and Cash Equivalents
11,469,015
6,765,343
3,059,221
37,505,067
34,639,855
Exploration and Evaluation Asset - Additions
(excluding transfer)
Mine Properties Under Development
Expenditure - Additions
(excluding transfer)
12,140,869
15,219,583
8,447,600
442,022
65,098
-
-
-
860,265
11,697,347
Total Assets
Net Assets
64,554,032
80,720,300
42,103,633
80,518,692
85,690,886
57,717,361
73,334,855
34,685,715
70,478,375
78,500,958
1 Earnings per share from 2016 to 2018 have not been adjusted to reflect the 25:1 share consolidation conducted
in December 2019.
16
2020 ANNUAL REPORT
REVIEW OF OPERATIONS
ORE RESERVES AND MINERAL RESOURCES
Woodlark Global Mineral Resources
Woodlark Ore Reserves
The Woodlark Mineral Resource is 47Mt @ 1.04g/t Au for
1.57Moz of gold8 including 222,000oz of gold in the Inferred
category (Table 9).
An updated Ore Reserves estimate was released in
November 2018 and was completed by
independent
consultants, Mining Plus. The updated Ore Reserves
estimate of 28.9Mt @ 1.12g/t Au for 1,037,600oz9 of gold is
detailed in Table 10.
Table 9: Woodlark Global Mineral Resource Estimate – March 2018
Category
(>0.4g/t lower cut)
Measured
Indicated
Inferred
Total
Total by deposit
Busai
Kulumadau
Woodlark King
Total Ore Reserve
Tonnes
(Mt)
21.24
18.94
6.80
47.00
Grade
(g/t Au)
1.10
0.98
1.00
1.04
Table 10: Woodlark Ore Reserves Estimate – November 2018
Category
(>0.4g/t lower cut)
Tonnes
(Mt)
Grade
(g/t Au)
Proven
Probable
Proven
Probable
Proven
Probable
Proven
Probable
Total
9.3
4.3
7.4
5.2
1.9
0.8
18.6
10.4
28.9
1.03
0.87
1.37
1.17
1.06
0.84
1.17
1.02
1.12
Ounces
(Koz)
754
597
222
1,573
Ounces
(oz)
307,300
120,900
324,700
196,900
65,000
22,800
697,000
340,600
1,037,600
8 Refer to March 2018 Pre-feasibility Study – ‘Robust Woodlark Gold project PFS Supports Development.’
9 Refer to ‘Woodlark Ore Reserve Update’ announced on 7 November 2018.
17
2020 ANNUAL REPORT REVIEW OF OPERATIONS
Competent Person’s Statement
Forward Looking Statements
All statements other than statements of historical
fact included in this announcement including, without
limitation, statements regarding future plans and objectives
of Geopacific are forward-looking statements. When used
in this announcement, forward-looking statements can
be identified by words such as ‘may’, ‘could’, ‘believes’,
‘estimates’, ‘targets’, ‘expects’ or ‘intends’ and other
similar words that involve risks and uncertainties.
These statements are based on an assessment of present
economic and operating conditions, and on a number of
assumptions regarding future events and actions that, as at
the date of this announcement, are expected to take place.
Such forward-looking statements are not guarantees of
future performance and involve known and unknown risks,
uncertainties, assumptions and other important factors,
many of which are beyond the control of the company, its
directors and management of Geopacific that could cause
Geopacific’s actual results to differ materially from the
results expressed or anticipated in these statements.
Geopacific cannot and does not give any assurance that
the results, performance or achievements expressed or
implied by the forward-looking statements contained in
this announcement will actually occur and investors are
cautioned not to place undue reliance on these forward-
looking statements.
Geopacific does not undertake
to update or revise forward-looking statements, or to
publish prospective financial information in the future,
regardless of whether new information, future events or
any other factors affect the information contained in this
announcement, except where required by applicable law
and stock exchange listing requirements. The Woodlark
Gold Project is permitted by the Papua New Guinea
Government, subject to meeting the conditions of the
licence.
The information in this announcement that relates to the
Woodlark Mineral Resources is based on information
compiled and reviewed by Mr Nicholas Johnson, a
Competent Person who is a Member of the Australian
Institute of Geoscientists and a full-time employee of MPR
Geological Consultants Pty Ltd. Mr Johnson has sufficient
experience which is relevant to the style of mineralization
and type of deposits under consideration and to the activity
which he has undertaken to qualify as a Competent Person
as defined in the JORC Code 2012 and is a qualified person
for the purposes of NI43-101. Mr Johnson has no economic,
financial or pecuniary interest in the company and consents
to the inclusion in this report of the matters based on his
information in the form and context in which it appears.
The information in this announcement that relates to the
Woodlark Ore Reserves is based on information compiled
and reviewed by Mr John Battista, a Competent Person who
is a Member and Chartered Professional of the Australian
Institute of Mining and Metallurgy (AusIMM) and a full-time
employee of Mining Plus Pty Ltd. Mr Battista has sufficient
experience which is relevant to the style of mineralisation
and type of deposits under consideration and to the activity
which he has undertaken to qualify as a Competent Person
as defined in the JORC Code 2012 and is a qualified person
for the purposes of NI43-101. Mr Battista has no economic,
financial or pecuniary interest in the company and consents
to the inclusion in this report of the matters based on his
information in the form and context in which it appears.
In relation to the Mineral Resources and Ore Reserves,
the Company confirms that all material assumptions and
technical parameters that underpin the ASX announcements
made on 12 March 2018 (‘Robust Woodlark Gold project PFS
Supports Development) and 7 November 2018 (‘Woodlark
Ore Reserve Update) (Historical Announcements) continue
to apply and have not materially changed. The Ore
Reserves estimate underpinning the production targets
in this announcement is based on information compiled
and reviewed by Mr Battista who is a Competent Person in
accordance with the JORC Code 2012.
Where the Company refers to the Mineral Resources and
Ore Reserves in this report (referencing the Historical
Announcements), it confirms that it is not aware of any new
information or data that materially affects the information
included in the Historical Announcements and all material
assumptions and technical parameters underpinning the
Mineral Resources estimate and Ore Reserves estimate
in those announcements continue to apply and have not
materially changed. The Company confirms that the form
and context in which the Competent Persons findings are
presented have not materially changed from the Historical
Announcements.
All information relating to the Mineral Resources and Ore
Reserves were prepared and disclosed under the JORC
Code 2012.
18
2020 ANNUAL REPORT DIRECTORS’ REPORT
DIRECTORS’ REPORT
The Directors present their report together with the financial report of the Geopacific Group, being Geopacific Resources
Limited (Geopacific or the Company) and its controlled entities (the Group or consolidated entity) for the financial year
ended 31 December 2020, and the auditor’s report thereon.
1.
DIRECTORS AND COMPANY SECRETARY
The names of the Company’s Directors and Company Secretary in office during the financial year and until the
date of this report are as follows. Directors were in office for the entire period unless otherwise stated.
Name, Position Held & Qualification
Experience, Special Responsibilities & Other Directorships
Ian Clyne
Non-Executive Chairman
Assumed Role: 8 May 2019
Non-Executive Director
Appointed: 6 October 2016
B. Bus (Management)
Mr Clyne has over 35 years’ experience in international banking
having worked in senior executive positions in ten countries in Asia,
Oceania, Australia and Europe. He has specialised in emerging
markets and has held roles of President, Director, Managing Director
and Chief Executive Officer with universal banking operations that
have extensive branch networks and large employee bases. Mr Clyne
has successfully re-engineered banks in Indonesia, Italy, Poland and
Papua New Guinea.
Mr Clyne held the role of Managing Director and Group CEO of
Bank South Pacific (BSP), based in Port Moresby (2008 – 2013). He
undertook a major transformation program changing BSP from a
typical emerging economy banking institution into an innovative,
technology driven, modern bank. Under his leadership, the bank grew
from having 400,000 accounts to over 1 million in Papua New Guinea
and 1.5 million across the Pacific, including Fiji and the Solomon
Islands, with a market capitalisation of $1.7 billion at the end of his
term.
Mr Clyne is also a member of the Audit and Risk Committee and the
Remuneration and Nomination Committee.
Mr Clyne is currently a Non-Executive Director of Union Bank of
Nigeria. Mr Clyne has not held any other directorships in the past
three years.
Mr Clyne has the following interest in shares in the Company as at the
date of this report – 925,568 ordinary shares.
19
2020 ANNUAL REPORT DIRECTORS’ REPORT
Name, Position Held & Qualification
Experience, Special Responsibilities & Other Directorships
Colin Gilligan
Non-Executive Director
Appointed: 26 June 2018
B. Sc Engineering (Mining) Hons
National Diploma - Coal Mining
Mr Gilligan is a mining engineer with over 25 years’ experience in the
resources sector, in Australia, South Africa, North America and Asia.
He has held technical, executive and director roles with a number
of companies throughout his career including Mitsui, Thiess, Anglo,
Coalspur Mines and Resource Generation.
During his career Mr Gilligan has provided leadership to a number of
operations, EPC contracts, mining contracts and development projects
across a range of commodities. He has also successfully contributed
to raising development funding in various forms.
Mr Gilligan brings a successful background in organisational
leadership, project development and delivery, predominantly achieved
through a focus on people, culture and optimal efficiency.
Mr Gilligan also contributes significant board level experience at
private and public company level, particularly on technical matters,
governance, funding, risk management, strategy and leadership.
Mr Gilligan is a member of the Audit and Risk Committee.
Mr Gilligan is currently an Independent Non-Executive Director at
Resource Generation Limited. Mr Gilligan has not held any other
directorships for the past three years.
Mr Gilligan has the following interest in shares in the Company as at
the date of this report – 119,048 ordinary shares.
20
2020 ANNUAL REPORT DIRECTORS’ REPORT
Name, Position Held & Qualification
Experience, Special Responsibilities & Other Directorships
Ian Murray
Non-Executive Director
Appointed: 9 September 2019
B. Com
Graduate Diploma in Accounting
(GDA)
Advanced Taxation Certificate
Member of the Australian Institute
of Company Directors (MAICD)
Mr Murray is a Chartered Accountant with over 25 years’ of mining
experience in senior leadership positions, including the position of
Chairman then Managing Director of Gold Road Resources Limited
(Gold Road) and Chief Financial Officer then Managing Director of
DRDGold Ltd. He has also held executive positions with international
Big Four accounting firms.
Mr Murray brings a wealth of financial, corporate, project development
and operational experience to the Board. Most recently he held the
role of Managing Director of Gold Road and was instrumental in taking
the Gruyere Project from an exploration play through to a fully funded
8.2mtpa gold operation that is set to produce 300koz per annum in
joint venture with Gold Fields Ltd.
Oxford Advanced Management &
Leadership Programme (OAMLP)
Mr Murray is the Chairman of the Audit and Risk Committee and the
Remuneration and Nomination Committee.
Fellow of the Australia & New
Zealand Institute of Chartered
Accountants (FCA)
Mr Murray is currently an Independent Non-Executive Director at
Black Rock Mining Ltd and Todd River Resources Ltd, Executive
Chairman of Matador Mining Ltd, as well as a Non-Executive Director
of non-for-profit Miners Promise Ltd and charity Miners Promise
Australia Ltd.
During the past three years, Mr Murray has also served as a director
of the following listed entities:
• Gold Road Resources Limited (retired January 2019); and
• Gascoyne Resources Limited (resigned October 2018)
Mr Murray has the following interest in shares in the Company as at
the date of this report – 238,095 ordinary shares.
21
2020 ANNUAL REPORT DIRECTORS’ REPORT
Name, Position Held & Qualification
Experience, Special Responsibilities & Other Directorships
Sir Charles Lepani
Non-Executive Director
Appointed: 29 July 2020
B. Arts (Economics)
Masters of Public Administration
Matthew Smith
Chief Financial Officer & Company
Secretary
Appointed: 1 December 2016
B. Com (Accounting)
Member of the Australia & New
Zealand Institute of Chartered
Accountants (CA)
Sir Charles Lepani was born in the Trobriand Islands in the Milne
Bay Province of Papua New Guinea. He is a graduate of the University
of Papua New Guinea with a Bachelor of Arts (Economics), and won
a Fulbright Scholarship to attend the John F Kennedy School of
Government at Harvard University, Boston, where he graduated with a
Masters of Public Administration.
Sir Charles has over 40 years’ experience in both the public and private
sectors representing Papua New Guinea as a Senior Diplomat and
Advisor. Prior to joining the Board, his most recent roles were as High
Commissioner of PNG in Australia from 2005-2017, and as Director
General of PNG APEC 2017-2018.
Sir Charles has been an advisor and consultant to successive Prime
Ministers of PNG as well as the departments of Treasury, Finance, and
the Law and Justice Sector. He has also worked alongside the United
Nations Development Programme (UNDP), the United Nations Centre
for Transnational Corporations (UNCTC) and the Asian Development
Bank.
Sir Charles will bring a substantial degree of insight, understanding,
and local expertise to the management of our Woodlark Gold Project.
Sir Charles was appointed as a member of the Remuneration and
Nomination Committee on 3 February 2021.
Mr Lepani held no interest in shares in the Company as at the date of
this report.
Mr Smith has over 15 years’ experience in the resource industry across
a broad range of commodities including precious metals, industrials
and bulk commodities. Mr Smith has worked for a range of companies
operating in the Asia Pacific region and most recently held the role of
Chief Financial Officer at ASX listed Kingsrose Mining Limited, with
gold operations in Indonesia.
Mr Smith is a Chartered Accountant with relevant industry experience
being involved in a number of project funding transactions across debt
and equity markets. Mr Smith also brings specialist knowledge in the
areas of international taxation, corporate structuring, accounting and
corporate governance.
Mr Smith has previously held the role of Company Secretary at Straits
Resources Limited.
During the past three years, Mr Smith has also served as a director of
Kula Gold Limited (resigned 2 July 2019).
Mr Smith has the following interest in shares in the Company as at the
date of this report – 333,317 ordinary shares.
22
2020 ANNUAL REPORT DIRECTORS’ REPORT
Name, Position Held & Qualification
Experience, Special Responsibilities & Other Directorships
Mike Meintjes
Company Secretary
Appointed: 1 February 2021
B. Com (Hons) (Financial
Accounting)
F.Fin (FINSIA)
Member of the Australia & New
Zealand Institute of Chartered
Accountants (CA)
Ron Heeks
Managing Director
Appointed: 28 March 2013
B. App. Sc (Geology)
Member of AusIMM
Resigned: 4 June 2020
Mr Meintjes is an experienced governance specialist having first
qualified as a Chartered Accountant and worked for over 30 years
with a Big Four accounting firm. During this period he spent three and
a half years with Ernst & Young in Papua New Guinea based in Port
Moresby.
Since 2012, Mr Meintjes has held a number of part-time roles
principally in the resource sector where he has acted as Company
Secretary. Mr Meintjes is currently the company secretary for
Alligator Energy Limited (ASX: AGE) and recently resigned as company
secretary for Resource Generation Limited (ASX: RES).
Mr Meintjes held no interest in shares in the Company as at the date of
this report.
With 30 years’ mining industry experience, Mr Heeks was a founder of
Exploration and Mining Consultants and has had previous experience
with Western Mining Corporation, Newcrest, Newmont (US) and RSG
Consulting.
Mr Heeks has held senior roles in both mine management and
exploration and is a former General Manager – Technical for Straits
Asia Indonesian Operations and Chief Technical Officer for Adamus
Resources Southern Ashanti Gold Operation. He has lived and worked
in various countries around the world gaining extensive experience in
South-East Asia and Indonesia in particular.
Mr Heeks was appointed Managing Director of the Company on 28
March 2013 after the takeover of Worldwide Mining Projects Ltd.
During the past three years, Mr Heeks has also served as a director of
Kula Gold Limited (resigned 2 July 2019).
Mr Heeks held 449,832 ordinary shares in shares in the Company as at
the date of his resignation.
23
2020 ANNUAL REPORT DIRECTORS’ REPORT
2.
PRINCIPAL ACTIVITY
The Group is principally engaged in the development of the Woodlark Gold Project in Papua New Guinea. There
were no significant changes in the nature of this activity of the Group during the financial year.
3.
OPERATING AND FINANCIAL REVIEW
A review of the operations and financial position of the Group during the year ended 31 December 2020, including
details of the results of operations, changes to the state of affairs, and likely developments in the operation of the
Group in subsequent financial years is set out in the Review of Operations.
4.
5.
DIVIDENDS
No dividends were paid or declared during the financial year (2019: nil).
STATE OF AFFAIRS
There have not been any significant changes in the state of affairs of the Group during the financial year, other
than those noted in the financial report.
6.
EVENTS SUBSEQUENT TO REPORTING DATE
The financial statements have been prepared based upon conditions existing at 31 December 2020 and due
consideration has been given to events that have occurred subsequent to 31 December 2020 that provide evidence
of conditions that existed at the end of the reporting period.
In December 2020, the Company announced a successful $140 million Placement which was finalised in February
2021. The Placement was strongly supported by existing institutional shareholders and was complemented
by significant demand from new major domestic and international investors and was cornerstoned by two of
Geopacific’s substantial shareholders, Tembo and DELPHI, and several leading domestic and international
institutions. In addition, there was strong support from Sprott Resource Lending and its affiliates, along with
members of the Geopacific Board and Management.
This transformational capital raising will provide the equity funding component of the development capital
required for the Company’s Woodlark Gold Project.
The Placement consisted of two tranches at an Issue Price of $0.42 per share which comprised the issue of 333.3
million shares:
• Tranche 1: 43.7 million shares issued in December 2020 to raise $18.4 million pursuant to the Company’s
placement capacity under Listing Rule 7.1 and Listing Rule 7.1A; and
• Tranche 2: 289.6 million shares issued in February to raise $121.6 million.
Tranche 2 of the Placement was subject to shareholder approval under Listing Rules 7.1 and 10.11 which was
obtained in February 2021 at an Extraordinary General Meeting of the Company.
The Company also extended an SPP Offer to existing eligible shareholders to acquire up to $30,000 worth of
Geopacific shares at $0.42 per share, the same price as the Placement, with a cap of $10 million. The SPP Offer
closed on 10 February 2021 and raised a further $1.87million (4,461,821 Shares).
Other than the matter discussed above, no other matters or circumstances haves arisen since the end of the
financial period year which significantly affected or may significantly affect the operations of the Group, the
results of those operations, or the state of affairs of the Group in future financial years.
24
2020 ANNUAL REPORT DIRECTORS’ REPORT
7.
DIRECTORS’ INTERESTS AND BENEFITS
The relevant interest of each Director in the share capital as notified by the Directors to the Australian Securities
Exchange in accordance with section 205G(1) of the Corporations Act 2001, at the date of this report is as follows:
Name
I Clyne
C Gilligan
I Murray
C Lepani
Shares
748,190
-
-
-
Direct
Options
Rights
-
-
-
-
-
-
-
-
Shares
177,378
119,048
238,095
-
Indirect
Options
Rights
-
-
-
-
-
-
-
-
8.
DIRECTORS’ MEETINGS
The number of Directors’ meetings (including meetings of committees) and the number of meetings attended by
each of the Directors of the Company during the financial year are set out below:
Name
I Clyne
C Gilligan
I Murray
C Lepani
R Heeks(i)
Directors Meetings
Audit and Risk Committee Meetings
Attended*
Eligible to Attend
Attended*
Eligible to Attend
13
13
13
4
4
13
13
13
5
4
2
2
2
-
-
2
2
2
-
-
* Either in person, or by electronic means.
(i) Mr R Heeks resigned on 4 June 2020
The Board of Directors takes ultimate responsibility for corporate governance. This includes the establishment
of compensation arrangements for the Company’s Executive Directors and senior executives. It also includes
the appointment and retirement of Non-Executive Directors, appointment of Auditors, monitoring key areas of
business risk, maintenance of ethical standards and Audit and Risk Committees. The Board seeks independent
professional advice as necessary in carrying out its duties and responsibilities.
9.
LIKELY DEVELOPMENTS, PROSPECTS AND BUSINESS STRATEGIES
The Group will continue to advance its development and exploration portfolio and seek to increase its tenement
holdings by acquiring further projects.
10.
ENVIRONMENTAL REGULATIONS
Entities in the Group are subject to normal environmental regulations in areas of operations in Papua New
Guinea, Cambodia and Fiji. There were no breaches of these regulations during the financial year, or in the period
subsequent to the end of the financial year and up to the date of this report.
25
2020 ANNUAL REPORT DIRECTORS’ REPORT
11.
SHARE OPTIONS
There were 5,113,308 Options over unissued shares unexercised at 31 December 2020 (2019: 4,700,324). During
the 2020 reporting period, the Company issued 520,132 shares on the exercise of unlisted Options. Since the end
of the 2020 reporting period and up to the date of this report, no unlisted Options have been cancelled or exercised.
Details of unlisted Options over unissued shares in the Company as at the date of this report are presented in the
following table:
Options on Issue
Exercise Price
Expiry Date
32,000
8,000
970,638
30,307
808,740
1,296,965
1,063,850
526,262
376,546
$62.50
$125.00
$0.00
$0.00
$1.02
$0.00
$0.58
$0.00
$0.93
Not later than 5-years after defining a JORC compliant ore
reserve of over 200,000oz Au on the Faddy’s Gold Deposit
Not later than 10-years after defining a JORC compliant ore
reserve of over 1,000,000oz Au on the Faddy’s Gold Deposit
10 July 2021
21 August 2021
10 July 2022
19 July 2022
19 July 2023
21 August 2023
21 August 2024
Option holders do not have any rights to participate in any issues of shares or other interest in the Company or
any other entity.
12.
SHARE APPRECIATION RIGHTS
There were 2,430,722 share appreciation rights over unissued shares unexercised at 31 December 2020 (2019:
2,023,706). During the 2020 reporting period, the Company did not issue any shares on the exercise of unlisted
share appreciation rights. Since the end of the 2020 reporting period and up to the date of this report, no unlisted
share appreciation rights have been cancelled or exercised.
Details of unlisted share appreciation rights over unissued shares in the Company as at the date of this report are
presented in the following table:
Share appreciation rights on Issue
Exercise Price
894,605
1,129,101
407,016
$0.71
$0.40
$0.65
Expiry Date
10 July 2022
19 July 2023
21 August 2024
13.
INSURANCE OF OFFICERS
The Company has paid a premium to insure the Directors, Company Secretary and Executives of the Group in
respect of certain legal liabilities, including costs and expenses in successfully defending legal proceedings,
whilst they remain as Directors or Officers and for seven years thereafter. The insurance contract prohibits the
disclosure of the total amount of the premiums and a summary of the nature of the liabilities insured.
14.
PROCEEDINGS ON BEHALF OF COMPANY
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings
on behalf of the Company, or to intervene in any proceedings to which the Company is a party, for the purpose of
taking responsibility on behalf of the Company for all or part of those proceedings.
No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under
section 237 of the Corporations Act 2001.
26
2020 ANNUAL REPORT DIRECTORS’ REPORT
15.
AUDITOR’S INDEPENDENCE DECLARATION
The auditor’s independence declaration for the year ended 31 December 2020 is set out on page 44.
16.
AUDITOR
The Company’s auditor is Ernst & Young.
The Company has agreed with Ernst & Young, as part of its terms of engagement, to indemnify Ernst & Young
against certain liabilities to third parties arising from the audit engagement. The indemnity does not extend to any
liability resulting from a negligent, wrongful or wilful act or omission by Ernst & Young.
During the financial year the Company has not paid any premium in respect to any insurance for Ernst & Young or
a body corporate related to Ernst & Young.
During the year, the following fees were paid or payable to the auditors of the Company for services provided by
the auditor of the Company and its subsidiaries, its related practices and non related audit firms:
Audit Services
Consolidated
Ernst & Young
Audit and review of the financial report for Geopacific and its controlled
subsidiaries and other audit work under the Corporations Act 2001
Total
17.
NON-AUDIT SERVICES
2020
$
65,100
65,100
2019
$
57,500
57,500
There were no non-audit services provided by the auditor during the period of this report.
18.
REMUNERATION REPORT - AUDITED
This report outlines the remuneration arrangements of the Group pursuant to the requirements of the
Corporations Act 2001 and its regulations. This information has been audited as required under section 308(3)(c)
of the Corporations Act 2001.
This report details the remuneration arrangements of the Group’s key management personnel (KMP), who are
defined as those persons who have the authority and responsibility for planning, directing and controlling the
major activities of the Group, directly or indirectly, including any Director of Geopacific.
Details of the KMP of the Group during the reporting period are set out in the table below:
Name
Non-Executive Directors
Ian Clyne
Colin Gilligan
Ian Murray
Position
Non-Executive Chairman
Non-Executive Director
Non-Executive Director
Sir Charles Lepani
Appointed 29 July 2020
Non-Executive Director
Executives
Tim Richards
Matthew Smith
Glenn Zamudio
Ron Heeks
Appointed 6 October 2020
Chief Executive Officer
Chief Financial Officer & Company Secretary
General Manager - Projects
Resigned 4 June 2020
Managing Director
There were no changes to KMP other than those noted above after the reporting date and before the date the
financial report was authorised for issue.
27
2020 ANNUAL REPORT DIRECTORS’ REPORT
18.
REMUNERATION REPORT - AUDITED (CONTINUED)
Remuneration Governance
In preparation for the development of the Woodlark Gold Project, the Board decided to establish a Remuneration
and Nomination Committee during the 2020 reporting period.
The Remuneration and Nomination Committee was responsible for reviewing and recommending the
remuneration arrangements of the Group KMP and ensuring that the Group’s remuneration structures are
aligned with the interests of the Company and its shareholders. This includes an annual remuneration review of
base salary (including superannuation), short-term incentives (STI) and long-term incentives (LTI), including the
appropriateness of performance hurdles.
Remuneration Consultants
During the 2017 reporting period, BDO Chartered Accountants developed a comprehensive remuneration
framework for the Company to provide recommendations as defined in section 9B of the Corporations Act 2001.
The remuneration framework was approved by shareholders at the Annual General Meeting (AGM) held on 30
May 2018.
During the 2020 reporting period, the Company engaged BDO Chartered Accountants to complete a benchmarking
exercise to update the position from the 2017 report. This exercise incorporated an update to the comparison peer
group of companies and a refresh of the underlying peer group remuneration data.
A total of $28,500 was paid to remuneration consultants during 2020.
Remuneration Overview and Strategy
The objective of the Group’s remuneration framework is to support the delivery of sustained shareholder value
and to ensure rewards accurately reflect achievements in line with general market conditions. The strategy is
designed to attract, motivate and retain high calibre individuals through the provision of remuneration packages
that incorporate a balance of fixed and variable remuneration. In accordance with sound corporate governance
practices, the structure of Non-Executive and Executive remuneration is separate and distinct. There is no direct
relationship between remuneration and the financial performance of the Group.
The following table shows the Group’s performance over the reporting period and the previous four financial years
and against overall remuneration for these years:
2016
$
2017
$
2018
$
2019
$
2020
$
Loss Per Share (Cents) (i)
0.45
0.27
2.49
Year-end share price (Cents) (i)
0.036
0.027
0.016
Market capitalisation ($ million)
41.6
48.7
33.3
6.43
0.50
87.3
2.59
0.43
94.1
Total KMP remuneration ($)
1,011,937
1,468,516
2,196,274
2,127,902
3,012,188
(i)
The loss per share and year-end share price from 2016 to 2018 has not been adjusted to reflect the 25:1 share
consolidation conducted in December 2019.
28
2020 ANNUAL REPORT DIRECTORS’ REPORT
18.
REMUNERATION REPORT - AUDITED (CONTINUED)
Executive Remuneration Framework
The Board’s objective is to reward Executives with a quantum and mix of remuneration commensurate with
their position and responsibilities and that is competitive within the marketplace. The Company remunerates its
Executives with a mix of both fixed and at risk, or variable, remuneration. Variable remuneration incorporates a
balance of short, medium and long-term incentives.
Fixed remuneration for Executives consists of base salary, Zero Exercise Price Options (ZEPO’s), superannuation
and other non-cash benefits. It is designed to provide a base level of remuneration which is appropriate for the
Executives’ position, reflecting the individual’s skills, level of experience and responsibilities.
Variable remuneration, or performance linked remuneration, includes a combination of short, medium and long-
term incentives designed to provide an “at risk” reward in a manner which aligns with the creation of sustained
shareholder value.
All Executives are eligible to receive short, medium and long-term incentives which can be issued in accordance
with the Company’s Securities Incentive Plan (Incentive Plan) that was approved by shareholders at the AGM held
on 30 May 2018. The Incentive Plan incorporates a 5% cap on the total shares that can be issued to Executives
pursuant to the plan.
The following table provides a high-level summary of the Company’s remuneration framework:
Fixed
remuneration
Remuneration linked to market
rate of the role.
Total fixed remuneration
Variable
remuneration
Incentive
Remuneration for delivering
on key milestones which are
designed to create value for
shareholders.
Short-term incentive
Medium-term incentive
Variable
remuneration
Reward
Remuneration for the creation of
value for shareholders - directly
linked to shareholder returns.
Long-term incentive
Remuneration for meeting
role requirements.
Incentive for the achievement
of annual objectives.
Incentive for the achievement
of sustained business value.
Reward for performance over
the long-term.
The Incentive Plan provides for the use of a range of equity based instruments to deliver incentives which focus
participants on the delivery of sustained shareholder value and minimise the cash outlay associated with total
remuneration. The various components of the Incentive Plan are outlined below.
Fixed Remuneration Correction Plan
The fixed remuneration correction plan was designed to align total fixed remuneration with market rates using a
share based payment rather than cash. In order to determine appropriate market rates, a peer group consisting
of fourteen development and exploration companies across a range of commodities was selected on the basis of:
• Company size by reference to market capitalisation;
• Scale and stage of development of projects; and
• Geographic operating locations.
Independent analysis completed by BDO Chartered Accountants determined that a gap existed between the total
fixed remuneration of the Company’s executives in comparison to the Peer Group for given roles. In order to
ameliorate the gap, Class A Options (ZEPO’s) are issued for the difference between:
• the 50th percentile of peer group total fixed remuneration for their given role; and
• the participants’ total cash based annual fixed remuneration.
Class A Options are issued annually in advance, for no consideration and have an exercise price of nil. As the
Class A Options are issued as part of the fixed remuneration correction plan, no vesting conditions are attached
other than the continuation of service, which can be waived at the discretion of the Board.
The value of any Class A Options is included in the Executives’ total fixed remuneration for the period. During the
year, Class A Options were issued with a one year vesting period in relation to services performed for the 2020
financial year.
29
2020 ANNUAL REPORT DIRECTORS’ REPORT
18.
REMUNERATION REPORT - AUDITED (CONTINUED)
Incentive Plan
The Incentive Plan is linked to the achievement of milestones that are set each calendar year by the Board. The
Board selects milestones that are intended to drive sustained returns for shareholders. Following the completion
of each calendar year, the Board determines which performance milestones were satisfied in the prior year in
order to calculate the quantum of instruments to be issued.
The total incentive plan opportunity, which represents the maximum incentive that could be issued is determined
as follows:
• 190% of total fixed remuneration for the Managing Director; and
• 160% of total fixed remuneration for all other participants.
The total incentive plan opportunity is divided up between a cash based bonus and a range of equity based
instruments. Each element is given a weighting designed to provide an appropriate mix of short, medium and
long-term incentives for participants.
During the reporting period, instruments were issued under the Incentive Plan in relation to milestones that were
achieved during the 2019 calendar year. The Board determined that three out of the five performance milestones
had been satisfied, resulting in the award of up to 60% of the total incentive opportunity.
The milestones in respect of the 2019 reporting period are outlined in the following table:
2019 Milestone
Weighting
Board Assessment
1. Raise sufficient funding from capital markets to commence
development at the Woodlark Gold Project.
2. Restructure the Group via corporate transaction/s to secure 100%
direct ownership of Woodlark Mining Limited (the owner of the
Woodlark Gold Project).
3. Rebalance the Company’s share registry through the attraction of
new institutional shareholders representing greater than 20% of
the issued capital.
4. Board acceptance and implementation of a restructure or
divestment of the Group’s non-core assets in Fiji and Cambodia.
5. Board acceptance of a financing solution for the development of
the Woodlark Gold Project (Stretch Target).
20%
20%
20%
20%
20%
Achieved.
Achieved.
Achieved.
Not achieved.
Not achieved.
30
2020 ANNUAL REPORT DIRECTORS’ REPORT
18.
REMUNERATION REPORT - AUDITED (CONTINUED)
Incentive Plan (Continued)
The table below outlines the maximum percentages available for each element of the incentive plan, along with
the percentages awarded based on the 2019 milestones that were satisfied:
Managing Director
Other Participants
Plan
Element
Instrument
Maximum
Available
Incentive
Awarded
Maximum
Available
Incentive
Awarded
Vesting
Period
Exercise
Price
Conditions
Short-term
incentive
Cash based
bonus
11%
Nil
11%
Nil
N/A
N/A
N/A
Medium-
term
incentive
Long-term
incentive
Long-term
incentive
Total
Class B
Options –
ZEPO’s
Class C
Options –
PEPO’s
45%
27%
45%
26%
3 years
Nil
21%
13%
19%
11%
4 years
143% of the
Company’s
share price at
grant date (i)
SAR’s
23%
100%
14%
40%
24%
14%
3 years
Nil (ii)
100%
39%
Continuation
of service
Continuation
of service
Continuation
of service
(i) The exercise price was adjusted for the 25:1 share consolidation in December 2019.
(ii) Exercise price of SAR’s - theoretical exercise price is the Company’s share price at grant date.
The Board, in exercising its discretion, determined that cash based bonuses would not be paid in respect of the
2019 reporting period. No incentives milestones were set in respect of the 2020 reporting period.
Non Executive Directors
Fees and payments to Non Executive Directors reflect the demands, which are made on, and the responsibilities
of the Directors. A review of Non Executive Directors’ fees and payments is conducted annually. The Board may
from time to time seek the advice of independent remuneration consultants to ensure Non Executive Directors’
fees and payments are appropriate in the market setting.
The Chairman’s fees are determined independently to the fees of Non Executive Directors based on comparative
roles in market. The Chairman is not present at any discussions relating to determination of his own remuneration.
Directors’ fees
Non Executive Directors’ fees are determined within an aggregate Directors’ fee pool limit, which is periodically
recommended for approval by shareholders. The pool limit currently stands at $400,000 per year in aggregate as
agreed at the 2012 AGM.
A Director may also be paid fees or other amounts if special duties are performed outside the scope of normal
duties of a Director. During the 2020 reporting period the Chairman assumed additional responsibilities in order
to accommodate a smooth transition of management. For undertaking these additional services, the Chairman
was paid a total of $326,903 outside of the normal director fees.
A Director may also be reimbursed for out of pocket expenses incurred as a result of their directorship or any
special duties.
31
2020 ANNUAL REPORT DIRECTORS’ REPORT
18.
REMUNERATION REPORT - AUDITED (CONTINUED)
Details of Remuneration
The tables below set of the details of the remuneration of the Group’s KMP, as required by Section 308(3C) of the
Corporations Act 2001.
Short Term Benefits
Post Employment Benefits
Share
Based
Payments
Long
Term
Benefits
Performance
Related
2020
Salaries
& Fees
Annual
Leave Bonus
Super-
annuation
Termination
Payments
Options &
Rights
Long
Service
Leave
$
$
$
$
$
$
$
Non-Executive Directors (NED)
I Clyne(i)
C Gilligan
C Lepani(ii)
I Murray
47,500
60,000
27,807
60,000
NED Sub total
195,307
Executive Directors
298,542
255,000
553,542
I Clyne(i)
R Heeks(iii)
Executive
Directors
Sub total
Other KMP
-
-
-
-
-
-
-
-
T Richards(iv)
103,899
8,391
M Smith
258,214
21,075
G Zamudio
217,937
18,265
Other KMP
Sub total
580,050 47,731
-
-
-
-
-
-
-
-
-
-
-
-
4,513
5,700
-
5,700
15,913
28,361
-
-
-
-
-
-
-
-
-
-
-
-
-
399,996
740,735
28,361
399,996
740,735
-
-
-
-
-
-
-
-
Total
$
52,013
65,700
27,807
65,700
211,220
326,903
1,395,731
1,722,634
10,364
25,331
22,439
58,134
-
-
-
-
-
-
122,654
193,701
7,681
506,002
185,846
5,191
449,678
379,547
12,872
1,078,334
%
-
-
-
-
-
-
53
-
38
41
TOTAL
1,328,899 47,731
-
102,408
399,996
1,120,282
12,872
3,012,188
(i) Mr I Clyne worked in an executive capacity from 1 July 2020 through to 31 December 2020
(ii) Sir C Lepani commenced on 29 July 2020
(iii)
Mr R Heeks resigned on 4 June 2020. Mr Heeks continued to work as a consultant until 4 September 2020 and was paid $100,000
for the period from 5 June 2020 until 4 September 2020. This amount is included as salaries and wages in the above table
(iv) Mr T Richards commenced on 6 October 2020
32
2020 ANNUAL REPORT DIRECTORS’ REPORT
18.
REMUNERATION REPORT - AUDITED (CONTINUED)
Details of Remuneration (Continued)
Short Term Benefits
Post Employment Benefits
Share
Based
Payments
Long
Term
Benefits
Performance
Related
2019
Salaries
& Fees
Annual
Leave Bonus
Super-
annuation
Termination
Payments
Options &
Rights
Long
Service
Leave
$
$
$
$
$
$
$
Total
$
36,676
27,375
102,066
65,700
20,602
252,419
%
-
-
11
-
-
473,606
30
473,606
-
-
11,553
-
-
11,553
143,606
143,606
-
-
-
-
-
-
-
-
Non-Executive Directors
M Jerkovic(i)
M Bojanjac(ii)
I Clyne
C Gilligan
I Murray(iii)
33,494
25,000
82,660
60,000
18,815
NED Sub total
219,969
Executive Directors
R Heeks
330,000
330,000
Executive
Directors
Sub total
Other KMP
-
-
-
-
-
-
-
-
M Smith
206,731
17,692
G Zamudio
178,462
26,538
J Kerr(iv)
75,000
-
Other KMP Sub
total
460,193
44,230
TOTAL
1,010,162
44,230
-
-
-
-
-
-
-
-
-
-
-
-
-
3,182
2,375
7,853
5,700
1,787
20,897
-
-
20,900
19,475
-
-
-
-
-
-
-
-
-
-
183,498
2,817
431,638
183,498
3,045
411,018
43
45
82
7,125
20,769
456,327
-
559,221
47,500
20,769
823,323
5,862
1,401,877
68,397
20,769
978,482
5,862
2,127,902
(i) Mr M Jerkovic resigned on 8 May 2019
(ii) Mr M Bojanjac resigned on 29 May 2019
(iii) Mr I Murray commenced on 9 September 2019
(iv)
Mr J Kerr resigned on 31 May 2019. On this date, the Board approved that Mr J Kerr would be entitled to his unvested Options
and Rights, waiving the service period normally required as at the date he ceased employment. This resulted in an accelerated
expensing profile relating to share based payments. Geopacific’s share price on that date was $0.013. The fair value of these
grants was not changed at the date of modification and the remaining vesting conditions assigned to his options and rights were
not modified on this date
33
2020 ANNUAL REPORT DIRECTORS’ REPORT
18.
REMUNERATION REPORT - AUDITED (CONTINUED)
Service Agreements
A summary of the key terms of the Director contracts with the Company are set out below:
Ian Clyne - Non-Executive Chairman
• Directors Fees of $95,000 per annum pro-rata from 1 January 2020 to 30 June 2020;
• Directors Fees of $2,500 per day while working in an executive capacity from 1 July 2020 to 31 December 2020;
• Statutory superannuation contributions;
• Eligible to participate in the long-term incentive schemes offered by the Company; and
• No Notice Period.
Colin Gilligan - Non-Executive Director
• Directors Fees of $60,000 per annum;
• Statutory superannuation contributions;
• Eligible to participate in the long-term incentive schemes offered by the Company; and
• No Notice Period.
Ian Murray - Non-Executive Director
• Directors Fees of $60,000 per annum;
• Statutory superannuation contributions;
• Eligible to participate in the long-term incentive schemes offered by the Company; and
• No Notice Period.
Sir Charles Lepani - Non-Executive Chairman (appointed 29 July 2020)
• Directors Fees of $60,000 per annum;
• Statutory superannuation contributions;
• Eligible to participate in the long-term incentive schemes offered by the Company; and
• No Notice Period.
Ron Heeks - Managing Director (resigned 4 June 2020)
• Consulting Fees of $330,000 per annum;
• Eligible to participate in the long-term incentive schemes offered by the Company; and
• Six month notice period plus an additional one month for each year of service.
Short-term Incentives
No bonus payments were made to Directors of the Company or other KMP of the Group during the period and all
potential benefits under the short-term incentive plan were forfeited.
34
2020 ANNUAL REPORT DIRECTORS’ REPORT
18.
REMUNERATION REPORT - AUDITED (CONTINUED)
Long-term Incentives - Share based Compensation
Options
Options over ordinary shares in the Company were provided as remuneration to Directors of the Company and
KMP of the Group during the year as per the Securities Incentive Plan, which was approved by shareholders at the
Company’s AGM held on 30 May 2018. The following table outlines the Options granted or vested during the 2020
reporting period to the Directors of the Company and other KMP of the Group.
Options
granted
during
the
year
Grant
date
Fair
value
per
option
at grant
date
Value
of
option
at grant
date
($)
Vesting
date
Exercise
price
Expiry
date
2020
Instru-
ment
Year
Executive Directors
R Heeks
ZEPO 2020
5,231 28-Jul-20 $0.680
3,557 28-July-21 $0.000
21-Aug-21
R Heeks
ZEPO 2020 244,662 28-Jul-20 $0.680 166,370 28-July-23 $0.000
21-Aug-23
R Heeks
PEPO 2020 182,344 28-Jul-20 $0.430
78,408 28-July-24 $0.972
21-Aug-24
Other KMP
M Smith
ZEPO 2020
12,538 11-Aug-20 $0.625
7,836 11-Aug-21 $0.000
21-Aug-21
M Smith
ZEPO 2020 168,960 11-Aug-20 $0.625 105,600 11-Aug-23 $0.000
21-Aug-23
M Smith
PEPO 2020 116,521 11-Aug-20 $0.393
45,793 11-Aug-24 $0.894
21-Aug-24
G Zamudio
ZEPO 2020
12,538 11-Aug-20 $0.625
7,836 11-Aug-21 $0.000
21-Aug-21
G Zamudio
ZEPO 2020 112,640 11-Aug-20 $0.625
70,400 11-Aug-23 $0.000
21-Aug-23
G Zamudio PEPO 2020
77,681 11-Aug-20 $0.393
30,529 11-Aug-24 $0.894
21-Aug-24
Options
vested/
lapsed
during
the
year
-
-
-
-
-
-
-
-
-
All instruments issued during the 2020 reporting period were issued on 31 August 2020. The grant date differs for
the directors to comply with the accounting standards.
35
2020 ANNUAL REPORT DIRECTORS’ REPORT
18.
REMUNERATION REPORT - AUDITED (CONTINUED)
Long-term Incentives - Share based Compensation (Continued)
The following table outlines the Options granted or vested during the 2019 reporting period to the Directors of the
Company and other KMP of the Group.
Options
granted
during
the
year
Grant
date
Fair
value
per
option
at grant
date
Value
of
option
at grant
date
($)
Vesting
date
Exercise
price
Expiry
date
Options
vested/
lapsed
during
the
year
2019
Instru-
ment
Year
Executive Directors
R Heeks
ZEPO 2019
261,538 30-May-19 $0.014
3,662 19-Jul-20
$0.000
19-Jul-20
R Heeks
ZEPO 2019 9,174,808 30-May-19 $0.014
128,448 19-Jul-22
$0.000
19-Jul-22
R Heeks
PEPO 2019 7,951,500 30-May-19 $0.008
63,612 19-Jul-23
$0.023
19-Jul-23
Other KMP
M Smith
ZEPO 2019 4,838,462 12-Jul-19
$0.016
77,416 19-Jul-20
$0.000
19-Jul-20
M Smith
ZEPO 2019 6,336,000 12-Jul-19
$0.016
101,376 19-Jul-22
$0.000
19-Jul-22
M Smith
PEPO 2019 5,081,143 12-Jul-19
$0.009
45,730 19-Jul-23
$0.023
19-Jul-23
G Zamudio
ZEPO 2019 4,838,462 12-Jul-19
$0.016
77,416 19-Jul-20
$0.000
19-Jul-20
G Zamudio
ZEPO 2019 6,336,000 12-Jul-19
$0.016
101,376 19-Jul-22
$0.000
19-Jul-22
G Zamudio PEPO 2019 5,081,143 12-Jul-19
$0.009
45,730 19-Jul-23
$0.023
19-Jul-23
J Kerr
J Kerr
J Kerr
ZEPO 2019 2,016,026 12-Jul-19
$0.016
32,257 19-Jul-20
$0.000
19-Jul-20
ZEPO 2019 5,441,852 12-Jul-19
$0.016
87,070 19-Jul-22
$0.000
19-Jul-22
PEPO 2019 4,364,083 12-Jul-19
$0.009
39,277 19-Jul-23
$0.023
19-Jul-23
-
-
-
-
-
-
-
-
-
-
-
-
The fair value of the Options is measured at grant date and allocated equally over the period from grant date to
vesting date, unless Directors of the Company and KMP of the Group resign during the vesting period in which case
the fair value of the Options is expensed immediately. This allocation is reflected in the Share Based Payments
column of the remuneration tables above.
The fair value at grant date was determined by a combination of internal and external sources using a Black-
Scholes option pricing model and independent third party valuations.
36
2020 ANNUAL REPORT DIRECTORS’ REPORT
18.
REMUNERATION REPORT - AUDITED (CONTINUED)
Long-term Incentives - Share based Compensation (Continued)
Share Appreciation Rights
Share Appreciation Rights over ordinary shares in the Company were granted as remuneration to Directors of
the Company and KMP of the Group during the year as per the Securities Incentive Plan, which was approved by
shareholders at the Company’s AGM held on 30 May 2018.
The following table outlines the Share Appreciation Rights granted or vested to the Directors of the Company and
other KMP of the Group during the 2020 reporting period.
Rights
granted
during
the
year
Fair
value
per right
at grant
date
Value
of right
at grant
date
($)
Grant
date
Vesting
date
Exercise
price
Expiry
date
2020
Instru-
ment
Year
Executive Directors
R Heeks
SAR
2020 182,656 28-Jul-20
$0.468
85,483 28-July-23 $0.680
21-Aug-24
Other KMP
M Smith
G Zamudio
SAR
SAR
2020 134,616 11-Aug-20 $0.429
57,750
11-Aug-23 $0.625
21-Aug-24
2020
89,744 11-Aug-20 $0.429
38,500
11-Aug-23 $0.625
21-Aug-24
Rights
vested/
lapsed
during
the year
-
-
-
All 2020 Share Appreciation Rights were issued on 31 August 2020. The grant date differs for the directors to
comply with the accounting standards.
Rights
granted
during
the
year
Fair
value
per right
at grant
date
Value
of right
at grant
date
($)
Grant
date
Vesting
date
Exercise
price
Expiry
date
2019
Instru-
ment
Year
Executive Directors
R Heeks
SAR
2019 7,620,188 30-May-19
$0.009
68,582 19-Jul-22 $0.014
19-Jul-23
Other KMP
M Smith
G Zamudio
J Kerr
SAR
SAR
SAR
2019 5,616,000 12-Jul-19
$0.010
56,160 19-Jul-22 $0.016
19-Jul-23
2019 5,616,000 12-Jul-19
$0.010
56,160 19-Jul-22 $0.016
19-Jul-23
2019 4,823,460 12-Jul-19
$0.010
48,235 19-Jul-22 $0.016
19-Jul-23
Rights
vested/
lapsed
during
the year
-
-
-
-
The fair value of the Share Appreciation Rights is measured at grant date and allocated equally over the period
from grant date to vesting date, unless Directors of the Company and KMP of the Group resign during the vesting
period in which case the fair value of the Share Appreciation Rights is expensed immediately. This allocation is
reflected in the Share Based Payments column of the remuneration tables above.
The fair value at grant date was independently determined by a third party.
37
2020 ANNUAL REPORT DIRECTORS’ REPORT
18.
REMUNERATION REPORT - AUDITED (CONTINUED)
Equity Instrument Disclosures Relating to KMP
Options
Options over Ordinary Shares in the Company held during the financial year by Directors of the Company and
other KMP of the Group.
Granted
During
the Year
Exercised
During
the Year
Net
Change
Other
Held at
Resignation
Closing
Balance
31 December
2020
Options
Exercisable at
31 December
2020(i)
Opening
Balance
1 January
2020
-
-
2020
Directors
I Clyne
C Gilligan
R Heeks(ii)
1,111,690
C Lepani(iii)
I Murray
Sub total
-
-
1,111,690
Other KMP
T Richards(iv)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(1,111,690)
-
-
(1,111,690)
-
-
-
-
-
-
-
-
-
-
-
1,032,039
936,879
1,968,918
(1,111,690)
1,968,918
-
-
-
-
-
-
-
-
-
-
M Smith
927,559
298,019
(193,539)
G Zamudio
927,559
202,859
(193,539)
Sub total
1,855,118
500,878
(387,078)
TOTAL
2,966,808
500,878
(387,078)
(i) Options exercisable at 31 December 2020 have not yet vested
(ii) Mr R Heeks resigned on 4 June 2020
(iii) Sir C Lepani commenced on 29 July 2020
(iv) Mr T Richards commenced on 6 October 2020
38
2020 ANNUAL REPORT DIRECTORS’ REPORT
18.
REMUNERATION REPORT - AUDITED (CONTINUED)
Equity Instrument Disclosures Relating to KMP (Continued)
Granted
During
the Year
Exercised
During
the Year
Net
Change
Other (i)
Held at
Resignation (ii)
Closing
Balance
31 December
2019
Options
Exercisable at
31 December
2019 (iii)
Opening
Balance
1 January
2019
-
-
2019
Directors
M Jerkovic
M Bojanjac
I Clyne
750,000
C Gilligan
-
-
-
-
-
-
-
(750,000)
-
-
-
-
-
R Heeks
10,593,263 17,387,846
(188,888)
(26,680,531)
I Murray
-
-
-
-
Sub total
11,343,263 17,387,846
(938,888)
(26,680,531)
Other KMP
M Smith
10,427,777 16,255,625
(3,494,444)
(22,261,399)
G Zamudio
10,427,777 16,255,625
(3,494,444)
(22,261,399)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,111,690
1,111,690
-
-
1,111,690
1,111,690
927,559
927,559
-
927,559
927,559
-
J Kerr
10,427,777 11,822,025
(3,494,444)
-
(18,755,358)
Sub total
31,283,331 44,333,275 (10,483,332)
(44,522,798)
(18,755,358)
1,855,118
1,855,118
TOTAL
42,626,594 61,721,121 (11,422,220)
(71,203,329)
(18,755,358)
2,966,808
2,966,808
(i) Net Change Other includes the adjustments for the share consolidation on a 25:1 basis
(ii)
Held at Resignation does not factor in the 25:1 share consolidation as the consolidation occurred after the resignation
(iii) Options exercisable at 31 December 2019 have not yet vested
39
2020 ANNUAL REPORT DIRECTORS’ REPORT
18.
REMUNERATION REPORT - AUDITED (CONTINUED)
Equity Instrument Disclosures Relating to KMP (Continued) Share Appreciation Rights
Share Appreciation Rights over Ordinary Shares in the Company held during the financial year by Directors of the
Company and other KMP of the Group.
Granted
During
the Year
Exercised
During
the Year
Net
Change
Other
Held at
Resignation
Closing
Balance
31 December
2020
Rights
Exercisable at
31 December
2020(i)
Opening
Balance
1 January
2020
-
-
498,337
-
-
498,337
2020
Directors
I Clyne
C Gilligan
R Heeks(ii)
C Lepani(iii)
I Murray
Sub total
Other KMP
T Richards(iv)
-
M Smith
367,269
134,616
G Zamudio
367,269
89,744
Sub total
734,538
224,360
TOTAL
1,232,875
224,360
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(498,337)
-
-
(498,337)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
501,885
457,013
958,898
501,885
457,013
958,898
(498,337)
958,898
958,898
(i) Share Appreciation Rights exercisable at 31 December 2020 have not yet vested
(ii) Mr R Heeks resigned on 4 June 2020
(iii) Sir C Lepani commenced on 29 July 2020
(iv) Mr T Richards commenced on 6 October 2020
40
2020 ANNUAL REPORT DIRECTORS’ REPORT
18.
REMUNERATION REPORT - AUDITED (CONTINUED)
Equity Instrument Disclosures Relating to KMP (Continued)
Opening
Balance
1 January
2019
Granted
During
the Year
Exercised
During
the Year
Net
Change
Other(i)
Held at
Resignation(ii)
Closing
Balance
31 December
2019
Rights
Exercisable at
31 December
2019(iii)
2019
Directors
M Jerkovic
M Bojanjac
I Clyne
C Gilligan
R Heeks
I Murray
-
-
-
-
-
-
-
-
4,838,214
7,620,188
-
-
Sub total
4,838,214
7,620,188
Other KMP
M Smith
3,565,714
5,616,000
G Zamudio
3,565,714
5,616,000
J Kerr
3,565,714
4,823,475
Sub total
10,697,142 16,055,475
TOTAL
15,535,356 23,675,663
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(11,960,065)
-
(11,960,065)
(8,814,445)
(8,814,445)
-
-
-
-
-
-
-
-
-
-
(8,389,189)
-
-
-
-
-
-
-
-
498,337
498,337
-
-
498,337
498,337
367,269
367,269
-
367,269
367,269
-
(17,628,890)
(8,389,189)
734,538
734,538
(29,588,955)
(8,389,189)
1,232,875
1,232,875
(i) Net Change Other includes the adjustments for the share consolidation on a 25:1 basis
(ii) Held at Resignation does not factor in the 25:1 share consolidation as the consolidation occurred after the resignation
(iii) Share Appreciation Rights exercisable at 31 December 2019 have not yet vested
41
2020 ANNUAL REPORT DIRECTORS’ REPORT
18.
REMUNERATION REPORT - AUDITED (CONTINUED)
Equity Instrument Disclosures Relating to KMP (Continued)
Ordinary Shares
The number of Ordinary Shares in the Company held during the financial year by each Director of the Company
and other KMP of the Group, including their personally related parties, was as follows:
Opening
Balance
1 January 2020
Issued
on Vesting
of Options
Shares
Acquired
on Market
Held at
Resignation(i)
Net
Change
Other
Closing Balance
31 December 2020
-
-
-
-
-
-
-
-
-
-
-
330,330
-
-
-
-
330,330
-
333,317
373,317
706,634
1,036,964
2020
Directors
I Clyne
C Gilligan
R Heeks(i)
C Lepani(ii)
I Murray
Subtotal
Other KMP
T Richards(iii)
M Smith
G Zamudio
Subtotal
272,000
-
449,832
-
-
721,832
-
139,778
179,778
319,556
-
-
-
-
-
-
-
193,539
193,539
387,078
58,330
-
-
-
-
-
-
(449,832)
-
-
58,330
(449,832)
-
-
-
-
-
-
-
-
TOTAL
1,041,388
387,078
58,330
(449,832)
(i) Mr R Heeks resigned on 4 June 2020
(ii) Sir C Lepani commenced on 29 July 2020
(iii) Mr T Richards commenced on 6 October 2020
42
2020 ANNUAL REPORT DIRECTORS’ REPORT
18.
REMUNERATION REPORT - AUDITED (CONTINUED)
Equity Instrument Disclosures Relating to KMP (Continued)
Opening
Balance
1 January 2019
Issued on
Vesting of
Performance
Rights
Shares
Acquired on
Market(i)
Held at
Resignation(ii)
Net Change
Other(iii)
Closing Balance
31 December 2019
2019
Directors
M Jerkovic
13,196,677
M Bojanjac
3,416,666
-
-
-
-
(13,196,677)
(3,416,666)
-
-
-
-
2,400,000
750,000
3,650,000
-
-
-
8,768,618
188,888
2,288,278
-
-
-
-
-
-
-
(6,528,000)
272,000
-
-
(10,795,952)
449,832
-
-
27,781,961
938,888
5,938,278
(16,613,343)
(17,323,952)
721,832
I Clyne
C Gilligan
R Heeks
I Murray
Subtotal
Other KMP
M Smith
J Kerr
Subtotal
G Zamudio
1,000,000
-
-
3,494,444
3,494,444
3,494,444
1,000,000
10,483,332
-
-
-
-
-
-
(3,354,666)
(4,314,666)
(3,494,444)
-
139,778
179,778
-
(3,494,444)
(7,669,332)
319,556
TOTAL
28,781,961
11,422,220
5,938,278
(20,107,787)
(24,993,284)
1,041,388
(i) Shares Acquired on Market includes shares acquired in the Placement
(ii) Held at Resignation does not factor in the 25:1 share consolidation as the consolidation occurred after the
resignations
(iii) Net Change Other includes the adjustments for the share consolidation on a 25:1 basis
Transactions with directors, director related entities and other related parties
Melron Pty Ltd
Payment was made to Melron Investments Pty Ltd for director services fees. Mr R Heeks is a Director of Melron
Investments Pty Ltd and served as Managing Direct of Geopacific. The total amount charged by Melron Investments
Pty Ltd during the financial year was $654,996 plus GST (2019: $330,000). There were no amounts owing to
Melron Pty Ltd as at 31 December 2020. All amounts were due and payable under normal commercial terms.
END OF REMUNERATION REPORT
The Directors Report, including the Remuneration Report, is signed in accordance with a resolution of the
Directors:
Ian Clyne
Non-Executive Chairman
Perth, Australia
30 March 2021
43
2020 ANNUAL REPORT AUDITOR’S INDEPENDENCE DECLARATION
Ernst & Young
11 Mounts Bay Road
Perth WA 6000, Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222
Fax: +61 8 9429 2436
ey.com/au
Auditor’s independence declaration to the directors of Geopacific
Resources Limited
As lead auditor for the audit of the financial report of Geopacific Resources Limited for the financial
year ended 31 December 2020, I declare to the best of my knowledge and belief, there have been:
a.
No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
b.
No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Geopacific Resources Limited and the entities it controlled during the
financial year.
Ernst & Young
Pierre Dreyer
Partner
30 March 2021
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
PD:AJ:GPR:008
44
2020 ANNUAL REPORT INDEPENDENT AUDITOR’S REPORT
Ernst & Young
11 Mounts Bay Road
Perth WA 6000, Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222
Fax: +61 8 9429 2436
ey.com/au
Independent auditor’s report to the members of Geopacific Resources
Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Geopacific Resources Limited (the Company) and its
subsidiaries (collectively the Group), which comprises the consolidated statement of financial position
as at 31 December 2020, the consolidated statement of profit or loss and other comprehensive
income, consolidated statement of changes in equity and consolidated statement of cash flows for the
year then ended, notes to the financial statements, including a summary of significant accounting
policies, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
a.
Giving a true and fair view of the consolidated financial position of the Group as at 31 December
2020 and of its consolidated financial performance for the year ended on that date; and
b.
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial
report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial report of the current year. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide
a separate opinion on these matters. For each matter below, our description of how our audit
addressed the matter is provided in that context.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
PD:AJ:GPR:007
45
2020 ANNUAL REPORT INDEPENDENT AUDITOR’S REPORT
We have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of the
Financial Report section of our report, including in relation to these matters. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risks of
material misstatement of the financial report. The results of our audit procedures, including the
procedures performed to address the matters below, provide the basis for our audit opinion on the
accompanying financial report.
Going concern assessment
Why significant
How our audit addressed the key audit matter
The Group is not yet generating mining revenue.
Accordingly, the testing of the availability of sufficient
funding for the Group to meet its obligations is
considered to be a key part of our going concern
assessment and therefore a significant aspect of our
audit.
This assessment is largely based on the expectations
of, and the estimates made, by the Group. The
expectations and estimates can be influenced by
subjective elements such as estimated future cash
flows. Estimates are based on assumptions, including
expectations regarding future developments in the
economy and the market.
The Group’s financial report is prepared on a going
concern basis. The Group’s assessment in respect of
going concern is set out Note 1 to the financial report.
We performed the following procedures:
► Vouched the capital raised subsequent to year end and
confirmed the cash balance at 30 March 2021;
► Analysed the Group’s cash flow forecast and enquired
with the Group to gain an understanding of the inputs
and process underpinning the cash flow forecast
prepared for the purpose of the going concern
assessment;
► Assessed whether the cash flow forecast accurately
reflected the budget that was approved by the Board;
► Assessed the external inputs and assumptions within
the cash flow forecast by comparing them to
assumptions and estimates used elsewhere in the
preparation of the financial report. We also considered
them in the context of our understanding and
knowledge of the Group’s operations and
commitments;
► Assessed the sensitivity analysis that the Group
performed on the cash flow forecast;
► Assessed the possible mitigating actions identified by
the Group in the event that actual cash flows are
below cash flow forecast; and
► Assessed the adequacy of the disclosure included in
Note 1 of the financial report.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
46
2020 ANNUAL REPORT
INDEPENDENT AUDITOR’S REPORT
Derecognition of the Kou Sa project
Why significant
How our audit addressed the key audit matter
In performing our procedures, we:
► Reviewed the terms of the SPA and the termination
notice received from the vendors;
► Obtained and inspected communications between the
Group and the vendors during the 2020 financial year
and up to the date of this report;
► Challenged management’s assessment of the
accounting treatment of the derecognition of the
exploration and evaluation assets and extinguishment
of the related deferred consideration (including its
presentation on a net basis in the consolidated
statement of profit or loss) based on the contractual
terms of the SPA, the termination notice and the
relevant accounting standards. This included
discussion with the Group’s external legal advisers
regarding the timing of extinguishment of the Group’s
deferred consideration to the vendors; and
► Assessed the adequacy of disclosures and
presentation in the financial report.
The Group has derecognised its interest in the Kou Sa
Project in Cambodia and the related deferred
consideration as disclosed in Note 6 to the financial
report following the receipt of a termination notice
from the vendors in December 2020.
The termination notice informed the Group that the
vendors had elected to terminate the original Sale and
Purchase agreement and subsequent amendments
(SPA) under the termination provisions of the SPA.
This termination has resulted in the derecognition
from the consolidated statement of financial position
of capitalised exploration and evaluation assets of
$5,710,134 (see Note 12) and the simultaneous
extinguishment of the related deferred consideration
of $7,799,975 (see Note 16) based on the terms of
the SPA and the termination notice.
A net gain of $1,884,834 was recognised in the
consolidated statement of profit or loss as a result of
this termination. The determination of this net gain
took into account a final settlement of $US$0.5
million payable to the vendors under the termination
provisions of the SPA.
Management determined that the presentation of the
results of the derecognition on a net basis in the
consolidated statement of profit or loss was
appropriate in order to reflect the substance of the
transaction as the derecognition of the capitalised
exploration and evaluation assets and extinguishment
of the deferred consideration arose due to the same
transaction (termination of the SPA) and with the
same counterparties.
This was considered a key audit matter because of the
significant judgement involved in determining both the
timing of derecognition of the capitalised exploration
and evaluation assets and the extinguishment of the
deferred consideration following receipt of the
termination notice as well as whether the presentation
of the results of the termination should be recognised
on a gross or net basis in the consolidated statement
of profit or loss.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
47
2020 ANNUAL REPORT
INDEPENDENT AUDITOR’S REPORT
Information other than the financial report and auditor’s report thereon
The directors are responsible for the other information. The other information comprises the
information included in the Company’s 2020 Annual Report, but does not include the financial report
and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon, with the exception of the Remuneration Report
and our related assurance opinion.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financi al report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters relating to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, an d to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
48
2020 ANNUAL REPORT
INDEPENDENT AUDITOR’S REPORT
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgment and maintain professional scepticism throughout the audit. We also:
►
►
►
►
►
►
Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Group’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in
our auditor’s report to the related disclosures in the financial report or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up
to the date of our auditor’s report. However, future events or conditions may cause the Group
to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report, includ ing the
disclosures, and whether the financial report represents the underlying transactions and events
in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities
or business activities within the Group to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Group audit. We remain solely
responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, actions
taken to eliminate threats or safeguards applied.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
49
2020 ANNUAL REPORT
INDEPENDENT AUDITOR’S REPORT
From the matters communicated to the directors, we determi ne those matters that were of most
significance in the audit of the financial report of the current year and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we dete rmine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Report on the audit of the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 27 to 43 of the directors' report for the
year ended 31 December 2020.
In our opinion, the Remuneration Report of Geopacific Resources Limited for the year ended 31
December 2020, complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and pres entation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001 . Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
Ernst & Young
Pierre Dreyer
Partner
Perth
30 March 2021
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
50
2020 ANNUAL REPORT
DIRECTORS’ DECLARATION
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
DIRECTORS’ DECLARATION
In accordance with a resolution of the Directors of Geopacific Resources Limited, I declare that:
1.
In the opinion of the Directors:
(a) the financial statements and notes, of Geopacific Resources Limited for the financial year ended 31
December 2020 are in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the consolidated entity’s financial position as at 31 December 2020
and of its performance for the year ended on that date; and
(ii) complying with Accounting Standards and Corporations Regulations 2001.
(b) the financial statements and notes also comply with International Financial Reporting Standards as
disclosed in Note 1.
(c) There are reasonable grounds to believe that the Company will be able to pay its debts as and when
they become due and payable.
2. This declaration has been made after receiving the declarations required to be made to the Directors by
the Chief Executive Officer and Chief Financial Officer in accordance with section 295A of the
Corporations Act 2001 for the financial year ended 31 December 2020.
On behalf of the Board
Ian Clyne
Non-Executive Chairman
Perth, Australia
30 March 2021
54 | P a g e
51
2020 ANNUAL REPORT CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2020GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2020
Finance income
Administration expenses
Consultancy expense
Depreciation expense
Employee benefits expense
Share based payments
Occupancy expenses
Finance costs
Impairment write downs
Foreign currency gain
Gain on derocognition of Kou Sa Project
Exploration expense
Loss before income tax
Income tax benefit
Consolidated
2020
$
2019
$
282,423
93,750
(965,938)
(1,374,089)
(141,634)
(2,418,509)
(1,120,281)
(55,743)
(830,927)
(20,448)
401,346
1,884,834
(208,345)
(4,567,311)
(364,164)
(743,127)
(199,355)
(1,672,205)
(1,374,119)
(58,253)
(1,443,017)
(75,473)
-
-
(1,501,751)
(7,337,714)
-
-
Note
5
14 & 15
16
9 & 11
6
7
Loss after tax from continuing operations
(4,567,311)
(7,337,714)
Loss for the year attributable to:
Non-controlling interest
Owners of the parent
Other comprehensive income/(loss)
Items of other comprehensive income/(loss) to be
reclassified to profit or loss in subsequent periods
(net of tax)
Exchange differences on translating foreign
controlled entities
Other comprehensive (loss)/income for the year,
net of tax
Total comprehensive loss for the year
52
-
(4,567,311)
(61,349)
(7,276,365)
(4,567,311)
(7,337,714)
(5,358,751)
(195,365)
(5,358,751)
(195,365)
(9,926,062)
(7,533,079)
55 | P a g e
2020 ANNUAL REPORT CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2020
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2020
Total comprehensive income/(loss) attributable to:
Non-controlling interest
Owners of the parent
Consolidated
Note
2020
$
2019
$
-
(9,926,062)
(9,926,062)
(48,896)
(7,484,183)
(7,533,079)
Loss per share (cents) for loss attributable to the ordinary
equity holders of the company:
Basic loss per share
Diluted loss per share
26
26
(2.59)
(2.59)
(6.43)
(6.43)
The above consolidated statement of profit or loss and other comprehensive income should be read
in conjunction with the accompanying notes.
56 | P a g e
53
2020 ANNUAL REPORT CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2020
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2020
Current Assets
Cash and cash equivalents
Receivables
Prepayments
Inventory
Total Current Assets
Non-Current Assets
Receivables
Exploration and evaluation assets
Mine properties under development
Property, plant and equipment
Right of use asset
Total Non-Current Assets
TOTAL ASSETS
Current Liabilities
Trade and other payables
Lease liability
Provisions
Total Current Liabilities
Non-Current Liabilities
Trade and other payables
Lease liability
Provisions
Total Non-Current Liabilities
TOTAL LIABILITIES
NET ASSETS
Note
8
9
10
11
9
12
13
14
15(a)
16
15(b)
17
16
15(b)
17
Consolidated
2020
$
2019
$
34,639,855
392,774
1,384,099
444,169
36,860,897
37,505,067
687,717
1,027,731
339,592
39,560,107
1,046,971
1,844,673
37,975,609
7,244,464
718,272
48,829,989
-
8,262,803
30,803,497
1,892,285
-
40,958,585
85,690,886
80,518,692
6,128,458
220,164
142,907
6,491,529
6,991,223
82,111
65,590
7,138,924
-
496,708
201,691
698,399
2,694,195
-
207,198
2,901,393
7,189,928
10,040,317
78,500,958
70,478,375
Equity
Issued capital
Reserves
Accumulated losses
Total Equity attributable to equity holders
18
19
165,801,105
605,072
(87,905,219)
78,500,958
148,972,741
4,843,542
(83,337,908)
70,478,375
The above consolidated statement of financial position should be read
in conjunction with the accompanying notes.
57 | P a g e
54
2020 ANNUAL REPORT
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2020
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55
2020 ANNUAL REPORT
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2020GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDING 31 DECEMBER 2020
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees
Interest received
Government incentives and other income
Interest paid
Net Cash Used In Operating Activities
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for plant and equipment
Proceeds from the disposal of plant and equipment
Exploration expenditure
Mine development expenditure
Payment as part of the Kula transaction
Proceeds received from the Kula transaction
Cash held by subsidiary on its disposal
Net Cash Used In Investing Activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from share issues (net of costs)
Payment of principal portion of lease liability
Net Cash From Financing Activities
Consolidated
Note
2020
$
2019
$
(5,198,755)
167,886
114,537
(9,950)
29(b)
(4,926,282)
(4,243,018)
32,519
-
(4,513)
(4,215,012)
(5,837,187)
182
(65,098)
(9,703,347)
-
-
-
(15,605,450)
(1,119,562)
71,429
(697,980)
(1,077,051)
(745,382)
725,382
(67,745)
(2,910,909)
17,398,899
(133,725)
17,265,174
42,006,632
(104,182)
41,902,450
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS
Cash and cash equivalents at beginning of the year
Effect of exchange rates on cash held in foreign currencies
CASH AND CASH EQUIVALENTS AT END OF THE YEAR
(3,266,558)
37,505,067
401,346
34,639,855
34,776,529
3,059,221
(330,683)
37,505,067
The above consolidated statement of cash flows should be read
in conjunction with the accompanying notes.
59 | P a g e
56
2020 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Geopacific Resources Limited (the Company or Geopacific) is an Australian Securities Exchange listed public
company domiciled in Australia. The consolidated financial report of the Company for the financial year
ended 31 December 2020 comprises the Company and its controlled entities (together referred to as the
‘Group’). The registered office is located at 278 Stirling Highway, Claremont, WA, 6010.
The Group is principally engaged in the development of the Woodlark Gold Project in Papua New Guinea.
The financial report was authorised for issue by the directors on 30 March 2021.
Basis of preparation
The financial report is a general purpose financial report that has been prepared in accordance with
Australian Accounting Standards, other authoritative pronouncements of the Australian Accounting
Standards Board (AASB) and the Corporations Act 2001. The Group is a for-profit entity for financial reporting
purposes under Australian Accounting Standards.
Compliance with Australian Accounting Standards ensures that the financial statements and the notes
thereto also comply with International Financial Reporting Standards as issued by the International
Accounting Standards Board.
Material accounting policies adopted in the preparation of these financial statements are presented below
and have been consistently applied unless otherwise stated.
The financial report has been prepared on a historical cost basis.
Going Concern
The financial statements have been prepared on the going concern basis, which contemplates the continuity
of normal business activities and the realisation of assets and settlement of liabilities in the ordinary course
of business.
During the year ended 31 December 2020, the Group incurred a net loss after tax of $4,567,311 (2019:
$7,337,714) and had cash outflows from operations of $4,926,282 (2019: $4,215,012).
During October 2020, Geopacific announced the selection of Sprott Private Resources Lending II L.P.
(“Sprott”) as its preferred financier for the development of the Woodlark Gold Project. On 5 October 2020,
the Company entered into a period of exclusivity until 30 June 2021 with Sprott to finalise a US$85 million
Project Finance Facility and US$15 million Callable Gold Stream for development of the Company’s Woodlark
Gold Project. The Project Finance Facility and the Gold Stream remain subject to the usual conditions
including Sprott committee approval and final documentation.
This exclusivity arrangement with Sprott follows the results of extensive technical due diligence on the
Woodlark Gold Project by Sprott and its advisors.
In November 2020, the Group completed a Project Execution Update on the Woodlark Gold Project which
indicated a thirteen year operating life and an estimated capital expenditure requirement of $254.8 million.
60 | P a g e
57
2020 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Going Concern (continued)
On 14 December 2020, the Company announced a successful $140 million share placement which was
finalised during February 2021. The Placement consisted of two tranches at an Issue Price of $0.42 per share
which comprised the issue of 333.3 million shares:
(cid:120) Tranche 1: 43.7 million shares issued in December 2020 raising $18.4 million. The raise was made
pursuant to the Company’s placement capacity under Listing Rule 7.1 and Listing Rule 7.1A; and
(cid:120) Tranche 2: 289.6 million shares were issued in February 2021 raising $121.6 million. The raise was subject
to shareholder approval under Listing Rules 7.1 and 10.11 which was granted in February 2021 at an
Extraordinary General Meeting of the Company.
On 11 January 2021 the Company released a Share Purchase Plan Offer (SPP) to its eligible shareholders at
$0.42 per share to raise up to $10 million. The SPP closed on 10 February 2021, applications for 4.5 million
shares were received and subsequently issued under the Plan raising a further $1.9 million.
Whilst the Group had cash on hand of $34,639,855 (2019: $37,505,067) at 31 December 2020 and currently
has cash on hand of $143,857,106 at 30 March 2021, its cash flow forecast for the year ending 31 December
2021 reflects that the Group will require additional funding over that period in order to meet the Group’s
forecast expenditure and complete the development and construction of the Woodlark Gold Project mine
and processing plant.
The Directors, however, have discretion regarding the level and timing of expenditure to be incurred on the
development and construction as a large component of the forecast expenditure is currently not yet
committed. The Directors believe that the equity component required to fund the development and
construction of the Woodlark Gold Project mine and processing plant has been completed via the $142
million share Placement and subsequent SPP.
As indicated above, the Group is currently negotiating an appropriate debt funding package with Sprott in
order to complete the total forecast funding for the Woodlark Gold Project.
The Directors have considered the funding and operational status of the business in arriving at their
assessment of going concern and believe that the going concern basis of preparation is appropriate based
on:
(cid:120) Having adequate cash on hand at 30 March 2021 to meet the forecast cash outlay for completion of the
Civil Works Program, being the first phase of the Woodlark Gold Project development and other
committed costs for the year ending 31 December 2021;
(cid:120) The Group’s ability to raise funds from external sources to meet ongoing development, exploration and
working capital requirements, as demonstrated by the capital raisings of $18.4 million during the year
ended 31 December 2020 and a further $123.5 million in February 2021;
(cid:120) The Group’s ability to manage the timing of cash flows to meet the committed obligations of the business
as and when they fall due;
61 | P a g e
58
2020 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Going Concern (continued)
(cid:120) The Directors are confident of being able to finalise the necessary debt funding from Sprott in order to
complete the development and construction of the Woodlark Gold project, the Directors do have the
flexibility to amend business plans, should global and market conditions not be conducive to raise the
necessary debt funding required to fully fund the development of the Woodlark Gold Project, taking into
account the cash on hand and the commitments as disclosed in Note 21 at 31 December 2020, and to
defer the Woodlark Gold Project development until market conditions improve.
New and amended Accounting Standards and Interpretations adopted during the year
The Group applied for the first-time certain standards and amendments, which are effective for annual
periods beginning on or after 1 January 2020. The Group has not early adopted any other standard,
interpretation or amendment that has been issued but is not yet effective. The details of the standards and
amendments adopted from 1 January 2020 are set out below.
AASB 2019-3 Amendments to Australian Accounting Standards (AASs) – Interest Rate Benchmark Reform
[Phase 1]
Interbank offered rates (IBOR) are benchmark interest rates referenced in financial products worldwide.
Examples include:
(cid:120) A loan that incurs interest quarterly at 3-month LIBOR plus a margin
(cid:120) An interest rate swap involving the exchange of fixed-rate monthly interest payments for variable interest
payments based on monthly BBSW plus a margin
Due to IBORs’ widespread usage, it has been observed that the market-wide reform of such interest rate
benchmarks, including its replacement with alternative benchmark rates, could have significant implications
on financial reporting. Addressing the financial reporting effects of IBOR reform comes in two phases.
The first phase deals with urgent issues affecting financial reporting before the replacement of existing
interest rate benchmarks. It introduces amendments to AASB 7 Financial Instruments: Disclosures, AASB 9
Financial Instruments and AASB 139 Financial Instruments: Recognition and Measurement, providing
mandatory temporary relief enabling hedge accounting to continue during the period of uncertainty before
existing interest rate benchmarks are replaced with alternative “nearly risk-free” benchmarks.
These amendments apply retrospectively. However, any hedge relationships that have previously been de-
designated cannot be reinstated, nor can any hedge relationships be designated with the benefit of hindsight.
AASB 2018-7 Amendments to AASs – Definition of Material
The amendments align the definition of ‘material’ across AASB 101 and AASB 108 Accounting Policies,
Changes in Accounting Estimates and Errors, and clarify certain aspects of the definition. The new definition
states that, ’Information is material if omitting, misstating or obscuring it could reasonably be expected to
influence decisions that the primary users of general purpose financial statements make on the basis of those
financial statements, which provide financial information about a specific reporting entity.’
The amendments clarify that materiality will depend on the nature or magnitude of information, or both. An
entity will need to assess whether the information, either individually or in combination with other
information, is material in the context of the financial statements. The amendments are applied
prospectively.
62 | P a g e
59
2020 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
New and amended Accounting Standards and Interpretations adopted during the year (continued)
AASB 2018-6 Amendments to AASs – Definition of a Business
The definition of a business helps entities to distinguish business combinations from asset purchases.
Business combinations are accounted for using the acquisition method, which, among other things, may give
rise to goodwill.
Accounting treatments for other types of transactions may also be affected, depending on whether the
transaction involves a business (e.g., A loss of control transaction where a retained interest is accounted for
using the equity method).
With the aim of helping companies determine whether an acquired set of activities and assets is a business,
the amendments to AASB 3 Business Combinations:
(cid:120) Clarify the minimum requirements for a business to exist
(cid:120) Remove the assessment of whether market participants are capable of replacing missing elements of a
business
(cid:120) Provide guidance to help entities assess whether an acquired process is substantive
(cid:120) Narrow the definitions of a business and of outputs
(cid:120)
Introduce an optional fair value concentration test to identify a business
These amendments are applied prospectively.
AASB 2019-1 Amendments to AASs – References to the Conceptual Framework
The Conceptual Framework for Financial Reporting (Conceptual Framework) describes the objective of, and
the concepts for, general purpose financial reporting. The purpose of the Conceptual Framework is to:
(cid:120) Assist in the development of accounting standards;
(cid:120) Help preparers develop consistent accounting policies where there is no applicable standard in place;
and
(cid:120) Assist all stakeholders to understand the standards better.
The Conceptual Framework is not a standard, and none of the concepts override those in any standard or any
requirements in a standard. The application of the Conceptual Framework is at present limited to for-profit
entities.
The revised Conceptual Framework includes: a new chapter on measurement; guidance on reporting financial
performance; improved definitions and guidance - in particular, the definitions of an asset and a liability; and
clarifications in important areas, such as the roles of stewardship, prudence and measurement uncertainty in
financial reporting.
Conceptual Framework for Financial Reporting issued on 29 March 2018
The Conceptual Framework is not a standard, and none of the concepts contained therein override the
concepts or requirements in any standard. The purpose of the Conceptual Framework is to assist the
International Accounting Standard Board (IASB) in developing standards, to help preparers develop consistent
accounting policies where there is no applicable standard in place and to assist all parties to understand and
interpret the standards. This will affect those entities which developed their accounting policies based on the
Conceptual Framework. The revised Conceptual Framework includes some new concepts, updated definitions
and recognition criteria for assets and liabilities and clarifies some important concepts. These amendments
had no impact on the consolidated financial statements of the Group.
63 | P a g e
60
2020 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
New and amended Accounting Standards and Interpretations issued but not yet effective
Australian Accounting Standards that have recently been issued or amended but are not yet effective and
have not been adopted by the Group for the annual reporting year ended 31 December 2020 are outlined
in the table below.
Reference
Title
Summary
COVID-19-
Related Rent
Concessions
AASB
2020-4
Amend-
ments to
AASs
Due to the COVID-19 pandemic, many lessors have
granted rent concessions to lessees that impact
lease payments. Rent concessions granted by a
including any
lessor can take many
combination of:
(cid:120) A rent payment holiday;
(cid:120) A reduction in lease payments for a period of
forms,
time;
Application date
of
standard
1
2020
June
for
Group
1 January
2021
to AASB 16
(cid:120) Other arrangements providing rent relief.
A concession might also include a change to the
lease term.
The amendment
is applied
retrospectively with the cumulative effect of initial
application recognised as an adjustment to the
opening balance of retained earnings or other
component of equity, as appropriate, at the
beginning of the annual reporting period in which
the lessee first applies the amendment. Earlier
application is permitted.
Similar relief was not provided to lessors for several
reasons, including the fact that AASB 16 did not
introduce significant changes to lessor accounting.
impact of the
The Group
amendments, however, the amendments are not
expected to have a material impact on the Group.
is assessing the
64 | P a g e
61
2020 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
New and amended Accounting Standards and Interpretations issued but not yet effective (continued)
Reference
Title
Summary
AASB 17 replaces AASB 4, AASB 1023 General
Insurance Contracts and AASB 1038 Life Insurance
Contracts for for-profit entities.
AASB 17 applies to all types of insurance contracts
(i.e., life, non-life, direct insurance and reinsurance),
regardless of the type of entity that issues them, as
well as to certain guarantees and
financial
instruments with discretionary participation
features.
The overall objective of AASB 17 is to provide an
accounting model for insurance contracts that is
more useful and consistent for insurers. In contrast
to the requirements in AASB 4, which are largely
based on grandfathering previous local accounting
policies, AASB 17 provides a comprehensive model
for
insurance contracts, covering all relevant
accounting aspects. The core of AASB 17 is the
general model, supplemented by:
• A specific adaptation for contracts with direct
participation features (the variable fee approach)
• A simplified approach (the premium allocation
approach) mainly for short-duration contracts
The Group is currently assessing the impact of the
amendments.
The AASB
issued amendments to AASB 101
Presentation of Financial Statements to clarify the
requirements for classifying liabilities as current or
non-current. The amendments clarify:
• What is meant by a right to defer settlement
• That a right to defer must exist at the end of the
reporting period
• That classification is unaffected by the likelihood
that an entity will exercise its deferral right
in a
• That only
convertible liability is itself an equity instrument
would the terms of a liability not impact its
classification. The amendments are effective for
annual reporting periods beginning on or after 1
January 2023 and must be applied retrospectively.
The Group is currently assessing the impact of the
amendments.
if an embedded derivative
AASB-17
Insurance
Contracts
AASB
2020-1
Amendments
to AASB 101 –
Classification
of Liabilities as
Current or
Non-current
62
Application date
of
standard
1 January
2023
for
Group
1 January
2023
1 January
2023
1 January
2023
65 | P a g e
2020 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
New and amended Accounting Standards and Interpretations issued but not yet effective (continued)
Reference
Title
Summary
AASB
2020-3
Amendments
to AASB 116 –
Property, Plant
and
Equipment:
Proceeds
before
Intended Use
AASB
2020-3
Amendment to
AASB 9 – Fees
in the ‘10 per
cent’ Test for
Derecognition
of Financial
Liabilities
Previously under AASB 116 Property, Plant and
Equipment, net proceeds from selling items produced
while constructing an item of property, plant and
equipment were to be deducted from the cost of the
asset. Due to interpretation issues, AASB 116 was
amended, the Standard now prohibits entities
deducting from the cost of an item of property, plant
and equipment, any proceeds from selling items
produced while bringing that asset to the location and
condition necessary for it to be capable of operating
in the manner intended by management. Instead, an
entity recognises the proceeds from selling such
items, and the costs of producing those items, in
profit or loss. The Group is assessing the impact of the
amendments, however, the amendments are not
expected to have a material impact on the Group.
Under AASB 9, an existing financial liability that has
been modified or exchanged
considered
extinguished when the contractual terms of the new
liability are substantially different, measured by the
“10 per cent” test. That is, when the present value of
the cash flows under the new terms, including any
fees paid or received, is at least 10 per cent different
from the present value of the remaining cash flows of
the original financial liability.
The amendment to AASB 9 clarifies that fees included
in the 10 per cent test are limited to fees paid or
received between the borrower and the lender,
including amounts paid or received by them on the
other’s behalf. When assessing the significance of
any difference between the new and old contractual
terms, only the changes in contractual cash flows
between the lender and borrower are relevant.
Consequently, fees incurred on the modification or
exchange of a financial liability paid to third parties
are excluded from the 10 per cent test. The Group is
currently assessing the impact of the amendments.
is
Application date
of
standard
1 January
2022
for Group
1 January
2022
1 January
2022
1 January
2022
66 | P a g e
63
2020 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
New and amended Accounting Standards and Interpretations issued but not yet effective (continued)
Application date
of
standard
1 January
2022
for
Group
1 January
2022
Reference
Title
Summary
AASB
2020-3
Amendments
to AASB 137 –
Onerous
Contracts –
Cost of
Fulfilling a
Contract
AASB 137 defines an onerous contract as a contract
in which the unavoidable costs of meeting the
obligations under the contract exceed the economic
it.
benefits expected to be received under
Unavoidable cost is the lower of the cost of fulfilling
the contract and any compensation or penalties
arising from failure to fulfil it
AASB 137 does not specify which costs to include in
determining the cost of fulfilling a contract.
Consequently, AASB 137 was amended to clarify
that when assessing whether a contract is onerous,
the cost of fulfilling the contract comprises all costs
that relate directly to the contract, which includes
both the incremental costs of fulfilling that contract
(e.g., materials and labour) and an allocation of
other costs that relate directly to fulfilling contracts
(e.g., depreciation of property, plant and
equipment). The amendments are not expected to
have a material impact on the Group.
67 | P a g e
64
2020 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Significant accounting policies
The following is a summary of the material accounting policies adopted by the Group in the preparation of
the financial report. The accounting policies have been consistently applied, unless otherwise stated.
(a) Cash and cash equivalents
Cash and short-term deposits in the consolidated statement of financial position comprise cash at bank
and on hand. Cash equivalents are short-term, highly liquid investments that are readily convertible to
known amounts of cash and which are subject to an insignificant risk of changes in value.
For the purposes of the consolidated statement of cash flows, cash and cash equivalents consist of cash
and cash equivalents as defined above.
(b) Share Capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares
or options are shown in equity as a deduction from the proceeds.
(c) Employee benefits
Wages, salaries and annual leave
Liabilities for wages and salaries, including non-monetary benefits, and annual leave expected to be
wholly settled within 12-months of the reporting date are recognised in provisions in respect of
employees’ services up to the reporting date. The liabilities are measured at the amounts expected to be
paid when they are settled. All other amounts are considered other long-term benefits for measurement
purposes and are measured at the present value of expected future payments to be made in respect to
services provided by employees.
Long service leave
The liability for long service leave is recognised in the provision for employee benefits and measured as
the present value of expected future payments to be made, in respect of services provided by employees
up to the reporting date using the projected unit credit method. Consideration is given to expected
future salary levels, experience of employee departures and periods of service. Expected future
payments are discounted using market yields at the reporting date on high quality corporate bonds with
terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.
Superannuation
The Group makes contributions on behalf of its employees to complying superannuation funds in
accordance with the rates outlined by the statutory regulations.
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2020 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(c) Employee benefits (continued)
Share-based payments
The fair value of options and rights granted to Directors and employees is recognised as a share-based
payments expense with a corresponding increase in equity. The fair value is measured at grant date and
recognised over the period during which the employees become unconditionally entitled to the options
or rights.
The fair value at grant date is determined by a combination of internal and external sources using a Black-
Scholes option pricing model and independent third party valuations that take into account the exercise
price, the term of the right or option, the impact of dilution, the share price at grant date and expected
price volatility of the underlying share, the expected dividend yield and the risk-free interest rate for the
term of the right or option.
The fair value of the options and rights granted is adjusted to reflect market vesting conditions, but
excludes the impact of any non-market vesting conditions (for example, profitability and sales growth
targets). Non-market vesting conditions are included in assumptions about the number of options and
rights that are expected to become exercisable. At each year end, the Company revises its estimate of
the number of options that are expected to become exercisable. The employee benefit expense
recognised each period takes into account the most recent estimate.
Upon the exercise of options or rights, the balance of the share-based payments reserve relating to those
options is transferred to a vested share-based payments reserve and the proceeds received, net of any
directly attributable transaction costs, are credited to share capital.
(d) Financial Instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial
liability or equity instrument of another entity.
Financial assets
Initial recognition and measurement
Financial assets are classified, at initial recognition, and subsequently measured at amortised cost, fair
value through other comprehensive income (OCI), or fair value through profit or loss (FVTPL).
The classification of financial assets at initial recognition that are debt instruments depends on the
financial asset’s contractual cash flow characteristics and the Group’s business model for managing them.
With the exception of trade receivables that do not contain a significant financing component or for
which the Group has applied the practical expedient, the Group initially measures a financial asset at its
fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs.
Trade receivables that do not contain a significant financing component or for which the Group has
applied the practical expedient for contracts that have a maturity of one year or less, are measured at
the transaction price determined under AASB 15.
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2020 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(d) Financial Instruments (continued)
Initial recognition and measurement (continued)
In order for a financial asset to be classified and measured at amortised cost or fair value through OCI, it
needs to give rise to cash flows that are ‘solely payments of principal and interest’ (SPPI) on the principal
amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument
level and have a business model of holding the financial asset and collecting contractual cash flows.
The Group’s business model for managing financial assets refers to how it manages its financial assets in
order to generate cash flows. The business model determines whether cash flows will result from
collecting contractual cash flows, selling the financial assets, or both.
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in four categories:
(cid:120)
(cid:120)
Financial assets at amortised cost (debt instruments);
Financial assets at fair value through OCI with recycling of cumulative gains and losses (debt
instruments);
Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses
upon derecognition (equity instruments); and
Financial assets at fair value through profit or loss.
(cid:120)
(cid:120)
Financial assets at amortised cost (debt instruments)
The Group measures financial assets at amortised cost if both of the following conditions are met:
(cid:120)
The financial asset is held within a business model with the objective to hold financial assets in order
to collect contractual cash flows; and
The contractual terms of the financial asset give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding.
(cid:120)
Financial assets at amortised cost are subsequently measured using the effective interest rate (EIR)
method and are subject to impairment. Interest received is recognised as part of finance income in the
statement of profit or loss and other comprehensive income. Gains and losses are recognised in profit or
loss when the asset is derecognised, modified or impaired.
Financial assets at fair value through profit or loss
Financial assets that do not meet the criteria for amortised cost are measured at fair value through profit
and loss.
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2020 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(d) Financial Instruments (continued)
Impairment of financial assets
The Group recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at
fair value through profit or loss. ECLs are based on the difference between the contractual cash flows
due in accordance with the contract and all the cash flows that the Group expects to receive, discounted
at an approximation of the original EIR. ECLs are recognised in two stages. For credit exposures for which
there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit
losses that result from default events that are possible within the next 12-months (a 12-month ECL). For
those credit exposures for which there has been a significant increase in credit risk since initial
recognition, a loss allowance is required for credit losses expected over the remaining life of the
exposure, irrespective of the timing of the default (a lifetime ECL).
For trade receivables and contract assets, the Group applies a simplified approach in calculating ECLs. In
this regard, the Group recognises a loss allowance based on the financial asset’s lifetime ECL at each
reporting date. The Group has assessed the risk from a provision matrix that is based on the Group’s
historic credit loss experience, adjusted for factors that are specific to the debtor, general economic
conditions and an assessment of both the current as well as forecast conditions at the reporting date.
For all other financial assets measured at amortised cost, the Group recognises lifetime ECLs when there
has been a significant increase in credit risk since initial recognition. If the credit risk on the financial
instrument has not increased significantly since initial recognition, the Group measures the loss
allowance for that financial instrument at an amount equal to a 12-month ECL. The determination of the
ECL includes both quantitative and qualitative information and analysis, based on the Group’s historical
experience and forward-looking information.
The Group considers an event of default has occurred when a financial asset is more than 90 days past
due or external sources indicate that the debtor is unlikely to pay its creditors, including the Group. A
financial asset is credit impaired when there is evidence that the counterparty is in significant financial
difficulty or a breach of contract, such as a default or past due event has occurred. The Group writes off
a financial asset when there is information indicating the counterparty is in severe financial difficulty and
there is no realistic prospect of recovery.
Financial liabilities
Initial recognition and measurement
Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at
amortised cost using the effective interest method.
No gain or loss is recognised in profit or loss upon conversion or expiration of the conversion option.
Transaction costs that relate to the issue of the convertible notes are allocated to the liability and equity
components in proportion to the allocation of the gross proceeds. Transaction costs relating to the equity
component are recognised directly in equity. Transaction costs relating to the liability component are
included in the carrying amount of the liability component and are amortised over the lives of the
convertible notes using the effective interest method.
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2020 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(d) Financial Instruments (continued)
Initial recognition and measurement (continued)
The conversion option classified as equity is determined by deducting the amount of the liability
component from the fair value of the compound instrument as a whole. This is recognised and included
in equity, net of income tax effects, and is not subsequently remeasured. In addition, the conversion
option classified as equity will remain in equity until the conversion option is exercised, in which case,
the balance recognised in equity will be transferred to issued capital. Where the conversion option
remains unexercised at the maturity date of the convertible note, the balance recognised in equity will
be transferred to accumulated losses within equity.
(e) Foreign currency transactions and balances
Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the
currency of the primary economic environment in which the entity operates (‘the functional currency’).
The consolidated financial statements are presented in Australian dollars, which is Geopacific’s functional
and presentation currency.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates
prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at year-end exchange rates of monetary assets
and liabilities denominated in foreign currencies are recognised in the consolidated statement of profit
or loss and other comprehensive income.
Group companies
The financial results and position of foreign operations, whose functional currency is different from the
Group’s presentation currency, are translated as follows:
(cid:120) assets and liabilities are translated at year-end exchange rates prevailing at reporting date; and
(cid:120)
income and expenses are translated at average exchange rates for the period.
Exchange differences arising on translation of foreign operations are recognized in other comprehensive
income. On disposal of a foreign operation, the component of other comprehensive income relating to
that particular foreign operation is reclassified to profit or loss in the period.
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2020 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(f) Goods and Services Tax (GST) and Value Added Tax (VAT)
Revenues, expenses and assets are recognised net of the amount of associated GST or VAT, unless the
GST or VAT incurred is not recoverable from the taxation authority. In this case, the GST or VAT is
recognised as part of the cost of acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST or VAT receivable or payable. The
net amount of GST or VAT recoverable from, or payable to, the taxation authority is included with other
receivables or payables in the consolidated statement of financial position.
Cash flows are presented on a gross basis. The GST or VAT components of cash flows arising from
investing or financing activities which are recoverable from, or payable to the taxation authority, are
presented as operating cash flows.
(g) Impairment of non-financial assets
Non-financial assets are reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by
which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher
of an asset’s fair value less costs of disposal and value in use. For the purposes of assessing impairment,
assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are
largely independent of the cash inflows from other assets or groups of assets (cash-generating units).
Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal
of the impairment at each reporting date.
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2020 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(h) Income tax
The income tax expense or revenue for the year is the tax payable on the current year’s taxable income
based on the national income tax rate adjusted by changes in deferred tax assets and liabilities
attributable to temporary differences between the tax bases of assets and liabilities and their carrying
amounts in the financial statements, and to unused tax losses.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to
apply when the assets are recovered or liabilities are settled, based on the laws that have been enacted
or substantively enacted by the reporting date. The relevant tax rates are applied to the cumulative
amounts of deductible and taxable temporary differences to measure the deferred tax asset or liability.
An exception is made for certain temporary differences arising from the initial recognition of an asset or
a liability. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset
current tax assets and liabilities, and they relate to income taxes levied by the same tax authority on the
same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets
on a net basis or their tax assets and liabilities will be realised simultaneously.
No deferred tax asset or liability is recognised in relation to temporary differences if they arose in a
transaction, other than a business combination, that at the time of the transaction did not affect either
accounting profit or taxable profit or loss.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying
amount and tax bases of investments in controlled entities where the Company is able to control the
timing of the reversal of the temporary differences and it is probable that the differences will not reverse
in the foreseeable future.
A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences
to the extent that it is probable that future taxable profits will be available against which they can be
utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is
no longer probable that the related tax benefit will be realised.
Current and deferred tax balances attributable to amounts recognised directly in equity are also
recognised directly in equity.
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2020 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(i) Loss per share
Basic loss per share
Basic loss per share is calculated by dividing the result attributable to equity holders of the Company,
excluding any costs of servicing equity other than ordinary shares, by the weighted average number of
ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares
issued during the year.
Diluted loss per share
Diluted loss per share adjusts the figures used in the determination of basic loss per share to take into
account the after tax effect of interest and other financing costs associated with dilutive potential
ordinary shares and the weighted average number of shares assumed to have been issued for no
consideration in relation to dilutive potential ordinary shares.
(j) Mineral Tenements and Deferred Mineral Exploration Expenditure
Exploration and evaluation expenditure is carried forward as an asset when rights to tenure are current
and:
(cid:120)
such costs are expected to be recouped through the successful development and exploitation of the
area of interest, or by its sale; or
(cid:120) exploration activities in the area of interest have not reached a stage which permits a reasonable
assessment of the existence or otherwise of economically recoverable reserves and active or
significant operations in, or in relation to, the area of interest are continuing.
In the event that an area of interest is abandoned or if the Directors consider the expenditure to be of
reduced value, accumulated costs carried forward are written off or impaired in the year in which that
assessment is made. A regular review is undertaken of each area of interest to determine the
appropriateness of continuing to carry forward costs in relation to that area of interest.
Immediate restoration, rehabilitation and environmental costs necessitated by exploration and
evaluation activities are treated as exploration and evaluation expenditure. Exploration activities
resulting in future obligations in respect of restoration costs result in a provision to be made by
capitalising the estimated costs, on a discounted basis, of restoration. The unwinding of the effect of the
discounting on the provision is recorded as a finance cost in the statement of profit or loss.
When a decision is made to proceed with development in a particular area of interest, the relevant
exploration and evaluation asset is tested for impairment and the balance is then transferred to mine
properties under development.
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2020 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(k) Mine properties under development
Once technical feasibility and commercial viability of extraction of mineral resources in a particular area
of interest becomes demonstrable, the exploration and evaluation assets attributable to that area of
interest are reclassified as mine properties under development.
Mine properties under development represent the direct and indirect costs incurred in preparing mines
for production and includes site upgrades, clearing, stripping and waste removal costs incurred before
production commences. These costs also include borrowing costs incurred during the development
stage. These costs are capitalised to the extent that they are expected to be recouped through the
successful exploitation of the related mining leases. Once production commences, these costs will be
amortised using the units of production method based on the estimated economically recoverable
reserves to which they relate or are written off if the mine property is abandoned.
Mine properties under development are assessed for impairment if an impairment trigger is identified.
For the purposes of impairment testing capitalised mine properties are allocated to the cash generating
unit (CGU) to which the properties relate.
(l) Plant and equipment
Plant and equipment is stated at historical cost less accumulated depreciation and any accumulated
impairment losses. Historical cost includes expenditure that is directly attributable to the acquisition of
the items.
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 Group and the cost of the item can be measured reliably. All other repairs and maintenance are
charged to the consolidated statement of profit or loss and other comprehensive income during the
financial year in which they are incurred.
Depreciation on assets is calculated using the straight-line or diminishing value method to allocate their
cost, net of their residual values, over their estimated useful lives, as follows:
(cid:120) Plant and equipment
(cid:120) Computer software
(cid:120) Furniture and fittings
5% - 50%
25% - 100%
4% - 15%
The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted
prospectively if appropriate, at each reporting date.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying
amount is greater than its estimated recoverable amount.
An item of plant and equipment is derecognised upon disposal or when no further future economic
benefits are expected to arise from the continued use of the asset.
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2020 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(l) Plant and equipment (continued)
Any gains or loss on derecognition of an asset (calculated as the difference between the net disposal
proceeds and the carrying amount of the asset) are included in the consolidated statement of profit or
loss and other comprehensive income in the period the item is derecognised.
(m) Inventory
Inventories are valued at the lower of cost and net realisable value. Cost is determined on a first-in-first
out (FIFO) basis. Any provision for obsolescence or damage is determined by reference to specific stock
items identified. The carrying value of obsolete or damaged items is written down to net realisable value.
(n) Principles of consolidation
The consolidated financial statements comprise the financial statements of Geopacific and its controlled
entities, referred to collectively throughout these financial statements as the “Group”. Controlled
entities are consolidated from the date on which control commences until the date that control ceases.
Control is achieved when the Group is exposed, or has rights to, variable returns from its involvement
with the investee and has the ability to affect those returns through its power over the investee.
Specifically, the Group controls an investee if, and only if, the Group has:
(cid:120) Power over the investee (i.e. existing rights that give it the current ability to direct the relevant
activities of the investee);
(cid:120) Exposure, or rights, to variable returns from its involvement with the investee; and
(cid:120) The ability to use its power over the investee to affect its returns.
Generally, there is a presumption that a majority of voting rights results in control. To support this
presumption and when the Group has less than a majority of the voting or similar rights of an investee,
the Group considers all relevant facts and circumstances in assessing whether it has power over an
investee, including:
(cid:120) The contractual arrangement(s) with the other vote holders of the investee;
(cid:120) Rights arising from other contractual arrangements; and
(cid:120) The Group’s voting rights and potential voting rights.
The Group reassesses whether or not it controls an investee if facts and circumstances indicate that there
are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when
the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary.
Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are
included in the consolidated financial statements from the date the Group gains control until the date
the Group ceases to control the subsidiary.
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2020 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(n) Principles of consolidation (continued)
The financial statements of the controlled entities are prepared for the same reporting period as the
parent company using consistent accounting policies. Adjustments are made to bring into line any
dissimilar accounting policies that may exist.
The balances and effects of transactions between controlled entities included in the consolidated
financial statements have been fully eliminated.
Non-controlling interest
Non-controlling interests are allocated their share of net profit or loss after tax in the consolidated
statement of profit or loss and other comprehensive income and are presented within equity in the
consolidated statement of financial position, separately from the equity of the owners of the parent.
Losses are attributed to the non-controlling interests even if that results in a deficit balance. When
necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting
policies in line with the Group’s accounting policies. All intra-group assets and liabilities, equity, income,
expenses and cash flows relating to transactions between members of the Group are eliminated in full
on consolidation. A change in the ownership interest of a subsidiary, without a loss of control, is
accounted for as an equity transaction.
(o) Lease liability
At the commencement date of the lease, the Group recognises lease liabilities measured at the present
value of lease payments to be made over the lease term. The lease payments include fixed payments
(including in-substance fixed payments) less any lease incentives receivable, variable lease payments that
depend on an index or a rate and amounts expected to be paid under residual value guarantees. The
variable lease payments that do not depend on an index or a rate are recognised as expense in the period
on which the event or condition that triggers the payment occurs.
In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the
lease commencement date if the interest rate implicit in the lease is not readily determinable. After the
commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and
reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured
if there is a modification, a change in the lease term or a change in the in-substance fixed lease payments.
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2020 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(o) Lease liability (continued)
Short-term leases and leases of low-value assets
The Group applies the short-term and lease of low-value assets recognition exemptions to leases that
are considered short-term or of low value (i.e. those leases that have a lease term of less than 12 months
or where the value of the leased asset when new is below $10,000). Lease payments on short-term leases
and leases of low-value assets are expensed over the lease term.
Right-of-use asset
The Group recognises right-of-use assets at the commencement date of the lease (i.e. the date the
underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated
depreciation and impairment losses, and adjusted for any re-measurement of lease liabilities. The cost
of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred and
lease payments made at or before the commencement date less any lease incentives received. Unless
the Group is reasonably certain to obtain ownership of the leased asset at the end of the lease term, the
recognised assets are depreciated on a straight-line basis over the shorter of its estimated useful life and
lease term. Right-of-use assets are assessed for impairment.
(p) Interest income
Interest income is recognised as the interest accrues using the effective interest method.
(q) Comparative figures
When required by Accounting Standards or in order to enhance comparability, comparative figures have
been adjusted to conform to changes in presentation for the current financial year.
(r) Provisions
Provisions are recognised when the Group has legal or constructive obligation, as a result of past events,
for which it is probable that an outflow of economic benefits will result and that outflow can be reliably
measured.
Provisions are measured using the best estimate of the amounts required to settle the obligation at the
end of the reporting period.
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2020 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(s) Business combinations
The acquisition method of accounting is used to account for all business combinations regardless of
whether equity instruments or other assets are acquired. The consideration transferred for the
acquisition of a subsidiary comprises the fair values of the assets transferred, the liabilities incurred and
the equity interests issued by the Group. The consideration transferred also includes the fair value of any
asset or liability resulting from a contingent consideration arrangement and the fair value of any pre-
existing equity interest in the subsidiary. Acquisition related costs are expensed as incurred. Identifiable
assets acquired and liabilities and contingent liabilities assumed in a business combination are, with
limited exceptions, measured initially at their fair values at the acquisition date. On an acquisition by
acquisition basis, the Group recognises any non-controlling interest in the acquiree either at fair value or
at the non-controlling interest's proportionate share of the acquiree’s net identifiable assets.
The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree
over the fair value of the net identifiable assets acquired is recorded as goodwill. If those amounts are
less than the fair value of the net identifiable assets of the subsidiary acquired and the measurement of
all amounts has been reviewed, the difference is recognised directly in profit or loss as a bargain
purchase.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are
discounted to their present value as at the date of exchange. The discount rate used is the entity's
incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an
independent financier under comparable terms and conditions.
Contingent consideration is classified either as equity or a financial liability. Amounts classified as a
financial liability are subsequently remeasured to fair value with changes in fair value recognised in
statement of profit or loss.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
2
FINANCIAL RISK MANAGEMENT
The Group has exposure to a variety of risks arising from its use of financial instruments. This note presents
information about the Group’s exposure to the specific risks, and the policies and processes for measuring
and managing those risks. Further quantitative disclosures are included throughout this financial report. The
Board of Directors have the overall responsibility for the risk management framework.
(a) Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument
fails to meet its contractual obligations, and arises principally from transactions with customers and
investments.
The carrying amount of financial assets included in the consolidated statement of financial position
represents the Group’s maximum exposure to credit risk in relation to those assets. The Group does not
hold any credit derivatives to offset its credit exposure.
The Group trades only with recognised, credit worthy third parties and as such collateral is not requested
nor is it the Group’s policy to securitise its trade and other receivables. Receivable balances are
monitored on an ongoing basis with the result that the Group does not have a significant exposure to
bad debts. The Group has the following concentrations of credit risk:
Receivables
The Group has no listed investments and the current nature of the business activity does not result in
trading receivables. The receivables are through the normal course of business. Non-current receivables
are expected to be recovered by the Group notwithstanding extended timing of receipt. The risk of non-
recovery of receivables from this source is considered to be negligible.
Cash deposits
The Group’s primary banker is the ANZ Banking Group. The Moody’s credit rating of ANZ Banking Group
is A1.
(b) Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due.
The Group’s approach to managing liquidity is to ensure, as far as possible, that it has sufficient liquidity
to meet its liabilities when due, under both normal and stressed conditions, without incurring
unacceptable losses or risking damage to the Group’s reputation.
The Group manages its liquidity risk by monitoring its cash reserves and forecast spending. Management
is cognisant of the future demands for resources to finance the Group’s current and future operations,
and consideration is given to the liquid assets available to the Group before commitment is made for
future expenditure or investment.
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2020 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
2
FINANCIAL RISK MANAGEMENT (CONTINUED)
(b) Liquidity risk (continued)
The following table reflects the liquidity risk arising from the financial liabilities held by the Group at
balance date. The contractual maturity reflects undiscounted gross amounts:
Consolidated
2020
Carrying
amount
$
Contractual
cash flows
$
6 months
or less
$
6-12
months
$
1-5 years
$
Financial Liabilities - Due for Payment
Trade and other payables
Lease liability
Total expected outflows
6,128,458
716,872
6,845,330
6,128,458
867,615
6,996,073
6,128,458
124,500
6,252,958
-
106,888
106,888
-
636,227
636,227
Consolidated
2019
Carrying
amount
$
Contractual
cash flows
$
6 months
or less
$
6-12
months
$
1-5 years
$
Financial Liabilities - Due for Payment
Trade and other payables
Lease liability
Total expected outflows
9,685,418
82,111
10,911,920
92,142
9,767,529 11,004,062
5,871,024
55,285
5,926,309
1,120,199
36,857
1,157,056
3,920,697
-
3,920,697
At 31 December 2020, the Group had no interest-bearing liabilities (2019: nil).
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2020 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
2
FINANCIAL RISK MANAGEMENT (CONTINUED)
(c) Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and
equity prices will affect the Group’s income or the value of its holdings of financial instruments. The
objective of market risk management is to manage and control market risk exposures within acceptable
parameters, while optimising any return.
Foreign exchange risk
The Group operates in Australia and Papua New Guinea and is exposed to foreign exchange risks arising
from the fluctuation of the exchange rates of the Australian dollar, United States dollar and the Papua
New Guinean Kina. The Group has no further material foreign currency dealings other than the above.
Foreign exchange risk arises when future commercial transactions and recognised assets and liabilities
are denominated in a currency that is not the functional currency of the Group entity in question. The
Group does not have a formal foreign currency risk management policy however, it monitors its foreign
currency expenditure in light of exchange rate movements.
Foreign currency sensitivity
The following table demonstrates the sensitivity to a reasonably possible change in the United States
Dollar and Australian Dollar exchange rates, with all other variables held constant. The impact on the
Group’s pre-tax equity is due to changes in the fair value of monetary assets and liabilities. The Group’s
exposure to foreign currency changes for all other currencies is not material.
Profit and Loss
Equity
500bp
increase
$
500bp
decrease
$
500bp
increase
$
500bp
decrease
$
-
-
-
-
-
-
-
-
(3,324)
(267)
3,324
267
3,501
609,525
(3,501)
(609,525)
2020 - AUD foreign currency sensitivity
2019 - AUD foreign currency sensitivity
2020 - USD foreign currency sensitivity
2019 - USD foreign currency sensitivity
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market interest rates. The Group’s exposure to the risk of changes in market
interest rates relates primarily to the Group’s cash and cash equivalents.
The Group’s income and operating cash flows are not materially exposed to changes in market interest
rates. The assets are cash and cash equivalents and other short-term interest-bearing deposits. No
financial instruments have been used to mitigate risk.
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2020 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
2
FINANCIAL RISK MANAGEMENT (CONTINUED)
(c) Market risk (continued)
Interest rate risk (continued)
The interest profile of the Group’s interest-bearing financial instruments at the reporting date are
outlined in the table below:
Variable rate instruments:
Cash and cash equivalents
Total
Consolidated
2020
$
2019
$
34,639,855
34,639,855
37,505,067
37,505,067
The following table demonstrates the sensitivity to a reasonably possible change in interest rates on the
cash and cash equivalent holdings at the reporting date. The analysis assumes that all other variables
remain constant.
Profit and Loss
Equity
100bp
increase
$
100bp
decrease
$
100bp
increase
$
100bp
decrease
$
2020 - Variable rate instruments
2019 - Variable rate instruments
346,399
375,051
(346,399)
(375,051)
346,399
375,051
(346,399)
(375,051)
(d) Capital management
The Board’s policy is to maintain a sound capital base, defined as equity, so as to maintain investor,
creditor and market confidence and to sustain future development of the business. The Board of
Directors monitors capital expenditure and cash flows as mentioned in (b) above.
The objective when managing capital is to safeguard the Group’s ability to continue as a going concern,
so as to maintain a strong capital base sufficient to continue the development and exploration of its
projects. In order to maintain or adjust the capital structure, the Group may return capital to
shareholders, issue new shares or sell assets. The Group’s focus has been to raise sufficient funds through
equity to fund development and exploration activities.
There were no changes in the Group’s approach to capital management during the year. Risk
management policies and procedures are established with regular monitoring and reporting. Neither the
Company nor any of its controlled entities are subject to externally imposed capital requirements.
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2020 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
2
FINANCIAL RISK MANAGEMENT (CONTINUED)
(e) Impairment Losses
During the 2020 reporting period $14,670 was written off in relation to the Group’s financial assets (2019:
$75,473).
(f) Fair values versus carrying amounts
The carrying amounts of financial assets and liabilities as described in the consolidated statement of
financial position represent their estimated net fair value.
3
CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS
Estimates and judgments are continually evaluated and are based on historical experience and other factors
including expectations of future events that may have a financial impact on the Group and that are believed
to be reasonable under the circumstances. The Group makes estimates and assumptions concerning the
future. The resulting accounting estimates will, by definition, seldom equal the related actual results.
Key judgments
Exploration and evaluation expenditure
The Group’s policy in relation to the accounting for exploration and evaluation expenditure is stated in Note
1(j). There is judgment involved in determining the treatment of exploration and evaluation expenditure,
including, determining whether it should be carried forward as capitalised exploration, transferred to mine
properties under development, or written off to the consolidated statement of profit or loss and
comprehensive income.
The Board and management give due consideration to the areas of interest relating to the exploration and
evaluation expenditure on a regular basis and are confident that decisions to either transfer, write off or
carry forward such expenditure fairly reflects the prevailing situation. In the year ended 31 December 2020,
no previously capitalised exploration and evaluation expenditure was transferred to mine properties under
development (2019: $30,461,193); $5,710,134 of previously capitalised exploration and evaluation
expenditure related to the Kou Sa project was derecognised in the year ended 31 December 2020 (2019: nil),
see Note 6.
Mine properties under development
The Group’s policy in relation to the accounting for mine properties under development is stated in Note
1(k). There is judgment involved in determining the treatment of mine properties under development,
including, determining whether it should be carried forward as capitalised mine properties under
development, transferred to property, plant and equipment, transferred to exploration and evaluation
expenditure or written off to the consolidated statement of profit or loss and comprehensive income.
The Board and management give due consideration to the areas of interest relating to mine properties under
development on a regular basis and are confident that decisions to either transfer, write off or carry forward
such expenditure fairly reflects the prevailing situation. In the year ended 31 December 2020 no mine
properties under development has been transferred or written off (2019: nil).
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2020 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
3
CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS (CONTINUED)
Key judgments (continued)
Leases - Estimating the incremental borrowing rate
The Group cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental
borrowing rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Group would have to
pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a
similar value to the right-of-use asset in a similar economic environment. The IBR therefore reflects what the
Group ‘would have to pay’, which requires estimation when no observable rates are available (such as for
subsidiaries that do not enter into financing transactions) or when they need to be adjusted to reflect the
terms and conditions of the lease (for example, when leases are not in the subsidiary’s functional currency).
The Group estimates the IBR using observable inputs (such as market interest rates) when available and is
required to make certain entity-specific estimates (such as the subsidiary’s stand-alone credit rating). The
weighted average incremental borrowing rate applied to the leases is 8% (2019: 8%).
Kou Sa Project
In January 2015 a Group subsidiary, Royal Australia Resources Ltd, entered into an agreement to acquire
100% of the issued capital of Golden Resource Development Co Ltd (the Kou Sa Project) for US$14 million,
US$7.7 million of this amount was paid as required under the agreement. Through an amendment to the
original agreement a revised payment schedule for the remaining US$6.3 million was agreed, these payments
were dependent upon the completion of certain milestones in regard to the project, with the first payment
to be completed no later than 21 September 2019. The Group continued to progress the Kou Sa Project
throughout 2019 and 2020, while further negotiations were conducted with the intention to further
restructure and defer the remaining consideration payments. No mutually satisfactory resolution could be
agreed and a termination notice was subsequently received from the vendors in December 2020. On receipt
of the termination notice, management concluded that it no longer controlled the Kou Sa Project assets and
they were, therefore, derecognised. On that basis, the related deferred consideration payable was also
treated as extinguished on receipt of the termination notice.
Key Estimates
Share based payments
The Group measures the cost of equity-settled transactions by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value is determined by a combination of internal
and external sources using a Black-Scholes option pricing model and independent third party valuations.
Refer Note 25 for details of estimates and assumptions used.
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2020 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
4
PARENT COMPANY INFORMATION
The following information has been extracted from the books and records of the parent entity, Geopacific,
and has been prepared in accordance with Accounting Standards.
STATEMENT OF FINANCIAL POSITION
Assets
Current assets
Non-current assets
Total Assets
Liabilities
Current liabilities
Non-current liabilities
Total Liabilities
Equity
Issued capital
Reserves
Accumulated losses
Total Equity
STATEMENT OF COMPREHENSIVE INCOME
Total loss
TOTAL COMPREHENSIVE LOSS
Guarantees
Parent
2020
$
2019
$
33,987,184
47,127,481
81,114,665
37,158,663
33,939,118
71,097,781
2,085,435
528,272
2,613,707
591,501
27,905
619,406
165,801,105
1,825,415
(89,125,562)
78,500,958
149,029,347
705,133
(79,256,105)
70,478,375
(9,869,457)
(9,869,457)
(8,052,188)
(8,052,188)
Geopacific has not entered into any guarantees, in relation to the debts of its subsidiaries (2019: nil).
The Company has term deposits of $250,000 (2019: $132,000) over the lease of its office premises and credit
card facilities. This has been classified as trade and other receivables in current assets.
Contingent liabilities
At 31 December 2020, Geopacific had no contingent liabilities (2019: nil).
Contractual commitments
At 31 December 2020, Geopacific had not entered into any contractual commitments for the acquisition of
property, plant and equipment (2019: nil).
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2020 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
5
FINANCE INCOME
Government incentives
Other income
Interest income – financial institutions
Total finance income
6
GAIN ON DERECOGNITION OF KOU SA PROJECT
Kou Sa Project
Exploration & evaluation asset derecognised (Note 12)
Deferred consideration liability (Note 16)
Payables derecognised
Payables recognised
Total
Consolidated
2020
$
2019
$
100,000
14,537
167,886
282,423
61,231
-
32,519
93,750
Consolidated
2020
$
2019
$
(5,710,134)
7,799,975
404,828
(609,835)
1,884,834
-
-
-
-
-
In January 2015, the Company’s subsidiary, Royal Australia Resources Ltd, entered into an agreement to
acquire 100% of the issued capital of Golden Resource Development Co Ltd (the Kou Sa Project) for US$14
million. US$7.7 million of the acquisition price was paid as required under the agreement.
An amendment to the original agreement was executed in September 2016 which revised the acquisition
payment schedule for the remaining US$6.3 million. The amendment resulted in the remaining acquisition
payments being due for payment as follows:
(cid:120) US$1.575 million due at completion of a bankable feasibility study for the Kou Sa Project, or by 21
September 2019, whichever is earlier; and
(cid:120) US$4.725 million to be paid in equal instalments over three years following payment of the above
US$1.575 million.
The Group have been in negotiation with the vendors of the Kou Sa Project during 2019 and 2020 to
restructure the deferred consideration payments. No mutually satisfactory resolution could be agreed and a
termination notice was subsequently received from the vendors in December 2020. On receipt of the
termination notice, management concluded that it no longer controlled the Kou Sa project assets and they
were, therefore derecognised. On that basis, the related deferred consideration payable was also treated as
extinguished.
As a result, the Group has reflected the derecognition of the Kou Sa project assets and related deferred
consideration liability in the reporting period ended 31 December 2020 which resulted in a gain on
derecognition of $1,884,834 as detailed above. This gain included recognising a final settlement of US$0.5
million payable to the vendors under the termination provisions of the original agreement to acquire the Kou
Sa project.
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2020 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
7
INCOME TAX
(a)
The components of the income tax benefit comprise:
Current tax
Deferred tax
Total tax benefit
(b)
Reconciliation of income tax to prima facie tax benefit:
Consolidated
2020
$
2019
$
-
-
-
-
-
-
Consolidated
2020
$
2019
$
Net loss before tax
(4,567,311)
(7,337,714)
Prima facie tax benefit at 30% (2019: 30%)
(1,370,193)
(2,201,314)
Adjusted for the tax effect of:
Non-deductible share based payments
Other non-deductible expenses
Derecognition of Kou Sa Project
Tax losses not recognised
Total tax benefit
336,085
(1,355,099)
(565,450)
2,954,657
-
412,236
637,565
-
1,151,513
-
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2020 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
7
INCOME TAX (CONTINUED)
(c)
Deferred tax:
Deferred tax assets:
Provisions
Tax losses
Total before offset
Offset by deferred tax liabilities
Total deferred tax assets after offset
Deferred tax liabilities:
Exploration and evaluation expenditure
Mine properties under development
Total before offset
Offset by deferred tax assets
Total deferred tax liabilities after offset
(d)
Deferred tax assets not recognised:
Deferred tax assets not recognised
Tax losses not brought to account
Provisions
Business related costs
Total deferred tax assets not recognised
Consolidated
2020
$
2019
$
45,082
11,891,298
11,936,380
(11,936,380)
-
53,788
9,788,094
9,841,882
(9,841,882)
-
553,402
11,382,978
11,936,380
(11,936,380)
-
600,833
9,241,049
9,841,882
(9,841,882)
-
Consolidated
2020
$
2019
$
53,198,157
48,592
225,287
53,472,036
55,194,328
28,048
193,990
55,416,366
Movement of tax losses not brought to account
Tax losses not brought to account - beginning of the year
Tax losses not recognised
Under/(over)
Foreign exchange fluctuation
Tax losses – end of the year
Tax losses - recognised to the extent of the deferred tax liability
Tax losses not brought to account – end of the year
55,194,328
2,954,657
456,941
(5,407,769)
53,198,157
(11,891,298)
41,306,859
44,149,379
1,151,512
9,588,905
304,532
55,194,328
(9,788,094)
45,406,234
Deferred tax assets relating to tax losses have only been recognised in Papua New Guinea to the extent of
the deferred tax liability balance.
The deferred tax assets relating to the remainder of the Group have not been recognised in the current
reporting period as the Directors do not believe the realisation is probable at this point in time.
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2020 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
8
CASH AND CASH EQUIVALENTS
Current
Cash at bank
Total cash and cash equivalents
9
RECEIVABLES
Current
Security deposits
Sundry debtors
GST receivable
Total current trade and other receivables
Non-current
Security deposits
Sundry debtors
GST receivable
Total non-current trade and other receivables
Consolidated
2020
$
2019
$
34,639,855
34,639,855
37,505,067
37,505,067
Consolidated
2020
$
2019
$
250,000
18,418
124,356
392,774
9,816
35,821
1,001,334
1,046,971
264,532
40,930
382,255
687,717
-
-
-
-
Write down
During the reporting period a write down of $14,670 was recorded in respect of the security deposits (2019:
$75,473 in respect of the loan receivable).
10
PREPAYMENTS
Current
Community relocation materials
Total Prepayments
Consolidated
2020
$
2019
$
1,384,099
1,384,099
1,027,731
1,027,731
Prepayments relate to a 30% upfront payment to the relocation contractor for the procurement of materials
associated with the Communities Relocation Program. The prepayment is unwound when the underlying
materials have been delivered.
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2020 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
11
INVENTORY
Current
Consumables
Kitchen stocks
Cleaning stocks
Medical stocks
Protective clothing
Total
Consolidated
2020
$
2019
$
362,524
45,182
13,478
6,549
16,436
444,169
295,401
30,096
6,641
5,583
1,871
339,592
Write down
During the year ended 31 December 2020, consumables were identified which had expired or were damaged
and as such had no net realisable value. The full amount of $5,779 (2019: $30,822) was written off from
inventory and recorded in the consolidated statement of profit or loss.
12
EXPLORATION AND EVALUATION ASSETS
Consolidated
2020
$
2019
$
Non-current
1,844,673
8,262,803
Movement during the year
Carrying value - beginning of the year
Additions
Derecognition of Kou Sa Project(i)
Transfers to mine properties under development (Note 13)
Foreign exchange fluctuation
Carrying value - end of the year
(i) The Company derecognised the Kou Sa Project. See Note 6 for further information
8,262,803
65,098
(5,710,134)
-
(773,094)
1,844,673
37,494,025
442,022
-
(30,461,193)
787,949
8,262,803
Impairment
At 31 December 2020, the Group conducted an assessment to determine whether there were any indicators
of impairment in relation to the carrying value of its capitalised exploration and evaluation expenditure. No
indicators of impairment were present and therefore the Group did not impair any previously capitalised
expenditure (2019: nil).
Costs not directly relating to the advancement of the Group’s exploration projects were expensed as
exploration expenditure in the consolidated statement of profit or loss and other comprehensive income.
For the 2020 reporting period this amounted to $208,345 (2019: $1,501,751).
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2020 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
13
MINE PROPERTIES UNDER DEVELOPMENT
Consolidated
2020
$
2019
$
Non-current
37,975,609
30,803,497
Movement during the year
Carrying value - beginning of the year
Transfers from exploration and evaluation (Note 12)
Transfers from property, plant and equipment (Note 14)
Additions
Foreign exchange fluctuation
Carrying value - end of the year
30,803,497
-
184,592
11,697,347
(4,709,827)
37,975,609
-
30,461,193
60,855
860,265
(578,816)
30,803,497
Impairment
At 31 December 2020, the Group conducted an assessment to determine whether there were any indicators
of impairment in relation to the carrying value of its mine properties. No indicators of impairment were
present, therefore the Group did not impair any capitalised mine properties under development (2019: nil).
Transfer from exploration and evaluation expenditure
In October 2019, the Group raised over $40 million via share a Placement and Share Purchase Plan to advance
the Woodlark Gold Project and development activities. Management formed the view that completing the
Placement and commencing development activities was sufficient to demonstrate the technical feasibility and
commercial viability of the Woodlark Gold Project. As a result, the capitalised exploration and evaluation
expenditure associated with the projects mining licence was reclassified to mine properties under
development.
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2020 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
14
PROPERTY, PLANT AND EQUIPMENT
2020
Consolidated
Right-of-
use asset
$
Work under
construction
$
Plant &
Equipment
$
Computer
Software
$
Furniture
& Fittings
$
Total
$
Gross carrying amount – at cost
Less: accumulated depreciation
Balance
-
-
-
5,871,008
-
5,871,008
5,066,861
(4,172,762)
894,099
98,737
(98,584)
153
941,239 11,977,845
(4,733,381)
7,244,464
(462,035)
479,204
Right-of-
use asset
$
186,225
(101,577)
84,648
Right-of-
use asset
$
84,648
-
-
-
2019
Gross carrying amount – at cost
Less: accumulated depreciation
Balance
Plant & Equipment
Movement 2020
Balance at 1 January 2020
Additions
Disposals
Transfer between categories
Transfers to mine properties under
development
Transfer to right-of-use asset
Foreign exchange fluctuation
Depreciation
Balance at 31 December 2020
Plant & Equipment
Movement 2019
Consolidated
Work under
construction
$
Plant &
Equipment
$
Computer
Software
$
Furniture
& Fittings
$
Total
$
472,105
-
472,105
5,106,267
(4,354,656)
751,611
98,737 1,043,349
(460,797)
582,552
(97,368)
1,369
6,906,683
(5,014,398)
1,892,285
Work under
construction
$
472,105
5,343,546
-
106,268
Plant &
Equipment
$
751,611
489,966
(256)
(90,271)
Computer
Software
$
1,369
-
-
-
Furniture
& Fittings
$
582,552
3,675
-
(15,997)
-
(33,859)
-
(50,789)
-
-
-
(50,911)
-
5,871,008
(156,805)
-
(77,661)
(22,485)
894,099
-
-
-
(1,216)
153
(27,787)
-
(58,226)
(5,013)
479,204
Right-of-
use asset
$
Work under
construction
$
Plant &
Equipment
$
Balance at 1 January 2019
Additions
Disposals
Transfers from assets held for sale
Transfers to mine properties under
development
Impact of adopting AASB 16
Foreign exchange fluctuation
Depreciation
Balance at 31 December 2019
-
-
-
-
-
186,225
-
(101,577)
84,648
-
462,394
-
-
9,418
-
293
-
472,105
187,903
631,353
(8,604)
9,964
(19,938)
-
1,511
(50,578)
751,611
Computer
Software
$
2,780
865
-
-
Furniture
& Fittings
$
650,928
24,179
(1,593)
-
-
-
-
(2,276)
1,369
(50,335)
-
4,297
(44,924)
582,552
Total
$
1,892,285
5,837,187
(256)
-
(184,592)
(33,859)
(186,798)
(79,503)
7,244,464
Total
$
841,611
1,118,791
(10,197)
9,964
(60,855)
186,225
6,101
(199,355)
1,892,285
94 | P a g e
91
2020 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
15
RIGHT-OF-USE ASSET AND LEASE LIABILITY
(a) Right-of-use asset
Non-current
Gross carrying amount - office leases
Less: accumulated depreciation
Total
Movement during the year
Balance at 1 January
Transfer from property, plant and equipment (Note 14)
Additions
Depreciation expense
Balance at 31 December
(b) Lease liability
Current
Non-current
Movement during the year
Balance at 1 January
Additions
Interest expense
Payments
Balance at 31 December
92
Consolidated
2020
$
2019
$
746,544
(28,272)
718,272
-
33,859
746,544
(62,131)
718,272
-
-
-
-
-
-
-
-
Consolidated
2020
$
2019
$
220,164
496,708
716,872
82,111
746,544
9,950
(121,733)
716,872
82,111
-
82,111
186,225
-
4,513
(108,627)
82,111
95 | P a g e
2020 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
16
TRADE AND OTHER PAYABLES
Current
Trade creditors and accrued expenses
Deferred consideration(i)
Total
Non-current
Deferred consideration(i)
Total
Consolidated
2020
$
2019
$
6,128,458
-
6,128,458
1,950,327
5,040,896
6,991,223
-
-
2,694,195
2,694,195
Deferred consideration movement during the year
Carrying value - beginning of the year
Unwind of the discount – finance cost
Foreign exchange fluctuation
Derecognition of Kou Sa Project – extinguishment of liability(i)
Carrying value - end of the year
(i) The Company derecognised the Kou Sa Project. See Note 6 for further information
7,735,091
830,927
(766,043)
(7,799,975)
-
6,244,927
1,443,017
47,147
-
7,735,091
17
PROVISIONS
Current
Employee provisions
Total
Non-current
Rehabilitation provision
Employee provisions
Total
Movements
Rehabilitation provision
Balance at 1 January
Movement in provision
Foreign exchange fluctuation
Balance at 31 December
Consolidated
2020
$
2019
$
142,907
142,907
65,590
65,590
170,127
31,564
201,691
179,293
27,905
207,198
179,293
10,169
(19,335)
170,127
178,183
-
1,110
179,293
96 | P a g e
93
2020 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
18
ISSUED CAPITAL
Consolidated
2020
$
2019
$
Issued Capital
165,801,105
148,972,741
Reconciliation of movements in Issued Capital during the period:
Date
Shares
$
Shares
$
2020
2019
Balance at 1 January
Shares issued pursuant to a Placement
Consideration for acquisition of Woodlark(i)
Conversion of Options
Shares issued pursuant to a Placement
Shares issued as part of a SPP
Shares issued pursuant to a Placement
Adjustment for share consolidation
Conversion of Zero Exercise Price Options
Shares issued pursuant to a Placement
Less: share issue costs
05-Apr-19
02-Jul-19
11-Jul-19
28-Oct-19
09-Dec-19
17-Dec-19
20-Dec-19
21-Jul-20
18-Dec-20
174,525,760
-
-
-
-
-
-
-
520,131
43,761,472
-
148,972,741
-
-
-
-
-
-
-
-
18,379,818
(1,551,454)
2,081,907,130
510,000,000
150,000,000
17,188,888
689,774,033
4,040,000
910,225,997
(4,188,610,288)
-
-
-
104,116,108
4,335,000
2,850,000
-
17,244,350
101,000
22,755,650
-
-
-
(2,429,367)
Balance at 31 December
218,807,363
165,801,105
174,525,760
148,972,741
(i) Acquisition of the remaining interest in Woodlark Mining Limited was settled by the issue of 150,000,000 shares in Geopacific to
Kula Gold Limited at a share price of $0.019 per share, this occurred prior to the 1 for 25 share consolidation in December 2019
97 | P a g e
94
2020 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
19
RESERVES
(a) Reserves
Share-based payments reserve
Foreign currency translation reserve
Other equity reserve
Total
(b) Movements
Share-based payments reserve
Balance at 1 January
Share based payment expense
Balance at 31 December
Foreign currency translation reserve
Balance at 1 January
Exchange losses during year
Balance at 31 December
Other equity reserve
Balance at 1 January
Transfers during the year
Balance at 31 December
Total reserves
(c) Nature and purpose of reserves
Share-based payments reserve
The share-based payments reserve records:
Consolidated
2020
$
2019
$
3,993,609
(2,018,220)
(1,370,317)
605,072
2,873,328
3,340,531
(1,370,317)
4,843,542
2,873,328
1,120,281
3,993,609
1,499,209
1,374,119
2,873,328
3,340,531
(5,358,751)
(2,018,220)
3,535,896
(195,365)
3,340,531
(1,370,317)
-
(1,370,317)
755,748
(2,126,065)
(1,370,317)
605,072
4,843,542
(cid:120)
(cid:120)
(cid:120)
the value of exercised and unexercised options issued or granted to employees and Directors which
have been expensed;
the value of exercised and unexercised performance rights and share appreciation rights issued to
employees and Directors which have been expensed; and
the value of options issued on acquisition of Millennium Mining (Fiji) Ltd.
Foreign currency translation reserve
The foreign currency translation reserve records unrealised exchange gains and losses on translation of the
Group’s controlled entities’ results and financial position where their functional currency is different to the
Group’s presentation currency.
Other equity reserve
The other equity reserve records transfers of interests to the Group from non-controlling interests.
98 | P a g e
95
2020 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
20
CONTINGENT LIABILITIES
The Group did not have any contingent liabilities at the end of the reporting period (2019: nil).
21
COMMITMENTS
(a)
Tenement Commitments
Entities in the Group are required to spend certain amounts to retain their interest in areas over which Special
Prospecting Licenses are held. All requirements have been complied with and all reports and lodgements
have been made. In the ordinary course of business, the Group is currently waiting on the reissue of certain
licences by the Mineral and Resource Departments of Papua New Guinea.
The following table provides an outline of the annual expenditure required by tenement:
Tenement
EL 1172
EL 1279
EL 1465
Location
Papua New
Guinea
Papua New
Guinea
Papua New
Guinea
Tenement
Renewed
to
27-Nov-21
Annual
Commitment
2021
$
112,646
25-Aug-21
150,195
Comments
22-Dec-20
75,098 Licence renewal lodged with authorities for
an additional two years. Tenure remains
while renewal pending.
(b) Operating Commitments
The Group entered into contracts with HBS Machinery and Rhodes to commence the Civil Works Program at
the Woodlark Gold Project. The future lease payments for the HBS non-cancellable lease contracts is
$2,481,376. The committed expenditure for the Rhodes contact is $4,041,719. Both of these contracts are
scheduled to be completed within one year.
99 | P a g e
96
2020 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
22
PARTICULARS RELATING TO CONTROLLED ENTITIES
(a) Material Subsidiaries
Worldwide Mining Projects Pty Ltd
PT IAR Indonesia Ltd
Eastkal Pte Ltd
Royal Australia Resources Ltd
Golden Resource Development(i)
Geopacific Limited
Beta Limited
Millennium Mining (Fiji) Limited
Woodlark Mining Limited
Country of
Incorporation
and Carrying
on Business
Australia
Indonesia
Singapore
Cambodia
Cambodia
Fiji
Fiji
Fiji
Papua New
Guinea
Effective Ownership
Percentage
2020
2019
%
100
100
100
85
-
100
100
100
100
%
100
100
100
85
100
100
100
100
100
Class of
Share
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
(i) The Company derecognised the Kou Sa Project. See Note 6 for further information
100 | P a g e
97
2020 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
23
KEY MANAGEMENT PERSONNEL DISCLOSURES
(a) Directors
Details of each person holding the position of Director of the Company during the current and prior reporting
periods are outlined in the table below:
Name
Non-Executive Directors
Ian Clyne
Colin Gilligan
Sir Charles Lepani Appointed 29 July 2020
Ian Murray
Executive Directors
Ron Heeks
Resigned 4 June 2020
(b) Other Key Management Personnel (KMP)
Position
Non-Executive Chairman
Non-Executive Director
Non-Executive Director
Non-Executive Director
Managing Director
Details of the Other KMP of the Group during the current and prior reporting periods are set out in the table
below:
Name
Executives
Tim Richards
Matthew Smith
Glenn Zamudio
Appointed 6 October 2020
Position
Chief Executive Officer
Chief Financial Officer & Company Secretary
General Manager - Projects
(c)
KMP Compensation
Consolidated
2020
$
2019
$
1,328,899
102,408
1,120,282
47,731
12,872
399,996
3,012,188
1,010,162
68,397
978,482
44,230
5,862
20,769
2,127,902
101 | P a g e
Key Management Personnel Compensation:
Short-term benefits
Post-employment benefits
Share-based payments
Annual leave
Long-term benefits
Termination payments
Total
98
2020 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
24
RELATED PARTY TRANSACTIONS
Melron Pty Ltd
Payment was made to Melron Investments Pty Ltd for director services fees. Mr R Heeks is a Director of
Melron Investments Pty Ltd and served as Managing Direct of Geopacific. The total amount charged by
Melron Investments Pty Ltd during the financial year was $654,996 plus GST (2019: $330,000). There were
no amounts owing to Melron Pty Ltd as at 31 December 2020. All amounts were due and payable under
normal commercial terms.
25
SHARE-BASED PAYMENTS
(a)
Employee Incentive Plan
The Company’s Securities Incentive Plan was approved by shareholders at the Annual General Meeting held
on 30 May 2018. All employees are eligible to participate in the plan.
Instruments granted under the plan are issued for no consideration, carry no dividend or voting rights and
when exercised convert into ordinary shares.
Included under share-based payments expense in the statement of profit or loss and other comprehensive
income is an amount of $1,120,281 (2019: $1,374,119) which relates to equity settled share-based payments
transactions issued under the plan.
All options granted to key management personnel are for ordinary shares in Geopacific, which confer a right
of one ordinary share for every option held.
All share appreciation rights granted to key management personnel are for ordinary shares in Geopacific,
which confer an amount of shares equal to the difference between the Company’s share price at the end of
the vesting period and the price on grant date.
During the reporting period the Company issued four types of incentives to employees. They were short-
term zero exercise price options (ZEPO’s), medium-term ZEPO’s, premium exercise price options (PEPO’s)
and share appreciation rights (SAR’s). These incentives were granted on 28 July 2020 and 11 August 2020 and
were issued in accordance with the Securities Incentive Plan. The vesting condition of each incentive is
continuous employment (at Board discretion).
All incentives issued during the 2019 reporting period were issued prior to the 25:1 share consolidation that
took place in December 2019. All incentives were adjusted at the time of the consolidation to reduce the
number of incentives (reduced 25:1) and increase the exercise price (increased 25:1) where relevant.
102 | P a g e
99
2020 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
25
SHARE-BASED PAYMENTS (CONTINUED)
(a)
Employee Incentive Plan (continued)
The incentives were valued by a combination of internal and external sources using a Black-Scholes option
pricing model and independent third party valuations. The key inputs and valuations are summarised below:
Item
Underlying share value
Exercise price
Valuation date(i)
Vesting date
Vesting period (years)
Expiry date
Life of the options (years)
Volatility(ii)
Risk free rate
Dividend yield
Granted on 28 July 2020(i)
Number of options
Value per option
Value per tranche
Granted on 11 August 2020
Number of options
Value per option
Value per tranche
Short-Term
ZEPO’s
Medium-Term
ZEPO’s
PEPO’s
SAR’s
$0.625
Nil
11-Aug-20
11-Aug-21
1.00
21-Aug-21
1.03
100%
0.260%
Nil
5,231
$0.680
3,557
25,076
$0.625
15,673
$0.625
Nil
11-Aug-20
11-Aug-23
3.00
21-Aug-23
3.03
100%
0.275%
Nil
244,662
$0.680
166,370
281,600
$0.625
176,000
$0.625
$0.894
11-Aug-20
11-Aug-24
4.00
21-Aug-24
4.03
100%
0.410%
Nil
182,344
$0.430
78,408
194,202
$0.393
76,321
$0.625
$0.625
11-Aug-20
11-Aug-23
3.00
21-Aug-24
4.03
100%
0.275%
Nil
182,656
$0.468
85,483
224,360
$0.429
96,250
(i) The grant date for R Heeks was determined as the AGM date, being 28 July 2020. The value per instrument differs for R
Heeks as the valuation was conducted on the grant date
(ii) A volatility of the share price fluctuation was calculated by considering the historical movement of the share price over a
period of time as well factoring market conditions of its competitors to predict the distribution of relative share
performance
103 | P a g e
100
2020 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
25
SHARE-BASED PAYMENTS (CONTINUED)
(a)
Employee Incentive Plan (continued)
2020
2019
Number of
options or
rights
Weighted
average
exercise
price ($)
Number of
options or
rights
Weighted
average
exercise
price ($)
2,787,735
30,307
526,262
(520,132)
2,824,172
-
2,824,172
1,872,590
376,546
-
-
2,249,136
-
2,249,136
2,023,707
407,016
-
-
2,430,723
-
2,430,723
-
-
-
-
-
-
-
41,454,763
13,003,205
32,424,070
(17,188,888)
69,693,150
(66,905,415)
2,787,735
0.7714
0.9300
-
-
0.7980
-
0.7980
20,218,500
26,596,200
-
-
46,814,700
(44,942,110)
1,872,590
0.5381(i)
0.6000(i)
-
-
0.5485
-
0.5485(i)
22,365,071
28,227,488
-
-
50,592,559
(48,568,852)
2,023,707
-
-
-
-
-
-
0.0408
0.0233
-
-
0.0309
0.7405
0.7714
0.0285(i)
0.0160(i)
-
-
0.0215
0.5166
0.5381(i)
Zero exercise price options
Outstanding at beginning of year
Granted Class A
Granted Class B
Exercised
Total
Adjusted for share consolidation
Outstanding at end of year
Premium exercise price options
Outstanding at beginning of year
Granted Class C
Expired/lapsed
Exercised
Total pre-share consolidation
Adjusted for share consolidation(ii)
Outstanding at end of year
Share appreciation rights
Outstanding at beginning of year
Granted
Expired/lapsed
Exercised
Total pre-share consolidation
Adjusted for share consolidation(ii)
Outstanding at end of year
(i) The exercise price of the share appreciation rights – represents a theoretical exercise price given the payoff is the difference
between the Company’s share price at the end of the vesting period and the price on grant date
(ii) The weighted average exercise price has been updated to reflect the 25:1 share consolidation
The weighted average remaining contractual life of the incentives outstanding at 31 December 2020 are:
Instrument
Zero exercise price options
Premium exercise price options
Share appreciation rights
Years
1.39
2.37
2.36
104 | P a g e
101
2020 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
25
SHARE-BASED PAYMENTS (CONTINUED)
(b) Unlisted Incentives
There were 40,000 options over unissued shares unexercised at reporting date (2019: 40,000). Since the end
of the financial year, no unlisted options have been cancelled or exercised.
Details of unlisted options over unissued shares in the Company as at the date of this report are outlined in
the tables below:
2020
Issue Date
Expiry
Date
Exercise
Price
Number on
Issue
Movement During the Year
6-Jun-09
6-Jun-09
Note (a)
Note (b)
$
62.50
125.00
1-Jan-20
32,000
8,000
40,000
Granted
-
-
-
Lapsed
-
-
-
Adjusted for share
consolidation
-
-
-
Number on
Issue
31-Dec-20
32,000
8,000
40,000
(a) Not later than 5 years after defining a JORC compliant ore reserve of over 200,000oz Au on the Faddy’s Gold Deposit
(b) Not later than 10 years after defining a JORC compliant ore reserve of over 1,000,000oz Au on the Faddy’s Gold Deposit
2019
Issue Date
Expiry
Date
Exercise
Price(i)
Number on
Issue
Movement During the Year
1-Jan-19
6-Jun-09
6-Jun-09
Note (a)
Note (b)
(768,000)
(192,000)
(960,000)
(i) The exercise price has been updated to reflect the 25:1 share consolidation conducted in December 2019
800,000
200,000
1,000,000
Granted
-
-
-
Lapsed
-
-
-
$
62.50
125.00
Adjusted for share
consolidation
Number on
Issue
31-Dec-19
32,000
8,000
40,000
(a) Not later than 5 years after defining a JORC compliant ore reserve of over 200,000oz Au on the Faddy’s Gold Deposit
(b) Not later than 10 years after defining a JORC compliant ore reserve of over 1,000,000oz Au on the Faddy’s Gold Deposit
(c)
Services
During the reporting period, the Company did not issue any shares as payment for services (2019: nil).
105 | P a g e
102
2020 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
26
LOSS PER SHARE
(a)
Basic and Diluted Loss per Share
Basic loss per share:
From continuing operations attributable to the ordinary equity
holders of the company
Diluted loss per share:
From continuing operations attributable to the ordinary equity
holders of the company
(b)
Reconciliation of Loss Used in Calculating Loss Per Share
Basic and Diluted Loss Per Share:
Loss attributable to the ordinary equity holders of the Company
used in calculating basic and diluted loss per share:
From continuing operations
(c) Weighted Average Number of Shares Used as the Denominator
Weighted average number of ordinary shares used as the
denominator in calculating basic and diluted loss per share
Consolidated
2020
Cents
2019
Cents
(2.59)
(2.59)
(2.59)
(2.59)
(6.43)
(6.43)
(6.43)
(6.43)
Consolidated
2020
$
2019
$
(4,567,311)
(4,567,311)
(7,276,365)
(7,276,365)
Consolidated
2020
2019
No. of Shares No. of Shares(i)
176,404,229
113,152,082
(i) The weighted average number of ordinary shares is reflective of the 25:1 share consolidation conducted in December 2019
106 | P a g e
103
2020 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
27
EVENTS OCCURRING AFTER BALANCE DATE
The financial statements have been prepared based upon conditions existing at 31 December 2020 and due
consideration has been given to events that have occurred subsequent to 31 December 2020 that provide
evidence of conditions that existed at the end of the reporting period.
In December 2020, the Company announced a successful $140 million Placement which was finalised in
February 2021. The Placement was strongly supported by existing institutional shareholders and was
complemented by significant demand from new major domestic and international investors and was
cornerstoned by two of Geopacific’s substantial shareholders, Tembo and DELPHI, and several leading
domestic and international institutions. In addition, there was strong support from Sprott Resource Lending
and its affiliates, along with members of the Geopacific Board and Management.
This transformational capital raising will provide the equity funding component of the development capital
required for the Company’s Woodlark Gold Project.
The Placement consisted of two tranches at an Issue Price of $0.42 per share which comprised the issue of
333.3 million shares:
(cid:120) Tranche 1: 43.7 million shares issued in December 2020 to raise $18.4 million pursuant to the
Company’s placement capacity under Listing Rule 7.1 and Listing Rule 7.1A; and
(cid:120) Tranche 2: 289.6 million shares issued in February to raise $121.6 million.
Tranche 2 of the Placement was subject to shareholder approval under Listing Rules 7.1 and 10.11 which was
obtained in February 2021 at an Extraordinary General Meeting of the Company.
The Company also extended an SPP Offer to existing eligible shareholders to acquire up to $30,000 worth of
Geopacific shares at $0.42 per share, the same price as the Placement, with a cap of $10 million. The SPP
Offer closed on 10 February 2021 and raised a further $1.87million (4,461,821 Shares).
Other than the matter discussed above, no other matters or circumstances haves arisen since the end of the
financial period year which significantly affected or may significantly affect the operations of the Group, the
results of those operations, or the state of affairs of the Group in future financial years.
107 | P a g e
104
2020 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
28
OPERATING SEGMENTS
The Group has identified its operating segments based on the internal reports that are reviewed by the Board
in assessing performance and determining the appropriate allocation of the Group’s resources. The Group
also has had regard to the qualitative thresholds for the determination of operating segments.
For management purposes in the 2020 reporting period the Group was organised into two operating
segments based on geographical locations, which involve mineral exploration and development in Papua
New Guinea and all other segments, which incorporates the minor activities conducted during the period in
Cambodia and Fiji. All other corporate expenses are disclosed as “Corporate” within this segment report. The
Group’s principal activities are interrelated and the Group has no revenue from operations.
All significant operating decisions are based on analysis of the Group as two segments. The accounting
policies applied for internal reporting purposes are consistent with those applied in preparation of the
financial statements.
2020
All other
segments
Papua New
Guinea
$
$
Corporate
$
Other income
Net Loss for the year
Segment Assets
Segment Liabilities
-
344,796
115,610
998,273
63
282,360
(101,311)
(4,810,796)
50,792,747
34,782,529
3,577,948
2,613,707
Total
$
282,423
(4,567,311)
85,690,886
7,189,928
2019
Cambodia
$
Papua New
Guinea
$
Corporate
$
Fiji
$
Total
$
Other income
-
61,232
32,518
-
93,750
Net Loss for the year
(2,309,309)
(749,861)
(4,160,065)
(118,479)
(7,337,714)
Segment Assets
6,289,629
36,937,466
37,169,475
122,122
80,518,692
Segment Liabilities
8,170,401
1,250,510
619,406
-
10,040,317
108 | P a g e
105
2020 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
29
NOTES TO THE STATEMENT OF CASH FLOWS
(a)
Cash and Cash Equivalents
Cash and cash equivalents at the end of the financial year as shown in the Statement of Cash Flows is
reconciled to the related items in the Statement of Financial Position as follows:
Cash at bank
Total
(b)
Reconciliation of Cash Flows from Operating Activities
Consolidated
2020
$
2019
$
34,639,855
34,639,855
37,505,067
37,505,067
Consolidated
2020
$
2019
$
Net loss after income tax
(4,567,311)
(7,337,714)
Adjustments for Non-cash Items:
Depreciation
Share based payments
Impairment write downs
Finance costs
Foreign currency revaluation
Gain on derecognition of Kou Sa Project
Proceeds from disposal of plant and equipment
Changes in Assets & Liabilities
Increase in trade and other receivables
(Increase) in inventory
Increase in trade and other payables
Increase/(Decrease) in provisions
Net Cash Used in Operating Activities
106
141,634
1,120,281
20,448
830,927
(401,346)
(1,884,834)
-
199,355
1,374,119
75,473
1,443,017
-
-
(61,232)
(770,068)
-
528,015
55,972
(4,926,282)
(302,748)
(96,821)
553,320
(61,781)
(4,215,012)
109 | P a g e
2020 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
29
NOTES TO THE STATEMENT OF CASH FLOWS (CONTINUED)
(c)
Non-cash investing and financing activities
Consolidated
2020
$
2019
$
Gain on derecognition of Kou Sa Project(i)
Shares issued as part of the Kula transaction(ii)
(i) The Company derecognised the Kou Sa Project. See Note 6 for further information
(ii) Acquisition of the remaining interest in Woodlark Mining Limited was settled by the issue of 150,000,000 shares in Geopacific to
Kula Gold Limited at a share price of $0.019 per share
(1,884,834)
-
-
2,850,000
30
REMUNERATION OF AUDITORS
The Auditor of Geopacific is Ernst & Young.
Amounts received or receivable - Ernst & Young for:
- An audit or review of the financial report
Total
Consolidated
2020
$
2019
$
65,100
65,100
57,500
57,500
110 | P a g e
107
2020 ANNUAL REPORT SHAREHOLDER INFORMATION
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
SHAREHOLDER INFORMATION
The shareholder information set out below was applicable as at 28 March 2021.
(a)
Analysis of numbers of equity security holders by size of holding:
Analysis of numbers of equity security holders by size holding:
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
Total
(b)
Equity security holders – ordinary shares
Class of Equity Security
Ordinary Shares
Number
Shares
294
537
243
602
189
1,865
141,254
1,414,278
1,817,451
20,925,596
488,542,467
512,841,046
The names of the twenty largest holders of quoted equity securities, ordinary shares, are listed below:
Ordinary Shares
Number Held
113,602,310
63,453,391
53,017,644
51,045,958
47,270,363
15,535,540
12,904,762
11,904,762
10,196,816
8,050,369
6,900,000
5,784,086
4,711,782
4,472,224
4,200,000
3,571,429
3,449,265
3,309,501
2,545,000
2,380,952
428,306,154
84,534,892
512,841,046
% of
Issued
Shares
22.15
12.37
10.34
9.95
9.22
3.03
2.52
2.32
1.99
1.57
1.34
1.13
0.92
0.87
0.82
0.70
0.67
0.65
0.50
0.46
83.52
16.48
100.00
111 | P a g e
HSBC CUSTODY NOMINEES
NDOVU CAPITAL IV B V
J P MORGAN NOMINEES AUSTRALIA
DELPHI UNTERNEHMENBERATUNG
CITICORP NOMINEES PTY LIMITED
NATIONAL NOMINEES LIMITED
SPARTA AG
DEUTSCHE BALATON
BROADGATE INVESTMENTS PTY LTD
CS THIRD NOMINEES PTY LIMITED
HOME IDEAS SHOW PTY LTD
BNP PARIBAS NOMS PTY LTD
UBS NOMINEES PTY LTD
HENDERSON INTERNATIONAL PTY
MR CRAIG GRAEME CHAPMAN
NERO RESOURCE FUND PTY LTD
SPARTA AG
BNP PARIBAS NOMINEES PTY LTD
DIXSON TRUST PTY LIMITED
BNP PARIBAS NOMINEES PTY LTD
TOP 20 SHAREHOLDERS
OTHER SHAREHOLDERS
TOTAL ORDINARY SHAREHOLDERS
108
2020 ANNUAL REPORT
SHAREHOLDER INFORMATION
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
SHAREHOLDER INFORMATION
(c)
Substantial holders
Extracts from substantial shareholder register:
SPARTA AG
NDOVU CAPITAL IV B V
SPHERIA ASSET MANAGEMENT
Shareholding
Number Held
% of Issued
Shares
77,418,482
64,086,031
62,782,986
15.10
12.60
12.24
The above holdings are based on the most recent Notice of Change of Interests of Substantial Holder
statements lodged by each substantial holder.
(d)
Voting rights
The voting rights attached to each class of equity securities are set out below:
Fully paid Ordinary Shares
On a show of hands, every member present at a meeting in person or by proxy shall have one vote and
upon a poll each share shall have one vote.
Options – listed and unlisted
There are no voting rights attached to options.
(e)
Summary of unlisted options issued
Options expiring not later than five years after
the defining on Faddy's Gold Deposit of a JORC
complaint Ore Reserve of over 200,000 oz of
contained Au with an exercise price of $62.50
Option holder with more than 20% of class
Exploration Drilling Services (Fiji) Ltd
L Anderson Investments Pty Ltd
Sheila Anderson Investments
Options expiring not later than ten years after
the defining on Faddy's Gold Deposit of a JORC
compliant Ore Reserve of over 1,000,000 oz of
contained Au with an exercise price of $125.00
Option holder with more than 20% of class
Exploration Drilling Services (Fiji) Ltd
L Anderson Investments Pty Ltd
Sheila Anderson Investments
Number of
Options
Number of
Holders
Options
Held
% of
Options
Issued
32,000
5
8,000
5
12,800
8,800
7,200
3,200
2,200
1,800
40.0
27.5
22.5
40.0
27.5
22.5
112 | P a g e
109
2020 ANNUAL REPORT
SHAREHOLDER INFORMATION
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
SHAREHOLDER INFORMATION
(e)
Summary of unlisted options issued (continued)
Number of
Options
Number of
Holders
Options
Held
% of
Options
Issued
Zero exercise price options expiring three years
from the issue date on 10 July 2021
Option holder with more than 20% of class
R Heeks
Premium exercise price options expiring four
years from the issue date on 10 July 2022
Option holder with more than 20% of class
R Heeks
Share appreciation rights expiring four years
from the issue date on 10 July 2022
Option holder with more than 20% of class
R Heeks
Zero exercise price options expiring 13 years
from the issue date on 19 July 2022
Option holder with more than 20% of class
R Heeks
Premium exercise price options expiring four
years from the issue date on 19 July 2023
Option holder with more than 20% of class
R Heeks
Share appreciation rights expiring four years
from the issue date on 19 July 2023
Option holder with more than 20% of class
R Heeks
Zero exercise price options expiring one year
from the issue date on 21 August 2021
Option holder with more than 20% of class
M Smith
G Zamudio
Zero exercise price options expiring three years
from the issue date on 21 August 2023
Option holder with more than 20% of class
R Heeks
M Smith
G Zamudio
970,638
808,740
894,605
1,296,965
1,063,850
1,129,101
30,307
526,262
110
6
6
6
5
5
5
3
3
220,875
22.8
195,300
24.1
193,529
21.6
366,993
28.3
318,060
29.9
304,808
27.0
12,538
12,538
244,662
168,960
112,640
41.4
41.4
46.5
32.1
21.4
113 | P a g e
2020 ANNUAL REPORT
SHAREHOLDER INFORMATION
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
SHAREHOLDER INFORMATION
(e)
Summary of unlisted options issued (continued)
Premium exercise price options expiring four
years from the issue date on 21 August 2024
Option holder with more than 20% of class
R Heeks
M Smith
G Zamudio
Share appreciation rights expiring four years
from the issue date on 21 August 2024
Option holder with more than 20% of class
R Heeks
M Smith
G Zamudio
Number of
Options
Number of
Holders
Options
Held
% of
Options
Issued
376,546
3
407,016
3
182,344
116,521
77,681
182,656
134,616
89,744
48.4
31.0
20.6
44.9
33.1
22.0
114 | P a g e
111
2020 ANNUAL REPORT
TENEMENT DETAILS
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
TENEMENT DETAILS
Current interest in tenements held by Geopacific and its subsidiaries, as at 31 December 2020 are listed
below:
Country
Location
Tenement
Interest
Papua New Guinea
Papua New Guinea
Papua New Guinea
Papua New Guinea
Papua New Guinea
Papua New Guinea
Papua New Guinea
Papua New Guinea
Papua New Guinea
Papua New Guinea
Papua New Guinea
Papua New Guinea
Woodlark Island
Woodlark Island
Woodlark Island
Woodlark Island
Woodlark Island
Woodlark Island
Woodlark Island
Woodlark Island
Woodlark Island
Woodlark Island
Woodlark Island
Woodlark Island
EL 1172
EL 1279
EL 1465
LMP 89
LMP 90
LMP 91
LMP 92
LMP 93
ME 85
ME 105
ME 111
ML 508
112
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
115 | P a g e
2020 ANNUAL REPORT