31 October 2022
2022 Annual Report
Hammer Metals Limited (ASX:HMX) (“Hammer” or “the Company”) is pleased to attach its Annual Report
for the year ended 30 June 2022.
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
Hammer Metals
2022
Unit 1, 28-30
Mayfair Street
West Perth WA 6005
+61 8 6369 1195
info@hammermetals.com.au
www.hammermetals.com.au
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ANNUAL REPORT 2022HAMMER METALS LIMTED ABN
87 095 092 158
ASX
HMX
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 &
REGISTERED OFFICE
Unit 1, 28-30 Mayfair Street,
West Perth, WA 6005
Telephone: +61 8 6369 1195
Email:
info@hammermetals.com.au
Website:
www.hammermetals.com.au
Postal Address
Unit 1, 28-30 Mayfair Street,
West Perth, WA 6005
2
AUDITORS
PFK
Level 5,
35 Havelock Street
Perth West
WA, 6005
Telephone: +61 8 9426 8999
Email: info@pkfperth.com.au
SHARE REGISTRY
Advanced Share Registry Ltd
110 Stirling Highway
Nedlands WA 6009
Australia
Telephone:+61 8 9389 8033
Facsimile:+61 8 9262 3723
STOCK EXCHANGE
ASX Limited
Level 40, Central Park,
152-158 St Georges Terrace
Perth WA 6000
CORPORATE
GOVERNANCE
The Company’s corporate
governance statement
can be found at the following
URL: www.hammermetals.com.
au/company-profile/corpo-
rate-governance/
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ANNUAL REPORT 2022HAMMER METALS LIMITED
Contents
INTRODUCTION
Chairman's Letter
Corporate Strategy
Operational Highlights
Corporate Activity
OPER ATIONS
Operational Summary
FINANCIALS
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6
7
8
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
Statement
10
Director’s Declaration
Independent Auditor’s Report
ASX Additional Information
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100
101
106
STATEMENTS & REPORTS
Annual Mineral Resource Statement
Tenement Interests
Directors Report
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48
51
Photography by Kate Allen
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ANNUAL REPORT 2022HAMMER METALS LIMTED Introduction
Chairman's
Letter
It is my pleasure to present Hammer Metals’
Annual Report for the 2022 financial year.
Dear Fellow Shareholders,
I will leave Dan Thomas to outline in detail the Company’s activities
over the past year and what we have planned, but suffice it to
say copper exploration at Hammer’s Mount Isa project has been
the Company’s principal focus. A more modest gold program was
executed at Bronzewing South in WA.
At Mount Isa the Company’s joint venture with Sumitomo Metal
Mining Oceana Pty Ltd has proved to be a productive exploration
partnership, with a high level of activity being undertaken alongside
Hammer’s 100% funded exploration programs. The funding from
Hammer’s capital raisings last year along with the JV funding has
permitted strong and consistent exploration programs over the
period, with activities ranging from Hammer’s “large-target” project
generation work to the more field based geochemical, geological
and geophysical programs. Hammer has drilled over 24,500 metres
of aircore, RC and diamond drilling at its projects in the past 12
months with another RC program at Mount Isa currently underway.
There have been several very encouraging developments during
the year. Firstly, at Kalman, Hammer’s largest deposit containing an
estimated 360,000 tonnes of copper-equivalent metal, extensional
drilling identified new shallow copper-gold-molybdenum-rhenium
zones that have good potential to add shallow open-pittable
material to the Kalman resource inventory. This discovery along with
a sustained improvement in the molybdenum price and the positive
results from the initial ore sorting test work have enhanced Kalman’s
development potential and provide strong justification for a rigorous
campaign to move Kalman forward. A program of extensional and
definition drilling of this new zone is currently underway, and the
next stage of metallurgical test work is being planned.
Of most benefit to Hammer’s growth and capacity to expedite the
potential development of Hammer’s resources will be the discovery
of additional high-grade copper mineralisation within trucking
distance of Kalman and I am pleased to note that progress is being
made in this regard.
New zones of high-grade copper mineralisation have been
discovered at Ajax, Ajax East and Pearl highlighting the substantial
potential for discovering new resources along the +10km long
Trafalgar trend. A Mineral Resource Estimate for the Lake View
copper-gold deposit located 2km west of Ajax is also underway.
4
With respect to Hammer’s “large target” generative work the
Company has delineated new IOCG targets “under cover” at
Bullrush, located 10km north of Rio Tinto’s recent discovery of a
large IOCG system at Devoncourt. Other exciting developments
Include the discovery of a previously untested large-scale altered
and mineralised zone at Jimmy’s Creek, as well as a series of strong
VTEM conductors north of the high-grade Tick Hill gold mine. Both
these areas are located adjacent to the regional scale Pilgrim Fault,
in a similar structural position to the Kalman Deposit.
In the background Hammer has been assembling a suite of exciting
Rare Earth Element (REE) targets such as Hardway and Yellowstone.
These targets will be drilled in coming months.
There is good reason to look forward to the year ahead. Although
metal prices have softened in recent months the range of
commodities in Hammer’s portfolio are fundamental to supporting
the global energy transition, and our gold project provides a useful
option on a recovery in the gold price. Increasing corporate activity
in the copper space in general, as well as in the Mount Isa district
itself, are all positive indicators that Hammer is well positioned both
in a geographical and commodity sense.
In conclusion I would like to thank Hammer’s 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 for their efforts over the past year. The Hammer Metals
team is committed to making a significant exploration discovery
and delivering a positive outcome for our shareholders.
Sincerely,
Russell Davis
Chairman
ANNUAL REPORT 2022HAMMER METALS LIMITED
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ANNUAL REPORT 2022HAMMER METALS LIMTED
Corporate Stategy
Corporate
Strategy
■ Position the company for discovery, through innovative and focused exploration for large copper-gold and gold deposits in two
of the world’s great metal provinces.
■ Grow the Company’s defined JORC resources to progress to a viable mining development scenario in Mount Isa.
■ Work to consolidate and improve the quality of the Company’s tenement positions.
■ Operate safely and effectively.
■ Deliver positive financial returns to shareholders.
Photography by Kate Allen
6
ANNUAL REPORT 2022HAMMER METALS LIMITED Operational
Highlights
■ Extension of known mineralisation at Hammer’s Kalman
Cu/Au/Mo/Re project at shallow depths to the north of the
existing JORC resource.
■
Discovery of the Ajax and Pearl copper/gold trends. These
prospects extend for ~5km from the northern edge of the
Trafalgar trend and continue up to Hammer’s Lakeview prospect.
The highly prospective trend contains a significant sulphide rich
system with zones of high-grade copper occurrences.
■ Hammer acquired new tenements across a southern section
of the Mount Isa fault and along the prospective IOCG corridor
near Mount Hope and along the Fountain Range Fault.
■ Completion of broad scale geophysical programs including
ground, downhole and airborne EM surveys, IP surveys,
detailed gravity surveys and aerial and ground magnetic surveys
generating sizeable highly prospective copper/gold targets.
■ Completed over 24.5km of drilling across a wide variety of
targets in the Mount Isa and Yandal projects.
■ Continued to define new prospective targets across lightly
explored tenure in the Yandal gold belt.
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ANNUAL REPORT 2022HAMMER METALS LIMTED Corporate Stategy
Corporate
Activity
During the year, the Company further enhanced its
standing in the Mount Isa region through several new
tenement applications in the highly sought after Mount Isa
copper district.
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.
The company continued to grow its portfolio with the addition
of several prospective tenements near the Company’s existing
tenure along the Fountain Range and Mount Isa fault structures.
In August, 2021 the company officially welcomed Sumitomo Metal
Mining Oceania (“SMMO”) as our new partner in the Mount Isa
East Joint Venture.
With a reinvigoration of our Mount Isa exploration portfolio,
activities at our Yandal project slowed during the year. Tenure
acquired during FY21 were subject to their inaugural work
programs with initial programs delineating new and exciting
nickel and gold targets.
Earlier in FY22, the Company 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 a diamond drilling
program targeting copper mineralisation below the Mount Phiilp Iron
Ore project. The program, as part of the MIEJV, was part funded with
the assistance of a ~$148k Collaborative Exploration Incentive (CEI)
grant from the Queensland State Government. The Company also
successfully applied for and received a Research and Development
Tax Incentive refund of ~$615k from the Federal Government.
As reported in an ASX release on 15 July 2021, the company finalised
the FY21 capital raising with shareholder approval for the director’s
participation in the program with 6,842,104 shares purchased
at a price of 9.5c per share raising an additional $650,000. No
additional fundraising activities occurred during FY22.
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.
Photography by Planetary Geophysics
8
ANNUAL REPORT 2022HAMMER METALS LIMITED 9
ANNUAL REPORT 2022HAMMER METALS LIMTED Operations Summary
Mt Isa Project
(QLD)
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.
Over the past 12 months, international molybdenum prices
have continued to strengthen and when considered with the
corresponding movements in copper prices the attractiveness
of the Kalman JORC resource increases.
Further drilling along the Trafalgar trend continued to deliver
zones of copper and gold mineralisation and when considered
with the mineralisation seen at Ajax and Pearl, it highlights the
prospective nature of the 18km trend from the south of Trafalgar
through to the Elaine (100% HMX) and the Jubilee (51% HMX)
copper-gold deposits.
Broad scale geophysical programs, including Electromagnetic
(EM), Induced Polarisation (IP), Gravity and Magnetic surveys
have further contributed to a growing list of impressive IOCG
targets for Hammer in the Mount Isa region. Further ground
truthing and geochemical soil sampling programs will lead to
the maturation of these prospects and their drilling in FY23.
With defined copper-gold resources at Kalman, Overlander,
Elaine and Jubilee (51% HMX) and significant mineralisation
being discovered at Trafalgar, Lakeview and Ajax, 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 expanded to the southern regions of Hammer’s
tenement holdings with drilling at Overlander and targets being
defined at Mascotte and Mount Hope South. The attractiveness
of this region has been further enhanced with several targets
being identified in a VTEM survey along the Pilgrim fault 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.
Through its wholly owned subsidiaries, the Company holds a
strategic tenement position covering over 2,700km2 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 position established by Hammer over the past decade
secures Hammer an enviable position in one of the world’s most
prospective base metal provinces.
Renewed exploration success in the Mount Isa region and the
ongoing consolidation of prospective projects in the regionis a
timely reminder of the inherent value contained within Hammer’s
portfolio.
With the world’s increasing focus on cleaner forms of energy
and the pursuit of battery minerals for energy storage and
transportation, known existing mineral inventories will become
increasingly valuable.
The Company’s discovery of the Ajax/Pearl copper-gold trend
was the highlight of the year with a continued reinvigoration of
our exciting and advanced base metals prospects in Mount Isa.
New drilling at Kalman, the first in almost five years, extended the
known limits of shallow primary mineralisation and has opened
the potential for a resource upgrade to the project.
The extension of shallow mineralisation at Kalman has
encouraged the Company to embark on further exploration of
the deposit in addition to advancing our understanding of the
suitability of the mineralisation to be upgraded by ore sorting
and potential mine planning upgrades. The upcoming drilling
program which will comprise of further shallow exploration
drilling to the north of the deposit has the potential to rerate and
ultimately upgrade the economics of the project.
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ANNUAL REPORT 2022HAMMER METALS LIMITED Mount Isa Project Locations.
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ANNUAL REPORT 2022HAMMER METALS LIMTED Operations Summary
Photography by Kate Allen
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) (ASX Announcement 27 September 2016). The deposit
remains open at shallow depths to the north whilst the down
plunge portions of high-grade mineralisation also remain open
at depth. With a molybdenum grade of 0.14%, Kalman is the third
highest grade undeveloped molybdenum resource 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, Ajax and
Pearl. All are located within 30km of the main highway between
Mount Isa and Cloncurry.
During the year, four RC holes for a total of 776m were drilled
in a poorly tested area at the northern end of the deposit. The
successful delineation of near-surface mineralisation in this
area has potential to materially upgrade the Kalman resource.
Hammer has identified zones for further drilling, targeting this
lode along strike and at depth (ASX Announcement 15 February
2022) at the time of this report.
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A N N UA L R EP O R T 2022
H A M M ER M E TA L S L I M I T ED
Significant intercepts from the drilling included:
■
64m at 0.23% Cu, 0.12% Mo, 0.10g/t Au, 3.0g/t Ag, and
2.6g/t Re (0.75% CuEq) from 67m in K-143;
o Including 16m at 0.19% Cu, 0.34% Mo, 0.08g/t Au,
8.84g/t Ag, and 8.59g/t Re (1.71% CuEq) from 114m in
including 4m* at 0.66% Mo and 20.78g/t Re from 125m;
■ 50m at 0.63% Cu, 0.01% Mo, 0.49g/t Au, 0.5g/t Ag, and
0.1g/t Re (0.79g/t CuEq) from 20m in K-144;
o Including 16m at 1.38% Cu, 0.01% Mo, 0.84g/t
Au, 0.62g/t Ag, and 0.04g/t Re (1.59% CuEq)
from 43m and 1m at 7.3g/t Au from 47m;
■ 22m at 0.82% Cu, 0.03% Mo, 0.37g/t Au, 0.8g/t Ag, and
0.63%Re (1.0% CuEq) from 99m in K-145;
o Including 8m at 1.41% Cu, 0.08% Mo, 0.75g/t Au,
1.5g/t Ag, and 1.7g/t Re (1.88% CuEq) from 99m; and
■ 9m at 0.65% Cu, 0.23% Mo, 0.27g/t Au, 12.0g/t Ag,
and 4.8g/t Re (1.74% CuEq) from 41m in K-142.
Mineralisation intercepted at 99m in hole K-145 represents an
extension of a mineralised lode approximately 100m to the north
of the existing JORC resource blocks. Future drilling will aim to
extend this zone of mineralisation which remains open at depth
and to the north.
Plan view of the Kalman Deposit showing
the current resource model, location of K-142
through K-145 and the eastern target zone.
Section through K-145 with high grade intercept
outside of the current JORC Resource Model.
Similarly, a broad zone of mineralisation intercepted in hole
K-144 potentially indicates the amalgamation of two interpreted
mineral lenses. The previous resource model also constrained
the eastern zone of mineralisation at depth below hole K-144.
This also represents a zone for further resource definition at
a shallow depth which would be amenable to future open pit
mining.
A 500kg composite metallurgical sample has been gathered
to trial ore sorting beneficiation technology on the project
while historical mining scenarios have been revisited to further
understand potential mining scenarios and the associated cut-off
grades. With copper prices hitting all-time highs (>US$10,000/t)
and molybdenum prices breaching US$45,000, there is an
opportunity to further evaluate potential development options
for Kalman and Hammer’s other copper deposits at Overlander
and Jubilee.
Plans for the coming year include:
■ Further drilling to add additional JORC resources at
shallow depths to the north of the deposit;
■ Build on the ore sorting testwork that has recently been
commissioned by the Company;
■ Update previous mining scenarios to determine potential
mining scenarios and associated cut-off grades; and
■ If warranted, embark on a new Scoping Study for the
deposit.
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ANNUAL REPORT 2022HAMMER METALS LIMTED Operations Summary
▲ Kalman West
Kalman West is located approximately 1km west of the
Kalman Cu-Au-Mo-Re Deposit.
The prospect contains a multi-element soil anomaly partially
coincident with a zone of graphitic sediments and a correlating
VTEM anomaly. 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.
Three holes for 487m were drilled at Kalman West targeting both
a MT/VTEM anomaly and a zone of surface quartz veining with
visible gold (ASX Announcement 14 October 2021).
HKWRC009 (299m TD) was drilled to test the shallow expression
of an MT anomaly beneath the Kalman West Shear Zone. This hole
intersected a copper bearing hanging wall zone on the western
margin of the Kalman West Shear Zone followed by anomalous
Pb-Zn-Ag mineralisation with induvial assays of up to 1.86% Pb,
0.95% Zn and 18.1g/t Ag hosted by graphitic metasediments.
Anomalous Au was intersected in structures interpreted to be
along strike of several significant gold intersections encountered
200m to the north.
Plan of the Kalman West Prospect (ASX Announcement 14 October 2021).
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ANNUAL REPORT 2022HAMMER METALS LIMITED Northern Minerals Hub
– Ajax, Lakeview, Neptune, Jubilee (51%), Elaine, Pearl
(SMMO earning 60%).
Trafalgar-to-Jubilee trend.
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ANNUAL REPORT 2022HAMMER METALS LIMTED Operations Summary
▲ Ajax
The Ajax prospect is located approximately
1.2km south-east of Lakeview along the 15km
Trafalgar-to-Jubilee mineralised trend.
Reconnaissance Reverse Circulation (RC) drill-hole HMLVRC014,
which was designed to test prospective surface geological
features on the Lakeview trend, intersected a significant zone
of high-grade copper and gold mineralisation: 11m @ 5.5% Cu
and 2.5g/t Au from 24m in HMLVRC014 was recorded (ASX
Announcement 9 March 2022).
Following this initial success, an EM conductor was identified
at Ajax East and the first diamond drill test of this prospect
successfully identified an extensive mineralised sulphidic
system containing high-grade copper mineralisation (ASX
Announcements dated 12 May 2022, 14 and 29 June 2022).
Significant intercepts recorded in HMLVDD001 include:
■ 0.75m at 7.31% Cu and 0.21g/t Au from 181.65m;
■ 5m at 1.10% Cu from 293.6m, including:
o 0.9m at 3.18% Cu from 297.7m; and
■ 0.75m at 4.73% Cu, 0.25% Ni and
842ppm Co from 342.1m.
HMLVDD001 at 258m down-hole. Example of chalcopyrite-pyrrhotite mineralisation encountered
in the hangingwall sulphide zone at Ajax east (ASX Announcement 29 June 2022).
HMLVDD001 at 342.7m down-hole. Example of chalcopyrite-pyrrhotite mineralisation encountered
in the footwall sulphide zone at Ajax east (ASX Announcement 29 June 2022).
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ANNUAL REPORT 2022HAMMER METALS LIMITED Subsequent down-hole and fixed-loop electromagnetic surveys
have identified new conductive horizons while also increasing
the size of the modelled conductors. The overall strike extent of
the conductive horizon at Ajax East has been extended to more
than 1km and remains open to the north and potentially to the
south within the Mt Isa East JV area. Follow up soil sampling
programs were also completed to further define zones of copper
mineralisation along with ground magnetic and EM surveys.
A follow up drilling program was designed with six holes recently
being completed to test the prospective sulphide horizon at
various points along the anomalous copper and conductive
trend. Results were awaited at the time of this report.
Additional EM Conductors identified in hanging and footwall – cross-section
though HMLVDD00 (ASX Announcement 29 June 2022).
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ANNUAL REPORT 2022HAMMER METALS LIMTED Operations Summary
▲ 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 initial three-hole (300m) program was successful in delineating
mineralisation and a second nine-hole (1080m) program was
completed to further investigate mineralisation at depth (ASX
Announcement dated 22 June 2021 and 14 October 2021).
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.
Modelling of the Lakeview drilling is underway with the aim of
releasing a Mineral Resource Estimate in the near term. The
deposit remains open down plunge with further drilling being
considered in upcoming programs.
Lakeview long section looking north (ASX Announcement 14 October 2021).
18
ANNUAL REPORT 2022HAMMER METALS LIMITED ▲ Neptune
The Neptune project area 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’s previous drilling in the area returned several
encouraging intersections including 100m at 0.48% Cu and
0.18g/t Au.
Both targets were overlain by an elevated copper-in-soil
geochemical response. Both holes reached their target zones
and identified zones of magnetite with minor copper anomalism.
Hole HMNPRC002 tested the Morning Star target and intersected
a thin mineralised horizon. A hole planned at the Lady Amy target
could not be completed due to inclement weather and will be
added to the current RC drilling program.
Hammer undertook 760m of RC drilling at the Sirius, Morning
Star and Lady Kate prospects within the Neptune Project area.
Drilling at both the Lady Kate and Sirius targets was designed to
test aeromagnetic anomalies within the Ballara Quartzite.
Neptune prospect area showing the location of the Sirius, Lady Kate and Morning Star targets tested by holes
HMLRRC004, HMNPRC002 and HMPRC001 respectively (ASX Announcement 12 May 2022 and 9 March 2021).
19
ANNUAL REPORT 2022HAMMER METALS LIMTED Operations Summary
▲ Overlander
Three reverse circulation holes were drilled at
Overlander North.
Two of these holes (OVRC033 and OVRC034) were designed
to test the southern margin of the Overlander IOCG alteration
zone. Both holes intersected favourable alteration, however failed
to intersect significant mineralisation (ASX Announcement 14
October 2021).
The third hole, OVRC035 was designed to test a rhyolitic crackle
breccia on the eastern margin of Overlander North. The hole
intersected 78m @ 0.26% Cu from 75m.
The rhyolitic breccia outcrops sporadically over a 1.6km strike
length and is tested by only four holes (including OVRC035). The
unit can be up to 100m in true thickness (ASX Announcement
15 June 2015).
The other three holes have similar thick copper
intersections including:
■ 117 metres at 0.35% Cu from 43m in OVRC024;
■ 71m at 0.31% Cu from 61m in OVRC032; and
■ 137m at 0.27% Cu from 105m in K-11.
The rhyolitic crackle breccia at Overlander is considered to have
the potential to host a large tonnage Cu-Co resource. The Company
is continuing to assess this significant system for its potential to
host a large-scale economic zone of copper mineralisation.
Overlander North Prospect plan (ASX
Announcement 14 October 2021).
OVDD004 421.2m. Brecciation and shearing associated
with the Overlander shear. This sample is located
within a zone of 3.31m at 1.49% Cu from 419m.
20
ANNUAL REPORT 2022HAMMER METALS LIMITED Overlander is a large mineralised system with a strike extent in
excess of 6km – with numerous significant copper intercepts.
Overlander also hosts one of Hammer’s JORC resources,
however outside of the immediate resource area, the system
remains relatively underexplored.
Two holes for 869m were drilled at Overlander South testing two
targets. OVDD004 (589.5m TD) was designed to test an IP metal
factor (“IPMF”) geophysical model at depth while also intersecting
the Overlander south shear zone hosted mineralisation and the
interpreted position of the footwall rhyolite breccia.
The hole intersected a significant zone of alteration and
disseminated mineralisation in both the Overlander Shear and
the Footwall Rhyolite Breccia. Down-hole EM was conducted on
the hole resulting in the identification of three off-hole conductors.
Significant intercepts from OVDD004 include
(ASX Announcement 12 May 2022):
■ 20m at 0.37% Cu from 410m including
3.31m at 1.49% Cu from 419m;
■ 32.2m at 0.31% Cu from 500m; and
■ 21.3m at 0.30% Cu from 546.9m.
Cross-section of Overlander South Prospect showing the location of existing drilling, IP Metal
Factor contours and significant intercepts (ASX Announcement 27 April 2022).
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ANNUAL REPORT 2022HAMMER METALS LIMTED Operations Summary
Southern Region
▲ South Hope
Hammer’s Mount Hope prospects are located within
EPM26777, approximately 20km south west of Hammer’s
Kalman Project and is characterised by small scale
historical copper working.
Following the report of a substantial IP anomaly in Hammer’s
Exploration Licence, Hammer completed an IP survey over
several of its Mount Hope prospects. The surveys have delineated
several significant anomalies which have been prioritised for
further investigation and drill testing. A maximum IP anomaly of
>42mv/v was recorded in the survey along trend from nearby
copper workings and represents an immediate drilling prospect.
The South Hope prospect was recently subject to detailed
geological mapping to define drill targets. Drilling aims to test
and extend the initial channel sample result of 20.3m @ 1.7% Cu
(ASX Announcement 20 June 2022).
South Hope historic workings.
Mount Hope East Anomaly chargeability cross-section showing the projected position of the Stubby prospect.
22
ANNUAL REPORT 2022HAMMER METALS LIMITED ▲ Mascotte and Mascotte Junction
Mascotte is located approximately 5km to the east of
South Hope and is a former copper mine, mined in the
early 1900’s.
Production records documented in an historical exploration report (CR22223) indicated that Mount Mascotte produced 4,824 tonnes of
copper and 248.4 ounces of gold. There are no records of historical drilling at Mascotte with recent Hammer rock chips confirming the
presence of high-grade zone of mineralisation. An initial drilling test of the prospective zones at Mount Hope, Mascotte and Mascotte
Junction has been planned and is expected to be completed within the next month.
▲ The Brothers
The Brothers prospect was highlighted as a VTEM
anomaly in Hammer’s recent Pilgrim South VTEM survey.
The Brother’s prospect was first explored by MIM in the mid
1990’s, identifying a broad gold in soil geochemical anomaly.
A limited drilling program of 4 reverse circulation holes tested
zones of soil anomalism but did not test the prospective target
identified by this VTEM survey. The significant strike extent
of the soil geochemical anomaly and the coincident broad
VTEM response make this a high priority target for further field
investigations.
The survey data is undergoing final processing prior to being
modelled. A field review of the target zones continue with a
potential to drill test the prospective horizons in early 2023.
Background VTEM channel 35 image
(B Field Z component), B Field Channel 35 to 40,
line responses (black lines), Historic Au soil geochemical
contours. Additional anomalies also evident.
23
ANNUAL REPORT 2022HAMMER METALS LIMTED Operations Summary
▲ Bullrush
An undercover Tier 1 IOCG target with subtle magnetic
gravity features.
The Company’s original exploration activities in this region
delivered early promise, with mineralisation identified at Dronfield
and Perentie in addition to the prospective alteration zones within
the Mount Isa East Joint Venture at Malbon.
Recent work by Rio Tinto Exploration over the multi-phase Wimberu
granite met with success at the Devoncourt project where Rio has
discovered a blind IOCG system hosted by a late-stage intrusive
breccia body within the Wimberu Intrusive complex.
Detailed view of the Bulrush magnetic and gravity survey area showing the location of the Rio
Tinto Exploration Devoncourt Project (ASX Announcement 19 September 2022).
To improve the quality of basic geological information, Hammer
undertook 200m line-spaced aeromagnetic and 200m station
spaced gravity surveys in adjacent tenements. Final magnetic
and gravity data have been received and the data are currently
being modelled. This work will include depth-to-target modelling
which will dictate the drilling method required to drill test targets.
Hammer will also consider offering the Bullrush prospect to
selective groups for possible Joint Venture.
24
ANNUAL REPORT 2022HAMMER METALS LIMITED New Tenure
▲ EPM28285 “The Plus” tenement application
The Plus application covers the northern extension of
the Nil Desperandum mineralised trend being explored
by Carnaby.
HMX Tenement Position with regional geology underlay.
25
ANNUAL REPORT 2022HAMMER METALS LIMTED
Operations Summary
▲ Resolve Extended – EPM28189
New tenement secured adjoining its existing tenure at
Resolve located along the Mount Isa Fault.
This expanded tenement package covers a 31km section of the Mount Isa Fault and is considered to be relatively lightly explored
for base metal mineralisation. Hammer has previously identified the Ashover target within the Resolve tenement where follow-up
of elevated drainage gold results identified individual maximum rock chip responses of 0.44g/t Au, 78.2g/t Ag, 36.8% Cu and
0.14% Co (ASX Announcement 20 May 2020).
Other Commodities
As previously reported the significant potential of Hammer’s tenement holding for several other commodities including cobalt, iron
ore, potash, graphite, manganese and rare earth elements has become apparent. 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.
▲ Hardway Rare Earths
The Hardway copper mine contains a promising early stage
Heavy Rare Earth Prospect.
Average Rare Earth Element Distribution - Hardway Rock
Chips
Y2O3
48%
CeO2
9%
La2O3
3% Sc2O3
4%
Dy2O3
6%
Er2O3
4%
Eu2O3
1%
Ho2O3
1%
Gd2O3
5%
Nd2O3
9%
Lu2O3
0%
Pr2O3
2%
Yb2O3
3%
Tm2O3
1%
Tb2O3
1%
Sm2O3
3%
Average Rare Earth Element Distribution Hardway rock chip samples.
26
ANNUAL REPORT 2022HAMMER METALS LIMITED Maximum individual grades of rare earth elements were recorded
as follows: 2,430ppm Yttrium, 298pmm Dysprosium, 752ppm
Neodymium, 47ppm Terbium, 31ppm Thulium, 900ppm Cerium,
336ppm Lanthanum, 192ppm Scandium, 40ppm Europium,
222ppm Erbium, 70ppm Holmium, 30ppm Lutetium, 198ppm
Ytterbium, 147ppm Praseodymium and 210ppm Samarium
(ASX Announcement 26 July 2022).
A recent soil sampling program was completed with PXRF analysis
confirming broad trends of soils containing Yttrium anomalism.
These zones will be subject to further field interrogation and
in-fill soil sampling with the aim of identifying drill ready targets.
The Hardway mine (formerly ML2760) is situated within Hammer
Metals EPM14022, located between Mount Isa and Cloncurry
approximately 1km north of the Barkly highway.
The Mining Lease lapsed and has now been incorporated into
the 100% Hammer-held EPM14022.
A drilling program by Goldsearch in 2007 along strike from the
main workings noted Yttrium assays exceeding 500ppm, which,
at the time, was the upper limit of the analytical method utilised.
A grade of >500ppm was recorded over 3m in MKRC023 (see
Table 3). No over grade or rare earth element analyses were
conducted on the samples and no further investigations to
determine the nature of Yttrium were completed.
Hammer’s recent rock chip sampling and assaying of an
extensive element suite identified a unique mix of high-value
heavy rare earth oxides. Individual samples recorded Total Rare
Earth Oxide of 0.56% TREOY with maximum HREOY grades of
0.39% -The average ratio across the samples collected of HREOY
to TREOY is 62%. The Hardway rare earth mineralisation is also
unique in that it contains low levels of uranium and thorium.
Hardway soil (PXRF contours) and rock chip sampling.
27
ANNUAL REPORT 2022HAMMER METALS LIMTED 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
2,700km2 Mount Isa Project.
The areas are considered highly prospective for the discovery of Iron Oxide Copper Gold Deposits (“IOCG”). The Joint Venture is
now in its third year of operation with the exploration activities heavily focussed on the Trafalgar to Pearl copper and gold trends.
Even Steven
(part of Mount Isa East JV)
The Even-Steven area comprises four advanced
copper/gold targets encompassing the Trafalgar, Pearl,
Even-Steven and Jimmy Creek prospects.
▲ Trafalgar/Trafalgar Trend
The Trafalgar trend was subject to a follow up drilling
program and detailed Induced Polarisation surveys.
A drilling program based on the results of the completed IP
surveys and detailed soil surveys along the Trafalgar trend is
currently underway.
\
An initial diamond hole was drilled into Trafalgar to examine
the nature of mineralisation. Significant intersections
include:
■ 1.13m at 7.65% Cu from within a mineralised envelope of
6.5m at 0.8g/t Au and 2.68% Cu from 147m in HMTRDD001.
Maximum individual grades are 5.23g/t Au and 7.65% Cu.
Copper mineralisation is associated with elevated cobalt and
geochemically significant elevated LREE, P and HREE’s such
as neodymium.
28
Oblique view showing Induced Polarisation
chargeability sections along the Trafalgar trend.
The underlying image is Magnetics RTP.
ANNUAL REPORT 2022HAMMER METALS LIMITED HMTRDD001 121.5m. Chalcopyrite intimately associated with red rock alteration. Hanging
wall Trafalgar lode. The interval 121-122m assayed 0.14g/t Au and 1.46% Cu.
HMTRDD001 151.5m Chalcopyrite-Pyrrhotite as matrix infill in a quartz vein breccia. Main
Trafalgar lode. The interval 151.42-152.55 assayed 0.5g/t Au and 7.65% Cu.
During the year, Hammer completed a 7-hole 1,151m RC program,
testing targets along the immediate Trafalgar trend along strike to
the north and south from the historical mining area. Significant
zones of copper and gold mineralisation were intersected in
all holes in the program, highlighting the prospectivity of the
Trafalgar trend.
\
Shallow mineralised intercepts were recorded at many of the
targets and, in some cases, with broad zones of mineralisation
(ASX Announcement 4 April 2022).
Trafalgar trend drilling and trial IP line location.
29
ANNUAL REPORT 2022HAMMER METALS LIMTED Operations Summary
▲ Victory
Located at the southern end of the Trafalgar trend,
Victory encompasses associated workings on surface.
Drilling at this prospect encountered a broad low-grade intersection with two higher grade mineralised lenses with results including:
■ 40m at 0.34% Cu and 0.1g/t Au from 47m in HMTRRC0011, including:
o 2m at 1.34% Cu and 0.45g/t Au from 47m; and
o 3m at 1.66% Cu and 0.5g/t Au from 55m.
A coincident DHEM and IP anomaly is located at Victory with follow up drilling in progress to further test this prospective target
(ASX Announcement 4 April 2022).
▲ Springs Extended
Springs Extended is located 800m north of Trafalgar.
Two RC holes (HMTRRC0013 and HMTRRC0015) were drilled 300m apart at the Springs Extended.
Significant results include:
■ 18m at 0.73%Cu and 0.25g/t Au from 44m in HMTRRC0015, including:
o 4m at 2.12%Cu and 0.64g/t Au from 55m; and
■ 45m at 0.33% Cu, 0.06g/t Au from 40m in HMTRRC0013 including
o 5m at 1.36% Cu and 0.17g/t Au from 78m (ASX Announcement 4 April 2022).
Trafalgar Long Section.
30
ANNUAL REPORT 2022HAMMER METALS LIMITED ▲ Pearl and Pearl Extended
The Pearl prospect is located on the Trafalgar-to-Jubilee
trend, approximately 2km south of Ajax East and on the
same magnetic ridge.
Numerous artisanal copper workings and shafts on five structures
are located along 800m of strike length.
Fixed-Loop Electromagnetic surveys identified a significant
cluster of conductors at Pearl, with the individual conductors
aligning to the regional foliation and broadly related to the position
of workings at surface. An extension of the JV’s IP surveys has
now been completed over Pearl with significant chargeability
anomalies also recorded in line with the previous EM anomalies
(see ASX Announcement 29 June 2022).
Four lines of 400m-spaced IP surveys were conducted covering
the Pearl, Pearl Extended and Big Pearl positions. This survey was
the extension of the previous surveys conducted by the MIEJV
over the prospective Trafalgar copper/gold trend. Conductivity
anomalies were recorded along each line in the Pearl region
and were largely coincident with Hammer’s FLEM surveys in this
region. The alignment of the IP, EM and geochemistry anomalies
elevate the Pearl region as a priority target for the JV.
This work upgraded the Pearl prospect with drilling at this target
now complete. Assays are awaited at the time of this report.
Pearl EM and IP Survey Results
31
ANNUAL REPORT 2022HAMMER METALS LIMTED Operations Summary
▲ Jimmy Creek
Jimmy Creek is a target on the Pilgrim Fault Zone
which displays characteristics similar to the Kalman
Cu-Au-Mo-Re deposit.
Geological mapping has been undertaken at Jimmy Creek and previous rock chip sampling conducted by Summit Gold (Australia) Pty
Ltd in 1995 shows maximum responses of 9.6% Cu, 9.55g/t Au and 1410ppm Mo respectively. This element association indicates a
similarity to the Kalman Deposit located 13km to the south and in a similar structural position (ASX Announcement 5 September 2022).
Breccia with coarse albite actinolite magnetite
infill and abundant malachite on fractures.
Outcrop of massive manganese oxide
gossan at Jimmy Creek.
Mt Philp Area
(Part of the Mount Isa East JV)
▲ Mount Philp
The Mount Isa East Joint venture was awarded
approximately $148,600 to partly fund a diamond drill
hole under the Mt Philp Hematite Deposit.
HMMPDD001, was designed to test the IOCG potential below
the hematite alteration at Mt Philp, specifically targeting the redox
transition between hematite to postulated magnetite at depth.
Redox transitions are the focus of IOCG mineralisation in the
Mt Isa region.
The drillhole did prove the theory that the Mt Philp Hematite
deposit transitions to magnetite at depth and the entire plus 3km
strike extent of the Mt Philp Hematite deposit is a large-scale Iron
Oxide alteration zone. However, only minor mineralisation was
encountered in the drillhole.
32
Mt Philp and Shadow region showing the
location of the CEI hole and trial IP line.
ANNUAL REPORT 2022HAMMER METALS LIMITED ▲ Shadow
A trial two-dimensional IP survey was completed to
examine the chargeable response of mineralisation at
Trafalgar and the Shadow trend.
A single line was conducted at Shadow across HMSHDD001 The
Joint Venture is assessing these results with a view to possibly
undertaking a more strike extensive survey at both areas during
the current field season.
Shadow North is located approximately 2.5km north of Shadow.
In-fill soil sampling was conducted to better define an elevated
gold response on the eastern side of the Mt Philp Hematite
Deposit (ASX Announcement 2 March 2022).
The peak individual gold response in the infill survey was 500ppb
with multiple sites showing plus 50ppb gold responses. Multiple
copper and gold anomalies have been defined by this survey
and ground review will initially focus on Targets 5, 9 and 7. The
Joint Venture is evaluating this target zone as a possible Tick
Hill analogue.
Induced Polarisation Survey – Chargeability
response with interpreted geology at Shadow.
Plan view showing the location of the
Shadow North soil survey.
33
ANNUAL REPORT 2022HAMMER METALS LIMTED Operations Summary
Yandal Gold Projects (WA)
Hammer holds a 100% interest in approximately 290km2
of tenements, located within the Yandal greenstone belt in
Western Australia.
The Company acquired these projects in 2019 and has
focussed on 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.
During the year the Company completed a detailed RC drilling
program (3,554m) targeting prospective geological trend
at Bronzewing South, commencing less than 300m from the
3million ounce Bronzewing gold mine.In addition to this program,
the company conducted an initial drill test at the Gummow target
and also completed a detailed soil survey project across a
broad area focussing on prospective geological trends within
the groups tenement holdings.
Bronzewing South Gold Project
▲ Bronzewing South
The RC drilling program completed during the quarter focussed on the
northernmost target position within the geological/structural corridor
trending south of the Bronzewing Gold mine. Drilling intercepted
the targeted rock units, the Bapinmarra Dolerite/Ultramafic,
Bronzewing Basalt and Discovery Granodiorite as expected,
including several shear zones and zones of quartz/carbonate veining
however no significant mineralisation was intercepted by the hole
(ASX Announcement 23 December 2021).
The completed RC holes will also provide excellent platforms
for future diamond drilling tails should the targeted horizon be
pursued at depth. The remaining targets (two of five) within this
southern corridor remain valid and will be considered as part of
future drilling programs within this target area.
Long section looking west through the Bronzewing South area showing the five targets
identified in the detailed gravity survey (ASX Announcement 9 November 2020).
34
ANNUAL REPORT 2022HAMMER METALS LIMITED Bronzewing South plan showing Hammer targets (ASX Announcement 9 November 2020).
35
ANNUAL REPORT 2022HAMMER METALS LIMTED Operations Summary
▲ Gummow Prospect
The Gummow Prospect is located 4.9km to the south of
the Bronzewing Deposit.
The prospect is located within a northwest trending shear zone traversing a tholeiitic basalt (similar to Bronzewing Basalt), between a
felsic intrusive (interpreted to be a Discovery Granodiorite equivalent) and a coarse grained mafic (interpreted as the Madfish Basalt)
(ASX Announcement 23 December 2021).
Drilling of this anomaly was limited to two holes (314m) with an initial intercept of:
■ 4m @ 0.18g/t Au from 40m in BWSRC048
The drilling in both holes intercepted a mafic sequence on the northern side of an interpreted felsic intrusive. Minor sulphidic veining
was intersected which is associated with anomalous gold values. Further investigation of this anomaly to be considered in a future
air core program.
▲ Harrier and Bower
The Harrier and Bower project areas are within 3km of
the former Bronzewing Gold mine.
Given the tenements proximity to the former mine, it remains lightly
explored. A review of the historical exploration activities on this
project have highlighted multiple significant soil anomalies over an
area with historical nugget discoveries (See ASX Announcement
23 December 2021). In 2011, Navigator Resources completed a
soil sampling program that consisted of 1,056 BLEG samples on a
200m by 50m grid pattern. Several anomalies including the Bower
and Harrier prospects were highlighted.
At Bower in the north, a program peak soil response of 225ppb
Au is coincident with a reported eastern nugget patch over a
600m strike length. An anomalous zone with a peak response
of 80ppb Au is present at the southern end of a western nugget
patch. At Harrier to the south of the tenement, a coherent anomaly
with a strike length of 1.3km and a width of 250m is evident with
a maximum soil result of 41ppb Au. The anomaly correlates well
with a reported gold nugget trend on the tenure and the anomaly
remains open to the north and the south of the area. Hammer will
look to test these anomalies with an air core program in FY23.
Harrier and Bower soil survey results.
36
ANNUAL REPORT 2022HAMMER METALS LIMITED North Orelia
These tenements are situated to the North of the McClure
group of deposits which include the Orelia and Lotus
gold deposits.
These tenements are situated to the North of the McClure group of deposits which include the Orelia and Lotus gold deposits. During
the financial year, the Company completed drilling 308 holes for 9768m to test previously undrilled targets on the Orelia trend. Based
on the drilling Hammer has completed to date at Target 1 the Company considers that there is good potential to define a shallow
gold resource at Target 1 with further infill drilling.
Four prospects were tested as part of the recently completed Aircore program, highlighting several anomalous zones that warrant
follow-up exploration.
▲ Target 2
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 (ASX Announcement 25 August 2021).
▲ Target 3
Drilling at Target 3 extended the strike length of known mineralisation. Intercepts included (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.
▲ Target 4
Target 4 is located immediately along strike to the north of
Northern Star’s Orelia Deposit. Mineralisation encountered to
date within this target is often associated with sulphidic shale
units which contain an anomalous Zinc zone of up to 70m
in width and up to 1.2km in length (with maximum downhole
individual analyses of 6520ppm Zn, 38.2% Sulphur and elevated
Cu and Pb). This zone is located at the boundary between mafic
and felsic/intermediate rocks.
Significant intercepts include:
(ASX Announcement 25 August 2021)
■ 18m at 0.12g/t Au from 24m in BWSAC0577;
■ 16m at 0.47g/t Au from 52m in BWSAC0585;
■ 3m at 0.47g/t Au from 52m in BWSAC0818; and
■ 8m at 0.35g/t Au from 72mn in BWSAC0828.
Drilling in hole BWSAC0839 finished in an anomalous zone of
gold mineralisation - 0.32g/t Au from 56m.
37
ANNUAL REPORT 2022HAMMER METALS LIMTED Operations Summary
▲ Eastern Granite
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 with this work partly funded by a
Western Australia Government Exploration Initiative grant.
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
were associated with a north-northwest trending shear zone on
the margin of the granite. Both holes terminated in anomalous
mineralisation (ASX Announcement 25 August 2021). 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.
North Orelia Trend Targets three and four showing significant Hammer Drilling Intercepts
(Background image Magnetics) (ASX Announcement 25 August 2021).
38
ANNUAL REPORT 2022HAMMER METALS LIMITED North Yandal Soil Surveys
Hammer completed an extensive soil geochemical
program during the second quarter of 2022.
The program focused on tenements in the Bronzewing North and Ken’s Bore project regions. A total of 3,547 samples were taken
with a mixture of -2mm soils and minus 80 mesh samples being submitted to the laboratory for a combination of total and partial
leach geochemical analysis. Several prospective gold, nickel and lithium targets were generated which will be subject to further field
review and potential first pass air core drilling in the coming year.
Hammer Metals Bronzewing South Project Area.
Hammer Metals Bronzewing South Project Area.
Pilbara Iron Ore (WA)
In early FY22, the Company completed the sale of its 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.
39
ANNUAL REPORT 2022HAMMER METALS LIMTED 40
ANNUAL REPORT 2022HAMMER METALS LIMITED Competent Person’s Statements
▲ 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
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.
▲ Mineral Resource Estimates
Where the company refers to Mineral Resource Estimates
for the following prospects:
■ the Kalman deposit (ASX Announcement
27 September 2016);
■ the Jubilee deposit (ASX Announcement
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.
Photography by Planetary Geophysics
41
ANNUAL REPORT 2022HAMMER METALS LIMTED ▲ Annual Mineral Resource Statement
As of 30 June 2022
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 2016, Haren Consulting was contracted by Hammer Metals Limited to complete a maiden mineral resource estimate for
the Millennium deposit. The estimate is based on good quality RC drilling data. The Mineral Resource was based on a series of 23
RC holes drilled by Hammer Metals following its acquisition of the tenements in May 2016 and 17 RC holes drilled by the previous
operator in 2013-2014. Drilling extends to a maximum down hole depth of 322m and the mineralisation was modelled from surface
to a depth of approximately 280m below surface. The drill hole spacing is approximately 50 to 100m along strike.
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.
Hammer sold its Millennium project to Global Energy Metals Corporation (“GEMC”) in June 2019. Therefore, the Millennium Cu-Co-Au
resource has been taken out of the Annual Mineral Resource statement.
CSA Global Pty Ltd conducted the Resource Estimate over the West Pilbara Iron Ore Deposit and this was reported to the ASX on 26
July 2010. In 2014, the Resource was updated to adhere to the JORC Code 2012 Edition, however the Resource Estimate remained
unchanged.
Cerro Resources Limited, the previous tenure holder over the Mt. Philp Hematite Deposit reported the Resource Estimate to the ASX
on the 12 March 2012. The Mt Philp Resource Estimate adhered to the JORC Code 2004 edition.
In relation to the Overlander, West Pilbara, 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
42
ANNUAL REPORT 2022HAMMER METALS LIMITED ▲ 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
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
The 51%-owned Jubilee Deposit is situated 50 kilometres west of Mount Isa in 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.
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.
43
ANNUAL REPORT 2022HAMMER METALS LIMTED
Annual Mineral Resource Statement
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 (ASX
Announcement 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 (ASX Announcement 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
Inferred
Inferred
Total
Mining
Method
Open Pit
Tonnes
kt
22,000
Underground
8,300
30,000
CuEq
%
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.
44
ANNUAL REPORT 2022HAMMER METALS LIMITED ▲ 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
The 100%-owned Overlander Project is situated 60 kilometres to the southeast of the mining centre of Mount Isa in 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.
45
ANNUAL REPORT 2022HAMMER METALS LIMTED Annual Mineral Resource Statement
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.
▲ Mt. Philp Deposit Jorc 2004 Mineral Resource Estimate
(12 March, 2012)
Classification
Tonnes
Fe %
Indicated
19,110,000
Inferred
Total
11,400,000
30,510,000
41
34
39
P %
0.02
0.02
0.02
SiO2 %
Al2O3 %
TiO2 %
LOI %
38
48
42
1.3
2.0
1.6
0.38
0.46
0.41
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.
46
ANNUAL REPORT 2022HAMMER METALS LIMITED ▲ Resource By Commodity
I
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47
ANNUAL REPORT 2022HAMMER METALS LIMTED
Tenement Interests
Competent Person’s Statements
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 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.
TENEMENT INTERESTS AT END OF SEPTEMBER 2022
Mt Isa (Queensland)
MT. DOCKERELL MINING PTY LTD
Lease
Lease Name
Lease Status
Interest
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
EPM27861
EPM28285
48
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
Saint Mungo
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
The Plus
Application
100%
100%
80%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
ANNUAL REPORT 2022HAMMER METALS LIMITED 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 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
100%
100%
100%
51%
100%
100%
100%
100%
100%
100%
100%
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
Lease Name
Lease Status
Interest
Kens Bore
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Application
Granted
Granted
Granted
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
49
ANNUAL REPORT 2022HAMMER METALS LIMTED Tenement Interests
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
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%
100%
Lease
E53/2085
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
50
ANNUAL REPORT 2022HAMMER METALS LIMITED Directors
Report
51
ANNUAL REPORT 2022HAMMER METALS LIMTED Directors Report
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 2022 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.
RUSSELL DAVIS
Non-Executive Chairman
BSc (Honours) MBA MAusIMM, MAICD
ZBIGNIEW LUBIENIECKI
Non-Executive Director
BSc (Applied Geology), MAIG
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.
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.
DAVID CHURCH
Non-Executive Director
(appointed 1 July 2020)
LLB
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.
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 MBA from the Melbourne Business
School. 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.
52
ANNUAL REPORT 2022HAMMER METALS LIMITED ▲ 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
M3 Mining Limited
None
Cosmo Metals
Caprice Resources Limited
Period of Directorship
July 2021 – current1
-
August 2021 - current
October 2019 - current
1 – Mr Davis was a director of M3 Mining Limited prior to its listing on the Australian Securities Exchange in July 2021
▲ 3. Company Secretary
MARK PITTS – COMPANY SECRETARY
B.Bus, FCA, GAICD
Mr Pitts is a Chartered Accountant with over 30 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 Director 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
7
7
7
7
7
7
7
7
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.
53
ANNUAL REPORT 2022HAMMER METALS LIMTED
Directors Report
▲ 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 $645,270 (2021: $611,525).
CORPORATE:
EXPLORATION ACTIVITIES:
The following issues of ordinary shares were completed during
the year:
■ On 15 July 2021, following approval granted at the
general meeting of shareholders held in July 2021,
6,842,104 shares were issued to directors raising
$650,000 before costs. These shares represented
participation of the Company’s Directors in the share
placement completed during the previous financial year.
■ On 21 December 2021, 1,500,000 shares were
issued upon the exercise of performance rights held
by the Company’s managing director which had
vested in October 2021.
■ On 27 May 2021, 400,000 shares were issued upon
the exercise of options at 3.2 cents each ($ 0.032),
raising $17,600 before costs.
A total of 2,000,000 unquoted options exercisable at $0.04 on
or before 13 May 2025 were issued to a corporate advisor in
accordance with a mandate agreement.
During the financial year no options expired or lapsed unexercised.
Since the end of the financial year, no options have been granted
or expired.
The following performance rights were exercised during the year:
■ 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.
No performance rights were issued or expired during, or since
the end of the financial year. Subsequent to the end of the
financial year, on 4 August 2022, a total of 7,650,000 options
exercisable at 3.2 cents each ($0.032) were exercised. These
options were exercised utilising a cashless exercise facility, and
therefore a total of 4,664,633 new ordinary shares were issued.
Hammer is currently exploring in two great minerals provinces,
focused on the discovery of copper and gold deposits. In the
Mount Isa region, the Company has embarked on an aggressive
exploration program looking to build upon its existing JORC
compliant copper/gold resources. Hammer continues to advance
its gold exploration activities in the Yandal Belt in WA, focusing
on targets near the former Bronzewing gold mine.
QUEENSLAND - MOUNT ISA REGION PROJECTS
In the Mount Isa base metals district, Hammer has four projects
with established copper gold JORC resources. The company
is committed to growing its metal inventory near these existing
resources, in addition to exploring the district 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 2,600 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 the Mount Isa region are predominantly
focused on the Trafalgar to Jubilee copper/gold mineralisation
trend. The company completed 7,792m of Reverse Circulation
(“RC”) drilling (52 holes) and 800m of Diamond Drilling (two
holes) at ten distinct targets (Ajax, Ajax East, Overlander South,
Kalman, Lakeview, Sirius, Morning Star and Lady Kate). The
highlights from these drilling programs were the identification of
the Ajax East sulphide trend and multiple shallow intersections in
the northern part of the Kalman project opening up the potential
for resource upgrades at the project.
Several significant geophysical, geochemical and mapping
programs were completed during the year with numerous new
targets being generated. A drilling program is ongoing at the time
of this report focusing on the Ajax East Sulphide trend before a
return to extensional testing at the Kalman project which will look
to increase the copper/gold/molybdenum and rhenium resource
of the project.
54
ANNUAL REPORT 2022HAMMER METALS LIMITED Work continued on Hammer’s North Orelia prospect with the
reporting of results from a 9,700m, 309-hole air core drilling
program. An extensive 5000 sample soil geochemical program
was completed with results awaited at the time of this report.
Separate air core and reverse circulation drilling programs have
been designed for this project area and will be considered for
testing in the upcoming financial year.
IMPACT OF COVID-19 PANDEMIC
During the first of half of the financial year, Hammer was impacted
by COVID-19 related border closures, however the Board has
instituted several measures to ensure that delays and disruptions
from these closures were kept to a minimum. Minor disruptions
with COVID illnesses on site in early 2022 were experienced,
however ongoing disruptions are not expected.
Mt Isa East Joint Venture (“MIEJV”)
Following a formal sale process, JOGMEC sold their interest
in the MIEJV to Sumitomo Metal Mining Oceania. Work on the
MIEJV continued throughout the year, including 2,121m of RC
drilling and 631m of Diamond Drilling at six distinct targets.
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.
During the year the company completed the first deep RC
drilling program on the tenement immediately south of the
3million ounce Bronzewing gold mine. A total of 13 holes for
3,554m of RC drilling was completed (ASX Announcement 23
December 2021).
▲ 7. Dividends
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 4 August 2022, a total of 7,650,000 options
exercisable at 3.2 cents each ($0.032) were
exercised. These options were exercised utilising
a cashless exercise facility, and therefore a total of
4,664,633 new ordinary shares were issued.
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.
▲ 9. Likely Developments
The COVID-19 pandemic is ongoing and while it has yet to have
a significant financial impact on the Group, it is not practicable
to estimate the potential impact, positive or negative, after the
reporting date. The situation is constantly developing and is
dependent on measures imposed by the Australian Government,
such as maintaining social distancing requirements, quarantine,
travel restrictions and any economic stimulus that may be
provided.
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.
55
ANNUAL REPORT 2022HAMMER METALS LIMTED 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
41,244,013
4,000,000
64,493,551
1,052,631
2,000,000
7,000,000
1,500,000
1,000,000
-
8,000,000
-
-
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.
56
ANNUAL REPORT 2022HAMMER METALS LIMITED ▲ 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)
2022
2021
(0.08)
2020
(0.40)
2019
(0.29)
2018
(0.26)
Net loss ($)
(645,270)
(611,525)
(1,978,610)
(852,517)
(673,062)
Share price at 30 June
$0.045
$0.092
$0.043
$0.023
$0.025
Service contracts
Share trading policy
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 entered into an Executive Service agreement
with Mr Thomas on 1 August 2021. An Executive service fee of
$275,000 (plus superannuation at 10%) 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 Director 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 $50,000 (inclusive of superannuation benefits as required
under the applicable legislation). The Chair receives a fixed
annual fee of $75,000 (inclusive of 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.
57
ANNUAL REPORT 2022HAMMER METALS LIMTED
Directors Report
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ANNUAL REPORT 2022HAMMER METALS LIMITED
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59
ANNUAL REPORT 2022HAMMER METALS LIMTED
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
No options were granted to key management personnel during the year. 4,500,000 options were granted to the Non-Executive
Directors during the previous financial 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
No options were granted as remuneration to key management personnel during the year.
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
% 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
60
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
-
ANNUAL REPORT 2022HAMMER METALS LIMITED The following performance rights, which all expire on 21 December 2024, were issued to the Company’s Managing Director during
the year:
■ 1,000,000 Tranche 6 performance rights, vesting upon
the Company announcing a new JORC 2012 compliant
mineral resource estimate of 50,000 tonnes Cu or
equivalent KPI at the sole discretion of the Board;
■ 1,000,000 Tranche 8 performance rights, vesting upon
the Company announcing a new JORC 2012 compliant
mineral resource estimate of 200,000 tonnes Cu or
equivalent KPI at the sole discretion of the Board
■ 1,000,000 Tranche 7 performance rights, vesting upon
the Company announcing a new JORC 2012 compliant
mineral resource estimate of 100,000 tonnes Cu or
equivalent KPI at the sole discretion of the Board; and
The number of rights under each tranche on issue during the current and previous financial year are as follows:
Managing Director Performance Rights – Tranche 3
Managing Director Performance Rights – Tranche 4
Managing Director Performance Rights – Tranche 5
Managing Director Performance Rights – Tranche 6
Managing Director Performance Rights – Tranche 7
Managing Director Performance Rights – Tranche 8
30 June 2022
No.
30 June 2021
No.
-
-
5,000,000
1,000,000
1,000,000
1,000,000
8,000,000
750,000
750,000
5,000,000
-
-
-
6,500,000
The fair value of the performance rights issued during the year to Key Management Personnel was determined by reference to the
underlying security on the date of issue. These fair values have not been adjusted as there exist no market-based performance
conditions attached to the rights. The key inputs and valuations are summarised as follows:
Underlying security spot price on grant date
$0.044
$0.044
$0.044
Mr D Thomas –
Tranche 6
Mr D Thomas –
Tranche 7
Mr D Thomas –
Tranche 8
Grant date
Expiration date
Vesting date
Life (years)
Discount applied (Note 1)
Number of rights
Value per right
Remaining life (years) (Note 2)
Total value
Value recognised to date
Value still to be recognised
29 Nov 2021
29 Nov 2021
29 Nov 2021
21 Dec 2024
21 Dec 2024
21 Dec 2024
-
3
-
-
3
-
-
3
-
1,000,000
1,000,000
1,000,000
$0.044
2.4
$44,000
$8,551
$35,449
$0.044
2.4
$44,000
$8,551
$35,449
$0.044
2.4
$44,000
$8,551
$35,449
Note 1 – all three tranches of performance rights issued during the year contain no market-based vesting conditions and therefore
no discount has been applied.
Note 2 – the remaining life represents the time, in years, left until the expiry of the right.
61
ANNUAL REPORT 2022HAMMER METALS LIMTED Directors Report
▲ 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
Mr R Davis
3,500,000
Mr D Thomas
7,000,000
Mr Z Lubieniecki
4,500,000
Mr D Church
1,000,000
Mr M Pitts
1,000,000
-
-
-
-
-
-
-
-
-
-
▲ 12.7 Equity holdings and transactions
Held at
end of
period / on
resignation
Vested and
exercisable
at end of
period
Lapsed or
Expired
-
-
-
-
-
-
-
-
-
-
3,500,000
3,500,000
7,000,000
7,000,000
4,500,000
4,500,000
1,000,000
1,000,000
1,000,000
1,000,000
During the year, no shares were issued to key management personnel in lieu of fees for the prior year (2021: 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:
Held at
beginning of
period/on
appointment
Purchases
Sales
Granted in
lieu of fees
Mr R Davis
39,152,973
1,026,316
Mr D Thomas
2,241,407
258,593
Mr Z Lubieniecki
57,401,125
5,263,158
Mr D Church
Mr M Pitts
-
1,052,631
1,424,581
-
-
-
-
-
-
Exercise of
Options and
Performance
Rights
Held at end
of period/on
resignation
-
40,179,289
1,500,000
4,000,000
-
-
-
62,664,283
1,052,631
1,424,581
-
-
-
-
-
62
ANNUAL REPORT 2022HAMMER METALS LIMITED ▲ 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
6,500,000
3,000,000
(1,500,000)
Mr Z Lubieniecki
Mr D Church
Mr M Pitts
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
8,000,000
-
-
-
-
-
-
-
-
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
Mr Z Lubieniecki
Mr R Davis
Transaction
Consulting Fees
Consulting Fees
Transaction value year ended
Balance outstanding as at
30 June 2021
$
30 June 2020
$
30 June 2021
$
30 June 2020
$
42,375
40,708
-
8,500
-
8,500
-
-
Mr M Pitts
Accounting services
48,790
41,520
5,780
3,670
The Company paid fees to Zbigniew Lubieniecki and Russell Davis, as consulting fees for geological services provided. The Company
paid fees to Endeavour Corporate, a company associated with Mark Pitts, for accounting and financial reporting services provided
to the Group.
END OF REMUNERATION REPORT
63
ANNUAL REPORT 2022HAMMER METALS LIMTED Directors Report
▲ 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
Corporate Advisor Options – Tranche 3
13 May 2025
$0.032
$0.035
$0.05
$0.06
$0.035
$0.05
$0.05
$0.04
700,000
1,000,000
3,000,000
4,000,000
3,000,000
2,600,000
4,500,000
2,000,000
20,8000,000
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
During the financial year, the Company issued 400,000 ordinary shares as a result of the exercise of unquoted options exercisable
at 3.2 cents on or before 30 November 2021 (2021: 1,250,000).
During the previous financial year, the Company 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).
Subsequent to year end on 4 August 2022, a total of 7,650,000 options exercisable at 3.2 cents each ($0.032) were exercised. These
options were exercised utilising a cashless exercise facility, and therefore a total of 4,664,633 new ordinary shares were issued.
▲ 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 5
13 December 2023
Managing Director Rights – Tranche 6
21 December 2024
Managing Director Rights – Tranche 7
21 December 2024
Managing Director Rights – Tranche 8
21 December 2024
5,000,000
1,000,000
1,000,000
1,000,000
8,000,000
The terms of these rights are summarised in section 12.5 above.
Shares issued on exercise of performance rights
During the financial year, the Company issued 1,500,000 ordinary shares as a result of the exercise of performance rights (2021: 1,500,000).
64
ANNUAL REPORT 2022HAMMER METALS LIMITED ▲ 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.
▲ 16. Indemnification Of Officers And Auditors
The Company has entered into Deeds of Access and Indemnity (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 them 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 PKF Perth, the Company’s auditor, provided no non-audit services to the Company.
▲ 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 2022.
▲ 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
28 September 2022
65
ANNUAL REPORT 2022HAMMER METALS LIMTED Auditor’s Independence Declaration
66
ANNUAL REPORT 2022HAMMER METALS LIMITED Level 4, 35 Havelock Street, West Perth, WA 6005 PO Box 609, West Perth, WA 6872 T: +61 8 9426 8999 F: +61 8 9426 8900 www.pkfperth.com.au PKF Perth is a member firm of the PKF International Limited family of legally independent firms and does not accept any responsibility or liability for the actions or inactions of any individual member or correspondent firm or firms. Liability limited by a scheme approved under Professional Standards Legislation. - 13 - PKF Perth AUDITOR’S INDEPENDENCE DECLARATION TO THE DIRECTORS OF HAMMER METALS LIMITED In relation to our audit of the financial report of Hammer Metals Limited for the year ended 30 June 2022, to the best of my knowledge and belief, there have been no contraventions of the auditor independence requirements of the Corporations Act 2001 or any applicable code of professional conduct. PKF PERTH SIMON FERMANIS PARTNER 28 SEPTEMBER 2022 WEST PERTH, WESTERN AUSTRALIA Consolidated Statement Of Financial Position
HAMMER METALS LIMITED
and its Controlled Entities
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2022
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 2022
$
30 June 2021
$
10
11
12
13
14
15
16
16
17
18
5,193,673
501,762
5,695,435
370,695
268,662
21,337,979
21,977,336
27,672,771
691,567
63,997
755,564
169,940
169,940
925,504
9,706,093
140,842
9,846,935
484,299
303,302
17,429,445
18,217,046
28,063,981
1,171,283
63,997
1,235,280
232,595
232,595
1,467,875
26,747,267
26,596,106
62,965,503
1,399,364
(37,617,600)
62,277,335
1,291,101
(36,972,330)
26,747,267
26,596,106
The consolidated statement of financial position is to be read in conjunction with the accompanying notes.
- 14 -
67
ANNUAL REPORT 2022HAMMER METALS LIMTED
Consolidated Statement Of Profit Or Loss And Other
Consolidated Statement Of Profit Or Loss And Other
Comprehensive Income
Comprehensive Income
HAMMER METALS LIMITED
and its Controlled Entities
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2022
Note
30 June 2022
$
Other income
Sale of tenement
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
30 June 2021
$
308,019
-
(114,839)
(765,502)
(186,795)
(45,878)
(26,906)
213,202
(1,915)
214,863
322,727
(102,143)
(735,505)
(140,492)
(40,191)
(42,458)
(113,604)
-
(636,803)
(620,614)
1,303
(9,770)
(8,467)
(645,270)
-
(645,270)
-
-
14,006
(4,917)
9,089
(611,525)
-
(611,525)
-
-
Total Comprehensive loss for the year
(645,270)
(611,525)
Loss per share:
Basic and diluted loss per share (cents per share)
9(a)
(0.08)
(0.08)
The consolidated statement of profit or loss and other comprehensive income is to be read in conjunction with the
accompanying notes.
68
- 15 -
ANNUAL REPORT 2022HAMMER METALS LIMITED
Consolidated Statement Of Changes In Equity
Consolidated Statement Of Changes In Equity
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69
ANNUAL REPORT 2022HAMMER METALS LIMTED
Consolidated Statement Of Cash Flows
HAMMER METALS LIMITED
and its Controlled Entities
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2022
Note
30 June 2022
$
30 June 2021
$
Cash flows from operating activities
Interest received
Receipts from other parties to joint operations
COVID-related government assistance received
Fuel rebate received
Payments to suppliers and employees
Net cash used in operating activities
23
Cash flows from investing activities
Payments for exploration expenditure
Sale of tenements
Management fees received from farm-in and joint
arrangement partners
Receipt of research and development grant
Government exploration grants received
Cash calls received from farm-in and joint venture
partners
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
Share fund oversubscriptions returned
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
Cash and cash equivalents at end of year
10
1,303
-
-
8,197
(1,010,887)
(1,001,387)
14,006
100,000
38,500
4,667
(776,845)
(619,672)
(4,926,844)
322,727
(3,868,940)
-
233,500
615,195
-
175,000
-
(3,580,422)
150,000
-
12,800
(14,125)
(6,861)
(72,425)
69,389
(4,512,420)
9,706,093
5,193,673
197,170
384,209
377,224
-
(5,946)
(2,916,283)
5,349,994
500,000
5,053,150
-
(305,104)
(34,527)
10,563,513
7,027,558
2,678,535
9,706,093
The consolidated statement of cash flows is to be read in conjunction with the accompanying notes.
70
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ANNUAL REPORT 2022HAMMER METALS LIMITED
Notes To The Consolidated Financial Statements
HAMMER METALS LIMITED
and its Controlled Entities
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 2022 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 28 September 2022.
(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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71
ANNUAL REPORT 2022HAMMER METALS LIMTED
HAMMER METALS LIMITED
and its Controlled Entities
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2. BASIS OF PREPARATION (continued)
(d) Use of estimates and judgements (continued)
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 14.
iv. Share based payments
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of
the equity instruments at the date at which they are granted. The fair value is determined by using either the
Binomial or Black-Scholes model considering the terms and conditions upon which the instruments were
granted. The accounting estimates and assumptions relating to equity-settled share-based payments would
have no impact on the carrying amounts of assets and liabilities within the next annual reporting period but
may impact profit or loss and equity. Refer to note 20 for further information.
v. Lease term
The lease term is a significant component in the measurement of both the right-of-use asset and lease
liability. Judgement is exercised in determining whether there is reasonable certainty that an option to extend
the lease or purchase the underlying asset will be exercised, or an option to terminate the lease will not be
exercised, when ascertaining the periods to be included in the lease term. In determining the lease term, all
facts and circumstances that create an economical incentive to exercise an extension option, or not to
exercise a termination option, are considered at the lease commencement date. Factors considered may
include the importance of the asset to the Group's operations; comparison of terms and conditions to
prevailing market rates; incurrence of significant penalties; existence of significant leasehold improvements;
and the costs and disruption to replace the asset. The Group reassesses whether it is reasonably certain to
exercise an extension option, or not exercise a termination option, if there is a significant event or significant
change in circumstances.
72
- 19 -
ANNUAL REPORT 2022HAMMER METALS LIMITED
HAMMER METALS LIMITED
and its Controlled Entities
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2. BASIS OF PREPARATION (continued)
(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 2022, the Group has incurred a consolidated loss before tax of $645,270 and net cash
outflows from operating and investing activities of $4,581,809. As at 30 June 2022, the Group had $5,193,673 in cash
and cash equivalents and net current assets of $4,939,871.
On the above basis, the Directors are of the view that the going concern basis of preparation is appropriate.
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.
ii.
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.
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.
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73
ANNUAL REPORT 2022HAMMER METALS LIMTED
HAMMER METALS LIMITED
and its Controlled Entities
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(a) Basis of consolidation (continued)
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.
(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.
74
- 21 -
ANNUAL REPORT 2022HAMMER METALS LIMITED
HAMMER METALS LIMITED
and its Controlled Entities
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(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
• Plant and equipment
3 to 4 years
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).
(d) Financial instruments (continued)
For the purpose of subsequent measurement, financial assets, are classified into the following categories:
• amortised cost
•
fair value through profit or loss (FVTPL)
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.
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.
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75
ANNUAL REPORT 2022HAMMER METALS LIMTED
HAMMER METALS LIMITED
and its Controlled Entities
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(d)
Financial instruments (continued)
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.
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.
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
Trade receivables are initially recognised at their transaction price and other receivables at fair value. Receivables that
are held to collect contractual cash flows and are expected to give rise to cash flows representing solely payments of
principal and interest are classified and subsequently measured at amortised cost. Receivables that do not meet the
criteria for amortised cost are measured at fair value through profit or loss.
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76
ANNUAL REPORT 2022HAMMER METALS LIMITED
HAMMER METALS LIMITED
and its Controlled Entities
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(f)
Impairment (continued)
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.
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.
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77
ANNUAL REPORT 2022HAMMER METALS LIMTED
HAMMER METALS LIMITED
and its Controlled Entities
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(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.
(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.
78
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ANNUAL REPORT 2022HAMMER METALS LIMITED
HAMMER METALS LIMITED
and its Controlled Entities
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(k)
Income tax (continued)
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.
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79
ANNUAL REPORT 2022HAMMER METALS LIMTED
HAMMER METALS LIMITED
and its Controlled Entities
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(n) Exploration and evaluation expenditure (continued)
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:
i.
ii.
The expenditure is expected to be recouped through successful development and commercial
exploitation of an area of interest, or alternatively by its sale; and
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).
- 27 -
80
ANNUAL REPORT 2022HAMMER METALS LIMITED
HAMMER METALS LIMITED
and its Controlled Entities
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(n)
Exploration and evaluation expenditure (continued)
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.
(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.
- 28 -
81
ANNUAL REPORT 2022HAMMER METALS LIMTED
HAMMER METALS LIMITED
and its Controlled Entities
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
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
COVID-related government assistance
Fees received from preparation of exploration information
Other income
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
Other employee expenses
Total employee costs
6.
FINANCE INCOME AND FINANCE COSTS
Recognised in loss for the year:
Interest income
Finance costs / lease interest expense
Net finance income
7. AUDITORS’ REMUNERATION
Auditors of the Company – KPMG (resigned 11 March 2022)
Audit services:
Audit and review of financial reports
Auditors of the Company – PKF (appointed 11 March 2022)
Audit services:
Audit and review of financial reports
30 June 2022
$
30 June 2021
$
189,294
-
-
25,569
214,863
141,780
38,500
100,000
27,739
308,019
30 June 2022
$
30 June 2021
$
7,818
34,640
42,458
226,142
18,627
140,492
750
386,011
5,946
20,960
26,906
239,315
17,982
186,795
-
444,092
30 June 2022
$
30 June 2021
$
1,303
(9,770)
8,467
14,006
(4,917)
9,089
30 June 2022
$
30 June 2021
$
28,166
37,000
19,000
47,166
-
37,000
82
- 29 -
ANNUAL REPORT 2022HAMMER METALS LIMITED
HAMMER METALS LIMITED
and its Controlled Entities
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
8.
INCOME TAX
(a) Income tax benefit
Current tax
Deferred tax
Total income tax benefit
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 25%
(2021: 27.5%)
Adjusted for:
Non-deductible expenses / (Non-Assessable Income)
Under/over from prior year
Temporary differences and tax losses not recognised
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
30 June 2022
$
30 June 2021
$
-
-
-
-
-
-
(645,270)
(611,525)
(177,449)
(168,169)
35,869
-
141,580
-
(820)
-
168,989
-
3,443
222,016
42,217
78,997
8,099,807
8,446,480
539
212,976
73,772
131,500
7,566,723
7,985,510
(c) Recognised deferred tax assets & liabilities
Temporary timing differences related to:
Exploration and evaluation expenditure
Income tax losses
(4,793,097)
4,793,097
-
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.
(5,334,495)
5,334,495
-
(d) Movement of temporary differences recognised during the year ended 30 June 2022:
Exploration and evaluation
expenditure
Carried-forward tax losses
Balance 1 July
2021
Profit or Loss
Other
comprehensive
income
Equity
Balance 30
June 2022
(4,793,097)
(541,398)
4,793,097
-
541,395
-
-
-
-
-
-
-
(5,334,495)
5,334,495
-
- 30 -
83
ANNUAL REPORT 2022HAMMER METALS LIMTED
HAMMER METALS LIMITED
and its Controlled Entities
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
8.
INCOME TAX (CONTINUED)
(e) Movement of temporary differences recognised during the year ended 30 June 2021:
Exploration and evaluation
expenditure
Carried-forward tax losses
Balance 1 July
2020
Profit or Loss
Other
comprehensive
income
Equity
Balance 30
June 2021
(3,880,462)
(912,635)
3,880,462
-
912,635
-
-
-
-
-
-
-
(4,793,097)
4,793,097
-
9.
LOSS PER SHARE
(a) Basic and dilutive loss per share calculated using the weighted
average number of fully paid ordinary shares on issue at the reporting
date.
30 June 2022
$
30 June 2021
$
(0.08) cents
(0.08) cents
Options disclosed in Note 17(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
814,035,632
721,519,795
10. CASH AND CASH EQUIVALENTS
Cash at bank and on hand
30 June 2022
$
5,193,673
30 June 2021
$
9,706,093
The Group’s exposure to interest rate risk and sensitivity analysis for financial assets and financial liabilities are
disclosed in Note 25.
11. TRADE AND OTHER RECEIVABLES
Current
GST receivable
Security deposit
Other receivables
Trade and other receivables are non-interest bearing.
12. OTHER FINANCIAL ASSETS
Non - Current
Investments in other entities
Listed shares in TSXV and ASX-listed companies - at fair value
30 June 2022
$
30 June 2021
$
53,463
25,150
423,149
501,762
23,733
25,150
91,959
140,842
30 June 2022
$
30 June 2021
$
370,695
484,299
The Group’s exposure to equity price risk and sensitivity analysis in disclosed in Note 25. Listed shares recognised
as non-current assets have been recognised at fair value through profit or loss (“FVTPL”)
84
- 31 -
ANNUAL REPORT 2022HAMMER METALS LIMITED
HAMMER METALS LIMITED
and its Controlled Entities
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
13.
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
Closing balance at the end of the period
14.
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 2022
$
30 June 2021
$
324,262
(55,600)
268,662
303,302
-
(34,640)
-
268,662
324,262
(20,960)
303,302
71,570
252,592
(20,960)
-
303,302
30 June 2022
$
30 June 2021
$
17,429,445
4,523,729
-
-
(615,195)
21,337,979
14,110,772
4,030,106
50,000
(377,224)
(384,209)
17,429,445
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.
- 32 -
85
ANNUAL REPORT 2022HAMMER METALS LIMTED
HAMMER METALS LIMITED
and its Controlled Entities
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
15.
TRADE AND OTHER PAYABLES
Trade payables and accruals
Employee Leave Accruals
Share issue funds received in advance – Note 1
30 June 2022
$
30 June 2021
$
612,132
79,435
-
691,567
623,965
47,318
500,000
1,171,283
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 25.
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.
16.
LEASE LIABILITIES
Current lease liabilities
Non-current lease liabilities
30 June 2022
$
30 June 2021
$
63,997
169,940
233,937
63,997
232,595
296,592
The nature of the Group’s leasing activities includes office leases and the lease of motor vehicles.
17.
(a)
ISSUED CAPITAL
Share capital
Ordinary shares
On issue at 1 July
Exercise of HMXOD listed options
Shares issued to acquire tenements
Shares issued for cash at $0.095 per share1
Shares issued in lieu of fees
Conversion of performance rights
Exercise of unlisted options
Share issue costs
30 June 2022
30 June 2021
30 June 2022
30 June 2021
No.
No.
$
$
806,652,519
578,356,565
62,277,335
51,429,354
-
-
167,105,021
1,250,000
-
-
5,649,199
50,000
6,842,104
56,315,727
650,000
5,349,994
-
1,500,000
400,000
-
875,206
1,500,000
1,250,000
-
-
27,429
17,600
(6,861)
23,500
25,392
55,000
(305,104)
On issue at 30 June – fully paid
815,394,623
806,652,519
62,965,503
62,277,335
1 – A portion ($500,000) of the total share funds received for the year ended 30 June 2022 was received during
the year ended 30 June 2021 and was recorded as a liability as at 30 June 2021. Refer to Note 15.
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 (2021: Nil).
86
- 33 -
ANNUAL REPORT 2022HAMMER METALS LIMITED
HAMMER METALS LIMITED
and its Controlled Entities
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
17.
(b)
ISSUED CAPITAL (CONTINUED)
Options outstanding over ordinary shares
Listed options (Option issue reserve)
Listed HMXOD options exercisable at $0.03 on or before 30 Sep 2020
30 June 2022
No.
30 June 2021
No.
-
-
Unlisted options (Share-based payment reserve)
Unlisted options exercisable at $0.032 on or before 30 Nov 2022
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
Unlisted options exercisable at $0.04 expiring 13 May 2025
8,350,000
3,000,000
4,000,000
1,000,000
3,000,000
2,600,000
4,500,000
2,000,000
8,750,000
3,000,000
4,000,000
1,000,000
3,000,000
2,600,000
4,500,000
-
28,450,000
26,850,000
No listed options were issued during the year (2021: Nil).
No unlisted options were granted to directors, executives and employees during the year (2021: 4,500,000).
400,000 unlisted options were exercised during the year (2021: 1,250,000).
2,000,000 unlisted options were granted to consultants during the year (2021: Nil)
No listed options were exercised during the year (2021: 167,105,021), and none lapsed unexercised (2021:
3,724,428).
No fully vested unlisted options expired unexercised during the period (2021: 2,676,078).
Options carry no voting rights until converted to fully paid ordinary shares. All unlisted options were granted
for no cash consideration.
(c)
Performance rights outstanding
Performance rights (Share-based payment reserve)
Managing Director Performance Rights – Tranche 3
Managing Director Performance Rights – Tranche 4
Managing Director Performance Rights – Tranche 5
Managing Director Performance Rights – Tranche 6
Managing Director Performance Rights – Tranche 7
Managing Director Performance Rights – Tranche 8
30 June 2022
No.
30 June 2021
No.
-
-
5,000,000
1,000,000
1,000,000
1,000,000
8,000,000
750,000
750,000
5,000,000
-
-
-
6,500,000
The following performance rights were granted during the period (refer note 20):
Number of
options
Vesting Date
Vesting Condition
Managing Director Performance Rights
-
-
-
Tranche 6
Tranche 7
Tranche 8
1,000,000
1,000,000
1,000,000
N/A
N/A
N/A
Refer below
Refer below
Refer below
Expiry Date
13/12/2023
13/12/2023
13/12/2023
All performance rights require the managing director to remain employed until vesting date. The tranches
outstanding at balance date contain the following non-market based vesting conditions:
•
•
•
•
Tranche 5 performance rights vest upon the satisfactory completion of a transaction in accordance with the
terms outlined in the Company’s Notice of AGM dated 8 October 2019;
Tranche 6 performance rights vest upon the Company announcing a new JORC 2012 compliant mineral
resource estimate of 50,000 tonnes Cu or equivalent KPI at the sole discretion of the Board;
Tranche 7 performance rights vest upon the Company announcing a new JORC 2012 compliant mineral
resource estimate of 100,000 tonnes Cu or equivalent KPI at the sole discretion of the Board; and
Tranche 8 performance rights vest upon the Company announcing a new JORC 2012 compliant mineral
resource estimate of 200,000 tonnes Cu or equivalent KPI at the sole discretion of the Board.
- 34 -
87
ANNUAL REPORT 2022HAMMER METALS LIMTED
HAMMER METALS LIMITED
and its Controlled Entities
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
18.
RESERVES
30 June 2022
$
30 June 2021
$
Share-based payment reserve (1)
Balance at beginning of period
Options issued to Directors and executives
Options issued to Corporate advisor
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
1,291,101
-
78,000
25,653
(4,800)
(27,429)
36,839
1,399,364
-
-
-
-
1,144,698
105,750
-
-
(15,000)
(25,392)
81,045
1,291,101
650,225
(636,049)
(14,176)
-
1,291,101
(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 was 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.
1,399,364
19.
a)
COMMITMENTS
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. As a result, exploration expenditure commitments beyond twelve months cannot be
reliably determined.
The Group has a minimum expenditure commitment on tenure under its control.
The Group 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 2022
$
30 June 2021
$
30 June 2022
$
30 June 2021
$
Annual minimum exploration expenditure
2,927,546
2,325,718
-
-
The annual minimum exploration expenditure disclosed above includes $1,518,264 which falls under
tenements related to the joint arrangements as set out in Note 22. Of this amount, $112,009 is related to the
tenement held within the Mt Frosty Joint Venture, under which the Group is responsible for 51% of
expenditures on the joint arrangement, and $1,406,255 relates to twelve tenements that are held by the
Group and fall under, either partially or in full, the Mt Isa East Joint Venture. This is a joint arrangement
between the Group and Sumitomo Metal Mining Oceania Pty Ltd (“SMMO”), the full details of which are
disclosed in Note 22.
88
- 35 -
ANNUAL REPORT 2022HAMMER METALS LIMITED
HAMMER METALS LIMITED
and its Controlled Entities
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
20.
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:
Outstanding at 1 July
Granted during the period
Exercised during the period
Expired / lapsed during the period
Outstanding at 30 June
Exercisable at 30 June
30 June 2022
30 June 2021
No of unlisted
options
26,850,000
2,000,000
400,000
-
28,850,000
28,850,000
Weighted
average
exercise price
$0.045
$0.04
$0.032
-
$0.043
No of unlisted
options
26,276,078
4,500,000
(1,250,000)
(2,676,078)
26,850,000
22,850,000
Weighted
average
exercise price
$0.044
$0.050
$0.032
$0.070
$0.045
The options outstanding at year end have exercise prices ranging from $0.032 to $0.07 and a weighted average
remaining contractual life of 1.335 years.
The following options were granted during the year.
Number of
options
granted
Corporate Advisor Options
2,000,000
Date granted
13 May 2022
% Vested
100%
% Forfeited
/ Lapsed
-
Financial year in
which grant
vested / will vest
-
The fair value of the options issued during the year to corporate advisors 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)
Corporate Advisor
$0.062
$0.04
13 May 2022
13 May 2025
Immediate
3
80%
2.83%
-
2,000,000
$0.039
2.87
- 36 -
89
ANNUAL REPORT 2022HAMMER METALS LIMTED
HAMMER METALS LIMITED
and its Controlled Entities
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
20.
SHARE BASED PAYMENTS (CONTINUED)
Granted during previous financial year
The following options were granted during the prior year.
Key Management Personnel
Russell Davis
Zbigniew Lubieniecki
David Church
Number of
options
granted
Date granted
% Vested
% Forfeited
/ Lapsed
Financial year in
which grant
vested / will vest
2,000,000 30 November 2020
1,500,000 30 November 2020
1,000,000 30 November 2020
100%
100%
100%
-
-
-
-
-
-
The fair value of the options issued during the previous 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
The number of performance rights on issue is as follows:
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 2022
No.
6,500,000
3,000,000
(1,500,000)
-
8,000,000
-
30 June 2021
No.
8,000,000
-
(1,500,000)
-
6,500,000
-
90
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ANNUAL REPORT 2022HAMMER METALS LIMITED
HAMMER METALS LIMITED
and its Controlled Entities
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
20.
SHARE BASED PAYMENTS (CONTINUED)
The fair value of the performance rights issued during the 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:
Underlying security spot price on grant date
Grant date
Expiration date
Vesting date
Life (years)
Discount applied (Note 1)
Number of rights
Value per right
Remaining life (years) (Note 2)
Total value
Value recognised to date
Value still to be recognised
Mr D Thomas –
Tranche 6
$0.044
29 Nov 2021
21 Dec 2024
-
3
-
1,000,000
$0.044
2.4
$44,000
$8,551
$35,449
Mr D Thomas –
Tranche 7
$0.044
29 Nov 2021
21 Dec 2024
-
3
-
1,000,000
$0.044
2.4
$44,000
$8,551
$35,449
Mr D Thomas –
Tranche 8
$0.044
29 Nov 2021
21 Dec 2024
-
3
-
1,000,000
$0.044
2.4
$44,000
$8,551
$35,449
Note 1 – all three tranches of performance rights issued during the year contain no market-based vesting conditions
and therefore no discount has been applied.
Note 2 – the remaining life represents the time, in years, left until the expiry of the right.
All performance rights require the managing director to remain employed until vesting date. The vesting conditions
attached to each tranche issued during the year are as follows:
•
•
•
Tranche 6 performance rights vest upon the Company announcing a new JORC 2012 compliant mineral
resource estimate of 50,000 tonnes Cu or equivalent KPI at the sole discretion of the Board;
Tranche 7 performance rights vest upon the Company announcing a new JORC 2012 compliant mineral
resource estimate of 100,000 tonnes Cu or equivalent KPI at the sole discretion of the Board; and
Tranche 8 performance rights vest upon the Company announcing a new JORC 2012 compliant mineral
resource estimate of 200,000 tonnes Cu or equivalent KPI at the sole discretion of the Board.
21.
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
Executives
Mr M Pitts (Company Secretary)
The key management personnel compensation comprised:
Short-term employee benefits
Post-employment benefits
Share-based payments
30 June 2022
$
529,405
40,837
62,492
632,734
30 June 2021
$
489,208
37,050
186,794
713,052
- 38 -
91
ANNUAL REPORT 2022HAMMER METALS LIMTED
HAMMER METALS LIMITED
and its Controlled Entities
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
21.
RELATED PARTIES (CONTINUED)
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:
Mr Z Lubieniecki
Mr R Davis
Mr M Pitts
Transaction
Consulting
Fees
Consulting
Fees
Accounting
services
Transaction value year ended
Balance outstanding as at
30 June 2022
$
30 June 2021
$
30 June 2022
$
30 June 2021
$
42,375
40,708
8,500
-
48,790
41,520
-
8,500
5,780
-
-
3,670
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 and
Russell Davis as consulting fees for geological services provided.
22.
INTEREST IN OTHER ENTITIES
Country of
Incorporation
Percentage held
2022
Percentage held
2021
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
Hammer Bulk Commodities Pty Ltd (i)
Midas Metals Asia Pty Ltd (i)
(i) These subsidiaries are dormant and have not traded during the year.
Australia
Australia
Australia
Australia
Australia
Australia
100%
100%
100%
100%
100%
85%
100%
100%
100%
100%
100%
85%
The investments held in controlled entities are included in the financial statements of the parent at cost.
92
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ANNUAL REPORT 2022HAMMER METALS LIMITED
HAMMER METALS LIMITED
and its Controlled Entities
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
22.
INTEREST IN OTHER ENTITIES (CONTINUED)
Joint arrangements
The Group has the following farm-in / farm-out arrangements:
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 $597,665 at 30 June 2022 and is
included in exploration and evaluation assets (note 14).
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:
•
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.
During the previous 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.
During the year, the Third Farm-in Period was completed and the Mt Isa East JV has continued to operate in
line with the terms of the agreement noted above.
23.
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
Sale of tenements
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
- 40 -
30 June 2022
$
30 June 2021
$
(645,270)
(611,525)
42,458
140,492
113,604
(322,727)
9,770
(189,649)
-
(62,229)
(212,294)
(1,001,387)
26,906
186,795
(213,202)
-
4,917
(141,780)
23,500
(41,504)
146,221
(619,672)
93
ANNUAL REPORT 2022HAMMER METALS LIMTED
HAMMER METALS LIMITED
and its Controlled Entities
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
24.
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 2022.
30 June 2022
Segment income
Segment profit / (loss) before income tax expense
Segment assets
Segment liabilities
30 June 2021
Segment income
Segment loss before income tax expense
Segment assets
Segment liabilities
-
318,639
15,734,221
(52,344)
-
(17,782)
12,914,534
(139,607)
Queensland
Exploration
$
Western Australia
Exploration
$
Corporate
$
214,863
(963,638)
6,334,792
(863,945)
-
(271)
5,603,758
(9,215)
-
(273)
308,019
(593,470)
4,514,911
(22,842)
10,634,536
(1,305,426)
25.
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.
94
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ANNUAL REPORT 2022HAMMER METALS LIMITED
HAMMER METALS LIMITED
and its Controlled Entities
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
25.
FINANCIAL INSTRUMENTS DISCLOSURES (CONTINUED)
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:
Cash and cash equivalents
Trade and other receivables
Carrying amount
Note
10
11
30 June 2022
$
5,193,673
501,762
30 June 2021
$
9,706,093
140,842
Impairment losses
None of the Group’s trade and other receivables are past due and impaired (2021: 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
30 June 2022
Trade and Other Payables
Lease liabilities
30 June 2021
Trade and Other Payables
Lease liabilities
Carrying
Amount
Contractual
Cash-Flows
< 6 months
6-12
months
1-2 years
2-5 years
691,567
233,937
925,504
691,567
247,904
939,471
691,567
36,201
715,059
1,171,283
296,592
1,467,875
1,171,283
320,305
1,491,588
1,171,283
36,201
1,207,484
-
36,201
36,201
-
36,201
36,201
-
72,401
72,401
-
103,101
103,101
-
72,401
72,401
-
175,502
175,502
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.
- 42 -
95
ANNUAL REPORT 2022HAMMER METALS LIMTED
HAMMER METALS LIMITED
and its Controlled Entities
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
25.
FINANCIAL INSTRUMENTS DISCLOSURES (CONTINUED)
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:
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 2022
$
30 June 2021
$
22,256
0.25%
22,256
0.25%
5,171,417
0.20%
9,683,837
0.01%
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 (2021: 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 2021 was performed on the
same basis.
Loss
Equity
Consolidated
30 June 2022
Variable rate instruments
30 June 2021
Variable rate instruments
50bp
increase
50bp
decrease
50bp
increase
50bp
decrease
$25,857
($25,857)
$25,857
($25,857)
$48,419
($48,419)
$48,419
($48,419)
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 ASX and TSXV at quoted prices
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
30 June 2022
$
30 June 2021
$
370,695
484,299
5,193,673
501,762
(691,567)
(233,937)
9,706,093
140,842
(1,171,283)
(296,592)
96
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ANNUAL REPORT 2022HAMMER METALS LIMITED
HAMMER METALS LIMITED
and its Controlled Entities
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
25.
FINANCIAL INSTRUMENTS DISCLOSURES (CONTINUED)
There are no off-balance sheet financial asset and liabilities at year-end.
All financial assets and liabilities were denominated in Australian dollars during the years ended 30 June 2022 and
2021.
Fair value risk
The group uses three different methods in estimating the fair value of a financial investment. The methods comprise:
•
•
•
Level 1 – the fair value is calculated using quoted prices in active markets; and
Level 2 – the fair value is estimated using inputs other than quoted prices included in Level 1 that are observable
for the asset or liability, either directly (as prices) or indirectly (derived from prices)
Level 3 – the fair value is estimated using inputs other than quoted prices.
Quoted market price represents the fair value determined based on quoted prices on active markets as at the
reporting date without any deduction for transaction costs.
The fair value of derivatives that do not have an active market are based on valuation techniques. Level 2 derivatives
include market observable inputs whilst level 3 derivatives do not include market observable inputs.
Transfer between categories
There were no transfers between levels during the year.
The fair value of financial instruments as well as the methods used to estimate the fair value are summarised in the
table below.
Consolidated
30 June 2022
Equity securities – listed on ASX and
TSXV at quoted prices
30 June 2021
Equity securities – listed on ASX and
TSXV at quoted prices
Valuation
Technique:
Market
Observable
Inputs
Level 2
$
Valuation
Technique:
Non-market
Observable
Inputs
Level 3
$
Quoted Market
Price
Level 1
$
370,695
370,695
484,299
484,299
-
-
-
-
Total
$
370,695
370,695
484,299
484,299
-
-
-
-
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.
- 44 -
97
ANNUAL REPORT 2022HAMMER METALS LIMTED
HAMMER METALS LIMITED
and its Controlled Entities
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
25.
FINANCIAL INSTRUMENTS DISCLOSURES (CONTINUED)
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 2021 was performed on the same basis.
Consolidated
30 June 2022
Equity securities – listed on TSXV
30 June 2021
Equity securities – listed on TSXV
Loss
Equity
10%
increase
10%
decrease
10%
increase
10%
decrease
$37,695
($37,695)
$37,695
($37,695)
$48,430
($48,430)
$48,430
($48,430)
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.
26.
PARENT ENTITY DISCLOSURES
Company
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
30 June 2022
$
30 June 2021
$
20,982,882
6,624,615
27,607,497
21,241,534
6,729,891
27,971,425
690,290
169,940
860,230
26,747,267
1,200,479
174,840
1,375,319
26,596,106
62,965,503
(37,617,600)
1,399,364
26,747,267
62,277,335
(36,972,330)
1,291,101
26,596,106
98
- 45 -
ANNUAL REPORT 2022HAMMER METALS LIMITED
HAMMER METALS LIMITED
and its Controlled Entities
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
26.
PARENT ENTITY DISCLOSURES (CONTINUED)
Company
Financial Performance
Loss for the year
Other comprehensive income
Total comprehensive income
30 June 2022
$
30 June 2021
$
(645,270)
-
(645,270)
(597,349)
-
(597,349)
There were no contingent liabilities of the parent entity at 30 June 2022 (2021: None), nor where there any
commitments of the parent entity (2021: None).
27.
CONTINGENCIES
The Group has no contingencies as at 30 June 2022 (2021: nil).
28.
EVENTS SUBSEQUENT TO BALANCE DATE
Subsequent to year end the following events have occurred:
• On 4 August 2022, a total of 7,650,000 options exercisable at 3.2 cents each ($0.032) were exercised. These
options were exercised utilising a cashless exercise facility, and therefore a total of 4,664,633 new ordinary
shares were issued.
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.
The COVID-19 pandemic is ongoing and while it has yet to have a significant financial impact on the Group, it is not
practicable to estimate the potential impact, positive or negative, after the reporting date. The situation is constantly
developing and is dependent on measures imposed by the Australian Government, such as maintaining social
distancing requirements, quarantine, travel restrictions and any economic stimulus that may be provided.
- 46 -
99
ANNUAL REPORT 2022HAMMER METALS LIMTED
Director’s Declaration
HAMMER METALS LIMITED
and its Controlled Entities
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.
ii.
giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its performance for
the financial year ended on that date; and
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 2022 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
Chairman
Perth
Dated 28 September 2022
100
- 47 -
ANNUAL REPORT 2022HAMMER METALS LIMITED
101
ANNUAL REPORT 2022HAMMER METALS LIMTED Level 4, 35 Havelock Street, West Perth, WA 6005 PO Box 609, West Perth, WA 6872 T: +61 8 9426 8999 F: +61 8 9426 8900 www.pkfperth.com.au PKF Perth is a member firm of the PKF International Limited family of legally independent firms and does not accept any responsibility or liability for the actions or inactions of any individual member or correspondent firm or firms. Liability limited by a scheme approved under Professional Standards Legislation. - 48 - PKF Perth INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF HAMMER METALS LIMITED Report on the Financial Report Opinion We have audited the accompanying financial report of Hammer Metals Limited (the “Company”), which comprises the consolidated statement of financial position as at 30 June 2022, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the Directors’ Declaration of the Company and the consolidated entity comprising the company and the entities it controlled at the year’s end or from time to time during the financial year. In our opinion, the accompanying financial report of Hammer Metals Limited is in accordance with the Corporations Act 2001, including: i) Giving a true and fair view of the consolidated entity’s financial position as at 30 June 2022 and of its performance for the year ended on that date; and ii) Complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for Opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence We are independent of the consolidated entity in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code 102
ANNUAL REPORT 2022HAMMER METALS LIMITED - 49 - PKF Perth Key Audit Matter A key audit matter is a matter that, in our professional judgement, was of most significance in our audit of the financial report of the current year. 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. For each matter below, our description of how our audit addressed the matter is provided in that context Carrying value of capitalised exploration expenditure Why significant How our audit addressed the key audit matter As at 30 June 2022 the carrying value of exploration and evaluation assets was $21,337,979 (2021: $17,429,445), as disclosed in notes 3 and 15. The consolidated entity’s accounting policy in respect of exploration and evaluation expenditure is outlined in notes 3 and 15. Significant judgement is required: • in determining whether facts and circumstances indicate that the exploration and evaluation assets should be tested for impairment in accordance with Australian Accounting Standard AASB 6 Exploration for and Evaluation of Mineral Resources (“AASB 6”); and • in determining the treatment of exploration and evaluation expenditure in accordance with AASB 6, and the consolidated entity’s accounting policy. In particular: o whether the particular areas of interest meet the recognition conditions for an asset; and o which elements of exploration and evaluation expenditures qualify for capitalisation for each area of interest. Our work included, but was not limited to, the following procedures: • Conducting a detailed review of management’s assessment of impairment trigger events prepared in accordance with AASB 6 including: o assessing whether the rights to the tenure of the areas of interest remained current at reporting date as well as confirming that rights to tenure are expected to be renewed for tenements that will expire in the near future; o holding discussions with the Directors and management as to the status of ongoing exploration programmes for the areas of interest, as well as assessing if there was evidence that a decision had been made to discontinue activities in any specific areas of interest; and o obtaining and assessing evidence of the consolidated entity’s future intention for the areas of interest, including reviewing future budgeted expenditure and related work programmes; • considering whether exploration activities for the areas of interest had reached a stage where a reasonable assessment of economically recoverable reserves existed; • testing, on a sample basis, exploration and evaluation expenditure incurred during the year for compliance with AASB 6 and the consolidated entity’s accounting policy; and • assessing the appropriateness of the related disclosures in Notes 3 and 15. 103
ANNUAL REPORT 2022HAMMER METALS LIMTED - 50 - PKF Perth Other Information Those charged with governance are responsible for the other information. The other information comprises the information included in the consolidated entity’s annual report for the year ended 30 June 2022 but does not include the financial report and our auditor’s report thereon. Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon, with the exception of the Remuneration Report. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of Directors’ for the Financial Report The Directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the Directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In preparing the financial report, the Directors are responsible for assessing the consolidated entity’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the consolidated entity or to cease operations, or have no realistic alternative but to do so. Auditor’s Responsibilities for the Audit of the Financial Report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, 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. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. As part of an audit in accordance with Australian Auditing Standards, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the consolidated entity’s internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Directors 104
ANNUAL REPORT 2022HAMMER METALS LIMITED - 51 - PKF Perth • Conclude on the appropriateness of the Directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the consolidated entity’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the consolidated entity to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation. • Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the consolidated entity to express an opinion on the group financial report. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. We communicate with the Directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the Directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied. From the matters communicated with the Directors, we determine those matters that were of most significance in the audit of the financial report of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Report on the Remuneration Report Opinion We have audited the Remuneration Report included in the Directors’ Report for the year ended 30 June 2022. In our opinion, the Remuneration Report of Hammer Metals Limited for the year ended 30 June 2022, complies with section 300A of the Corporations Act 2001. 105
ANNUAL REPORT 2022HAMMER METALS LIMTED . - 52 - PKF Perth Responsibilities 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 responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. PKF PERTH SIMON FERMANIS PARTNER 28 SEPTEMBER 2022 WEST PERTH, WESTERN AUSTRALIA 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 14 October
2022.
(a)
Ordinary shareholders
Twenty largest holders of ordinary shares
Central Mutual (Investments) Pty Ltd
Mr Zbigniew Waldemar Lubieniecki
Zenith Pacific Limited
Davis Family Capital Pty Ltd
BNP Paribas Nominees Pty Ltd
Lundie Investments Pty Ltd
BNP Paribas Nominees Pty Ltd
Samlisa Nominees Pty Ltd
B + C Watson Holdings Pty Ltd
J P Morgan Nominees Australia Pty Limited
BNP Paribas Nominees Pty Ltd ACF Clearstream
HSBC Custody Nominees (Australia) Limited
Mr Shane Ronald Britten
Mr Philip Joseph Parkins
Sacchetta Group Holdings Pty Ltd
ANGIP Nominees Ptd Ltd
AXSIM Funds Management Pty Ltd
Citicorp Nominees Pty Limited
Mr Bryce Roy Symons
Mr Peter William Karlson + Mr Peter James Cargin
Number of
shares
82,616,840
64,493,551
50,000,000
41,244,013
37,122,130
26,041,037
20,693,843
20,000,000
9,144,764
9,000,000
8,532,360
7,449,498
6,890,842
6,744,086
6,650,000
6,500,000
4,700,000
4,644,062
4,400,000
3,850,000
% held
10.07
7.86
6.10
5.03
4.53
3.18
2.52
2.44
1.12
1.10
1.04
0.91
0.84
0.82
0.81
0.79
0.57
0.57
0.54
0.47
420,717,026
51.30
Significant Shareholders are:
Shareholder
Number of Shares
% held
Central Mutual (Investments) Pty Ltd
Mr Zbigniew Waldemar Lubieniecki
Zenith Pacific Limited
82,616,840
64,493,551
50,000,000
10.07
7.86
6.10
Each fully paid ordinary share entitles the holder to one vote at general meetings of shareholders and is
entitled to dividends when declared.
The total number of shares on issue is 820,059,256
The number of shareholders holding less than a marketable parcel is 524.
There is no current on market buy back.
The Company has no ordinary shares which are subject to voluntary escrow.
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ANNUAL REPORT 2022HAMMER METALS LIMITED
ASX ADDITIONAL INFORMATION
Distribution of ordinary shareholders
Category of shareholding
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
Number of
shareholders
Number of shares
%
169
128
370
1,324
766
2,757
31,976
470,289
2,948,504
55,809,064
760,799,423
820,059,256
0.00%
0.06%
0.36%
6.81%
92.77%
100.00%
(b)
Unquoted securities
The Company has the following unquoted securities on issue.
Category of security
Number
Number of
holders
Unlisted options exercisable at $0.032 on or before 30 November 2022
8,750,000
10
Unlisted options exercisable at $0.05 on or before 21 October 2023
Unlisted options exercisable at $0.06 on or before 21 October 2023
3,000,000
4,000,000
Unlisted options exercisable at $0.035 on or before 13 December 2022
1,000,000
Unlisted options exercisable at $0.05 on or before 30 June 2024
Unlisted options exercisable at $0.035 on or before 30 June 2023
2,600,000
3,000,000
Unlisted options exercisable at $0.05 on or before 30 November 2024
4,500,000
Performance rights expiring 13 December 2023, vesting on 21 October
2021
Performance rights expiring 13 December 2023, vesting on 21 October
2021 and upon the achievement of a share price hurdle of $0.036 for a
period of 30 days
Performance rights expiring 13 December 2023, vesting on the
satisfaction of a suitable transaction
750,000
750,000
5,000,000
1
1
1
5
1
3
1
1
1
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ANNUAL REPORT 2022HAMMER METALS LIMTED
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ANNUAL REPORT 2022HAMMER METALS LIMITED