Greatland Gold plc
Company number: 5625107
Greatland Gold plc
Report & Financial Statements
for the year ended 30 June 2019
Greatland Gold plc
Company number: 5625107
Contents
Company information
Chairman’s statement
Board of directors
Strategic report
Directors’ report
Statement of directors’ responsibilities
Corporate governance statement
Remuneration committee report
Audit committee report
Independent auditor’s report
Group statement of comprehensive income
Group balance sheet
Group statement of changes in equity
Company balance sheet
Company statement of changes in equity
Group cash flow statement
Company cash flow statement
Notes to financial statements
Page
3
4-5
6
7-10
11-15
16
17-23
24
25
26-29
30
31
32-33
34
35
36
37
38-55
2
Greatland Gold plc
Company number: 5625107
Company Information
Directors
Alex Borrelli – Non-Executive Chairman
Gervaise Heddle – Chief Executive Officer
Callum Baxter – Chief Technical Officer
Clive Latcham – Non-Executive Director
all of
33 St. James’s Square
London SW1Y 4JS
Secretary
Stephen F Ronaldson
Registered Office
Salisbury House, London Wall
London EC2M 5PS
Website
www.greatlandgold.com
Nominated Adviser
Solicitors
Auditors
Joint Broker
Joint Broker
Bankers
SPARK Advisory Partners Limited
5 St. John’s Lane
London EC1M 4BH
Druces LLP
Salisbury House, London Wall
London EC2M 5PS
Chapman Davis LLP
2 Chapel Court
London SE1 1HH
Numis Securities
The London Stock Exchange Building
10 Paternoster Square
London EC4M 7LT
SI Capital Limited
46 Bridge Street
Godalming
Surrey GU7 1HL
Coutts & Co
440 Strand
London WC2R 0QS
Media and Investor Relations Luther Pendragon
Registrars
48 Gracechurch Street
London EC3V 0EJ
Share Registrars Limited
The Courtyard
17 West Street
Farnham
Surrey GU9 7DR
Registered number
5625107
3
Greatland Gold plc
Company number: 5625107
Chairman’s Statement
I am pleased to report on the Company’s audited results for the year ended 30 June 2019.
This year proved to be a period of outstanding progress for Greatland Gold plc (“Greatland”), as
highlighted by the excellent results from Greatland’s second drill campaign at its Havieron gold-copper
target in the Paterson region of Western Australia. These results were instrumental in securing a US$65
million Farm-In Agreement with Newcrest Operations Limited (“Newcrest”), a wholly-owned
subsidiary of Newcrest Mining Limited (ASX:NCM). Newcrest commenced its drilling programme at
Havieron in May 2019 and excellent initial drill results have defined a series of higher-grade zones
within a broad envelope of mineralisation. We are delighted by these results and by Newcrest’s ongoing
commitment to the exploration programme at Havieron.
Beyond our success at Havieron, we continued to systematically advance all of our six 100% owned
projects, particularly in the highly prospective Paterson province of Western Australia, where we have
a strong strategic position and believe there are opportunities to identify tier-one gold-copper deposits.
Key developments for the year across Greatland’s portfolio of exploration projects are detailed in the
Strategic Report, but I would like to briefly note some highlights.
Havieron and the Paterson region
During the year, Greatland’s second exploration campaign at Havieron continued to deliver excellent
drill results that received wide ranging industry recognition and caught the attention of several major
gold miners. The signing of the Farm-in Agreement with Newcrest in March 2019 demonstrates the
potential scale of the project. This followed a series of standout results including an upper zone of
103m at 3.5g/t gold and 0.93% copper from 459m and a lower zone of 128m at 7.4g/t gold and 0.54%
copper from 660m in our first drill hole of the second drill campaign (HAD005).
Newcrest launched its drilling programme at Havieron in May 2019 and, post year end, announced
three sets of excellent results (July, September and October 2019), which further support our view that
Havieron has the potential to become a truly significant, underground mining operation. Newcrest has
demonstrated its continued commitment to the project by increasing the number of drill rigs at site
from two to six, and by meeting the US$5million minimum expenditure commitment ahead of the
expected timetable.
If the trend of positive drill results continues, the Farm-in Agreement with Newcrest gives us the
potential to fast track Havieron through to Feasibility Study. The current intention of both parties is
that, subject to a positive Feasibility Study outcome, the ore from Havieron will be toll processed at
Newcrest’s Telfer Gold Mine, which sits approximately 45 kilometres to the west of Havieron,
delivering material benefits for both parties including lower upfront capital costs, reduced time to
production and first cash flows, and the potential for a significantly higher net present value for the
project.
Elsewhere in the Paterson region, we commenced our first drilling campaign at another high-priority
target, Black Hills, following positive results from a high-powered, deep-sensing Induced Polarisation
survey that displayed potential for near-surface gold mineralisation. At our Paterson Range East
licence, we have identified numerous high-priority exploration targets with a similar discrete magnetic
signature to Havieron, and we continue to advance our exploration activity at Scallywag, a gold-copper
prospect that sits in relatively proximity to Havieron.
4
Greatland Gold plc
Company number: 5625107
Chairman’s Statement, continued
Fundraising from new institutional investors to accelerate exploration at our high-priority targets
Greatland successfully raised £2,983,400 of new equity (net of costs) during the year. Subsequent to
financial year end, Greatland raised a further £3,968,672 of new equity (net of costs) with funds raised
by SI Capital Limited and Numis Securities Limited (“Numis”) (acting as introduction agent). In a
further indication of our continued progress, Greatland appointed Numis as joint broker and
broadened the shareholder base with new institutional and high net worth investors participating in
the fundraising completed in August 2019.
While Greatland continues to maintain a disciplined, results-based approach towards capital allocation,
the funds raised will give us increased flexibility to accelerate exploration across our key projects,
particularly in the Paterson region.
Strengthened Board and operations
The developments at Havieron have taken the Company to a new level, both from a corporate and an
operational standpoint. In order to scale up, and to match our ambitions going forward, we successfully
strengthened our board and operations team during the year. We were delighted to welcome someone
of the calibre of Clive Latcham to the Board, bringing over 30 years of industry experience, including
almost 10 years in senior roles with Rio Tinto. His expertise and contacts have proven invaluable since
he arrived and I am sure he will continue to be a great addition to Greatland.
As the Company continues to grow and develop, we want to ensure we maintain the highest standards.
To that end, we have invested in improving several aspects of Greatland’s operations including
Greatland’s Safety Management System (“SMS”) which assists us to systematically achieve and
maintain high standards for managing our employees’ safety and health.
Looking ahead
Greatland is the only AIM listed company with exposure to the new “gold/copper rush” in the
Paterson region of Western Australia. Our focus now is to build on our success and to leverage the
knowledge and insights gained at Havieron to prioritise and accelerate exploration at key targets across
our Paterson licences. We are also working to continue to systematically advance our wider portfolio
of projects.
In addition, we are well positioned to build on our track record of identifying and acquiring
underdeveloped opportunities at attractive valuations and we will continue to seek to build shareholder
value by acquiring projects that we believe have genuine tier-one potential in safe jurisdictions.
Our progress this year demonstrates our commitment to our five year strategy which remains to
maximise risk-adjusted return on shareholders’ capital by systematically advancing exploration across
our key assets and seeking opportunities to monetise those key exploration assets whether through
sale, joint venture or spin-out via initial public offering.
I would like to thank the management team for their tireless efforts and the significant progress made
over the last 12 months. I would also like to thank our shareholders for their ongoing support as we
continue to look forward with increased confidence.
Alex Borrelli
Chairman
29 October 2019
5
Greatland Gold plc
Company number: 5625107
Board of Directors
Alex Borrelli
FCA, Non-executive Chairman
Alex is Chairman of Greatland Gold plc. Alex qualified as a Chartered Accountant and has many years’
experience in investment banking encompassing flotations, takeovers, and mergers and acquisitions
for private and quoted companies. Alex is also Chairman of Xpediator plc, an AIM-listed company.
Gervaise Heddle
BEc(Hons), BA(Juris), CFA, Chief Executive Officer
Gervaise is Chief Executive Officer of Greatland Gold plc, and a former Non-Executive Director of
MetalNRG plc and Thor Mining plc. Previously, Gervaise was a Division Director of Macquarie Bank
and a Fund Manager at Merrill Lynch Investment Managers. Gervaise is a CFA charterholder and has
extensive financial market experience. Gervaise is based in Australia.
Callum Baxter
MSc (Ore Deposit Geology), MAIG, MAusIMM, Chief Technical Officer
Callum is Chief Technical Officer of Greatland Gold plc and Chairman and CEO of investee company
Starvest plc. Callum is a geologist with over twenty years’ global multi-commodity experience and is a
member of the Australian Institute of Geoscientists and the Australasian Institute of Mining and
Metallurgy. Callum has considerable experience in the natural resources sector as a geologist with
junior, mid-tier and major mining companies, primarily specialising in early stage exploration. Callum
is based in Australia.
Clive Latcham (appointed 15 October 2018)
BE (Hons), MSc (Mineral Economics), Non-Executive Director
Clive is a chemical engineer and mineral economist with over thirty years’ experience in senior roles in
the mining sector. Clive joined Greatland from ERM - Environmental Resource Management, the
world’s leading sustainability consultancy group, where he is currently Senior External Advisor, and
advisor to the Chairman and Chief Executive Officer. Prior to his role at ERM, Clive worked as an
independent advisor to private equity and mining consultancy firms, and spent nine years in senior
roles with Rio Tinto plc. During his time at Rio Tinto, Clive spent four years as Copper Group Mining
Executive, where he was responsible for managing Rio Tinto’s investments in the operating businesses
of Escondida in Chile, Grasberg in Indonesia, and Phalaborwa in South Africa and for the initial
development of new projects and acquisitions, including La Granja in Peru and La Sampala in
Indonesia.
6
Greatland Gold plc
Company number: 5625107
Strategic report
Principal activities, strategy and business model
The principal activity of the Group is to explore for and develop natural resources, with a focus on
gold. The Board seeks to increase shareholder value by the systematic evaluation of its existing resource
assets, and by acquiring exploration and development projects in underexplored areas.
The Group’s strategy and business model is developed by the Chief Executive Officer and is approved
by the Board. The executive directors who report to the Board are responsible for implementing the
strategy and managing the business.
The Group’s primary strategy is to advance projects that have potential for the discovery of large
mineralised systems (typically considered to be in excess of one million ounces of gold) through the
various stages of exploration and development with a view to monetising at least one or more of those
projects, whether through an outright sale, joint venture, or spin-out via initial public offering, within
a three to five year period.
Business development and performance
During the year ended 30 June 2019, Greatland successfully advanced exploration across its portfolio
of projects (six projects, 100% owned by Greatland), as detailed in the “Review of key developments
by project” section below. Most notably, Greatland’s second drilling campaign at its 100%-owned
Havieron gold-copper project in Western Australia returned excellent results including 103m at 3.5g/t
gold and 0.93% copper from 459m and 128m at 7.4g/t gold and 0.54% copper from 660m (HAD005),
179.1m at 1.4g/t gold and 0.47% copper from 547.9m (HAD006) and 67m at 2.0g/t gold and 0.91%
copper from 426m (HAD008).
In March 2019, Greatland signed a Farm-in Agreement with Newcrest Operations Limited
(“Newcrest”), a wholly-owned subsidiary of Newcrest Mining Limited (ASX:NCM), to explore and
develop Greatland’s Havieron project. Newcrest has the right to acquire up to a 70% interest in a 12-
block area within E45/4701 that covers the Havieron target by spending up to US$65m.
The Group’s financial position was further strengthened during the year by the successful raise of
£2,983,400 of new equity (net of costs). The Group’s cash deposits stood at £2,755,998 at 30 June
2019 (compared to £3,597,101 at 30 June 2018). These funds will be used to accelerate exploration
across our key exploration projects, particularly in the Paterson region.
Review of key developments by project
Paterson project (Western Australia), 100% owned
The Paterson project, comprising the Havieron, Paterson Range East and Black Hills licences, is
located in the Paterson region of northern Western Australia. The three licences collectively cover
more than 385 square kilometres of ground which is considered prospective for intrusion related gold-
copper systems and Telfer style gold deposits.
In September 2018, Greatland commenced its second drill programme at Havieron, which was
designed to further determine the extent and orientation of the high-grade zone of mineralisation at
Havieron that was detected in Greatland’s maiden drilling campaign. Highlights of the drill results from
the second campaign included 103m at 3.5g/t gold and 0.93% copper from 459m and 128m at 7.4g/t
gold and 0.54% copper from 660m (HAD005), 179.1m at 1.4g/t gold and 0.47% copper from 547.9m
(HAD006) and 67m at 2.0g/t gold and 0.91% copper from 426m (HAD008)
The excellent results from the second drill campaign at Havieron were fundamental in securing a
US$65m Farm-In Agreement with Newcrest in early 2019. Newcrest subsequently began drilling at the
Havieron target in May 2019. Initial results from Newcrest’s ongoing drilling programme at Havieron
have defined up to four higher-grade zones within a broad mineralised envelope and have extended
the limits of known mineralisation. Best results from Newcrest’s drilling to date include 52m at 7.0g/t
gold and 0.17% copper from 1122m (HAD006 extension), 139.4m at 2.9g/t gold and 0.39% copper
from 865.7m (HAD012), 244.6m at 2.0g/t gold and 0.4% copper from 450m (HAD014) and 96.4m at
4.5g/t gold and 0.14% copper from 916.4m (HAD018).
7
Greatland Gold plc
Company number: 5625107
Strategic report, continued
Review of key developments by project, continued
During the financial year, Greatland continued to conduct systematic exploration campaigns across its
100%-owned Paterson licences. At the Scallywag target (10 kilometres west of Havieron on E45/4701),
Greatland conducted a Mobile Metal Ion (“MMI”) survey which highlighted a multi-element
anomalous zone over 6km in strike length. Ground gravity and induced polarisation (IP) geophysics
survey are currently being conducted over the Scallywag target area and, together with 3D modelling
and detailed aeromagnetic data, will be used to help establish drill targets.
In June 2018, Greatland commenced its first field exploration campaign at Black Hills (E45/4512)
which successfully identified multiple gold nuggets at surface and established a strike length of high-
grade gold mineralisation at surface of up to 800 metres. Subsequently, two Induced Polarisation (“IP”)
surveys were carried out. The first IP survey, which commenced in August 2018, delineated a
chargeability anomaly at the Saddle Reefs prospect approximately 1 kilometre long. The second IP
survey, carried out in June/July 2019, extended that chargeability anomaly to over 1.4 kilometres in
length, part of which is spatially coincident with the surface gold mineralisation. A drill programme
was subsequently designed to test the 1.4km anomaly which commenced in July 2019. Initial results
from the drilling programme confirmed the presence of gold mineralisation at Black Hills with best
results including 56m at 0.56g/t gold from 68m (SRRC012).
During the period Greatland commenced work on a new, detailed, low level airborne magnetic survey
to cover the entire Paterson Range East licence. The Paterson Range East licence is 25km north of the
Havieron prospect and covers 224 square kilometres of Proterozoic basement rocks prospective for
Havieron style gold-copper mineralisation. Comprising approximately 5,200-line kilometres at a line
spacing of 50m the new survey significantly increased the resolution of approximately twenty magnetic
targets previously identified across the licence and allowed for numerous high-priority targets, with a
similar magnetic signature to Havieron, to be identified and defined.
Firetower project (Tasmania), 100% owned
The Firetower project is located in central north Tasmania, Australia, and covers an area of 62 square
kilometres. Historic drilling at the Firetower prospect has identified significant gold mineralisation
from surface (up to 30g/t).
A comprehensive IP survey carried out in 2018 highlighted a large chargeability response,
approximately 1,000 metres long, traversing east-west across the Firetower prospect, which is open to
the east and up to depths of 400 metres. In June 2019, the Company commenced a drilling programme
at Firetower which included plans to carry out over 2,000m of drilling on five north-south traverses to
test the chargeability anomaly at Firetower, with additional drilling to test the previously undrilled areas
at Firetower East highlighted by the IP survey. Initial results from this drilling programme confirmed
the presence of broad widths of gold mineralisation at the Firetower prospect, with best results
including 54.5m at 1.36g/t gold from surface (0m), including 5m at 5.41g.t gold from 45m (hole
2019FTD001).
Panorama project (Western Australia), 100% owned
The Panorama project consists of three adjoining exploration licences, covering 155 square kilometres,
located in the Pilbara region of Western Australia, in an area that is considered to be highly prospective
for gold and cobalt.
During the period, Greatland continued field exploration at Panorama with field reconnaissance and
surface geochemical work. Numerous gold nuggets were found in thin soil cover extending the strike
by nearly 3km to 6.1km over Panorama North (E45/4936). Further field exploration was conducted
and a detailed, low-level aeromagnetic survey covering the three licences commenced in July 2019.
8
Greatland Gold plc
Company number: 5625107
Strategic report, continued
Review of key developments by project, continued
Ernest Giles project (Western Australia), 100% owned
The Ernest Giles project is located in central Western Australia, covering an area of approximately
1,370 square kilometres with over 180km of strike of rocks prospective for gold and nickel. The eastern
Yilgarn Craton is one of the most highly mineralised areas in Western Australia and is considered
prospective for large gold deposits.
During the period, Greatland carried out a reverse circulation (“RC”) drilling programme which
included twenty five drill holes at the Meadows area, two drill holes at the Empress area, two drill holes
at the Wishbone area and one drill hole at the Carnegie area for a total of over 8,200m of drilling.
Results from the drilling campaign at Meadows extended the two previously identified large zones of
gold mineralization: a Western zone with a strike of approximately 6.2km and open to the north, and
an Eastern zone with a strike of approximately 2.5km. The campaign also detected gold, silver and
copper mineralisation at the Wishbone area.
A comprehensive review of all data for the Ernest Giles project was carried out later in the year. The
Board decided that Greatland should focus on high priority targets within the project and,
consequently, both the Carnegie (E38/2882) and Empress North (E38/3228) licences were
relinquished, thereby enabling work to be concentrated on higher priority targets within the retained
project licences.
Warrentinna project (Tasmania), 100% owned
The Warrentinna project is located 60 kilometres north east of Launceston in north eastern Tasmania
and covers an area of 37 square kilometres with 15 kilometres of strike prospective for gold. During
the period, Greatland undertook the acquisition of LIDAR data with resulting generation of digital
elevation models (DEM) over the licence which will aid in planned exploration on the ground.
Bromus project (Western Australia), 100% owned
The Bromus project is located 25 kilometres south west of Norseman in the southern Yilgarn region
of Western Australia. The Bromus project covers 52 square kilometres of under-explored greenstone
and intrusive granites of the Archean Yilgarn Block at the southern end of the Kalgoorlie-Norseman
belt. During the period, Greatland undertook an aeromagnetic survey of the tenement allowing high
quality digital elevation and geophysics data to be obtained. During the period, Greatland made an
application for an additional exploration licence (E63/1953) covering 32 square kilometres which is
considered prospective for gold, contiguous to the north and west of Bromus, which has subsequently
been granted.
Further details regarding exploration activities during the year can be found on the Company’s website
at www.greatlandgold.com.
Main trends and factors likely to impact future business performance
The Board considers the following to be the key trends and factors that are likely to impact future
business performance:
• General commodity cycle – Commodity prices have generally improved since the low point in
early 2016, however, prices for many commodities (including gold and copper) have fallen in recent
months. The Board maintains a positive outlook for commodity prices, and the gold price in
particular.
• Exploration results – Management’s ability to successfully execute Greatland’s exploration strategy
is a key factor in the future business performance of the Company. Specific business principles
designed to maximize the Company’s chance of long-term success in this regard are highlighted in
the following section (“Principal risks and uncertainties”).
9
Greatland Gold plc
Company number: 5625107
Strategic report, continued
Principal risks and uncertainties
The management of the business and the execution of the Board’s strategy are subject to a number of
key risks and uncertainties:
• Mineral exploration - Mineral exploration is a high-risk activity and there can be no guarantee that
the Company can identify a mineral resource that can be extracted economically. In order to
minimise this risk and to maximise the Company’s chances of long-term success, we are committed
to the following strategic business principles:
○ The board regularly reviews our exploration and development programmes and allocates
capital in a manner that it believes will maximise risk-adjusted return on capital;
○ We focus our activities on jurisdictions that we believe represent low political and operational
risk. Moreover, we strongly prefer to operate in jurisdictions where our team has considerable
on the ground experience. At the present time, all of the Company’s projects are in Australia,
a country with established mining codes, stable government, skilled labour force, excellent
infrastructure, and a well established mining industry;
○ We apply advanced exploration techniques to areas and regions that we believe are relatively
under-explored historically;
○ Exploration work is conducted on a systematic basis. More specifically, exploration work is
carried out in a phased, results-based fashion and leverages a wide range of exploration
methods including modern geochemical and geophysical techniques and various drilling
methods.
• Commodity price risk – The principal commodities that are the focus of our exploration and
development efforts (precious metals and base metals) are subject to highly cyclical patterns in
global demand and supply, and consequently, the price of those commodities is highly volatile.
• Recruiting and retaining highly skilled directors and employees – the Company’s ability to execute
its strategy is highly dependent on the skills and abilities of its people. We undertake ongoing
initiatives to foster good staff engagement and ensure that remuneration packages are competitive
in the market.
• Occupational health and safety – every Director and employee of the Company is committed to
promoting and maintaining a safe workplace environment. The Company regularly reviews
occupational health and safety policies and compliance with those policies. The Company also
engages with external occupational health and safety expert consultants to ensure that policies and
procedures are appropriate as the Company expands its activity levels.
By order of the Board
Gervaise Heddle
Chief Executive Officer
29 October 2019
10
Greatland Gold plc
Company number: 5625107
Directors’ report
The Directors present their thirteenth annual report on the affairs of the Group and parent company,
together with the Group financial statements for the year ended 30 June 2019.
Fundraising
The Group raised £2,983,400 net of costs during the year (2018: £4,443,988).
Results and dividends
The Group’s results are described in the Group statement of comprehensive income on page 30. The
audited financial statements for the year ended 30 June 2019 are set out on pages 30 to 55.
The Group has incurred a loss for the year of £3,264,307 (2018: £1,836,545).
The Directors do not recommend the payment of a dividend.
Risk Management
The Board considers risk assessment to be important in achieving its strategic objectives. There is a
process of evaluation of performance targets through regular reviews by senior management to
forecasts. Project milestones and timelines are regularly reviewed.
General and economic risks
• Contractions in the world’s major economies or increases in the rate of inflation resulting from
international conditions;
• movements in the equity and share markets in the United Kingdom and throughout the world;
• weakness in global equity and share markets, in particular, in the United Kingdom, and adverse
changes in market sentiment towards the resource industry;
•
•
•
currency exchange rate fluctuations and, in particular, the relative prices of the Australian Dollar,
and the UK Pound;
exposure to interest rate fluctuations; and
adverse changes in factors affecting the success of exploration and development operations, such
as increases in expenses, changes in government policy and further regulation of the industry;
unforeseen major failure, breakdowns or repairs required to key items of plant and equipment
resulting in significant delays, notwithstanding regular programmes of repair, maintenance and
upkeep; and variations in grades and unforeseen adverse geological factors or prolonged weather
conditions.
Funding risk
The Group or the companies in which it has invested may not be able to raise, either by debt or further
equity, sufficient funds to enable completion of planned exploration, investment and/or development
projects.
Commodity risk
Commodities are subject to high levels of volatility in price and demand. The price of commodities
depends on a wide range of factors, most of which are outside the control of the Group. Mining,
processing and transportation costs also depend on many factors, including commodity prices, capital
and operating costs in relation to any operational site.
11
Greatland Gold plc
Company number: 5625107
Directors’ report, continued
Exploration and development risks
• Exploration and development activity is subject to numerous risks, including failure to achieve
estimated mineral resource, recovery and production rates and capital and operating costs.
• Success in identifying economically recoverable reserves can never be guaranteed. The Group also
cannot guarantee that the companies in which it has invested will be able to obtain the necessary
permits and approvals required for development of their projects.
• Some of the states within Australia have native title laws which could affect exploration and
development activities. The companies in which the Group has an interest may be required to
undertake clean-up programmes on any contamination from their operations or to participate in
site rehabilitation programmes which may vary from state to state. The Group’s policy is to follow
all applicable laws and regulations and the Group is not currently aware of any material issues in
this regard.
• Timely approval of mining permits and operating plans through the respective regulatory agencies
cannot be guaranteed.
• Availability of skilled workers is an ongoing challenge.
• Geology is always a potential risk in mining activities.
Market risk
The ability of the Group (and the companies in which it invests) to continue to secure sufficient and
profitable sales contracts to support its operations is a key business risk.
Key performance indicators
Given the straightforward nature of the Group’s activities, the Company’s directors are of the opinion
that analysis using key performance indicators is not necessary for an understanding of the
development, performance or position of the business at the present time.
Directors
The Directors who served during the year are as follows:
Callum Baxter
Alex Borrelli
Gervaise Heddle
Clive Latcham - appointed 15 October 2018.
Share capital
Information relating to shares issued during the period is given in Note 15 to the accounts.
Charitable and political donations
During the period there were no charitable or political contributions.
Payment of suppliers
The Group’s policy is to settle terms of payment with suppliers when agreeing terms of business, to
ensure that suppliers are aware of the terms of payment and to abide by them. It is usual for suppliers
to be paid within 30 days of receipt of invoice. At 30 June 2019 the Group’s creditors were equivalent
to approximately 30 days’ costs.
12
Greatland Gold plc
Company number: 5625107
Directors’ report, continued
Substantial shareholdings
On 30 June 2019 and 15 October 2019, the following were registered as being interested in 3% or more
of the Company’s ordinary share capital:
15 October 2019
30 June 2019
Ordinary
shares of
£0.001 each
Percentage of
issued share
capital
Ordinary
shares of
£0.001 each
Percentage of
issued share
capital
865,482,564
24.20%
835,744,881
25.15%
487,947,994
13.64%
448,834,749
13.51%
Hargreaves Lansdown (Nominees)
Limited
Interactive Investor Services
Nominees Limited
HSDL Nominees Limited
347,257,084
9.71%
323,438,194
Barclays Direct Investing
Nominees Limited
228,802,195
6.40%
228,492,402
Vidacos Nominees Limited
195,038,023
5.45%
199,903,737
Jim Nominees Limited
289,573,717
8.09%
174,264,829
Share Nominees Limited
177,131,727
4.95%
164,984,550
Lawshare Nominees Limited
146,246,019
4.09%
125,356,402
HSBC Client Holdings Nominee
(UK) Limited
98,348,545
2.75%
103,333,071
9.73%
6.88%
6.02%
5.24%
4.96%
3.77%
3.11%
Rock (Nominees) Limited
102,087,240
2.85%
100,334,070
3.02%
Included in the above Nominee accounts, Mr Stephen Beetham held a total of 133,333,333 (4.01%)
shares in the Company at the year end.
Auditors
The Directors will place a resolution before the annual general meeting to reappoint Chapman Davis
LLP as auditors for the coming year.
13
Greatland Gold plc
Company number: 5625107
Directors’ report, continued
Directors’ remuneration
The remuneration of the directors paid during the year was fixed by the remuneration committee
consisting of Alex Borrelli and Clive Latcham. This has been achieved acknowledging the need to
maximise the effectiveness of the Company’s limited resources during the year.
Furthermore, as announced by the Company on 7 September 2018, 61,000,000 share options were
issued to three directors; Gervaise Heddle Chief Executive Officer, Callum Baxter Chief Technical
Director and Alex Borrelli Non-Executive Chairman. Subsequently, as announced by the Company on
22 March 2019, 10,000,000 share options were issued to Clive Latcham, Non-Executive Director. As
set out in Note 16, under the Company’s employee share option plan there were 213.5 million
unexercised options in issue (2018: 205 million).
During the year the Directors were awarded performance bonuses totalling £316,972 (see note 8)
(2018: £196,874). This amount represents an award to reflect the outstanding progress made by the
Company during the year, most notably the excellent exploration results from Greatland’s second drill
campaign at the Company's Havieron target in the Paterson region, and the subsequent signing of a
US$65millon Farm-in Agreement with Newcrest to explore and develop Greatland’s Havieron gold-
copper project (as announced by the Company on 12 March 2019).
Events after the reporting period
There are no significant post balance sheet events to disclose for the year ended 30 June 2019, other
than those set out in Note 21.
Corporate Governance
A corporate governance statement follows on page 17.
Control Procedures
The Board has approved financial budgets and cash forecasts; in addition, it has implemented
procedures to ensure compliance with accounting standards and effective reporting.
Environmental Responsibility
The Company is aware of the potential impact that its subsidiary companies may have on the
environment. The Company ensures that it and its subsidiaries at a minimum comply with the local
regulatory requirements and the revised Equator Principles with regard to the environment.
Employment Policies
The Group is committed to promoting policies which ensure that high calibre employees are attracted,
retained and motivated, to ensure the ongoing success for the business. Employees and those who seek
to work within the Group are treated equally regardless of sex, marital status, creed, colour, race or
ethnic origin.
Health and Safety
The Group’s aim is to achieve and maintain a high standard of workplace safety. In order to achieve
this objective, the Group provides training and support to employees and sets demanding standards
for workplace safety.
Going Concern
The consolidated entity has incurred a loss before tax of £3,264,307 for the year ended 30 June 2019,
and had a net cash outflow of £3,801,159 from operating and investing activities. At that date there
were net current assets of £2,203,109. The loss resulted almost entirely from exploration costs and
associated administrative related costs.
14
Greatland Gold plc
Company number: 5625107
Directors’ report, continued
Going Concern, continued
The Directors are confident in the Company’s ability to raise new finance from stock markets if this is
required during the financial year ending 30 June 2020 and the Group has demonstrated a consistent
ability to do so. This includes a share issuance of 225,813,513 placing shares for gross proceeds of
£4,177,550 as announced by the Company on 12 August 2019.
The Group’s cash flow forecast for the 12 months ending 31 October 2020 highlights adequate funding
at current levels of projected expenditure to last well into 2021. The Board of Directors is confident
that sufficient funding is in place to meet all its operational and exploration commitments over the
next twelve months and to remain cash positive for the whole period.
Given the Group’s current positive cash position and its ability to raise new capital the Directors have
a reasonable expectation that the Group has adequate resources to continue in operational existence
for the foreseeable future. For these reasons, they continue to adopt the going concern basis in
preparing the annual report and accounts.
By order of the Board
Gervaise Heddle
Chief Executive Officer
29 October 2019
15
Greatland Gold plc
Company number: 5625107
Statement of directors' responsibilities
Directors' responsibilities for the financial statements
The Directors are responsible for preparing the Directors’ Report and the financial statements in
accordance with applicable law and regulations.
Company law in the United Kingdom requires the directors to prepare Group and Company financial
statements for each financial year which give a true and fair view of the state of affairs of the company
and the group and of the profit or loss of the group for that period. In addition, the AIM rules of the
London Stock Exchange require that the Group financial statements be prepared in accordance with
International Financial Reporting Standards (“IFRS”) as adopted by the European Union (“EU”); the
Company financial statements are prepared on the same basis.
In preparing the Group and Company financial statements, the directors are required to:
•
select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable and prudent;
•
state whether applicable accounting standards have been followed, subject to any material
departures disclosed and explained in the financial statements;
• prepare the financial statements on the going concern basis unless it is inappropriate to
presume that the group will continue in business.
So far as each director is aware, there is no relevant audit information of which the Company’s auditors
are unaware, and the directors have taken all the steps that they ought to have taken as directors in
order to make themselves aware of any relevant audit information and to establish that the Company’s
auditors are aware of that information.
The directors are responsible for keeping proper accounting records, for safeguarding the assets of the
group and for taking reasonable steps for the prevention and detection of fraud and other irregularities.
They are also responsible for ensuring that the annual report includes information required by the AIM
market of the London Stock Exchange.
The maintenance and integrity of the Company’s website is the responsibility of the directors: the work
carried out by the auditors does not involve consideration of these matters and, accordingly, the
auditors accept no responsibility for any changes that may have occurred to the financial statements
since they were initially presented on the website.
Legislation in the United Kingdom governing the preparation and dissemination of the financial
statements may differ from legislation in other jurisdictions.
16
Greatland Gold plc
Company number: 5625107
Corporate Governance Statement
All members of the board of Greatland Gold plc are committed to the principles of good corporate governance.
We believe strongly in the value and importance of strong corporate governance and in our accountability to all
of Greatland’s stakeholders, including shareholders, employees, contractors and suppliers and native title
communities. We recognise the importance of promoting and maintaining a strong occupational health and safety
culture and minimising the impact of our activities on local communities and the environment.
Changes to the AIM rules on 30 March 2018 required AIM companies to apply a recognised corporate
governance code from 28 September 2018. Greatland has chosen to adhere to the Quoted Company Alliance’s
(“QCA”) Corporate Governance Code for Small and Mid-Size Quoted Companies (revised in April 2018 to meet
the new requirements of AIM Rule 26).
The QCA Code is constructed around ten broad principles and a set of disclosures. The QCA has stated what it
considers to be appropriate arrangements for growing companies and asks companies to provide an explanation
about how they are meeting the principles through the prescribed disclosures. We have considered how we apply
each principle to the extent that the board judges these to be appropriate in the circumstances, and below we
provide an explanation of the approach taken in relation to each.
At this time, the board believes that it is compliant with all ten Principles of the QCA Code.
The following paragraphs set out Greatland Gold plc’s compliance with the 10 principles of the QCA
Code.
Principle 1: Establish a strategy and business model which promotes long-term value for shareholders
The principal activity of the Company is to explore for and develop natural resources, with a focus on gold. The
Board seeks to increase shareholder value by the systematic evaluation of its existing resource assets, and by
acquiring exploration and development projects in underexplored areas.
The Company’s strategy and business model is developed by the CEO and is approved by the Board. The
executive directors who report to the Board are responsible for implementing the strategy and managing the
business.
The Company’s primary strategy is to advance projects that have potential for the discovery of large mineralised
systems (typically considered to be in excess of one million ounces of gold) through the various stages of
exploration and development with a view to monetising at least one or more of those projects, whether through
an outright sale, joint venture, or spin-out via initial public offering, within a three to five year period.
The key challenges we face include:
• Mineral exploration - Mineral exploration is a high-risk activity and there can be no guarantee that the
Company can identify a mineral resource that can be extracted economically. In order to minimise this risk
and to maximise the Company’s chances of long-term success, we are committed to the following strategic
business principles:
○ The board regularly reviews our exploration and development programmes and allocates capital in a
manner that it believes will maximise risk-adjusted return on capital;
○ We focus our activities on jurisdictions that we believe represent low political and operational risk.
Moreover, we strongly prefer to operate in jurisdictions where our team has considerable on the ground
experience. At the present time, all of the Company’s projects are in Australia, a country with established
mining codes, stable government, skilled labour force, excellent infrastructure, and a well established
mining industry;
○ We apply advanced exploration techniques to areas and regions that we believe are relatively under-
explored historically;
○ Exploration work is conducted on a systematic basis. More specifically, exploration work is carried out
in a phased, results-based fashion and leverages a wide range of exploration methods including modern
geochemical and geophysical techniques and various drilling methods.
17
Greatland Gold plc
Company number: 5625107
Corporate Governance Statement, continued
• Commodity price risk – The principal commodities that are the focus of our exploration and
development efforts (precious metals and base metals) are subject to highly cyclical patterns in global
demand and supply, and consequently, the price of those commodities is highly volatile.
• Recruiting and retaining highly skilled directors and employees – the Company’s ability to execute its
strategy is highly dependent on the skills and abilities of its people. We undertake ongoing initiatives to
foster good staff engagement and ensure that remuneration packages are competitive in the market.
• Occupational health and safety – every Director and employee of the Company is committed to
promoting and maintaining a safe workplace environment. The Company regularly reviews occupational
health and safety policies and compliance with those policies. The Company also engages with external
occupational health and safety expert consultants to ensure that policies and procedures are appropriate
as the Company expands its activity levels.
Principle 2: Seek to understand and meet shareholder needs and expectations
We have made significant efforts to ensure regular and effective engagement with our broad base of shareholders.
In addition to our Annual General Meeting, which is one of our primary forums to present to and meet with
investors, we engage in a wide range of activities designed to ensure that investors are regularly updated on the
progress of the Company and we attend investor events that provide investors with the opportunity to provide
us with feedback and suggestions.
Responsibility for investor relations rests with the CEO, supported by the other Directors of the Company.
During the last 12 months, the following activities were conducted in order to engage with shareholders and to
ensure that the members of the Board maintained and further developed a strong understanding of the needs
and expectations of shareholders:
Description
Activity
of
Frequency
Participants
Comments
AGM
Annually
All Directors
CEO interviews
Weekly
CEO
Quarterly
CEO, CTO
Investor
Presentations
Investor
and
Conferences
Shows
Industry
Bi-Annually
CEO, CTO,
Chairman
The Company attends and presents at
various investor shows
CEO conducts regular interviews
with Proactive Investors, BRR Media,
and Share Talk
Company presents at various investor
presentation forums
The Company is committed to communicating openly with its shareholders to ensure that its strategy and
performance are clearly understood. All Company announcements and the Company’s most recent investor
presentation are available to shareholders, investors and the public on our website.
Private shareholders: The AGM is the principal forum for dialogue with private shareholders, and we encourage
all shareholders to attend and participate. Last year, the AGM was well attended with approximately thirty
shareholders present at the meeting. The Notice of Meeting is sent to shareholders at least 21 days before the
meeting. All members of the board, and the committees, attend the AGM whenever possible and are available to
answer questions raised by shareholders. Shareholders vote on each resolution, and voting can also be counted
by way of a poll. For each resolution we announce the number of votes received for, against and withheld. The
company also maintains a dedicated email address which investors can use to contact the company which is
prominently displayed on its website together with the company’s address and phone number.
Institutional shareholders: The directors actively seek to build a mutual understanding of the objectives of
institutional shareholders. We communicate with institutional investors frequently through a combination of
formal meetings, participation at investor conferences, and informal briefings with management.
18
Greatland Gold plc
Company number: 5625107
Corporate Governance Statement, continued
The majority of meetings with shareholders and potential investors are arranged by the Company’s corporate
broker.
Principle 3: Take into account wider stakeholder and social responsibilities and their implications for
long-term success
The Board recognises its responsibility under UK corporate law to promote the success of the Company for the
benefit of its members as a whole. The Board also understands that it has a responsibility towards employees,
partners, suppliers and contractors and the local communities in which it operates.
Stakeholder
Shareholders
Suppliers and Contractors
Staff and Employees
Native Title Communities
Reason for Engagement
How we engage
Shareholders are the owners of
the Company and the board’s
primary mission is to increase
shareholder value
The Company engages with
external suppliers to conduct the
majority of its field exploration
activities (including drilling and
geophysical surveys)
Recruiting and retaining highly
skilled and motivated professions
is one of the key drivers of our
success
of
The Company recognises
the
the
heritage
important
traditional owners of the land and
its ethical and legal responsibility
to work together with those
communities
As described in previous section
(Principle 2)
We work
that all
to ensure
members of staff engage in a
professional
and
respectful
manner with
suppliers. We
operate systems to ensure that
supplier invoices are processed
and paid promptly.
to
regular
In
addition
communication
between
Directors and employees, we
conduct monthly staff meetings to
promote
two-way
communication.
The Company ensures that it
regularly engages with native title
communities
routinely
engages with external expert
consultants
and
Principle 4: Embed effective risk management, considering both opportunities and threats, throughout
the organisation
The CEO maintains a risk register for the Company that identifies key risks in the areas of corporate strategy,
financial, staff, occupational health and safety, environmental and native title relations. All members of the board
are provided with a copy of the register. The register is reviewed periodically and is updated as and when
necessary.
Within the scope of the annual audit, specific financial risks are evaluated in detail, including in relation to foreign
currency, liquidity and credit.
Managing occupational health and safety risk is one of the key focuses of all directors and employees. Staff are
required to immediately report any occupational health and safety incidents and regular training is undertaken to
ensure compliance with health and safety policies.
Principle 5: Maintain the board as a well-functioning, balanced team led by the chair
The Board sets the Company’s strategy and ensures that necessary resources are in place in order for the Company
to meet its objectives. All members of the Board take collective responsibility for the performance of the
Company and all decisions are taken in the interests of the Company.
Whilst the Board has delegated the normal operational management of the Company to the Executive Directors
and other senior management, there are detailed specific matters subject to decision by the Board of Directors.
19
Greatland Gold plc
Company number: 5625107
Corporate Governance Statement, continued
These include decisions to commit to major exploration campaigns and approval of associated exploration
budgets, acquisitions and disposals, joint ventures and other investments of a capital nature. The Non-executive
Directors have a particular responsibility to challenge constructively the strategy proposed by the Executive
Directors, to scrutinise and challenge performance, and to ensure appropriate remuneration and that succession
planning arrangements are in place in relation to Executive Directors and other senior members of the
management team.
The members of the board have a collective responsibility and legal obligation to promote the interests of the
Company, and are collectively responsible for defining corporate governance arrangements. Ultimate
responsibility for the quality of, and approach to, corporate governance lies with the Chair of the board.
The board consists of four directors of whom two are executive directors (Gervaise Heddle, Chief Executive
Officer and Callum Baxter, Chief Technical Officer) and two are independent non-executive directors (Alex
Borrelli, Non-Executive Chairman and Clive Latcham, Non-Executive Director) The board is supported by two
committees: audit and remuneration. The board does not consider that it is of a size at present to require a
separate nominations committee, and all members of the board are involved in the appointment of new Directors.
All Directors are required to attend 10-12 board and board committee meetings per year and to be available at
other times as required for face-to-face and telephone meetings with the executive team and investors. Board
meetings are led by the Chair and follow an agenda that is circulated prior to the meeting. Every board and
committee meeting is minuted and every Director is aware of the right to have any concerns minuted and to seek
independent advice at the Company’s expense where appropriate.
Principle 6: Ensure that between them the directors have the necessary up-to-date experience, skills and
capabilities
All four members of the board bring relevant experience in mining and resources, and all have many years
experience in public markets. The board believes that its blend of relevant experience, skills and personal qualities
and capabilities is sufficient to enable it to successfully execute its strategy. Directors attend seminars and other
regulatory and trade events to ensure that their knowledge remains current.
Alex Borrelli, Independent Non-Executive Chairman
Term of office: Joined as Non-Executive Director on 18 April 2016. Appointed as Non-executive Chairman on
14 August 2016; Chair of the Remuneration Committee and Chair of the Audit Committee.
Background and suitability for the role: Alex is Chairman of Greatland Gold plc. Alex qualified as a Chartered
Accountant and has many years’ experience in investment banking encompassing flotations, takeovers, and
mergers and acquisitions for private and quoted companies. Alex is also Chairman of Xpediator plc, an AIM-
listed company.
Gervaise Heddle, Chief Executive Officer, Executive Director
Term of office: Joined as Non-Executive Director on 27 May 2016. Appointed as Executive Director on 18 July
2016, Appointed as Chief Executive Officer on 19 January 2017; Member of the Audit Committee.
Background and suitability for the role: Gervaise Heddle is Chief Executive Officer of Greatland Gold plc.
Previously, Gervaise was a Non-executive Director of Thor Mining plc, a Non-executive Director of MetalNRG
plc, a Division Director of Macquarie Bank and a Fund Manager at Merrill Lynch Investment Managers. Gervaise
is a CFA charterholder and has extensive financial markets experience.
Callum Baxter, Chief Technical Officer, Executive Director
Term of office: Co-Founding Director of the Company 16 November 2005, Appointed as Chief Technical
Officer on 19 January 2017.
Background and suitability for the role: Callum Baxter is Chief Technical Officer of Greatland Gold plc and
Chairman/CEO of investee company Starvest plc. Callum is an experienced geologist and investor with over
twenty five years exposure to capital markets and the natural resources sector specialising in early stage
exploration.
20
Greatland Gold plc
Company number: 5625107
Corporate Governance Statement, continued
Clive Latcham, Independent Non-Executive Director
Term of office: Joined as Non-Executive Director on 15 October 2018. Member of the Remuneration Committee
and Member of the Audit Committee.
Background and suitability for the role: Clive is a Non-Executive Director of Greatland Gold plc. Clive is a
chemical engineer and mineral economist with over thirty years’ experience in senior roles in the mining sector.
Clive joined Greatland from ERM - Environmental Resource Management, the world’s leading sustainability
consultancy group, where he is currently Senior External Advisor, and advisor to the Chairman and Chief
Executive Officer. Prior to his role at ERM, Clive worked as an independent advisor to private equity and mining
consultancy firms, and spent nine years in senior roles with Rio Tinto plc. During his time at Rio Tinto, Clive
spent four years as Copper Group Mining Executive, where he was responsible for managing Rio Tinto’s
investments in the operating businesses of Escondida in Chile, Grasberg in Indonesia, and Phalaborwa in South
Africa and for the initial development of new projects and acquisitions, including La Granja in Peru and La
Sampala in Indonesia.
The Company is committed to a culture of equal opportunities for all employees regardless of gender. The Board
will be diverse in terms of its range of culture, nationality and international experience. The current Board
members are male and, within the senior management team, there is one female geologist as well as one male
geologist.
Principle 7: Evaluate board performance based on clear and relevant objectives, seeking continuous
improvement
A board evaluation process led by the Chairman took place in October 2019. All then current Directors began
by completing a questionnaire about the effectiveness of the board and a self-assessment of their own
contributions that was returned to the Chairman. The Chairman then reviewed this information and used it as
the basis for an individual discussion with each Director, followed by a collective discussion with the board.
The review considers effectiveness in a number of areas including general supervision and management, business
risks and opportunities, succession planning, communication (both internal and external), ethics and compliance,
corporate governance and individual contribution.
A number of refinements in working practices were identified as a result of this exercise and have since been
adopted.
Principle 8: Promote a corporate culture that is based on ethical values and behaviours
The board believes that the promotion of a corporate culture based on sound ethical values and behaviours is
essential to maximise shareholder value. Our core values serve as a common language that allows all members of
staff to work together as an effective team and it is these values and our shared long-term business vision and
strategy that we believe will drive growth in shareholder value over the long term.
We are committed to three core values:
1. Creating a safe, positive and inclusive workplace environment
2. Engaging all stakeholders and the broader community with respect, integrity and honesty
3. Fostering a high performance culture that values the contribution of all team members
Principle 9: Maintain governance structures and processes that are fit for purpose and support good
decision-making by the board
The Board provides strategic leadership for the Company and operates within the scope of a robust corporate
governance framework. Its purpose is to ensure the delivery of long-term shareholder value, which involves
setting the culture, values and practices that operate throughout the business, and defining the strategic goals that
the Company implements in its business plans. The board defines a series of matters reserved for its decision and
has approved terms of reference for its Audit and Remuneration Committees to which certain responsibilities
are delegated. The chair of each committee reports to the board on the activities of that committee.
For the financial year ended 30 June 2019, the Board met ten times in relation to normal operational matters.
21
Greatland Gold plc
Company number: 5625107
Corporate Governance Statement, continued
Committees and Governance Structures
The Audit Committee monitors the integrity of financial statements, oversees risk management and control,
monitors the effectiveness of the internal audit function and reviews external auditor independence. The Audit
Committee comprises Alex Borrelli, Clive Latcham and Gervaise Heddle.
The Remuneration Committee sets and reviews the compensation of executive directors including the setting of
targets and performance frameworks for cash- and share-based awards. The Remuneration Committee comprises
Alex Borrelli and Clive Latcham.
The Executive Team, consisting of the Executive Directors, operates as a management committee, chaired by
the CEO, which reviews operational matters and performance of the business, and is responsible for significant
management decisions while delegating other operational matters to individual managers within the business.
The Chairman has overall responsibility for corporate governance and in promoting high standards throughout
the Company. He leads and chairs the board, ensuring that committees are properly structured and operate with
appropriate terms of reference, ensures that performance of individual Directors, the board and its committees
are reviewed on a regular basis, leads in the development of strategy and setting objectives, and oversees
communication between the Company and its shareholders.
The CEO provides leadership and management of the Company, leads the development of objectives, strategies
and performance standards as agreed by the board, monitors, reviews and manages key risks and strategies with
the board, ensures that the assets of the Company are maintained and safeguarded, leads on investor relations
activities to ensure communications and the Company’s standing with shareholders and financial institutions is
maintained, and ensures that the board is aware of the views and opinions of employees on relevant matters.
The Executive Directors are responsible for implementing and delivering the strategy and operational decisions
agreed by the board, making operational and financial decisions required in the day-to-day operation of the
Company, providing executive leadership to managers, championing the Company’s core values and promoting
talent management.
The Independent Non-Executive Directors contribute independent thinking and judgement through the
application of external experience and knowledge, scrutinises the performance of management, provides
constructive challenge to the Executive Directors and ensures that the Company is operating within the
governance and risk framework approved by the board.
The Company Secretary is responsible for providing clear and timely information flow to the board and its
committees and supports the board on matters of corporate governance and risk.
The matters reserved for the board are:
• Setting long-term objectives and commercial strategy;
• Approving annual operating and capital expenditure budgets;
• Changing the share capital or corporate structure of the Company;
• Approving half year and full year results and reports;
• Approving dividend policy and the declaration of dividends;
• Approving major new exploration programmes, investments, disposals, and other capital projects;
• Approving resolutions to be put to general meetings of shareholders and the associated documents or circulars;
and
• Approving changes to the board structure.
The board has approved the adoption of the QCA Code as its governance framework against which this
statement has been prepared and will monitor the suitability of this Code on an annual basis and revise its
governance framework as appropriate as the Company evolves.
22
Greatland Gold plc
Company number: 5625107
Corporate Governance Statement, continued
Internal controls
The Directors acknowledge their responsibility for the Company’s systems of internal controls and for reviewing
their effectiveness. These internal controls are designed to safeguard the assets of the Company and to ensure
the reliability of financial information for both internal use and external publication. Whilst they are aware that
no system can provide absolute assurance against material misstatement or loss, in the light of increased activity
and further development of the Company, continuing reviews of internal controls will be undertaken to ensure
that they are adequate and effective.
Insurance
The Company maintains insurance in respect of its Directors and Officers against liabilities in relation to the
Company.
Treasury Policy
The Company finances its operations through equity and holds its cash as a liquid resource to fund the obligations
of the Company. Decisions regarding the management of these assets are approved by the Board.
Securities Trading
The Board has adopted a Share Dealing Code that applies to Directors, senior management and any employee
who is in possession of ‘inside information’. All such persons are prohibited from trading in the Company’s
securities if they are in possession of ‘inside information’. Subject to this condition and trading prohibitions
applying to certain periods, trading can occur provided the relevant individual has received the appropriate
prescribed clearance.
Principle 10: Communicate how the company is governed and is performing by maintaining a dialogue
with shareholders and other relevant stakeholders
The Board recognises that meaningful engagement with its shareholders is integral to the continued success of
the Company. Over the past 12 months, members of the Board have sought to actively engage with shareholders
on a number of occasions, through meetings, presentations and investor shows (as described in Principle 2).
Over the next 12 months, the Board expects to maintain a regular dialogue with investors that will provide
investors with updates on company performance and any changes to the corporate governance structures and/or
policies.
The Board keeps investors informed through updates on the Investor Relations section of the Company’s
website.
By order of the board
Alex Borrelli
Chairman
29 October 2019
23
Greatland Gold plc
Company number: 5625107
Remuneration Committee Report
The Remuneration Committee sets and reviews the compensation of executive directors including the setting of
targets and performance frameworks and determining for such persons their total individual remuneration
packages, including, where appropriate, bonuses, incentive payments and share options or other share awards.
The remuneration of Non-executive Directors is a matter for the Chairman and the executive members of the
Board. No Director is involved in any decision as to their own remuneration.
Details on the activities of the Remuneration Committee during the year are contained in the Remuneration
Committee Report below. During the year ended 30 June 2019, and up to the signing of this report, the
Remuneration Committee comprised Alex Borrelli, who acts as Chairman, and Clive Latcham. The Remuneration
Committee formally met twice during year and all members attended the meetings.
Dear Shareholder,
On behalf of the Board, I am pleased to present the Remuneration Committee Report for the year ended 30 June
2019. The Remuneration Committee is responsible for establishing and proposing to the Board a recommended
framework for the remuneration of board executive directors and designated senior executives and, pursuant to
the terms of the agreed framework, determining for such persons their total individual remuneration packages,
including, where appropriate, bonuses, incentive payments and share options or other share awards. The
Remuneration Committee is also responsible for ensuring the Company is compliant with all relevant consultant
and employment contracts and HMRC responsibilities.
Remuneration Committee Membership and Activities
The Remuneration Committee’s members during the year were Alex Borrelli, acting as Chair of the Committee,
and Clive Latcham.
The Committee met twice during the year and its activities were as follows:
•
•
•
reviewed Executive Directors’ performance
reviewed Executive Director remuneration arrangements
reviewed developments in corporate governance and best practice
Remuneration Policy
The Company’s remuneration policy is based on the following broad principles:
•
•
•
•
•
to provide competitive remuneration packages to enable the Company to recruit, retain and motivate
individuals with the skills, capabilities and experience to achieve its objectives;
to align the interests of management with the interests of shareholders;
to ensure remuneration levels support the Company’s strategy;
to align pay with market conditions and the Company’s activities; and
to provide adequate succession planning.
Alex Borrelli
Chairman
29 October 2019
24
Greatland Gold plc
Company number: 5625107
Audit Committee Report
The Audit Committee monitors the integrity of financial statements, oversees risk management and control,
monitors the effectiveness of the internal audit function and reviews external auditor independence. The Audit
Committee is appointed by the Board from amongst the non-executive directors and given the current size of
the Company an executive director also sites on the committee.
The Audit Committee is authorised by the Board to investigate any activity within its terms of reference and to
obtain outside legal or other independent professional advice and to secure the attendance of outsiders with
relevant experience and expertise, if it considers this necessary.
Dear Shareholder,
On behalf of the Board, I am pleased to present the Audit Committee Report for the year ended 30 June 2019.
The Audit Committee is primarily responsible for providing oversight of the financial reporting process,
the audit process, the Company's system of internal controls and compliance with laws and regulations.
The main role and responsibilities of the Audit Committee are:
•
•
•
•
•
•
•
•
to review the company’s internal financial controls:
to monitor and review the effectiveness of the company’s internal and external audit arrangements;
to monitor and review the effectiveness of the company’s risk management systems (including without
limitation fraud risk);
to monitor the integrity of the financial statements of the company and any formal announcements
relating to the company’s financial performance, reviewing significant financial reporting judgements
contained in them;
to review and monitor the external auditor’s independence and objectivity and the effectiveness of the
audit process, taking into consideration relevant UK professional and regulatory requirements;
to make recommendations to the Board, for it to put to the shareholders for their approval in general
meeting, in relation to the appointment of the external auditor and to approve the remuneration and
terms of engagement of the external auditor;
to report to the Board, identifying any matters in respect of which it considers that action or
improvement is needed, and making recommendations as to the steps to be taken;
to consider the findings of internal investigations and management response.
Audit Committee Membership and Activities
During the year ended 30 June 2019 and up to the signing of this report, the Audit Committee comprised Alex
Borrelli, as Chairman; Clive Latcham and Gervaise Heddle. The Audit Committee formally met twice during year
and all members attended the meetings.
The activities of the Audit Committee were as follows:
•
•
•
•
•
•
•
•
•
•
reviewed key accounting and audit judgements;
reviewed and consider whether the information provided was complete and appropriate based on its
own knowledge;
reviewed the external auditor issues that arose during the course of the audit;
reviewed the management letter in order to assess whether it is based on a good understanding of the
company’s business and establish whether recommendations have been acted upon and, if not, the
reasons why they have not been acted upon;
reviewed management’s responsiveness to the external auditor’s findings and recommendations;
reviewed whether the auditor met the agreed audit plan and understand the reasons for any changes;
obtained feedback about the conduct of the audit from key people involved;
reported to the Board on the effectiveness of the external audit process;
reviewed the appointment or reappointment of the external auditor, and information on the length of
tenure of the current audit firm;
reviewed the whistleblowing policy policies and procedures to prevent bribery and corruption.
Alex Borrelli
Chairman
29 October 2019
25
Greatland Gold plc
Company number: 5625107
Independent Auditor’s Report to the Members of Greatland Gold plc
Opinion
We have audited the financial statements of Greatland Gold plc (the ‘Parent Company’) and its subsidiary (the
‘Group’) for the year ended 30 June 2019 which comprise the Group Statement of Comprehensive Income, the
Group and Parent Company Balance Sheets, the Group and Parent Company Cash Flow Statements, the Group
and Parent Company Statements of Changes in Equity, and the related notes 1 to 26, including the accounting
policies in note 1. The financial reporting framework that has been applied in their preparation is applicable law
and International Financial Reporting Standards (IFRSs) as adopted by the European Union.
In our opinion:
•
•
•
the financial statements give a true and fair view of the state of the Group’s and of the Parent Company’s
affairs as at 30 June 2019 and of the Group’s and the Parent Company’s loss for the year then ended;
the financial statements have been properly prepared in accordance with IFRSs as adopted by the European
Union; and
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006
and, as regards the Group financial statements, Article 4 of the IAS Regulation.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable
law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the
audit of the financial statements section of our report. We are independent of the group and the parent company
in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK,
including the FRC’s Ethical Standard as applied to listed entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to
report to you where:
•
•
the directors’ use of the going concern basis of accounting in the preparation of the financial statements
is not appropriate; or
the directors have not disclosed in the financial statements any identified material uncertainties that may
cast significant doubt about the Company’s ability to continue to adopt the going concern basis of
accounting for a period of at least twelve months from the date when the financial statements are
authorised for issue.
26
Greatland Gold plc
Company number: 5625107
Independent Auditor’s Report to the Members of Greatland Gold plc, continued
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit
of the financial statements of the current period. These matters were addressed in the context of our audit of
the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion
on these matters.
We have determined the matters described below to be the key audit matters to be communicated in our report.
Carrying value of intangible non-current assets – Exploration properties
The Group’s intangible exploration properties represent a significant asset on its statement of financial position
totalling £2,016,783 as at 30 June 2019.
Management and the Board are required to ensure that only costs which meet the IFRS criteria of an asset and
accord with the Group’s accounting policy are capitalised within exploration properties. Additionally in
accordance with the requirements of IFRS 6 ‘Exploration for and Evaluation of Mineral Resources’ (‘IFRS 6’)
Management and the Board are required to assess whether there is any indication whether there are any indicators
of impairment of these assets.
Given the significance of the exploration properties on the Group’s statement of financial position and the
significant management judgement involved in the determination of the capitalisation of costs and the assessment
of the carrying values of the asset there is an increased risk of material misstatement.
How the Matter was addressed in the Audit
The procedures included, but were not limited to, assessing and evaluating management's assessment of whether
any impairment indicators in accordance with IFRS 6 have been identified across the Group’s exploration
projects, the indicators being:
• Expiring, or imminently expiring, rights to tenure;
• A lack of budgeted or planned exploration and evaluation spend on the areas of interest;
• Discontinuation of, or a plan to discontinue, exploration activities in the areas of interest;
• Insufficient data exists to suggest the carrying value of exploration properties is likely to be recovered
in full through successful development or sale.
We also reviewed the expenditure that was directly written off to the Income Statement as exploration costs
reducing the requirement for impairment charges.
In addition, we obtained the expenditure budget for the period to 31 October 2020 and assessed that there is
reasonable forecasted expenditure to confirm continued exploration spend into the areas of interest indicating
that Management are committed to the projects. We also reviewed AIM announcements and Board meeting
minutes for the year and subsequent to year end for exploration activity to identify any indicators of impairment.
We also assessed the disclosures included in the financial statements in relation to exploration properties.
Materiality
In planning and performing our audit we applied the concept of materiality. An item is considered material if it
could reasonably be expected to change the economic decisions of a user of the financial statements. We used
the concept of materiality to both focus our testing and to evaluate the impact of any misstatements identified.
Based on professional judgement, we determined overall materiality for the group financial statements as a whole
to be £100,000 this equating to circa 2% of Gross Assets and circa 3% of the loss for the year.
27
Greatland Gold plc
Company number: 5625107
Independent Auditor’s Report to the Members of Greatland Gold plc, continued
Other information
The Directors are responsible for the other information. The other information comprises the information
included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion
on the financial statements does not cover the other information and, except to the extent otherwise explicitly
stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the financial statements or
our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to determine whether there is a material
misstatement in the financial statements or a material misstatement of the other information. If, based on the
work we have performed, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
•
•
the information given in the Strategic Report and the Directors’ Report for the financial year for which the
financial statements are prepared is consistent with the financial statements; and
the Strategic Report and the Directors’ Report have been prepared in accordance with applicable legal
requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Group and its environment obtained in the course of the
audit we have not identified material misstatements in the Strategic Report or the Directors’ Report. We have
nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to
report to you if, in our opinion:
•
•
•
adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit
have not been received from branches not visited by us; or
the Parent Company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
28
Greatland Gold plc
Company number: 5625107
Independent Auditor’s Report to the Members of Greatland Gold plc, continued
Responsibilities of directors
As explained more fully in the Directors’ Responsibilities Statement, the directors are responsible for the
preparation of the financial statements and for being satisfied that they give a true and fair view, and for such
internal control as the Directors determine is necessary to enable the preparation of financial statements that are
free from material misstatement whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s ability to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis
of accounting unless the Directors either intend to liquidate the Group or the Parent Company or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are 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 ISAs (UK) 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 these financial
statements.
A further description of our responsibilities for the audit of the financial statements is located on the Financial
Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our
auditor’s report.
Use of our report
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members
those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the
Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Rowan J. Palmer (Senior Statutory Auditor)
for and on behalf of Chapman Davis LLP
Chartered Accountants and Statutory Auditors
London, United Kingdom
29 October 2019
29
Group statement of comprehensive income
for the year ended 30 June 2019
Greatland Gold plc
Company number: 5625107
Notes
Year ended
30 June 2019
Year ended
30 June 2018
2
3
4
5
£
-
£
-
(2,309,760)
(1,021,493)
(888,661)
(37,131)
(18,450)
(811,359)
(7,584)
-
(3,254,002)
(1,840,436)
(10,305)
3,891
(3,264,307)
(1,836,545)
-
-
(3,264,307)
(1,836,545)
(52,730)
(74,867)
(52,730)
(74,867)
(3,317,037)
(1,911,412)
Revenue
Exploration costs
Administrative expenses
Depreciation
Impairment cost
Operating loss
Net finance costs/income
Loss before taxation
Income tax expense
Loss for the year
Other comprehensive income
Exchange differences on translation of foreign
operations
Other comprehensive income for the year
net of taxation
Total comprehensive income for the year
attributable to equity holders of the parent
company
Loss per share - basic and diluted
9
(0.10) pence
(0.07) pence
All operations are considered to be continuing.
30
Greatland Gold plc
Company number: 5625107
Note
30 June 2019
30 June 2018
Re-stated
£
£
£
£
10
11
18
13
103,114
2,016,783
2,755,998
77,480
41,877
1,233,648
2,119,897
1,275,525
3,597,101
79,061
2,833,478
4,953,375
3,676,162
4,951,687
Group balance sheet
as at 30 June 2019
ASSETS
Non-current assets
Tangible assets
Intangible assets
Current assets
Cash and cash equivalents
Trade and other receivables
Total current assets
TOTAL ASSETS
LIABILITIES
Current liabilities
Trade and other payables
14
(630,369)
(685,322)
TOTAL LIABILITIES
NET ASSETS
EQUITY
(630,369)
4,323,006
(685,322)
4,266,365
Called-up share capital
15
3,323,420
Share premium reserve
12,554,173
Share based payment reserve
16
349,606
Retained earnings
Other reserves
(12,072,653)
168,460
3,002,256
9,749,891
243,472
(8,950,444)
221,190
TOTAL EQUITY
4,323,006
4,266,365
These financial statements were approved by the Board of Directors on 29 October 2019 and signed
on its behalf by:
Alex Borrelli
Chairman
Gervaise Heddle
Chief Executive Officer
31
Greatland Gold plc
Company number: 5625107
Group statement of changes in equity
for the year ended 30 June 2019
Share capital
(restated)
Share
premium
account
(restated)
Share based
payment
reserve
Retained
earnings
Other
reserves
Total
£
£
£
£
£
£
As at 30 June 2017
1,506,955
6,627,270
328,060
(7,223,363)
296,057
1,534,979
Loss for the year
Currency translation
differences
Total comprehensive
income
Share option charge
Transfer on exercise of
options and warrants
-
-
-
-
-
-
-
-
-
-
-
-
-
(1,836,545)
-
(1,836,545)
-
(74,867)
(74,867)
(1,836,545)
(74,867)
(1,911,412)
24,876
-
(109,464)
109,464
Share capital issued
101,731
4,591,658
Reclassification of share
capital
1,393,570
(1,393,570)
Cost of share issue
-
(75,467)
-
-
-
-
-
-
Total contributions by
and distributions to
owners of the Company
1,495,301
3,122,621
(84,588)
109,464
-
-
-
-
-
-
24,876
-
4,693,389
-
(75,467)
4,642,798
As at 30 June 2018
3,002,256
9,749,891
243,472
(8,950,444)
221,190
4,266,365
Loss for the year
Currency translation
differences
Total comprehensive
income
Share option charge
Transfer on exercise of
options and warrants
Share capital issued
Cost of share issue
Total contributions by
and distributions to
owners of the Company
-
-
-
(3,264,307)
-
(3,264,307)
-
(52,730)
(52,730)
(3,264,307)
(52,730)
(3,317,037)
-
-
-
-
-
-
-
-
-
-
248,232
-
(142,098)
142,098
321,164
2,936,782
-
(132,500)
-
-
-
-
321,164
2,804,282
106,134
142,098
-
-
-
-
-
248,232
-
3,257,946
(132,500)
3,373,678
As at 30 June 2019
3,323,420
12,554,173
349,606
(12,072,653)
168,460
4,323,006
Note:
The brought forward share capital and share premium balances from 30 June 2017 and 30 June 2018 have been restated by
£415,358 and £1,393,570 to £3,002,256 and £9,749,891 respectively. These restatements are a reclassification between the value
of share capital and share premium due to an incorrect calculation of nominal share capital. The total equity remains unchanged
for both brought forward periods.
32
Group statement of changes in equity
for the year ended 30 June 2019, continued
Other reserves
Merger reserve
Greatland Gold plc
Company number: 5625107
Foreign currency
translation
reserve
Total other reserves
As at 30 June 2017
Currency translation differences
Total comprehensive income
As at 30 June 2018
Currency translation differences
Total comprehensive income
As at 30 June 2019
£
225,000
-
-
225,000
-
-
225,000
£
71,057
(74,867)
(74,867)
(3,810)
(52,730)
(52,730)
(56,540)
£
296,057
(74,867)
(74,867)
221,190
(52,730)
(52,730)
168,460
33
Greatland Gold plc
Company number: 5625107
Note
30 June 2019
30 June 2018
Re-stated
£
£
£
£
Company balance sheet
as at 30 June 2019
ASSETS
Non-current assets
Investment in subsidiary
12
50,000
50,000
Current assets
Cash and cash equivalents
Trade and other receivables
18
13
2,247,271
6,624,946
2,753,575
3,488,649
Total Current Assets
TOTAL ASSETS
LIABILITIES
Current Liabilities
8,872,217
8,922,217
6,242,224
6,292,224
Trade and other payables
14
(255,510)
(69,108)
TOTAL LIABILITIES
NET ASSETS
EQUITY
(255,510)
8,666,707
(69,108)
6,223,116
Called-up share capital
15
3,323,420
Share premium reserve
Share based payment reserve
16
Merger reserve
Retained earnings
12,554,173
349,606
225,000
(7,785,492)
3,002,256
9,749,891
243,472
225,000
(6,997,503)
TOTAL EQUITY
8,666,707
6,223,116
These financial statements were approved by the Board of Directors on 29 October 2019 and signed
on its behalf by:
Alex Borrelli
Chairman
Gervaise Heddle
Chief Executive Officer
34
Greatland Gold plc
Company number: 5625107
Company statement of changes in equity
for the year ended 30 June 2019
Called up
share
capital
(restated)
Share
premium
account
(restated)
Share based
payment
reserve
Retained
earnings
Merger
reserve
Total
£
£
£
£
£
£
As at 30 June 2017
1,506,955
6,627,270
328,060
(6,532,249)
225,000
2,155,036
Loss for the year
Total comprehensive
income
Share option charge
Transfer on exercise of
options and warrants
-
-
-
-
-
-
-
-
-
-
(574,718)
(574,718)
24,876
-
(109,464)
109,464
Share capital issued
101,731
4,591,658
1,393,570
(1,393,570)
-
(75,467)
-
-
-
-
-
-
1,495,301
3,122,621
(84,588)
109,464
Reclassification of share
capital
Cost of share issue
Total contributions by and
distributions to owners of
the Company
-
-
-
-
-
-
-
-
(574,718)
(574,718)
24,876
-
4,693,389
-
(75,467)
4,642,798
As at 30 June 2018
3,002,256
9,749,891
243,472
(6,997,503)
225,000
6,223,116
Loss for the year
Total comprehensive
income
Share option charge
Transfer on exercise of
options and warrants
-
-
-
-
-
-
-
-
-
-
(930,087)
(930,087)
248,232
-
(142,098)
142,098
Share capital issued
321,164
2,936,782
Cost of share issue
-
(132,500)
-
-
-
-
Total contributions by and
distributions to owners of
the Company
321,164
2,804,282
106,134
142,098
-
-
-
-
-
-
-
(930,087)
(930,087)
248,232
-
3,257,946
(132,500)
3,373,678
As at 30 June 2019
3,323,420
12,554,173
349,606
(7,785,492)
225,000
8,666,707
Note:
The brought forward share capital and share premium balances from 30 June 2017 and 30 June 2018 have been restated by £415,358
and £1,393,570 to £3,002,301 and £9,749,891 respectively. These restatements are a reclassification between the value of share
capital and share premium due to an incorrect calculation of nominal share capital. The total equity remains unchanged for both
brought forward periods.
35
Group cash flow statement
for the year ended 30 June 2019
Greatland Gold plc
Company number: 5625107
Notes
Year ended
30 June 2019
Year ended
30 June 2018
Cash flows from operating activities
Operating loss
Decrease/(Increase) in trade & other receivables
(Decrease)/Increase in trade & other payables
Depreciation
Impairment charge
Share option charge
Net (decrease) in cash and cash equivalents
from operating activities
Cash flows from investing activities
Interest received
Payments to acquire intangible assets
Payments to acquire tangible assets
Net cash (out)flows used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Transaction costs of issue of shares
Net cash inflows from financing activities
Net (decrease)/increase in cash and cash
equivalents
18
Cash and cash equivalents at the beginning of period
Exchange (loss) on cash and cash equivalents
Cash and cash equivalents at end of period
18
£
£
(3,254,001)
(1,840,436)
1,581
(70,454)
37,131
18,450
248,232
(27,268)
566,494
7,584
-
24,876
(3,019,061)
(1,268,750)
5,195
(688,517)
(98,774)
(782,098)
3,115,900
(132,500)
2,983,400
(817,759)
3,597,101
(23,344)
2,755,998
3,891
(361,711)
(49,267)
(407,087)
4,443,988
(75,467)
4,368,521
2,692,684
930,500
(26,083)
3,597,101
During the year shares in the Company totalling £142,045 (2018: £249,401) were issued for the
acquisition of intangible assets (see note 15). This amount represents material non-cash flows and is
excluded from the cash flow statement.
36
Company cash flow statement
for the year ended 30 June 2019
Greatland Gold plc
Company number: 5625107
Notes
Year ended
30 June 2019
Year ended
30 June 2018
£
£
Cash flows from operating activities
Operating loss
Decrease in trade & other receivables
Increase/(Decrease in trade & other payables
Share option charge
Net (decrease) in cash and cash equivalents
from operations
Cash flows from investing activities
Interest received
Loans to subsidiary
Net cash (outflows) used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Transaction costs of issue of shares
Net cash flows from financing activities
Net (decrease)/increase in cash and cash
equivalents
Cash and cash equivalents at the beginning of period
Cash and cash equivalents at end of period
18
18
(914,836)
(574,818)
5,749
170,901
248,232
4,163
(29,855)
24,876
(489,954)
(575,634)
250
(3,000,000)
(2,999,750)
100
(1,950,000)
(1,949,900)
3,115,900
(132,500)
2,983,400
(506,304)
2,753,575
2,247,271
4,443,988
(75,467)
4,368,521
1,842,987
910,588
2,753,575
During the year shares in the Company totalling £142,045 (2018: £249,401) were issued for the
acquisition of intangible assets (see note 15). This amount represents material non-cash flows and is
excluded from the cash flow statement.
37
Greatland Gold plc
Company number: 5625107
Notes to financial statements
for the year ended 30 June 2019
1
Principal accounting policies
1.1
Authorisation of financial statements and statement of compliance with IFRS
The group financial statements of Greatland Gold plc for the year ended 30 June 2019 were
authorised for issue by the board on 29 October 2019 and the balance sheets signed on the board’s
behalf by Mr Gervaise Heddle and Mr Alex Borrelli. Greatland Gold plc is a public limited company
incorporated and domiciled in England and Wales. The Company’s ordinary shares are traded on
AIM.
The Group’s financial statements have been prepared in accordance with International Financial
Reporting Standards (IFRS). The Company’s financial statements have been prepared in accordance
with IFRS as adopted by the European Union and as applied in accordance with the provisions of
the Companies Act 2006. The principal accounting policies adopted by the Group and Company are
set out below.
New standards, amendments and interpretations adopted by the Group
The Group has applied the following standards and amendments for the first time for their annual
reporting period commencing 1 July 2018:
- IFRS 9 Financial Instruments
- IFRS 15 Revenue from Contracts with Customers
No retrospective adjustments were required following the adoption of IFRS 9 and IFRS 15.
On 1 July 2018 (the date of initial application of IFRS 9), the Group’s management assessed which
business models apply to the financial assets held by the Group and classified its financial instruments
into the appropriate IFRS 9 categories. No reclassifications were required.
New standards, amendments and interpretations not yet adopted
At the date of authorisation of these financial statements, the following Standards and Interpretations
which have not been applied in these financial statements, were in issue but not yet effective for the
year presented:
- IFRS 16 in respect of Leases which will be effective for accounting periods beginning on or after 1
January 2019.
- IFRS 17 Insurance Contracts (effective date 1 January 2021).
There are no other IFRSs or IFRIC interpretations that are not yet effective that would be expected
to have a material impact on the Group.
1.2
Significant accounting judgments, estimates and assumptions
Significant accounting estimates and assumptions
The carrying amounts of certain assets and liabilities are often determined based on estimates and
assumptions of future events. The key estimates and assumptions that have a significant risk of
causing a material adjustment to the carrying amounts of certain assets and liabilities within the next
annual reporting period are:
Impairment of goodwill and intangibles with indefinite useful lives
The Group determines whether goodwill and intangibles with indefinite useful lives are impaired at
least on an annual basis. This requires an estimation of the recoverable amount of the cash-generating
units to which the goodwill and intangibles with indefinite useful lives are allocated.
Share-based payment transactions
The Group measures the cost of equity-settled transactions with employees by reference to the fair
value of the equity instruments at the date at which they are granted. The fair value is determined
using a Black-Scholes model.
38
Greatland Gold plc
Company number: 5625107
Notes to financial statements
for the year ended 30 June 2019, continued
1.3
Basis of preparation
The consolidated financial statements of Greatland Gold plc and its subsidiary have been prepared in
accordance with International Reporting Standards (IFRS) as adopted for use in the European Union.
The consolidated financial statements have been prepared on the historical cost basis, except for the
measurement to fair value of assets and financial instruments as described in the accounting policies
below, and on a going concern basis.
Going Concern
The consolidated entity has incurred a loss before tax of £3,264,307 for the year ended 30 June 2019,
and had a net cash outflow of £3,801,159 from operating and investing activities. At that date there
were net current assets of £2,203,109. The loss resulted almost entirely from exploration costs and
associated administrative related costs.
The Directors are confident in the Company’s ability to raise new finance from stock markets if this
is required during 2020 and the Group has demonstrated a consistent ability to do so. This includes
a share issuance of 225,813,513 placing shares for gross proceeds of £4,177,550 as announced by the
Company on 12 August 2019.
The Group’s cash flow forecast for the 12 months ending 31 October 2020 highlights adequate
funding at current levels of projected expenditure to last throughout this period. The Board of
Directors are confident that sufficient funding is in place to meet all its operational and exploration
commitments over the next twelve months and to remain cash positive for the whole period.
Given the Group’s current positive cash position and its ability to raise new capital the Directors have
a reasonable expectation that the Group has adequate resources to continue in operational existence
for the foreseeable future. For these reasons, they continue to adopt the going concern basis in
preparing the annual report and accounts.
1.4
Basis of consolidation
The consolidated accounts combine the accounts of the Company and its sole subsidiary, Greatland
Pty Ltd, using the purchase method of accounting.
In the Company’s balance sheet the investment in Greatland Pty Ltd includes the nominal value of
shares issued together with the cash element of the consideration. As required by the Companies Act
2006, no premium was recognised on the share issue. The difference between nominal and fair value
of the shares issued was credited to the merger reserve.
1.5
Goodwill
Goodwill on acquisition is capitalised and shown within fixed assets. Positive goodwill is subject to
annual impairment review with movements charged in the income statement.
Negative goodwill is reassessed by the Directors and attributed to the relevant assets to which it
relates.
1.6
Non-current asset investments
Investments in subsidiary companies are classified as non-current assets and included in the balance
sheet of the Company at cost at the date of acquisition irrespective of the application of merger relief
under the Companies Act.
1.7
Cash and cash equivalents
Cash and short-term deposits in the balance sheet comprise cash at bank and in hand and short-term
deposits with an original maturity of three months or less.
For the purposes of the Cash Flow Statement, cash and cash equivalents consist of cash and cash
equivalents as defined above, net of outstanding bank overdrafts.
39
Greatland Gold plc
Company number: 5625107
Notes to financial statements
for the year ended 30 June 2019, continued
1.8
Income tax and deferred taxation
Current tax assets and liabilities for the current and prior periods are measured as the amount expected
to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute
the amount are those that are enacted or substantially enacted by the balance sheet date.
Full provision is made for deferred taxation resulting from timing differences which have arisen but
not reversed at the balance sheet date.
1.9
Tangible fixed assets
Fixed assets are depreciated on a straight-line basis at annual rates that will reduce the book amounts
to estimated residual values over their anticipated useful lives as follows:
• Motor vehicles: 20% per annum
• Equipment: 7% per annum
1.10
Foreign currencies
Both the functional and presentational currency of Greatland Gold plc is sterling (£). Each group
entity determines its own functional currency and items included in the financial statements of
each entity are measured using that functional currency.
The functional currency of the foreign subsidiary, Greatland Pty Limited, is Australian Dollars
(A$).
Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies are translated at the rate of
exchange ruling at the balance sheet date. All differences are taken to the income statement.
On consolidation of a foreign operation, assets and liabilities are translated at the balance sheet
rates, income and expenses are translated at rates ruling at the transaction date. Exchange
differences on consolidation are taken to the income statement.
1.11
Other income
The Group had no other income during the periods ending 30 June 2019 and 30 June 2018.
Previous years consisted of a grant from the state government of Western Australia. Government
grants are accounted for on a receipts basis.
1.12
Finance costs/revenue
Borrowing costs are recognised as an expense when incurred.
Finance revenue is recognised as interest accrues using the effective interest method. This is a
method of calculating the amortised cost of a financial asset and allocating the interest income
over the relevant period using the effective interest rate, which is the rate that exactly discounts
estimated future cash receipts through the expected life of the financial asset to the net carrying
amount of the financial asset.
1.13
Trade and other receivables
Trade receivables, which generally have 30 day terms, are recognised and carried at original
invoice amount less an allowance for any uncollectible amounts.
An allowance for doubtful debts is made when there is objective evidence that the Group will
not be able to collect the debts. Bad debts are written off when identified.
1.14
Financial instruments
The Group’s financial instruments, other than its investments, comprise cash and items arising
directly from its operation such as trade debtors and trade creditors. The Group has an overseas
subsidiary in Australia whose expenses are denominated in Australian Dollars. Market price risk
is inherent in the Group’s activities and is accepted as such.
There is no material difference between the book value and fair value of the Group’s cash.
40
Greatland Gold plc
Company number: 5625107
Notes to financial statements
for the year ended 30 June 2019, continued
1.15
Trade and other payables
Trade payables and other payables are carried at amortised cost and represent liabilities for
goods and services provided to the Group prior to the end of the financial year that are unpaid
and arise when the Group becomes obliged to make future payments in respect of the purchase
of these goods and services.
1.16
Earnings per share
Basic earnings per share is calculated as net profit attributable to members of the parent, adjusted
to exclude any costs of servicing equity (other than dividends) and preference share dividends,
divided by the weighted average number of ordinary shares, adjusted for any bonus element.
Diluted earnings per share is calculated as net profit attributable to members of the parent,
adjusted for:
•
•
•
costs of servicing equity (other than dividends) and preference share dividends;
the after tax effect of dividends and interest associated with dilutive potential ordinary
shares that have been recognised as expenses; and
other non-discretionary changes in revenues or expenses during the period that would result
from the dilution of potential ordinary shares; divided by the weighted average number of
ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element.
1.17
Exploration and development expenditure
Exploration and development costs include expenditure on prospects at an exploratory stage.
These costs include the cost of acquisition, exploration, determination of recoverable reserves,
economic feasibility studies and all technical and administrative overheads directly associated
with those projects. A substantial proportion of these costs are carried forward in the balance
sheet as intangible fixed assets.
Recoupment of capitalised exploration and development costs is dependent upon successful
development and commercial exploitation of each area of interest and are amortised over the
expected commercial life of each area once production commences. The Company adopts the
‘area of interest’ method of accounting whereby a substantial proportion of exploration and
development costs relating to an area of interest are capitalised and carried forward until
abandoned. In the event that an area of interest is abandoned, or if the Directors consider the
expenditure to be of no value, accumulated exploration costs are written off in the financial year
in which the decision is made. All expenditure incurred prior to approval of an application is
expensed with the exception of refundable rent which is raised as a debtor.
Impairment reviews are carried out regularly by the Directors of the Company. Where a project
is abandoned or is considered not to be of commercial value to the Company, the related costs
are written off or provisions are made.
1.18
Share based payments
The fair value of options granted to directors and others in respect of services provided is
recognised as an expense in the profit and loss account with a corresponding increase in equity
reserves – the share based payment reserve.
On exercise or cancellation of share options, the proportion of the share based payment reserve
relevant to those options is transferred to the profit and loss account reserve. On exercise,
equity is also increased by the amount of the proceeds received.
The fair value is measured at grant date and the charge is spread over the relevant vesting period.
The fair value of options is calculated using the Black-Scholes model taking into account the
terms and conditions upon which the options were granted. Vesting conditions are non-market
and there are no market vesting conditions. The exercise price is fixed at the date of grant and
no compensation is due at the date of grant.
41
Greatland Gold plc
Company number: 5625107
Notes to financial statements
for the year ended 30 June 2019, continued
2
Revenue and segmental analysis
The Group’s prime business segment is mineral exploration.
The Group operates within two geographical segments, the United Kingdom and Australia. The
UK sector consists of the parent company which provides administrative and management
services to the subsidiary undertaking based in Australia.
The following tables present revenue and loss information and certain asset and liability
information by geographical segments:
Year ended 30 June 2019
Revenue
Total segment revenue
Total consolidated revenue
Result
Segment results
Loss before tax and finance costs
Interest receivable
Interest payable
Loss on disposal of investments
Loss before taxation
Taxation expense
Loss after taxation
As at 30 June 2019
Assets and liabilities
Segment assets
Total assets
Segment liabilities
Total liabilities
Other segment information:
Capital expenditure
Depreciation
Impairment
UK
£
-
Australia
Total
£
-
£
-
-
(914,837)
(2,339,165)
(3,254,002)
(3,254,002)
5,195
(15,500)
-
(3,264,307)
-
(3,264,307)
UK
£
Australia
£
Total
£
2,275,468
2,677,907
(255,510)
(374,859)
4,953,375
4,953,375
(630,369)
(630,369)
-
-
-
929,338
37,131
18,450
929,338
37,131
18,450
42
Notes to financial statements
for the year ended 30 June 2019, continued
2
Revenue and segmental analysis, continued
Year ended 30 June 2018
Revenue
Total segment revenue
Total consolidated revenue
Result
Segment results
Loss before tax and finance costs
Interest receivable
Loss on disposal of investments
Loss before taxation
Taxation expense
Loss after taxation
As at 30 June 2018
Assets and liabilities
Segment assets
Total assets
Segment liabilities
Total liabilities
Other segment information
Capital expenditure
Depreciation
3
Net finance costs
Finance revenue
Finance costs
Greatland Gold plc
Company number: 5625107
UK
£
-
Australia
Total
£
-
£
-
-
(574,818)
(1,265,618)
(1,840,436)
(1,840,436)
3,891
-
(1,836,545)
-
(1,836,545)
UK
£
Australia
£
Total
£
2,787,522
2,164,165
4,951,687
4,951,687
(69,108)
(616,214)
(685,322)
(685,322)
-
-
660,380
660,380
7,584
7,584
2019
£
5,195
(15,500)
(10,305)
2018
£
3,891
-
3,891
43
Notes to financial statements
for the year ended 30 June 2019, continued
4
Loss on ordinary activities before taxation
Loss on ordinary activities before taxation is stated after charging:
Auditors’ remuneration – audit
Depreciation
Impairment charge
Directors’ emoluments
Greatland Gold plc
Company number: 5625107
2019
£
16,200
37,131
18,450
2018
£
15,000
7,584
-
962,406
611,327
Auditors’ remuneration for audit services above excludes AU$7,814 (2018: AU$5,100) charged by
Charles Foti Business Services (Australia) relating to the audit of the subsidiary company.
5
Taxation
Analysis of charge in year
Tax on profit on ordinary activities
Factors affecting tax charge for year
2019
2018
£
-
£
-
The differences between the tax assessed for the year and the standard rate of corporation tax are
explained as follows:
Loss on ordinary activities before tax
Standard rate of corporation tax in the UK
Loss on ordinary activities multiplied by the standard rate of
corporation tax
Effects of:
Expenses not deductible for tax:
Share option charge
Future tax benefit not brought to account
Income tax expense
2019
£
2018
£
(3,264,307)
(1,836,545)
19%
£
19%
£
(620,218)
(348,944)
47,164
4,726
573,054
344,218
-
-
No deferred tax asset has been recognised because there is insufficient evidence of the timing of
suitable future profits against which they can be recovered.
44
Notes to financial statements
for the year ended 30 June 2019, continued
6
Employee information (excluding directors)
Staff costs comprised:
Wages and salaries
Bonus
Pension
Share option charge
Exploration
Greatland Gold plc
Company number: 5625107
2019
£
195,139
23,798
15,220
58,471
292,628
Number
3
2018
£
103,171
27,285
5,899
5,654
142,009
Number
2
Of the total Staff costs in the year, £229,773 (2018: £115,628) arises from work on the Exploration
Properties and has been expensed to the Income Statement as exploration costs.
7
Dividends
No dividends were paid or proposed by the Directors. (2018: £Nil)
8
Directors’ emoluments
Directors’ remuneration
Share option charge
2019
£
787,116
175,290
962,406
2018
£
592,104
19,223
611,327
2019
Executive directors
Callum Baxter
Gervaise Heddle
Non-executive directors
Alex Borrelli
Clive Latcham (appointed
15 October 2018)
Directors’
salary
Pension
/Superannuation
Bonus
Total
£
£
£
£
166,944
166,944
40,000
21,319
30,826
30,826
785
-
144,736
144,736
20,000
20,000
342,506
342,506
60,785
41,319
395,207
62,437
329,472
787,116
Of the total Directors’ remuneration disclosed above in the income statement, 75% (or £256,879) for
Callum Baxter and 25% (or £85,626) for Gervaise Heddle has been allocated to exploration costs in
the income statement for the year.
See Note 16 for share options granted during the year.
Also, see note 22 for related party transactions.
45
Greatland Gold plc
Company number: 5625107
Notes to financial statements
for the year ended 30 June 2019, continued
8
Directors’ emoluments, continued
2018
Executive directors
Callum Baxter
Gervaise Heddle
Non-executive directors
Alex Borrelli
Michael McNeilly
(resigned 25 October 2017)
Directors’
salary
Pension
/Superannuation
Bonus
Total
£
£
£
£
160,434
160,434
38,000
7,548
14,204
14,204
406
-
92,187
92,187
12,500
-
266,825
266,825
50,906
7,548
366,416
28,814
196,874
592,104
Of the total Directors’ remuneration disclosed above in the income statement, 75% (or £200,118) for
Callum Baxter and 25% (or £66,706) for Gervaise Heddle has been allocated to exploration costs in the
income statement for the year.
See Note 16 for share options granted during the year.
Also, see note 22 for related party transactions.
9
Loss per share
The basic loss per share is derived by dividing the loss for the period attributable to ordinary
shareholders by the weighted average number of shares in issue.
Loss for the period
2019
£
2018
£
(3,264,307)
(1,836,545)
Weighted average number of Ordinary shares of £0.001 in
issue
3,252,941,141
2,773,225,653
(0.10) pence
(0.07) pence
Loss per share – basic
Weighted average number of Ordinary shares of £0.001 in
issue inclusive of outstanding options
3,252,941,141
2,773,225,653
As inclusion of the potential Ordinary shares would result in a decrease in the loss per share they are
considered to be anti-dilutive; as such, a diluted earnings per share is not included.
46
Notes to financial statements
for the year ended 30 June 2019, continued
10
Tangible fixed assets – Group
Cost
At 30 June 2018
Disposals during the period
Additions during the period
Foreign exchange rate fluctuations
At 30 June 2019
Depreciation
At 30 June 2018
Disposals during the period
Charge for the period
Greatland Gold plc
Company number: 5625107
Motor
vehicle
£
-
-
Equipment
Total
£
£
49,267
49,267
-
-
33,310
65,464
98,774
-
(868)
(868)
33,310
113,863
147,173
-
-
7,390
7,390
-
-
5,174
31,957
37,131
Foreign exchange rate fluctuations
(48)
(414)
(462)
At 30 June 2019
Net book value
At 30 June 2019
At 30 June 2018
Cost
At 30 June 2017
Disposals during the period
Additions during the period
Foreign exchange rate fluctuations
At 30 June 2018
Depreciation
At 30 June 2017
Disposals during the period
Charge for the period
Foreign exchange rate fluctuations
At 30 June 2018
Net book value
At 30 June 2018
At 30 June 2017
5,126
38,933
44,059
28,184
74,930
103,114
-
41,877
41,877
Motor
vehicle
£
-
-
-
-
-
-
-
-
-
-
-
-
Equipment
Total
£
-
-
£
-
-
49,267
49,267
-
-
49,267
49,267
-
-
7,584
(194)
7,390
-
-
7,584
(194)
7,390
41,877
41,877
-
-
47
Notes to financial statements
for the year ended 30 June 2019, continued
11
Intangible non-current assets – Group
Exploration properties
At 30 June 2018
Additions during the period
Impairment during the period
Foreign exchange rate fluctuations
At 30 June 2019
Impairment
At 30 June 2018
Charge for the period
Foreign exchange rate fluctuations
At 30 June 2019
Net book amount
At 30 June 2019
At 30 June 2018
Impairment review
Greatland Gold plc
Company number: 5625107
2019
£
1,864,442
830,563
(18,450)
(28,978)
2,647,577
2018
£
1,302,309
611,112
-
(48,979)
1,864,442
(630,794)
(630,794)
-
-
-
-
(630,794)
(630,794)
2,016,783
1,233,648
1,233,648
671,515
As at 30 June 2019, the Directors carried out an impairment review of the exploration properties and
considered an impairment charge was not required (2018: £nil). However, during the year £2,295,560 (2018:
£1,021,493) of exploration related costs have been charged directly to the Income Statement as these costs
were deemed non-beneficial to the future value of the exploration properties. Costs directly related to
exploration programmes that, in the opinion of the Directors, are considered to add value to the respective
exploration properties are capitalised.
12
Non-current asset investments in subsidiary - Company
Cost
At 30 June 2018
Impairment of investment
At 30 June 2019
Net book amount
At 30 June 2019
At 30 June 2018
£
50,000
-
50,000
50,000
50,000
The parent company of the Group holds more than 20% of the share capital of the following company:
Company
Country of
registration
Class
Proportion
held
Nature of business
Greatland Pty Ltd
Australia
Common
100%
Mineral exploration
48
Greatland Gold plc
Company number: 5625107
Notes to financial statements
for the year ended 30 June 2019, continued
13
Trade and other receivables
Group
Company
Current trade and other receivables:
Prepayments
Other debtors
Loans due from subsidiary
Total
2019
£
51,104
26,376
-
2018
£
34,058
45,003
2019
£
28,198
-
-
6,596,748
77,480
79,061
6,624,946
2018
£
33,946
-
3,454,703
3,488,649
The loan due from subsidiary was interest free throughout the period and has no fixed repayment date. No
provision £nil (2018: £nil) has been made against this loan.
14
Trade and other payables
Group
Company
Current trade and other payables:
Trade creditors
Accruals
Salaries and Social Security
Employee Benefits
Total
2019
£
356,282
209,016
10,577
54,494
2018
£
2019
£
615,818
35,010
44,050
209,016
-
10,577
25,454
907
2018
£
24,786
44,050
-
272
630,369
685,322
255,510
69,108
49
Notes to financial statements
for the year ended 30 June 2019, continued
15
Share capital
Greatland Gold plc
Company number: 5625107
Called up, allotted, issued and fully paid
As previously stated at 30 June 2018, Ordinary shares of £0.001 each
Adjustments to share capital
Correction at 30/06/17
Correction at 30/06/18
Restated at 30 June 2018, Ordinary shares of £0.001 each
Issued during the year
On 27 July 2018, at a price of £0.0125, for cash
On 03 September 2018, at a price of £0.0125, for drilling services (DDH1)
On 14 January 2019, at a price of £0.02, for cash
On 09 April 2019, at a price of £0.005, for cash
On 09 April 2019, at a price of £0.002, for cash
On 09 April 2019, at a price of £0.0028, for cash
On 09 April 2019, at a price of £0.007, for cash
As at 30 June 2019, Ordinary shares of £0.001p each
Number
3,002,256,509
£
1,193,328
-
-
3,002,256,509
415,358
1,393,570
3,002,256
212,000,000
11,363,636
7,300,000
25,000,000
25,000,000
33,000,000
7,500,000
3,323,420,145
212,000
11,364
7,300
25,000
25,000
33,000
7,500
3,323,419
Note:
The brought forward share capital and share premium balances from 30 June 2017 and 30 June 2018 have been
restated by £415,358 and £1,393,570 respectively to £3,002,301 and £9,749,891 respectively. These
restatements are a reclassification between the value of share capital and share premium due to an incorrect
calculation of nominal share capital. The total equity remains unchanged for both brought forward periods.
Total share options in issue
As at 30 June 2019 there were 213.5 million unexercised options over Ordinary shares; 25 million exercisable at
0.2 pence per share in issue, 42 million exercisable at 0.28 pence per share in issue, 47.5 million exercisable at
0.7 pence per share in issue, 39.5 million exercisable at 1.4 pence per share in issue, 39.5 million exercisable at
2 pence per share in issue and 20 million exercisable at 2.5 pence per share in issue (2018: 205 million).
Total warrants in issue
On 3 September 2018 the Company announced that it had issued to DDH1 11,363,636 ordinary shares of 0.1
pence for the consideration of £142,045. 11,363,636 warrants with a 2.0 pence exercise price and an exercise
period of 12 months were granted on the same date. In respect of these warrants a share based payment charge
of £14,200 (approximately 10% of the consideration paid in ordinary shares) has been charged to the Income
Statement.
As at 30 June 2019 there were 204.7 million unexercised investor warrants over Ordinary shares at 2.0 pence
outstanding. These warrants expired unexercised on 9 August 2019.
50
Greatland Gold plc
Company number: 5625107
Notes to financial statements
for the year ended 30 June 2019, continued
16 Share based payments
The Company grants share options to employees as part of the remuneration of key management personnel
and directors to enable them to purchase ordinary shares in the Company. Under the plan, 99 million options
were granted for no cash consideration; 79 million options were granted for a period of three years expiring
on 07 September 2022 and 20 million options were granted for a period of three years expiring on 22 March
2023.
Granted
during the
period
At 30 June
2018
Share options
exercised
Exercisable at
30 June 2019
Exercise price
(pence)
C Baxter
C Baxter
C Baxter
-
-
-
25,000,000
(25,000,000)
28,000,000
(28,000,000)
-
-
17,500,000
Date from
which
exercisable
Expiry
date
20 Apr 2016
20 Apr 2019
18 Jan 2017
18 Jul 2020
18 Aug 2017
16 Feb 2021
07 Sep 2019
06 Sep 2022
07 Sep 2019
06 Sep 2022
20 Apr 2016
20 Apr 2021
0.2p
0.28p
0.7p
1.4p
2.0p
0.2p
17,500,000
14,000,000
14,000,000
25,000,000
7,500,000
2,500,000
2,500,000
-
-
-
-
-
-
-
-
14,000,000
0.28p
18 Jan 2017
18 Jul 2022
0.7p
1.4p
2.0p
0.5p
18 Aug 2017
16 Feb 2021
07 Sep 2019
06 Sep 2022
07 Sep 2019
06 Sep 2022
27 May 2016
27 May 2019
25,000,000
(25,000,000)
-
28,000,000
17,500,000
-
-
-
-
28,000,000
0.28p
18 Jan 2017
18 Jul 2020
17,500,000
14,000,000
14,000,000
0.7p
1.4p
2.0p
18 Aug 2017
16 Feb 2021
07 Sep 2019
06 Sep 2022
07 Sep 2019
06 Sep 2022
5,000,000
(5,000,000)
-
0.28p
18 Jan 2017
18 Jul 2020
C Baxter
14,000,000
C Baxter
14,000,000
-
-
A Borrelli
A Borrelli
A Borrelli
-
-
-
25,000,000
14,000,000
7,500,000
A Borrelli
2,500,000
A Borrelli
2,500,000
-
-
G Heddle
G Heddle
G Heddle
-
-
-
G Heddle
14,000,000
G Heddle
14,000,000
-
-
G Cryan
G Cryan
-
-
5,000,000
G Cryan
3,000,000
G Cryan
3,000,000
-
-
0.7p
1.4p
2.0p
0.7p
1.4p
2.0p
2.5p
2.5p
18 Aug 2017
16 Feb 2021
07 Sep 2019
06 Sep 2022
07 Sep 2019
06 Sep 2022
18 Aug 2017
16 Feb 2021
07 Sep 2019
06 Sep 2022
07 Sep 2019
06 Sep 2022
21 Mar 2020
20 Mar 2023
21 Mar 2020
20 Mar 2023
-
-
-
5,000,000
3,000,000
3,000,000
B Wasse
-
7,500,000
(7,500,000)
-
B Wasse
6,000,000
B Wasse
6,000,000
C Latcham
10,000,000
M Sawyer
10,000,000
-
-
-
-
-
-
-
-
6,000,000
6,000,000
10,000,000
10,000,000
99,000,000
205,000,000
(90,500,000)
213,500,000
51
Greatland Gold plc
Company number: 5625107
Notes to the financial statements
for the year ended 30 June 2019, continued
16 Share based payments, continued
The fair value of the 79 million options granted on 07 September 2018 using an adjusted Black-Scholes method
and assumptions were as follows:
Options issued
Grant date
Fair value at measurement date
Share price at grant date
Exercise price
Expected volatility
39.5 million share options
39.5 million share options
07 September 2018
07 September 2018
0.609 pence
1.225 pence
1.4 pence
83%
0.505 pence
1.225 pence
2.0 pence
83%
Vesting period: 1 year after grant
07 September 2019
07 September 2019
Option life
Expected dividends
Risk free interest rate
Discount
36 months
36 months
0.00%
0.50%
40%
0.00%
0.50%
40%
£119,676
Fair value of options granted
£144,367
The fair value of the 20 million options granted on 22 March 2019 using an adjusted Black-Scholes method and
assumptions were as follows:
Options issued
Grant date
Fair value at measurement date
Share price at grant date
Exercise price
Expected volatility
Vesting period: 1 year after grant
Option life
Expected dividends
Risk free interest rate
Discount
Fair value of options granted
20 million share options
22 March 2019
0.607 pence
1.935 pence
2.5 pence
58%
22 March 2020
36 months
0.00%
0.50%
40%
£72,848
The fair value of the share options expensed during the year was £234,032, being the value of the options
attributable to the vesting period to 30 June 2019 (2018: £24,876). £102,859 will be expensed in the following
year, being the value of these options attributable to the end of their vesting dates. £142,098 in respect of the
exercised share options was transferred to reserves (2018: £109,464).
The volatility is set by reference to the historic volatility of the share price of the Company.
52
Greatland Gold plc
Company number: 5625107
Notes to the financial statements
for the year ended 30 June 2019, continued
17 Nature and purpose of reserves – Other reserves
Merger Reserve
The merger reserve was created in accordance with the merger relief provisions of the Companies Act 1985 (as
amended), and 2006, relating to accounting for business combinations involving the issue of shares at a premium. In
preparing group consolidated financial statements, the amount by which the fair value of the shares issued exceeded
their nominal value was recorded within a merger reserve on consolidation, rather than in a share premium account.
Foreign currency translation reserve
The foreign currency translation reserve is used to record exchange differences arising from the translation of the
financial statements of foreign subsidiaries.
Available for sale financial asset reserve
This reserve is used to record the post-tax fair value movements in available for sale assets and investments.
18 Cash and cash equivalents – Group
Cash at bank and in hand
Total cash and cash equivalents
Cash and cash equivalents – Company
Cash at bank and in hand
Total cash and cash equivalents
30 June 2019
£
Currency
adjustments
£
Net Cash
flow
£
30 June 2018
£
2,755,998
2,755,998
(23,344)
(817,759)
3,597,101
(23,344)
(817,759)
3,597,101
30 June 2019
£
2,247,271
2,247,271
Currency
adjustments
£
-
Net Cash
flow
£
(506,304)
30 June 2018
£
2,753,575
-
(506,304)
2,753,575
Cash at bank earns interest at floating rates based on daily bank deposit rates.
Short-term deposits are made for varying periods of between one day and three months, depending on the immediate
cash requirements of the Group, and earn interest at the respective short-term deposit rates
19 Commitments
As at 30 June 2019, the Company had entered into the following commitment:
Exploration commitments
Ongoing exploration expenditure is required to maintain title to the Group mineral exploration permits. No provision
has been made in the financial statements for these amounts as the expenditure is expected to be fulfilled in the
normal course of the operations of the Group.
20 Significant agreements and transactions
In March 2019, Greatland signed a Farm-in Agreement with Newcrest Operations Limited (“Newcrest”), a wholly-
owned subsidiary of Newcrest Mining Limited (ASX:NCM), to explore and develop Greatland’s Havieron gold-
copper project in the Paterson region of Western Australia. Newcrest has the right to acquire up to a 70% interest
in a 12-block area within E45/4701 that covers the Havieron target by spending up to US$65 million. The Farm-
in Agreement with Newcrest and results from Newcrest’s drilling campaign at Havieron are discussed in further
detail in the Chairman’s Statement and the Strategic Report.
There were no other significant agreements and transactions to report other than that reported in Note 21.
53
Greatland Gold plc
Company number: 5625107
Notes to the financial statements
for the year ended 30 June 2019, continued
21
Events after the reporting period
Post-Balance Sheet Capital Raise and issue of options
On 12 August 2019 the Company announced that it had raised £4,177,550 through a placing and subscription of
225,813,513 new ordinary shares of 0.1 pence each at a subscription price of 1.85 pence per Ordinary Share. Under
this placing, warrants to subscribe for a further 225,813,513 new Ordinary Shares in the Company were issued at
an exercise price of 2.5p per warrant, within a 2 year exercise period.
On 26 September 2019 the Company announced that it had issued a total of 64,000,000 options to directors and
key employees; 32,000,000 options at 2.5p per share option and 32,000,000 options at 3.0p per share option. Each
option has a 12 month vesting period and entitles the holder upon exercise to one ordinary share of 0.1 pence in
the capital of the Company. All options have a life of three years from the vesting date and all options will vest
immediately upon a change of control event.
22 Related party transactions
Remuneration of key management personnel
The remuneration of the directors, and other key management personnel of the Group, is set out below in aggregate
for each of the categories specified in IAS24 Related Party Disclosures.
Short-term employee benefits
Share based payments
Key management personnel
23 Financial instruments – Group
2019
£
787,116
248,232
234,157
1,269,505
2018
£
592,104
24,876
136,355
753,335
The Group uses financial instruments comprising cash, liquid resources and debtors/creditors that arise from its
operations.
The Group’s exposure to currency and liquidity risk is not considered significant. The Group’s cash balances are
held in Pound Sterling and in Australian dollars, the latter being the currency in which the significant operating
expenses are incurred.
To date the Group has relied upon equity funding to finance operations. The Directors are confident that adequate
cash resources exist to finance operations to commercial exploitation, but controls over expenditure are carefully
managed.
The net fair value of financial assets and liabilities approximates the carrying values disclosed in the financial
statements. The currency of the financial assets is as follows:
Cash and short term deposits
30 June 2019
30 June 2018
Sterling
Australian Dollars
At 30 June 2019
The financial assets comprise interest earning bank deposits.
£
2,247,271
508,727
2,755,998
£
2,753,575
843,526
3,597,101
54
Greatland Gold plc
Company number: 5625107
Notes to financial statements
for the year ended 30 June 2019, continued
24 Contingent liabilities
Acquisition of Havieron Project
Under the terms of the agreement for the acquisition of the Havieron Gold Project an initial payment of A$25,000
in cash and 65,490,000 ordinary shares (see note 15) of 0.1 pence each in the Company were made. However, a
second payment of 145,530,000 ordinary shares of 0.1 pence each will be made upon a “Decision to Mine”.
25 Control
There is considered to be no ultimate controlling entity.
26 Retained earnings of the parent Company
As permitted by section 408 of the Companies Act 2006, the profit and loss account of the parent Company has
not been separately presented in these accounts. The parent Company loss for the period was £930,087 (2018
£574,718).
55