More annual reports from Great Panther Mining:
2023 ReportPeers and competitors of Great Panther Mining:
Panthera ResourcesFOR THE YEAR ENDED 31 DECEMBER 2021
CONTENTS
CORPORATE DIRECTORY
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
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
CONSOLIDATED STATEMENT OF CASH FLOWS
NOTES TO THE FINANCIAL STATEMENTS
SHAREHOLDER INFORMATION
TENEMENT DETAILS
1
2
3
9
11
19
34
35
42
43
45
46
47
48
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104
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
Non-Executive Chairman
Andrew Bantock
Non-Executive Director
Colin Gilligan
Non-Executive Director
Ian Murray
Sir Charles Lepani Non-Executive Director
Matthew Smith
Chief Financial Officer & Company Secretary
Postal Address
PO Box 439
Claremont WA 6910
Banker
Sumitomo Mitsui Banking
Corporation - Sydney Branch
Level 40, 2 Chifley Square
Sydney NSW 2000
Stock Exchange
ASX Limited
Level 4, Central Park
152-158 St Georges Terrace
Perth WA 6000
ASX Code: GPR
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
2021 ANNUAL REPORT
1
CHAIRMAN’S REPORT
Dear Shareholders,
To put it bluntly, Geopacific Resources significantly underperformed in 2021.
And while the suspension of major development works at the Woodlark
Gold Project (the Project) in early 2022 was extremely disappointing for
shareholders, I believe that further disappointment would have ensued if
the board had simply decided to plough on.
Instead, we will use the suspension to drill test resource
extension targets, reassess the Project, rationalise costs
and complete the detailed planning required to position
Geopacific to go again - to realise and capitalise on its
significant resource base and development potential.
At a time of strong gold demand, there are few >1-million-
ounce Ore Reserve opportunities in the market, and even
fewer with the growth potential of Woodlark. We are
committed to realise this potential and our ongoing drilling
campaign continues to deliver encouraging results.
We are also committed to continuing the Company’s
in the community and consolidating
important work
our social licence to operate. Though slower and more
expensive than originally planned, the Woodlark village
relocation program is now over 50% complete, and together
with Geopacific’s ongoing health and education programs,
is making a real difference for the local community.
We will be working hard to ensure your Company can
capitalise on its potential over the next year, targeting
both resource expansion and delivery of a redesigned
and de-risked development plan for Woodlark. Drilling
is scheduled to continue throughout 2022, feeding into
updated geological resource modelling which will provide
the basis for the Company to reassess the scale and format
of the project’s development design.
In closing I extend my thanks to shareholders for your
continuing support. Having only recently stepped in as
Chair, I acknowledge your frustrations and can assure you
that your board is committed not only to address the issues
of the past, but more importantly, to capitalise on your
Company’s significant opportunities into the future.
Andrew Bantock
It is important to note that work packages were materially
advanced prior to the suspension, providing a platform
for future growth. However, in the face of significant cost
increases and schedule delays, your board took the prudent
step of suspending development. Unfortunately, this also
necessitated redundancies across the organisation.
The Project was undoubtedly impacted by COVID-19, with
consequential impacts increasing resource and materials
lead times and pricing. However, the fact remains that the
Project development plan and budget was developed in late
2020, nine months into the pandemic.
The capital cost increase was driven by a combination of
factors, including: general cost escalation for materials
and labour across the mining sector; the need to redesign
ground improvement and civil engineering works to deal
with unexpected complexities; process plant design
revisions; and increased costs from schedule extensions to
accommodate these and other factors.
This capital cost increase took the Company beyond
the bounds of its finance facilities, requiring drawdown
repayment, ongoing waivers, extensive technical reviews
and renegotiation of the facility terms. Ultimately, we
were unable to present a funding case which met the
requirements of the facilities. As a consequence, the
facilities were closed-out in March 2022. This measure
did have some consolation benefits though, through the
elimination of ongoing funding costs and freeing-up cash
sitting in restricted bank accounts.
Despite the suspension, the Project retains considerable
inherent value. We are firmly focussed on Woodlark
Island’s potential to deliver strong returns in the future
from an orebody that remains open both laterally and at
depth. It is located in a highly prospective geological setting
which provides an exciting platform for future discoveries
to come.
2
2021 ANNUAL REPORT REVIEW OF OPERATIONS
The Woodlark Gold Project (the Project) is a potentially high margin gold deposit, located on Woodlark
Island in Papua New Guinea (PNG).
During the 2021 reporting period, activities at the Project
focussed on infrastructure development and the ongoing
community relocation program. Key long lead items such
as the SAG and ball mills were ordered and engineering
and design work, principally for the processing facilities
was progressed.
In November 2021, the Company announced that earthwork
activities associated with the development of the Project
had been delayed due to a combination of inclement
weather, deteriorating ground conditions and the impact
of COVID-19 limiting the availability of site access and
overall worker productivity rates. In addition, a decision
was taken to reassess the original wharf design and
evaluate a potential upgrade of the existing wharf facility
to reduce cost and construction complexity while providing
greater opportunities for local community participation in
the Project. Delays were also experienced in issuance of
the construction tender for the offshore tailings line and
the local community relocation program. Due to the impact
of the delays, the Company made the decision to defer all
non-essential activities at the Project.
As part of the deferral of non-essential work, the Company
commenced a critical path analysis to minimise the impact
of the delays on the overall project schedule as well as
launching a review of the schedule and cost estimate to
determine the impact on the development budget.
On 15 December 2021, the Company requested a voluntary
suspension of trading in its ordinary shares listed on the
ASX. This request arose after preliminary results from
the review initiated in November 2021 indicated that there
was likely to be a material increase in the capital cost
for development of the Project. The Company continued
to undertake the detailed work program to define and
quantify the extent of the increase which extended into the
2022 financial year.
Post financial year end, it was determined from the
ongoing review that changes were required to preserve
the Company’s financial and asset position. In view of the
ongoing delays in the project schedule and the consequent
implications for capital cost escalation, a range of steps
were taken, including suspending all detailed engineering
and civil works at the Project pending the conclusion of the
review of the Company’s strategic options and instigating a
redundancy program across the organisation.
Whilst development of the Project was suspended early in
the 2022 financial year, Geopacific remains committed to
engagement with the local communities on Woodlark Island
and activities associated with the community relocation
program are continuing. Geopacific also continues to
support other community programs as on the island,
including education facilities and health care services.
Geopacific remains focussed on realising the full potential
of the Project and has commenced a drilling program aimed
at pit extension and step-out targets across Woodlark
Island.
Exploration
During the year, the Company commenced a 20,000m
grade control and near pit drilling campaign, representing
the first RC drilling activity conducted on Woodlark Island
since 2018. Drilling contractor, Quest Exploration Drilling
(QED), mobilised on site in September 2021 and to date
have drilled approximately 80 holes. The drilling campaign
has been undertaken to further define and substantiate the
upside optionality that resides within the existing pit shells
(via grade control drilling) and across the broader mining
and exploration leases on Woodlark Island.
Since the commencement of the program, the Company
has received assays from 34 grade control holes with
a substantial number reporting significant high-grade
intercepts (all within 60 metres of surface), supporting
our view that there is considerable upside potential within
the existing pit shells. Key assay results from Kulumadau
include:
• 080KUL146 with 58 metres at 4.67g/t Au
(271 gram metres), from surface;
• 080KUL160 with 39 metres at 5.33g/t Au
(208 gram metres), from 21 metres;
• 080KUL145 with 37 metres at 5.59g/t Au
(207 gram metres) from 8 metres;
• 080KUL175 with 26 metres at 7.38g/t Au
(192 gram metres) from 34 metres and 9 metres at
20.2g/t Au (182 gram metres), from 20 metres; and
• 080KUL167 with 9 metres at 15.5g/t Au
(140 gram metres), from surface.
A larger drill rig was mobilised to site in January 2022 to
facilitate the drilling of deeper holes to test down dip and
extension targets associated with the current pits.
3
2021 ANNUAL REPORT REVIEW OF OPERATIONS
The resource extension drilling results to date from
Kulumadau and Busai reinforce the potential for pit
extension possibilities, with all three planned pits at the
Project open along strike and at depth. To date a total of 12
resource extension holes have been assayed at Busai and
Kulumadau with highly encouraging results, all within 100
metres of surface. Key results from the resource drilling
campaign include:
Busai:
• BSRC21140 with 14 metres at 5.01g/t Au,
from 73 metres;
• BSRC21141 with 8 metres at 2.14g/t Au,
from 19 metres; and
• BSRC21136 with 11 metres at 1.99g/t Au,
from 16 metres.
Kulumadau:
• KURC21027 with 17 metres at 0.97g/t Au,
from 22 metres; and
• KURC21024 with 12 metres at 0.76g/t Au,
from 65 metres.
A further 25 grade control holes and 5 resource extension
holes from the Kulumadau deposit have been completed
with samples in the laboratory awaiting assay1.
Exploration drilling to the north and east of the current
Kulumadau resource commenced in February 2022 and
is ongoing. There are 14 holes from this program awaiting
assay1.
A reconciliation of the grade control model to the Mineral
Resource (ref ASX release 12 March 2018) will commence
upon receipt of all outstanding samples.
The drilling campaign for the first half of 2022 will focus on
Woodlark’s significant near-pit exploration potential within
the existing mineral lease (Figure 3).
Figure 1: Kulumadau cross section
1 As at 17 March 2022
4
2021 ANNUAL REPORT REVIEW OF OPERATIONS
Figure 2: Busai cross section
Figure 3: Mining lease exploration target areas
5
2021 ANNUAL REPORT REVIEW OF OPERATIONS
Sustainability
Communities Relocation Program – Woodlark
An important aspect of the Project is the relocation of
the Kulumadau community which encompasses
the
construction of 223 houses, in addition to a school, churches
and trade stores.
Houses range from 3 bedroom to 5 bedroom based on the
size of the household and existing dwelling that is being
relocated, while the school includes classrooms, teachers’
accommodation, dormitories and other infrastructure. The
majority of the workforce involved in the construction of the
buildings are local Woodlark Island residents. At the end of
2021 over 50% of the relocation program construction had
been completed.
Occupational Health and Safety and Training
Safety management processes and procedures on site
reflect the focus and importance of our employee’s
welfare. Our policy and procedures were enhanced early
in 2021 ahead of the commencement of early works, with
an updated Health and Safety Policy, rollout of a new site
induction and Health and Safety training program and key
OH&S executive appointments.
Implementation of the health and safety management
system, roll out of internal safety training and training of
COVID-19 testing procedures and testing equipment were
an ongoing focus, and importantly there were no lost time
or medical treatment injuries in 2021.
Community and Social Responsibility
Extensive Community engagement has
taken place
on Woodlark Island over a number of years to build
strong relationships and to ensure the development of a
sustainable local economy. Key initiatives in 2021 included
training and development to provide industry standard skills
and qualifications for local employees, partnering with key
stakeholders and experts to identify and develop viable
alternative industries on the island, and supporting the
development of Government services with improvements
in the areas of health, education and law and order.
Key outcomes during the year were the election of the Dal
Wanuwan (Woodlark Landowners Association) executive,
in addition to the registration of the Landowner Umbrella
Company (MDAL) and sub-clan investment companies, and
election, appointment and training of directors for these
entities. The MDAL manage landowner business activities
and other landowner investments along with the sub-clan
investment companies. A number of landowner business
opportunities have been progressed including worker
transport, transport for school children, camp waste and
grounds maintenance and pest control.
The Company is committed to providing assistance to
the Woodlark community
in ensuring the COVID-19
vaccine rollout is implemented effectively and worked
with the Milne Bay Provincial Health Authority to promote
awareness of COVID-19 and administer vaccinations to
people on Woodlark Island.
6
2021 ANNUAL REPORT REVIEW OF OPERATIONS
Funding
In February 2021, the Company completed a successful
$140 million placement with shareholders, after an
Extraordinary General Meeting (EGM) approving Tranche
2 of the capital placement announced in December 2020.
The Placement consisted of two tranches:
• 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
• Tranche 2: 289.6 million shares issued in February
2021, post the EGM to raise $121.6 million under Listing
Rules 7.1 and 10.11.
The Company also completed a Share Purchase Plan at
$0.42 per share, the same price as the Placement, to raise
a further $1.87 million.
In June 2021, the Company completed binding terms and
satisfied all conditions precedent to reach financial close
with Sprott Private Resource Lending II (CO), Inc. (Sprott)
for the US$100m project financing associated with the
development of the Project.
The US$100m in financing was in the form of a US$85m in
Project Finance Facility (Facility Agreement) and US$15m
via a Callable Gold Stream (Stream Agreement), with the
US$15m Stream Agreement deposit available immediately.
US$85m under the Facility Agreement was deposited into
the Company’s Debt Proceeds Account (DPA), with funding
to be available under staged drawdowns scheduled to occur
on satisfaction of certain project development milestones.
In November 2021, the Company made the decision to defer
all non-essential activities at the Project primarily due to
uncertainties associated with the plant site earthworks, a
potential change to the location of the wharf and delays in
the tailings pipeline engineering. Following this decision,
the Company agreed amendments to the terms and
conditions of the Facility and the Stream Agreements with
Sprott for the facilities to remain in place on substantially
the same terms and conditions, including substantially
the same conditions precedent to the advance of funds
provided the conditions precedent are satisfied to enable
first drawdown by 31 August 2022.
Pursuant to the amendments, in December 2021 the
Company prepaid all of the principal (and accrued interest)
under the Facility Agreement and repaid the deposit
advanced under the Stream Agreement.
Significant
reductions to the Facility prepayment obligations and the
Stream termination payment were negotiated with Sprott
and the prepayment penalty was modified to a termination
fee with an aggregate total of US$10m, payable if the
facilities are cancelled or not drawn by 31 August 2022.
The amendments also required the Company to hold
US$12m in the DPA as collateral (inclusive of the US$10m
termination fee).
In February 2022, the Company announced that it was
continuing its review of the schedule and cost estimate
for the Project and the
implications of a material
increase in capital costs. The Company advised that
changes would need to be implemented progressively
to preserve the Company’s financial and asset position.
In view of ongoing delays in the project schedule and
the consequent implications for capital cost escalation,
a range of steps were taken including the suspension
of all detailed engineering and civil works at the Project
pending a review of the Company’s strategic options. The
suspension of these activities preserves cash reserves
whilst the Company undertakes its review. Unfortunately,
this required redundancies across the organisation.
Non-core Project Activities
Kou Sa Project, Cambodia
The Company is in negotiation with the vendors of the Kou
Sa Project to dispose of its interest in the Kou Sa Copper
Gold Project.
Fijian Gold Projects, Fiji
All licences have been relinquished.
7
2021 ANNUAL REPORT REVIEW OF OPERATIONS
Financial Review
2017
$
2018
$
2019
$
2020
$
2021
$
Loss After Tax
(4,042,911)
(53,750,659)
(7,337,714)
(4,567,311)
(61,318,687)
Loss Per Share (Cents)1
(7.35)
(68.55)
(6.43)
(2.59)
(12.67)
Cash and Cash Equivalents
6,765,343
3,059,221
37,505,067
34,639,855
67,470,477
Exploration and Evaluation Asset - Additions
(excluding transfers)
Mine Properties Under Development
Expenditure - Additions (excluding transfers)
15,219,583
8,447,600
442,022
65,098
36,097
-
-
860,265
11,688,121
23,230,220
Total Assets
80,720,300
42,103,633
80,518,692
85,690,886 176,265,685
Net Assets
73,334,855
34,685,715
70,478,375
78,500,958 141,367,250
1 Earnings per share from 2017 to 2018 have been adjusted to reflect the 25:1 share consolidation conducted
in December 2019.
Table 1: Key Financial Metrics
The Group recorded a net loss after tax for the year ended
31 December 2021 of $61,318,687 (2020: $4,567,311),
largely impacted by a non-cash impairment charge of
$27,267,012 recognised in relation to its Woodlark Gold
Project assets, finance costs of $16,816,122 and onerous
contracts expense recognised of $6,703,000.
At 31 December 2021, the Group’s total assets were
$176,265,685 (2020: $85,690,886) and net assets were
$141,367,250 (2020: $78,500,958). The increase in the
Group’s total assets and net assets relates primarily to
expenditure on mine property development during the 2021
year and higher cash balance held following a successful
share placement finalised in February 2021.
At reporting date, the Group held cash and cash equivalents
of $67,470,477 (2020: $34,639,855) which
includes a
balance of $16,526,649 held in the Group’s Debt Proceeds
Account to fund the termination fee to Sprott and a reserve
buffer.
8
2021 ANNUAL REPORT REVIEW OF OPERATIONS
ORE RESERVES AND MINERAL RESOURCES
Woodlark Global Mineral Resources
The Woodlark Mineral Resource is 47Mt @ 1.04g/t Au for 1.57Moz of gold2 including 222,000oz of gold in the Inferred
category (Table 2).
Category
(>0.4g/t lower cut)
Measured
Indicated
Inferred
Total
Tonnes
(Mt)
21.24
18.94
6.80
47.00
Grade
(g/t Au)
1.10
0.98
1.00
1.04
Ounces
(Koz)
754
597
222
1,573
Table 2: Woodlark Global Mineral Resource Estimate – March 2018
Woodlark Ore Reserves
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 1,037,600oz3 of gold is detailed in Table 3.
Total by deposit
Category
(>0.4g/t lower cut)
Tonnes
(Mt)
Grade
(g/t Au)
Busai
Kulumadau
Woodlark King
Total Ore Reserve
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
Table 3: Woodlark Ore Reserves Estimate – November 2018
Ounces
(oz)
307,300
120,900
324,700
196,900
65,000
22,800
697,000
340,600
1,037,600
2
3
Refer to March 2018 Pre-feasibility Study – ‘Robust Woodlark Gold project PFS Supports Development.’
Refer to ‘Woodlark Ore Reserve Update’ announced on 7 November 2018.
9
2021 ANNUAL REPORT REVIEW OF OPERATIONS
Competent Person’s Statement
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.
that underpin
technical parameters
In relation to the Mineral Resources and Ore Reserves,
the Company confirms that all material assumptions
the ASX
and
(‘Robust
announcements made on 12 March 2018
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.
10
The information in this announcement that relates to
exploration results is based on information compiled by or
under the supervision of Jeffrey Moncrieff, a Competent
Person who is a Member of The Australasian Institute
of Mining and Metallurgy and Manager – Planning
and Growth for Geopacific. Mr Moncrieff has sufficient
experience which is relevant to the style of mineralisation
and type of deposit under consideration and the activity
he is undertaking to qualify as a Competent Person as
defined in the 2012 Edition of the “Australasian Code for
Reporting of Exploration Results, Mineral Resources and
Ore Reserves”. Mr Moncrieff consents to the inclusion in
the announcement of the matters based on his information
in the form and context in which it appears.
All information relating to the Mineral Resources and Ore
Reserves were prepared and disclosed under the JORC
Code 2012.
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.
2021 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 2021, 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.
Position Held & Qualification
Experience, Special Responsibilities & Other Directorships
Andrew Bantock
Non-Executive Chairman
Appointed: 13 January 2022
B.Com
Member of the Australia & New
Zealand Institute of Chartered
Accountants (CA)
Mr Bantock has over 30 years of experience in corporate finance and
commercial leadership. After qualifying as a Chartered Accountant
with leading global firm Arthur Andersen, working in Australia
and the UK, Mr Bantock commenced his commercial career with
ASX/NZSE listed GRD Group, owner of New Zealand’s largest gold
producer, Macraes Mining (later Oceana Gold), and world renown
resource project design and construction engineer, GRD Minproc.
Mr Bantock later become Finance Director of GRD, also serving six
years as a Non-Executive Director of Western Australia’s water utility,
Water Corporation, where he chaired the Audit and Compliance
Committee.
Mr Bantock subsequently helped to establish and co-lead an ASX
listed exploration group, in various roles, including as founding
Executive Chairman of Chalice Gold Mines Ltd and founding Managing
Director of Liontown Resources Ltd, before being recruited back to a
senior finance role, as CFO of Glencore’s Australian nickel business.
Mr Bantock is currently a Senior Managing Director of FTI Consulting,
an independent global business advisory firm.
Mr Bantock is currently the Non-Executive Chairman of Elevate
Uranium Limited. Mr Bantock did not hold any other directorships in
the past three years.
Mr Bantock held no interest in shares in the Company as at the date
of this report.
2021 ANNUAL REPORT
11
DIRECTORS’ REPORT
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 of 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 the Chairman of the Project Oversight Committee and a
member of the Audit and Risk Committee.
Mr Gilligan is not currently a director of any other public company. Mr
Gilligan was appointed CEO of BUMA Australia on 17 December 2021.
During the past three years, Mr Gilligan has also served as a director
of the following listed entities:
• Resource Generation Limited (resigned 4 February 2022).
Mr Gilligan has the following interest in shares in the Company as at
the date of this report – 119,048 ordinary shares.
12
2021 ANNUAL REPORT DIRECTORS’ REPORT
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)
Oxford Advanced Management &
Leadership Programme (OAMLP)
Fellow of the Australia & New
Zealand Institute of Chartered
Accountants (FCA)
Sir Charles Lepani
Non-Executive Director
Appointed: 29 July 2020
B. Arts (Economics)
Masters of Public Administration
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.
Mr Murray is the Chairman of the Audit and Risk Committee and
the Remuneration and Nomination Committee and a member of the
Project Oversight Committee.
Mr Murray is currently an Independent Non-Executive Director at
Black Rock Mining Ltd and Jupiter Mines 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
• Todd River Resources Ltd (resigned 25 October 2021)
Mr Murray has the following interest in shares in the Company as at
the date of this report – 238,095 ordinary shares.
Sir Charles has over 40 years of experience in both the public and
private sectors representing PNG 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.
13
2021 ANNUAL REPORT DIRECTORS’ REPORT
Position Held & Qualification
Experience, Special Responsibilities & Other Directorships
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)
Ian Clyne
Appointed: 6 October 2016
Resigned: 13 January 2022
Executive Chairman
1 January 2021 to 30 June 2021
11 November 2021 to 13 January 2022
Non-Executive Chairman
1 July 2021 to 10 November 2021
B. Bus (Management)
Mr Smith has over 20 years of 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 – 498,389 ordinary shares.
Mr Clyne has over 35 years of 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 was a member of the Audit and Risk Committee and the
Remuneration and Nomination Committee.
Mr Clyne is a Non-Executive Director of Union Bank of Nigeria and
TISA Community Finance Limited. Mr Clyne did not hold any other
directorships in the past three years.
Mr Clyne has the following interest in shares in the Company at the
date of his resignation – 1,289,498 ordinary shares.
14
2021 ANNUAL REPORT DIRECTORS’ REPORT
Position Held & Qualification
Experience, Special Responsibilities & Other Directorships
Mike Meintjes
Appointed: 1 February 2021
Resigned: 2 March 2022
Joint Company Secretary
B. Com (Hons) (Financial Accounting)
F.Fin (FINSIA)
Member of the Australia & New
Zealand Institute of Chartered
Accountants (CA)
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 CFO and company secretary
for Alligator Energy Limited (ASX: AGE) and previously as company
secretary for Resource Generation Limited (ASX: RES).
Mr Meintjes has the following interest in shares in the Company at the
date of his resignation – 15,000 shares.
2.
PRINCIPAL ACTIVITY
The Group is principally engaged in the development and exploration 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 2021, 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.
DIVIDENDS
No dividends were paid or declared during the financial year (2020: nil).
5.
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 2021 and due
consideration has been given to events that have occurred subsequent to 31 December 2021 that provide evidence
of conditions that existed at the end of the reporting period.
On 13 January 2022, the Company announced the appointment of Mr Andrew Bantock as Chairman and director
of the Company, and the retirement of Mr Ian Clyne as Chairman and director of the Company.
In February 2022, the Company announced that in view of ongoing delays in the project schedule and the
consequent implications for capital cost escalation, a range of steps were taken including the suspension of
all detailed engineering and civil works at the Project pending a review of the Company’s strategic options. The
suspension of these activities will preserve cash reserves and require redundancies across the Group.
In April 2022, the Company announced that it terminated the Facility and Stream Agreements with Sprott. The
financial liabilities comprising of the termination fees described in Notes 18 and 19 to the financial statements
were settled and paid for an aggregate amount of US$6 million. This did not result in gain or loss on termination.
Other than the matter discussed above, no other matters or circumstances haves arisen since the end of the
financial 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.
15
2021 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
A Bantock
C Gilligan
I Murray
C Lepani
Shares
Direct
Options
Rights
Shares
Indirect
Options
Rights
-
-
-
-
-
-
-
-
-
-
-
-
-
119,048
238,095
-
-
-
-
-
-
-
-
-
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
Directors Meetings
Audit and Risk Committee Meetings
Attended*
Eligible to Attend
Attended*
Eligible to Attend
17
17
17
17
17
17
17
17
3
3
3
-
3
3
3
-
* Either in person, or by electronic means.
Name
I Clyne
C Gilligan
I Murray
C Lepani
Remuneration and Nomination
Committee Meetings
Project Oversight
Committee Meetings
Attended*
Eligible to Attend
Attended*
Eligible to Attend
2
-
2
1
2
-
2
1
-
9
9
-
-
9
9
-
* Either in person, or by electronic means.
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 PNG, 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.
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2021 ANNUAL REPORT DIRECTORS’ REPORT
11.
SHARE OPTIONS
There were 7,462,191 Options over unissued shares unexercised at 31 December 2021 (2020: 5,113,308). During
the 2021 reporting period, the Company issued 3,349,828 unlisted Options and 1,000,945 shares on the exercise of
unlisted Options. Since the end of the 2021 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
320,000
808,740
1,296,965
327,500
1,063,850
526,262
376,546
2,702,328
$62.50
$125.00
$0.00
$1.02
$0.00
$0.00
$0.58
$0.00
$0.93
$0.32
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
1 January 2022 (or as otherwise extended)
10 July 2022
19 July 2022
1 January 2023
19 July 2023
21 August 2023
21 August 2024
29 September 2026
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 2021 (2020:
2,430,722). During the 2021 reporting period, the Company did not issue any share appreciation rights or shares
on the exercise of unlisted share appreciation rights. Since the end of the 2021 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
Theoretical 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.
SHARE PERFORMANCE RIGHTS
There were 3,112,442 Share Performance Rights over unissued shares unexercised at 31 December 2021 (2020:
nil). During the 2021 reporting period, the Company issued 3,112,442 share performance rights and did not issue
any shares on the exercise of share performance rights. Since the end of the 2021 reporting period and up to the
date of this report, no unlisted share performance rights have been cancelled or exercised.
Details of unlisted Share Performance Rights over unissued shares in the Company as at the date of this report
are presented in the following table:
Share Performance Rights on Issue
3,112,442
Exercise Price
$0.00
Expiry Date
31 March 2024
17
2021 ANNUAL REPORT DIRECTORS’ REPORT
14.
INSURANCE OF OFFICERS
The Company has paid an insurance premium to cover 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.
15.
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.
16.
AUDITOR’S INDEPENDENCE DECLARATION
The auditor’s independence declaration for the year ended 31 December 2021 is set out on page 34.
17.
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
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
18.
NON-AUDIT SERVICES
Consolidated
2021
$
218,000
218,000
2020
$
65,100
65,100
There were no non-audit services provided by the auditor during the period of this report.
18
2021 ANNUAL REPORT DIRECTORS’ REPORT
19.
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
Non-Executive role from 1 July 2021 to 10 November 2021
Executive role from 1 January 2021 to 30 June 2021 and
11 November 2021 to 13 January 2022
Position
Chairman
Colin Gilligan
Ian Murray
Sir Charles Lepani
Executives
Timothy Richards
Matthew Smith
Graeme Rapley
Commenced 1 February 2021, Ceased 31 October 2021
Glenn Zamudio
Ceased 31 March 2021
Non-Executive Director
Non-Executive Director
Non-Executive Director
Chief Executive Officer
Chief Financial Officer & Company Secretary
Project Director - Woodlark
General Manager - Projects
Subsequent to 31 December 2021, Andrew Bantock was appointed Non-Executive Chairman following the
retirement of Ian Clyne on 13 January 2022. 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.
Remuneration Governance
In preparation for the development of the Woodlark Gold Project, the Board established a Remuneration and
Nomination Committee in February 2021.
The Remuneration and Nomination Committee is responsible for reviewing and recommending the remuneration
arrangements of the 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.
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2021 ANNUAL REPORT DIRECTORS’ REPORT
19.
REMUNERATION REPORT - AUDITED (CONTINUED)
Remuneration Consultants
During the 2021 reporting period, the Company engaged BDO Chartered Accountants to complete a benchmarking
exercise of non-executive director fees for peer group companies. The findings indicated that the Board was being
remunerated at the median level of the identified peer group and that an opportunity existed to adjusted to the
62.5th percentile in the future. No adjustments to non-executive director fees were made from the findings and
recommendations in the report.
During the 2020 reporting period, the Company engaged BDO Chartered Accountants to complete a benchmarking
exercise of the comprehensive remuneration framework review first conducted in 2017. 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 $13,450 was paid to remuneration consultants during 2021.
Remuneration Overview and Strategy
During the 2021 reporting period, the Group’s Remuneration and Benefits Strategy was reviewed in light of the
decision to develop the Woodlark Gold Project and documented along with the development of various supporting
guidelines and procedures. The objective of the Group’s remuneration framework is to support the delivery of
sustained shareholder value and to reward employees in line with general market conditions. The strategy is
designed to attract, motivate and retain high calibre individuals through the provision of remuneration packages
that incorporates a balance of fixed and variable remuneration.
In accordance with sound corporate governance practices, the structure of non-executive and executive
remuneration is separate and distinct. There is no direct relationship between non-executive remuneration and
the financial performance of the Group.
The remuneration strategy and practices are influenced by the Australian and PNG (as applicable to the relevant
roles) mining industry peer companies with which it competes for talent. These peer companies are predominantly
ASX and PNGX listed gold producing companies with a similar or larger market capitalisation.
Geopacific is committed to gender pay equity and has established human resource systems, policies and
procedures to ensure that all remuneration review processes are conducted fairly and free of any bias. The
approach encompasses the complete employee lifecycle including appointment, salary review, performance
reviews and bonus reviews.
The following table shows the Group’s performance over the reporting period and the previous four financial years
and against overall remuneration for these years:
2017
2018
2019
2020
Loss Per Share (Cents)(i)
Year-end share price ($)(i)
Market capitalisation ($ million)
7.35
0.675
48.7
68.55
0.40
33.3
6.43
0.50
87.3
2.59
0.43
94.1
2021
12.67
0.21(ii)
109.0
Total KMP remuneration ($)
1,468,516
2,196,274
2,127,902
3,012,188
2,543,732
(i) The loss per share and year-end share price from 2017 to 2018 have been adjusted to reflect the 25:1 share
consolidation conducted in December 2019.
(ii) Share price at 14 December 2021 prior to voluntary suspension on ASX.
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2021 ANNUAL REPORT DIRECTORS’ REPORT
19.
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. The mix of fixed and at-risk remuneration
varies according to the role of each Executive, with the highest level of at-risk remuneration applied to those roles
that have the greatest potential to influence and deliver Company outcomes and drive shareholder value.
Variable remuneration, or performance linked remuneration, includes a combination of short and long-term
incentives designed to provide an “at risk” reward in a manner which aligns with the creation of sustained
shareholder value. The short and long term incentives are integral to a competitive market based remuneration
package and should not be mistaken for constituting a bonus for performing the role.
All Executives are eligible to receive short 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:
Remuneration Element
Description
Criteria
Total Fixed Remuneration
Variable Remuneration:
Short Term Incentive
Variable Remuneration:
Long Term Incentive
Remuneration linked to market
rate of the role. Included the Fixed
Remuneration Correction Plan
relevant to prior years (see below).
Remuneration for meeting role
requirements.
At risk remuneration for delivering
on key performance indicators which
are designed to drive personal and
Company performance.
Incentive for the achievement of
board approved annual corporate
objectives along with two to three
role specific performance objectives.
At risk remuneration for the creation
of value for shareholders - directly
linked to outcomes that will drive
shareholder returns.
Incentive for corporate performance
over the long-term.
Total Fixed Remuneration
Total Fixed Remuneration (TFR) incorporates base salary plus superannuation paid to employees. All Geopacific
roles are benchmarked against matching roles from industry benchmarking data.
Fixed Remuneration Correction Plan
In prior years a fixed remuneration correction plan was in place designed to align total fixed remuneration with
market rates using a share based payment rather than cash. The Fixed Remuneration Correction Plan was
discontinued during the 2021 financial year.
In prior years, Class A Options were issued annually in advance, for no consideration and had an exercise price
of nil. As the Class A Options were issued as part of the fixed remuneration correction plan, no vesting conditions
were attached other than the continuation of service, which could be waived at the discretion of the Board.
The value of Class A Options was included in the Executives’ total fixed remuneration for the period. No Class A
Options were issued in the current reporting period. During the prior year, Class A Options were issued with a
one-year vesting period in relation to services performed for the 2020 financial year.
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2021 ANNUAL REPORT DIRECTORS’ REPORT
19.
REMUNERATION REPORT - AUDITED (CONTINUED)
Short Term Incentive Plan
Short Term Incentives (STIs) are structured to remunerate senior employees for achieving annual Company
targets as well as their own individual performance targets designed to favourably impact the business.
The criteria used to assess the STI include funding and development progress, costs and key safety elements that
are within management’s control and underpin the overall performance of the Company.
The STI is linked to specific personal and Company objectives over the financial year. Performance of the STI
objectives is assessed subsequent to the end of the financial year, with the amount determined to be achieved
paid in cash or shares.
For Executive KMP, the Board is responsible for setting and assessing the key performance indicators (KPI)
against which the annual STI is measured. For Executive KMP, the STI results are weighted 70% corporate targets
and 30% to individual or personal targets. For all other Management levels, the STI results are weighted 50% to
corporate targets and 50% to individual targets. Corporate and individual targets are established by reference to
the Company’s strategy.
For each KPI there are defined “threshold”, “target” and “stretch” measures which are capable of objective
assessment. The proportion of the STI earned is calculated by adding the average result of the Company targets
with the average result of an individual’s performance targets.
The Board, in exercising its discretion determined that no STI would be paid in respect of the 2021 reporting
period.
Securities Incentive Plan - Long Term Incentive
During the 2021 reporting period, the Company introduced revised Long Term Incentive Plan (LTI Plan). The revised
LTI Plan involves the granting of Performance Rights which vest upon achievement of performance measures over
a three-year period. Performance Rights carry no dividend or voting rights. On vesting, each Performance Right
is convertible into one ordinary share. The Board retains overall discretion on whether an LTI should be granted
or the amount varied each performance year. If an employee ceases to be an employee by a Group Company all
unvested Performance Rights are forfeited and lapse unless otherwise determined by the Board.
If the Board forms the opinion that an employee has committed an act of fraud, defalcation or gross misconduct,
the individual will forfeit all unvested rights. The Company may also recover damages from vested Performance
Rights held by or for the benefit of the individual.
The LTI 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 over a three-year period and
which are considered consistent with peer group companies.
The total incentive plan opportunity, which represents the maximum incentive available to the employee is
determined as follows:
Level
Chief Executive Officer
Chief Financial Officer
General Managers
Percentage Available
100% of total fixed remuneration
80% of total fixed remuneration
60% of total fixed remuneration
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2021 ANNUAL REPORT DIRECTORS’ REPORT
19.
REMUNERATION REPORT - AUDITED (CONTINUED)
Securities Incentive Plan - Long Term Incentive (Continued)
The Board approved the following vesting milestones for the Performance Rights granted in relation to the 2021
financial year:
Vesting Milestone
Description
Executive KMP
Other Management
1. Production
Achievement of forecast production and cash
costs in FY 2023
2. Resource growth
25% increase to the Woodlark Gold Project
JORC Mineral Resource by the end of FY 2023
3. Retention
Continued employment to the end of FY 2023
75%
25%
-
50%
17%
33%
Weighting
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 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.
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 $600,000 per year in aggregate as
agreed at the 2021 AGM (2020: $400,000).
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 2021 reporting period the Chairman assumed additional responsibilities in order
to accommodate a smooth transition of management during the first half of 2021 and subsequently again in Q4
of 2021 when the Project review was being undertaken. For these additional services, the Chairman was paid at a
rate of $2,500 per day for a total of $172,500 during the year. When this rate applied, the standard Non-Executive
Chairman’s fee was not paid.
A Director may also be reimbursed for out-of-pocket expenses incurred as a result of their directorship or any
special duties.
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2021 ANNUAL REPORT DIRECTORS’ REPORT
19.
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
Salaries &
Fees
$
Annual
Leave
$
Bonus
$
Super-
annuation
Termination
Payments
Options &
Rights
Long Service
Leave
$
$
$
$
2021
Non-Executive Directors (NED)
I Clyne(i)
C Gilligan
I Murray
C Lepani
NED Sub total
Executive Director
I Clyne(i)
Executive Director Sub total
Other KMP
T Richards
M Smith
G Rapley(ii)
G Zamudio(iii)
31,667
60,000
60,000
60,000
211,667
172,500
172,500
451,125
305,763
250,508
83,525
Other KMP Sub total
1,090,921
-
-
-
-
-
-
-
20,873
4,716
12,716
5,589
43,894
-
-
-
-
-
-
-
-
60,000
-
17,808
77,808
3,167
5,850
5,850
5,040
19,907
16,825
16,825
27,136
24,486
-
13,721
65,343
-
-
-
-
-
-
-
-
-
-
119,383
119,383
Total
$
34,834
65,850
65,850
65,040
231,574
189,325
189,325
-
-
-
-
-
-
-
-
-
-
-
-
-
-
238,026
181,117
-
308,090
727,233
1,299
6,557
-
(9,605)
(1,749)
738,459
582,639
263,224
538,511
2,122,833
%
-
-
-
-
-
32
41
-
61
TOTAL
1,475,088
43,894
77,808
102,075
119,383
727,233
(1,749)
2,543,732
(i) Mr I Clyne worked in an executive capacity from 1 January 2021 to 30 June 2021 and from 11 November 2021 to 31 December 2021
(ii) Mr G Rapley commenced on 1 February 2021 and resigned on 31 October 2021
(iii) Mr G Zamudio resigned on 31 March 2021. On this date, the Board approved that Mr G Zamudio 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 $0.28. 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.
2021 ANNUAL REPORT
24
19.
REMUNERATION REPORT - AUDITED (CONTINUED)
Details of Remuneration (Continued)
Short Term Benefits
Post Employment Benefits
Share Based
Payments
Long Term
Benefits
Performance
Related
DIRECTORS’ REPORT
Salaries &
Fees
$
Annual
Leave
$
Bonus
$
Super-
annuation
Termination
Payments
Options &
Rights
Long Service
Leave
$
$
$
$
2020
Non-Executive Directors (NED)
I Clyne(i)
C Gilligan
C Lepani(ii)
I Murray
NED Sub total
Executive Directors
I Clyne(i)
R Heeks(iii)
Executive Directors Sub total
Other KMP
T Richards(iv)
M Smith
G Zamudio
Other KMP Sub total
47,500
60,000
27,807
60,000
195,307
298,542
255,000
553,542
103,899
258,214
217,937
580,050
-
-
-
-
-
-
-
-
8,391
21,075
18,265
47,731
-
-
-
-
-
-
-
-
-
-
-
-
-
4,513
5,700
-
5,700
15,913
28,361
-
28,361
10,364
25,331
22,439
58,134
-
-
-
-
-
-
-
-
-
-
-
-
399,996
399,996
740,735
740,735
-
-
-
-
-
193,701
185,846
379,547
Total
$
52,013
65,700
27,807
65,700
211,220
326,903
1,395,731
1,722,634
122,654
506,002
449,678
%
-
-
-
-
-
-
53
-
38
41
-
-
-
-
-
-
-
-
-
7,681
5,191
12,872
1,078,334
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 5 October 2020
2021 ANNUAL REPORT
25
DIRECTORS’ REPORT
19.
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 July 2021 to 10 November 2021;
• Directors Fees of $2,500 per day while working in an executive capacity from 1 January 2021 to 30 June 2021
and 11 November 2021 to 31 December 2021;
• Statutory superannuation contributions;
• Eligible to participate in the long-term incentive schemes offered by the Company, subject to shareholder
approval; 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, subject to shareholder
approval; 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, subject to shareholder
approval; and
• No notice period.
Sir Charles Lepani - 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, subject to shareholder
approval; and
• No notice period.
26
2021 ANNUAL REPORT DIRECTORS’ REPORT
19.
REMUNERATION REPORT - AUDITED (CONTINUED)
Short Term Incentives
No bonus payments were made to Directors of the Company during the reporting period. A cash bonus payment
based on achievement of KPIs for the 2020 financial year was awarded and made in January 2021 to two KMP
of the Group for performance during that period. The STI entitlement was based on a percentage of the TFR as
follows:
2020 Incentive (Paid in 2021)
M Smith
G Zamudio
*
inclusive of superannuation $1,692
STI %
20% of TFR
7.5% of TFR
STI Value
$60,000
$19,500*
The Company’s STI measures as approved by the Board for the 2021 financial year relate to the delivery of the
primary objective of the Company, being safe project execution and include:
STI Measure
Threshold and Target
Environmental,
Social Governance
Project Execution
Community relocation completed by Q4 2021, Landowner business
arm and landowner association governance in place, Alotau office
operational, site medical clinic operational providing local support.
Funding (debt and equity) in place for board final investment
decision Q2 2021. Cost to complete estimate as at 31 December
2021 tracking within +/-5% of agreed baseline.
Result
Not achieved.
Not achieved.
Safety Performance No more than 2 LTI’s for the company of contractor workforce.
Achieved Stretch.
The table below outlines the STIs that were available to Executive KPI during the 2021 financial year.
Maximum potential STI
2021
Target
Stretch1
T Richards
$238,625
$357,938
M Smith
$149,186
$223,779
G Rapley2
N/A
N/A
% linked to
Corporate Performance
% linked to
Personal Performance
Actual STI
awarded
100%
100%
-
-
-
-
-
-
-
1
2
Inclusive of “Target”
G Rapley did not participate in the STI scheme due to his unique role he had a specific Retention and Performance
bonus of 50% of one year’s TFR after 2 years or upon early completion of the Project.
The Board has discretion on whether to pay the STI in any given year, irrespective of whether the Company and
personal STI targets are achieved. The Board, in exercising its discretion determined that no STI would be paid in
respect of the 2021 financial year.
27
2021 ANNUAL REPORT DIRECTORS’ REPORT
19.
REMUNERATION REPORT - AUDITED (CONTINUED)
Long Term Incentives – Share Based Compensation
Options
Options over ordinary shares in the Company were provided as remuneration to KMP during the year as per the
Securities Incentive Plan, which was approved by shareholders at the Company’s AGM held on 30 May 2018.
No Options were granted during the 2021 reporting period to the Directors of the Company and other KMP of the
Group. No Options vested during the 2021 reporting period.
The following table outlines the Options granted or vested during the 2020 reporting period to the Directors of the
Company and other KMP of the Group.
Options
granted
during
the
year
Grant
date
Fair
value
per
option
at grant
date
Value of
option
at grant
date
($)
Vesting
date
Exercise
price
Expiry
date
Options
vested/
lapsed
during
the
year
2020
Instru-
ment
Year
Executive Director
R Heeks
ZEPO(i) 2020
5,231 28-Jul-20 $0.680
3,557 28-July-21 $0.000
21-Aug-21
R Heeks
ZEPO(i) 2020 244,662 28-Jul-20 $0.680 166,370 28-July-23 $0.000
21-Aug-23
R Heeks
PEPO(ii) 2020 182,344 28-Jul-20 $0.430
78,408 28-July-24 $0.972
21-Aug-24
Other KMP
T Richards ZEPO(i) 2020 320,000
8-Jul-20
$0.445 142,400
1-Jan-22
$0.000
1-Jan-22
T Richards ZEPO(i) 2020 327,500
8-Jul-20
$0.445 145,738
1-Jan-23
$0.000
1-Jan-23
M Smith
ZEPO(i) 2020
12,538 11-Aug-20 $0.625
7,836 11-Aug-21 $0.000
21-Aug-21
M Smith
ZEPO(i) 2020 168,960 11-Aug-20 $0.625 105,600 11-Aug-23 $0.000
21-Aug-23
M Smith
PEPO(ii) 2020 116,521 11-Aug-20 $0.393
45,793 11-Aug-24 $0.894
21-Aug-24
G Zamudio ZEPO(i) 2020
12,538 11-Aug-20 $0.625
7,836 11-Aug-21 $0.000
21-Aug-21
G Zamudio ZEPO(i) 2020 112,640 11-Aug-20 $0.625
70,400 11-Aug-23 $0.000
21-Aug-23
G Zamudio PEPO(ii) 2020
77,681 11-Aug-20 $0.393
30,529 11-Aug-24 $0.894
21-Aug-24
-
-
-
-
-
-
-
-
-
-
-
(i) Zero exercise price options (ZEPO)
(ii) Premium exercise price options (PEPO)
The fair value of the Options is measured at grant date and allocated equally over the period from grant date to
vesting date, unless participants resign during the vesting period, in which case the fair value of the Options is
expensed immediately. This allocation is reflected in the Share Based Payments column of the remuneration
tables above.
The fair value at grant date was determined by a combination of internal and external sources using a Black-
Scholes option pricing model and independent third-party valuations.
28
2021 ANNUAL REPORT DIRECTORS’ REPORT
19.
REMUNERATION REPORT - AUDITED (CONTINUED)
Long Term Incentives – Share Based Compensation (Continued)
Share Appreciation Rights
Share Appreciation Rights over ordinary shares in the Company were granted as remuneration to KMP during
prior financial years as per the Securities Incentive Plan, which was approved by shareholders at the Company’s
AGM held on 30 May 2018.
No Share Appreciation Rights were issued during the 2021 reporting period due to the introduction of the revised
LTI Plan.
The following table outlines the Share Appreciation Rights granted during the 2020 reporting period to the
Directors of the Company and other KMP of the Group.
Rights
granted
during
the
year
Fair
value
per right
at grant
date
Value
of right
at grant
date
($)
Grant
date
Vesting
date
Exercise
price
Expiry
date
2020
Instru-
ment
Year
Executive Director
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
SAR 2020 134,616 11-Aug-20 $0.429
57,750 11-Aug-23 $0.625
21-Aug-24
G Zamudio
SAR 2020
89,744 11-Aug-20 $0.429
38,500 11-Aug-23 $0.625
21-Aug-24
Rights
vested/
lapsed
during
the year
-
-
-
The fair value of the Share Appreciation Rights is measured at grant date and allocated equally over the period
from grant date to vesting date, unless participants resign during the vesting period, in which case the fair value of
the Share Appreciation Rights is expensed immediately. This allocation is reflected in the Share Based Payments
column of the remuneration tables above.
The fair value at grant date was independently determined by a third party.
Share Performance Rights
Share Performance Rights over ordinary shares in the Company were granted as remuneration to KMP during
the year as per the Securities Incentive Plan, which was approved by shareholders at the Company’s AGM held
on 30 May 2018.
The following table outlines the Share Performance Rights granted or vested during the 2021 reporting period to
the Directors of the Company and other KMP of the Group.
Rights
granted
during
the year
Grant
date
Fair
value
per right
at grant
date
Value
of right
at grant
date
($)
Vesting
date
Exercise
price
Expiry
date
Instru-
ment
Year
2021
Other KMP
T Richards
SPR 2021 1,079,545 2-Aug-21 $0.335
361,648 31-Dec-23 $0.000
31-Mar-24
M Smith
SPR 2021
600,000 2-Aug-21 $0.335
201,000 31-Dec-23 $0.000
31-Mar-24
Rights
vested/
lapsed
during
the year
-
-
The fair value of the Share Performance Rights is measured at grant date and allocated equally over the period
from grant date to vesting date. If participants resign during the vesting period, the Share Performance Rights
are forfeited unless the Board at its discretion decides otherwise. If Share Performance Rights are retained by
the participants upon resignation or termination, the fair value of the Share Performance 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.
29
2021 ANNUAL REPORT DIRECTORS’ REPORT
19.
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.
Opening
Balance
1 January
2021
Granted
During
the Year
Exercised
During
the Year
Net
Change
Other
Held at
Resignation
Closing
Balance
31 December
2021
Options
Exercisable at
31 December
2021
-
-
-
-
-
-
-
-
-
2021
Directors
I Clyne
C Gilligan
I Murray
C Lepani
Sub total
Other KMP
T Richards
647,500
M Smith
1,032,039
G Rapley(i)
-
G Zamudio(ii)
936,879
Sub total
TOTAL
2,616,418
2,616,418
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(165,072)
-
-
(165,072)
(165,072)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(936,879)
-
-
-
-
-
647,500
866,967
-
-
(936,879)
1,514,467
(936,879)
1,514,467
-
-
-
-
-
-
-
-
-
-
-
(i) Mr G Rapley commenced on 1 February 2021 and resigned on 31 October 2021
(ii) Mr G Zamudio resigned on 31 March 2021
Opening
Balance
1 January
2020
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)
2020
Directors
I Clyne
C Gilligan
I Murray
C Lepani(iii)
-
-
-
-
-
-
-
-
-
-
-
-
-
R Heeks(ii)
1,111,690
Sub total
1,111,690
Other KMP
T Richards(iv)
-
647,500
M Smith
927,559
298,019
(193,539)
G Zamudio
927,559
202,859
(193,539)
Sub total
1,855,118
1,148,378
(387,078)
TOTAL
2,966,808
1,148,378
(387,078)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(1,111,690)
(1,111,690)
-
-
-
-
-
-
-
-
-
-
647,500
1,032,039
936,879
2,616,418
(1,111,690)
2,616,418
-
-
-
-
-
-
-
-
-
-
-
(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 5 October 2020
30
2021 ANNUAL REPORT DIRECTORS’ REPORT
19.
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.
Opening
Balance
1 January
2021
Granted
During
the Year
Exercised
During
the Year
Net
Change
Other
Held at
Resignation
Closing
Balance
31 December
2021
Rights
Exercisable at
31 December
2021(i)
2021
Directors
I Clyne
C Gilligan
I Murray
C Lepani
Sub total
Other KMP
T Richards
M Smith
G Rapley(ii)
-
-
-
-
-
-
501,885
-
G Zamudio(iii)
457,013
Sub total
TOTAL
958,898
958,898
Opening
Balance
1 January
2020
-
-
-
-
498,337
498,337
2020
Directors
I Clyne
C Gilligan
I Murray
C Lepani(iii)
R Heeks(ii)
Sub total
Other KMP
T Richards(iv)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(457,013)
(457,013)
(457,013)
-
-
-
-
-
-
-
-
-
-
-
-
501,885
501,885
-
-
-
-
501,885
501,885
501,885
501,885
(i) Share Appreciation Rights exercisable at 31 December 2021 have not yet vested
(ii) Mr G Rapley commenced on 1 February 2021 and resigned on 31 October 2021
(iii) Mr G Zamudio resigned on 31 March 2021
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)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(498,337)
(498,337)
-
-
-
-
(498,337)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
501,885
457,013
958,898
958,898
501,885
457,013
958,898
958,898
M Smith
367,269
134,616
G Zamudio
367,269
89,744
Sub total
TOTAL
734,538
224,360
1,232,875
224,360
(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 5 October 2020
31
2021 ANNUAL REPORT DIRECTORS’ REPORT
19.
REMUNERATION REPORT - AUDITED (CONTINUED)
Equity Instrument Disclosures Relating to KMP (Continued)
Share Performance Rights
Share Performance Rights over Ordinary Shares in the Company held during the financial year by Directors of the
Company and other KMP of the Group.
Opening
Balance
1 January
2021
Granted
During
the Year
Exercised
During
the Year
Net
Change
Other
Held at
Resignation
Closing
Balance
31 December
2021
Rights
Exercisable at
31 December
2021
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,079,545
600,000
-
-
1,679,545
1,679,545
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,079,545
600,000
-
-
1,679,545
1,679,545
-
-
-
-
-
-
-
-
-
-
-
2021
Directors
I Clyne
C Gilligan
I Murray
C Lepani
Sub total
Other KMP
T Richards
M Smith
G Rapley(i)
G Zamudio(ii)
Sub total
TOTAL
(i) Mr G Rapley commenced on 1 February 2021 and resigned on 31 October 2021
(ii) Mr G Zamudio resigned on 31 March 2021
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 2021
Issued on
Vesting of
Options
Shares
Acquired
on Market
Held at
Resignation
Net
Change
Other(iii)
Closing Balance
31 December 2021
330,330
-
-
-
330,330
-
-
-
-
-
-
-
333,317
165,072
-
373,317
706,634
-
-
363,930
-
-
-
363,930
66,000
-
-
-
-
-
-
-
-
-
-
-
(373,317)
595,238
119,048
238,095
-
1,289,498
119,048
238,095
-
952,381
1,646,641
119,048
-
-
-
185,048
498,389
-
-
165,072
66,000
(373,317)
119,048
683,437
1,036,964
165,072
429,930
(373,317)
1,071,429
2,330,078
2021
Directors
I Clyne
C Gilligan
I Murray
C Lepani
Subtotal
Other KMP
T Richards
M Smith
G Rapley(i)
G Zamudio(ii)
Subtotal
TOTAL
(i) Mr G Rapley commenced on 1 February 2021 and resigned on 31 October 2021
(ii) Mr G Zamudio resigned on 31 March 2021
(iii) Subscription under the share placement finalised on 12 February 2021 after obtaining shareholder approval at
an EGM
32
2021 ANNUAL REPORT DIRECTORS’ REPORT
19.
REMUNERATION REPORT - AUDITED (CONTINUED)
Equity Instrument Disclosures Relating to KMP (Continued)
Ordinary Shares (Continued)
Opening Balance
1 January 2020
Issued on
Vesting of
Options
Shares
Acquired
on Market
Held at
Resignation
Net
Change
Other
Closing Balance
31 December 2020
2020
Directors
I Clyne
C Gilligan
I Murray
C Lepani(ii)
R Heeks(i)
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)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
330,330
-
-
-
-
330,330
-
333,317
373,317
706,634
1,036,964
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 5 October 2020
Other Transactions with KMP and their related parties
There were no other transactions with KMP and their related parties during the year.
END OF REMUNERATION REPORT
The Directors Report, including the Remuneration Report, is signed in accordance with a resolution of the
Directors:
Andrew Bantock
Non-Executive Chairman
Perth, Australia
1 April 2022
33
2021 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 2021, 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;
b. No contraventions of any applicable code of professional conduct in relation to the audit; and
c. No non-audit services provided that contravene 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
g
Pierre Dreyer
Pierre Dreyer
Partner
1 April 2022
34
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
2021 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 2021, the consolidated statement of 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
2021 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.
Material uncertainty related to going concern
We draw attention to Note 1 in the financial report, which describes the principal events or conditions
which raise doubt about the Group’s ability to continue as a going concern. These events or conditions
indicate that a material uncertainty exists that may cast significant doubt on the Group’s ability to
continue as a going concern. Our opinion is not modified in respect of this matter.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
35
2021 ANNUAL REPORT
INDEPENDENT AUDITOR’S REPORT
2
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. In addition to the matter described in the Material uncertainty
related to going concern section, we have determined the matters described below to be the key audit
matters to be communicated in our report. For each matter below, our description of how our audit
addressed the matter is provided in that context.
We have fulfilled the responsibilities describe d 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.
36
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
2021 ANNUAL REPORT
INDEPENDENT AUDITOR’S REPORT
3
Impairment of non-current assets
Why significant
How our audit addressed the key audit matter
As at 31 December 2021, the Group had non-current assets
of $100,619,619 comprising of capitalised development
expenditure, property, plant and equipment and right of use
assets.
At the end of each reporting period, the Group exercises
judgment in determining whether there is any indication of
impairment of these assets. If any such indicators exist, the
Group estimates the recoverable amount of the applicable
assets. The Group assessed whether any indicators of
impairment were present at 31 December 2021 and
concluded that indicators of impairment were present in
respect to the Woodlark project cash generating unit (CGU).
Management performed an impairment calculation to
determine the recoverable amount of the CGU. This
calculation resulted in a recoverable amount of
$100,000,000 for these non-current assets, and an
impairment charge of $27,275,446 being charged to the
consolidated statement of profit or loss.
Key assumptions, judgments and estimates, used in the
formulation of the Group’s impairment testing of non-
current assets are disclosed in note 13.
We considered this to be a key audit matter because of the
significant judgement involved in determining:
► Whether indicators of impairment were present,
► The recoverable amount of the Woodlark project
CGU including the appropriate assumptions used in
selecting comparable transactions to determine
appropriate reserve and resource valuation
multiples,
► The final estimated recoverable amount within the
reasonable range of values determined based on
identified market transactions.
We evaluated the Group’s consideration of internal and
external sources of information in assessing whether
indicators of impairment existed.
As indicators of impairment were identified, impairment
testing was conducted by the Group. We evaluated the
assumptions and methodologies used by the Group and the
estimates made in conducting this testing. Our audit
procedures included the following:
►
Inquired of management and the board of
directors regarding the status of the proposed
development activities and mine plan.
► Evaluated, with involvement from our valuation
specialists, the appropriateness of the Group’s
valuation approach and methodology used to
determine the recoverable amount of the
Woodlark CGU given the risks associated with this
CGU.
► Assessed the reserve and resource valuation
multiples used to determine the recoverable
amount of the Woodlark CGU for reasonableness.
This included comparing management’s
recoverable amount to alternative benchmarks for
determining indicative fair value less costs of
disposal.
► Ensured the Group's impairment methodology and
calculations were in accordance with the
requirements of Australian Accounting Standards.
► Assessed the work of the Group's experts with
respect to the reserve and resource assumptions
used to determine recoverable amount. We
examined the competence, qualifications and
objectivity of the Group's experts and whether key
assumptions were consistent with those used
elsewhere in the financial report.
► Assessed the impact of sensitivities to the reserve
and resource multiples used to determine the
recoverable amount of the CGU to ensure there
was no indication of further impairment based on
the latest available information.
► Evaluated the adequacy of the Group's disclosures
in the financial report relating to impairment.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
37
2021 ANNUAL REPORT
INDEPENDENT AUDITOR’S REPORT
4
Provision for onerous contracts
Why significant
How our audit addressed the key audit matter
As 31 December 2021, the Group recognised a provision for
onerous contracts amounting to $6,703,000. This amount
related to the estimated unavoidable costs of terminating a
number of contractual arrangements.
We considered this to be a key audit matter because of the
significant judgement involved in the Group’s estimation of
the unavoidable costs to be incurred in terminating these
arrangements. See note 3 of the financial report for the
Group’s judgements involved in relation to this estimate.
We evaluated the Group’s assessment of accounting for the
existence and estimation of unavoidable costs under
onerous contracts as a result of suspending key mine
development programs. Our audit procedures included the
following:
► Obtained the Group’s contract register and
confirmed its completeness through inquiry of
management and the directors, review of board
minutes and legal correspondence, and market
announcements.
►
Inspected significant executed contracts, and a
sample of non-significant contracts to identify
whether they contained any unavoidable costs that
would be incurred in the event that these
contracts were terminated.
► Obtained and inspected written communications
between the Group and the contract parties to
determine the appropriateness of management’s
judgement as to the future termination of the
contract and whether the quantum and terms of
any termination payments under the relevant
agreements had subsequently been amended.
► Reviewed any legal correspondence obtained by
the Group which assessed the Group’s contractual
obligations and penalties incurred on termination
of certain contractual arrangements in question.
► Reviewed supporting documentation where the
quantum of the termination payment payable
under the contract was not in accordance with the
termination payments set out in the relevant
contract in order to assess the adequacy of the
provision recognised.
► Reviewed a sample of subsequent payments in the
subsequent payments register in order to identify
potential contract termination payouts which
should have been recognised.
► Evaluated the adequacy of the Group's disclosures
in the financial report relating to onerous
contracts.
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 2021 annual report other than the financial report and our
auditor’s report thereon. We obtained the directors’ report that is to be included in the annual report,
prior to the date of this auditor’s report, and we expect to obtain the remaining sections of the annual
report after the date of this auditor’s report.
Our opinion on the financial report does not cover the other information and we do not and will not
express any form of assurance conclusion thereon, with the exception of the Remuneration Report
and our related assurance opinion.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
38
2021 ANNUAL REPORT
INDEPENDENT AUDITOR’S REPORT
4
5
Provision for onerous contracts
Why significant
How our audit addressed the key audit matter
As 31 December 2021, the Group recognised a provision for
We evaluated the Group’s assessment of accounting for the
onerous contracts amounting to $6,703,000. This amount
existence and estimation of unavoidable costs under
related to the estimated unavoidable costs of terminating a
onerous contracts as a result of suspending key mine
number of contractual arrangements.
development programs. Our audit procedures included the
We considered this to be a key audit matter because of the
significant judgement involved in the Group’s estimation of
the unavoidable costs to be incurred in terminating these
arrangements. See note 3 of the financial report for the
Group’s judgements involved in relation to this estimate.
following:
► Obtained the Group’s contract register and
confirmed its completeness through inquiry of
management and the directors, review of board
minutes and legal correspondence, and market
announcements.
►
Inspected significant executed contracts, and a
sample of non-significant contracts to identify
whether they contained any unavoidable costs that
would be incurred in the event that these
contracts were terminated.
► Obtained and inspected written communications
between the Group and the contract parties to
determine the appropriateness of management’s
judgement as to the future termination of the
contract and whether the quantum and terms of
any termination payments under the relevant
agreements had subsequently been amended.
► Reviewed any legal correspondence obtained by
the Group which assessed the Group’s contractual
obligations and penalties incurred on termination
of certain contractual arrangements in question.
► Reviewed supporting documentation where the
quantum of the termination payment payable
under the contract was not in accordance with the
termination payments set out in the relevant
contract in order to assess the adequacy of the
provision recognised.
► Reviewed a sample of subsequent payments in the
subsequent payments register in order to identify
potential contract termination payouts which
should have been recognised.
► Evaluated the adequacy of the Group's disclosures
in the financial report relating to onerous
contracts.
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 2021 annual report other than the financial report and our
auditor’s report thereon. We obtained the directors’ report that is to be included in the annual report,
prior to the date of this auditor’s report, and we expect to obtain the remaining sections of the annual
report after the date of this auditor’s report.
Our opinion on the financial report does not cover the other information and we do not and will 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 on the other information obtained prior to the date of this
auditor’s report, 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 r eport as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with 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.
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.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
39
2021 ANNUAL REPORT
INDEPENDENT AUDITOR’S REPORT
6
► 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.
From the matters communicated to the directors, we determine 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 determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Report on the audit of the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 31
December 2021.
In our opinion, the Remuneration Report of Geopacific Resources Limited for the year ended 31
December 2021, complies with section 300A of the Corporations Act 2001.
40
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
2021 ANNUAL REPORT
INDEPENDENT AUDITOR’S REPORT
7
41
Responsibilities
The directors of the Company are responsible for the preparation and presentat ion 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
g
Pierre Dreyer
Pierre Dreyer
Partner
Perth
1 April 2022
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
2021 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 2021 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 2021
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) subject to the matters set out in Note 1 to the financial statements, 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 2021.
On behalf of the Board
Andrew Bantock
Non-Executive Chairman
Perth, Australia
1 April 2022
42
50 | P a g e
51 | P a g e
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2021
Other income
Administration expenses
Consultancy expense
Depreciation expense
Employee benefits expense
Share-based payments
Finance costs
Impairment write downs
Exploration expense
Onerous contracts expense
Other expense
Foreign currency gain
Fair value loss on financial liabilities
Gain on derecognition of Kou Sa Project
Loss before income tax
Income tax benefit
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 income/(loss) for the year,
net of tax
Consolidated
2021
$
2020
$
518,373
282,423
(791,756)
(2,211,484)
(260,607)
(2,264,770)
(731,128)
(16,816,122)
(4,320,633)
(27,275,446)
(6,703,000)
(1,071,906)
609,792
(1,021,681)
(1,374,089)
(141,634)
(2,418,509)
(1,120,281)
(830,927)
(20,448)
(208,345)
401,346
1,884,834
(61,318,687)
(4,567,311)
Note
5(a)
14 & 15
27
5(b)
18 & 19
17(ii)
6
7
9, 11, 13 & 14
-
-
-
-
-
-
-
-
-
(61,318,687)
(61,318,687)
(4,567,311)
(4,567,311)
4,107,798
(5,358,751)
4,107,798
(5,358,751)
Loss after tax from continuing operations
(61,318,687)
(4,567,311)
Total comprehensive loss for the year
(57,210,889)
(9,926,062)
2021 ANNUAL REPORT
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
DIRECTORS’ DECLARATION
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2021
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2021
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 2021 are in accordance with the Corporations Act 2001, including:
Other income
(i) giving a true and fair view of the consolidated entity’s financial position as at 31 December 2021
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) subject to the matters set out in Note 1 to the financial statements, 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 2021.
Administration expenses
Consultancy expense
Depreciation expense
Employee benefits expense
Share-based payments
Finance costs
Fair value loss on financial liabilities
Impairment write downs
Exploration expense
Onerous contracts expense
Other expense
Foreign currency gain
Gain on derecognition of Kou Sa Project
Loss before income tax
Income tax benefit
Consolidated
2021
$
2020
$
518,373
282,423
(791,756)
(2,211,484)
(260,607)
(2,264,770)
(731,128)
(16,816,122)
(4,320,633)
(27,275,446)
-
(6,703,000)
(1,071,906)
609,792
-
(61,318,687)
(1,021,681)
(1,374,089)
(141,634)
(2,418,509)
(1,120,281)
(830,927)
-
(20,448)
(208,345)
-
-
401,346
1,884,834
(4,567,311)
-
-
Note
5(a)
14 & 15
27
5(b)
18 & 19
9, 11, 13 & 14
17(ii)
6
7
Loss after tax from continuing operations
(61,318,687)
(4,567,311)
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 income/(loss) for the year,
net of tax
-
(61,318,687)
(61,318,687)
-
(4,567,311)
(4,567,311)
4,107,798
(5,358,751)
4,107,798
(5,358,751)
Total comprehensive loss for the year
(57,210,889)
(9,926,062)
50 | P a g e
51 | P a g e
43
On behalf of the Board
Andrew Bantock
Non-Executive Chairman
Perth, Australia
1 April 2022
2021 ANNUAL REPORT
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2021
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2021
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2021
Total comprehensive loss attributable to:
Non-controlling interest
Owners of the parent
Consolidated
Note
2021
$
2020
$
-
(57,210,889)
(57,210,889)
-
(9,926,062)
(9,926,062)
Loss per share (cents) for loss attributable to the ordinary
equity holders of the company:
Basic loss per share
Diluted loss per share
28
28
(12.67)
(12.67)
(2.59)
(2.59)
The above consolidated statement of profit or loss and other comprehensive income should be read
in conjunction with the accompanying notes.
Accumulated losses
Total Equity attributable to equity holders
The above consolidated statement of financial position should be read
in conjunction with the accompanying notes.
52 | P a g e
53 | P a g e
44
Current Assets
Cash and cash equivalents
Trade and other receivables
Prepayments
Inventories
Total Current Assets
Non-Current Assets
Trade and other 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
Other financial liabilities
Provisions
Total Current Liabilities
Non-Current Liabilities
Interest-bearing liabilities
Other financial liabilities
Provisions
Total Non-Current Liabilities
TOTAL LIABILITIES
NET ASSETS
Equity
Issued capital
Reserves
Consolidated
Note
2021
$
2020
$
8
9
10
11
9
12
13
14
15(a)
15 & 19
16
17
15 & 19
18
17
67,470,477
267,436
1,292,363
781,125
69,811,401
3,829,642
2,005,023
50,895,186
49,104,814
619,619
106,454,284
18,480,389
193,662
15,285,048
33,959,099
-
420,326
519,010
939,336
34,639,855
392,774
1,384,099
444,169
36,860,897
1,046,971
1,844,673
37,975,609
7,244,464
718,272
48,829,989
6,128,458
220,164
142,907
6,491,529
-
496,708
201,691
698,399
176,265,685
85,690,886
34,898,435
7,189,928
141,367,250
78,500,958
20
21
284,846,318
5,744,838
(149,223,906)
141,367,250
165,801,105
605,072
(87,905,219)
78,500,958
2021 ANNUAL REPORT
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2021
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2021
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2021
Total comprehensive loss attributable to:
Non-controlling interest
Owners of the parent
Consolidated
Note
2021
$
2020
$
-
-
(57,210,889)
(57,210,889)
(9,926,062)
(9,926,062)
Loss per share (cents) for loss attributable to the ordinary
equity holders of the company:
Basic loss per share
Diluted loss per share
28
28
(12.67)
(12.67)
(2.59)
(2.59)
The above consolidated statement of profit or loss and other comprehensive income should be read
in conjunction with the accompanying notes.
Current Assets
Cash and cash equivalents
Trade and other receivables
Prepayments
Inventories
Total Current Assets
Non-Current Assets
Trade and other 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
Other financial liabilities
Provisions
Total Current Liabilities
Non-Current Liabilities
Interest-bearing liabilities
Other financial liabilities
Provisions
Total Non-Current Liabilities
TOTAL LIABILITIES
NET ASSETS
Note
8
9
10
11
9
12
13
14
15(a)
16
15 & 19
17
18
15 & 19
17
Consolidated
2021
$
2020
$
67,470,477
267,436
1,292,363
781,125
69,811,401
3,829,642
2,005,023
50,895,186
49,104,814
619,619
106,454,284
34,639,855
392,774
1,384,099
444,169
36,860,897
1,046,971
1,844,673
37,975,609
7,244,464
718,272
48,829,989
176,265,685
85,690,886
18,480,389
193,662
15,285,048
33,959,099
-
420,326
519,010
939,336
6,128,458
220,164
142,907
6,491,529
-
496,708
201,691
698,399
34,898,435
7,189,928
141,367,250
78,500,958
Equity
Issued capital
Reserves
Accumulated losses
Total Equity attributable to equity holders
20
21
284,846,318
5,744,838
(149,223,906)
141,367,250
165,801,105
605,072
(87,905,219)
78,500,958
The above consolidated statement of financial position should be read
in conjunction with the accompanying notes.
52 | P a g e
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45
2021 ANNUAL REPORT
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDING 31 DECEMBER 2021
Consolidated
Share-
Based
Payments
Reserve
(Note 21)
$
Foreign
Currency
Translation
Reserve
(Note 21)
$
Option
Reserve
(Note 21)
$
Issued
Capital
(Note 20)
$
Other Equity
Reserve
(Note 21)
$
Accumulated
Losses
$
Total
Attributable
to Owners of
Parent
$
Total
Equity
$
At 1 January 2021
Loss for the year
Exchange difference on translation of foreign operations
Total comprehensive income/(loss) for the year
Transactions with owners in their capacity as owners
Shares issued during the year
Options issued during the year
Share issue costs
Share-based payments
165,801,105
3,993,609
-
-
-
-
-
-
-
-
-
-
125,285,095
-
(6,239,882)
-
-
-
-
731,128
-
300,840
-
-
(2,018,220)
(1,370,317)
(87,905,219)
78,500,958
78,500,958
-
4,107,798
4,107,798
-
-
-
-
-
-
-
-
-
-
-
(61,318,687)
-
(61,318,687)
(61,318,687)
4,107,798
(57,210,889)
(61,318,687)
4,107,798
(57,210,889)
-
-
-
-
125,285,095
300,840
(6,239,882)
731,128
125,285,095
300,840
(6,239,882)
731,128
At 31 December 2021
284,846,318
4,724,737
300,840
2,089,578
(1,370,317)
(149,223,906)
141,367,250
141,367,250
At 1 January 2020
Loss for the year
Exchange difference on translation of foreign operations
Total comprehensive loss for the year
Transactions with owners in their capacity as owners
Shares issued during the year
Share issue costs
Share-based payments
At 31 December 2020
148,972,741
-
-
-
18,379,818
(1,551,454)
-
165,801,105
2,873,328
-
-
-
-
-
1,120,281
3,993,609
-
-
-
-
-
-
-
-
3,340,531
-
(5,358,751)
(5,358,751)
-
-
-
(2,018,220)
(1,370,317)
-
-
-
-
-
-
(1,370,317)
(83,337,908)
(4,567,311)
-
(4,567,311)
-
-
-
(87,905,219)
70,478,375
(4,567,311)
(5,358,751)
(9,926,062)
18,379,818
(1,551,454)
1,120,281
78,500,958
70,478,375
(4,567,311)
(5,358,751)
(9,926,062)
18,379,818
(1,551,454)
1,120,281
78,500,958
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
46
54 | P a g e
2021 ANNUAL REPORT
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2021
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDING 31 DECEMBER 2021
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees
Interest received
Government incentives and other income
Interest and other finance costs 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
Net Cash Used In Investing Activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from share and option issued (net of costs)
Proceeds from borrowings (net of costs)
Repayment of borrowings
Payment of principal portion of lease liability
Net Cash From Financing Activities
Consolidated
Note
2021
$
2020
$
(8,355,108)
147,753
-
(5,983,746)
(14,191,101)
(5,198,755)
167,886
114,537
(9,950)
(4,926,282)
31(b)
(56,538,984)
-
(36,097)
(4,733,857)
(61,308,938)
(5,837,187)
182
(65,098)
(9,703,347)
(15,605,450)
118,674,686
125,883,689
(140,596,551)
(242,319)
103,719,505
17,398,899
-
-
(133,725)
17,265,174
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
28,219,466
34,639,855
4,611,156
67,470,477
(3,266,558)
37,505,067
401,346
34,639,855
The above consolidated statement of cash flows should be read
in conjunction with the accompanying notes.
55 | P a g e
47
2021 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021 GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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 2021 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 1 April 2022.
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
This financial report has been prepared on the going concern basis, which contemplates the continuity of
normal business activity and the realisation of assets and settlement of liabilities in the normal course of
business.
During the year ended 31 December 2021, the Group incurred a net loss after tax of $61,318,687 (2020:
$4,567,311) and had operating and investing cash outflows of $14,191,101 (2020: $4,926,282) and
$61,308,938 (2020: $15,605,450) respectively.
In February 2021, the Group completed a successful $140 million placement with shareholders, raised in two
tranches, being an initial raising of $18.4 million in December 2020 and a second tranche of $121.6 million
raised in February 2021. The Company also completed a Share Purchase Plan to raise a further $1.87 million.
In June 2021, the Group reached financial close with Sprott for the previously announced US$100 million
project financing associated with the development of the Project. The US$100 million in financing was in the
form of an US$85 million Facility Agreement and a US$15 million Stream Agreement, with the US$15 million
Stream Agreement deposit available immediately. The US$85 million under the Finance Agreement was
deposited into the Company’s DPA, with funding to be available under staged drawdowns scheduled to occur
on satisfaction of certain Project development milestones.
Going Concern (continued)
In November 2021, the Group announced that Project development activities been delayed due to a
combination of inclement weather, deteriorating ground conditions and the impact of COVID-19 limiting the
availability of site access and overall worker productivity rates. In addition, a decision was taken to reassess
the original wharf design and evaluate a potential upgrade of the existing wharf facility to reduce cost and
construction complexity while providing greater opportunities for local community participation in the
Project. Delays were also experienced in issuance of the construction tender for the offshore tailings line and
the local community relocation program. Due to the impact of the delays, the Group made the decision to
defer all non-essential activities at the Project.
As part of the deferral of non-essential work, the Group commenced a critical path analysis to minimise the
impact of the delays on the overall project schedule as well as launching a review of the schedule and cost
estimate to determine the impact on the development budget.
Following the decision to defer all non-essential activities at the Project, the Company agreed amendments
to the terms and conditions of the Facility and Stream Agreements with Sprott for the facilities to remain in
place on substantially similar terms and conditions. Pursuant to the amendments, the Company prepaid all
of the principal (and accrued interest) under the Facility Agreement and repaid the deposit advanced under
the Stream Agreement in December 2021.
In mid-December 2021, the Company requested a voluntary suspension of trading in its ordinary shares. This
request arose after preliminary results from the review initiated in November 2021 indicated that there was
likely to be a material increase in the capital cost for development of the Project. The Company continued to
undertake the detailed work program to define and quantify the extent of the increase which extended into
the 2022 financial year.
Post financial year end it was determined that changes were required to preserve the Group financial
position. In view of the ongoing delays in the Project schedule and the consequent implications for capital
cost escalation, a range of steps were taken, including suspending all detailed engineering and civil works at
the Project pending the conclusion of the review of the Company’s strategic options and instigating a
redundancy program across the Group.
Whilst the Group had cash on hand of $67,470,477 (2020: $34,639,855) at 31 December 2021, its cash flow
forecast for the period ending 31 July 2023 reflects that the Group will require additional funding over that
period in order to meet the Group’s committed expenditure. Current volatility in global equity and
commodity markets resulting from the uncertainty created by the impact of COVID-19 as well as the conflict
between Ukraine and Russia, may impact the Group’s ability to raise debt or equity in the future.
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
upon:
(cid:120) The Group’s ability to raise funds from external sources to meet ongoing working and investing
capital requirements, as demonstrated by the capital raisings of $18.4 million and $123.47 million in
December 2020 and February 2021 respectively; and
(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.
48
56 | P a g e
57 | P a g e
2021 ANNUAL REPORT
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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 2021 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 1 April 2022.
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
business.
This financial report has been prepared on the going concern basis, which contemplates the continuity of
normal business activity and the realisation of assets and settlement of liabilities in the normal course of
During the year ended 31 December 2021, the Group incurred a net loss after tax of $61,318,687 (2020:
$4,567,311) and had operating and investing cash outflows of $14,191,101 (2020: $4,926,282) and
$61,308,938 (2020: $15,605,450) respectively.
In February 2021, the Group completed a successful $140 million placement with shareholders, raised in two
tranches, being an initial raising of $18.4 million in December 2020 and a second tranche of $121.6 million
raised in February 2021. The Company also completed a Share Purchase Plan to raise a further $1.87 million.
In June 2021, the Group reached financial close with Sprott for the previously announced US$100 million
project financing associated with the development of the Project. The US$100 million in financing was in the
form of an US$85 million Facility Agreement and a US$15 million Stream Agreement, with the US$15 million
Stream Agreement deposit available immediately. The US$85 million under the Finance Agreement was
deposited into the Company’s DPA, with funding to be available under staged drawdowns scheduled to occur
on satisfaction of certain Project development milestones.
Going Concern (continued)
In November 2021, the Group announced that Project development activities been delayed due to a
combination of inclement weather, deteriorating ground conditions and the impact of COVID-19 limiting the
availability of site access and overall worker productivity rates. In addition, a decision was taken to reassess
the original wharf design and evaluate a potential upgrade of the existing wharf facility to reduce cost and
construction complexity while providing greater opportunities for local community participation in the
Project. Delays were also experienced in issuance of the construction tender for the offshore tailings line and
the local community relocation program. Due to the impact of the delays, the Group made the decision to
defer all non-essential activities at the Project.
As part of the deferral of non-essential work, the Group commenced a critical path analysis to minimise the
impact of the delays on the overall project schedule as well as launching a review of the schedule and cost
estimate to determine the impact on the development budget.
Following the decision to defer all non-essential activities at the Project, the Company agreed amendments
to the terms and conditions of the Facility and Stream Agreements with Sprott for the facilities to remain in
place on substantially similar terms and conditions. Pursuant to the amendments, the Company prepaid all
of the principal (and accrued interest) under the Facility Agreement and repaid the deposit advanced under
the Stream Agreement in December 2021.
In mid-December 2021, the Company requested a voluntary suspension of trading in its ordinary shares. This
request arose after preliminary results from the review initiated in November 2021 indicated that there was
likely to be a material increase in the capital cost for development of the Project. The Company continued to
undertake the detailed work program to define and quantify the extent of the increase which extended into
the 2022 financial year.
Post financial year end it was determined that changes were required to preserve the Group financial
position. In view of the ongoing delays in the Project schedule and the consequent implications for capital
cost escalation, a range of steps were taken, including suspending all detailed engineering and civil works at
the Project pending the conclusion of the review of the Company’s strategic options and instigating a
redundancy program across the Group.
Whilst the Group had cash on hand of $67,470,477 (2020: $34,639,855) at 31 December 2021, its cash flow
forecast for the period ending 31 July 2023 reflects that the Group will require additional funding over that
period in order to meet the Group’s committed expenditure. Current volatility in global equity and
commodity markets resulting from the uncertainty created by the impact of COVID-19 as well as the conflict
between Ukraine and Russia, may impact the Group’s ability to raise debt or equity in the future.
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
upon:
(cid:120) The Group’s ability to raise funds from external sources to meet ongoing working and investing
capital requirements, as demonstrated by the capital raisings of $18.4 million and $123.47 million in
December 2020 and February 2021 respectively; and
(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.
56 | P a g e
57 | P a g e
49
2021 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021 GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Going Concern (continued)
Significant accounting policies
Notwithstanding the above, these conditions indicate the existence of a material uncertainty that may cast
significant doubt about the Group’s ability to continue as a going concern and, therefore, whether it will
realise its assets and extinguish its liabilities in the normal course of business at the amounts stated in the
financial report.
This financial report does not include any adjustments relating to the recoverability and classification of
recorded asset amounts, nor to the amounts or classification of liabilities that might be necessary should
the Group not be able to continue as a going concern.
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 2021. 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 2021 are set out below.
AASB 2020-8 Amendments to AASs – Interest Rate Benchmark Reform
The amendments provide temporary reliefs which address the financial reporting effects when an interbank
offered rate (IBOR) is replaced with an alternative nearly risk-free interest rate (RFR). The amendments
include the following practical expedients:
•
•
•
•
practical expedients when accounting for changes in the basis for determining the contractual cash
flows of financial assets and liabilities;
reliefs from discontinuing hedge relationships;
temporary relief from having to meet the separately identifiable requirement when a RFR instrument
is designated as a hedge of a risk component; and
additional AASB 7 - Financial Instruments disclosures.
Management has performed an assessment and these amendments did not impact the consolidated financial
statements of the Group. The Group intends to use the practical expedients in future periods when existing
IBORs are replaced by RFRs.
Accounting Standards and Interpretations issued but not yet effective
A number of new standards, amendment of standards and interpretation that have recently been issued but
not yet effective have not been adopted by the Group as at the financial reporting date. The Group has
reviewed these standards and interpretations and has determined that none of the new or amended
standards will significantly affect the Group’s accounting policies, financial position or performance.
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.
50
58 | P a g e
59 | P a g e
2021 ANNUAL REPORT
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Going Concern (continued)
Significant accounting policies
Notwithstanding the above, these conditions indicate the existence of a material uncertainty that may cast
significant doubt about the Group’s ability to continue as a going concern and, therefore, whether it will
realise its assets and extinguish its liabilities in the normal course of business at the amounts stated in the
financial report.
This financial report does not include any adjustments relating to the recoverability and classification of
recorded asset amounts, nor to the amounts or classification of liabilities that might be necessary should
the Group not be able to continue as a going concern.
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 2021. 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 2021 are set out below.
AASB 2020-8 Amendments to AASs – Interest Rate Benchmark Reform
The amendments provide temporary reliefs which address the financial reporting effects when an interbank
offered rate (IBOR) is replaced with an alternative nearly risk-free interest rate (RFR). The amendments
include the following practical expedients:
practical expedients when accounting for changes in the basis for determining the contractual cash
•
•
•
•
flows of financial assets and liabilities;
reliefs from discontinuing hedge relationships;
is designated as a hedge of a risk component; and
additional AASB 7 - Financial Instruments disclosures.
temporary relief from having to meet the separately identifiable requirement when a RFR instrument
Management has performed an assessment and these amendments did not impact the consolidated financial
statements of the Group. The Group intends to use the practical expedients in future periods when existing
IBORs are replaced by RFRs.
Accounting Standards and Interpretations issued but not yet effective
A number of new standards, amendment of standards and interpretation that have recently been issued but
not yet effective have not been adopted by the Group as at the financial reporting date. The Group has
reviewed these standards and interpretations and has determined that none of the new or amended
standards will significantly affect the Group’s accounting policies, financial position or performance.
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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51
2021 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021 GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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.
(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:
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.
Financial assets at amortised cost (debt instruments)
The Group measures financial assets at amortised cost if both of the following conditions are met:
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.
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.
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
52
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2021 ANNUAL REPORT
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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)
(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.
(cid:120)
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.
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.
61 | P a g e
53
(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.
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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2021 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021 GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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.
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.
(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.
Financial liabilities at fair value through profit or loss (FVTPL)
Financial liabilities carried at FVTPL are initially recorded at fair value and transaction costs are expensed
in the consolidated statement of comprehensive loss. Gains and losses arising from changes in the fair
value of the financial liabilities held at FVTPL are included in the profit and loss in the period in which
they arise. Where management has opted to recognise a financial liability at FVTPL, any changes
associated with the Company’s own credit risk will be recognised in other comprehensive income or loss.
Financial instruments – derivatives
Derivatives are classified as FVTPL and initially recognised at their fair value on the date the derivative
contract is entered into and transaction costs are expensed. Derivatives are subsequently re-measured
at their fair value at each statement of financial position date with changes in fair value recognised
through profit and loss. Fair values for derivative instruments are determined using valuation techniques,
with assumptions based on market conditions existing at the statement of financial position date or
settlement date of the derivative.
Derivatives embedded in debt instruments or non-financial host contracts are treated as separate
derivatives when their risks and characteristics are not closely related to their host contracts.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or
expires. When an existing financial liability is replaced by another from the same lender on substantially
different terms, or the terms of an existing liability are substantially modified, such an exchange or
modification is treated as the derecognition of the original liability and the recognition of a new liability.
The difference in the respective carrying amounts is recognised in the statement of profit or loss.
(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.
54
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2021 ANNUAL REPORT
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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.
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.
62 | P a g e
(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.
Financial liabilities at fair value through profit or loss (FVTPL)
Financial liabilities carried at FVTPL are initially recorded at fair value and transaction costs are expensed
in the consolidated statement of comprehensive loss. Gains and losses arising from changes in the fair
value of the financial liabilities held at FVTPL are included in the profit and loss in the period in which
they arise. Where management has opted to recognise a financial liability at FVTPL, any changes
associated with the Company’s own credit risk will be recognised in other comprehensive income or loss.
Financial instruments – derivatives
Derivatives are classified as FVTPL and initially recognised at their fair value on the date the derivative
contract is entered into and transaction costs are expensed. Derivatives are subsequently re-measured
at their fair value at each statement of financial position date with changes in fair value recognised
through profit and loss. Fair values for derivative instruments are determined using valuation techniques,
with assumptions based on market conditions existing at the statement of financial position date or
settlement date of the derivative.
Derivatives embedded in debt instruments or non-financial host contracts are treated as separate
derivatives when their risks and characteristics are not closely related to their host contracts.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or
expires. When an existing financial liability is replaced by another from the same lender on substantially
different terms, or the terms of an existing liability are substantially modified, such an exchange or
modification is treated as the derecognition of the original liability and the recognition of a new liability.
The difference in the respective carrying amounts is recognised in the statement of profit or loss.
(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.
63 | P a g e
55
2021 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021 GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(e) Foreign currency transactions and balances (continued)
(h) Income tax
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.
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.
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.
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.
(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.
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.
56
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2021 ANNUAL REPORT
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(e) Foreign currency transactions and balances (continued)
(h) Income tax
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.
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.
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.
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.
(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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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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57
2021 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021 GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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 the development of 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.
(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 represents 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
the items.
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
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 is calculated using the straight-line or diminishing value method to allocate cost, net of
residual values, over the estimated useful live of the assets, 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 its 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.
58
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2021 ANNUAL REPORT
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(i) Loss per share
Basic loss per share
issued during the year.
Diluted 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
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 the development of 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.
(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 represents 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 is calculated using the straight-line or diminishing value method to allocate cost, net of
residual values, over the estimated useful live of the assets, 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 its 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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59
2021 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021 GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(l) Plant and equipment (continued)
(n) Principles of consolidation (continued)
Any gain 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.
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.
(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.
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 and right-of-use assets
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.
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.
60
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2021 ANNUAL REPORT
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(l) Plant and equipment (continued)
(n) Principles of consolidation (continued)
Any gain 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.
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.
(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.
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 and right-of-use assets
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.
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.
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2021 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021 GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(o) Lease liability and right-of-use assets (continued)
(s) Business combinations
Right-of-use assets
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.
Onerous contracts
If the Group as a contract that is onerous, the present obligation under the contract is recognised and
measured as a provision. However, before a separate provision for an onerous contract is established,
the Group recognises any impairment loss that has occurred on assets dedicated to that contract.
An onerous contract is a contract under which the unavoidable costs (i.e. the costs that the Group cannot
avoid because it has the contract) of meeting the obligations under the contract exceed the economic
benefits expected to be received under it. The unavoidable costs under a contract reflect the least net
cost of exiting from the contract, which is the lower of the cost of fulfilling it and any compensation or
penalties arising from failure to fulfil it. The cost of fulfilling a contract comprises the costs that relate
directly to contract activities.
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.
62
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2021 ANNUAL REPORT
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(o) Lease liability and right-of-use assets (continued)
(s) Business combinations
Right-of-use assets
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.
Interest income is recognised as the interest accrues using the effective interest method.
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.
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
Provisions are measured using the best estimate of the amounts required to settle the obligation at the
(p) Interest income
(q) Comparative figures
(r) Provisions
measured.
end of the reporting period.
Onerous contracts
If the Group as a contract that is onerous, the present obligation under the contract is recognised and
measured as a provision. However, before a separate provision for an onerous contract is established,
the Group recognises any impairment loss that has occurred on assets dedicated to that contract.
An onerous contract is a contract under which the unavoidable costs (i.e. the costs that the Group cannot
avoid because it has the contract) of meeting the obligations under the contract exceed the economic
benefits expected to be received under it. The unavoidable costs under a contract reflect the least net
cost of exiting from the contract, which is the lower of the cost of fulfilling it and any compensation or
penalties arising from failure to fulfil it. The cost of fulfilling a contract comprises the costs that relate
directly to contract activities.
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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63
2021 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021 GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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
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
2021
Carrying
amount
Contractual
6 months
cash flows
or less
$
$
$
6-12
months
$
1-5 years
$
Financial Liabilities - Due for Payment
Trade and other payables
18,480,389
18,480,389 18,480,389
Lease liability
613,988
759,095
106,701
Total expected outflows
19,094,377 19,239,484 18,587,090
-
107,914
107,914
-
544,480
544,480
Consolidated
2020
Carrying
amount
Contractual
6 months
cash flows
or less
$
$
$
6-12
months
$
1-5 years
$
Financial Liabilities - Due for Payment
Trade and other payables
6,128,458
6,128,458
6,128,458
-
-
Lease liability
Total expected outflows
716,872
867,615
124,500
6,845,330
6,996,073
6,252,958
106,888
106,888
636,227
636,227
The Group’s primary banker is Sumitomo Mitsui Banking Corporation. The Moody’s credit rating of
Sumitomo Mitsui Banking Corporation is A1.
At 31 December 2021, the Group had no interest-bearing liabilities (2020: nil).
(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.
64
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2021 ANNUAL REPORT
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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.
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
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:
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.
(a) Credit risk
investments.
Receivables
Cash deposits
(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.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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
2021
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
18,480,389
613,988
18,480,389 18,480,389
106,701
19,094,377 19,239,484 18,587,090
759,095
-
107,914
107,914
-
544,480
544,480
The Group’s primary banker is Sumitomo Mitsui Banking Corporation. The Moody’s credit rating of
Sumitomo Mitsui Banking Corporation is A1.
At 31 December 2021, the Group had no interest-bearing liabilities (2020: nil).
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
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65
2021 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021 GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
2
FINANCIAL RISK MANAGEMENT (CONTINUED)
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 PNG and is exposed to foreign exchange risks arising from the
fluctuation of the exchange rates of the Australian dollar (AUD) and the United States dollar (USD). The
PNG Kina (PGK) currency is only utilised within the PNG entity, and is therefore not exposed to foreign
exchange risk. 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 AUD and USD
exchange rates, with all other variables held constant. The impact on the Group’s profit and loss 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
$
2021 - AUD foreign currency sensitivity
2020 - AUD foreign currency sensitivity
76,495
(3,324)
(84,547)
3,324
2021 - USD foreign currency sensitivity
2020 - USD foreign currency sensitivity
(769,684)
3,501
850,704
(3,501)
-
-
-
-
-
-
-
-
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.
(c) Market risk (continued)
Interest rate risk (continued)
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.
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
2021
$
2020
$
67,470,477
67,470,477
34,639,855
34,639,855
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
$
2021 - Variable rate instruments
2020 - Variable rate instruments
674,705
346,399
(674,705)
(346,399)
-
-
-
-
(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
a mix of equity and debt 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.
66
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2021 ANNUAL REPORT
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
2
FINANCIAL RISK MANAGEMENT (CONTINUED)
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 PNG and is exposed to foreign exchange risks arising from the
fluctuation of the exchange rates of the Australian dollar (AUD) and the United States dollar (USD). The
PNG Kina (PGK) currency is only utilised within the PNG entity, and is therefore not exposed to foreign
exchange risk. 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 AUD and USD
exchange rates, with all other variables held constant. The impact on the Group’s profit and loss 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
500bp
500bp
decrease
increase
decrease
$
$
$
2021 - AUD foreign currency sensitivity
2020 - AUD foreign currency sensitivity
76,495
(3,324)
(84,547)
3,324
2021 - USD foreign currency sensitivity
2020 - USD foreign currency sensitivity
(769,684)
3,501
850,704
(3,501)
-
-
-
-
-
-
-
-
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.
(c) Market risk (continued)
Interest rate risk (continued)
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.
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
2021
$
2020
$
67,470,477
67,470,477
34,639,855
34,639,855
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
$
2021 - Variable rate instruments
2020 - Variable rate instruments
674,705
346,399
(674,705)
(346,399)
-
-
-
-
(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
a mix of equity and debt 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.
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67
2021 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021 GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
2
FINANCIAL RISK MANAGEMENT (CONTINUED)
3
CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS (CONTINUED)
(e) Impairment Losses
During the 2021 reporting period, $6,934 was written off in relation to the Group’s financial assets (2020:
$14,670).
(f) Fair values versus carrying amounts
The carrying amounts of financial assets and liabilities as described in the consolidated statement of
financial position approximate 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. During the years ended 31 December
2021 and 31 December 2020, no previously capitalised exploration and evaluation expenditure was
transferred to mine properties under development. During the previous year ended 31 December 2020,
$5,710,134 of previously capitalised exploration and evaluation expenditure related to the Kou Sa project
was derecognised, 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 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. During the years ended 31 December 2021 and 31
December 2020 no mine properties under development has been transferred or written off. However, an
impairment charge was recognised during the year ended 31 December 2021. Refer to Note 13 for further
information.
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% (2020: 8%).
Onerous contracts
The Group has provided for onerous contracts in relation to several major contracts that it is terminating as
a result of suspending key development programs at the Project. The onerous contracts provision assessment
requires the Board and management to make certain estimates regarding the unavoidable costs and the
expected economic benefits from the contracts. These estimates require significant management judgement
and are subject to risk and uncertainty.
Changes to any of the estimates could result in significant changes to the level of provisioning required, which
would in turn impact future financial results.
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 27 for details of estimates and assumptions used.
Impairment of non-financial assets
value less costs of disposal.
The recoverable amount of a cash-generating unit (CGU) is determined as the higher of value in use and fair
The future recoverability of the CGU is dependent on a number of factors, including the level of measured,
indicated and inferred Mineral Resources, future legal changes and changes to commodity prices, operating
and development costs.
To the extent that the carrying value of the CGU is determined not to be recoverable in the future, profits
and net assets will be reduced in the period in which this determination is made. Refer to Note 13 for
impairment testing of the Group’s CGU at 31 December 2021.
68
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2021 ANNUAL REPORT
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
2
FINANCIAL RISK MANAGEMENT (CONTINUED)
3
CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS (CONTINUED)
During the 2021 reporting period, $6,934 was written off in relation to the Group’s financial assets (2020:
(e) Impairment Losses
$14,670).
(f) Fair values versus carrying amounts
The carrying amounts of financial assets and liabilities as described in the consolidated statement of
financial position approximate 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. During the years ended 31 December
2021 and 31 December 2020, no previously capitalised exploration and evaluation expenditure was
transferred to mine properties under development. During the previous year ended 31 December 2020,
$5,710,134 of previously capitalised exploration and evaluation expenditure related to the Kou Sa project
was derecognised, 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 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. During the years ended 31 December 2021 and 31
December 2020 no mine properties under development has been transferred or written off. However, an
impairment charge was recognised during the year ended 31 December 2021. Refer to Note 13 for further
information.
76 | P a g e
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% (2020: 8%).
Onerous contracts
The Group has provided for onerous contracts in relation to several major contracts that it is terminating as
a result of suspending key development programs at the Project. The onerous contracts provision assessment
requires the Board and management to make certain estimates regarding the unavoidable costs and the
expected economic benefits from the contracts. These estimates require significant management judgement
and are subject to risk and uncertainty.
Changes to any of the estimates could result in significant changes to the level of provisioning required, which
would in turn impact future financial results.
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 27 for details of estimates and assumptions used.
Impairment of non-financial assets
The recoverable amount of a cash-generating unit (CGU) is determined as the higher of value in use and fair
value less costs of disposal.
The future recoverability of the CGU is dependent on a number of factors, including the level of measured,
indicated and inferred Mineral Resources, future legal changes and changes to commodity prices, operating
and development costs.
To the extent that the carrying value of the CGU is determined not to be recoverable in the future, profits
and net assets will be reduced in the period in which this determination is made. Refer to Note 13 for
impairment testing of the Group’s CGU at 31 December 2021.
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69
2021 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021 GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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.
5
INCOME AND EXPENSES
(a)
Other Income
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
Net loss for the year
TOTAL COMPREHENSIVE LOSS
Guarantees
Parent
2021
$
2020
$
49,119,658
93,749,408
142,869,066
33,987,184
47,127,481
81,114,665
846,305
655,511
1,501,816
2,085,435
528,272
2,613,707
284,846,318
2,950,150
(146,429,218)
141,367,250
165,801,105
1,825,415
(89,125,562)
78,500,958
(57,303,656)
(57,303,656)
(9,869,457)
(9,869,457)
The Company has term deposits of $250,000 (2020: $250,000) 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 2021, Geopacific had no contingent liabilities (2020: nil).
Contractual commitments
At 31 December 2021, Geopacific had not entered into any contractual commitments for the acquisition of
property, plant and equipment (2020: nil).
Government incentives
Other income
Interest income – financial institutions
Total
(b)
Finance Costs
Borrowing costs
Loan termination fee
Interest expense on lease liability
Unwinding of discount on rehabilitation provision
Unwinding of discount on borrowings (Note 18)
Unwinding of discount on deferred consideration liability
Total
Consolidated
2021
$
2020
$
-
370,620
147,753
518,373
100,000
14,537
167,886
282,423
Consolidated
2021
$
2020
$
(232,951)
(8,263,326)
(8,496,277)
(11,260)
(3,248)
(8,305,337)
-
(16,816,122)
-
-
-
-
-
-
(830,927)
(830,927)
70
78 | P a g e
79 | P a g e
2021 ANNUAL REPORT
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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.
5
INCOME AND EXPENSES
(a)
Other Income
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
Net loss for the year
TOTAL COMPREHENSIVE LOSS
Guarantees
Parent
2021
$
2020
$
49,119,658
93,749,408
142,869,066
33,987,184
47,127,481
81,114,665
846,305
655,511
1,501,816
2,085,435
528,272
2,613,707
284,846,318
2,950,150
(146,429,218)
141,367,250
165,801,105
1,825,415
(89,125,562)
78,500,958
(57,303,656)
(57,303,656)
(9,869,457)
(9,869,457)
The Company has term deposits of $250,000 (2020: $250,000) over the lease of its office premises and credit
card facilities. This has been classified as trade and other receivables in current assets.
At 31 December 2021, Geopacific had no contingent liabilities (2020: nil).
Contingent liabilities
Contractual commitments
At 31 December 2021, Geopacific had not entered into any contractual commitments for the acquisition of
property, plant and equipment (2020: nil).
Government incentives
Other income
Interest income – financial institutions
Total
(b)
Finance Costs
Borrowing costs
Loan termination fee
Interest expense on lease liability
Unwinding of discount on rehabilitation provision
Unwinding of discount on borrowings (Note 18)
Unwinding of discount on deferred consideration liability
Total
Consolidated
2021
$
2020
$
-
370,620
147,753
518,373
100,000
14,537
167,886
282,423
Consolidated
2021
$
2020
$
(232,951)
(8,263,326)
(8,496,277)
(11,260)
(3,248)
(8,305,337)
-
(16,816,122)
-
-
-
-
-
-
(830,927)
(830,927)
78 | P a g e
79 | P a g e
71
2021 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021 GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
6
GAIN ON DERECOGNITION OF KOU SA PROJECT
7
INCOME TAX
Kou Sa Project
Exploration & evaluation asset derecognised (Note 12)
Deferred consideration liability
Payables derecognised
Payables recognised
Total
Consolidated
2021
$
2020
$
-
-
-
-
-
(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 were 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 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.
(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
2021
$
2020
$
-
-
-
-
-
-
Consolidated
2021
$
2020
$
Net loss before tax
Prima facie tax benefit at 30% (2020: 30%)
(61,318,687)
(18,395,606)
(4,567,311)
(1,370,193)
Adjusted for the tax effect of:
Effect of different tax rate of foreign subsidiary
Non-deductible share-based payments
Other non-deductible expenses
Temporary difference for deferred tax assets not recognised
Derecognition of Kou Sa Project
Tax losses not recognised
Prior period adjustment
Total tax benefit
601,127
219,338
3,691,154
2,158,732
7,950,884
3,774,371
-
-
336,085
(1,355,099)
(565,450)
2,954,657
-
-
-
-
72
80 | P a g e
81 | P a g e
2021 ANNUAL REPORT
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
6
GAIN ON DERECOGNITION OF KOU SA PROJECT
7
INCOME TAX
Kou Sa Project
Exploration & evaluation asset derecognised (Note 12)
Deferred consideration liability
Payables derecognised
Payables recognised
Total
Consolidated
2021
$
2020
$
-
-
-
-
-
(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 were 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 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.
(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
2021
$
2020
$
-
-
-
-
-
-
Consolidated
2021
$
2020
$
Net loss before tax
Prima facie tax benefit at 30% (2020: 30%)
(61,318,687)
(18,395,606)
(4,567,311)
(1,370,193)
Adjusted for the tax effect of:
Effect of different tax rate of foreign subsidiary
Non-deductible share-based payments
Other non-deductible expenses
Temporary difference for deferred tax assets not recognised
Derecognition of Kou Sa Project
Tax losses not recognised
Prior period adjustment
Total tax benefit
601,127
219,338
3,691,154
2,158,732
-
7,950,884
3,774,371
-
-
336,085
(1,355,099)
-
(565,450)
2,954,657
-
-
80 | P a g e
81 | P a g e
73
2021 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021 GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
7
INCOME TAX (CONTINUED)
(c)
Deferred tax:
Deferred tax assets:
Property, plant and equipment
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
Business related costs
Other
Total deferred tax assets not recognised
Movement of tax losses not brought to account
Total tax losses - beginning of the year
Current year tax losses
Under/(over)
Foreign exchange fluctuation
Total 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
Consolidated
2021
$
2020
$
5,294,235
2,936,188
8,917,051
17,147,474
(17,147,474)
-
-
45,082
11,891,298
11,936,380
(11,936,380)
-
601,508
16,545,966
17,147,474
(17,147,474)
-
553,402
11,382,978
11,936,380
(11,936,380)
-
Consolidated
2021
$
2020
$
57,743,975
512,593
60,770
58,317,338
41,306,859
225,287
48,592
41,580,738
53,198,157
7,950,884
2,358,135
3,153,850
66,661,026
(8,917,051)
57,743,975
55,194,328
2,954,657
456,941
(5,407,769)
53,198,157
(11,891,298)
41,306,859
Deferred tax assets relating to tax losses have only been recognised in PNG to the extent of the deferred tax
liabilities 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.
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
8
CASH AND CASH EQUIVALENTS
(i) Held in the Group’s Debt Proceeds Accounts to fund the termination fee to Sprott (see Notes 18 and 19)
9
TRADE AND OTHER RECEIVABLES
Consolidated
2021
$
2020
$
50,943,828
16,526,649
67,470,477
34,639,855
-
34,639,855
Consolidated
2021
$
2020
$
250,000
1,625
15,811
267,436
250,000
18,418
124,356
392,774
10,206
31,259
3,788,177
3,829,642
9,816
35,821
1,001,334
1,046,971
Current
Cash at bank
Restricted cash (i)
Total
and a reserve buffer.
Current
Security deposits
Sundry debtors
GST receivable
Total
Non-current
Security deposits
Sundry debtors
GST receivable
Total
Write down
During the year ended 31 December 2021, a write down of $6,934 was recorded in respect of sundry debtors
(2020: $14,670 in respect of security deposits).
74
82 | P a g e
83 | P a g e
2021 ANNUAL REPORT
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
7
INCOME TAX (CONTINUED)
(c)
Deferred tax:
Deferred tax assets:
Property, plant and equipment
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
Business related costs
Other
Total deferred tax assets not recognised
Movement of tax losses not brought to account
Total tax losses - beginning of the year
Current year tax losses
Under/(over)
Foreign exchange fluctuation
Total tax losses – end of the year
Consolidated
2021
$
2020
$
5,294,235
2,936,188
8,917,051
17,147,474
(17,147,474)
45,082
11,891,298
11,936,380
(11,936,380)
601,508
16,545,966
17,147,474
553,402
11,382,978
11,936,380
(17,147,474)
(11,936,380)
-
-
-
-
-
Consolidated
2021
$
2020
$
57,743,975
41,306,859
512,593
60,770
225,287
48,592
58,317,338
41,580,738
53,198,157
7,950,884
2,358,135
3,153,850
66,661,026
(8,917,051)
57,743,975
55,194,328
2,954,657
456,941
(5,407,769)
53,198,157
(11,891,298)
41,306,859
Tax losses – recognised to the extent of the deferred tax liability
Tax losses not brought to account – end of the year
Deferred tax assets relating to tax losses have only been recognised in PNG to the extent of the deferred tax
liabilities 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.
82 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
8
CASH AND CASH EQUIVALENTS
Current
Cash at bank
Restricted cash (i)
Total
Consolidated
2021
$
2020
$
50,943,828
16,526,649
67,470,477
34,639,855
-
34,639,855
(i) Held in the Group’s Debt Proceeds Accounts to fund the termination fee to Sprott (see Notes 18 and 19)
and a reserve buffer.
9
TRADE AND OTHER RECEIVABLES
Current
Security deposits
Sundry debtors
GST receivable
Total
Non-current
Security deposits
Sundry debtors
GST receivable
Total
Consolidated
2021
$
2020
$
250,000
1,625
15,811
267,436
250,000
18,418
124,356
392,774
10,206
31,259
3,788,177
3,829,642
9,816
35,821
1,001,334
1,046,971
Write down
During the year ended 31 December 2021, a write down of $6,934 was recorded in respect of sundry debtors
(2020: $14,670 in respect of security deposits).
83 | P a g e
75
2021 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021 GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
10
PREPAYMENTS
12
EXPLORATION AND EVALUATION ASSETS
Current
Community relocation materials (i)
Insurance (ii)
Total
Consolidated
2021
$
2020
$
95,534
1,196,829
1,292,363
1,384,099
-
1,384,099
(i) Relates 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.
(ii) Relates mainly to Project specific contract works insurance for premiums paid up to 31 December
2022.
11
INVENTORIES
Current
Consumables
Kitchen stocks
Cleaning stocks
Medical stocks
Protective clothing
Total
Consolidated
2021
$
2020
$
441,054
169,512
35,099
111,571
23,889
781,125
362,524
45,182
13,478
6,549
16,436
444,169
Write down
During the year ended 31 December 2021, consumables which had expired or were damaged were identified
and as such had no net realisable value. The full amount of $1,500 was written off from inventory and
recorded in the consolidated statement of profit or loss (2020: $5,779).
Non-current
2,005,023
1,844,673
Movement during the year
Carrying value - beginning of the year
Additions
Derecognition of Kou Sa Project (i)
Foreign exchange fluctuation
Carrying value - end of the year
Consolidated
2021
$
2020
$
1,844,673
36,097
-
124,253
2,005,023
8,262,803
65,098
(5,710,134)
(773,094)
1,844,673
(i) The Company derecognised the Kou Sa Project in the previous year. See Note 6 for further information.
At 31 December 2021, 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 capitalised expenditure
Impairment
(2020: 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. No
such costs were incurred for the 2021 reporting period (2020: $208,345).
76
84 | P a g e
85 | P a g e
2021 ANNUAL REPORT
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
10
PREPAYMENTS
12
EXPLORATION AND EVALUATION ASSETS
Community relocation materials (i)
Current
Insurance (ii)
Total
(i) Relates 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.
(ii) Relates mainly to Project specific contract works insurance for premiums paid up to 31 December
Consolidated
2021
$
2020
$
95,534
1,196,829
1,292,363
1,384,099
-
1,384,099
Consolidated
2021
$
2020
$
441,054
169,512
35,099
111,571
23,889
781,125
362,524
45,182
13,478
6,549
16,436
444,169
2022.
11
INVENTORIES
Current
Consumables
Kitchen stocks
Cleaning stocks
Medical stocks
Protective clothing
Total
Write down
During the year ended 31 December 2021, consumables which had expired or were damaged were identified
and as such had no net realisable value. The full amount of $1,500 was written off from inventory and
recorded in the consolidated statement of profit or loss (2020: $5,779).
Consolidated
2021
$
2020
$
Non-current
2,005,023
1,844,673
Movement during the year
Carrying value - beginning of the year
Additions
Derecognition of Kou Sa Project (i)
Foreign exchange fluctuation
Carrying value - end of the year
1,844,673
36,097
-
124,253
2,005,023
8,262,803
65,098
(5,710,134)
(773,094)
1,844,673
(i) The Company derecognised the Kou Sa Project in the previous year. See Note 6 for further information.
Impairment
At 31 December 2021, 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 capitalised expenditure
(2020: 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. No
such costs were incurred for the 2021 reporting period (2020: $208,345).
84 | P a g e
85 | P a g e
77
2021 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021 GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
13
MINE PROPERTIES UNDER DEVELOPMENT
Consolidated
2021
$
2020
$
Non-current
50,895,186
37,975,609
Movement during the year
Carrying value - beginning of the year
Additions
Impairment
Transfers from property, plant and equipment (Note 14)
Change in rehabilitation provision
Foreign exchange fluctuation
Carrying value - end of the year
37,975,609
23,230,220
(13,877,597)
194,464
302,399
3,070,091
50,895,186
30,803,497
11,688,121
-
184,592
9,226
(4,709,827)
37,975,609
Impairment
The Group has identified one CGU, the Woodlark Gold Project. The Woodlark Gold Project CGU comprises mine
properties under development and associated property, plant and equipment.
For the year ended 31 December 2021, the Group assessed whether there were any indicators of impairment
in relation to the Woodlark Gold Project CGU. Upon identification of impairment indicators relating to increase
in the capital cost for development of the Project and ongoing delays in the project schedule leading to
subsequent suspension of key development programs, management performed an impairment assessment on
the CGU, applying the fair value less costs of disposal basis using resource multiples of selected gold projects of
similar scale and those carrying similar jurisdictional risk as PNG (level 3 in the fair value hierarchy).
In order to make its assessment, the Company obtained a range of gold market transaction multiples covering
a number of comparable jurisdictions. The available market transaction multiples were assessed on both
mineral resource and ore reserve related metrics with the selection of transactions narrowed to only include
projects of a similar scale to the Woodlark Gold Project.
In applying this methodology, a value per mineral resource ounce was established using the relevant market
transaction implied enterprise value divided by total mineral resource ounces. For each of the relevant
transactions, the total mineral resource ounce value was multiplied by the Woodlark Gold Project total mineral
resource of 1,573,000 gold ounces to provide a valuation estimate. This process provided a wide valuation
range. Having considered the risk profile specific to the asset, a fair value at the lower end was selected and
applied as the recoverable amount of the Woodlark Project CGU.
The impairment assessment resulted in an impairment charge of $27,267,012, allocated to Mine Properties
under Development ($13,877,597) and Property, Plant and Equipment ($13,389,415) based on a recoverable
amount of $100 million for the CGU.
78
86 | P a g e
2021 ANNUAL REPORT
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
13
MINE PROPERTIES UNDER DEVELOPMENT
14
PROPERTY, PLANT AND EQUIPMENT
Transfers from property, plant and equipment (Note 14)
2020
2021
Gross carrying amount – at cost
Less: accumulated depreciation
and impairment
Balance
Consolidated
Right-of-
use asset
$
Work under
construction
$
Plant &
Equipment
$
Computer
Software
$
Furniture
& Fittings
$
Total
$
-
55,185,136
11,822,630
98,737 1,023,706
68,130,209
- (12,078,658)
43,106,478
-
(6,301,645)
5,520,985
(98,737)
-
(546,355)
477,351
(19,025,395)
49,104,814
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
(462,035)
479,204
11,977,845
(4,733,381)
7,244,464
The Group has identified one CGU, the Woodlark Gold Project. The Woodlark Gold Project CGU comprises mine
properties under development and associated property, plant and equipment.
Plant & Equipment
Movement 2021
Balance at 1 January 2021
Additions
Disposals
Transfer between categories
Transfers to mine properties
under development
Depreciation
Impairment (Note 13)
Foreign exchange fluctuation
Balance at 31 December 2021
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
Depreciation
Foreign exchange fluctuation
Balance at 31 December 2020
Right-of-
use asset
$
Work under
construction
$
Plant &
Equipment
$
Computer
Software
$
-
-
-
-
-
-
-
-
5,871,008
52,478,790
-
(3,559,701)
894,099
2,493,453
-
3,592,483
-
-
(12,078,658)
395,039
43,106,478
(177,574)
(28,364)
(1,310,757)
57,645
5,520,985
153
-
-
-
-
(153)
-
-
-
Furniture
& Fittings
$
479,204
23,615
-
(32,782)
Total
$
7,244,464
54,995,858
-
-
(16,890)
(5,262)
-
29,466
477,351
(194,464)
(33,779)
(13,389,415)
482,150
49,104,814
Right-of-
use asset
$
84,648
-
-
-
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)
-
(22,485)
(77,661)
894,099
-
-
(1,216)
-
153
(27,787)
-
(5,013)
(58,226)
479,204
Total
$
1,892,285
5,837,187
(256)
-
(184,592)
(33,859)
(79,503)
(186,798)
7,244,464
87 | P a g e
79
Non-current
Additions
Impairment
Movement during the year
Carrying value - beginning of the year
Change in rehabilitation provision
Foreign exchange fluctuation
Carrying value - end of the year
Impairment
Consolidated
2021
$
2020
$
50,895,186
37,975,609
37,975,609
23,230,220
(13,877,597)
194,464
302,399
3,070,091
50,895,186
30,803,497
11,688,121
-
184,592
9,226
(4,709,827)
37,975,609
For the year ended 31 December 2021, the Group assessed whether there were any indicators of impairment
in relation to the Woodlark Gold Project CGU. Upon identification of impairment indicators relating to increase
in the capital cost for development of the Project and ongoing delays in the project schedule leading to
subsequent suspension of key development programs, management performed an impairment assessment on
the CGU, applying the fair value less costs of disposal basis using resource multiples of selected gold projects of
similar scale and those carrying similar jurisdictional risk as PNG (level 3 in the fair value hierarchy).
In order to make its assessment, the Company obtained a range of gold market transaction multiples covering
a number of comparable jurisdictions. The available market transaction multiples were assessed on both
mineral resource and ore reserve related metrics with the selection of transactions narrowed to only include
projects of a similar scale to the Woodlark Gold Project.
In applying this methodology, a value per mineral resource ounce was established using the relevant market
transaction implied enterprise value divided by total mineral resource ounces. For each of the relevant
transactions, the total mineral resource ounce value was multiplied by the Woodlark Gold Project total mineral
resource of 1,573,000 gold ounces to provide a valuation estimate. This process provided a wide valuation
range. Having considered the risk profile specific to the asset, a fair value at the lower end was selected and
applied as the recoverable amount of the Woodlark Project CGU.
The impairment assessment resulted in an impairment charge of $27,267,012, allocated to Mine Properties
under Development ($13,877,597) and Property, Plant and Equipment ($13,389,415) based on a recoverable
amount of $100 million for the CGU.
86 | P a g e
2021 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021 GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
15
RIGHT-OF-USE ASSET AND LEASE LIABILITY
16
TRADE AND OTHER PAYABLES
(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
Consolidated
2021
$
2020
$
846,447
(226,828)
619,619
718,272
-
128,175
(226,828)
619,619
746,544
(28,272)
718,272
-
33,859
746,544
(62,131)
718,272
Consolidated
2021
$
2020
$
193,662
420,326
613,988
220,164
496,708
716,872
716,872
128,175
11,260
(242,319)
613,988
82,111
746,544
9,950
(121,733)
716,872
Trade creditors and accrued expenses
Current
Total
17
PROVISIONS
Current
Employee entitlements
Loan termination fee (i)
Onerous contracts (ii)
Total
Non-current
Employee entitlements
Rehabilitation (iii)
Total
Consolidated
2021
$
2020
$
18,480,389
18,480,389
6,128,458
6,128,458
Consolidated
2021
$
2020
$
318,723
8,263,325
6,703,000
15,285,048
22,322
496,688
519,010
-
6,703,000
6,703,000
170,127
302,399
3,248
20,914
496,688
142,907
142,907
31,564
170,127
201,691
-
-
-
-
-
179,293
9,226
943
(19,335)
170,127
(i) Relates to borrowings from Sprott. See Notes 18 and 19 for further information.
(ii) Onerous contracts provision movement during the year
Balance at 1 January
Provision recognised
Balance at 31 December
Refer to Note 3 for further information.
(iii) Rehabilitation provision movement during the year
Balance at 1 January
Provision recognised
Unwinding of discount
Foreign exchange fluctuation
Balance at 31 December
The rehabilitation provision represents the present value of rehabilitation costs relating to the Project
site, which are expected to be incurred at the end of mine life. The timing of the rehabilitation expenditure
is dependent on the life of the mine which may vary in future.
80
88 | P a g e
89 | P a g e
2021 ANNUAL REPORT
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
15
RIGHT-OF-USE ASSET AND LEASE LIABILITY
16
TRADE AND OTHER PAYABLES
Transfer from property, plant and equipment (Note 14)
(a) Right-of-use asset
Non-current
Gross carrying amount - office leases
Less: accumulated depreciation
Total
Movement during the year
Balance at 1 January
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
Consolidated
2021
$
2020
$
846,447
(226,828)
619,619
718,272
-
128,175
(226,828)
619,619
746,544
(28,272)
718,272
-
33,859
746,544
(62,131)
718,272
Consolidated
2021
$
2020
$
193,662
420,326
613,988
220,164
496,708
716,872
716,872
128,175
11,260
(242,319)
613,988
82,111
746,544
9,950
(121,733)
716,872
88 | P a g e
Current
Trade creditors and accrued expenses
Total
17
PROVISIONS
Current
Employee entitlements
Loan termination fee (i)
Onerous contracts (ii)
Total
Non-current
Employee entitlements
Rehabilitation (iii)
Total
Consolidated
2021
$
2020
$
18,480,389
18,480,389
6,128,458
6,128,458
Consolidated
2021
$
2020
$
318,723
8,263,325
6,703,000
15,285,048
22,322
496,688
519,010
142,907
-
-
142,907
31,564
170,127
201,691
(i) Relates to borrowings from Sprott. See Notes 18 and 19 for further information.
(ii) Onerous contracts provision movement during the year
Balance at 1 January
Provision recognised
Balance at 31 December
-
6,703,000
6,703,000
-
-
-
Refer to Note 3 for further information.
(iii) Rehabilitation provision movement during the year
Balance at 1 January
Provision recognised
Unwinding of discount
Foreign exchange fluctuation
Balance at 31 December
170,127
302,399
3,248
20,914
496,688
179,293
9,226
943
(19,335)
170,127
The rehabilitation provision represents the present value of rehabilitation costs relating to the Project
site, which are expected to be incurred at the end of mine life. The timing of the rehabilitation expenditure
is dependent on the life of the mine which may vary in future.
89 | P a g e
81
2021 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021 GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
18
INTEREST-BEARING LIABILITIES
18
INTEREST-BEARING LIABILITIES (continued)
Consolidated
2021
$
2020
$
Non-current
Sprott Project Finance Facility (i)
Total
(i) Sprott Project Finance Facility movement during the year
Balance at 1 January
Amount recognised at inception
Reclassified as derivative liability (Note 19(i))
Interest and other finance costs paid
Unwinding of discount
Change in fair value
Value of derivative liability transferred to host liability prior to
prepayment (Note 19(i))
Loan principal prepaid
Foreign exchange fluctuation
Balance at 31 December 2021
-
-
-
106,023,933
(20,618,236)
(5,392,376)
8,305,337
2,490,596
22,338,504
(119,507,068)
6,359,310
-
-
-
-
-
-
-
-
-
-
-
-
-
In June 2021 Geopacific agreed binding terms and achieved financial close with Sprott for US$100 million
in project funding to develop the Woodlark Gold Project. The US$100 million in financing was in the form
of a US$85 million in Project Finance Facility (Facility) which was deposited into the Company’s Debt
Proceeds Account with funds available under staged drawdowns scheduled to occur with project
development milestones, and US$15 million via a Callable Gold Stream (Callable Stream) which was
available immediately.
The face value of the facility was US$85 million and was accounted for as a financial liability subsequently
measured at amortised cost under AASB 9 Financial Instruments. The Callable Stream, and its related
accounting, are further described in Note 19.
On 24 June 2021, the Company issued a drawdown notice to Sprott to draw the entire Facility, subject to an
“original issue discount” of 3.98% of the advance. The funds were received on 29 June 2021. The Facility had
a maturity repayment date of 30 June 2026 and was secured against the Group’s assets. The Facility bears
interest at a base rate of 7.25% per annum up to 31 August 2023 (and 6.25% per annum thereafter) plus the
greater of 3-month LIBOR or 1.75% per annum. 75% of the monthly interest will be capitalised and form part
of the principal amount until 31 March 2023. Repayment of the principal amount outstanding of the Facility
(which includes capitalised interest) occurs over 40 equal monthly instalments commencing from 31 March
2023.
The Company may elect to prepay the full principal outstanding within 36 months after financial close, being
June 2024. If it does so then it will be liable to pay Sprott an amount equal to 3% of the principal repaid and
the difference in the interest foregone as a result of the prepayment. This additional charge is not payable
to Sprott if the prepayment is made after June 2024.
The floating interest rate floor of 1.75% over the base rate and the Company’s ability to repay the full
outstanding principal balance have been determined to be embedded derivatives not closely related to the
Facility, which should be bifurcated and accounted for separately. As the value of these two embedded
derivatives are not significant, they have not been recognised on initial recognition.
In addition, as part of the Facility, an additional interest charge is payable on the Facility based on a gold
price differential multiplied by 2,500 ounces per month for 40 months (total 100,000 ounces) commencing
on 31 March 2023 (Additional Interest Payments). The gold price differential is calculated using the greater
of the average USD London Bullion Metal Association (LBMA) PM gold price per ounce (of the prior month)
or US$1,750 per ounce, less US$1,475 per ounce. These additional interest payments have been determined
to be an embedded derivative that is not closely related to the Facility. This embedded derivative has,
therefore, been bifurcated and accounted for separately as a “Derivative liability” in Note 19 (i).
The drawdown of the Facility was initially measured at its fair value, taking into account the original issue
discount and transaction costs arising on the Facility, in determining the amortised cost of the Facility. These
transaction costs, along with the original issue discount, have been incorporated into the calculation of the
effective interest for this Facility.
The Group has entered into an “all-assets” general security deed to secure the Group’s obligations under
relevant documents encompassing the Sprott debt facility. The securities granted to Sprott are first ranking.
Pursuant to the Facility, the Company issued 5,404,655 shares and 2,702,328 options (with an exercise price
of $0.322 and expiry date of 29 September 2026) on 29 June 2021 in return for consideration of
US$1,570,062 ($2,091,742) received from Sprott. See Note 20 for details of share capital raised.
The availability of the Facility was subject to certain financial and other covenants.
In December 2021, the Company and Sprott agreed to make certain amendments to the terms of the Facility
and Callable Stream agreements. As a result, prepayment of the principal and accrued interest under the
Facility agreement and repayment of the deposit advanced under the Callable Stream agreement was
required to occur on 15 December 2021 and was made on that date accordingly. The voluntary prepayment
premium that would otherwise apply on the Facility is not payable on the prepayment.
As a result of this debt modification, the Company revalued the Facility to fair value as at 15 December 2021.
The fair value of the host liability and the related derivative liabilities were valued based on the payment
required to simultaneously extinguish the Facility. A loss on change in fair value of $2,490,596 was
recognised in the profit and loss on the modification and extinguishment of the Facility.
Pursuant to the amended agreement, a fee of US$5 million is payable if the Facility agreement is terminated.
This was recorded at fair value of US$3 million as a component of the debt modification on 15 December
2021.
Subsequent to balance date, the Company negotiated terms for the termination of both the Facility and
Callable Stream agreements. Refer to Note 29 for further information.
No amount was drawn under the amended Facility agreement at 31 December 2021.
82
90 | P a g e
91 | P a g e
2021 ANNUAL REPORT
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
18
INTEREST-BEARING LIABILITIES
18
INTEREST-BEARING LIABILITIES (continued)
Consolidated
2021
$
2020
$
Sprott Project Finance Facility (i)
Non-current
Total
(i) Sprott Project Finance Facility movement during the year
Balance at 1 January
Amount recognised at inception
Reclassified as derivative liability (Note 19(i))
Interest and other finance costs paid
Value of derivative liability transferred to host liability prior to
Unwinding of discount
Change in fair value
prepayment (Note 19(i))
Loan principal prepaid
Foreign exchange fluctuation
Balance at 31 December 2021
-
-
-
-
106,023,933
(20,618,236)
(5,392,376)
8,305,337
2,490,596
22,338,504
(119,507,068)
6,359,310
-
-
-
-
-
-
-
-
-
-
-
-
In June 2021 Geopacific agreed binding terms and achieved financial close with Sprott for US$100 million
in project funding to develop the Woodlark Gold Project. The US$100 million in financing was in the form
of a US$85 million in Project Finance Facility (Facility) which was deposited into the Company’s Debt
Proceeds Account with funds available under staged drawdowns scheduled to occur with project
development milestones, and US$15 million via a Callable Gold Stream (Callable Stream) which was
available immediately.
The face value of the facility was US$85 million and was accounted for as a financial liability subsequently
measured at amortised cost under AASB 9 Financial Instruments. The Callable Stream, and its related
accounting, are further described in Note 19.
On 24 June 2021, the Company issued a drawdown notice to Sprott to draw the entire Facility, subject to an
“original issue discount” of 3.98% of the advance. The funds were received on 29 June 2021. The Facility had
a maturity repayment date of 30 June 2026 and was secured against the Group’s assets. The Facility bears
interest at a base rate of 7.25% per annum up to 31 August 2023 (and 6.25% per annum thereafter) plus the
greater of 3-month LIBOR or 1.75% per annum. 75% of the monthly interest will be capitalised and form part
of the principal amount until 31 March 2023. Repayment of the principal amount outstanding of the Facility
(which includes capitalised interest) occurs over 40 equal monthly instalments commencing from 31 March
2023.
The Company may elect to prepay the full principal outstanding within 36 months after financial close, being
June 2024. If it does so then it will be liable to pay Sprott an amount equal to 3% of the principal repaid and
the difference in the interest foregone as a result of the prepayment. This additional charge is not payable
to Sprott if the prepayment is made after June 2024.
90 | P a g e
The floating interest rate floor of 1.75% over the base rate and the Company’s ability to repay the full
outstanding principal balance have been determined to be embedded derivatives not closely related to the
Facility, which should be bifurcated and accounted for separately. As the value of these two embedded
derivatives are not significant, they have not been recognised on initial recognition.
In addition, as part of the Facility, an additional interest charge is payable on the Facility based on a gold
price differential multiplied by 2,500 ounces per month for 40 months (total 100,000 ounces) commencing
on 31 March 2023 (Additional Interest Payments). The gold price differential is calculated using the greater
of the average USD London Bullion Metal Association (LBMA) PM gold price per ounce (of the prior month)
or US$1,750 per ounce, less US$1,475 per ounce. These additional interest payments have been determined
to be an embedded derivative that is not closely related to the Facility. This embedded derivative has,
therefore, been bifurcated and accounted for separately as a “Derivative liability” in Note 19 (i).
The drawdown of the Facility was initially measured at its fair value, taking into account the original issue
discount and transaction costs arising on the Facility, in determining the amortised cost of the Facility. These
transaction costs, along with the original issue discount, have been incorporated into the calculation of the
effective interest for this Facility.
The Group has entered into an “all-assets” general security deed to secure the Group’s obligations under
relevant documents encompassing the Sprott debt facility. The securities granted to Sprott are first ranking.
Pursuant to the Facility, the Company issued 5,404,655 shares and 2,702,328 options (with an exercise price
of $0.322 and expiry date of 29 September 2026) on 29 June 2021 in return for consideration of
US$1,570,062 ($2,091,742) received from Sprott. See Note 20 for details of share capital raised.
The availability of the Facility was subject to certain financial and other covenants.
In December 2021, the Company and Sprott agreed to make certain amendments to the terms of the Facility
and Callable Stream agreements. As a result, prepayment of the principal and accrued interest under the
Facility agreement and repayment of the deposit advanced under the Callable Stream agreement was
required to occur on 15 December 2021 and was made on that date accordingly. The voluntary prepayment
premium that would otherwise apply on the Facility is not payable on the prepayment.
As a result of this debt modification, the Company revalued the Facility to fair value as at 15 December 2021.
The fair value of the host liability and the related derivative liabilities were valued based on the payment
required to simultaneously extinguish the Facility. A loss on change in fair value of $2,490,596 was
recognised in the profit and loss on the modification and extinguishment of the Facility.
Pursuant to the amended agreement, a fee of US$5 million is payable if the Facility agreement is terminated.
This was recorded at fair value of US$3 million as a component of the debt modification on 15 December
2021.
Subsequent to balance date, the Company negotiated terms for the termination of both the Facility and
Callable Stream agreements. Refer to Note 29 for further information.
No amount was drawn under the amended Facility agreement at 31 December 2021.
91 | P a g e
83
2021 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021 GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
19
OTHER FINANCIAL LIABILITIES
19
OTHER FINANCIAL LIABILITIES (continued)
Current
Lease liability (Note 15(b))
Total
Non-current
Lease liability (Note 15(b))
Derivative liability (i)
Sprott Callable Stream (ii)
Total
(i) Derivative liability movement during the year
Balance at 1 January
Amount recognised at inception (Note 18)
Change in fair value
Value of liability transferred to host liability prior to
prepayment (Note 18)
Balance at 31 December
Consolidated
2021
$
2020
$
193,662
193,662
220,164
220,164
420,326
-
-
420,326
496,708
-
-
496,708
20,618,236
1,720,268
(22,338,504)
-
-
-
-
-
-
As indicated in Note 18, as part of the Sprott Facility, the floating interest rate floor of 1.75% over the base
rate, the Company’s ability to repay the full outstanding principal balance and the Additional Interest
Payments, represent embedded derivatives. The interest rate floor and prepayment embedded derivatives
were not brought to account (see Note 18), however the Additional Interest Payments were fair valued on
initial recognition.
The value of the derivative liability was transferred back to the host liability prior to the principal of the
Sprott Facility being prepaid in full in December 2021.
(ii) Sprott Callable Stream movement during the year
Balance at 1 January
Amount recognised at inception
Other finance costs paid
Change in fair value
Amount repaid
Foreign exchange fluctuation
Balance at 31 December
Consolidated
2021
$
2020
$
19,967,251
(104,486)
109,768
(21,089,483)
1,116,950
-
-
-
-
-
-
-
-
-
On 24 June 2021, the Company issued a drawdown notice to Sprott to draw down the US$15 million
“deposit” available under the Callable Stream which formed part of the Sprott project funding. The Callable
Stream provided Sprott the option to acquire 3.375% of the gold production from the Woodlark Gold Project
until it had acquired a cumulative total of 30,000 gold ounces and 1.6575% of the gold production thereafter.
Alternatively, Sprott could elect to receive cash amounting to 70% of the spot LBMA price of the gold
produced. The objective was to repay the “deposit” through this mechanism by approximately June 2026,
however, subject to the buy-back option (see below), the gold stream arrangement under the Callable
Stream is effectively perpetual.
Under the Callable Stream agreement, the Group had a buy-back option for the gold stream arrangement,
whereby it could pay US$15 million plus any uncredited balance remaining on the “deposit” in order to fully
extinguish any remaining liability to Sprott. The buy-back option period was 180 days from 30 June 2026
(which is the maturity date of the Facility disclosed in Note 18).
The Group elected to designate all financial instruments under the Callable Stream arrangement as a
financial liability at fair value through profit and loss, both on initial recognition and at each reporting date.
Any changes in fair value were recorded as a gain or loss in the profit and loss, except for those arising from
changes in the Group’s own credit risk, which are recorded in other comprehensive income.
On 15 December 2021, the deposit advanced under the Callable Stream agreement was repaid in full and
the terms and conditions of the agreement were amended. A loss on change in fair value of $109,768 was
recognised in the profit and loss on the modification and extinguishment of the borrowing.
Pursuant to the amended agreement, a fee of US$5 million is payable if the Callable Stream agreement is
terminated. This was recorded at fair value of US$3 million as a component of the debt modification on 15
December 2021.
Subsequent to balance date, the Company negotiated terms for the termination of both the Facility and
Callable Stream agreements. Refer to Note 29 for further information.
No amount was drawn under the amended agreement at 31 December 2021.
84
92 | P a g e
93 | P a g e
2021 ANNUAL REPORT
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
19
OTHER FINANCIAL LIABILITIES
19
OTHER FINANCIAL LIABILITIES (continued)
Lease liability (Note 15(b))
Current
Total
Non-current
Lease liability (Note 15(b))
Derivative liability (i)
Sprott Callable Stream (ii)
Total
(i) Derivative liability movement during the year
Balance at 1 January
Change in fair value
Amount recognised at inception (Note 18)
Value of liability transferred to host liability prior to
prepayment (Note 18)
Balance at 31 December
Consolidated
2021
$
2020
$
193,662
193,662
220,164
220,164
420,326
496,708
420,326
496,708
-
-
-
20,618,236
1,720,268
(22,338,504)
-
-
-
-
-
-
-
As indicated in Note 18, as part of the Sprott Facility, the floating interest rate floor of 1.75% over the base
rate, the Company’s ability to repay the full outstanding principal balance and the Additional Interest
Payments, represent embedded derivatives. The interest rate floor and prepayment embedded derivatives
were not brought to account (see Note 18), however the Additional Interest Payments were fair valued on
initial recognition.
The value of the derivative liability was transferred back to the host liability prior to the principal of the
Sprott Facility being prepaid in full in December 2021.
(ii) Sprott Callable Stream movement during the year
Balance at 1 January
Amount recognised at inception
Other finance costs paid
Change in fair value
Amount repaid
Foreign exchange fluctuation
Balance at 31 December
Consolidated
2021
$
2020
$
-
19,967,251
(104,486)
109,768
(21,089,483)
1,116,950
-
-
-
-
-
-
-
-
On 24 June 2021, the Company issued a drawdown notice to Sprott to draw down the US$15 million
“deposit” available under the Callable Stream which formed part of the Sprott project funding. The Callable
Stream provided Sprott the option to acquire 3.375% of the gold production from the Woodlark Gold Project
until it had acquired a cumulative total of 30,000 gold ounces and 1.6575% of the gold production thereafter.
Alternatively, Sprott could elect to receive cash amounting to 70% of the spot LBMA price of the gold
produced. The objective was to repay the “deposit” through this mechanism by approximately June 2026,
however, subject to the buy-back option (see below), the gold stream arrangement under the Callable
Stream is effectively perpetual.
Under the Callable Stream agreement, the Group had a buy-back option for the gold stream arrangement,
whereby it could pay US$15 million plus any uncredited balance remaining on the “deposit” in order to fully
extinguish any remaining liability to Sprott. The buy-back option period was 180 days from 30 June 2026
(which is the maturity date of the Facility disclosed in Note 18).
The Group elected to designate all financial instruments under the Callable Stream arrangement as a
financial liability at fair value through profit and loss, both on initial recognition and at each reporting date.
Any changes in fair value were recorded as a gain or loss in the profit and loss, except for those arising from
changes in the Group’s own credit risk, which are recorded in other comprehensive income.
On 15 December 2021, the deposit advanced under the Callable Stream agreement was repaid in full and
the terms and conditions of the agreement were amended. A loss on change in fair value of $109,768 was
recognised in the profit and loss on the modification and extinguishment of the borrowing.
Pursuant to the amended agreement, a fee of US$5 million is payable if the Callable Stream agreement is
terminated. This was recorded at fair value of US$3 million as a component of the debt modification on 15
December 2021.
Subsequent to balance date, the Company negotiated terms for the termination of both the Facility and
Callable Stream agreements. Refer to Note 29 for further information.
No amount was drawn under the amended agreement at 31 December 2021.
92 | P a g e
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85
2021 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021 GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
20
ISSUED CAPITAL
21
RESERVES
Consolidated
2021
$
2020
$
Issued Capital
284,846,318
165,801,105
Reconciliation of movements in Issued Capital during the year
Date
Shares
$
Shares
$
2021
2020
Balance at 1 January
Conversion of Zero Exercise Price Options
Shares issued pursuant to a Placement
Shares issued pursuant to a Placement
Shares issued pursuant to a Share Purchase
Plan
Shares issued pursuant to Project Financing
Conversion of Zero Exercise Price Options
Conversion of Zero Exercise Price Options
Less: share issue costs
21-Jul-20
18-Dec-20
12-Feb-21
16-Feb-21
29-Jun-21
13-Jul-21
23-Aug-21
218,807,363
-
-
289,571,862
165,801,105
-
-
121,620,182
174,525,760
520,131
43,761,472
-
148,972,741
-
18,379,818
-
4,461,821
5,404,655
970,638
30,307
-
1,874,011
1,790,902
-
-
(6,239,882)
-
-
-
-
-
-
-
-
-
(1,551,454)
Balance at 31 December
519,246,646
284,846,318
218,807,363
165,801,105
(a) Reserves
Share-based payments reserve
Option reserve
Foreign currency translation reserve
Other equity reserve
Total
(b) Movements during the year
Share-based payments reserve
Balance at 1 January
Share-based payment expense
Balance at 31 December
Option reserve
Balance at 1 January
Options issued
Balance at 31 December
Foreign currency translation reserve
Balance at 1 January
Exchange gains/(losses) during year
Balance at 31 December
Other equity reserve
Balance at 1 January
Transfers during the year
Balance at 31 December
Total reserves
Consolidated
2021
$
2020
$
4,724,737
300,840
2,089,578
(1,370,317)
5,744,838
3,993,609
-
(2,018,220)
(1,370,317)
605,072
3,993,609
731,128
4,724,737
-
300,840
300,840
2,873,328
1,120,281
3,993,609
-
-
-
(2,018,220)
4,107,798
2,089,578
3,340,531
(5,358,751)
(2,018,220)
(1,370,317)
(1,370,317)
-
-
(1,370,317)
(1,370,317)
5,744,838
605,072
(c) Nature and purpose of reserves
Share-based payments reserve
The share-based payments reserve records:
(cid:120)
(cid:120)
the value of exercised and unexercised options, share appreciation rights and share performance
rights issued or granted to employees and Directors which have been expensed; and
the value of options issued on acquisition of Millennium Mining (Fiji) Ltd.
Option reserve
The option reserve records the value of options issued pursuant to Project Financing.
94 | P a g e
95 | P a g e
86
2021 ANNUAL REPORT
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
20
ISSUED CAPITAL
21
RESERVES
Consolidated
2021
$
2020
$
Issued Capital
284,846,318
165,801,105
Reconciliation of movements in Issued Capital during the year
Date
Shares
$
Shares
$
2021
2020
Balance at 1 January
Conversion of Zero Exercise Price Options
Shares issued pursuant to a Placement
Shares issued pursuant to a Placement
Shares issued pursuant to a Share Purchase
Plan
21-Jul-20
18-Dec-20
12-Feb-21
16-Feb-21
Shares issued pursuant to Project Financing
29-Jun-21
Conversion of Zero Exercise Price Options
13-Jul-21
Conversion of Zero Exercise Price Options
23-Aug-21
289,571,862
121,620,182
-
-
4,461,821
5,404,655
970,638
30,307
-
-
-
-
1,874,011
1,790,902
218,807,363
165,801,105
174,525,760
148,972,741
520,131
43,761,472
18,379,818
-
-
-
-
-
-
Less: share issue costs
Balance at 31 December
-
(6,239,882)
(1,551,454)
519,246,646
284,846,318
218,807,363
165,801,105
-
-
-
-
-
-
(a) Reserves
Share-based payments reserve
Option reserve
Foreign currency translation reserve
Other equity reserve
Total
(b) Movements during the year
Share-based payments reserve
Balance at 1 January
Share-based payment expense
Balance at 31 December
Option reserve
Balance at 1 January
Options issued
Balance at 31 December
Foreign currency translation reserve
Balance at 1 January
Exchange gains/(losses) during year
Balance at 31 December
Other equity reserve
Balance at 1 January
Transfers during the year
Balance at 31 December
Total reserves
Consolidated
2021
$
2020
$
4,724,737
300,840
2,089,578
(1,370,317)
5,744,838
3,993,609
-
(2,018,220)
(1,370,317)
605,072
3,993,609
731,128
4,724,737
-
300,840
300,840
2,873,328
1,120,281
3,993,609
-
-
-
(2,018,220)
4,107,798
2,089,578
3,340,531
(5,358,751)
(2,018,220)
(1,370,317)
-
(1,370,317)
(1,370,317)
-
(1,370,317)
5,744,838
605,072
(c) Nature and purpose of reserves
Share-based payments reserve
The share-based payments reserve records:
(cid:120)
(cid:120)
the value of exercised and unexercised options, share appreciation rights and share performance
rights issued or granted to employees and Directors which have been expensed; and
the value of options issued on acquisition of Millennium Mining (Fiji) Ltd.
Option reserve
The option reserve records the value of options issued pursuant to Project Financing.
94 | P a g e
95 | P a g e
87
2021 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021 GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
21
RESERVES (continued)
(c) Nature and purpose of reserves (continued)
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. It is also used to record exchange gains or losses on borrowings that form
part of the Company’s net investments in foreign operations.
Other equity reserve
The other equity reserve records transfers of interests to the Group from non-controlling interests.
22
CONTINGENT LIABILITIES
The Group did not have any contingent liabilities at the end of the reporting period (2020: nil).
23
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
Location
PNG
Tenement
Renewed
to
27-Nov-21
Annual
Commitment
2022
$
120,226 Licence renewal lodged with authorities for
Comments
an additional two years. Tenure remains
while renewal pending.
EL 1279
PNG
25-Aug-21
160,301 Licence renewal lodged with authorities for
an additional two years. Tenure remains
while renewal pending.
EL 1465
PNG
22-Dec-22
80,151
23
COMMITMENTS (continued)
(b) Operating Commitments
The outstanding operating commitments relating to the Woodlark Gold Project at 31 December are:
Consolidated
2021
$
2020
$
5,285,092
504,860
5,789,952
6,523,095
-
6,523,095
Payable within one year
Payable after one year but not more than five years
Total
During the previous year ended 31 December 2020, 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
contract is $4,041,719. Both of these contracts are scheduled to be completed within one year.
Variations were made to the Rhodes contract during the year ended 31 December 2021 and the committed
expenditure at 31 December 2021 is $1,761,067. This is included in the payable within one year category in
the table above.
24
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
Geocanada Resources Limited
Effective Ownership
Percentage
2021
2020
Country of
Incorporation
and Carrying
on Business
Australia
Indonesia
Singapore
Cambodia
Cambodia
Fiji
Fiji
Fiji
PNG
Canada
Class of
Share
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
%
100
100
100
-
-
100
100
100
100
100
%
100
100
100
85
-
100
100
100
100
-
(i) The Company derecognised the Kou Sa Project during the year ended 31 December 2020. See Note 6 for further information.
88
96 | P a g e
97 | P a g e
2021 ANNUAL REPORT
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
21
RESERVES (continued)
(c) Nature and purpose of reserves (continued)
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. It is also used to record exchange gains or losses on borrowings that form
part of the Company’s net investments in foreign operations.
Other equity reserve
The other equity reserve records transfers of interests to the Group from non-controlling interests.
The Group did not have any contingent liabilities at the end of the reporting period (2020: nil).
22
CONTINGENT LIABILITIES
23
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
Renewed
Annual
Commitment
2022
$
Tenement
Location
to
Comments
EL 1172
PNG
27-Nov-21
120,226 Licence renewal lodged with authorities for
EL 1279
PNG
25-Aug-21
160,301 Licence renewal lodged with authorities for
an additional two years. Tenure remains
while renewal pending.
an additional two years. Tenure remains
while renewal pending.
EL 1465
PNG
22-Dec-22
80,151
23
COMMITMENTS (continued)
(b) Operating Commitments
The outstanding operating commitments relating to the Woodlark Gold Project at 31 December are:
Payable within one year
Payable after one year but not more than five years
Total
Consolidated
2021
$
2020
$
5,285,092
504,860
5,789,952
6,523,095
-
6,523,095
During the previous year ended 31 December 2020, 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
contract is $4,041,719. Both of these contracts are scheduled to be completed within one year.
Variations were made to the Rhodes contract during the year ended 31 December 2021 and the committed
expenditure at 31 December 2021 is $1,761,067. This is included in the payable within one year category in
the table above.
24
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
Geocanada Resources Limited
Country of
Incorporation
and Carrying
on Business
Australia
Indonesia
Singapore
Cambodia
Cambodia
Fiji
Fiji
Fiji
PNG
Canada
Effective Ownership
Percentage
Class of
Share
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
2021
%
100
100
100
-
-
100
100
100
100
100
2020
%
100
100
100
85
-
100
100
100
100
-
(i) The Company derecognised the Kou Sa Project during the year ended 31 December 2020. See Note 6 for further information.
96 | P a g e
97 | P a g e
89
2021 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021 GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
25
KEY MANAGEMENT PERSONNEL DISCLOSURES
26
RELATED PARTY TRANSACTIONS
(a) Directors
There were no other transactions with related parties during the year other than those disclosed in Note 25.
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
Assumed Executive role from 1 January
to 30 June 2021 and from 11 November
to 31 December 2021
Colin Gilligan
Ian Murray
Sir Charles Lepani
Position
Non-Executive Chairman
Non-Executive Director
Non-Executive Director
Non-Executive Director
(b) Other Key Management Personnel (KMP)
Details of the Other KMP of the Group during the current and prior reporting periods are set out in the table
below:
Name
Executives
Timothy Richards
Matthew Smith
Graeme Rapley
Glenn Zamudio
Position
Chief Executive Officer
Chief Financial Officer & Company Secretary
Project Director - WML
General Manager - Projects
Appointed 1 February 2021; Ceased 31
October 2021
Ceased 31 March 2021
(c)
KMP Compensation
Key Management Personnel Compensation:
Short-term benefits
Post-employment benefits
Share-based payments
Long-term benefits
Termination payments
Total
Consolidated
2021
$
2020
$
1,596,790
102,075
727,233
(1,749)
119,383
2,543,732
1,376,630
102,408
1,120,282
12,872
399,996
3,012,188
27
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 $731,128 (2020: $1,120,281) which relates to equity settled share-based payments
transactions issued under the plan.
All options and share performance rights 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 3,112,442 share performance rights (SPR’s) to employees.
These incentives were granted on 2 August 2021 and were issued in accordance with the Securities Incentive
Plan. The vesting condition of the share performance rights is satisfaction of performance conditions relating
to production target and resource growth over a three-year measurement period and continuous
employment (at Board discretion).
90
98 | P a g e
99 | P a g e
2021 ANNUAL REPORT
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
25
KEY MANAGEMENT PERSONNEL DISCLOSURES
26
RELATED PARTY TRANSACTIONS
(a) Directors
There were no other transactions with related parties during the year other than those disclosed in Note 25.
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
Position
Ian Clyne
Assumed Executive role from 1 January
Non-Executive Chairman
to 30 June 2021 and from 11 November
to 31 December 2021
Non-Executive Director
Non-Executive Director
Non-Executive Director
Colin Gilligan
Ian Murray
Sir Charles Lepani
below:
Name
Executives
Timothy Richards
Matthew Smith
Graeme Rapley
(b) Other Key Management Personnel (KMP)
Details of the Other KMP of the Group during the current and prior reporting periods are set out in the table
Position
Chief Executive Officer
Chief Financial Officer & Company Secretary
Appointed 1 February 2021; Ceased 31
Project Director - WML
October 2021
Glenn Zamudio
Ceased 31 March 2021
General Manager - Projects
(c)
KMP Compensation
Key Management Personnel Compensation:
Short-term benefits
Post-employment benefits
Share-based payments
Long-term benefits
Termination payments
Total
Consolidated
2021
$
2020
$
1,596,790
102,075
727,233
(1,749)
119,383
1,376,630
102,408
1,120,282
12,872
399,996
2,543,732
3,012,188
98 | P a g e
27
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 $731,128 (2020: $1,120,281) which relates to equity settled share-based payments
transactions issued under the plan.
All options and share performance rights 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 3,112,442 share performance rights (SPR’s) to employees.
These incentives were granted on 2 August 2021 and were issued in accordance with the Securities Incentive
Plan. The vesting condition of the share performance rights is satisfaction of performance conditions relating
to production target and resource growth over a three-year measurement period and continuous
employment (at Board discretion).
99 | P a g e
91
2021 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021 GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
27
SHARE-BASED PAYMENTS (CONTINUED)
(a)
Employee Incentive Plan (continued)
The incentives were valued by independent third-party valuations. The key inputs and valuations are
summarised below:
27
SHARE-BASED PAYMENTS (CONTINUED)
(a)
Employee Incentive Plan (continued)
Item
Underlying share value
Exercise price
Valuation date
Vesting date
Vesting period (years)
Expiry date
Life of the options (years)
Volatility(i)
Risk free rate
Dividend yield
Granted on 2 August 2021
Number of rights
Value per right
Value per tranche
SPR’s
$0.335
Nil
2-Aug-21
31-Dec-23
3.00
31-Mar-24
2.66
75%
0.025%
Nil
3,112,442
$0.335
$1,042,668
(i) Volatility of the share price fluctuation was calculated by considering the historical movement of the share price over a
period of time as well factoring market conditions of its competitors to predict the distribution of relative share
performance.
Zero exercise price options
Outstanding at beginning of year
3,471,672
Granted Class A
Granted Class B
Granted Class C
Exercised
Outstanding at end of year
Premium exercise price options
Outstanding at beginning of year
Granted Class C
Expired/lapsed
Exercised
Share appreciation rights
Outstanding at beginning of year
Granted
Expired/lapsed
Exercised
Share performance rights
Outstanding at beginning of year
Granted
Expired/lapsed
Exercised
2021
2020
Number of
options or
rights
Weighted
average
exercise
price ($)
Number of
options or
rights
Weighted
average
exercise
price ($)
2,787,735
30,307
526,262
647,500
(520,132)
3,471,672
(1,000,945)
2,470,727
2,249,136
0.7980
1,872,590
376,546
0.7714
0.9300
2,430,722
0.5485(i)
2,023,706
407,016
0.5381(i)
0.6000(i)
-
-
-
-
-
-
-
-
-
-
-
-
3,112,442
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Outstanding at end of year
2,430,722
0.5485(i)
2,430,722
0.5485(i)
Outstanding at end of year
2,249,136
0.7980
2,249,136
0.7980
Outstanding at end of year
3,112,442
(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
92
100 | P a g e
101 | P a g e
2021 ANNUAL REPORT
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
27
SHARE-BASED PAYMENTS (CONTINUED)
(a)
Employee Incentive Plan (continued)
The incentives were valued by independent third-party valuations. The key inputs and valuations are
summarised below:
Item
Underlying share value
Exercise price
Valuation date
Vesting date
Vesting period (years)
Expiry date
Life of the options (years)
Volatility(i)
Risk free rate
Dividend yield
Granted on 2 August 2021
Number of rights
Value per right
Value per tranche
SPR’s
$0.335
Nil
2-Aug-21
31-Dec-23
31-Mar-24
3.00
2.66
75%
0.025%
Nil
3,112,442
$0.335
$1,042,668
(i) Volatility of the share price fluctuation was calculated by considering the historical movement of the share price over a
period of time as well factoring market conditions of its competitors to predict the distribution of relative share
performance.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
27
SHARE-BASED PAYMENTS (CONTINUED)
(a)
Employee Incentive Plan (continued)
2021
2020
Number of
options or
rights
Weighted
average
exercise
price ($)
Number of
options or
rights
Weighted
average
exercise
price ($)
3,471,672
-
-
-
(1,000,945)
2,470,727
2,249,136
-
-
-
2,249,136
2,430,722
-
-
-
2,430,722
-
3,112,442
-
-
3,112,442
-
-
-
-
0.7980
-
-
-
0.7980
0.5485(i)
-
-
-
0.5485(i)
-
-
-
-
-
2,787,735
30,307
526,262
647,500
(520,132)
3,471,672
1,872,590
376,546
-
-
2,249,136
2,023,706
407,016
-
-
2,430,722
-
-
-
-
-
-
-
-
-
-
-
0.7714
0.9300
-
-
0.7980
0.5381(i)
0.6000(i)
-
-
0.5485(i)
-
-
-
-
-
Zero exercise price options
Outstanding at beginning of year
Granted Class A
Granted Class B
Granted Class C
Exercised
Outstanding at end of year
Premium exercise price options
Outstanding at beginning of year
Granted Class C
Expired/lapsed
Exercised
Outstanding at end of year
Share appreciation rights
Outstanding at beginning of year
Granted
Expired/lapsed
Exercised
Outstanding at end of year
Share performance rights
Outstanding at beginning of year
Granted
Expired/lapsed
Exercised
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
100 | P a g e
101 | P a g e
93
2021 ANNUAL REPORT
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
28
LOSS PER SHARE
(a)
Basic and Diluted Loss per Share
From continuing operations attributable to the ordinary equity
Basic loss per share:
holders of the company
Diluted loss per share:
holders of the company
From continuing operations attributable to the ordinary equity
(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
Consolidated
2021
Cents
2020
Cents
(12.67)
(2.59)
(12.67)
(2.59)
Consolidated
2021
$
2020
$
(61,318,687)
(61,318,687)
(4,567,311)
(4,567,311)
Consolidated
2021
2020
No. of Shares
No. of Shares
Weighted average number of ordinary shares used as the
denominator in calculating basic and diluted loss per share
483,805,157
176,404,229
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021 GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
27
SHARE-BASED PAYMENTS (CONTINUED)
(a)
Employee Incentive Plan (continued)
The weighted average remaining contractual life of the incentives outstanding at 31 December 2021 are:
Instrument
Zero exercise price options
Premium exercise price options
Share appreciation rights
Share performance rights
(b) Unlisted Incentives
Years
0.77
1.36
1.35
2.25
There were 2,742,328 options over unissued shares unexercised at reporting date (2020: 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:
2021
Issue Date
Expiry
Date
Exercise
Price
Number on
Issue
Movement During the Year
6-Jun-09
6-Jun-09
29-Jun-21
Note (a)
Note (b)
29-Sep-26
$
62.50
125.00
0.322
1-Jan-21
32,000
8,000
Granted
-
-
- 2,702,328
40,000 2,702,328
Adjusted for
share
consolidation
Lapsed
-
-
-
-
Number on
Issue
31-Dec-21
32,000
8,000
2,702,328
2,742,328
-
-
-
-
(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
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
(c)
Services
During the reporting period, the Company did not issue any shares as payment for services (2020: nil).
94
102 | P a g e
103 | P a g e
2021 ANNUAL REPORT
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
28
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
Details of unlisted options over unissued shares in the Company as at the date of this report are outlined in
(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
The weighted average remaining contractual life of the incentives outstanding at 31 December 2021 are:
27
SHARE-BASED PAYMENTS (CONTINUED)
(a)
Employee Incentive Plan (continued)
Instrument
Zero exercise price options
Premium exercise price options
Share appreciation rights
Share performance rights
(b) Unlisted Incentives
Years
0.77
1.36
1.35
2.25
There were 2,742,328 options over unissued shares unexercised at reporting date (2020: 40,000). Since the
end of the financial year, no unlisted options have been cancelled or exercised.
the tables below:
2021
Issue Date
Expiry
Date
Exercise
Number on
Price
Issue
Movement During the Year
Number on
Issue
$
1-Jan-21
Granted
Lapsed
consolidation
31-Dec-21
Adjusted for
share
6-Jun-09
6-Jun-09
Note (a)
Note (b)
29-Jun-21
29-Sep-26
62.50
125.00
0.322
32,000
8,000
-
-
- 2,702,328
40,000 2,702,328
-
-
-
-
(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
2020
Issue Date
Expiry
Date
Exercise
Number on
Price
Issue
$
1-Jan-20
Granted
Lapsed
consolidation
31-Dec-20
Movement During the Year
Adjusted for share
6-Jun-09
6-Jun-09
Note (a)
Note (b)
62.50
125.00
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 (2020: nil).
-
-
-
-
-
-
-
32,000
8,000
2,702,328
2,742,328
Number on
Issue
32,000
8,000
40,000
102 | P a g e
Consolidated
2021
Cents
2020
Cents
(12.67)
(2.59)
(12.67)
(2.59)
Consolidated
2021
$
2020
$
(61,318,687)
(61,318,687)
(4,567,311)
(4,567,311)
Consolidated
2021
No. of Shares
2020
No. of Shares
483,805,157
176,404,229
103 | P a g e
95
2021 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021 GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
29
EVENTS OCCURRING AFTER BALANCE DATE
30
OPERATING SEGMENTS
The financial statements have been prepared based upon conditions existing at 31 December 2021 and due
consideration has been given to events that have occurred subsequent to 31 December 2021 that provide
evidence of conditions that existed at the end of the reporting period.
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.
On 13 January 2022, Mr Andrew Bantock was appointed as Chairman and director of the Company and Mr
Ian Clyne retired as Chairman and director of the Company.
In February 2022, the Company announced that in view of ongoing delays in the project schedule and the
consequent implications for capital cost escalation, a range of steps were taken including the suspension of
all detailed engineering and civil works at the Project pending a review of the Company’s strategic options.
The suspension of these activities will preserve cash reserves and require redundancies across the Group.
In April 2022, the Company announced that it terminated the Facility and Stream agreements with Sprott.
The financial liabilities comprising of the termination fees described in Notes 18 and 19 were settled and paid
for an aggregate amount of US$6 million. This did not result in gain or loss on termination.
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.
For management purposes in the 2021 reporting period the Group was organised into three operating
segments based on geographical locations, which involve mineral exploration and development in PNG 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 three segments. The accounting
policies applied for internal reporting purposes are consistent with those applied in preparation of the
financial statements.
All Other
Segments
$
PNG
$
Corporate
$
Total
$
Other Income
Net Profit/(Loss) for the year
Segment Assets
Segment Liabilities
370,620
238,625
95,008
648,935
-
(36,926,373)
109,829,892
25,822,178
147,753
(24,630,939)
66,340,785
8,427,322
518,373
(61,318,687)
176,265,685
34,898,435
Impairment write downs
6,934
27,268,512
-
27,275,446
Other Income
Net Profit/(Loss) for the year
Segment Assets
Segment Liabilities
All Other
Segments
$
344,796
115,610
998,273
-
-
PNG
$
Corporate
$
Total
$
63
(101,311)
50,792,747
3,577,948
282,360
(4,810,796)
34,782,529
2,613,707
282,423
(4,567,311)
85,690,886
7,189,928
Impairment write downs
20,448
-
20,448
2021
2020
96
104 | P a g e
105 | P a g e
2021 ANNUAL REPORT
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
29
EVENTS OCCURRING AFTER BALANCE DATE
30
OPERATING SEGMENTS
The financial statements have been prepared based upon conditions existing at 31 December 2021 and due
consideration has been given to events that have occurred subsequent to 31 December 2021 that provide
evidence of conditions that existed at the end of the reporting period.
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.
On 13 January 2022, Mr Andrew Bantock was appointed as Chairman and director of the Company and Mr
Ian Clyne retired as Chairman and director of the Company.
In February 2022, the Company announced that in view of ongoing delays in the project schedule and the
consequent implications for capital cost escalation, a range of steps were taken including the suspension of
all detailed engineering and civil works at the Project pending a review of the Company’s strategic options.
The suspension of these activities will preserve cash reserves and require redundancies across the Group.
In April 2022, the Company announced that it terminated the Facility and Stream agreements with Sprott.
The financial liabilities comprising of the termination fees described in Notes 18 and 19 were settled and paid
for an aggregate amount of US$6 million. This did not result in gain or loss on termination.
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.
For management purposes in the 2021 reporting period the Group was organised into three operating
segments based on geographical locations, which involve mineral exploration and development in PNG 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 three segments. The accounting
policies applied for internal reporting purposes are consistent with those applied in preparation of the
financial statements.
2021
All Other
Segments
$
PNG
$
Corporate
$
Total
$
Other Income
Net Profit/(Loss) for the year
Segment Assets
Segment Liabilities
370,620
238,625
95,008
648,935
-
(36,926,373)
109,829,892
25,822,178
147,753
(24,630,939)
66,340,785
8,427,322
518,373
(61,318,687)
176,265,685
34,898,435
Impairment write downs
6,934
27,268,512
-
27,275,446
2020
All Other
Segments
$
PNG
$
Corporate
$
Total
$
Other Income
Net Profit/(Loss) for the year
Segment Assets
Segment Liabilities
-
344,796
115,610
998,273
63
(101,311)
50,792,747
3,577,948
282,360
(4,810,796)
34,782,529
2,613,707
282,423
(4,567,311)
85,690,886
7,189,928
Impairment write downs
-
20,448
-
20,448
104 | P a g e
105 | P a g e
97
2021 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021 GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
31
NOTES TO THE STATEMENT OF CASH FLOWS
31
NOTES TO THE STATEMENT OF CASH FLOWS (CONTINUED)
(a)
Cash and Cash Equivalents
(c) Non-cash investing and financing activities
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
Restricted cash
Total
(b)
Reconciliation of Cash Flows from Operating Activities
Consolidated
2021
$
2020
$
50,943,828
16,526,649
64,470,477
34,639,855
-
34,639,855
Consolidated
2021
$
2020
$
Additions to lease liability
Fair value loss on financial liabilities
Gain on derecognition of Kou Sa Project(i)
(i) The Company derecognised the Kou Sa Project. See Note 6 for further information.
32
REMUNERATION OF AUDITORS
The Auditor of Geopacific is Ernst & Young.
Net loss after income tax
(61,318,687)
(4,567,311)
Amounts received or receivable - Ernst & Young for:
- An audit or review of the financial report
Total
Consolidated
2021
$
2020
$
128,175
4,320,633
746,544
-
-
(1,884,834)
Consolidated
2021
$
2020
$
218,000
218,000
65,100
65,100
Adjustments for:
Depreciation
Share-based payments
Impairment write downs
Finance costs
Fair value loss on financial liabilities
Foreign currency revaluation
Other income
Consultancy expense
Changes in Assets & Liabilities
(Increase) in trade and other receivables
(Increase) in prepayments
Increase in trade and other payables
Increase in provisions
Net Cash Used in Operating Activities
260,607
731,128
27,275,446
10,832,376
4,320,633
(609,792)
(370,620)
567,944
141,634
1,120,281
20,448
830,927
-
(401,346)
(1,884,834)
-
(2,663,877)
(364,803)
278,970
6,869,574
(14,191,101)
(770,068)
-
528,015
55,972
(4,926,282)
98
106 | P a g e
107 | P a g e
2021 ANNUAL REPORT
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
31
NOTES TO THE STATEMENT OF CASH FLOWS
31
NOTES TO THE STATEMENT OF CASH FLOWS (CONTINUED)
(a)
Cash and Cash Equivalents
(c) Non-cash investing and financing activities
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:
Additions to lease liability
Fair value loss on financial liabilities
Gain on derecognition of Kou Sa Project(i)
(i) The Company derecognised the Kou Sa Project. See Note 6 for further information.
32
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
Cash at bank
Restricted cash
Total
(b)
Reconciliation of Cash Flows from Operating Activities
Net loss after income tax
Adjustments for:
Depreciation
Share-based payments
Impairment write downs
Finance costs
Fair value loss on financial liabilities
Foreign currency revaluation
Other income
Consultancy expense
Changes in Assets & Liabilities
(Increase) in trade and other receivables
(Increase) in prepayments
Increase in trade and other payables
Increase in provisions
Net Cash Used in Operating Activities
Consolidated
2021
$
2020
$
50,943,828
16,526,649
64,470,477
34,639,855
-
34,639,855
Consolidated
2021
$
2020
$
(61,318,687)
(4,567,311)
260,607
731,128
27,275,446
10,832,376
4,320,633
(609,792)
(370,620)
567,944
141,634
1,120,281
20,448
830,927
(401,346)
(1,884,834)
-
-
(2,663,877)
(364,803)
278,970
6,869,574
(770,068)
-
528,015
55,972
(14,191,101)
(4,926,282)
106 | P a g e
Consolidated
2021
$
2020
$
128,175
4,320,633
-
746,544
-
(1,884,834)
Consolidated
2021
$
2020
$
218,000
218,000
65,100
65,100
107 | P a g e
99
2021 ANNUAL REPORT
SHAREHOLDER INFORMATION
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
SHAREHOLDER INFORMATION
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
SHAREHOLDER INFORMATION
The shareholder information set out below was applicable as at 11 March 2022.
(c)
Substantial holders
(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
260
607
333
860
246
2,306
117,405
1,678,565
2,602,060
31,075,682
483,772,934
519,246,646
The names of the twenty largest holders of quoted equity securities, ordinary shares, are listed below:
Ordinary Shares
upon a poll each share shall have one vote.
On a show of hands, every member present at a meeting in person or by proxy shall have one vote and
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
NDOVU CAPITAL IV B V
CITICORP NOMINEES PTY LIMITED
DELPHI UNTERNEHMENBERATUNG
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
SPARTA AG
2INVEST AG
DEUTSCHE BALATON AKTIENGESELLSCHAFT
BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM
BROADGATE INVESTMENTS PTY LTD
SPARTA AG
SPROTT PRIVATE RESOURCE LENDING II (CO) INC
BNP PARIBAS NOMS PTY LTD
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