29 October 2021
2021 Annual Report
Hammer Metals Limited (ASX:HMX) (“Hammer” or “the Company”) is pleased to attach its Annual Report
for the year ended 30 June 2021.
For further information, please contact:
Daniel Thomas
Managing Director
T +61 8 6369 1195
E info@hammermetals.com.au
This announcement was authorised for issue by Mark Pitts, Company Secretary, Hammer Metals Limited.
T (08) 6369 1195 E info@hammermetals.com.au
ASX:HMX
ABN 87 095 092 158 P Unit 1, 28-30 Mayfair Street, West Perth, WA 6005 hammermetals.com.au
Annual
Report
A BN 87 095 0 92 15 8
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02
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ABN
87 095 092 158
BOARD OF DIRECTORS
Russell Davis
Non-Executive Chairman
Daniel Thomas
Managing Director
Zbigniew Lubieniecki
Non-Executive Director
David Church
Non-Executive Director
COMPANY SECRETARY
Mark Pitts
PRINCIPAL AND REGISTERED OFFICE
Unit 1, 28-30 Mayfair Street,
West Perth, WA 6005
Telephone:
Email:
Website:
+61 8 6369 1195
info@hammermetals.com.au
www.hammermetals.com.au
POSTAL ADDRESS
Unit 1, 28-30 Mayfair Street,
West Perth, WA 6005
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AUDITORS
KPMG
235 St Georges Terrace
Perth WA 6000
Australia
Telephone:
Facsimile:
+61 8 9263 7171
+61 8 9263 7129
SHARE REGISTRY
Advanced Share Registry Ltd
110 Stirling Highway
Nedlands WA 6009
Australia
Telephone:
Facsimile:
+61 8 9389 8033
+61 8 9262 3723
STOCK EXCHANGE
ASX Limited
Level 40, Central Park,
152-158 St Georges Terrace
Perth WA 6000
ASX CODE
HMX
CORPORATE GOVERNANCE
The Company’s corporate governance statement
can be found at the following URL:
www.hammermetals.com.au/company-profile/corporate-governance/
Contents
Chairman’s Letter
Corporate Strategy
Operational Highlights
Corporate Activity
Operations Summary
Competent Persons Statement
Annual Mineral Resource Statement
Tenement Interests
Directors Report
Auditor’s Independence Declaration
Consolidated Statement Of Financial Position
Consolidated Statement Of Profit Or Loss And Other Comprehensive Income
Consolidated Statement Of Changes In Equity
Consolidated Statement Of Cash Flows
Notes To The Consolidated Financial Statements
Director’s Declaration
Independent Auditor’s Report
ASX Additional Information
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HAMMER METALS LIMITED / Annual Report 2021
Chairman’s Letter
Chairman’s
Letter
It is my pleasure to present Hammer Metals Annual Report for the 2021
financial year, providing details of our continued progress against our
business strategy.
Dear Fellow Shareholders,
Your Board’s objective is to bring wealth to our stakeholders by
making a significant exploration discovery. Hammer’s directors
and senior management are firmly aligned with our shareholders
in the desire to successfully achieve this objective.
The Company is focused on exploring its highly prospective
tenement positions in two of the world’s great mineral provinces
- the Eastern Goldfields of Western Australia for gold and the
Northwest Mineral Province in Queensland for copper and gold.
Our work in Northwest Queensland saw exploration success
in late 2020 at the Trafalgar copper-gold project which formed
part of the JOGMEC JV. Following this discovery and the interest
shown by other Japanese mining groups, JOGMEC undertook
a process whereby in August this year Sumitomo Metal Mining
Oceana Pty Ltd (Sumitomo Metal Mining) stepped into JOGMEC’s
shoes in the JV. Sumitomo Metal Mining’s international operations
span several world class operating copper mines and it is of
significant credit to the Hammer team and to the quality of the
project that the company has attracted a joint venture partner
with the stature of Sumitomo Metal Mining. We look forward to
working productively with Sumitomo Metal Mining into the future.
Exploration activity on the JV was unavoidably reduced during
this changeover period however work has now ramped-up,
with extensive geochemical, geophysical and drilling programs
presently underway. Exploration on the 100%-owned tenements
has also progressed well with significant copper-gold results
returned from maiden drilling programs at Neptune and Lakeview
along with several new copper and gold prospects identified
through our regional mapping and sampling.
Over in WA at our Bronzewing South project, RC and Aircore
drilling programs have continued to return encouraging results.
An exciting deep RC drilling program designed to test the
conceptual down-plunge position of the 3Moz Bronzewing
deposit is also anticipated to commence in October this year.
Hammer has secured additional prospective tenure in the Yandal
Belt to augment our holdings and as tenement applications
are progressively being granted the scope of our exploration
activities continues to expand. Hammer remains keen to grow
the gold side of the business and to acquire additional tenure
when opportunities arise.
There is good reason to look forward to the year ahead with
anticipation. Hammer ended the year in a strong financial position
with the ability to undertake effective work on several large-scale
exploration targets at both Mount Isa and Bronzewing South. The
key projects and work planned are discussed in more detail in
the pages ahead.
Lastly, I would like to thank our supportive shareholders, our
joint venture partners at Mount Isa (Sumitomo Metal Mining
Oceania and Glencore) as well as our small but effective team
led by Dan Thomas for their outstanding efforts during another
“pandemic” year.
Sincerely
New target generation is an ongoing process at Hammer, and
reviews of Hammer’s extensive exploration datasets both in-
house and by consultants NewExco and PGN has produced a
range of exciting targets to add to the project pipeline.
Russell Davis
Chairman
With one of the best ground positions in this productive mineral
region and the targets Hammer has in front of it, we are confident
of adding to Hammer’s existing copper resource inventory at
Kalman, Overlander, Elaine and Jubilee.
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Corporate Strategy
Corporate
Strategy
■ Position the company for discovery, through innovative
■ Work to consolidate and improve the quality of the
and focused exploration for large copper-gold
and gold deposits in two of the world’s great metal
provinces.
Company’s tenement positions.
■ Operate safely and effectively.
■ Grow the Company’s defined JORC resources to
progress to a viable mining development scenario in
Mount Isa.
■ Deliver positive financial returns to shareholders.
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Operational
Highlights
■ Discovery of the Trafalgar copper and gold deposit
as part of our Joint Venture with JOGMEC (now
Sumitomo Metal Mining). The Trafalgar discovery
is part of a 4km trend of copper and gold soil and
magnetic anomalies with mineralisation in drilling
accompanied by magnetite.
■ Reinvigoration of Hammer’s 100% owned exploration
project areas in the Mount Isa region with the
successful test of mineralised copper and gold
systems at Neptune and Lakeview.
■ Completed the first diamond drilling program at
Bronzewing South with several high priority targets
defined along the prospective corridor immediately
south of the 3Moz Bronzewing mine.
■ Welcomed Sumitomo Metal Mining to the Mount
Isa East Joint Venture following their purchase of
JOGMEC’s interest in the Joint Venture.
■ Defined multiple new targets within Hammer’s 100%
controlled tenure in the Mount Isa region.
■ Hammer continued to acquire additional new
properties through tenement applications within both
the Yandal and Mount Isa project areas.
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Corporate Activity
Corporate
Activity
The Company’s corporate activities are focussed on enhancing the
capacity of our exploration team to make discoveries through adequate
funding, as well as securing tenements or projects that improve the quality
and potential of the Company’s exploration portfolio.
During the year, the Company further enhanced its standing
in both the Yandal and Mount Isa regions. In Mount Isa, the
company continued to grow its portfolio with the addition
of several prospective tenements in close proximity to the
Company’s existing tenure. In addition to the growth in tenure,
the success of the Mount Isa East JV resulted in JOGMEC selling
their interest to Sumitomo Metal Mining.
In the Yandal belt the Company acquired the Harrier tenements
to the Southeast of the Bronzewing Gold mine. The tenements
are lightly explored with a mineralised trend passing through the
Harrier and Bower prospects associated with a north-northeast
trending structure with historical prospecting in this area
encountering zones of gold nuggets. The tenement is located
on the eastern limb of the Bronzewing Anticline within 3km of the
former Bronzewing Gold Mine. The company was also successful
in securing several new tenement applications over prospective
areas in the region.
Subsequent to the year end, the Company has successfully
divested its non-core early-stage Iron Ore project in Western
Australia for a consideration of $325,000 and a future NSR
royalty of 0.5% on all Iron Ore sales.
During the period, the Company completed its first diamond
drilling program at Bronzewing South with the assistance of
a $150,000 Exploration Incentive Scheme (EIS) grant from
the Western Australian state government testing a compelling
gravity, geochemical and structural target. The Company also
successfully applied for and received additional EIS funding of
$52,000 towards a 9km air core drilling program at our North
Orelia project.
As reported in ASX releases on 23 and 29 April 2021 and 26
May 2021, the company completed a raising of $5 million at a
price of 9.5c per share to existing, sophisticated and institutional
investors, with a Share Purchase Plan raising an additional $1
million from existing shareholders. The company is well funded
for aggressive and extensive exploration programs in the Mount
Isa and Yandal regions for the year ahead.
The HMXOD listed options expired on 30 September 2020,
with 187,820,778 of the quoted options being exercised. This
represented over 98% of the total number of quoted options on
issue. The exercise of these options at 3 cents each raised over
$5.6 million for the Company.
Management actively interacts with the investment and exploration
community. The Company’s website (www.hammermetals.com.
au) provides additional project and corporate information and
access to previous announcements.
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Mount Isa Project
(Queensland)
The Company is an active mineral explorer in the Mount Isa region,
focused on discovering large copper-gold deposits of the Ernest Henry
style and has a range of prospective targets at various stages of testing.
Through its wholly owned subsidiaries, the Company holds a
strategic tenement position covering over 2,100km2 with 100%
interests in the Kalman (Cu-Au-Mo-Re) deposit, the Overlander
North and Overlander South (Cu-Co) deposits, the Elaine-Dorothy
(Cu-Au) deposit and a 51% interest in the Jubilee (Cu-Au) deposit.
The ground position is focused on major regional-scale structural
zones and extends for over 100km from Mary Kathleen in the
north to the Tick Hill area in the south. The Company’s discovery
of the Trafalgar copper-gold deposit as part of the Mount Isa East
Joint Venture was the highlight of the year with a reinvigoration
of our exciting and advanced base metals prospects in Mount
Isa. The Trafalgar trend is highly prospective with numerous
mineralised targets appearing along a prospective trend that
runs for 14km from the south of Trafalgar through to the Elaine
(100% HMX) and the Jubilee (51% HMX) copper-gold deposits.
The significant mineralisation recently intercepted at Neptune
and Lakeview on Hammer’s 100% owned tenure demonstrates
the potential along this trend to contribute additional resources
to Hammer’s portfolio.
Significant market interest in the Trafalgar copper-gold discovery
resulted in our JV partner, JOGMEC, receiving unsolicited offers
for their position in the Joint Venture. This culminated in JOGMEC
selling their interest in the Mount Isa East Joint Venture to global
base metal producer and developer Sumitomo Metal Mining.
In addition to exploration activities at the Mount Isa East JV, the
Company continued to advance its own prospects within the
Mount Isa region. Copper and gold prospects located within a
25km radius of Kalman were prioritised for further evaluation,
with 6 targets areas advancing to drill testing during the year –
Lakeview, Kalman West, Overlander, Kings/Charlotte, Neptune
and Serendipity.
With defined copper-gold resources at Kalman, Overlander, Elaine
and Jubilee and significant mineralisation being discovered at
Trafalgar, Lakeview and Neptune, Hammer is focussing on the
expansion of its mineral inventory with a view to advancing the
company to become a future base metal miner.
Exploration also continued on Hammer’s gold prospects in
Mount Isa with the advancement of exploration efforts in the
Tick Hill region. Several areas have been identified for further
geochemical, geophysical and field mapping activities with
drilling targets to be generated during the coming year.
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Mount Isa Project Locations
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Operations Summary
Copper-Gold Exploration - Kalman and Surrounds
▲ Kalman Deposit
The Kalman Deposit contains 360kt of Copper Equivalent Metal.
The Indicated and Inferred Mineral Resource at Kalman stands at
20Mt at 0.61% Cu, 0.14% Mo, 0.34g/t Au and 3.7g/t Re (1.8%
CuEq) (refer ASX announcement 27 September 2016). The
deposit remains open down plunge and with a molybdenum
grade of 0.14%, Kalman is one of the highest-grade molybdenum
resources in the world.
Kalman is Hammer’s most advanced prospect with significant
mineral inventory. It is near Hammer’s other JORC compliant
resources at Elaine, Jubilee (51% HMX) and Overlander as well
as the Company’s lead exploration projects at Trafalgar, Lakeview
and Neptune. All are located within 30km of the main highway
between Mount Isa and Cloncurry.
Hammer continues to advance its exploration efforts through this
region with the aim of defining an appropriate resource that will
enable a future development of the Kalman project.
Kalman Deposit Block Model (CuEq) (See ASX announcement 27 September 2016)
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HAMMER METALS LIMITED / Annual Report 2021
Copper-Gold Exploration - Kalman and Surrounds
▲ Kalman West
Kalman West is located approximately 1km west of the Kalman Deposit.
The prospect contains a multi-element soil anomaly partially
coincident with a zone of graphitic sediments and a correlating
VTEM anomaly.
area has the potential to host a high-grade gold deposit. The
sample also contained more than 96 ounces of Ag which is the
upper detection limit for the method utilised.
The zone has been previously drilled by Hammer with noted
zones of lead, zinc and gold anomalism. The anomaly also aligns
with the Magneto-Telluric anomaly that was identified during
Hammer’s 2020 Queensland government CEI funded survey.
Recent prospecting in the area delineated a thin quartz vein with
visible gold. A 44,800g/t Au analysis of this vein indicates the
In a further test of this anomalous zone, Hammer added two holes
(for 188m) to the drilling program. This drilling was completed
in addition to the initial planned program which completed a
299m hole drilled targeting a deeper Magneto-telluric (“MT”)
and Versatile Time Domain Electromagnetic (“VTEM”) response.
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Example of visible gold samples obtained from a vein at Kalman West.
Lab Analysis of a sample from this vein reported 4.48% Au and in excess of 96oz per tonne Ag.
Photograph width is 6cm (See ASX announcement 26 July 2021)
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HAMMER METALS LIMITED / Annual Report 2021
Operations Summary
Plan of the Kalman West Prospect (see ASX announcement 14 October 2021)
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HAMMER METALS LIMITED / Annual Report 2021
Northern Minerals Hub –Lakeview, Neptune, Jubilee
(51%), Elaine, Blackrock and Sunset
▲ Lakeview
The Lakeview prospect is marked by historical workings along an
approximate 350m strike length.
Production records indicate that the former prospect was worked
in the 1960’s and early 1970’s with 1,213 tons of ore extracted
at a 16% Cu grade. The lode forms a distinctive sigmoidal shape
with shafts being present on the long limbs of the prospective
structure.
The aim of this follow-up drilling was to determine whether a Cu-
Au resource could be defined at Lakeview to add to Hammer’s
existing mineral resource inventory. At the time of this report,
assays from 3 of the 9-hole follow-up program have been
received. Significant intercepts from Lakeview includes:
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The initial four-hole (300m) program was successful in delineating
mineralisation and a second nine-hole (1080m) program was
completed to further investigate mineralisation at depth (refer to
ASX announcement dated 22 June 2021 and 14 October 2021).
■ 10m at 1.97% Cu and 0.42g/t Au from 23m in
HMLVRC003 including;
o 2m at 4.58% Cu and 0.95g/t Au from 26m; and
■ 8m at 1.97% Cu and 0.24g/t Au from 42m in
HMLVRC001 including;
o 5m at 2.9% Cu and 0.32g/t Au from 43m in;
■ 17m at 1.05% Cu and 0.39g/t Au from 29m in
HMLVRC004 including;
o 8m at 1.82% Cu and 0.76g/t Au from 38m.
■ 18m at 1.7% Cu and 0.49g/t Au from 61m in
HMLVRC005, including;
o 5m at 4.17% Cu and 1.04g/t Au from 61m;
Further attractive exploration targets continue to evolve in close
proximity to the Lakeview target with a number of prospective
surface features mapped, accompanied by high grade copper
and gold rock chips. These targets will form part of Hammer’s
upcoming Reverse Circulation drilling program.
Lakeview eastern shaft which records indicate is
approximately 28m deep
View of Hammer’s Mount Isa Northern Hub Copper Resources and Prospects
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HAMMER METALS LIMITED / Annual Report 2021
Operations Summary
Trafalgar Trend extending into Hammer’s 100% owned project areas showing the location of Pearl, Lakeside, Smoko
Gossan and Lakeview prospects approximately 7km to the north of Trafalgar (See ASX announcement 9 March 2021)
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Lakeview Plan view showing the location of the initial and follow-up drilling program
(See ASX announcement 14 October 2021)
HAMMER METALS LIMITED / Annual Report 2021
Operations Summary
Long section looking north through the Lakeview Prospect (See ASX announcement 14 October 2021)
Comparison of quartz-sulphide mineralisation from Lake View surface dumps (left) with sieved chips from HMLVRC001,
interval 44-45m assayed at 4.65% Cu and 0.52g/t Au (right) (See ASX announcement 22 June 2021)
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HAMMER METALS LIMITED / Annual Report 2021
Northern Minerals Hub –Lakeview, Neptune, Jubilee
(51%), Elaine, Blackrock and Sunset
▲ Lady Rose (Neptune)
The Lady Rose prospect is located within the Neptune project area and is
approximately 2km to the west of Trafalgar in an area of complex magnetic
anomalism with multiple copper prospects.
Mineralisation is associated with magnetite alteration and shows
strong similarities to mineralisation at Trafalgar, Black Rock and
the Jubilee Cu-Au resource. This style of mineralisation and
alteration is typical of IOCG systems in the Mt Isa region.
Hammer completed three drill holes at the prospect for a total
of 728m with the aim of extending known mineralisation to the
north, whilst also looking to test under previous workings at
the Lady Rose Extended and Jola Rose prospects. These two
prospects are characterised by small scale shafts and workings
and have not been previously drilled.
Significant intercepts from drilling include (see ASX announcement
26 July 2021):
■ 100m at 0.48% Cu and 0.18g/t Au from 173m
(HMLRRC002) including
o 3m at 2.23% Cu and 0.2g/t Au from 185m
o 3m at 3.09% Cu and 1.4g/t Au from 198m; and
o 5m at 2.21% Cu and 0.37g/t Au from 234m
■ 66m at 0.32% Cu and 0.07g/t Au from 33m
(HMLRRC003) including
o 2m at 1.92% Cu and 0.42g/t Au from 33m
Down hole electromagnetic surveys (“DHEM”) were completed on
holes HMLRRC002 and HMLRRC003 with the data from this survey
currently being processed by Hammer’s geophysical consultants.
This prospect along with others defined through mapping,
prospecting, geochemical and geophysical review shape as
exciting targets for Hammer in the 2022 Financial Year.
Cross section through HMLRRC002
(See ASX announcement 26 July 2021)
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Drilling at Lady Rose Extended
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HAMMER METALS LIMITED / Annual Report 2021
Operations Summary
Copper-Gold Exploration - Malbon Area
– Kings-Charlotte (100% HMX)
The Kings and Charlotte region is characterised by zones of outcropping
copper, cobalt and gold mineralisation with numerous anomalous soil
geochemical responses.
The majority of this project area has a thin layer of cover
masking potential mineral systems. Drilling during the year
tested outcropping features which consist of two main structural
directions.
Hammer drilled six holes for 660 meters. Holes 1, 5 and 6
tested the Charlotte structure and holes 2, 3 and 4 tested the
Kings structure. All holes intersected anomalous responses and
significantly the prospects have a strong gold response relative
to copper.
Elevated cobalt was also intersected at Charlotte. Significant
results included (see ASX announcement 26 July 2021):
■ 3m at 3.89% Cu and 0.56g/t Au from 18m in
HMAKRC004 including
o 1m at 10.1% Cu and 1.52g/t Au;
■ 1m at 2.13g/t Au from 9m in HMAKRC003; and
■ 10m at 0.58% Cu and 0.12% Co from 19m and 1m at
1.59% Cu from 36m in HMAKRC005.
Hammer’s tenements at Malbon contain multiple repeats of
this structural regime, in places displaying strong geochemical
anomalism. Hammer intends to further delineate and rank
these zones through use of surface prospecting and potentially
geophysical methods such as Sub-audio Magnetics (“SAM”)
during the coming year.
Rig on site at HMAKRC001
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HAMMER METALS LIMITED / Annual Report 2021
Southern Hub - Gold Focussed Exploration
▲ Tick Hill Region
Hammer’s first detailed work program in the Tick Hill region was designed to
provide an initial assessment of the gold potential of Hammer’s tenements.
Approximately 1000 soil samples from seven zones were
collected and analysed via a partial digest method. (See ASX
release 23 September 2020)
Highlights from Hammer’s partial leach gold results include;
■ A program high, gold value of 13ppb is located on
eastern side in the main Zone 4.
■ Continuous and broad Au anomalies are located
within the Zone 2 and Zone 6 with both anomalies
trending more than 1km long.
The maximum Au value 5.5ppb was recorded in Zone 6 and
6.0ppb Au in Zone 2. It is believed that Zone 2 could have similar
overall lithological and magnetic signature to position of Tick Hill,
on the eastern side of quartz-feldspar intrusive.
In comparison, the Tick Hill deposit was discovered by a joint
MIM and Carpentaria Exploration Company Pty. Ltd. team in
October 1989. Follow up work on a bulk cyanide leach (“BCL”)
sampling anomaly of 6.9 ppb gold in a stream draining the Tick
Hill deposit culminated in the drilling of early discovery holes.
Several gold anomalous zones were identified by the sampling.
Field reviews of the area of interest have commenced and will
continue with the aim of delineating drill ready targets for the
coming year.
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Tick Hill soil sampling area
Other Commodities
As previously reported the significant potential of Hammer’s tenement
holding for several critical minerals including cobalt, iron ore, potash,
graphite, manganese and rare earth elements.
Hammer continues to assess the geological merits of these prospects and remains open to considering partners to explore these
highly attractive prospects within Hammer’s large tenement holding.
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HAMMER METALS LIMITED / Annual Report 2021
Operations Summary
Mount Isa East Joint Venture (Sumitomo Metal Mining
earning 60% Interest)
The Joint Venture area covers sections of the Even Steven, Mount Philp,
Dronfield West and Malbon target areas covering approximately 290km2 of
Hammer’s 2,100km2 Mount Isa Project.
The areas are considered highly prospective for the discovery of
Iron Oxide Copper Gold deposits (“IOCG”).
The Joint Venture was highly successful during its second year
in operation with the discovery of the Trafalgar copper and gold
deposit. Following this discovery JOGMEC elected to sell their
rights and obligations in the Joint Venture to Sumitomo Metal
Mining Oceania (SMMO), a subsidiary of Sumitomo Metal Mining.
SMMO now holds the right to earn a 60% interest in the Joint
Venture. The future expenditure by SMMO combined with
the historical expenditure by JOGMEC will need to exceed
$6,000,000 by 31 March 2024 to earn the 60% interest in the
project. During this period, Hammer will continue to manage and
operate the exploration program.
Even Steven Area
The Even-Steven area comprises three advanced copper/gold Targets
encompassing the Trafalgar, Pearl and Even-Steven prospects. Two of
these three prospects were drilled during the period culminating in the
discovery of the copper and gold deposit at Trafalgar.
Aerial view of the Trafalgar prospect looking south.
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HAMMER METALS LIMITED / Annual Report 2021
▲ Trafalgar
Trafalgar is a north-northeast trending copper-gold prospect located on the
regional scale Fountain Range Fault.
■ 15m at 1.15% Cu and 0.35g/t Au from 92m in
HMTRRC003
■ 15m at 0.63% Cu and 0.15g/t Au from 29m in
HMTRRC004
■ 16m at 0.88% Cu and 0.34g/t Au from 192m in
HMTRRC006, including:
o 9m @ 1.28% Cu and 0.5g/t Au from 195m;
■ 19m at 0.70% Cu and 0.17g/t Au from 117m in
HMTRRC007, including
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The Trafalgar deposit remains open to the north and at depth with
new zones of mineralisation being discovered to the west of the
deposit. Evidence of a fault offset to the south of the deposit was
identified and further testing of this zone was not possible with
the finite budget and drilling program agreed during the JOGMEC
sales process. The southern extension will be considered as a
potential target zone in the upcoming drilling program.
Small scale historical mining occurred at the prospect until the
Mining Lease was abandoned in early 2017. The Trafalgar Mine
had been held under a Mining Lease by a non-related party since
the late 1970’s and as a result, the two Joint Venture holes drilled
in December 2020 were the first known exploration drill holes
conducted on the property.
The two holes were drilled on lines approximately 140m apart as
an initial test of the width and tenor of the prospect. Both holes
intersected copper mineralisation with a significant gold credit.
Significant intersections included (refer ASX announcement 20
January 2021):
■ 55m at 1.12% Cu and 0.30g/t Au from 119m including
16m at 1.77% Cu and 0.49g/t Au from 149m in
HMTRRC001 with maximum individual grades of
1.96g/t Au and 3.2% Cu; and
■ 60m at 1.04% Cu and 0.25g/t Au from 64m including
6m at 2.38% Cu and 1.45g/t Au from 91m in
HMTRRC002 with maximum individual of 3.22g/t Au
and 7.58% Cu.
Additional drilling was completed at Trafalgar in February and
June with an additional 7 holes completed for 1256m. The aim
of the additional drilling program at Trafalgar was to test along
strike and below previous intersections in addition to testing for
mineralised zones in the hanging wall. Significant intersections
from these two programs were (refer ASX announcement 24
September 2021):
Example of sulphide mineralisation encountered in drilling
at Trafalgar (HMTRRC001, 151-152m
(refer ASX announcement 20 January 2021)
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HAMMER METALS LIMITED / Annual Report 2021
Operations Summary
Even Steven Area
▲ Trafalgar Trend
The Trafalgar mineralised trend is defined by extensive copper-gold soil
anomalism and a strong magnetic ridge with multiple historic workings
over a strike length of over 3km.
The trend has had very little systematic exploration completed.
The scale of the mineralised system and the nature of the
alteration and mineralisation present provides encouragement
for locating new copper-gold zones along the trend. Apart from
Trafalgar, this trend is not tested by drilling.
Recent field mapping has identified new outcropping zones of
copper mineralisation within the trend.
Alteration, the presence of magnetite and elevated light rare earth
elements (with individual maximum grades of 0.20% Ce and
0.16% La in HMTRC006, refer ASX announcement 24 September
2021) are all indicative of an IOCG system.
Geological mapping indicates the presence of a red rock-
magnetite alteration zone which spans the central mineralised
trend and extends along strike.
At a broader scale the Trafalgar trend is marked by attenuated
magnetic and conductive highs which highlight the target zone
for immediate exploration and future drill testing.
Ivanhoe Copper Outcrop (left) and Lady Northcote
Copper Oxide Outcrop (right)
Old shaft at Victory, to the south of Trafalgar (left) and
massive sulphides from these workings (right) (See ASX
announcement 9 February 2021)
Trafalgar Trends and Prospects
(background is RTP magnetic image)
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HAMMER METALS LIMITED / Annual Report 2021
Mt Philp Area
▲ Shadow, Toby and Charlie
Drilling was also conducted at the Shadow (2 holes), Alpha, Juliett, Bravo
and Charlie prospects.
At Shadow, two holes for 399m were drilled approximately 180m
north of HMSHDD001. The aim of the holes was to test the
northern extent of the Shadow prospect in the area with the
highest magnetic response. The drilling encountered low levels
of Cu and Au anomalism (refer ASX announcement 20 January
2021). The Shadow prospect occurs at the northern end of a
4.7km long anomalous trend marked by elevated Cu, Au and
magnetic responses. The Joint Venture continues to assess the
potential to drill targets further south along this trend.
A strong coherent gold anomaly to the north of the Shadow trend
was identified through the soil geochemical surveys completed
by the Joint Venture. A follow up soil sampling program has been
initiated over this area with the intention of defining a drill ready
gold target to the north of the Shadow prospect.
Three holes were drilled for 792m at the Alpha, Bravo and
Juliett prospects. At the Bravo prospect HMTBRC002 tested a
subvertical EM plate defined in mid-2020. This hole intersected
graphite rich carbonaceous metasediment which is likely
the source of the conductive response. HMTBRC001 and
HMTBRC003 were designed to test anomalous soil responses at
the Juliett and Alpha prospects. HMTBRC003 intersected (refer
ASX announcement 20 January 2021):
■ 5m at 0.18% Cu and 0.11g/t Au from 106m and 1m @
0.21% Cu and 0.14g/t Au from 131m
At Charlie, the Joint Venture drilled one hole (HMCHRC001) to
test beneath a Cu-Zn-Ag gossanous zone. The hole intersected
a weakly mineralised zone of sulphide mineralisation from 51m
with mineralisation of 1m at 0.3% Cu, 48.7g/t Ag and 0.3% Zn
over 1m recorded.
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Location of Mt Isa East Joint Venture prospects drilled in
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Operations Summary
Shadow trend and Fountain Range soil sampling program extents (refer ASX announcement 9 December 2020)
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HAMMER METALS LIMITED / Annual Report 2021
Malbon and Dronfield Area
Soil sampling was conducted over the Mount Isa East JV Dronfield and
Malbon project areas.
The aim of the sampling program was to investigate magnetic
and gravity anomalies. The assays for these programs consisted
of a mix of 4 acid digest and partial leach soil sampling. The broad
spaced programs have defined zones of anomalism which will
now be examined in further detail with closer spaced soil surveys
during the FY22 year.
Dronfield and Malbon soil sampling program (See ASX announcement 26 July 2021)
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HAMMER METALS LIMITED / Annual Report 2021
Operations Summary
Trafalgar Trend extending into Hammer’s 100% owned project areas showing the location of Pearl, Lakeside and Smoko
Gossan Prospects approximately 7km to the north of Trafalgar
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HAMMER METALS LIMITED / Annual Report 2021
Yandal Gold Projects (WA)
Hammer holds a 100% interest in approximately 290sqkm of tenements,
located within the Yandal greenstone belt in Western Australia.
The Company acquired these projects in 2019 and has been
busy exploring and expanding its footprint in a prime gold
exploration region, located, close to existing infrastructure. The
Company remains keen to increase its exploration footprint in
this prospective region.
There are three main target areas:
1. The Bronzewing mineralised corridor extending for 5km
to the south of the 2.3 Moz Bronzewing Mine. This area is
considered highly prospective due to the area’s disrupted
exploration history and extensive blanketing by barren
transported cover. Previous drilling highlighted several
anomalous zones within the Bronzewing corridor which
have received limited follow-up with deeper RC and diamond
drilling. The previous drilling only tested for north-south lode
orientations which did not consider the inherent structural
complexity and variable orientation of the Bronzewing lodes.
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2. The Orelia trend shear zones extending for 15km along strike
to the north of the Lotus pit and adjacent 1Moz Orelia gold
deposit. RAB interface and Aircore drilling to an average
depth of <30m along the trend outlined numerous bottom-
of-hole gold anomalies (0.1-1g/t Au) some of which have not
been tested by deeper RC or diamond drilling.
3. The Kens Bore quartz vein target is located 11km southeast
of Bronzewing. Several strongly anomalous gold results in
rock chips coinciding with a 3km long gold-in-soil anomaly
at a granite – basalt contact marked by quartz veining.
During the year the Company completed a detailed reverse
circulation program (3,442m) targeting prospective gold
anomalies at North Orelia and Bronzewing South whilst also drill
testing a prospective electromagnetic anomaly at Ken’s Bore.
Hammer also completed ~1,202m of diamond drilling in two
holes targeting gravity low features approximately 5km south of
the Bronzewing gold mine. An extensive 9,700m aircore program
of 309 holes at several North Orelia geochemical targets was
also completed during the period.
Yandal Gold Project Areas
Bronzewing South Tenements
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HAMMER METALS LIMITED / Annual Report 2021
Operations Summary
Bronzewing South Gold Project
▲ Bronzewing South
The diamond drilling program at Bronzewing South, part funded by the
Western Australian Government Exploration Incentive Scheme grant,
was undertaken to test two gravity low targets considered to represent
potential alteration zones associated with gold mineralisation south of the
Bronzewing gold mine.
Results from BWSDD001 include 14m @ 0.14g/t Au from 202m.
This drillhole tested the edge of the interpreted gravity anomaly
and still encountered a significant zone of quartz and carbonate
veining with low levels of gold mineralisation. BWSDD003
tested a similar gravity low approximately 500m to the south of
BWSDD003.
As with BWSDD001 vein intensity was strongest in gravity lows,
however downhole gold anomalism was limited. Despite this
the intersection of the quartz and carbonate veining supports
Hammer’s targeting rationale and offers encouragement for other
target areas within the Bronzewing south tenement.
BWSDD001 212.2-216.7m. The core shows the vein styles and alteration accompanying mineralisation at Bronzewing
South. This zone is accompanied by fine grained disseminated pyrite. (see ASX announcement 15 January 2021)
A single RC hole targeted an intersection zone between northeast
trending faults and the eastern shear. The hole encountered a
broad low-grade mineralised envelope of 96m at 0.39g/t Au
from 48m (see ASX announcement 15 January 2021). Peak gold
grades are associated with quartz veined pyritic mafic units with
an elevated magnetic response. Intercepts of interest were:
■ 17m at 1.56g/t Au from 120m in drill hole
BWSRC0037, including; 1m at 19.69g/t Au from 123m
The identification of these zones along with an improved
understanding of the structure and stratigraphy plunging to the
south of the Bronzewing deposit is assisting in defining potentially
shallower targets closer to the tenement boundary.
Of most interest, is the corridor that sits in an analogous position
to the Bronzewing Gold mine. This corridor is defined by the
Bapinmarra dolerite unit to the west and an eastern share zone.
It is interpreted that within this corridor the mineralised trend is
plunging at 10 to 20 degrees to the south.
This target volume is traversed by several northeast trending
faults which are considered contributory to the location of
mineralisation at Bronzewing. Hammer has defined several
targets at the intersection of these key features which will be
progressively tested by a potential combination of reverse
circulation and diamond drilling.
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HAMMER METALS LIMITED / Annual Report 2021
A detailed gravity survey conducted at a 50m spacing was
undertaken to extend the coverage of a previously completed
survey across the immediate southern strike extension of the
Bronzewing Deposit. (Refer to ASX announcement dated 13
October 2020). The survey has assisted in refining the structural
framework and exploration model for the Bronzewing South
prospect, outlining five target zones directly south of the original
Bronzewing gold pits. These targets remain untested at depth
yet sit in a favourable structural corridor with several attractive
geophysical attributes.
Two of the five targets were partially tested by a 2020 diamond
drilling program (refer to ASX announcement dated 15 January
2021). This initial testing confirmed the location of prospective
stratigraphy within the Hammer Metals project area and the
presence of altered and mineralised material co-incident with
a gravity low
Hammer intends to target the third of these five targets located
only 300m south of the Bronzewing deposit in an upcoming
reverse circulation drilling program. Drill planning is complete
and program organisation is underway for a late October
mobilisation.
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Long section looking west through the Bronzewing South area showing the five targets identified in the detailed gravity
survey. Hammer plans to test the most northern anomaly in the upcoming drilling program.
(See ASX announcement 9 December 2020)
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Operations Summary
Bronzewing South area showing Hammer targets (See ASX announcement 25 August 2021)
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HAMMER METALS LIMITED / Annual Report 2021
Bronzewing South Gold Project
▲ North Orelia
These tenements are situated to the North of the McClure
group of deposits which include the Orelia and Lotus gold deposits.
The North Orelia tenements comprise of tenements
E36/869, 870, 916 and 1006. In addition to our first RC
program at North Orelia, Hammer tested several targets
with extensive air core programs. During the year, the
Company completed its first reverse circulation program
at two target areas along with further air core drilling.
Hammer also completed a ~9,700m aircore program in May
to test several new prospects with previously untested soil
geochemical targets on the northern Orelia trend. This work was
partly funded by a Western Australia Government Exploration
Initiative Scheme grant.
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▲ North Orelia - Target 1
The RC drilling program at Target 1 aimed to further test key structural
positions below the depth of weathering along a 2km mineralisation trend
that was identified through Hammer’s previous air core drilling programs.
The reverse circulation program consisted of 2,111m of drilling (20
holes). Significant intercepts included (see ASX announcement
15 January 2021):
■ 8m at 4.2g/t Au from 20m in BWSRC0025 including:
1m at 27.1g/t Au from 26m;
■ 4m at 6.3g/t Au from 77m in BWSRC0028;
■ 7m at 1.2g/t Au from 85m in BWSRC0031
including1m at 3.5g/t Au from 88m;
■ 14m @ 1.87g/t Au from 67m in BWSRC018
including4m @ 6.31g/t Au from 77m; and
■ 5m at 3.5g/t Au from 25m in BWSRC0026
including:1m at 16.6g/t from 25m;
■ 7m @ 1.17g/t Au from 85m including1m @ 3.50g/t Au.
▲ North Orelia - Target 4
Target 4 is located 1km along strike to the north of Northern Star’s
(ASX:NST) 1Moz Orelia Resource.
Orelia and the former Lotus and Cockburn deposits are located
within a fault bounded corridor and associated with regional
structures such as the Lotus Fault. Hammer Metals has been
progressively testing this corridor to identify specific stratigraphic
units and discern major fault zones.
Two RC holes for 330m were drilled to gather further geological
knowledge and test the prospective stratigraphy at Target 4. This
drilling confirmed the position of a semi-massive sulphide unit
which is also present on the western edge of the Orelia deposits
and is a stratigraphic marker for the prospective mineralised zone
at Target 4. Gold mineralisation was identified in one of the holes
drilled at this target with an intercept of 3m at 0.3g/t Au from 51m in
BWSRC0035. The semi-massive sulphide was also anomalous for
zinc. The information gathered from drilling at Target 4 highlights
the corridor in which Hammer will focus future drilling programs.
Example of sulphide mineralisation encountered in drilling
at Trafalgar (HMTRRC001, 151-152m
(see ASX announcement 20 January 2021)
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HAMMER METALS LIMITED / Annual Report 2021
Operations Summary
North Orelia Target 1 Plan (see ASX announcement 15 January 2021)
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HAMMER METALS LIMITED / Annual Report 2021
Bronzewing South Gold Project
▲ North Orelia -Target 2
The northern portion of Target 2 was tested by air core drilling with 47
holes for 745m. This drilling targeted the southern margin of a fractionated
granite. The best result from this target was 4m at 0.19g/t Au from 8m in
BWSAC0794 which was overlain by a plus 5ppb Au-in-soil anomaly.
▲ North Orelia - Target 3
Drilling at Target 3 extended the strike length of known mineralisation up
to 3.2km.
The 76 holes of air core drilling (2418m) targeted a shear zone with
significant intercepts of (see ASX announcement 25 August 2021):
■ 4m at 0.52g/t Au from 32m in BWSAC0638A;
■ 8m at 0.21g/t Au from 40m in BWSAC0641; and
■ 4m at 0.55g/t Au from 24m in BWSAC0653.
Drilling at three holes at Target 3 finished in anomalous zones
of gold mineralisation – including (see ASX announcement 25
August 2021);
■ 0.15g/Au from 8m in BWSAC0736, 0.11g/t Au
from 14m in BWSA0800, and 0.12g/t Au from 45m
BWSAC0640
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The zone is located on the eastern margin of the Orelia
mineralisation trend and is associated with elevated Arsenic,
Antimony and Tellurium.
▲ North Orelia - Eastern Granite
This target is located partly within a granite bordering the eastern margin
of the Orelia trend where soil geochemical sampling had defined a1.1km
by 300m gold anomaly.
No previously drilling had been conducted over this target.
Hammer Metals tested the area with 126 air core holes (3101m).
Significant geochemical intercepts of 8m at 0.12g/t Au from 20m
in BWSAC0621 and 4m at 0.15g/t Au from 12m in BWSAC0622
(see ASX announcement 25 August 2021) were associated with a
north-northwest trending shear zone on the margin of the granite.
Both holes terminated in anomalous mineralisation. Shear zones
within granites are attractive targets within the Yandal Belt and,
in some cases host economic mineralisation such as Northern
Star’s Ramone Deposit.
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HAMMER METALS LIMITED / Annual Report 2021
Operations Summary
North Orelia Trend Targets three and four showing significant Hammer Drilling Intercepts (Background image Magnetics)
(see ASX announcement 25 August 2021)
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HAMMER METALS LIMITED / Annual Report 2021
Bronzewing South Gold Project
▲ Ken’s Bore
Two reverse circulation holes for 480m were drilled to test an EM anomaly.
These holes encountered massive and semi massive sulphide with
true widths of up to 50m.
Intersected gold results include:
■ 11m @ 0.11g/t Au from 123m in BWSRC040; and
■ 2m @ 0.12g/t Au from 175m in BWSRC041
Significantly, the broad intervals of massive sulphide occur at the
contact of an ultramafic unit that extends through the Ken’s Bore
tenement.
▲ North Orelia - Eastern Granite
Several nickel sulphide prospects occur in association with similar
ultramafic units in the district and the presence of other untested
EM anomalies along this unit upgrades the nickel potential within
this tenement. Hammer is examining these untested anomalies in
further detail(see ASX announcement dated 15 January 2021).
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This target is located partly within a granite bordering the eastern margin
of the Orelia trend where soil geochemical sampling had defined a 1.1km
by 300m gold anomaly.
No previously drilling had been conducted over this target.
Hammer Metals tested the area with 126 air core holes (3101m).
Significant geochemical intercepts of 8m at 0.12g/t Au from 20m
in BWSAC0621 and 4m at 0.15g/t Au from 12m in BWSAC0622
(see ASX announcement 25 August 2021) were associated with a
north-northwest trending shear zone on the margin of the granite.
Both holes terminated in anomalous mineralisation. Shear zones
within granites are attractive targets within the Yandal Belt and,
in some cases host economic mineralisation such as Northern
Star’s Ramone Deposit.
Ken’s Bore RC Drill chips with broad massive sulphide zone
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HAMMER METALS LIMITED / Annual Report 2021
Operations Summary
Kens Bore composite section showing both BWSRC040 and BWSRC041 (See ASX announcement 15 January 2021)
View looking north showing the proximity of the Bronzewing Deposit to E36/854
Pilbara Iron Ore (WA)
Subsequent to the year end, the Company divested its early stage Iron Ore project in Western Australia for a consideration of $325,000
and a future NSR royalty of 0.5% on all Iron Ore sales.
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HAMMER METALS LIMITED / Annual Report 2021
Competent Persons Statement
▲ Exploration Results
The information in this report as it relates to exploration results
and geology was compiled by Mr. Mark Whittle, who is a fellow
of the AusIMM and an employee of Hammer Metals Limited.
Mr. Mark Whittle, who is also a share and option holder in the
Company, has sufficient experience which is relevant to the styles
of mineralisation and deposit types under consideration and to
the activity which he is undertaking to qualify as a Competent
▲ Mineral Resource Estimates
Person as defined in the 2012 Edition of the Australasian Code
for Reporting of Exploration Results, Mineral Resources and
Reserves. Mr. Whittle consents to the inclusion in the report of
the matters based on the information in the form and context in
which it appears.
Where the company refers to Mineral Resource Estimates for the
following prospects:
■ the Kalman deposit (ASX 27 September 2016); and
■ the Jubilee deposit (ASX 20 December 2018)
it confirms that it is not aware of any new information or data that
materially affects the information included in those announcements
and all material assumptions and technical parameters
underpinning the resource estimates continue to apply and have
not materially changed.
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HAMMER METALS LIMITED / Annual Report 2021
Annual Mineral Resource Statement
Annual Mineral Resource Statement
As of 30 June 2021
The Company’s Mineral Resource Statement has been compiled in accordance with the Australian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves (The JORC Code 2012 and 2004 Editions) and Chapter 5 of the ASX Listing Rules
and ASX Guidance Note 31. The Company has no Ore Reserve estimates.
The Company governs its activities in accordance with industry best-practice. The reported estimates for Overlander and Kalman
were generated by reputable, independent consulting firms. The resource reports and supporting data were subjected to internal
analysis and peer-review before release.
In 2016, Hammer Metals Limited commissioned Haren Consulting Pty Ltd to update the Kalman Resource based on new drilling and
geological interpretation. The resource was issued on the 27th of September 2016.
In November 2018, H&S Consultants Pty Ltd was commissioned to undertake a resource estimate on the Jubilee Cu-Au Deposit.
The resource was issued on 12 December 2018.
The estimate is based on good quality RC and Diamond drilling data. The estimate was based on a 42 reverse circulation holes
for 5475m and 3 diamond holes for 261m. Of these holes 26 were drilled by Hammer Metals Ltd and the remaining 19 drilled by
the previous operator. Drilling extends to a maximum depth of 325m below surface. The drill hole spacing is approximately 50m
along strike.
There has been no material change to the Jubilee Resource estimate since its initial release to the ASX dated 20 December 2018.
The company has not reported the Mineral Resource Estimate over the West Pilbara Iron Ore Deposit, as this immaterial, non-core
asset was divested subsequent to the end of the year.
In relation to the Kalman, Overlander, Elaine, Mt Philp, and Jubilee Resources, there have been no material changes to the Resource
Estimates during the reporting period.
Resource Project
Mineral Resource
Competent Person
Mr. L. Burlet
Ms. E. Haren
Ms. E. Haren
Mr. C. Allen
Organization
ASX Reporting Date
H&S Consultants Pty Ltd
December 12th, 2018
Haren Consulting
September 27th 2016
Haren Consulting
August 26th 2015
CSA Global Pty Ltd
July 26th 2010
Mr. T. Leahey
Cerro Resource NL
September 28th 2012
Jubilee
Kalman
Overlander
West Pilbara
Mt. Philp
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HAMMER METALS LIMITED / Annual Report 2021
▲ Jubilee Deposit JORC 2012 Mineral Resource Estimate (12 December, 2018)
(Reported at 0.5% Cu cut-off)
Classification Weathering Domain
Tonnes
Inferred
Inferred
Total
Mod-Slightly Weathered
Fresh
0.07
1.34
1.41
Cu
%
1.51
1.41
1.41
Au (Cut)
g/t
Cu
Tonnes
Au (Cut)
Ounces
0.55
0.63
0.62
1,000
1,200
19,000
27,100
20,000
28,300
■ Note: (1) Numbers rounded to two significant figures to reflect appropriate levels of confidence
■ Note: (2) Totals may differ due to rounding
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The 51%-owned Jubilee Deposit is situated 50 kilometres west of Mount Isa in North West Queensland.
In November 2018, H&S Consultants Pty ltd was commissioned to undertake a resource estimate on the Jubilee Cu-Au Deposit. The
resource was issued on 12 December 2018.
The estimate is based on good quality RC and Diamond drilling data. The estimate was based on a 42 reverse circulation holes for
5475m and 3 diamond holes for 261m. Of these holes 26 were drilled by Hammer Metals Ltd and the remaining 19 drilled by the
previous operator. Drilling extends to a maximum depth of 325m below surface. The drill hole spacing is approximately 50m along strike.
There has been no material change to the Jubilee Resource estimate since its initial release to the ASX dated 20 December 2018.
Refer to the ASX release dated 20 December, 2018. The company is not aware of any new information or data that materially affects
the information in the HMX ASX announcement. All material assumptions and technical parameters underpinning the mineral resource
estimate continue to apply and have not materially changed.
▲ Kalman Deposit JORC 2012 Mineral Resource
Estimate (27 September, 2016)
Classification Mining Method
CuEq
Cut-off
Tonnes
Kt
CuEq
%
Indicated
Open Pit
0.75%
7,100
Inferred
Inferred
Total
Open Pit
0.75%
6,200
Underground
1.4%
7,000
20,000
1.5
1.6
2.4
1.8
Cu
%
0.48
0.44
0.89
0.61
Mo
%
0.12
0.15
0.16
0.14
Au
ppm
0.27
0.24
0.50
0.34
Ag
ppm
Re
ppm
1.4
1.5
2.9
1.9
2.9
3.9
4.5
3.7
■ Note: (1) The copper equivalent equation is: CuEq= Cu+(0.864268*Au)+(0.011063*Ag)+(4.741128*Mo)+(0.064516*Re)
■ Note: (2) Copper Equivalent Price assumptions are: Cu: US$4,650/t; Au: US$1,250/oz; Ag: US$16/oz; Mo: US$10/lb; and
Re: US$3,000/kg.
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HAMMER METALS LIMITED / Annual Report 2021
Annual Mineral Resource Statement
The Kalman Molybdenum-Rhenium-Copper-Gold-Silver (Mo-Re-Cu-Au-Ag) deposit is situated 60 kilometres southeast of Mt Isa within
the Mt Isa Inlier, and forms part of the company’s Kalman Project.
Drilling extends to a maximum down hole depth of 998.3 metres and the mineralisation was modelled from surface to a depth of
approximately 800 metres below surface. The estimate is based on good quality RC and diamond core drilling data. The drill hole
spacing is approximately 100 metres along strike with some 50 metre-spaced infill drilling.
In September 2016, Haren Consulting was contracted by Hammer Metals Limited to complete an update of the Mineral Resource
estimate for the deposit. The estimate was reported to comply with the 2012 Edition of the ‘Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves’ by the Joint Ore Reserves Committee (JORC).
The Kalman Mineral Resource has been reported at two cut-off grades to reflect both open pit and underground mining scenarios.
The Kalman Mineral Resource estimate comprises a combined 20 million tonnes at 1.8% copper equivalent (CuEq) at 0.61% copper,
0.34 g/t gold, 0.14% molybdenum and 3.7 g/t rhenium in the Indicated and Inferred categories at revised cut-off grades. (Refer to
the ASX release dated 27 September 2016).
The Kalman Mineral Resource Estimate disclosed as part of the 2015 review was last updated in March 2014 in accordance with
the JORC Code (2012 Edition). The Resource estimate comprised a combined 30 million tonnes at 1.3% copper equivalent (CuEq)
at 0.54% Cu, 0.28% Au, 0.08% Mo and 2.2 g/t Re in the Inferred category. (Refer to the ASX Release dated 19 March 2014 for full
details of the Resource Estimate.)
▲ Kalman Deposit Mineral Resource Estimate (2015)
(Reported at 0.3% CuEq cut-off above 100m RL and 1.0% CuEq cut-off
below 100m RL)
Classification
Mining
Method
Tonnes
kt
CuEq
%
Inferred
Inferred
Total
Open Pit
22,000
Underground
8,300
30,000
1.1
1.9
1.3
Cu
%
0.42
0.87
0.54
Au
ppm
0.22
0.42
0.28
Ag
ppm
1.1
2.0
1.3
Mo
%
0.07
0.11
0.08
Re
ppm
1.9
2.9
2.2
■ Note: (1) Numbers rounded to two significant figures
■ Note: (2) Totals may differ due to rounding
■ Note: (3) (CuEq = Cu + 0.594464Au + 0.010051Ag + 4.953866Mo + 0.074375Re)
The reasons for the update were:
■ 8 holes (K131-K132 and K134-139) drilled by Hammer in 2014 were incorporated into the resource model. The drill
holes intersected multiple, relatively shallow high-grade molybdenum and copper intersections which were considered
to have the potential to enhance the existing mineral resource model.
■ The deposit was re-interpreted to improve mineralisation constraints.
The 2016 resource update differed from the 2014 update in that the resulting total resource tonnage was reduced from 30,000kt to
20,000kt and average metal grades increased, primarily due to the use of more elevated cut-off grades.
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HAMMER METALS LIMITED / Annual Report 2021
▲ Overlander North And South Deposits JORC 2012
Mineral Resource Estimates (26 August, 2015)
(Reported at 0.7% Cu cut-off)
OVERLANDER NORTH MINERAL RESOURCE
Classification
Tonnes
Indicated
Inferred
Total
253,000
870,000
1,123,000
Cu
%
1.4
1.3
1.3
Co
ppm
254
456
410
Cu
Tonnes
3,414
11,350
14,764
■ Note: (1) Numbers rounded to two significant figures to reflect appropriate levels of confidence
■ Note: (2) Totals may differ due to rounding
OVERLANDER SOUTH MINERAL RESOURCE
Classification
Tonnes
Indicated
Inferred
Total
-
649,000
649,000
Cu
%
-
1.0
1.0
Co
ppm
-
500
500
Cu
Tonnes
-
6,352
6,352
■ Note: (1) Numbers rounded to two significant figures to reflect appropriate levels of confidence
■ Note: (2) Totals may differ due to rounding
OVERLANDER NORTH AND SOUTH COMBINED MINERAL RESOURCE
Classification
Tonnes
Indicated
Inferred
Total
253,000
1,518,000
1,772,000
Cu
%
1.4
1.2
1.2
Co
ppm
254
476
445
Cu
Tonnes
3,414
17,700
21,112
■ Note: (1) Numbers rounded to two significant figures to reflect appropriate levels of confidence
■ Note: (2) Totals may differ due to rounding
Co
Tonnes
64
396
461
Co
Tonnes
-
327
327
Co
Tonnes
64
723
788
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HAMMER METALS LIMITED / Annual Report 2021
Annual Mineral Resource Statement
The 100%-owned Overlander Project is situated 60 kilometres to the southeast of the mining centre of Mount Isa in North West
Queensland and 6 kilometres to the west of Hammer’s Kalman copper-gold-molybdenum-rhenium deposit. It is a high-priority target
area for both shear-hosted copper and IOCG copper mineralisation. The Overlander North and South Copper Deposits are situated
approximately one kilometre apart within a common shear zone.
Drilling in the Overlander North deposit extends to a vertical depth of approximately 430m and the mineralisation was modelled from
surface to a depth of approximately 420 metres below surface. Drilling in the Overlander South deposit extends to a vertical depth of
approximately 215 metres and the mineralisation was modelled from surface to a depth of approximately 180m below surface. The
resource estimates are based on good quality RC and diamond drilling data. Drill hole spacing is predominantly on a 40 metre by
20 metre spacing with additional drill holes between sections targeted at the higher-grade cores of the deposits.
Following additional drilling in 2014 and 2015, the Mineral Resource Estimates for the Overlander North and South shear-hosted
copper Deposits were revised by Haren Consulting Pty Ltd and reported in accordance with the guidelines of the JORC Code (2012
Edition). They contain combined resources of 1,772,000 tonnes at 1.2% copper in the indicated and inferred categories (Refer to the
ASX release dated 26 August 2015). There has been no material change to the Overlander resource base during the financial year.
▲ Elaine Mineral Resource
CuEq cut-off %
0.10
0.20
0.25
0.30
0.40
0.50
0.60
0.70
0.80
Mt
64.34
32.77
26.10
22.81
17.81
15.05
12.47
9.31
6.46
CuEq %
0.34
0.54
0.62
0.67
0.76
0.82
0.88
0.95
1.04
Cu %
0.31
0.49
0.56
0.60
0.68
0.73
0.77
0.82
0.87
Au g/t
0.05
0.08
0.09
0.10
0.12
0.13
0.15
0.19
0.25
The 100%-owned Elaine Cu-Au deposit is situated on granted exploration licence 14022, approximately 50km east of Mount Isa in
North West Queensland.
A resource estimate was first completed and reported to ASX by previous owners (Chinalco Yunnan Copper Resources Limited, now
AUKing Limited) on 18th October 2012. The resource was conducted by Mine Development Associates. The company is not aware
of any new information or data that materially affects the information in the AKN ASX announcement. All material assumptions and
technical parameters underpinning the mineral resource estimate continue to apply and have not materially changed.
A review of the Resource Estimate was completed for the purpose of compiling this statement and the principles and methodology
of the resource estimation procedure and the resource classification procedure are considered to comply.
The Elaine Project Mineral Resource Estimate is based on approximately 30 holes to a depth of 450 metres below surface.
The current resource totals 9.3 million tonnes (Mt) grading 0.82% Cu and 0.19g/t Au and is classified as being all in the Inferred
category. The resource is tabulated below at a variety of CuEq % cut-offs.
ELAINE INFERRED MINERAL RESOURCE ESTIMATE METAL EQUIVALENT INFORMATION
The Copper Equivalent (CuEq) equation has been calculated to reflect current and forecast pricing.
CuEq grades were calculated using estimated block grades for Cu and Au. Metal prices used were:
■ Cu: US$5,400/t;
■ Au: US$1,300/oz;
The copper equivalent equation is: CuEq % = Cu % + (Au ppm * 0.70216).
Cut-offs of 0.7% have been applied for reporting Mineral Resources.
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HAMMER METALS LIMITED / Annual Report 2021
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▲ Mt. Philp Deposit JORC 2004 Mineral Resource Estimate (12 March, 2012)
Classification
Tonnes
Indicated
19,110,000
Inferred
Total
11,400,000
30,510,000
Fe
%
41
34
39
P
%
0.02
0.02
0.02
SiO2
%
Al2O3
%
38
48
42
1.3
2.0
1.6
TiO2
%
0.38
0.46
0.41
LOI
%
0.29
0.31
0.30
■ Note: (1) Numbers rounded to two significant figures to reflect appropriate levels of confidence
■ Note: (2) Totals may differ due to rounding
The Mount Philp Iron Ore deposit is located in north-western Queensland, 1,500 kilometres northwest of Brisbane. The Mineral
Resource Estimate is based on 48 diamond and reverse circulation (RC) drillholes completed in 2011 for a total of 3,801 metres.
Drilling comprises fans located on a nominal 100 metre pattern along the strike length of the ironstone. The Mineral Resource was
estimated and reported in-house by Cerro Resource NL.
The current resource totals 19.1 million tonnes grading 41.4% iron and 37.9% silica in the Indicated category and 11.4 million tonnes
grading 33.8% iron and 47.4% silica in the Inferred category. This resource is open at depth.
A resource estimate was first completed and reported to ASX by previous owners on 28th September 2012 and there has been no
material change to the resource base during the financial year. A review of the resource estimate was completed for the purpose of
compiling this statement and the principles and methodology of the resource estimation procedure and the resource classification
procedure have been reconciled with the CIM Resource Reserve definitions and found to comply.
▲ Governance And Internal Controls – Resource Calculations
The Company ensures good governance in relation to resource estimation through the use of third-party resource consultants and
internal review in accordance with industry best practice. All reported resource estimates were generated by reputable, independent
consulting firms. The resource reports and supporting data were subjected to internal analysis and peer review before release. The
Company is not aware of any additional information, other than that reported, which would have a material effect on the estimates
as reported.
Due to the nature, stage and size of the Company’s existing operations, the Board believes there would be no efficiencies gained
by establishing a separate mineral reserves and resources committee responsible for reviewing and monitoring the Company’s
processes for calculating mineral reserves and resources estimates and for ensuring that the appropriate controls are applied to
such calculations.
The Company will report any future mineral reserves and resources estimates in accordance with the 2012 JORC Code.
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HAMMER METALS LIMITED / Annual Report 2021
Annual Mineral Resource Statement
Competent Persons Statement
The information in this Annual Mineral Resources Statement is based on, and fairly represents information and supporting
documentation reviewed by Mr Mark Whittle, a Competent Person who is a fellow of the AusIMM and an employee of Hammer Metals
Limited. Mr Whittle, who is a share and option holder of the company, has sufficient experience which is relevant to the styles of
mineralisation and deposit types under consideration and to the activity which he is undertaking to qualify as a Competent Person
as defined in the 2004 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves
(2004 JORC Code) and the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore
Reserves (2012 JORC Code). Mr Whittle consents to the inclusion in the report of the matters based on this information in the form
and context in which it appears.
44
HAMMER METALS LIMITED / Annual Report 2021
Tenement Interests
▲ Tenement Interests At End Of September 2020
Mt Isa (Queensland)
MT. DOCKERELL MINING PTY LTD
Lease
EPM 11919
EPM 13870
EPM 18084
EPM 25165
EPM 26474
EPM 26511
EPM 26628
EPM 26694
EPM 26775
EPM 26776
EPM 26777
EPM 26902
EPM 26904
EPM 27018
EPM27469
EPM27470
EPM27806
EPM27815
Lease Name
Lease Status
Interest
Cameron River
Pelican
Dronfield
Cameron River 4
Enterprise
Sling Shot
Argylla
Mt Philp
Pilgrim North
Pilgrim Central
Pilgrim South
Marriage
Jady Jenny
Dingo Creek
Mount Moran
China Wall
Roos
Lady Vampire
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
T
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HAMMER METALS LIMITED / Annual Report 2021
Tenement Interests
MULGA MINERALS PTY LTD
Lease
EPM 12205
EPM 14019
EPM 14022
EPM 14467
EPM 25145
EPM 25866
EPM 25867
EPM 26126
EPM 26127
EPM 26130
EPM 26512
EPM 27355
Lease
E08/1997
Lease Name
Lease Status
Interest
Cloncurry
South Mary K
North Mary K
Mt Frosty
Green Creek
Malbon
Mt Jasper
Cathay
Resolve
El Questro
Black Angel
Pioneer
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Lease Name
Lease Status
Cheela Plains
Granted
100%
100%
100%
51%
100%
100%
100%
100%
100%
100%
100%
100%
Interest
100%
Yilgarn (Western Australia)
CARNEGIE EXPLORATION PTY LTD
Lease
E36/854
E36/855
E36/868
E36/869
E36/870
E36/882
E36/916
E36/996
E36/1006
E53/1989
E53/1996
E53/2030
E53/2085
46
Lease Name
Lease Status
Interest
Kens Bore
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Application
Application
Granted
Granted
Granted
Granted
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
HAMMER METALS LIMITED / Annual Report 2021
Lease
E53/2112
E53/2113
E53/2114
E53/2115
E53/2116
E53/2127
E53/2128
P36/1857
P36/1858
P53/1682
P53/1683
P53/1684
P53/1685
P53/1686
P53/1687
P53/1688
P53/1689
P53/1690
P53/1691
P53/1692
P53/1693
P53/1694
P53/1695
P53/1696
P53/1697
Lease Name
Lease Status
Interest
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
T
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HAMMER METALS LIMITED / Annual Report 2021
Directors Report
Directors
Report
48
HAMMER METALS LIMITED / Annual Report 2021
The Directors present their report together with the financial report of Hammer Metals Limited (“the Company” or “Hammer”) and of
the Group, comprising the Company and its subsidiaries, for the year ended 30 June 2021 and the auditor’s report thereon.
▲ 1. Directors
The names and details of the Company’s directors in office during the
financial year or since the end of the financial year are set out below.
During his career, Mr Thomas has worked
across Australia, North America, Asia and
Africa, in a wide range of commodities,
including base and precious metals. Mr
Thomas’ most recent role before joining the
Company was as Business Development
Manager at Sandfire Resources (ASX:SFR),
where he was instrumental in utilising
cash-flows generated by the DeGrussa
Copper-Gold Mine to grow the Company
both organically through exploration and
through business development initiatives,
including several acquisitions, investments
and joint ventures. Prior to his time at
Sandfire Resources Limited, Mr Thomas
held roles with Wesfarmers, PTT Asia
Pacific Mining and Mitsui E&P Australia.
ZBIGNIEW LUBIENIECKI
RUSSELL DAVIS
Non-Executive Chairman
BSc (Honours) MBA MAusIMM, MAICD
Russell Davis is a Geologist with over
30 years’ experience in the mineral
resources business. He has worked on
the exploration and development of a
range of commodities for a number of
international and Australian companies,
holding senior technical and corporate
positions including Chief Mine Geologist,
Exploration Manager and Managing
Director. Mr Davis was a founding Director
of Gold Road Resources Limited and
also Syndicated Metals Limited where he
was Managing Director from December
2007 to March 2012. Mr Davis has been
a Director of Hammer Metals (Australia)
Pty Ltd since its inception in 2012.
Non-Executive Director
BSc (Applied Geology), MAIG
Zbigniew (“Ziggy”) Lubieniecki holds a
Bachelor of Science (Applied Geology)
and is an experienced exploration
geologist with more than 30 years’
experience in exploration, mining,
management, property acquisition and
company listings. Mr Lubieniecki has
held senior positions including Chief
Mine Geologist for Plutonic Resources
Limited and exploration Manager for
Australian Platinum Mines and was most
recently an Executive Director of Gold
Road Resources Limited. Mr Lubieniecki
has had a successful exploration career
including the discovery of the 6.2-million-
ounce Gruyere gold deposit.
DANIEL THOMAS
Managing Director
BSc (Applied Chemistry), MBA
Daniel Thomas has over 20 years’
experience in operations, corporate
development, project management
and project finance having completed
undergraduate studies in Chemistry and
Geology as well as attaining an BMA from
the Melbourne Business School.
DAVID CHURCH
Non-Executive Director
(appointed 1 July 2020)
LLB, BEc
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David Church is currently the non-
executive Chairman of Caprice Resources
Limited and a consultant to the Hong-
Kong Stock Exchange-listed Regent
Pacific Group Limited, performing the
functions of General Counsel and Head
of Mergers and Acquisitions. Mr Church
is a qualified solicitor and has practiced in
Australia with Clayton Utz, and in the UK
and Hong Kong with Linklaters.
49
HAMMER METALS LIMITED / Annual Report 2021
Directors Report
▲ 2. Directorships Of Other Listed Companies
Directorships of other ASX listed companies held by Directors in the 3
years immediately before the end of the financial year are as follows:
Name
Company
Russell Davis
Daniel Thomas
Zbigniew Lubieniecki
David Church
None
None
None
Caprice Resources Limited
Period of Directorship
-
-
-
October 2019 - current
▲ 3. Company Secretary
MARK PITTS – COMPANY SECRETARY
B.Bus, FCA, GAICD
Mr Pitts is a Chartered Accountant with over 25 years’ experience in statutory reporting and business administration. He has been
directly involved with, and consulted to, a number of public companies holding senior financial management positions. Mr Pitts is
a Partner in the corporate advisory firm Endeavour Corporate providing secretarial support, corporate and compliance advice to a
number of ASX listed public companies.
▲ 4. Directors’ Meetings
The number of Directors’ meetings held, and the number of meetings
attended by each of the Directors of the Company during their term in
office in the financial year is as follows:
Director
Mr R Davis
Mr D Thomas
Mr Z Lubieniecki
Mr D Church
Meetings held while in office
Meetings attended
4
4
4
4
4
4
3
3
The Company does not have any committees. Matters usually considered by an audit, remuneration or nomination committee were
dealt with by the whole Board during regular Board meetings.
50
HAMMER METALS LIMITED / Annual Report 2021
▲ 5. Principal Activity
The principal activity of the Group during the course of the financial year
was mineral exploration in Australia.
▲ 6. Operating And Financial Review
The Group incurred an after-tax loss for the year of $611,525 (2020: $1,978,610).
CORPORATE:
The following issues of ordinary shares were completed during
the year:
The following performance rights were exercised during the year:
■ 750,000 performance rights, vesting on 21 October
■ Between 1 July and 30 September 2020, the
2020.
■ 750,000 performance rights, vesting on 21 October
2020, subject to achieving a minimum share price of
$0.031 for a period of 30 days.
No performance rights were issued or expired during, or since
the end of the financial year.
EXPLORATION ACTIVITIES:
Hammer Metals Limited is exploring in two great minerals
provinces, focused on the discovery of gold and copper deposits.
Following a successful drilling program with the discovery of the
Trafalgar copper and gold deposit within the Mount Isa East
JV with the Japan Oil, Gas and National Metals Corporation
(“JOGMEC”), the company has embarked on an aggressive
exploration program across its Mount Isa holdings. Hammer
continues to advance its gold exploration activities in the Yandal
province testing a number of targets near the former Bronzewing
and Orelia gold mines
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Company received valid exercise notices of
167,105,021 of its HMXOD listed options, which were
exercisable at $0.03 on or before 30 September
2020. Through the exercise of these options, the
company raised $5,013,151.
■ On 8 December 2020, 875,206 ordinary shares were
issued to Directors of the Company in lieu of fees
totalling $23,500. These shares were approved by
shareholders at the Company’s 2020 Annual General
Meeting. Furthermore, on this date, 1,500,000
performance rights were exercised and converted
into fully-paid ordinary shares.
■ On 3 February 2021, 1,000,000 unquoted options
exercisable at $0.032 on or before 30 November
2022 were exercised.
■ On 30 April 2021, the Company completed a
placement of 45,789,473 ordinary shares at $0.095
per share, raising $4,350,000 before costs.
■ On 3 February 2021, and additional 250,000
unquoted options exercisable at $0.032 on or before
30 November 2022 were exercised.
■ On 26 May 2021, the Company completed its Share
Purchase Plan, issuing 10,526,254 shares at $0.095
per share to raise $999,994 before costs.
A total of 4,500,000 unquoted options exercisable at $0.05 were
issued to Directors of the Company on 8 December 2020, after
being approved by the shareholders of the Company at the 2020
Annual General Meeting.
The following options expired during the period:
■ 2,676,078 unquoted options exercisable at $0.07
expired, unexercised, on 1 September 2020.
■ 3,724,428 HMXOD quoted options exercisable at $0.03
expired, unexercised, on 1 October 2020
Since the end of the financial year, no options have been granted
or expired and no options have been exercised.
51
HAMMER METALS LIMITED / Annual Report 2021
Directors Report
QUEENSLAND - MOUNT ISA REGION PROJECTS
ownership of the JV interests are formally transferred.
Hammer is exploring its Mount Isa project for large iron
oxide copper-gold (IOCG) deposits of the Ernest Henry style
(approximately 220 million tonnes at 1.1% Cu and 0.5g/t Au). The
Group holds approximately 2,100 km2 of tenure in the Mt. Isa
region. A systematic IOCG targeting exercise within the Mount
Isa region is ongoing through the Mt Isa East JV and 100%
funded activities.
Mt. Isa project – wholly-owned projects
Hammer’s activities in Mount Isa were reinvigorated on the back
of the success within the Mt Isa East JV. Early work during the
year focused on the gold potential in proximity to the historic
Tick Hill mine with a number of promising prospects identified.
Work continues to develop these targets whilst recent activities
focused on prospective Copper and Gold targets in close
proximity to Hammer’s Kalman deposit and the prospective trend
running from Trafalgar through to the Jubilee deposit (of which
the Company has a 51% interest). In total, 6 separate areas were
drill tested; Lakeview, Neptune, Kings/Alice (Malbon), Kalman
West, Overlander and Serendipity. Key results include (See ASX
Announcement 22 June and 26 July 2021):
■ 100m at 0.48% Cu and 0.2g/t Au from 173m in
HMLRRC002 at Neptune (Lady Rose); and
■ 10m at 1.97% Cu and 0.24g/t Au from 23m in
HMLVRC003 at Lakeview
Further programs focusing in on the copper and gold
mineralisation at Neptune are likely in the new financial year
along with other prospects which are being advanced through
geochemical and geophysical surveys. A drilling program is likely
in the last quarter of the 2021 calendar year.
Mt Isa East Joint Venture
The Mt Isa East Joint Venture (the “JV”) with JOGMEC was
executed in late 2019 and field activities continued throughout
the financial year. The JV agreement allows JOGMEC to earn a
60% interest in approximately 290sq. km of tenure by expending
$6 million in five years. The JV encountered success with
the exploration program at Trafalgar with the initial two holes
intersecting (See ASX Announcement 20 January 2021):
WESTERN AUSTRALIA - BRONZEWING
SOUTH PROJECT
Hammer’s tenements cover prospective structural trends in the
core of the Yandal Greenstone Belt. This region has reported
greater than 24Moz of current and historical gold production
from deposits such as Bronzewing, Jundee, Mt McClure, Darlot
and Thunderbox.
Hammer continues to acquire tenure, progressively applying
for areas as they become available and acquiring low-cost
tenements from others in the region (See ASX announcement 1
March 2021). The company now holds approximately 300km2
of tenure in the Yandal gold province.
North Orelia
Hammer’s tenements cover prospective trends along strike from
the former Lotus and Cockburn Deposits (of the Mt McClure
group) and the current 1.1Moz Orelia gold resource owned by
Northern Star Resources (ASX:NST). Hammer completed an
extensive air core and reverse circulation drilling program during
the year.
Hammer was able to complete 309 air-core holes for 9,700m
during the period (Refer to ASX release dated 25 August 2021).
A total of 2,111m of drilling in 20 holes was completed at Target
1 at North Orelia, focusing on a 2km stretch of gold anomalism
identified in previous Hammer air core drilling. At Target 4,
two reverse circulation holes were drilled for 330m targeting
prospective stratigraphy to the North of the Orelia gold deposit.
Bronzewing South
During the reporting period, Hammer tested two geological
targets, approximately 4km to the south of the former Bronzewing
Gold mine. Development of innovative targeting concepts resulted
in Hammer being awarded a $150,000 Western Australian
Government Exploration Incentive Grant to partly fund diamond
drill testing of gravity anomalies. In addition to the three diamond
drill holes (1326m), Hammer also completed a single reverse
circulation hole (178m) (See ASX announcement 9 November
2020 and 1 March 2021) and a detailed gravity survey across
select portions of the tenement.
■ 55m at 1.12% and 0.3g/t Au from 119m in
HMTRRC001; and
Ken’s Bore
Two reverse circulation holes for 480m were drilled to test an
Electromagnetic anomaly. These holes encountered massive and
semi massive sulphide with true widths of up to 50m (See ASX
announcement 15 January 2021).
■ 60m at 1.04% Cu and 0.25g/t Au from 64m in
HMTRC002
Further drilling at Trafalgar was completed in June with results
yet to be reported.
With the drilling success at Trafalgar, JOGMEC received
unsolicited approaches regarding their interests in the JV.
Following a formal sale process, JOGMEC has elected to sell
their interest in the JV to Sumitomo Metal Mining Oceania. The
transfer of the JV remains outstanding at the time of this report.
Exploration activities within the JV remain ongoing whilst the
52
HAMMER METALS LIMITED / Annual Report 2021
IMPACT OF COVID-19 PANDEMIC
During the previous financial year, Hammer reacted promptly
to the COVID-19 pandemic and conducted a full review of its
activities and expenditures during March 2020. It focused on
delaying fieldwork to safeguard the safety of employees, whilst
reducing overheads where possible to conserve working capital
against the growing uncertainty and volatility. These measures
have been gradually unwound over the course of the current
financial year, and the levels of operations have returned to
normal.
During the current financial year, Hammer has been impacted
by COVID-19 related border closures, however the Board has
instituted a number of measures to ensure that delays and
disruptions from these closures are minimal.
▲ 7. Dividends
All personnel and contractors of the Company are instructed in
operating during the pandemic in a safe manner, which includes
the use of masks, social distancing, and regular health checks
as appropriate.
The Directors recognise the continuing uncertainty surrounding
the pandemic and its impact upon the Group’s operations,
and believes the measures undertaken by the Group are
proportionate.
No dividends were paid or declared by the Company during the financial year.
▲ 8. Events Subsequent To Balance Date
Subsequent to year end the following events have occurred:
■ On 15 July 2021, the Company issued 6,842,104
shares to Directors of the Company, which related to
the Director’s participation in the placement completed
in April 2021. These shares were issued at $0.095 per
share, raising $650,000 before costs.
Other than the above, there has not been any other matter
or circumstance that has arisen after balance date that has
significantly affected, or may significantly affect, the operations
of the Group, the results of those operations, or the state of affairs
of the Group in future financial periods.
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■ On 19 August 2021, the Company announced that
Japan Oil, Gas and Metals National Corporation
(“JOGMEC”) and Sumitomo Metal Mining Oceania
Pty. Ltd. (“SMMO”) had signed an agreement whereby
JOGMEC would transfer its position within the Mt
Isa East JV to SMMO. The original terms of the
agreement between the Company and JOGMEC remain
unchanged, with the JV partner required to spend
$6 million over 5 years to earn a 60% interest in the
project.
▲ 9. Likely Developments
The Company will continue planning and executing exploration and
development work on its existing projects in Australia as well as projects
under review in Australia to complement and expand on existing tenement
holdings.
53
HAMMER METALS LIMITED / Annual Report 2021
Directors Report
▲ 10. Directors’ Interests
The relevant interest of each Director in the shares and options of the
Company as notified by the Directors to the Australian Securities Exchange
in accordance with S205G(1) of the Corporations Act 2001, at the date of
this report is as follows:
Director
Mr R Davis
Mr D Thomas
Mr Z Lubieniecki
Mr D Church
Ordinary shares
Unlisted options
Performance Rights
39,679,289
2,241,407
62,664,283
1,052,631
3,500,000
7,000,000
4,500,000
1,000,000
-
6,500,000
-
-
The above table includes indirect shareholdings held by related parties to the directors.
▲ 11. Environmental Regulations
In the course of its normal mining and exploration activities Hammer
adheres to environmental regulations imposed on it by the various
regulatory authorities, particularly those regulations relating to ground
disturbance and the protection of rare and endangered flora and fauna.
Hammer has complied with all material environmental requirements up to the date of this report. The Board believes that Hammer
has adequate systems in place for the management of its environmental requirements and is not aware of any breach of these
environmental requirements as they apply to it.
54
HAMMER METALS LIMITED / Annual Report 2021
▲ 12. Remuneration Report – Audited
12.1 PRINCIPLES OF COMPENSATION
Consequences of performance on shareholder wealth
Remuneration levels for key management personnel and other
staff of Hammer are competitively set to attract and retain
appropriately qualified and experienced personnel and therefore
includes a combination of cash paid and the issuance of options
and rights.
Key management personnel comprise the directors of the
Company and senior executives for Hammer. Staff remuneration
is reviewed annually.
In establishing performance measures and benchmarks to ensure
incentive plans are appropriately structured to align corporate
behaviour with the long-term creation of shareholder wealth, the
Board has regard for the stage of development of the Company’s
business, share price, operational and business development
achievements (including results of exploration activities) that
are of future benefit to the Company. In considering Hammer’s
performance and benefits for shareholder wealth, the Board
have regarded the following indices in respect to the current
and previous four financial years:
Loss per share (cents)
(0.08)
2021
2020
(0.40)
2019
(0.29)
2018
(0.26)
2017
(0.28)
Net loss ($)
(611,525)
(1,978,610)
(852,517)
(673,062)
(539,578)
Share price at 30 June
$0.092
$0.043
$0.023
$0.025
$0.036
Service contracts
Share trading policy
D
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In December 2010, Hammer introduced a share trading policy
which sets out the circumstances in which directors, executives,
employees and other designated persons may deal with securities
held by them in the Company. This includes any shares or any
other securities issued by the Company such as options. The
policy includes restriction on key management personnel and
other employees from entering into arrangements that limit their
exposure to losses that would result from share price decreases.
Entering into such arrangements has been prohibited by law
since 1 July 2011.
Daniel Thomas – Managing Director
The Company has entered into an Executive Service agreement
with Mr Thomas on 21 October 2019. An Executive service fee
of $220,000 (plus superannuation at 9.5%) per annum is payable
with an indefinite term. Either Party can terminate the agreement
subject to a three-month notice period. Mr Thomas is not entitled
to any termination payments other than for services rendered at
time of termination.
Mark Pitts – Company Secretary
Mr Pitts is a Partner in the corporate advisory firm Endeavour
Corporate providing secretarial support and corporate and
compliance advice, pursuant to a contract between Endeavour
Corporate and the Company. The contract with Endeavour
Corporate has no fixed term with the option of termination by
either party with two months’ written notice. Mr Pitts is not entitled
to any termination payments other than for services rendered at
time of termination.
Non-executive directors
All non-executive Directors receive a fixed annual Directors’ fee
of $40,000 (plus superannuation benefits as required under the
applicable legislation). The Chair receives a fixed annual fee of
$60,000 (plus superannuation benefits as required under the
applicable legislation).
The maximum aggregate amount of non-executive Directors’
fees payable by the Company as approved by the shareholders
at the 2011 annual general meeting is $300,000 per annum.
55
HAMMER METALS LIMITED / Annual Report 2021
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57
HAMMER METALS LIMITED / Annual Report 2021
Directors Report
▲ 12.3 Value of options to executives
The value of options will only be realised if and when the market price of the Company shares, as quoted on the Australian Securities
Exchange, rises above the Exercise Price of the options. Further details of the options are contained below.
▲ 12.4 Options and rights over equity instruments granted as compensation
4,500,000 options were granted to the Non-Executive Directors during the year. The terms of these options and rights are noted in
the table below.
▲ 12.5 Analysis of options and rights over equity
instruments granted as compensation
GRANTED DURING THE CURRENT FINANCIAL YEAR
The table below details the vesting profile of the options granted as remuneration to each key management person during the year.
Key Management Personnel
Number of
options granted
Date granted % Vested
% Forfeited
/ Lapsed
Financial year
in which grant
vested / will vest
Russell Davis
2,000,000 30 November 2020
100%
Zbigniew Lubieniecki
1,500,000 30 November 2020
100%
David Church
1,000,000 30 November 2020
100%
-
-
-
-
-
-
The fair value of the options issued during the year to Key Management Personnel was determined by reference to the Black-Scholes
option pricing model. The key inputs and valuations are summarised as follows:
Underlying security spot price on grant date
Exercise price
Grant date
Expiration date
Vesting date
Life (years)
Volatility
Risk free rate
Dividend Yield
Number of options
Valuation per option
Remaining life (years)
Total value
Value recognised to date
Value still to be recognised
58
Directors
$0.037
$0.05
30 November 2020
30 November 2024
Immediate
4
100%
0.20%
-
4,500,000
$0.0235
3.4
$105,750
$105,750
-
HAMMER METALS LIMITED / Annual Report 2021
GRANTED DURING PREVIOUS FINANCIAL YEARS
The following options were granted as remuneration to key management personnel during the prior year.
Key Management Personnel
Number of
options granted
Date granted % Vested
Mr D Thomas – Tranche 1
3,000,000 14 November 2019
100%
Mr D Thomas – Tranche 2
4,000,000 14 November 2019
0%
Mr M Pitts
500,000
23 June 2020
100%
% Forfeited
/ Lapsed
Financial year
in which grant
vested / will vest
0%
0%
0%
30 June 2021
30 June 2022
30 June 2020
The fair value of the options issued during the prior year to Key Management Personnel was determined by reference to the Black-
Scholes option pricing model. The key inputs and valuations are summarised as follows:
Underlying security spot price on grant date
Exercise price
Grant date
Expiration date
Vesting date
Life (years)
Volatility
Risk free rate
Dividend Yield
Number of options
Valuation per option
Remaining life (years)
Total value
Value recognised to date
Value still to be recognised
Mr D Thomas –
Tranche A
Mr D Thomas –
Tranche B
$0.021
$0.05
$0.021
$0.06
Mr M Pitts
$0.04
$0.05
14 November 2019 14 November 2019
23 June 2020
21 October 2023
21 October 2023
30 June 2024
21 October 2020
21 October 2021
Immediate
D
i
r
e
c
t
o
r
s
R
e
p
o
r
t
4
100%
0.795%
-
3,000,000
$0.0111
2.3
$33,360
$33,360
-
4
100%
0.795%
-
4,000,000
$0.0105
2.3
$42,080
$33,354
$6,726
4
100%
0.340%
-
500,000
$0.0260
2.0
$13,000
$13,000
-
The above options issued to Mr Thomas include a service condition for the individual to remain employed until the vesting date. There
are no further vesting conditions attached to the options issued to Mr Pitts.
The following performance rights, which all expire on 13 December 2023, were issued to the Company’s Managing Director during
the prior year:
■ 750,000 performance rights, vesting on
21 October 2020;
■ 750,000 performance rights, vesting on 21 October
2020, subject to achieving a minimum share price of
$0.031 for a period of 30 days at any point during the
vesting period;
■ 750,000 performance rights, vesting on
21 October 2021;
■ 750,000 performance rights, vesting on 21 October
2021, subject to achieving a minimum share price of
$0.036 for a period of 30 days at any point during the
vesting period; and
■ 5,000,000 performance rights, vesting upon the
satisfactory completion of a transaction in accordance
with the terms outlined in the Company’s Notice of
Annual General Meeting dated 8 October 2019.
59
HAMMER METALS LIMITED / Annual Report 2021
Directors Report
For Tranches 1 and 3, these rights vest on the vesting date (being the service period) with no additional vesting conditions.
During the financial year, the first two tranches above were exercised. No further rights were issued during the year and, as at the
end of the financial year, 6,500,000 rights were outstanding, none of which had vested.
The number of rights under each tranche on issue during the current and previous financial years are as follows:
Managing Director Performance Rights – Tranche 1
Managing Director Performance Rights – Tranche 2
Managing Director Performance Rights – Tranche 3
Managing Director Performance Rights – Tranche 4
Managing Director Performance Rights – Tranche 5
30 June 2021
No.
30 June 2020
No.
-
-
750,000
750,000
5,000,000
6,500,000
750,000
750,000
750,000
750,000
5,000,000
8,000,000
The fair value of the performance rights issued during the prior year to Key Management Personnel was determined by reference to
the underlying security on the date of issue, adjusted as necessary for any market-based performance conditions. The key inputs
and valuations are summarised as follows:
Mr D Thomas –
Tranche 1
Mr D Thomas –
Tranche 2
Mr D Thomas –
Tranche 3
Mr D Thomas –
Tranche 4
Mr D Thomas –
Tranche 5
Underlying security
spot price on grant date
$0.021
$0.021
$0.021
$0.021
$0.021
Grant date
14 Nov 2019
14 Nov 2019
14 Nov 2019
14 Nov 2019
14 Nov 2019
Expiration date
13 Dec 2023
13 Dec 2023
13 Dec 2023
13 Dec 2023
13 Dec 2023
Vesting date
Life (years)
Discount applied
(Note 1)
Number of rights
Value per right
Remaining life (years)
(Note 2)
21 Oct 2020
21 Oct 2020
21 Oct 2021
21 Oct 2021
Note 3
4.1
-
4.1
39%
4.1
-
4.1
26%
4.1
-
750,000
$0.021
750,000
$0.0129
750,000
$0.021
750,000
$0.0156
5,000,000
$0.021
N/A
N/A
2.5
2.5
2.5
Total value
$15,750
$9,642
$15,750
$11,729
$105,000
Value recognised to
date
Value still to be
recognised
$15,750
$9,642
$13,233
$9,854
$41,859
-
-
$2,517
$1,875
$63,141
Note 1 – this discount represents the expected likelihood that the share-price hurdle condition would be met and was determined
by an independent valuation.
Note 2 – the remaining life represents the time, in years, left until the expiry of the right. The rights may vest before this date, as noted
for tranches 1 and 2.
Note 3 – Tranche 5 contains a performance-based vesting condition. For measurement and recognition purposes, it has been
estimated that these rights would vest over their entire life.
60
HAMMER METALS LIMITED / Annual Report 2021
▲ 12.6 Option holdings
The movement during the reporting period in the number of options over ordinary shares in Hammer Metals Limited held, directly,
indirectly or beneficially, by each key management person, including their personally-related entities, is as follows:
Key Management
Personnel
Held at
beginning of
period/on
appointment Granted
Purchased
Exercised
Held at
end of
period / on
resignation
Vested and
exercisable
at end of
period
Lapsed or
Expired
Mr R Davis
6,500,000
2,000,000
Mr D Thomas
7,000,000
-
Mr Z Lubieniecki
3,000,000
1,500,000
Mr D Church
-
1,000,000
Mr M Pitts
1,582,287
-
-
-
-
-
-
(5,000,000)
-
-
-
(582,287)
-
-
-
-
-
3,500,000
3,500,000
7,000,000
3,000,000
4,500,000
4,500,000
1,000,000
1,000,000
1,000,000
1,000,000
▲ 12.7 Equity holdings and transactions
During the year, 875,206 shares were issued to key management personnel in lieu of fees for the prior year (2020: nil). The movement
during the reporting period in the number of ordinary shares in Hammer Metals Limited held directly, indirectly or beneficially, by each
key management person, including their personally related entities, is as follows:
D
i
r
e
c
t
o
r
s
R
e
p
o
r
t
Held at
beginning of
period/on
appointment
Purchases
Sales
Mr R Davis
33,600,000
252,631
Mr D Thomas
282,711
84,210
Mr Z Lubieniecki
57,200,837
Mr D Church
Mr M Pitts
-
842,294
-
-
-
Exercise of
Options and
Performance
Rights
Held at end
of period/on
resignation
Granted in
lieu of fees
-
-
-
-
-
300,432
5,000,000
39,152,973
374,486
1,500,000
2,241,407
200,288
-
-
-
-
57,401,125
-
582,287
1,424,581
61
HAMMER METALS LIMITED / Annual Report 2021
Directors Report
▲ 12.8 Performance right holdings
The movement during the reporting period in the number of performance rights over ordinary shares in Hammer Metals Limited held,
directly, indirectly or beneficially, by each key management person, including their personally-related entities, is as follows:
Held at
beginning of
period/on
appointment
Granted
Exercised
Other
movements
Held at
end of
period / on
resignation
Vested and
exercisable
at end of
period
Mr R Davis
-
Mr D Thomas
8,000,000
Mr Z Lubieniecki
Mr D Church
Mr M Pitts
-
-
-
-
-
-
-
-
-
1,500,000
-
-
-
-
-
-
-
-
-
6,500,000
-
-
-
-
-
-
-
-
12.9 Key management personnel transactions
The following table provides the total amount of transactions which have been entered into with related parties for the relevant financial
year exclusive of GST:
Key management
Personnel
Transaction
30 June 2021
$
30 June 2020
$
30 June 2021
$
30 June 2020
$
Transaction value year ended
Balance outstanding as at
Zbigniew Lubieniecki Consulting Services
40,708
58,875
-
9,075
Mark Pitts
Accounting services
41,520
41,140
3,670
1,280
The Company paid fees to Endeavour Corporate, a company associated with Mark Pitts, for accounting and financial reporting services
provided to the company. The Company also paid fees to Zbigniew Lubieniecki, as consulting fees for geological services provided.
END OF REMUNERATION REPORT
62
HAMMER METALS LIMITED / Annual Report 2021
▲ 13. Share Options
Unissued shares under option
At the date of this report unissued ordinary shares of the Company under option are:
Expiry Date
Exercise price
Number of options
Director/Executive/Employee Options
30 November 2021
Corporate Advisor Options – Tranche 1
13 December 2022
Managing Director Options – Tranche 1
21 October 2023
Managing Director Options – Tranche 2
21 October 2023
Corporate Advisor Options – Tranche 2
30 June 2023
Employee and Consultant Options
30 June 2024
Director Options
30 November 2024
$0.032
$0.035
$0.05
$0.06
$0.035
$0.05
$0.05
8,750,000
1,000,000
3,000,000
4,000,000
3,000,000
2,600,000
4,500,000
These options do not entitle the holder to participate in any share issue of the Company or any other body corporate.
Shares issued on exercise of options
The Company has issued 167,105,021 ordinary shares as a result of the exercise of HMXOD quoted options (exercisable at 3 cents
on or before 21 September 2020) and 1,250,000 as the result of the exercise of unquoted options exercisable at 3.2 cents on or
before 30 November 2021 during this year (2020: 19,525,757).
Subsequent to year end, on 15 July 2021, the Company issued 6,842,104 shares to Directors of the Company, which related to the
Director’s participation in the placement completed in April 2021. These shares were issued at $0.095 per share, raising $650,000
before costs.
D
i
r
e
c
t
o
r
s
R
e
p
o
r
t
▲ 14. Performance Rights
Unissued shares under performance rights
At the date of this report unissued ordinary shares of the Company under performance rights are:
Expiry Date
Number of rights
Managing Director Rights – Tranche 3
13 December 2023
Managing Director Rights – Tranche 4
13 December 2023
Managing Director Rights – Tranche 5
13 December 2023
750,000
750,000
5,000,000
The terms of these rights are summarised in section 12.5 above.
▲ 15. Corporate Governance
In recognising the need for the highest standards of corporate behaviours and accountability, the Directors support and have adhered to
the principles of sound corporate governance. The Board recognises the recommendations of the ASX Corporate Governance Council
and considers the Company is in compliance with those guidelines which are of importance to the operations of the Company. Where
a recommendation has not been followed, that fact has been disclosed together with the reasons for the departure.
The Company’s Corporate Governance Statement and disclosures available on the Company’s website at www.hammermetals.com.au.
63
HAMMER METALS LIMITED / Annual Report 2021
Directors Report
▲ 16. Indemnification Of Officers And Auditors
The Company has entered into Director and Officer Protection Deeds (Deed) with each Director and the Company Secretary (officers).
Under the Deed, the Company indemnifies the officers to the maximum extent permitted by law and the Constitution against legal
proceedings, damage, loss, liability, cost, charge, expense, outgoing or payment (including legal expenses on a solicitor/client basis)
suffered, paid or incurred by the officers in connection with the officers being an officer of the Company, the employment of the officer
with the Company or a breach by the Company of its obligations under the Deed.
Also pursuant to the Deed, the Company must insure the officers against liability and provide access to all board papers relevant to
defending any claim brought against the officers in their capacity as officers of the Company.
The Company has paid insurance premiums during the year in respect of liability for any past, present or future Directors, secretary,
officers and employees of the Company or related body corporate. The insurance policy does not contain details of the premium
paid in respect of individual officers of the Company. Disclosure of the nature of the liability cover and the amount of the premium is
subject to a confidentiality clause under the insurance policy.
The Company has not provided any insurance or indemnification for the Auditor of the Company.
▲ 17. Non-Audit Services
During the year, KPMG, the Company’s auditor provided taxation compliance services in addition to their statutory duties. Refer to
Note 7 to the financial statements for more information.
▲ 18. Lead Auditor’s Independence Declaration Under
Section 307c Of The Corporations Act 2001
The lead auditor’s independence declaration is set out on page 66 and forms part of the Directors’ report for the financial year ended
30 June 2021.
▲ 19. Significant Changes In State Of Affairs
In the opinion of Directors, other than that disclosed elsewhere in this report, there were no other significant changes in the state of
affairs of the Group that occurred during the financial year under review.
This report is made with a resolution of the Directors:
R Davis
Chairman
Perth
29 September 2021
64
HAMMER METALS LIMITED / Annual Report 2021
D
i
r
e
c
t
o
r
s
R
e
p
o
r
t
HAMMER METALS LIMITED / Annual Report 2021
65
Lead Auditor’s Independence Declaration under
Section 307C of the Corporations Act 2001
Auditor’s Independence Declaration
Auditor’s Independence Declaration
To the Directors of Hammer Metals Limited
I declare that, to the best of my knowledge and belief, in relation to the audit of Hammer Metals
Limited for the financial year ended 30 June 2020 there have been:
i.
no contraventions of the auditor independence requirements as set out in the
Corporations Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
ii.
Lead Auditor’s Independence Declaration under
Section 307C of the Corporations Act 2001
To the Directors of Hammer Metals Limited
KPMG
R Gambitta
Partner
I declare that, to the best of my knowledge and belief, in relation to the audit of Hammer Metals Limited
for the financial year ended 30 June 2021 there have been:
Perth
i.
no contraventions of the auditor independence requirements as set out in the Corporations
Act 2001 in relation to the audit; and
29 September 2020
KPM_INI_01
ii.
no contraventions of any applicable code of professional conduct in relation to the audit.
PAR_SIG_01
PAR_NAM_01
PAR_POS_01
PAR_DAT_01
PAR_CIT_01
Glenn Brooks
Partner
Perth
29 September 2021
- 13 -
KPMG, an Australian partnership and a member firm of the KPMG
network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity.
Liability limited by a scheme approved under
Professional Standards Legislation.
KPMG
66
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated
with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and
logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by
a scheme approved under Professional Standards Legislation
HAMMER METALS LIMITED / Annual Report 2021
Consolidated Statement Of Financial Position
▲ As At 30 June 2021
Current Assets
Cash and cash equivalents
Trade and other receivables
Total current assets
Non-current assets
Other financial assets
Right-of-use assets
Exploration and evaluation expenditure
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Lease liabilities
Total current liabilities
Non-current liabilities
Lease liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Share capital
Reserves
Accumulated losses
Total equity
Note
30 June 2020 30 June 2019
10
11
12
14
15
16
17
17
9,706,093
2,678,535
140,842
154,728
9,846,935
2,833,263
484,299
271,097
303,302
71,570
17,429,445
14,110,772
18,217,046
14,453,439
28,063,981
17,286,702
1,171,283
363,896
63,997
17,208
1,235,280
381,104
C
o
n
s
o
l
i
d
a
t
e
d
S
t
a
t
e
m
e
n
t
O
f
i
F
n
a
n
c
a
i
232,595
232,595
56,302
56,302
1,467,875
437,406
l
P
o
s
i
t
i
o
n
26,596,106
16,849,296
18
19
62,277,335
51,429,354
1,291,101
1,794,923
(36,972,330)
(36,374,981)
26,596,106
16,849,296
The consolidated statement of financial position is to be read in conjunction with the accompanying notes.
67
HAMMER METALS LIMITED / Annual Report 2021
Consolidated Statement Of Profit Or Loss And Other
Comprehensive Income
Consolidated Statement Of Profit Or Loss And Other
Comprehensive income
▲ For The Year Ended 30 June 2021
Note
30 June 2020 30 June 2019
Other income
Marketing expenses
Administrative expenses
Share based payments
Occupancy expenses
Depreciation and amortisation
Fair value adjustment on financial assets
Other expenses
Loss from operating activities
Finance income
Finance expenses
Net finance income / (expense)
Loss before income tax
Income tax benefit
Net loss for the year from continuing operations
Other comprehensive income
Other comprehensive loss for the year, net of income tax
4
5
5
6
8
308,019
99,092
(114,839)
(78,954)
(765,502)
(732,957)
(186,795)
(233,707)
(45,878)
(45,756)
(26,906)
-
213,202
(987,661)
(1,915)
-
(620,614)
(1,979,943)
14,006
(4,917)
9,089
2,299
(966)
1,333
(611,525)
(1,978,610)
-
-
(611,525)
(1,978,610)
-
-
-
-
Total Comprehensive loss for the year
(611,525)
(1,978,610)
Loss per share:
Basic and diluted loss per share (cents per share)
9(a)
(0.08)
(0.40)
The consolidated statement of profit or loss and other comprehensive income is to be read in conjunction with the accompanying notes.
68
HAMMER METALS LIMITED / Annual Report 2021
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HAMMER METALS LIMITED / Annual Report 2021
Consolidated Statement Of Cash Flows
Consolidated Statement Of Cash Flows
▲ For The Year Ended 30 June 2021
Cash flows from operating activities
Interest received
Receipts from other parties to joint operations
Rental income received
COVID-related government assistance received
Fuel rebate received
Payments to suppliers and employees
Note
30 June 2020 30 June 2019
14,006
100,000
2,299
-
-
9,185
38,500
4,667
-
2,035
(776,845)
(812,617)
Net cash used in operating activities
24
(619,672)
(799,098)
Cash flows from investing activities
Payments for exploration expenditure
Management fees received from farm-in and joint arrangement
partners
Receipt of research and development grant
Government exploration grants received
Purchase of plant and equipment
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of share capital
Share funds received in advance
Proceeds from issue of options
Transaction costs from issue of shares and options
Lease payments made
Net cash from financing activities
Net increase / (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
(3,868,940)
(2,369,818)
197,170
75,798
384,209
214,939
377,224
(5,946)
-
-
(2,916,283)
(2,079,081)
5,349,994
4,391,969
500,000
-
5,053,150
585,772
(305,104)
(274,512)
(34,527)
(7,171)
10,563,513
4,696,058
7,027,558
1,817,879
2,678,535
860,656
Cash and cash equivalents at end of year
10
9,706,093
2,678,535
The consolidated statement of cash flows is to be read in conjunction with the accompanying notes.
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HAMMER METALS LIMITED / Annual Report 2021
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HAMMER METALS LIMITED / Annual Report 2021
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Notes To The Consolidated Financial Statements
Notes To The Consolidated Financial Statements
▲ 1. Reporting Entity
Hammer Metals Limited (the “Company”) is a company domiciled in Australia. The Company’s registered office is Unit 1, 28-30
Mayfair Street, West Perth, Western Australia. The consolidated financial statements of the Company for the financial year ended 30
June 2021 comprises the Company and its subsidiaries (together referred to as the “Group”).
The Group is a for profit entity and is primarily involved in the exploration and extraction of mineral resources.
▲ 2. Basis Of Preparation
(A) STATEMENT OF COMPLIANCE
The consolidated financial statements are general purpose financial statements which have been prepared in accordance with
Australian Accounting Standards (AASBs) adopted by the Australian Accounting Standards Board (AASB) and the Corporations Act
2001. The consolidated financial statements also comply with International Financial Reporting Standards (IFRS’s) adopted by the
International Accounting Standards Board (IASB).
The consolidated financial report was authorised for issue by the Directors on 29 September 2021.
(B) BASIS OF MEASUREMENT
The financial report is prepared on the historical cost basis except for share based payments and other financial assets which are
measured at their fair value.
(C) FUNCTIONAL AND PRESENTATION CURRENCY
The financial report is presented in Australian dollars which is the functional and presentation currency of the Company and its
subsidiaries.
(D) USE OF ESTIMATES AND JUDGEMENTS
Set out below is information about:
■ critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in
the financial statements; and
■ assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within the
next financial year.
Critical judgements
i. Going concern
A key assumption underlying the preparation of the financial statements is that the Group will continue as a going concern.
An entity is a going concern when it is considered to be able to pay its debts as and when they are due, and to continue
in operation without any intention or necessity to liquidate or otherwise wind up its operations. A significant amount of
judgement has been required in assessing whether the Group is a going concern, as set out in note 2(f).
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HAMMER METALS LIMITED / Annual Report 2021
Estimates and assumptions
ii. Ore Reserves and Mineral Resources
Economically recoverable reserves represent the estimated quantity of product in an area of interest that can be expected
to be profitably extracted, processed and sold under current and foreseeable economic conditions. The Group determines
and reports ore reserves and mineral resources under the standards incorporated in the Australasian Code for Reporting
Exploration Results, Mineral Resources and Ore Reserves, 2012 edition (the JORC Code). The determination of ore
reserves or mineral resources includes estimates and assumptions about a range of geological, technical and economic
factors, including: quantities, grades, production techniques, recovery rates, production costs, transport costs, commodity
demand, commodity prices and exchange rates. Changes in ore reserves and mineral resources impact the assessment of
recoverability of exploration and evaluation assets, provisions for site restoration and the recognition of deferred tax assets,
including tax losses.
iii. Exploration and evaluation assets
Determining the recoverability of exploration and evaluation expenditure capitalised in accordance with the Group’s
accounting policy (refer note 3(n)), requires estimates and assumptions as to future events and circumstances, in particular,
whether successful development and commercial exploitation, or alternatively sale, of the respective areas of interest will
be achieved. Critical to this assessment is estimates and assumptions as to ore reserves (refer note 2(d)(ii)), the timing of
expected cash flows, exchange rates, commodity prices and future capital requirements. Changes in these estimates and
assumptions as new information about the presence or recoverability of an ore reserve becomes available, may impact the
assessment of the recoverable amount of exploration and evaluation assets. If, after having capitalised the expenditure under
accounting policy 3(n), a judgement is made that recovery of the expenditure is unlikely, an impairment loss is recorded in
the statement of profit and loss and other comprehensive income in accordance with accounting policy 3(f). The carrying
amounts of exploration and evaluation assets are set out in note 15.
(E) ADOPTION OF NEW AND REVISED STANDARDS
The Group has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian Accounting
Standards Board (‘AASB’) that are mandatory for the current reporting period.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
(F) GOING CONCERN
The financial report has been prepared on the going concern basis, which contemplates the continuity of normal business activity
and the realisation of assets and the settlement of liabilities in the normal course of business.
For the year ended 30 June 2021, the Group has incurred a consolidated loss before tax of $611,525 and net cash outflows from
operating and investing activities of $3,570,482. As at 30 June 2021, the Group had $9,706,093 in cash and cash equivalents and
net current assets of $8,611,655.
Subsequent to year end, the Company has received $650,000 (before costs) from the issue of shares at $0.095 per share.
On the above basis, the Directors are of the view that the going concern basis of preparation is appropriate.
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HAMMER METALS LIMITED / Annual Report 2021
Notes To The Consolidated Financial Statements
▲ 3. Statement Of Significant Accounting Policies
The Group has consistently applied the accounting policies set out in note 3 to all periods presented in these consolidated financial
statements.
(A) BASIS OF CONSOLIDATION
i. Subsidiaries
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable
returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The
financial statements of subsidiaries are included in the consolidated financial statements from the date on which control
commences until the date on which control ceases.
ii. Investments in associates
Associates are those entities in which the Group has significant influence, but not control or joint control, over the financial
and operating policies. Significant influence is presumed to exist when the Group holds between 20 percent and 50 percent
of the voting power of another entity.
Investments in associates are accounted for using the equity method and are recognised initially at cost. The cost of the
investments includes transaction costs.
The consolidated financial statements include the Group’s share of the profit or loss and other comprehensive income of
equity accounted investees, after adjustments to align the accounting policies with those of the Group, from the date that
significant influence commences until the date that significant influence ceases.
When the Group’s share of losses exceeds its interest in an equity accounted investee, the carrying amount of the investment,
including any long-term interest that form part thereof, is reduced to zero, and the recognition of further losses is discontinued
except to the extent that the Group has an obligation or has made payments on behalf of the investee.
iii. Joint arrangements
The Group classifies its interests in joint arrangements as either joint operations or joint ventures depending on the Group’s
rights to the assets and obligation for the liabilities of the arrangements. When making this assessment, the Group considers
the structure of the arrangements, the legal form of any separate vehicles, the contractual terms of the arrangements and
other facts and circumstances.
iv. Transactions eliminated on consolidation
Intragroup balances, and any unrealised gains and losses or income and expenses arising from intragroup transactions,
are eliminated in preparing the consolidated financial statements.
v. Business combinations
Business combinations are accounted for by applying the acquisition method.
For every business combination, the Group identifies the acquirer, which is the combining entity that obtains control of the
other combining entities or businesses. The Group controls an entity when it is exposed to, or has rights to, variable returns
from its involvement with the entity and has the ability to affect those returns through its power over the entity. The acquisition
date is the date on which control is transferred to the acquirer. Judgement is applied in determining the acquisition date
and determining whether control is transferred from one party to another.
vi. Contingent liabilities
A contingent liability of the acquiree is assumed in a business combination only if such a liability represents a present
obligation and arises from a past event, and its fair value can be measured reliably.
vii. Non-controlling interest
The Group measures any non-controlling interest at its proportionate interest in the identifiable net assets of the acquiree.
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HAMMER METALS LIMITED / Annual Report 2021
(B) FOREIGN CURRENCY
Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction. Monetary assets
and liabilities denominated in foreign currencies at the balance sheet date are translated to Australian dollars at the foreign exchange
rate ruling at that date. Foreign exchange differences arising on translation are recognised in the statement of profit and loss and
other comprehensive income. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency
are translated using the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign
currencies that are stated at fair value are translated to Australian dollars at foreign exchange rates ruling at the dates the fair value
was determined.
The assets and liabilities of foreign operations, including fair value adjustments arising on consolidation, are translated to Australian
dollars at foreign exchange rates ruling at the balance sheet date. The revenues and expenses of foreign operations are translated
to Australian dollars at rates approximating the foreign exchange rates ruling at the dates of the transactions. Foreign exchange
differences arising on retranslation are recognised directly in a separate component of equity.
(C) PLANT AND EQUIPMENT
Items of plant and equipment are stated at cost less accumulated depreciation (see below) and impairment losses (see accounting
policy 3(f)). Depreciation is charged to the statement of profit and loss and other comprehensive income on a straight-line basis over
their estimated useful lives. The estimated useful lives in the current and comparative periods are as follows:
■ Office equipment
3 to 4 years
■ Plant and equipment
3 to 5 years
The residual value, if significant, is reassessed annually.
(D) FINANCIAL INSTRUMENTS
Recognition and derecognition
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the financial
instrument. Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or when the
financial asset and substantially all the risks and rewards are transferred. A financial liability is derecognised when it is extinguished,
discharged, cancelled or expires.
Classification and initial measurement of financial assets
Except for those trade receivables that do not contain a significant financing component and are measured at the transaction price
in accordance with AASB 15, all financial assets are initially measured at fair value adjusted for transaction costs (where applicable).
For the purpose of subsequent measurement, financial assets, are classified into the following categories:
■ amortised cost
■ fair value through profit or loss (FVTPL)
■ equity instruments at fair value through other comprehensive income (FVOCI)
■ debt instruments at fair value through other comprehensive income (FVOCI).
All income and expenses relating to financial assets that are recognised in profit or loss are presented within finance costs, finance
income or other financial items, except for impairment of trade receivables which is presented within other expenses.
The classification is determined by both:
■ the entity’s business model for managing the financial asset
■ the contractual cash flow characteristics of the financial asset.
All income and expenses relating to financial assets that are recognised in profit or loss are presented within finance costs, finance
income or other financial items, except for impairment of trade receivables which is presented within other expenses.
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HAMMER METALS LIMITED / Annual Report 2021
Notes To The Consolidated Financial Statements
Subsequent measurement of financial assets
Financial assets at amortised cost
Financial assets are measured at amortised cost if the assets meet the following conditions (and are not designated as FVTPL):
■ they are held within a business model whose objective is to hold the financial assets to collect its contractual cash
flows
■ the contractual terms of the financial assets give rise to cash flows that are solely payments of principal and interest
on the principal amount outstanding.
After initial recognition, these are measured at amortised cost using the effective interest method.
Financial assets at fair value through profit or loss (FVTPL)
Financial assets that are held within a different business model other than ‘hold to collect’ or ‘hold to collect and sell’ are categorised
at fair value through profit and loss. Further, irrespective of business model financial assets whose contractual cash flows are not
solely payments of principal and interest are accounted for at FVTPL.
The category also contains an equity investment. The Group accounts for the investment at FVTPL and did not make the irrevocable
election to account for the investment in unlisted and listed equity securities at fair value through other comprehensive income (FVOCI).
The fair value was determined in line with the requirements of AASB 9, which does not allow for measurement at cost. Assets in
this category are measured at fair value with gains or losses recognised in profit or loss. The fair values of financial assets in this
category are determined by reference to active market transactions or using a valuation technique where no active market exists.
Equity instruments at fair value through other comprehensive income (Equity FVOCI)
Investments in equity instruments that are not held for trading are eligible for an irrevocable election at inception to be measured at
FVOCI.
Under Equity FVOCI, subsequent movements in fair value are recognised in other comprehensive income and are never reclassified
to profit or loss.
Dividend from these investments continue to be recorded as other income within the profit or loss.
Any gains or losses recognised in other comprehensive income (OCI) are not recycled upon derecognition of the asset.
Debt instruments at fair value through other comprehensive income (Debt FVOCI)
Financial assets with contractual cash flows representing solely payments of principal and interest and held within a business model
of collecting the contractual cash flows and selling the assets are accounted for at debt FVOCI.
The Group accounts for financial assets at FVOCI if the assets meet the following conditions:
■ they are held under a business model whose objective it is to “hold to collect” the associated cash flows and sell
financial assts; and
■ the contractual terms of the financial assets give rise to cash flows that are solely payments of principal and interest
on the principal amount outstanding.
Any gains or losses recognised in other comprehensive income (OCI) will be recycled upon derecognition of the asset
Trade and other receivables and contract assets
The Group makes use of a simplified approach in accounting for trade and other receivables as well as contract assets and records
the loss allowance as lifetime expected credit losses. These are the expected shortfalls in contractual cash flows, considering the
potential for default at any point during the life of the financial instrument. In calculating, the Group uses its historical experience,
external indicators and forward-looking information to calculate the expected credit losses using a provision matrix.
The Group assess impairment of trade receivables on a collective basis as they possess shared credit risk characteristics they have
been grouped based on the days past due.
Classification and measurement of financial liabilities
The Group’s financial liabilities include borrowings, trade and other payables and derivative financial instruments.
Financial liabilities are initially measured at fair value, and, where applicable, adjusted for transaction costs unless the Group
designated a financial liability at fair value through profit or loss.
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HAMMER METALS LIMITED / Annual Report 2021
Subsequently, financial liabilities are measured at amortised cost using the effective interest method except for derivatives and financial
liabilities designated at FVTPL, which are carried subsequently at fair value with gains or losses recognised in profit or loss (other
than derivative financial instruments that are designated and effective as hedging instruments).
All interest-related charges and, if applicable, changes in an instrument’s fair value that are reported in profit or loss are included
within finance costs or finance income.
(E) CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash balances and call deposits with an original maturity of three months or less. Bank overdrafts
that are repayable on demand and form an integral part of the Group’s cash management are included as a component of cash and
cash equivalents for the purpose of the statement of cash flows.
(F) IMPAIRMENT
The Group assesses at each balance date whether a financial asset or group of financial assets is impaired.
Financial assets at amortised cost
The group assesses on a forward-looking basis, the expected credit losses associated with its debt instruments carried at amortised
cost. The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since initial recognition
of the respective financial instrument. The Group always recognises the lifetime expected credit loss for trade receivables carried
at amortised cost.
The expected credit losses on these financial assets are estimated based on the Group’s historic credit loss experience, adjusted
for factors that are specific to the debtors, general economic conditions and an assessment of both the current as well as forecast
conditions at the reporting date.
For all other receivables measured at amortised cost, the Group recognises lifetime expected credit losses when there has been a
significant increase in credit risk since initial recognition. If the credit risk on the financial instrument has not increased significantly
since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equal to expected credit
losses within the next 12 months.
The Group considers an event of default has occurred when a financial asset is more than 90 days past due or external sources
indicate that the debtor is unlikely to pay its creditors, including the Group. A financial asset is credit impaired when there is evidence
that the counterparty is in significant financial difficulty or a breach of contract, such as a default or past due event has occurred.
The Group writes off a financial asset when there is information indicating the counterparty is in severe financial difficulty and there
is no realistic prospect of recovery.
Non-financial assets
The carrying amounts of the Company’s non-financial assets, other than deferred tax assets (see accounting policy 3(k)) are reviewed
at each reporting date to determine whether there is any indication of impairment. If any such indication exists then the asset’s
recoverable amount is estimated. For goodwill and intangible assets that have indefinite lives or that are not yet available for use, the
recoverable amount is estimated each year at the same time.
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment
testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are
largely independent of the cash inflows of other assets or groups of assets (the “cash-generating unit”). The goodwill acquired in a
business combination, for the purpose of impairment testing, is allocated to cash-generating units that are expected to benefit from
the synergies of the combination.
An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount.
Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of cash-generating units are allocated
first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets
in the unit (group of units) on a pro rata basis.
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HAMMER METALS LIMITED / Annual Report 2021
Notes To The Consolidated Financial Statements
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are
assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed
if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the
extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation
or amortisation, if no impairment loss had been recognised.
(G) SHARE CAPITAL
Ordinary shares
Transaction costs of an equity transaction are accounted for as a deduction from equity, net of any related income tax benefit.
(H) INTEREST BEARING BORROWINGS
Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs. Subsequent to initial recognition,
interest-bearing borrowings are stated at amortised cost with any difference between cost and redemption value being recognised
in the statement of profit and loss and other comprehensive income over the period of the borrowings on an effective interest basis.
(I) EMPLOYEE BENEFITS
Defined contribution plans
Obligations for contributions to defined contribution pension plans are recognised as an expense in the statement of profit and loss
and other comprehensive income as incurred.
Share based payment transactions
The grant-date fair value of equity-settled share-based payment arrangements granted to employees is generally recognised as an
expense, with a corresponding increase in equity, over the vesting period of the awards. The amount recognised as an expense is
adjusted to reflect the number of awards for which the related service and non-market performance conditions are expected to be
met, such that the amount ultimately recognised is based on the number of awards that meet the related service and non-market
performance conditions at the vesting date. For share-based payment awards with non-vesting conditions, the grant-date fair value
of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and
actual outcome.
Wages, salaries, annual leave, sick leave and non-monetary benefits
Liabilities for employee benefits for wages, salaries, annual leave and sick leave represent present obligations resulting from
employees’ services provided to reporting date, calculated at undiscounted amounts based on remuneration wage and salary rates
that the Group expects to pay as at reporting date including related on-costs, such as, workers compensation insurance and payroll tax.
(J) FINANCE INCOME AND EXPENSES
Net finance income
Net finance income comprises interest payable on borrowings calculated using the effective interest method, interest receivable on
funds invested and realised foreign exchange gains and losses. Interest income is recognised in the statement of profit and loss and
other comprehensive income as it accrues, using the effective interest method.
78
HAMMER METALS LIMITED / Annual Report 2021
(K) INCOME TAX
Income tax on the statement of profit and loss and other comprehensive income for the periods presented comprises current and
deferred tax. Income tax is recognised in the statement of profit and loss and other comprehensive income except to the extent that
it relates to items recognised directly in equity, in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted at the
balance sheet date, and any adjustment to tax payable in respect of previous years.
Deferred tax is provided using the balance sheet liability method, providing for temporary differences between the carrying amounts of
assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following temporary differences
are not provided for: the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects
neither accounting nor taxable profit or loss and differences relating to investments in subsidiaries to the extent that they will probably
not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner of realisation or settlement
of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset
can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
The Company and its Australian resident wholly owned subsidiaries adopted the tax consolidation legislation with effect from 1 July
2014 and are therefore taxed as a single entity from that date. Hammer Metals Ltd is the head entity within the tax-consolidated
group. Any current tax liabilities (or assets) and deferred tax assets arising from unused tax losses of the subsidiaries are assumed
by the head entity in the tax-consolidated group.
(L) PROVISIONS
A provision is recognised in the balance sheet when the Group has a present legal or constructive obligation as a result of a past
event, and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect is material, provisions
are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time
value of money and, when appropriate, the risks specific to the liability.
A provision for site restoration in respect of contaminated and disturbed land, and the related expense, is recognised when the land
is contaminated or disturbed. Such activities include dismantling infrastructure, removal and treatment of waste material, and land
rehabilitation, including restoring, topsoiling and revegetation of the disturbed area.
(M) SEGMENT REPORTING
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The
chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments,
has been identified as the Board of Directors of the Company.
(N) EXPLORATION AND EVALUATION EXPENDITURE
Exploration for and evaluation of mineral resources is the search for mineral resources after the Group has obtained legal rights to
explore in a specific area, as well as the determination of the technical feasibility and commercial viability of extracting the mineral
resources. Accordingly, exploration and evaluation expenditures are those expenditures incurred by the Group in connection with
the exploration for and evaluation of minerals resources before the technical feasibility and commercial viability of extracting mineral
resources are demonstrable.
Accounting for exploration and evaluation expenditure is assessed separately for each area of interest. An area of interest is an
individual geological area which is considered to constitute a favourable environment for the presence of a mineral deposit or has
been proved to contain such a deposit.
Expenditure incurred on activities that precede exploration and evaluation of mineral resources, including all expenditure incurred
prior to securing legal rights to explore an area, is expensed as incurred.
For each area of interest, the expenditure is recognised as an exploration and evaluation asset where the following conditions are
satisfied
a) The rights to tenure of the area of interest are current; and
b) At least one of the following conditions is also met:
79
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HAMMER METALS LIMITED / Annual Report 2021
Notes To The Consolidated Financial Statements
i. The expenditure is expected to be recouped through successful development and commercial exploitation of
an area of interest, or alternatively by its sale; and
ii. Exploration and evaluation activities in the area of interest have not, at reporting date, reached a stage which
permits a reasonable assessment of the existence or otherwise ‘economically recoverable reserves’ and active
and significant operations in, or in relation to, the area of interest are continuing. Economically recoverable
reserves are the estimated quantity of product in an area of interest that can be expected to be profitably
extracted, processed and sold under current and foreseeable conditions.
Exploration and evaluation assets include
■ Acquisition of rights to explore;
■ Topographical, geological, geochemical and geophysical studies;
■ Exploratory drilling, trenching, and sampling and
■ Activities in relation to evaluating the technical feasibility and commercial viability of extracting the mineral resource.
General and administrative costs are allocated to, and included in, the cost of exploration and evaluation assets only to the extent that
those costs can be related directly to the operational activities in the area of interest to which the exploration and evaluation assets
relate. In all other instances, these costs are expensed as incurred.
Exploration and evaluation assets are transferred to Development Assets once technical feasibility and commercial viability of an area
of interest is demonstrable. Exploration and evaluation assets are assessed for impairment, and any impairment loss is recognised
prior to being reclassified.
The carrying amount of the exploration and evaluation assets is dependent on successful development and commercial exploitation,
or alternatively, sale of the respective area of interest.
Impairment testing of exploration and evaluation assets
Exploration and evaluation assets are assessed for impairment if sufficient data exists to determine technical feasibility and commercial
viability or facts and circumstances suggest that the carrying amount exceeds the recoverable amount.
Exploration and evaluation assets are tested for impairment when any of the following facts and circumstances exist:
■ The term of exploration licence in the specific area of interest has expired during the reporting period or will expire in
the near future, and is not expected to be renewed;
■ Substantive expenditure on further exploitation for and evaluation of mineral resources in the specific area are not
budgeted or planned;
■ Exploration for and evaluation of mineral resources in the specific area have not led to the discovery of commercially
viable quantities of mineral resources and the decision was made to discontinue such activities in the specified are; or
■ Sufficient data exists to indicate that, although a development in the specific area is likely to proceed, the carrying
amount of the exploration and evaluation asset is unlikely to be recovered in full from successful development of by
sale.
Where a potential impairment is indicated, an assessment is performed for each cash generating unit which is no larger than the
area of interest. The Group performs impairment testing in accordance with accounting policy 3(f).
Farm-in arrangements (in the exploration and evaluation phase)
For exploration and evaluation asset acquisitions (farm-in arrangements) in which the Group has made arrangements to fund a
portion of the selling partner’s (farmor’s) exploration and/or future development expenditures (carried interests), these expenditures
are reflected in the financial statements as and when the exploration work progresses.
Farm-out arrangements (in the exploration and evaluation phase)
The Group does not record any expenditure made by the farmee on its account. It also does not recognise any gain or loss on its
exploration and evaluation farm-out arrangements but redesignates any costs previously capitalised in relation to the whole interest
as relating to the partial interest retained.
Monies received pursuant to farm-in agreements are treated as a liability (advanced cash call) on receipt and until such time as the
relevant expenditure is incurred
80
HAMMER METALS LIMITED / Annual Report 2021
.
(O) GOVERNMENT GRANTS
Government grants are recognised when there is reasonable assurance that (a) the Group will comply with the conditions attaching
to them; and (b) the grants will be received; they are then recognised in profit or loss as other income or as a deduction against the
carrying value of an underlying asset.
The Group recognises the refundable research and development tax incentive (received under the tax legislation passed in 2011)
as a government grant. This incentive is refundable to the Group regardless of whether the Group is in a tax payable position and is
presented by deducting the grant from the carrying amount of the related exploration asset.
(P) RIGHT-OF-USE ASSETS
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which comprises
the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the commencement date net
of any lease incentives received, any initial direct costs incurred, and, except where included in the cost of inventories, an estimate
of costs expected to be incurred for dismantling and removing the underlying asset, and restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful life of the
asset, whichever is the shorter. Where the Group expects to obtain ownership of the leased asset at the end of the lease term, the
depreciation is over its estimated useful life. Right-of use assets are subject to impairment or adjusted for any remeasurement of
lease liabilities.
The Group has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases with terms of 12
months or less and leases of low-value assets. Lease payments on these assets are expensed to profit or loss as incurred.
(Q) LEASE LIABILITIES
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present value of
the lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease or, if that rate cannot
be readily determined, the Group’s incremental borrowing rate. Lease payments comprise of fixed payments less any lease incentives
receivable, variable lease payments that depend on an index or a rate, amounts expected to be paid under residual value guarantees,
exercise price of a purchase option when the exercise of the option is reasonably certain to occur, and any anticipated termination
penalties. The variable lease payments that do not depend on an index or a rate are expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured if there
is a change in the following: future lease payments arising from a change in an index or a rate used; residual guarantee; lease
term; certainty of a purchase option and termination penalties. When a lease liability is remeasured, an adjustment is made to the
corresponding right-of use asset, or to profit or loss if the carrying amount of the right-of-use asset is fully written down.
4. OTHER INCOME
Management fee from farm-in partners
Rental income
COVID-related government assistance
Fees received from preparation of exploration information
Other income
30 June 2021
$
30 June 2020
$
141,780
-
38,500
100,000
27,739
308,019
75,798
9,185
-
-
14,109
99,092
81
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HAMMER METALS LIMITED / Annual Report 2021
Notes To The Consolidated Financial Statements
5. RESULT FROM OPERATING ACTIVITIES
Net loss for the year before tax has been arrived at after the charging the
following expenses:
Depreciation of property, plant and equipment
Amortisation of right-of-use assets
Salary and wages
Superannuation expense
Share based payments
Total employee costs
6. FINANCE INCOME AND FINANCE COSTS
Recognised in loss for the year:
Interest income
Finance costs
Net finance income
7. AUDITORS’ REMUNERATION
Auditors of the Company - KPMG
Audit services:
30 June 2021
$
30 June 2020
$
5,946
20,960
26,906
-
-
-
239,315
139,888
17,982
186,795
444,092
12,665
233,707
386,260
30 June 2021
$
30 June 2020
$
14,006
(4,917)
9,089
2,299
(966)
1,333
30 June 2021
$
30 June 2020
$
Audit and review of financial reports
37,000
32,500
Non-audit services:
Taxation compliance services
-
37,000
34,048
66,548
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HAMMER METALS LIMITED / Annual Report 2021
8. INCOME TAX
(a) Income tax benefit
Current tax
Deferred tax
Total income tax benefit
30 June 2021
$
30 June 2020
$
-
-
-
-
-
-
Numerical reconciliation of income tax benefit to pre-tax accounting loss:
Loss before income tax
Income tax benefit using the Company’s domestic tax rate of 27.5% (2020:
27.5%)
Adjusted for:
Non-deductible expenses / (Non-Assessable Income)
Under/over from prior year
(611,525)
(1,978,610)
(168,169)
(544,118)
(820)
-
(880)
-
Temporary differences and tax losses not recognised
168,989
544,998
Income tax benefit
-
-
(b) Unrecognised deferred tax assets
Deferred tax assets have not been recognised in respect of the following
items:
Temporary timing differences related to:
Property, plant and equipment
Investments
Accrued expenses and provisions
Capital raising costs
Income tax losses
(c) Recognised deferred tax assets & liabilities
Temporary timing differences related to:
Exploration and evaluation expenditure
Income tax losses
539
212,976
73,772
131,500
174
271,607
53,757
99,424
7,566,723
7,483,908
7,985,510
7,908,870
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(4,793,097)
(3,880,462)
4,793,097
3,880,462
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m
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The deductible temporary differences and tax losses do not expire under current tax legislation. Deferred tax assets have not been
recognised in respect of these items because it is not probable that future taxable profit will be available against which the Group
can utilise the benefits from.
83
HAMMER METALS LIMITED / Annual Report 2021
Notes To The Consolidated Financial Statements
(d) Movement of temporary differences recognised during the year ended 30 June 2021:
Balance 1 July
2020
Profit or Loss
Other
comprehensive
income
Equity
Balance 30
June 2021
Exploration and evaluation
expenditure
(3,880,462)
(912,635)
Carried-forward tax losses
3,880,462
912,635
-
-
-
-
-
-
-
-
(4,793,097)
4,793,097
-
(e) Movement of temporary differences recognised during the year ended 30 June 2020:
Exploration and evaluation
expenditure
Balance 1
July 2019
Profit or Loss
(3,287,520)
(768,355)
Carried-forward tax losses
3,287,520
768,355
-
-
Other
comprehensive
income
Equity
-
-
-
-
-
-
Balance 30
June 2020
(3,880,462)
3,880,462
-
9. LOSS PER SHARE
30 June 2021
$
30 June 2020
$
(a) Basic and dilutive loss per share calculated using the weighted average
number of fully paid ordinary shares on issue at the reporting date.
(0.08) cents
(0.40) cents
Options disclosed in Note 16(b) are potential ordinary shares which are
considered anti-dilutive, therefore diluted earnings per share are the same as
basic earnings per share.
(b) Weighted average number of shares used in calculation of basic and
dilutive earnings per share
721,519,795
490,120,306
10. CASH AND CASH EQUIVALENTS
Cash at bank and on hand
30 June 2021
$
30 June 2020
$
9,706,093
2,678,535
The Group’s exposure to interest rate risk and sensitivity analysis for financial assets and financial liabilities are disclosed in Note 26.
84
HAMMER METALS LIMITED / Annual Report 2021
11. TRADE AND OTHER RECEIVABLES
Current
GST receivable
Security deposit
Exploration grant receivable
Other receivables
Trade and other receivables are non-interest bearing.
12. OTHER FINANCIAL ASSETS
Non - Current
Investments in other entities
30 June 2021
$
30 June 2020
$
23,733
25,150
-
91,959
5,704
38,858
99,000
11,166
140,842
154,728
30 June 2021
$
30 June 2020
$
Listed shares in TSXV and ASX-listed companies - at fair value
484,299
271,097
The Group’s exposure to equity price risk and sensitivity analysis in disclosed in Note 26. Listed shares recognised as non-current
assets have been recognised at fair value through profit or loss (“FVTPL”).
13. PLANT AND EQUIPMENT
Office equipment and fittings at cost
Accumulated depreciation
Net book value
14. RIGHT-OF-USE ASSETS
Plant and equipment – right of use
Less: accumulated depreciation
Total right-of-use assets
Movements in right-of-use assets for the period:
Opening balance at the beginning of the period
Additions for the period
Depreciation
Disposals
30 June 2021
$
30 June 2020
$
258,852
252,906
(258,852)
(252,906)
-
-
30 June 2021
$
30 June 2020
$
324,262
(20,960)
303,202
71,570
252,592
(20,960)
-
71,570
-
71,570
-
71,570
-
-
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Closing balance at the end of the period
303,202
71,570
HAMMER METALS LIMITED / Annual Report 2021
Notes To The Consolidated Financial Statements
15. EXPLORATION AND EVALUATION EXPENDITURE
Balance at 1 July
Exploration and evaluation expenditure incurred
Tenements acquired
Exploration grants received
Research and development grant received
Balance at 30 June
30 June 2021
$
30 June 2020
$
14,110,772
11,954,619
4,030,106
2,461,092
50,000
-
(377,224)
(90,000)
(384,209)
(214,939)
17,429,445
14,110,772
The ultimate recovery of costs carried forward for exploration and evaluation phases is dependent on the successful development and
commercial exploitation or sale of the respective areas of interest at an amount greater than or equal to carrying value. Refer note 3 (n).
Expenses capitalised to Exploration and Evaluation Expenditure assets for the year include direct exploration costs (drilling, rock chip
programs and surveys including magnetic and SAM), laboratory costs (assaying, analysis and review), geological and geochemical
consultants as well as allocated administration costs (including salary and wages) where those costs can be directly attributed to the
exploration or evaluation activities upon a given area of interest.
16. TRADE AND OTHER PAYABLES
Trade payables and accruals
Employee Leave Accruals
Share issue funds received in advance – Note 1
30 June 2021
$
30 June 2020
$
623,965
346,048
47,318
17,848
500,000
-
1,171,283
363,896
All trade and other payables are non-interest bearing and payable on normal commercial terms.
The Group’s exposure to currency and liquidity risk related to trade and other payables is disclosed in Note 26.
Note 1 – relates to funds received for the subscription of shares in the Company by a director, which was subject to shareholder
approval. Approval was obtained after balance date and therefore these funds were subsequently reallocated to issued capital.
30 June 2021
$
30 June 2020
$
63,997
232,595
296,592
17,208
56,302
73,510
17. LEASE LIABILITIES
Current lease liabilities
Non-current lease liabilities
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HAMMER METALS LIMITED / Annual Report 2021
18. ISSUED CAPITAL
(a) Share capital
Ordinary shares
On issue at 1 July
30 June 2021
No.
30 June 2020
No.
30 June 2021
$
30 June 2020
$
578,356,565
351,213,748
51,429,354
46,628,496
Shares issued for cash at $0.02 per share
Shares issued for cash at $0.022 per share
-
-
87,803,437
119,813,623
-
-
1,756,069
2,635,900
Exercise of HMXOD listed options
167,105,021
19,525,757
5,649,199
683,401
Shares issued to acquire tenements
1,250,000
Shares issued for cash at $0.095 per share
56,315,727
Shares issued in lieu of fees
Conversion of performance rights
Exercise of unlisted options
Share issue costs
875,206
1,500,000
1,250,000
-
-
-
-
-
-
-
50,000
5,349,994
23,500
25,392
55,000
-
-
-
-
-
(305,104)
(274,512)
On issue at 30 June – fully paid
806,652,519
578,356,565
62,277,335
51,429,354
Terms and conditions
Holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at
shareholders’ meetings. The company does not have authorised capital or par value in respect of its issued shares.
In the event of winding up of the Company, ordinary shareholders rank after all other shareholders and creditors and are fully entitled
to any proceeds of liquidation.
Dividends
No dividends were paid or declared for the year (2020: NIL).
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HAMMER METALS LIMITED / Annual Report 2021
Notes To The Consolidated Financial Statements
18. ISSUED CAPITAL Continued
(b) Options outstanding over ordinary shares
Listed options (Option issue reserve)
30 June 2021
No.
30 June 2020
No.
Listed HMXOD options exercisable at $0.03 on or before 30 Sep 2020
-
170,829,449
Unlisted options (Share-based payment reserve)
Unlisted options exercisable at $0.032 on or before 30 Nov 2022
8,750,000
10,000,000
Unlisted options exercisable at $0.05 expiring 21 Oct 2023
Unlisted options exercisable at $0.06 expiring 21 Oct 2023
Unlisted options exercisable at $0.035 expiring 13 Dec 2022
Unlisted options exercisable at $0.035 expiring 30 Jun 2023
Unlisted options exercisable at $0.05 expiring 30 Jun 2024
Unlisted options exercisable at $0.05 expiring 30 Nov 2024
3,000,000
3,000,000
4,000,000
4,000,000
1,000,000
1,000,000
3,000,000
3,000,000
2,600,000
2,600,000
4,500,000
-
26,850,000
197,105,527
No listed options were issued during the year (2020: Nil).
4,500,000 unlisted options were granted to directors, executives and employees during the year (2020: 9,600,000).
1,250,000 unlisted options were exercised during the year (2020: Nil).
No unlisted options were granted to consultants during the year (2020: 4,000,000)
167,105,021 Listed options were exercised during the year (2020: 19,525,757), and 3,724,428 lapsed (2020: Nil).
2,676,078 fully vested unlisted options expired unexercised during the period (2020: 14,300,000).
Options carry no voting rights until converted to fully paid ordinary shares. All unlisted options were granted for no cash consideration.
30 June 2021
No.
30 June 2020
No.
-
-
750,000
750,000
750,000
750,000
750,000
750,000
5,000,000
5,000,000
6,500,000
8,000,000
(c) Performance rights
Performance rights (Share-based payment reserve
Managing Director Performance Rights – Tranche 1
Managing Director Performance Rights – Tranche 2
Managing Director Performance Rights – Tranche 3
Managing Director Performance Rights – Tranche 4
Managing Director Performance Rights – Tranche 5
88
HAMMER METALS LIMITED / Annual Report 2021
The following performance rights were granted during the period (refer note 21):
18. ISSUED CAPITAL Continued
Managing Director Performance Rights
-
-
-
-
-
Tranche 1
Tranche 2
Tranche 3
Tranche 4
Tranche 5
Number of
options
Vesting Date
Vesting
Condition
Expiry Date
750,000
21/10/2020
-
13/12/2023
750,000
21/10/2020
Note 1
13/12/2023
750,000
21/10/2021
-
13/12/2023
750,000
21/10/2021
Note 2
13/12/2023
5,000,000
Note 3
Note 3
13/12/2023
All performance rights require the managing director to remain employed until vesting date. For Tranches 1 and 3, these rights vest on
the vesting date (being the service period) with no additional vesting condition. Tranches 2, 4 and 5 contain additional performance
condition as follows:
- Tranche 2 performance rights include a vesting condition of maintaining a minimum share price of $0.031 for a period of 30 Days
at any point during the vesting period.
- Tranche 4 performance rights include a vesting condition of maintaining a minimum share price of $0.036 for a period of 30 Days
at any point during the vesting period.
- Tranche 5 performance rights include a vesting condition of the satisfactory completion of a transaction in accordance with the
terms outlined in the Company’s Notice of AGM dated 8 October 2019.
19. RESERVES
Share-based payment reserve (1)
Balance at beginning of period
Options issued to Directors and executives
Options issued to Employees and contractors
Performance rights issued to Managing Director
Options exercised during the period
Performance rights exercised during the period
Further vesting expense of options and rights issued in previous periods
Option issue reserve (2)
Balance at beginning of period
Options exercised during the period
Lapse of unexercised options
30 June 2021
$
30 June 2020
$
1,144,698
910,991
105,750
-
-
(15,000)
(25,392)
81,045
35,967
155,700
42,040
-
-
-
1,291,101
1,144,698
650,225
(636,049)
(14,176)
747,854
(97,629)
-
-
650,225
1,291,101
1,794,923
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HAMMER METALS LIMITED / Annual Report 2021
Notes To The Consolidated Financial Statements
(1) The share-based payment reserve is used to record the fair value of options and rights issued to Directors and employees
and consultants under various share-based payment schemes and options issued for the acquisition of assets.
(2) The option issue reserve is used to record the value of listed options issued under an entitlement issue during a previous
financial year, less the costs of that issue. All listed options either were exercised or lapsed during the period, therefore
the balance of the reserve is now nil.
20. COMMITMENTS
a) Exploration Expenditure Commitments
In order to maintain current rights of tenure to exploration tenements the Company is required to perform minimum exploration work
to meet the minimum expenditure requirements specified by various State Governments within Australia. These obligations may be
reset when application for a mining lease is made and at other times.
The Group has a minimum expenditure commitment on tenure under its control.
The Company can apply for exemption from compliance with the minimum exploration expenditure requirements.
These obligations are not provided for in the financial report and are payable:
Consolidated
Company
30 June 2021
$
30 June 2020
$
30 June 2021
$
30 June 2020
$
Annual minimum exploration expenditure
2,325,718
1,590,410
-
-
21. SHARE BASED PAYMENTS
Incentive Option Plan
The Hammer Metals Incentive Option Plan was approved by shareholders on 14 November 2019. The key features of this plan are:
(a) The plan will be available to directors, employees and other permitted persons of the Company and its subsidiaries.
(b) Options are granted for no consideration.
(c) The options are issued at an exercise price as determined by the Board from time to time.
(d) The number of shares the subject of options issued under this plan and other similar plans will not exceed 5% of the Company’s
issued capital from time to time.
(e)
If a holder ceases to be an eligible participant of the plan during the exercise period of a vested option, the holder may exercise
the options within 30 days of ceasing to be an eligible participant and thereafter the options will lapse.
(f) The options issued under this plan shall not be quoted on ASX.
(g) The options’ terms are at the discretion of the Directors.
The number and weighted average exercise price of unlisted share options on issue is as follows:
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HAMMER METALS LIMITED / Annual Report 2021
21. SHARE BASED PAYMENTS Continued
30 June 2021
30 June 2020
No of unlisted
options
Weighted average
exercise price
No of unlisted
options
Weighted average
exercise price
Outstanding at 1 July
26,276,078
Granted during the period
4,500,000
Exercised during the period
(1,250,000)
$0.044
$0.050
$0.032
26,276,078
-
(13,600,000)
Expired / lapsed during the
period
(2,676,078)
$0.070
(14,300,000)
Outstanding at 30 June
Exercisable at 30 June
26,850,000
22,850,000
$0.045
26,276,078
8,000,000
$0.051
-
$0.061
$0.044
$0.044
The options outstanding at year end have exercise prices ranging from $0.032 to $0.07
and a weighted average remaining contractual life of 2.652 years.
The following options were granted during the prior year.
Number
of options
granted
Date granted
% Vested
% Forfeited
/ Lapsed
Financial year
in which grant
vested / will vest
Key Management Personnel
Russell Davis
2,000,000
30 November 2020
Zbigniew Lubieniecki
1,500,000
30 November 2020
David Church
1,000,000
30 November 2020
100%
100%
100%
-
-
-
-
-
-
The fair value of the options issued during the year to Key Management Personnel was determined by reference
to the Black-Scholes option pricing model. The key inputs and valuations are summarised as follows:
Underlying security spot price on grant date
Exercise price
Grant date
Expiration date
Vesting date
Life (years)
Volatility
Risk free rate
Dividend Yield
Number of options
Valuation per option
Remaining life (years)
Directors
$0.037
$0.05
30 November 2020
30 November 2024
Immediate
4
100%
0.20%
-
4,500,000
$0.0235
3.4
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HAMMER METALS LIMITED / Annual Report 2021
Notes To The Consolidated Financial Statements
21. SHARE BASED PAYMENTS Continued
Granted during previous financial years
The following options were granted during the prior year:
Key Management Personnel
Number of
options granted
Date granted % Vested
Mr D Thomas – Tranche A
3,000,000 14 November 2019
100%
Mr D Thomas – Tranche B
4,000,000 14 November 2019
0%
Employees and
contractors
Corporate advisors –
Tranche A
Corporate advisors –
Tranche B
2,600,000
23 June 2020
100%
1,000,000 14 November 2019
100%
3,000,000
23 June 2020
100%
% Forfeited
/ Lapsed
Financial year
in which grant
vested / will vest
0%
0%
0%
0%
0%
30 June 2021
30 June 2022
30 June 2020
30 June 2020
30 June 2020
The fair value of the options issued during the prior year to Key Management Personnel was determined by reference to the Black-
Scholes option pricing model. The key inputs and valuations are summarised as follows:
Mr D Thomas –
Tranche A
Mr D Thomas –
Tranche B
Mr M Pitts
Corp. Advisors
– Tranche A
Corp. Advisors
– Tranche B
Underlying security
spot price on grant date
$0.021
$0.021
Exercise price
$0.05
$0.06
$0.04
$0.05
$0.021
$0.04
$0.035
$0.035
Grant date
14 Nov 2019
14 Nov 2019
23 Jun 2020
14 Nov 2019
23 Jun 2020
Expiration date
21 Oct 2023
21 Oct 2023
30 Jun 2024
13 Dec 2022
30 Jun 2023
Vesting date
Life (years)
Volatility
Risk free rate
Dividend Yield
21 Oct 2020
21 Oct 2021
Immediate
Immediate
Immediate
4
100%
0.795%
-
4
100%
0.795%
-
4
100%
0.340%
-
3
100%
0.795%
-
3
100%
0.340%
-
Number of options
3,000,000
4,000,000
500,000
1,000,000
3,000,000
Valuation per option
$0.0111
$0.0105
$0.0260
$0.0110
$0.0257
Remaining life (years)
2.3
2.3
3.0
1.5
2.0
Total value
$33,360
$42,080
$13,000
$11,000
$77,100
Value recognised
to date
Value still to be
recognised
$33,360
$33,354
$13,000
$11,000
$77,100
-
$6,726
-
-
-
The above options issued to Mr Thomas include a service condition for the individual to remain employed until the vesting date. There
are no further vesting conditions attached to the options issued to Mr Pitts or the Corporate Advisors.
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HAMMER METALS LIMITED / Annual Report 2021
The number of performance rights on issue is as follows:
21. SHARE BASED PAYMENTS Continued
Outstanding at 1 July
Granted during the period
Exercised during the period
Expired / lapsed during the period
Outstanding at 30 June
Vested and exercisable at 30 June
30 June 2021
No.
30 June 2020
No.
8,000,000
-
-
8,000,000
(1,500,000)
-
-
-
6,500,000
8,000,000
-
-
The fair value of the performance rights issued during the prior year to Key Management Personnel was determined by reference to
the underlying security on the date of issue, adjusted as necessary for any market-based performance conditions. The key inputs
and valuations are summarised as follows:
Mr D Thomas –
Tranche 1
Mr D Thomas –
Tranche 2
Mr D Thomas
– Tranche 3
Mr D Thomas
– Tranche 4
Mr D Thomas
– Tranche 5
Underlying security
spot price on grant date
$0.021
$0.021
$0.021
$0.021
$0.021
Grant date
14 Nov 2019
14 Nov 2019
14 Nov 2019
14 Nov 2019
14 Nov 2019
Expiration date
13 Dec 2023
13 Dec 2023
13 Dec 2023
13 Dec 2023
13 Dec 2023
Vesting date
Life (years)
Discount applied
(Note 1)
Number of rights
Value per right
Remaining life (years)
(Note 2)
21 Oct 2020
21 Oct 2020
21 Oct 2021
21 Oct 2021
Note 3
4.1
-
750,000
$0.021
4.1
39%
750,000
$0.0129
4.1
-
4.1
26%
4.1
-
750,000
$0.021
750,000
5,000,000
$0.0156
$0.021
N/A
N/A
2.5
2.5
2.5
Total value
$15,750
$9,642
$15,750
$11,729
$105,000
Value recognised to
date
Value still to be
recognised
$15,750
$9,642
$13,233
$9,854
$41,859
-
-
$2,517
$1,875
$63,141
Note 1 – this discount represents the expected likelihood that the share-price hurdle condition would be met and was determined
by an independent valuation.
Note 2 – the remaining life represents the time, in years, left until the expiry of the right. The rights may vest before this date, as noted
for tranches 1 and 2.
Note 3 – Tranche 5 contains a performance-based vesting condition. For measurement and recognition purposes, it has been
estimated that these rights would vest over their entire life.
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HAMMER METALS LIMITED / Annual Report 2021
Notes To The Consolidated Financial Statements
22. RELATED PARTIES
Key Management Personnel Compensation:
The following were key management personnel of the Group at any time during the reporting period and unless otherwise indicated
were key management personnel for the entire period:
Executive Directors
Mr D Thomas
Non-executive Directors
Mr R Davis
Mr Z Lubieniecki
Mr D Church (appointed 1 July 2020)
Executives
Mr M Pitts (Company Secretary)
The key management personnel compensation comprised:
Short-term employee benefits
Post-employment benefits
Share-based payments
30 June 2021
$
30 June 2020
$
489,208
412,216
37,050
186,794
713,052
16,301
91,007
519,524
Remuneration levels are competitively set to attract and retain appropriately qualified and experienced Directors and executives.
Remuneration packages include a mix of fixed remuneration and equity-based remuneration.
Information regarding individual Directors and executive’s compensation and some equity instruments disclosures as permitted by
Corporations Regulations 2M.3.03 and 2M.6.04 is provided in the remuneration report section of the Directors’ report.
Certain key management personnel, or their related parties, hold positions in other entities that result in them having control or
significant influence over the financial or operating policies of those entities. Some of these entities (as detailed below) transacted
with the Group during the reporting period.
The aggregate value of transactions and outstanding balances relating to this entity were as follows:
Transaction value year ended
Balance outstanding as at
Transaction
30 June 2021
$
30 June 2020
$
30 June 2021
$
30 June 2020
$
Mr Z Lubieniecki
Consulting Fees
Mr M Pitts
Accounting services
40,708
41,520
58,875
41,140
-
3,670
9,075
1,280
The Company paid fees to Endeavour Corporate, a company associated with Mark Pitts, for accounting and financial reporting services
provided to the company. The Company also paid fees to Zbigniew Lubieniecki, as consulting fees for geological services provided.
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HAMMER METALS LIMITED / Annual Report 2021
Country of
Incorporation
Percentage held
2021
Percentage held
2020
23. INTEREST IN OTHER ENTITIES
Name
Parent and ultimate controlling entity
Hammer Metals Limited
Subsidiaries
Hammer Metals Australia Pty Ltd
Mt. Dockerell Mining Pty Ltd
Mulga Minerals Pty Ltd
Carnegie Exploration Pty Ltd
Australia
Australia
Australia
Australia
Hammer Bulk Commodities Pty Ltd (i)
Australia
Midas Metals Asia Pty Ltd (i)
Australia
100%
100%
100%
100%
100%
85%
100%
100%
100%
100%
100%
85%
(i) These subsidiaries are dormant and have not traded during the year.
The investments held in controlled entities are included in the financial statements of the parent at cost.
Element Minerals Australia Pty Ltd was disposed of on 28 June 2019. Refer Note 28 for details. Carnegie Exploration Pty Ltd was
acquired on 21 May 2019. Refer Note 22 for details.
Joint arrangements
The Group has the following farm-in / farm-out arrangements:
Dronfield
The Group has a farm-in agreement in relation to a tenement held in the Mt. Isa region. The Group has earned an 80% interest in the
project. The Group’s interest in the above arrangement includes capitalised exploration phase expenditure totalling $659,627 at 30
June 2021 and is included in exploration and evaluation assets (note 15).
Mt Frosty – Mt Isa Mines (Glencore)
During a previous financial year the Group (through its wholly owned subsidiary Mulga Minerals Pty Ltd (‘Mulga’)) completed the
acquisition of a 51% interest in the Mt. Frosty prospect and agreed terms for a new joint venture agreement with Mount Isa Mines
Limited (‘MIM’) (a 100% owned subsidiary of Glenore PLC).
Each party to the joint arrangement contributes exploration expenditure according to their participating interest (Hammer – 51% and
MIM – 49%).
Dilution provisions apply if a party elects not to contribute to a programme. If a party’s participating interest falls below 10% their
interest will convert to a 3% Net Profits Royalty.
Mulga acts as the initial manager of the joint arrangement. The Group’s interest in the above arrangement includes capitalised
exploration phase expenditure totalling $594,717 at 30 June 2021 and is included in exploration and evaluation assets (note 15).
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Mt Isa East JV – JOGMEC/SMMO
The Agreement with Japan Oil, Gas and Metals National Corporation (“JOGMEC“) was signed in November 2019 and covers sections
of the Even Steven, Mount Philp, Dronfield West and Malbon targets for a total area of approximately 290km2 of the 2,200km2 Mount
Isa Project. The arrangement is referred to as the Mount Isa East Joint Venture, however in accordance with the Australian Accounting
Standards is a joint arrangement by nature. During the Farm-in period, JOGMEC can achieve a 60% interest in the project areas by
expending $6,000,000 by 31 March 2024. The Farm-in Period is staged as follows, noting that JOGMEC earns its interest after the
completion of the Fifth and final Farm-in Period:
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HAMMER METALS LIMITED / Annual Report 2021
Notes To The Consolidated Financial Statements
■ The First Farm-in Period is a minimum expenditure of $1,000,000 by 31 March 2020 before JOGMEC can withdraw
from the agreement;
■ The Second Farm-in Period is an aggregate expenditure of $2,000,000 by 31 March 2021;
■ The Third Farm-in Period is an aggregate expenditure of $3,000,000 by 31 March 2022;
■ The Fourth Farm-in Period is an aggregate expenditure of $4,500,000 by 31 March 2023; and
■ The Fifth and final Farm-in Period is an aggregate expenditure of $6,000,000 by 31 March 2024.
Upon completion of the Fifth Farm-in Period, each company can elect to contribute its pro-rata share of future funding. If either party
does not contribute and is diluted to an ownership of less than 10% of the Mt Isa East JV, the Group’s equitable interest will convert
to a 2% Net Smelter Return Royalty. At any time, the Net Smelter Royalty Return Rate can be reduced to 1% via the payment of
A$2,000,000. The areas of interest are all 100% held by the Company’s subsidiaries Mt Dockerell Mining Pty Ltd and Mulga Minerals
Pty Ltd. Subsequent to the end of the financial year, JOGMEC and Sumitomo Metal Mining Oceania Pty. Ltd. (“SMMO”) signed an
agreement whereby JOGMEC would transfer its position within the Mt Isa East JV to SMMO. The terms of the agreement remain
unchanged. Refer Note 28.
24. RECONCILIATION OF CASH FLOWS FROM OPERATING ACTIVITIES
Loss for the year
Adjustments for:
Depreciation and amortisation
Share based payments
Fair value adjustment on financial assets
Gain on disposal of subsidiary
Interest expense
Management fee from farm-in partners
Shares issued in lieu of fees
Movements attributable to operating activities:
Decrease / (increase) in trade and other receivables
Increase / (decrease) in trade and other payables
Net cash used in operating activities
30 June 2021
$
30 June 2020
$
(611,525)
(1,978,610)
26,906
186,795
(213,202)
-
233,707
987,661
-
(58,424)
4,917
71
(141,780)
(75,798)
23,500
-
(41,504)
146,221
(13,743)
106,038
(619,672)
(799,098)
25. SEGMENT INFORMATION
The Group has three reportable segments, being mineral exploration in Queensland and Western Australia, and corporate activities.
The Group’s operating segments have been determined with reference to the monthly management accounts, program budgets and
cash flow forecasts used by the chief operating decision maker to make decisions regarding the Group’s operations and allocation
of working capital.
Segment information
The following tables represent revenue and profit information and certain asset and liability information regarding geographical
segments for the year ended 30 June 2021.
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HAMMER METALS LIMITED / Annual Report 2021
25. SEGMENT INFORMATION (Continued)
Queensland
Exploration
$
Western Australia
Exploration
$
Corporate
Overheads
$
30 June 2021
Segment income
-
Segment loss before income tax expense
(17,782)
-
(273)
308,019
(611,525)
Segment assets
Segment liabilities
30 June 2020
Segment income
Segment loss before income tax expense
12,914,534
(139,607)
4,514,911
(22,842)
10,634,536
(1,305,426)
-
(337)
-
99,092
(8,261)
(1,946,671)
Segment assets
Segment liabilities
11,947,179
(18,448)
406,267
(101,983)
4,933,256
(316,975)
26. FINANCIAL INSTRUMENTS DISCLOSURES
Overview
The Group has exposure to the following risks from their use of financial instruments:
Credit risk
Liquidity risk
Market risk
This note presents information about the Group’s exposure to each of the above risks, their objectives, policies and processes for
measuring and managing risk, and the management of capital.
The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework. Management
monitors and manages the financial risks relating to the operations of the Group through regular reviews of the risks.
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual
obligations and arises principally from the Group’s receivables from customers and investment securities.
Trade and other receivables
As the Company operates in the mining exploration sector it does not have significant trade receivables and is therefore not exposed
to credit risk in relation to trade receivables. The Group receives advanced cash calls from its farm-in / joint arrangement partner which
are classified as liabilities. The cash call amounts are reduced as and when expenditure in terms of the farm-in/ joint arrangement
agreement is incurred.
Presently, the Group undertakes exploration and evaluation activities in Australia. At the balance sheet date there were no significant
concentrations of credit risk.
Exposure to credit risk
The carrying amount of the Group’s financial assets represents the maximum credit exposure.
The Group’s maximum exposure to credit risk at the reporting date was:
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HAMMER METALS LIMITED / Annual Report 2021
Notes To The Consolidated Financial Statements
Carrying amount
30 June 2021
$
9,706,093
140,842
30 June 2020
$
2,678,535
154,728
Note
10
11
Cash and cash equivalents
Trade and other receivables
Impairment losses
None of the Group’s trade and other receivables are past due and impaired (2020: Nil).
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due (refer Note 2(f)). The Group’s
approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when
due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.
The Group manages liquidity risk by maintaining adequate reserves by continuously monitoring forecast and actual cash flows.
Typically, the Group ensures it has sufficient cash on demand to meet expected operational expenses for a period of 90 days, this
excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters.
The expected settlement of the Group’s financial liabilities is as follows.
Consolidated
Carrying
Amount
Contractual
Cash-Flows
< 6 months
6-12 months
1-2 years
2-5 years
30 June 2021
1,171,283
1,171,283
1,171,283 -
-
-
Trade and Other Payables
296,592
320,305
36,201 36,201
72,401
175,502
Lease liabilities
1,467,875
1,491,588
1,207,484 36,201
72,401
175,502
30 June 2021
363,896
363,896
363,896 -
Trade and Other Payables
73,510
78,886
8,606 8,606
Lease liabilities
437,406
442,782
372,502 8,606
-
17,212
17,212
-
44,462
44,462
Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the
Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and
control market risk exposures within acceptable parameters, while optimising the return.
Currency risk
The Group has no exposure to currency risk on investments and transactions that are denominated in a currency other than the
respective functional currencies of Group entities. The Group has not entered into any derivative financial instruments to hedge such
transactions and anticipated future receipts or payments that are denominated in a foreign currency.
Interest rate risk
The Group is not exposed to interest rate risk on borrowings as it has no borrowings subject to variable interest. The Group is exposed
to interest rate risk on its cash balances.
Profile
At the reporting date the interest rate profile of the Company’s and the Group’s interest-bearing financial instruments was:
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HAMMER METALS LIMITED / Annual Report 2021
Fixed rate instruments
Cash and cash equivalents
Weighted average interest rates
Variable rate instruments
Cash and cash equivalents
Weighted average interest rates
Carrying amount
30 June 2021
$
30 June 2020
$
22,256
0.25%
21,992
1.20%
9,683,837
2,656,543
0.01%
0.41%
Fair value sensitivity analysis for fixed rate instruments
The Group does not account for any fixed rate financial assets and liabilities at fair value through profit or loss. Therefore, a change
in interest rates at the reporting date would not affect profit or loss or equity (2020: Nil)
Cash flow sensitivity analysis for variable rate instruments
A sensitivity of 50 basis points has been used and considered reasonable given current interest rates. A 0.5% movement in interest
rates at the reporting date would have increased equity and profit or loss by the amounts shown below. This analysis assumes that
all other variables remain constant. The analysis for 2020 was performed on the same basis.
Consolidated
Loss
Equity
50bp
increase
50bp
decrease
50bp
increase
50bp
decrease
30 June 2021
Variable rate instruments
$48,419
($48,419)
$48,419
($48,419)
30 June 2020
Variable rate instruments
$13,283
($13,283)
$13,283
($13,283)
Carrying amounts versus fair values
The fair values of financial assets and liabilities materially equates to the carrying amounts shown in the statement of financial position.
Financial assets carried at fair value through profit or loss
Equity securities – listed on TSXV at quoted prices
484,299
271,097
30 June 2021
$
30 June 2020
$
Financial assets carried at amortised costs
Cash and cash equivalents
Trade and other receivables
Financial liabilities carried at amortised costs
Trade and other payables
Lease liabilities
9,706,093
2,678,535
140,842
154,728
(1,171,283)
(363,896)
(296,592)
(73,510)
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HAMMER METALS LIMITED / Annual Report 2021
Notes To The Consolidated Financial Statements
Other Market Price Risk
Other Equity price risk is the risk that the value of the instrument will fluctuate as a result of changes in market prices (other than those
arising from interest rate risk or currency risk), whether caused by factors specific to an individual investment, its issuer or all factors
affecting all instruments traded in the market. Investments are managed on an individual basis and material buy and sell decisions
are approved by the Board of Directors. The primary goal of the Group’s investment strategy is to maximise investment returns.
Fair value sensitivity analysis for equity securities (listed investments)
A sensitivity of 10% has been used and considered reasonable given current market rates. A 10% movement in market prices at
the reporting date would have increased equity and profit or loss by the amounts shown below. This analysis assumes that all other
variables remain constant. The analysis for 2020 was performed on the same basis.
Consolidated
Loss
Equity
10%
increase
10%
decrease
10%
increase
10%
decrease
30 June 2021
Equity securities – listed on TSXV
$48,430
($48,430)
$48,430
($48,430)
30 June 2020
Equity securities – listed on TSXV
$27,110
($27,110)
$27,110
($27,110)
Commodity Price Risk
The Group operates primarily in the exploration and evaluation phase and accordingly the Group’s financial assets and liabilities are
subject to minimal commodity price risk at this stage.
Capital Management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern, so as to maintain
a strong capital base sufficient to maintain future exploration and development of its projects. In order to maintain or adjust the capital
structure, the Group may return capital to shareholders, issue new shares or sell assets to reduce debt. The Group’s focus has been
to raise sufficient funds through equity to fund exploration and evaluation activities.
There were no changes in the Group’s approach to capital management during the year. Risk management policies and procedures
are established with regular monitoring and reporting.
Neither the Company nor any of its subsidiaries are subject to externally imposed capital requirements.
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HAMMER METALS LIMITED / Annual Report 2021
27. PARENT ENTITY DISCLOSURES
Financial Position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Accumulated losses
Reserves
Total equity
Financial Performance
Loss for the year
Other comprehensive income
Total comprehensive income
Company
30 June 2021
$
30 June 2020
$
21,241,534
10,822,666
6,729,891
6,341,410
27,971,425
17,164,076
1,200,479
258,478
174,840
56,302
1,375,319
314,780
26,596,106
16,849,296
62,277,335
51,429,354
(36,972,330)
(36,374,981)
1,291,101
1,794,923
26,596,106
16,849,296
(597,349)
(1,978,610)
-
-
(597,349)
(1,978,610)
There were no contingent liabilities of the parent entity at 30 June 2021 (2020: None), nor where there any commitments of the parent
entity (2020: None).
28. EVENTS SUBSEQUENT TO BALANCE DATE
Subsequent to year end the following events have occurred:
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■ On 15 July 2021, the Company issued 6,842,104 shares to Directors of the Company, which related to the Director’s
participation in the placement completed in April 2021. These shares were issued at $0.095 per share, raising
$650,000 before costs.
■ On 19 August 2021, the Company announced that Japan Oil, Gas and Metals National Corporation (“JOGMEC”) and
Sumitomo Metal Mining Oceania Pty. Ltd. (“SMMO”) had signed an agreement whereby JOGMEC would transfer its
position within the Mt Isa East JV to SMMO. The original terms of the agreement between the Company and JOGMEC
remain unchanged, with the JV partner required to spend $6 million over 5 years to earn a 60% interest in the project.
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s
Other than the above, there has not been any other matter or circumstance that has arisen after balance date that has significantly
affected, or may significantly affect, the operations of the Group, the results of those operations, or the state of affairs of the Group
in future financial periods.
101
HAMMER METALS LIMITED / Annual Report 2021
Directors’ Declaration
Directors’ Declaration
1. In the opinion of the Directors of Hammer Metals Limited (“the Company”):
(a) the consolidated financial statements and notes and the remuneration report in the Directors’ report, are in accordance
with the Corporations Act 2001, including:
i. giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its performance for the
financial year ended on that date; and
ii. complying with Australian Accounting Standards and the Corporations Regulations 2001;
(b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due
and payable.
2. The Directors have been given the declarations by the managing director and company secretary for the financial year ended 30
June 2020 pursuant to Section 295A of the Corporation Act 2001.
3. The Directors draw attention to Note 2(a) to the consolidated financial statements, which includes a statement of compliance with
International Financial Reporting Standards.
Signed in accordance with a resolution of the Directors:
R Davis
Executive Chairman
Perth
Dated 29 September 2021
102
HAMMER METALS LIMITED / Annual Report 2021
Independent Auditor’s Report
To the shareholders of Hammer Metals Limited
Independent Auditor’s Report
Independent Auditor’s Report
To the shareholders of Hammer Metals Limited
Report on the audit of the Financial Report
To the shareholders of Hammer Metals Limited
Report on the audit of the Financial Report
Opinion
Report on the audit of the Financial Report
We have audited the Financial Report of
Hammer Metals Limited (the Company).
Opinion
In our opinion, the accompanying Financial
Opinion
We have audited the Financial Report of
Report of the Company is in accordance with the
Hammer Metals Limited (the Company).
Corporations Act 2001, including:
We have audited the Financial Report of
In our opinion, the accompanying Financial
Hammer Metals Limited (the Company).
•
giving a true and fair view of the Group’s
Report of the Company is in accordance with the
financial position as at 30 June 2020 and of
In our opinion, the accompanying Financial
Corporations Act 2001, including:
its financial performance for the year ended
Report of the Company is in accordance with the
• giving a true and fair view of the Group’s
on that date; and
Corporations Act 2001, including:
financial position as at 30 June 2021 and of
•
complying with Australian Accounting
• giving a true and fair view of the Group’s
its financial performance for the year ended
Standards and the Corporations Regulations
financial position as at 30 June 2021 and of
on that date; and
2001.
its financial performance for the year ended
complying with Australian Accounting
on that date; and
Standards and the Corporations Regulations
complying with Australian Accounting
2001.
Standards and the Corporations Regulations
2001.
•
•
The Financial Report comprises:
• Consolidated statement of financial position as at
30 June 2020
The Financial Report comprises:
• Consolidated statement of profit or loss and other
• Consolidated statement of financial position
The Financial Report comprises:
comprehensive income, Consolidated statement
as at 30 June 2021.
• Consolidated statement of financial position
of changes in equity, and Consolidated statement
• Consolidated statement of profit or loss and
as at 30 June 2021.
of cash flows for the year then ended
other comprehensive income, Consolidated
• Consolidated statement of profit or loss and
• Notes including a summary of significant
statement of changes in equity, and
other comprehensive income, Consolidated
accounting policies
Consolidated statement of cash flows for the
statement of changes in equity, and
year then ended.
• Directors’ Declaration.
Consolidated statement of cash flows for the
• Notes including a summary of significant
year then ended.
The Group consists of the Company and the entities
accounting policies.
it controlled at the year-end or from time to time
• Notes including a summary of significant
during the financial year.
• Directors’ Declaration.
accounting policies.
Basis for opinion
The Group consists of the Company and the
• Directors’ Declaration.
entities it controlled at the year-end or from time
The Group consists of the Company and the
to time during the financial year.
entities it controlled at the year-end or from time
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit
to time during the financial year.
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Basis for opinion
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Our responsibilities under those standards are further described in the Auditor’s responsibilities for the
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit
audit of the Financial Report section of our report.
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit
We are independent of the Group in accordance with the Corporations Act 2001 and the ethical
Our responsibilities under those standards are further described in the Auditor’s responsibilities for
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
the audit of the Financial Report section of our report.
Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of
Our responsibilities under those standards are further described in the Auditor’s responsibilities for
the Financial Report in Australia. We have fulfilled our other ethical responsibilities in accordance with the
We are independent of the Group in accordance with the Corporations Act 2001 and the ethical
the audit of the Financial Report section of our report.
Code.
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics
We are independent of the Group in accordance with the Corporations Act 2001 and the ethical
for Professional Accountants (including Independence Standards) (the Code) that are relevant to our
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics
audit of the Financial Report in Australia. We have fulfilled our other ethical responsibilities in
Key Audit Matters
for Professional Accountants (including Independence Standards) (the Code) that are relevant to our
accordance with the Code.
audit of the Financial Report in Australia. We have fulfilled our other ethical responsibilities in
accordance with the Code.
Key Audit Matters are those matters that, in our professional judgement, were of most significance in our
Key Audit Matters
audit of the Financial Report of the current period.
Key Audit Matters
Key Audit Matters are those matters that, in our professional judgement, were of most significance in
This matter was addressed in the context of our audit of the Financial Report as a whole, and in forming
our audit of the Financial Report of the current period.
our opinion thereon, and we do not provide a separate opinion on this matter.
Key Audit Matters are those matters that, in our professional judgement, were of most significance in
This matter was addressed in the context of our audit of the Financial Report as a whole, and in
our audit of the Financial Report of the current period.
forming our opinion thereon, and we do not provide a separate opinion on this matter.
This matter was 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 this matter.
- 47 -
KPMG, an Australian partnership and a member firm of the KPMG
network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity.
Liability limited by a scheme approved under
Professional Standards Legislation.
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated
with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and
logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated
a scheme approved under Professional Standards Legislation
with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and
logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by
a scheme approved under Professional Standards Legislation
103
HAMMER METALS LIMITED / Annual Report 2021
Independent Auditor’s Report
Exploration and evaluation expenditure capitalised ($17,429,445)
Exploration and evaluation expenditure capitalised ($17,429,445)
Refer to Note 15 ‘Exploration and Evaluation expenditure’ to the Financial Report
Refer to Note 15 ‘Exploration and Evaluation expenditure’ to the Financial Report
The key audit matter
How the matter was addressed in our audit
The key audit matter
Exploration and evaluation expenditure
capitalised (E&E) is a key audit matter due to:
Exploration and evaluation expenditure
• The significance of the activity to the Group’s
capitalised (E&E) is a key audit matter due to:
business and] the balance (being 62% of
• The significance of the activity to the Group’s
total assets); and
business and] the balance (being 62% of
• The greater level of audit effort to evaluate
total assets); and
the Group’s application of the requirements
• The greater level of audit effort to evaluate
of the industry specific accounting standard
the Group’s application of the requirements
AASB 6 Exploration for and Evaluation of
of the industry specific accounting standard
Mineral Resources, in particular the
AASB 6 Exploration for and Evaluation of
conditions allowing capitalisation of relevant
Mineral Resources, in particular the
expenditure and presence of impairment
conditions allowing capitalisation of relevant
indicators. The presence of impairment
expenditure and presence of impairment
indicators would necessitate a detailed
indicators. The presence of impairment
analysis by the Group of the value of E&E,
indicators would necessitate a detailed
therefore given the criticality of this to the
analysis by the Group of the value of E&E,
scope and depth of our work, we involved
therefore given the criticality of this to the
senior team members to challenge the
scope and depth of our work, we involved
Group’s determination that no such
senior team members to challenge the
indicators existed.
Group’s determination that no such
indicators existed.
In assessing the conditions allowing capitalisation
of relevant expenditure, we focused on:
In assessing the conditions allowing capitalisation
• The determination of the areas of interest
of relevant expenditure, we focused on:
• The determination of the areas of interest
• Documentation available regarding rights to
(areas).
tenure, via licensing, and compliance with
• Documentation available regarding rights to
relevant conditions, to maintain current rights
tenure, via licensing, and compliance with
to an area of interest and the Group’s
relevant conditions, to maintain current rights
intention and capacity (including the ability to
to an area of interest and the Group’s
fund) to continue the relevant E&E activities.
intention and capacity (including the ability to
• The Group’s determination of whether the
fund) to continue the relevant E&E activities.
E&E are expected to be recouped through
• The Group’s determination of whether the
successful development and exploitation of
E&E are expected to be recouped through
the area of interest, or alternatively, by its
successful development and exploitation of
sale.
the area of interest, or alternatively, by its
sale.
In assessing the presence of impairment
indicators, we focused on those that may draw
In assessing the presence of impairment
into question the commercial continuation of
indicators, we focused on those that may draw
E&E activities for areas of interest where
into question the commercial continuation of
significant capitalised E&E exists. In addition to
E&E activities for areas of interest where
the assessments above, we paid particular
significant capitalised E&E exists. In addition to
attention to results from latest exploration
the assessments above, we paid particular
activities regarding the existence or otherwise of
attention to results from latest exploration
potentially commercially viable quantity of
activities regarding the existence or otherwise of
reserves and resources.
potentially commercially viable quantity of
reserves and resources.
(areas).
104
How the matter was addressed in our audit
Our procedures included:
• Evaluating the Group’s accounting policy to
Our procedures included:
recognise E&E using the criteria in the
• Evaluating the Group’s accounting policy to
accounting standard.
recognise E&E using the criteria in the
• Assessing the Group’s determination of its
accounting standard.
areas of interest for consistency with the
• Assessing the Group’s determination of its
definition in the accounting standard. This
areas of interest for consistency with the
involved evaluating the Group’s planned
definition in the accounting standard. This
exploration programmes as well as
involved evaluating the Group’s planned
announcements made to the ASX.
exploration programmes as well as
• Assessing the Group’s current rights to
announcements made to the ASX.
tenure for each area of interest by checking
• Assessing the Group’s current rights to
the ownership of the relevant license to
tenure for each area of interest by checking
government registries and evaluating
the ownership of the relevant license to
agreements in place with other parties. We
government registries and evaluating
also tested for compliance with conditions,
agreements in place with other parties. We
such as minimum expenditure requirements,
also tested for compliance with conditions,
on a sample of licenses.
such as minimum expenditure requirements,
• Testing the Group’s additions to E&E for the
on a sample of licenses.
year by evaluating a statistical sample of
• Testing the Group’s additions to E&E for the
recorded expenditure for consistency to
year by evaluating a statistical sample of
underlying records, the capitalisation
recorded expenditure for consistency to
requirements of the Group’s accounting
underlying records, the capitalisation
policy and the requirements of the
requirements of the Group’s accounting
accounting standard.
policy and the requirements of the
• Evaluating Group documents, such as
accounting standard.
minutes of Board meetings, for consistency
• Evaluating Group documents, such as
with their stated intentions regarding
minutes of Board meetings, for consistency
continuing activities in certain areas of
with their stated intentions regarding
interest and the expectation of recoupment
continuing activities in certain areas of
of E&E. We corroborated this through
interest and the expectation of recoupment
interviews with key operational and finance
of E&E. We corroborated this through
personnel and announcements made by the
interviews with key operational and finance
Group to the ASX.
personnel and announcements made by the
• Evaluating project and corporate budgets
Group to the ASX.
identifying areas with existing funding and
• Evaluating project and corporate budgets
those requiring alternate funding sources to
identifying areas with existing funding and
assess the Group’s capacity to continue E&E
those requiring alternate funding sources to
activities and for consistency with the
assess the Group’s capacity to continue E&E
expectation of recoupment of E&E. We
activities and for consistency with the
compared the allocation of funding for
expectation of recoupment of E&E. We
consistency to areas with E&E, for evidence
compared the allocation of funding for
of the ability to fund continued activities.
consistency to areas with E&E, for evidence
of the ability to fund continued activities.
exploration activities regarding the potential
existence of reserves and resources for
exploration activities regarding the potential
consistency to the treatment of E&E and the
existence of reserves and resources for
requirements of the accounting standard.
consistency to the treatment of E&E and the
requirements of the accounting standard.
• Comparing the results from the latest
• Comparing the results from the latest
HAMMER METALS LIMITED / Annual Report 2021
Other Information
Other Information
Other Information is financial and non-financial information in Hammer Metals Limited’s annual
reporting which is provided in addition to the Financial Report and the Auditor’s Report. The Directors
Other Information is financial and non-financial information in Hammer Metals Limited’s annual
are responsible for the Other Information.
reporting which is provided in addition to the Financial Report and the Auditor’s Report. The Directors
are responsible for the Other Information.
The Other Information we obtained prior to the date of this Auditor’s Report was the Directors’
Report and the Remuneration Report. The Chairman’s Letter, Corporate Strategy, Operational
The Other Information we obtained prior to the date of this Auditor’s Report was the Directors’
Highlights, Corporate Activity, Operations Summary, Competent Person’s Statement Annual Mineral
Report and the Remuneration Report. The Chairman’s Letter, Corporate Strategy, Operational
Resource Statement, Tenements Interests and ASX Additional Information are expected to be made
Highlights, Corporate Activity, Operations Summary, Competent Person’s Statement Annual Mineral
available to us after the date of the Auditor's Report.
Resource Statement, Tenements Interests and ASX Additional Information are expected to be made
Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not
available to us after the date of the Auditor's Report.
and will not express an audit opinion or any form of assurance conclusion thereon, with the exception
Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not
of the Remuneration Report and our related assurance opinion.
and will not express an audit opinion or any form of assurance conclusion thereon, with the exception
In connection with our audit of the Financial Report, our responsibility is to read the Other
of the Remuneration Report and our related assurance opinion.
Information. In doing so, we consider whether the Other Information is materially inconsistent with
In connection with our audit of the Financial Report, our responsibility is to read the Other
the Financial Report or our knowledge obtained in the audit, or otherwise appears to be materially
Information. In doing so, we consider whether the Other Information is materially inconsistent with
misstated.
the Financial Report or our knowledge obtained in the audit, or otherwise appears to be materially
We are required to report if we conclude that there is a material misstatement of this Other
misstated.
Information, and based on the work we have performed on the Other Information that we obtained
We are required to report if we conclude that there is a material misstatement of this Other
prior to the date of this Auditor’s Report we have nothing to report.
Information, and based on the work we have performed on the Other Information that we obtained
prior to the date of this Auditor’s Report we have nothing to report.
Responsibilities of the Directors for the Financial Report
Responsibilities of the Directors for the Financial Report
The Directors are responsible for:
• preparing the Financial Report that gives a true and fair view in accordance with Australian
The Directors are responsible for:
Accounting Standards and the Corporations Act 2001.
•
• preparing the Financial Report that gives a true and fair view in accordance with Australian
implementing necessary internal control to enable the preparation of a Financial Report that
•
Accounting Standards and the Corporations Act 2001.
gives a true and fair view and is free from material misstatement, whether due to fraud or
implementing necessary internal control to enable the preparation of a Financial Report that
error.
gives a true and fair view and is free from material misstatement, whether due to fraud or
• assessing the Group and Company’s ability to continue as a going concern and whether the
error.
use of the going concern basis of accounting is appropriate. This includes disclosing, as
• assessing the Group and Company’s ability to continue as a going concern and whether the
applicable, matters related to going concern and using the going concern basis of accounting
use of the going concern basis of accounting is appropriate. This includes disclosing, as
unless they either intend to liquidate the Group and Company or to cease operations, or have
no realistic alternative but to do so.
applicable, matters related to going concern and using the going concern basis of accounting
unless they either intend to liquidate the Group and Company or to cease operations, or have
no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Auditor’s responsibilities for the audit of the Financial Report
Our objective is:
Our objective is:
•
•
•
to obtain reasonable assurance about whether the Financial Report as a whole is free from
material misstatement, whether due to fraud or error; and
to obtain reasonable assurance about whether the Financial Report as a whole is free from
to issue an Auditor’s Report that includes our opinion.
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 Australian Auditing Standards will always detect a material misstatement when it
exists.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with Australian Auditing Standards will always detect a material misstatement when it
Misstatements can arise from fraud or error. They are considered material if, individually or in the
exists.
aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of the Financial Report.
Misstatements can arise from fraud or error. They are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on
A further description of our responsibilities for the audit of the Financial Report is located at the
the basis of the Financial Report.
Auditing and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf This description forms part of our
A further description of our responsibilities for the audit of the Financial Report is located at the
Auditor’s Report.
Auditing and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf This description forms part of our
Auditor’s Report.
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HAMMER METALS LIMITED / Annual Report 2021
Report on the Remuneration Report
Opinion
Directors’ responsibilities
In our opinion, the Remuneration Report of
Hammer Metals Limited for the year ended
30 June 2021, complies with Section 300A of the
Corporations Act 2001.
The Directors of the Company are responsible for
the preparation and presentation of the
Remuneration Report in accordance with Section
300A of the Corporations Act 2001.
Our responsibilities
We have audited the Remuneration Report
included in section 12 of the Directors’ report for
the year ended 30 June 2021.
Our responsibility is to express an opinion on the
Remuneration Report, based on our audit
conducted in accordance with Australian Auditing
Standards.
Glenn Brooks
Partner
Perth
29 September 2021
KPMG
106
HAMMER METALS LIMITED / Annual Report 2021
HAMMER METALS LIMITED / Annual Report 2021
107
ASX Additional Information
ASX ADDITIONAL INFORMATION
Additional information required by the Australian Stock Exchange Listing
Rules and not disclosed elsewhere in this report is set out below.
Information regarding share and option holdings is current as at 19 October 2021.
(A) ORDINARY SHAREHOLDERS
Twenty largest holders of ordinary shares
Number of Shares
% held
Central Mutual (Investments) Pty Ltd
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