30 October 2023
2023 Annual Report
Hammer Metals Limited (ASX:HMX) (“Hammer” or “the Company”) is pleased to attach its Annual Report
for the year ended 30 June 2023.
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
2023
ABN
87 095 092 158
ASX
HMX
BOARD OF DIRECTORS
Russell Davis
Non-Executive Chairman
Daniel Thomas
Managing Director
David Church
Non-Executive Director
James Croser
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
info@hammermetals.com.au
www.hammermetals.com.au
Postal Address
Unit 1, 28-30 Mayfair Street,
West Perth, WA 6005
02
AUDITORS
PFK
Level 5,
35 Havelock Street
Perth West
WA, 6005
Telephone: +61 8 9426 8999
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 E XCHANGE
ASX Limited
Level 40, Central Park,
152-158 St Georges Terrace
Perth WA 6000
CORPOR ATE
GOVERNANCE
The Company’s corporate
governance statement
can be found at the following
URL: hammermetals.com.au/
about/corporate-governance/
// Annual Report 2023HAMMER METALS LIMITED
Contents
Contents
INTRODUCTION
Chairman’s Letter
Corporate Strategy
Operational Highlights
Corporate Activity
OPER ATIONS
Operational Summary
STATEMENTS & REPORTS
Competent Person’s Statements
Annual Mineral Resource Statement
Tenement Interests
Directors Report
FINANCIALS
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
Director’s Declaration
Independent Auditor’s Report
ASX Additional Information
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camera Photo by Kate Allen
03
// Annual Report 2023HAMMER METALS LIMTED Introduction
Chairman's
Letter
On behalf of Hammer’s Board of Directors I would like
to present Hammer’s 2023 Annual Report
Dear Fellow Shareholders,
In my letter last year I wrote that I looked forward to the year
ahead with confidence and mentioned several goals we hoped
to achieve in the forthcoming year. Results of our field programs
will be discussed in greater detail by Dan Thomas in the following
Operations Review, however it is useful to look back on how the
Company has progressed.
On the positive side of the ledger the Company announced a
major 39% upgrade in its 100%-owned Kalman resource to a
contained 500,000 tonnes Cu equivalent metal, as well as adding
the smaller Lake View copper-gold deposit to the Company’s
mineral inventory. The Kalman project now comprises an estimated
208,000 tonnes of copper, 38,000 tonnes of molybdenum,
343,000 ounces of gold and 84,100 kilograms of rhenium in six
deposits. Mining studies have recommenced into assessing the
development potential of these resources.
Also, as foreshadowed last year Hammer’s 100%-owned Hardway
prospect is shaping up as an interesting copper-REE-yttrium
deposit. Hardway is located close to the Barkly Highway, within
easy trucking distance of Kalman, as are our other satellite
deposits at Elaine, Overlander North, Overlander South, Jubilee
and Lakeview. If further drilling at Hardway substantiates the
results to date it is anticipated Hardway will be added to Hammer’s
mineral inventory in the coming months.
Exciting new positions are also emerging at the southern end
of our tenement block from our drilling at Mount Hope South
and Mascotte where high grade copper-gold intersections have
been made this year. These targets are near to the Mount Hope
and Lady Fanny deposits currently being actively assessed by
Carnaby Resource Limited. Hammer holds a strong ground
position proximal to these deposits with multiple targets yet to
be tested.
04
// Annual Report 2023HAMMER METALS LIMITED After the initial encouraging results along the Ajax East - Pearl
trend and at Mascotte Junction, the Company’s subsequent
drilling did not see these prospects translate into new resource
positions. Whilst disappointments are unavoidable in exploration,
as a team we know we must persevere, reappraise, and refocus;
striving to put the funds that our shareholders, partners, and
investors provide to the Company into targets where we think we
have the best chances of discovery.
With respect to Hammer’s “large target” generative work, the
collection of baseline geochemical and geophysical data has
advanced the Bullrush IOCG target, the previously untested large-
scale altered and mineralised zone at Jimmy’s Creek, as well
as a series of strong VTEM conductors at Brothers north of the
high-grade Tick Hill gold mine to the drilling stage. The optimal
pathways to getting these targets tested at the earliest opportunity
is currently under consideration.
The Company is actively monitoring the heightened activities of
our neighboring explorers and miners in the Mount Isa region and
is vigorously assessing new opportunities that make strategic
sense to acquire, as well as identifying non-core areas for
divesting or farmout.
The Mount Isa region is predicted to be an important source
of base and critical metals to supply the energy transition
infrastructure and is attracting significant government and major
company attention. We believe that the potential for a large
copper discovery as well as discovery of other critical minerals
within Hammer’s 3,000km2 ground position remains high, and
that Hammer, with its significant mineral inventory located in the
core of this region has a key role to play in the critical mineral
thematic and any potential consolidation opportunities.
On the corporate front, in September we welcomed James Croser
to Hammer’s board of directors as a Non-executive Director. James
brings a wealth of practical mining and corporate experience to
the Company. Sadly, Ziggy Lubieniecki has retired from the board
however we will be able to access Ziggy’s exploration skills on
a consulting basis. On behalf of the board I would like to thank
Ziggy for his valued contribution.
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 Thomas for their efforts over the past
year. Hammer of course advances on the efforts of its exploration
team. I would like to acknowledge their significant contributions to
our activities as they do the practical work of getting the various
approvals and undertaking the field programs, and getting the
ideas tested. The Hammer Metals team remains committed to
making a significant exploration discovery and delivering a positive
outcome for our shareholders.
Sincerely,
Russell Davis
Chairman
05
// Annual Report 2023HAMMER METALS LIMTED
Corporate Strategy
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.
06
// Annual Report 2023HAMMER METALS LIMITED Operational
Highlights
→ Completion of an updated Mineral Resource Estimate for
Kalman with a ~39% increase in the contained metal within
the deposit equating to ~500,000t of contained copper
equivalent metal.
→ Improved categorisation of the Kalman resource with an
increase of 141% of inventory within the Indicated JORC
category.
→ Discovery of a significant copper/heavy rare earth element
system at Hardway with broad zones of mineralisation
discovered over a strike extent in excess of 1km.
→ Hammer applied and won a competitive tender process
for new tenements in close proximity to the Mount Hope
copper project.
→ Acquisition of an 80% interest in the Cu/REE projects
Mount Dorothy and Cobalt Ridge.
→ 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.
→ Significant mineralised copper intercepts recorded at
promising targets at South Hope and Mount Mascotte.
→ Completed over 14.5km of drilling across in excess of a
dozen targets in the Mount Isa project.
→ Identification of pegmatite system covering in excess of
1 square kilometre and lithium geochemical anomalism
at North Orelia, situated approximately 40km east of the
world class Kathleen Valley lithium deposit.
→ Continued to define new prospective targets across lightly
explored tenure in the Yandal gold, lithium and nickel belt.
07
// Annual Report 2023HAMMER METALS LIMTED Corporate Strategy
Corporate
Activity
The Company’s corporate activities are focussed on
enhancing the capacity of our exploration team to make
discoveries through adequate funding, as well as securing
tenements or projects that improve the quality and potential
of the Company’s exploration portfolio.
During the year, the Company further enhanced its standing in
the Mount Isa region with Hammer notified that it is the prioritised
applicant for EPM28285, located directly west of its Mount
Hope tenement (EPM26777), along-trend and less than 5km
north of Carnaby Resources’ (ASX: CNB) Lady Fanny and Nil
Desperandum copper discoveries. Hammer also acquired an
80% interest in the Mount Dorothy and Cobalt Ridge projects, two
critical minerals projects in the Mount Isa district.
With a strong focus on our Mount Isa exploration portfolio, and
declining interest for investors in gold exploration, our activities at
our Yandal project were again slow during the year. An extensive
soil sampling program in FY21 delivered exciting new lithium,
gold and nickel targets and have the company set for a new
phase of exploration in the Yandal region during the coming year.
On the funding front, the Company raised $3.5 million though a
share placement (“Placement”) at $0.060 per new share. The
Placement was well supported by existing shareholders and
several new high-quality institutional and sophisticated investors,
representing a strong endorsement of Hammer’s upcoming
planned exploration programs in the Mount Isa region of North
Queensland. An additional $200,000 was raised subsequent
to the financial year, with the approval for the participation of
Hammer’s directors in the placement. Aiding funding during the
year, a Research and Development tax refund of $1.1 million was
received in March.
Through historical transactions, the company also holds
investments in three junior exploration companies with a current
valuation of ~A$250,000.
08
// Annual Report 2023HAMMER METALS LIMITED 09
// Annual Report 2023HAMMER 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.
Through its wholly owned subsidiaries, the Company holds a
strategic tenement position covering over 3,000km2 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, the Lakeview (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 highlight of the FY23 year was the significant increase in the
Mineral Resource estimate of the Kalman Cu-Mo-Au-Re deposit.
The extension of a fourth lens of mineralisation to the north of
the deposit provided the foundation for a 40% increase in the
contained metal of the deposit. Ore sorting test work completed
on Kalman during the year also highlighted potential for further
optimisation of this deposit.
Over the year the company progressively tested many highly
prospective targets defined through previous geophysical and
geochemical programs. The culmination of these thorough
preliminary programs led to the discovery of a number of highly
prospective targets with broad initial drilling intercepts (>50m)
with grades in excess of 1% copper. These targets at Hardway,
Mount Mascotte and South Hope provide for follow up drilling
programs and potentially new JORC resources for Hammer’s
mineral inventory.
At Hardway, initial field work delineated a copper and a heavy
rare earth element system. Drilling during the year highlighted
significant strike potential (1km) with wide spaced drilling
intercepting mineralisation in most drill holes.
Exploration within Hammer’s southern portfolio also increased
during the year, resulting in strong copper intercepts in drilling at
Mount Hope South and the nearby Mount Mascotte and Mascotte
Junction prospects. Initial drilling at these prospects has been
encouraging with follow up programs underway at the time of
this report.
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 have been
completed leading to the maturation of prospects such as
Bullrush and The Brothers. These prospects are drill ready and
will be considered for drilling in FY24, potentially through a new
Joint Venture arrangement.
.
10
// Annual Report 2023HAMMER METALS LIMITED Mount Isa Project Locations
11
// Annual Report 2023HAMMER METALS LIMTED Operations Summary
Mount Isa
Copper Gold Projects
▲ Kalman
The 100%-owned Kalman deposit, located 50km south-east
of Mt Isa and 25km south of the Barkly Highway, is one of the
few polymetallic deposits in Queensland to contain significant
molybdenum and rhenium in addition to copper and gold.
With open pit and underground mining potential, the deposit
remains open at depth and along strike.
Hammer reported an updated Mineral Resource Estimate
(MRE) for Kalman during the June Quarter, delivering significant
additional tonnage of shallow mineralisation. The MRE update
reflects successful extensional drill programs completed last
year and positions Hammer with one of the largest undeveloped
mineral inventories in the Mount Isa region.
Highlights of the MRE update include:
→ A 39% increase in the contained metal within the deposit
and equates to ~500,000t of contained copper equivalent
metal:
o 39.2Mt at 1.07% Recovered Copper Equivalent (“CuEq
Rec”) at 0.53% Cu, 0.27g/t Au, 0.10% Mo, 1.5g/t Ag
and 2.1g/t Re (See ASX Announcement 8 May 2023).
o Open pit material represents 71% of the MRE
(27.7Mt at 0.89% Cu Eq Rec)1.; and
o The Kalman MRE contains 208,400t of copper,
343,200oz of gold, 38,000t of molybdenum,
1.92Moz of silver and 84,100kg of rhenium.
In addition to the improvement in resource categorisation, the
open pit resource at Kalman has grown from 13.3Mt to 27.7Mt.
The inclusion of additional mineralisation at a shallow depth has
the potential to positively impact the economics of the deposit.
▲ Kalman MRE by JORC Classification (May 2023 vs 2016)
Kalman Deposit - JORC 2012 Mineral Resource Estimate (May, 2023)
Classification
Indicated
Inferred
Total
CuEq
Cont.
% (3)
CuEq
Rec.
%(2,3,4)
Tonnes
Kt(1)
Cu
%
Au
g/t
17,120
1.04
0.87
0.43 0.22
22,070
1.46
1.22
0.61 0.31
Ag
g/t
1.2
1.7
Mo
%
Re
g/t
0.08
1.7
0.11
2.5
39,190
1.27
1.07
0.53 0.27
1.5
0.10
2.1
2016 Kalman Resource(6)
20,000
1.80
N/A
0.61 0.34
1.9
0.14
3.7
Change
96%
-29%
N/A
-13% -20% -20% -31% -42%
Contained
Cu Eq Metal
(Kt) (1)
Recovered
Cu Eq
Metal (Kt)(1)
180
320
500
360
39%
150
270
420
N/A
N/A
→ Note: (1) Rounded to nearest 10kt
→ Note: (2) The recovered copper equivalent equation is: CuEq Recovered = 0.86*Cu + (0.74*0.771051*Au)
+ (0.74*0.008336*Ag) + (0.86*4.857143*Mo) + (0.77*0.023334*Re)
→ Note: (3) Copper Equivalent Price assumptions are: Cu: US$7,714/t (US$3.50/lb); Au: US$1,850/oz; Ag: US$20/oz;
Mo: US$37,468/t (or US$17/lb); and Re: US$1,800/kg
→ Note: (4) Recovery assumptions are: Cu 86%; Au 74%; Ag 74%; Mo 86%; and Re 77%
→ Note: (5) 2016 Cut Off Grades; Open Cut: 0.7% Cu Eq. and Underground 1.2% Cu Eq.
→ Note: (6) 2023 Cut Off Grades: Open Pit 0.4% Cu Eq. and Underground 1.0% Cu Eq.
12
// Annual Report 2023HAMMER METALS LIMITED
Further effort in the coming year will continue to improve previous
study work, much of which is now more than five years old and
based upon the prior resource model. This work will include a
revision of historical mining study optimisations with updated
metal prices, cost assumptions and incorporate the recent
successful ore sorting test results (see ASX Announcement 1
November 2022).
A program to enhance metallurgical work completed in 2010 will
be considered in FY24 with a view to improving the historical
recoveries for copper and molybdenum. The separation of
copper and molybdenum sulphides is common practice in many
global porphyry deposits such as Cadia (NSW), Sierra Gorda
and Spence.
▲ Kalman MRE Categorisation Changes (2016 to 2023)
Kalman structure looking south
Categorisation Kalman
Resource
2016 MRE
(Kt)(1)
Indicated
Inferred
Proportion of Indicated
Proportion of Inferred
7,100
13,200
35%
65%
2023 MRE
(Kt)(2)
17,120
22,120
44%
56%
→ Note: (1) 2016 Cut Off Grades: Open Cut: 0.7% Cu Eq. and Underground 1.2% Cu Eq.
→ Note: (2) 2023 Cut Off Grades: Open Cut: 0.4% Cu Eq. and Underground 1.0% Cu Eq.
% Increase
141%
67%
25%
-13%
Kalman Cu Equivalent Grade Tonnage Curve
13
// Annual Report 2023HAMMER METALS LIMTED Operations Summary
Kalman Oblique View Looking Northwest showing Copper Equivalent % Blocks
(See ASX Announcement 8 May 2023)
Hammer also undertook an initial round of ore sorting testwork to determine whether ore sorting technology could be effectively
applied to upgrading Kalman ore. The results indicate that >80% of the combined value of the ore can be recovered with a 40-45%
reduction in mass processed.
Specifically, the ore sorting setting of rejecting low density
material could achieve:
→ Copper grade increase of 28% (0.71% to 0.91% Cu) with
a mass reduction of 35% and recovery of 83.4%;
→ Gold grade increase of 39% (0.23g/t to 0.32g/t Au) with
a mass reduction of 35% and recovery of 90.7% %; and
→ Molybdenum grade increase of 103% (0.33% to
0.67%Mo) with a mass reduction of 61.8% and a
recovery of 76.6%.
→ The initial work indicates that the Kalman deposit
is very amenable to ore sorting and a larger bulk
testwork program will be considered in FY24. (See ASX
Announcement 1 November 2022)
14
Drilling at Kalman
// Annual Report 2023HAMMER METALS LIMITED ▲ Kalman West
Kalman West is located approximately 1km west of the
Kalman Cu-Au-Mo-Re Deposit. The prospect is anomalous in
gold, copper, lead and zinc.
Initial mapping and drilling in the area showed the potential for high-
grade gold mineralisation.
Mapping indicated that these high-grade results are sourced from
several narrow quartz veins. Further investigation was considered
warranted as the Tick Hill Gold Deposit is hosted in a similar
geological and structural position relative to the Pilgrim Fault as
Kalman West. With previous drill intersections of 1m at 46.3g/t Au
and rock chips returning assays of up to 4.48% Au (refer to ASX
announcements dated 1 October 2015, 28 August 2017 and 26
July 2021), Hammer completed a close-spaced five-hole, 200m RC
drilling program in the area.
Whilst a significant intercept of 1m at 65.4g/t gold from 9m in
HKWRC015 was returned from this program, the continuity of the
high-grade mineralisation is poor and no further work is warranted.
(see ASX Announcement 7 March 2023).
▲ Lakeview
The Lakeview prospect is marked by historical workings
along an approximate 350m strike length.
Production records indicate that the mine 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.
A new JORC resource was defined at the Lakeview deposit during
the year. An Initial Mineral Resource Estimate was completed for
the Lakeview copper-gold deposit comprising 0.58 million tonnes
at 1.03% Cu and 0.30g/t Au in the Inferred category at a 0.3% Cu
cut-off. The Lakeview deposit extends from surface and is open at
depth with excellent potential for extensions both at depth and along
strike (See ASX Announcement 21 December 2022).
Lakeview long section looking north
(See ASX announcement 21 December 2022)
▲ Lakeview MRE by JORC classification (December 2022)
Lakeview Deposit - Inferred Mineral Resource Estimate by weathering type (Cu 0.3% cut-off) - December 2022
Oxide
Fresh
Oxide
Total
Tonnes
0.48
0.10
0.58
Cu (%)
13.06
0.84
1.03
Au (g/t)
0.31
0.25
0.30
Cu (t)
5,100
800
6,000
Au (Ozs)
4,800
800
5,600
→ Totals may not sum exactly due to minor rounding errors
15
// Annual Report 2023HAMMER METALS LIMTED Operations Summary
▲ Hardway
The Hardway prospect was identified as a highly prospective
target to be pursued during 2023.
Hammer has just completed its third drilling program at this prospect
where it has delineated broad zone of copper and heavy rare earth
mineralisation with a strike extent of at least 1km.
The Hardway Prospect is unique in the Mt Isa inlier due to its
combination of copper and REE mineralisation, and its location near
regional infrastructure. Hardway is a dominant Heavy Rare Earth
Yttrium Oxide (HREYO) system with an average HREYO/TREYO
ratio of 65% within the interval below.
Drilling highlights for the year included (see ASX Announcement,
6 February 2023, 7 March 2023, 24 May 2023, 21 August 2023.):
→ 57m at 1.0% Cu from surface in HMHWRC012, including
10m at 2.87% Cu, 0.11g/t Au and 0.09% TREYO from 25m;
→ 24m at 1.06% Cu and 0.20% TREYO from 14m within
58m at 0.55% Cu from surface in HMHWRC006 (hole
terminated in mineralisation).
→ 30m at 1.1% copper from 48m in HMHWRC001 in addition
to 26m at 0.14% TREYO from 34m.
Hardway North Pit looking south
Hardway - Soil Cu contours and drilling (See ASX Announcement 24 May 2023)
16
// Annual Report 2023HAMMER METALS LIMITED ▲ Ajax
The Ajax prospect is located approximately 1.2km south-east of
Lakeview along the 15km Trafalgar-to-Jubilee mineralised trend.
The Ajax trend was initially discovered in early 2022 with an intercept
of 11m at 5% Cu and 2.5g/t Au in HMLVRC014 (see ASX release
dated 9 March 2022).
In late 2022, follow-up drilling in the Ajax area tested this trend along
strike with copper intercepts including:
→ 48m @ 0.43% Cu and 0.12g/t Au from 10m in HMLVRC021,
including:
→ 4m at 2.4% Cu and 0.41g/t Au from 27m in HMLVRC021.
Five holes (for 1,050m) were drilled along the Ajax East FLEM anomaly.
These holes targeted FLEM anomalies and zones of demagnetisation.
The rationale was to test varying geophysical properties along the
strike length of the EM anomaly, as these properties reflect the
underlying alteration and sulphide mineralisation.
The broader extent of the sulphide system delineated at Ajax East
remains under-explored, with strike extents of greater than 250m
still without any drill coverage. Hammer will look to build upon its
geological knowledge of the Ajax area and further test this zone in
future drilling programs.
Ajax drilling highlights and underlying Electromagnetic Anomalies (See ASX Announcement 7 March 2023)
17
// Annual Report 2023HAMMER METALS LIMTED Operations Summary
Mount Hope Region
Hammer’s activities in the Mount Hope region increased
during the year with promising prospects developing at South
Hope, Mount Mascotte and their surrounds.
Several promising drill intersections were delivered from each of these prospects highlighting the immense potential in a region
where Hammer holds a very strong ground position including around the entirety of Carnaby Resources Mount Hope Mining
License.
Hammer’s Mount Hope and Mascotte tenements and current drilling targets
(See ASX Announcements: 22 November 2022, 19 December 2022, 23 December 2022, 4 and 27 July 2023)
18
// Annual Report 2023HAMMER METALS LIMITED ▲ South Hope
South Hope consists of a steeply west-dipping and
south-plunging quartz breccia pipe with chalcopyrite as the
main copper-bearing sulphide.
Initial drilling at South Hope delivered highly promising results
including (see ASX Announcements 4 and 27 July 2023):
→ 25m at 2.41% Cu and 0.47g/t Au from 74m in
HMHSRC001, including 6m at 3.12% Cu and 0.36g/t Au
from 85m.
→ Follow up drilling was equally successful delivering further
high grade copper intersections including (See ASX
Announcement 3 and 27 July 2023); and
→ 15m at 3.47% Cu within a broader mineralised zone of
56m at 1.12% Cu in HMHSRC007.
→ 4m at 3.03% Cu and 0.29g/t Au from 39m in HMSHRC003,
including 1m at 10.1% Cu and 0.98g/t Au from 40m.
Further follow up drilling in progress at the time of preparation of
this report with results expected to be returned in the near future.
Plan view of drill-holes, with modelled DHEM plates
(See also ASX announcements 20 July 2022, 25 October 2022, 22 November 2022, 4 and 27 July 2023)
19
// Annual Report 2023HAMMER METALS LIMTED Operations Summary
▲ Mount Hope South to South Hope
To the north of South Hope, Hammer has defined a mineralised
trend which appears to intersect with the Binna Burra structure,
currently being drilled by Carnaby Resources (ASX: CNB).
The Binna Burra structure is thought to continue onto Hammer’s EPM and is the likely source of the mineralisation which was previously
mined at the Mount Hope South prospect.
Prospecting between the Mount Hope South and South Hope
prospects has shown zones of quartz and ironstones with high-
grade copper/gold rock chip analyses (see ASX Announcement
20 July 2022).
The potential for these zones to link is still being evaluated with an
Induced Polarisation survey conducted in late September.
Hammer is yet to test this prospective zone adjacent to the tenement
boundary as the Company continues to gather valuable geological
information from our neighbour’s drilling programs. Any future
mining of this zone, if mineralisation is defined, may need to occur
in conjunction with our neighbours as the mining pits would be likely
to impinge on the neighbouring Mining Lease.
Mount Hope Plan -Historical workings and IP Anomalies
(See ASX Announcements 22 November 2022 and 4 July 2023)
20
// Annual Report 2023HAMMER METALS LIMITED ▲ Mount Mascotte and Mascotte Junction
The Mascotte group consists of two prospects separated by
approximately 900m, both of which are located approximately
4.5km to the east of the Mount Hope project area.
Mt Mascotte, which represents the more southerly of the two targets, consists of a north striking, vertically dipping gossan zone which
was historically mined by a small open cut and two shafts (now collapsed) in the early 1900’s.
The zone of copper mineralisation intercepted in HMMARC008
is thought to potentially represent a southerly plunging zone of
mineralisation, and at this time the true width of the intercept is
unable to be estimated. It is also noteworthy that the drill hole was
terminated in mineralisation.
In follow up work, a fixed loop EM survey was designed at Mascotte
which outlined a strong EM anomaly coincident with a gossanous
zone at Mascotte West. A further follow up drilling program at Mount
Mascotte and Mascotte West was in progress at the time of this report.
Drilling at the Mascotte prospects occurred across two programs
during the year with the second program designed to follow-up
results from an earlier drilling program which delivered significant
intercepts including (See ASX announcement 19 December 2022):
→ 6m at 3.73% Cu and 1.47g/t Au (from 50m) and 1m at
1.97% Cu and 0.23g/t Au (from 63m) in HMMARC002; and
→ 6m at 2.04% Cu, 0.14g/t Au, 0.07% Co and 0.17% Ni (from
30m) in HMMARC003 and 1m at 5.85% Cu and 0.14g./t
Au (from 18m).
Follow-up drilling at Mount Mascotte recorded a broad zone of
mineralisation at the southern end of the historic workings with
results from HMMARC008 including (See ASX Announcement 27
July 2023):
→ 53m at 1.55% Cu and 0.52g/t Au from 77m including:
o 12m at 2.48% Cu and 0.71g/t Au from 77m; and
o 9m at 2.33%Cu and 0.68g/t Au from 95m.
Mt Mascotte Long Section – Potentially
representing a plunging mineral system
Mt Mascotte and Mascotte Junction showing
drilling in addition to the west-dipping Fixed
Loop EM plate to the west of Mt Mascotte
(See ASX Announcement 27 July 2023)
21
// Annual Report 2023HAMMER METALS LIMTED
Operations Summary
Georgina - Bullrush
Hammer completed airborne magnetics and ground-based
gravity surveys to better delineate blind IOCG targets
beneath the Cambrian Georgina Basin cover.
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. (ASX announcement
19 September 2022).
Further refinement of gravity and magnetic models is being completed for the Bullrush area. Basement depth modelling has been completed
ascertaining the depth of cover and likely best drilling method to test the identified targets with a view to potential drill testing in the coming
months. Hammer has also identified the Bullrush prospect as a highly attractive target for possible Joint Venture.
Bullrush IOCG Target with Magnetics
22
// Annual Report 2023HAMMER METALS LIMITED New Tenure
▲ Mount Dorothy and Cobalt Ridge
During the final quarter of the year, Hammer agreed to
acquire 80% of the exploration tenure holding the Mount
Dorothy and Cobalt Ridge prospects from Element Minerals.
The interests were acquired in exchange for a 1% Net Smelter
Royalty (NSR) on each of the Mount Dorothy and Cobalt Ridge
properties. These prospects were initially sold by Hammer to Global
Energy Metals Corporation (GEMC) in 2019 as part of Hammer’s
divestment of the Millenium Cobalt Project. In light of Hammer’s
recent exploration success in making a significant copper-rare earth
discovery at the nearby Hardway prospect, and the exploration
results from Mount Dorothy by China Yunnan Copper Australia Ltd
in 2011 that suggest similarities in the mineralogy of the Hardway
and Mount Dorothy mineral systems, the Company is pleased to
have re-acquired the prospects.
With the renewed focus on critical minerals in Queensland,
Hammer continues to build its geological knowledge of the rare
earth systems in the region, in particular the unique nature of the
dominant heavy rare earth minerals contained in both the Hardway
and Mount Dorothy systems.
Historical drilling at the Mount Dorothy prospect returned the
following intersections (See ASX Announcement 14 July 2023):
→ 36m at 1.54% Cu from 50m in MDD006 including:
o 9m at 5.48% Cu from 55m.
→ 35m at 1.52% Cu from 17m in MDR002; including:
o 5m at 2.81% Cu and 744ppm Co from 19m.
→ 16m at 1,864ppm total TREYO from 71m in MDD005
The rare earth intercepts at Mount Dorothy showed a high
proportion (~75%) of HREEY expressed as a percentage of Total
Rare Earth Yttrium elements.
▲ EPM28285 “The Plus” tenement application
Hammer Metals was successful in applying for “The Plus”
tenement with sub blocks adjoining Hammer’s Mount Hope
tenements.
23
// Annual Report 2023HAMMER 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 3,000km2
Mount Isa Project.
The areas are considered highly prospective for the discovery of Iron Oxide Copper Gold deposits (“IOCG”). The Joint Venture
exploration activities heavily focussed on the Trafalgar to Pearl copper and gold trends.The MIE JV has entered the final year of the
4-year earn-in phase, concluding March 31, 2024.
During the year, the Joint Venture completed ~3km of RC drilling
at Trafalgar and Pearl with a 411m diamond drill hole complete
at the Mt Philp prospect (part funded through a CEI grant from
the Queensland Department of Resources).
Ongoing geophysical and geochemical programs within the
MIE JV are continuing, with soil surveys being completed at
Malbon and gravity surveys at Secret, Shakespeare, Dronfield
and Malbon underway.
A VTEM survey was completed in August 2023, targeting the
project areas at Malbon and Dronfield following up on previously
identified geochemical anomalies. Results from this survey are
undergoing analysis with a view to identifying suitable drilling
targets in the coming months.
Induced Polarisation (IP) Surveys for copper-gold targets at
Shadow South and Mount Philp have been scheduled, in addition
to IP survey lines being recently completed at the Jimmy Creek,
Even Steven and Secret/Shakespeare target zones.
A collaborative research program has been completed with the
CSIRO to examine select areas within the Joint Venture. This
study compared alteration and mineralisation styles within the
Joint Venture area to other IOCG deposits within the Isa region
and in the Gawler Craton in South Australia. Several priority
areas identified for potential large-scale IOCG targets were
identified, namely; south of Shadow, Jimmy Creek and Even
Steven. Further geochemical and geophysical programs have
been instigated to further define potential targets at these zones.
A drilling program is being scheduled for late 2023/early 2024
with targets to be further refined during the current geophysical
and geochemical programs.
▲ Trafalgar
Seven holes (for 1,703m) were drilled along the Trafalgar trend
at The Springs (two holes), Trafalgar (four holes) and Victory
prospects (one hole).
The drilling was primarily designed to test Induced Polarisation
chargeability zones defined in 2022.
Drilling at The Springs remains wide-spaced with several potential
targets to be tested between the zones of mineralisation intersected
in this drilling and previous drilling programs. Significant intercepts
from the two holes at The Springs include:
→ A mineralised system envelope of 25m at 0.19% Cu
from 40m with a second envelope of 10m at 0.94% Cu
and 0.16g/t Au from 152m in HMTRRC017 (See ASX
Announcement 12 December 2022).
Drilling has now identified several broad zones of copper
mineralisation along this extensive mineralised trend. A structural
review of the Trafalgar to Pearl trend was completed late in the
financial year with an emphasis on developing new prospective
targets within the northern portion of the Joint Venture ground.
24
// Annual Report 2023HAMMER METALS LIMITED Plan view of drill-holes, with modelled DHEM plates
(See also ASX announcements 20 July 2022, 25 October 2022, 22 November 2022, 4 and 27 July 2023)
25
// Annual Report 2023HAMMER METALS LIMTED Operations Summary
▲ Pearl
The Pearl prospect is located on the Trafalgar-to-Jubilee
trend, approximately 2km south of Ajax East and on the same
magnetic ridge which characterises this trend.
Numerous artisanal copper workings and shafts on five structures are located along 800m of strike length. In common with Ajax East,
the mineralisation at Pearl contains geochemically significant levels of copper, nickel and cobalt associated with zones of massive and
semi-massive sulphides, predominantly pyrrhotite.
Five holes (for 990m) were drilled into the Pearl Fixed Loop
Electromagnetic (FLEM) anomaly. These holes targeted both
surface workings and different aspects of the FLEM response.
Broad copper mineralisation intersected in most holes over a strike
length of some 700m, with the program targeting a cluster of fixed-
loop EM plates and Induced Polarisation (“IP”) anomalies along the
Trafalgar-to-Jubilee Trend. The holes were spaced at wide intervals
with significant potential remaining between the completed drilling.
Significant intercepts include:
→ 68m at 0.29% Cu and 0.06g/t Au from 31m in
HMPLRC001; and
→ 96m at 0.2% Cu and 0.03g/t from 156m in HMPLRC002
with 22m at 0.22% Cu from surface including 2m at 1.28%
Cu and 0.6g/t Au from 19m.
Additionally, Pearl has a wide low-grade mineralised envelope with
a wide zone of over 120m grading above 0.2% Cu intersected
in HMPLRC004 (249m total depth) (see ASX Announcement 12
December 2022).
Plan view showing the location of the Pearl
(within the Mt Isa East Joint Venture Area)
relative to the Ajax Prospect
(See ASX Announcement 29 June 2022)
Plan view showing the location of the Pearl
prospect with portable XRF copper in soil contours
and combined EM plates. The base image is the
magnetic first vertical derivative (RTP)
(See ASX announcement 5 September 2022)
26
// Annual Report 2023HAMMER METALS LIMITED Yandal 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 this prime gold exploration
region, located close to existing infrastructure. The Company remains keen to increase its exploration footprint in this prospective region.
An extensive soil geochemical program during 2022 focused on
tenements in the Bronzewing North and Ken’s Bore areas. 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 potential first pass air core
drilling in the coming year.
Overview of Greater Yandal Project
27
// Annual Report 2023HAMMER METALS LIMTED Operations Summary
▲ North Orelia: Gold/Lithium
The North Orelia tenements are situated to the North of the
McClure group of deposits which include the Orelia and Lotus
gold deposits and approximately 40km east of the globally
significant Kathleen Valley lithium deposit.
Target 1 at North Orelia has predominantly been a gold target for
Hammer with a mineralised trend being observed over 2km in
length (see ASX announcement 6 December 2022).
Work conducted during the year confirmed the lithium potential of
this tenure. Initial anomalous soils samples highlighted the potential
of this area and as a result, Hammer’s geologists undertook a
surface rock chip sampling program campaign across the Target 1
pegmatite occurrences. Sampling was conducted on the western
side of the Orelia Target 1 gold prospect close to the eastern margin
of the Kathleen Valley Granite intrusion. Reconnaissance and
preliminary sampling showed the presence of multiple pegmatites
oriented perpendicular (east-west) to the margin of the granitic
intrusion (north-south).
Preliminary portable XRF analyses of the Kathleen Valley Granite
in the Orelia region were undertaken which determined that the
large intrusive complexes have the capacity to produce late Lithium-
Caesium-Tantalum (LCT) pegmatites.
Of note is that bottom of air-core hole multi-element analyses
conducted over the Target 1 gold prospect also show zones of
geochemically anomalous lithium response in the range of 100ppm
to 300ppm.
This is interpreted to represent a primary geochemical dispersion
related to the presence of pegmatites. It should be noted that any
potential pegmatites are unlikely to have been tested in Hammer’s
gold drilling at Target 1 due to the pegmatite swarms being parallel
with historical drilling traverses. Also of note is that the only samples
submitted for multi-elemental analysis in Hammer’s historical drilling
at Target 1 was the last metre of each air core drill hole
The Company has recently submitted bottom-of-hole geochemical
samples from Target 1 at North Orelia which have assayed in
excess of 200ppm lithium. These samples have been submitted
for petrological analysis to aid in the identification of the lithium
dominant mineral species.
An air core program has been designed to further investigate the
Lithium potential of this trend and is expected to be completed
during the coming months. Consideration of additional drilling to
further define a prospective gold JORC compliant resource at
Target 1 will also be considered in a future air core program.
28
// Annual Report 2023HAMMER METALS LIMITED Orelia Target 1 showing the anomalous bottom of hole Lithium responses, mapped
pegmatites and rock chip sample locations (See ASX announcement 6 December 2022)
29
// Annual Report 2023HAMMER METALS LIMTED Operations Summary
▲ Tapenade
On the eastern margin of the Orelia Greenstone Belt, close
to the margin of the Kathleen Valley Granite, an outcropping
zone of lithium enrichment has been delineated over a 200m
strike length.
This newly discovered zone is called Tapenade. Elevated lithium rock chip responses up to 0.65% Li2O are present. These responses
are accompanied by elevated Rubidium, Caesium, Tantalum and to a lesser extent several other rare earth elements (see ASX
Announcement 6 December 2022).
Preliminary sampling of quartz vein zones to the north-east of
Tapenade identified an area of stacked quartz veins which have
thin zones of silica with a banded haematitic texture.
The hematite is interpreted as a weathered sulphatic precursor.
Samples taken from this zone were elevated in Au, Ag and Bi
with individual maximum values of 0.35g/t Au, 341g/t (11oz/t)
Ag and 0.38% Bi respectively. Little is known of this zone, and
further rock chip sampling and geological mapping are required
to determine the distribution of these banded zones and their
significance (see ASX announcement 6 December 2022).
Micaceous Pegmatite rock chip sample MW2211_15 from the western margin of Orelia Target 1.
Exhibited geochemical responses of LCT pegmatites. Assayed 2.7ppm Bi; 59ppm Li; 14ppm Be;
31ppm Cs; 61ppm Nb; 1055ppm Rb and 30 ppm Ta (See ASX Announcement 6 December 2022)
30
// Annual Report 2023HAMMER METALS LIMITED ▲ Harrier and Bower
The Harrier and Bower project areas are located 1km to the
east of Hammer’s Bronzewing South tenement and within
3km of the former Bronzewing Gold mine within the folded
continuation of the Bronzewing Mine stratigraphy.
Considering the tenements proximity to the former mine, it remains lightly explored. Hammer’s soil sampling program has confirmed
multiple zones of gold anomalism including a 1.2km long anomalous zone (referred to as the Bower Prospect) with a peak gold-in-
soil response of 11ppb Au, which is approximately five times the program background response.
Two lesser priority anomalies have been identified to the south of the tenement, both of which have not been drilled. The soil response also
indicates the presence of a thin ultramafic unit traversing through the sampling grid. All these anomalies require follow-up and consideration
will be given for a future air-core program to conduct a more thorough drill test of the large gold anomaly.
Harrier prospect soil gold response
31
// Annual Report 2023HAMMER METALS LIMTED 32
// Annual Report 2023HAMMER 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, 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.
33
// Annual Report 2023HAMMER METALS LIMTED Annual Mineral Resource Statement
▲ Annual Mineral Resource Statement
(As of 30 June 2023)
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.
After the completion of additional drilling 2021/2022, Hammer commissioned Haren Consulting Pty Ltd to update the Kalman Resource
based on new drilling and geological interpretation. The resource was issued on the 8th of May 2023.
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.
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 December 2022, Geowiz consulting was commissioned by Hammer Metals Limited to undertake the Mineral Resource Estimate
(MRE) for the Lakeview copper-gold deposit. The MRE has been estimated in accordance with the 2012 edition of the JORC Code.
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
Jubilee
Kalman
Lakeview
Overlander
Mt. Philp
West Pilbara
Mineral Resource
Competent Person
Mr. L. Burlet
Ms. E. Haren
Organization
ASX Reporting Date
H&S Consultants Pty Ltd
12 December 2018
Haren Consulting
23 May 2023
Mr. R. Corben
Geowiz Consulting
21 December 2022
Ms. E. Haren
Mr. T. Leahey
Mr. C. Allen
Haren Consulting
26 August 2015
Cerro Resource NL
28 September 2012
CSA Global Pty Ltd
26 July 2010
34
// Annual Report 2023HAMMER 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
0.07
1.34
1.41
Cu
%
1.51
1.41
1.41
Au (Cut)
g/t
Cu
Tonnes
Au (Cut)
Ounces
0.55
0.63
0.62
1,000
1,200
19,000
27,100
20,000
28,300
→ Note: (1) Numbers rounded to two significant figures to reflect appropriate levels of confidence
→ Note: (2) Totals may differ due to rounding
The 51%-owned Jubilee Deposit is situated 50 kilometres west of Mount Isa in Northwest 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.
35
// Annual Report 2023HAMMER METALS LIMTED
Annual Mineral Resource Statement
▲ Kalman Deposit JORC 2012 Mineral Resource Estimate
(23 May, 2023)
(Reported at a 0.4% CuEq and 1% CuEq cut-off for open pittable and underground
resources respectively)
Classification
Mining
Method
CuEq
Cut-off
Tonnes
Kt(1)
CuEq
Cont.
% (3)
CuEq
Rec.
%(2,3,4)
Cu
%
Au
g/t
Ag
g/t
Mo
%
Re
g/t
Contained
Cu Eq Metal
(Kt) (1)
Recovered
Cu Eq
Metal (Kt)(1)
Indicated
Open Pit
0.4% 17,120 1.04
0.87 0.43 0.22 1.2 0.08 1.7
Inferred
Inferred
Total
Open Pit
0.4% 10,540 1.11
0.93 0.40 0.21 1.3 0.10 2.2
Underground
1.0% 11,530 1.78
1.48 0.80 0.41 2.2 0.12 2.7
39,190 1.27
1.07 0.53 0.27 1.5 0.10 2.1
180
120
200
500
150
100
170
420
→ Note: (1) The recovered copper equivalent equation is: CuEq Recovered = 0.86*Cu + (0.74*0.771051*Au)
+ (0.74*0.008336*Ag) + (0.86*4.857143*Mo) + (0.77*0.023334*Re)
→ Note: (2) Copper Equivalent Price assumptions are: Cu: US$7,714/t (US$3.50/lb); Au: US$1,850/oz; Ag: US$20/oz;
Mo: US$37,468/t (or US$17/lb); and Re: US$1,800/kg
→ Note: (3) Recovery assumptions are: Cu 86%; Au 74%; Ag 74%; Mo 86%; and Re 77%.
→ Note: (4) Transition from Open to Underground Mining based on prior optimisation studies set at 75mRL.
Surface RL is approximately 425mRL.
The Kalman Molybdenum-Rhenium-Copper-Gold-Silver (Mo-Re-Cu-Au-Ag) deposit is situated 60 kilometres southeast of Mt Isa within
the Mt Isa Inlier, and forms part of the company’s Kalman Project.
Drilling extends to a maximum down hole depth of 998.3 metres and the mineralisation was modelled from surface to a depth of
approximately 800 metres below surface. The estimate is based on good quality RC and diamond core drilling data. The drill hole
spacing is approximately 100 metres along strike with some 50 metre-spaced infill drilling.
In May 2023, 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 39 million tonnes at 1.1% recovered copper equivalent (CuEq)
at 0.53% copper, 0.27 g/t gold, 0.10% molybdenum and 2.1 g/t rhenium in the Indicated and Inferred categories at revised cut-off
grades. (Refer to the ASX release dated 23 May 2023).
The Kalman Mineral Resource Estimate disclosed as part of the 2016 review was last updated in March 2016 in accordance with
the JORC Code (2012 Edition). The Resource estimate comprised a combined 20 million tonnes at 1.8% copper equivalent (CuEq)
at 0.53% Cu, 0.27g/t Au, 0.14% Mo and 3.7 g/t Re in the Inferred category. (Refer to the ASX Release dated 27 September 2016 for
full details of the Resource Estimate).
The reasons for the MRE update were:
→ 17 holes (K140-K156) drilled by Hammer in 2021/22 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 increased from 20,000kt
to 39,120kt and average metal grades decreased, primarily due to the use of lower cut-off grades.
36
// Annual Report 2023HAMMER METALS LIMITED ▲ Lakeview Deposit JORC 2012 Mineral Resources Estimate
(21 December, 2022)
(Reported at 0.3% Cu cut-off)
LAKEVIEW MINERAL RESOURCE
Classification
Inferred
Tonnes
Mt
0.59
Cu
%
1.02
Au
g/t
0.30
Cu
Tonnes
6,049
Au
Ounces
5,706
In December 2022, Geowiz consulting was commissioned by Hammer Metals Limited to undertake the Mineral Resource Estimate
(MRE) for the Lakeview copper-gold deposit. The MRE has been estimated in accordance with the 2012 edition of the JORC Code.
The 100%-owned Lakeview Deposit is located approximately 60 kilometres east of Mt Isa in northwest Queensland. A total of 13
Reverse Circulation (RC) drillholes define the deposit for 1,380 m of drilling. The deposit was sampled by drilling at nominal 40 m
spacing on 40m north-south oriented sections. Holes were generally angled at -60° towards the south with dip angles set to optimally
intersect the mineralised horizons, which dip at approximately 65°-70° to the north.
Mineralised intersections for the two main lodes were manually coded in each drill hole using a nominal 0.3% Cu cut-off. The coded
mineralised intersections were loaded into Leapfrog software and vein geological models were generated from the coded intervals for
the three interpreted lodes. Domain wireframes were extracted from the Leapfrog model and exported into Surpac™ V6.6 software
where they were used as a guide to generate final wireframes used to constrain the resource modelling.
A block model was set up with a parent cell size10m (E) x 4m (N) x 5m (RL) with standard sub-celling to 5m (E) x 2.0m (N) x 2.5m (RL)
to maintain the resolution of the mineralised domains. The 4m Northing dimension was used to reflect the geometry and orientation of
the domain wireframes. Samples composited to 1m length were used to interpolate Cu and Au into the block model using ordinary
kriging interpolation method. All block modelling was completed using Surpac™ v6.6 software.
Density was assigned to the block model based on 18 density measurements taken inside the interpreted lodes.
A Lerchs-Grossman pit optimisation was run using a Cu price of AUD$5.30 per pound and Au price of AUD$2,500 per ounce. The
block model was reported inside the pit shell to determine that blocks >0.3% Cu have reasonable prospects of future economic
extraction by surface mining.
Although the RC drilling has defined 3 continuous mineralised lodes, exploration of the Lakeview deposit is in the early stages and
more drilling is required to better define the extent of the deposit. Due to the limited amount of drilling, the MRE has been classified
as Inferred only based on the guidelines specified in the JORC Code.
The deposit appears to be of sufficient grade, quantity, and coherence to have reasonable prospects for eventual economic extraction.
37
// Annual Report 2023HAMMER METALS LIMTED Annual Mineral Resource Statement
▲ 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 Northwest
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.
38
// Annual Report 2023HAMMER METALS LIMITED 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
(28 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 28 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.
39
// Annual Report 2023HAMMER METALS LIMTED Annual Mineral Resource Statement
▲ Resource By Commodity
Tonnes
Mt
Contained
CuEq
%
Recovered
CuEq
%
Cu
%
Au
g/t
Co
%
Mo
%
Re
g/t
Fe
%
39.2
1.27
1.07
0.53
0.27
-
-
-
-
-
-
-
-
-
-
1.41
0.62
1.20
-
0.05
1.03
0.30
-
-
-
0.10
2.1
-
-
-
-
-
-
-
-
-
39.00
Deposit
Kalman
(Updated)
Jubilee
(51% HMX)
Overlander
Lakeview
1.4
1.8
0.6
Mount Philp
30.5
40
// Annual Report 2023HAMMER METALS LIMITED
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 2023
▲ Mt Isa (Queensland)
Mt. Dockerell Mining Pty Ltd
Lease
EPM 11919
EPM 13870
EPM 18084
EPM 25165
EPM 26474
EPM 26511
EPM 26628
EPM 26694
EPM 26775
EPM 26776
EPM 26777
EPM 26902
EPM 26904
EPM 27018
EPM 27469
EPM 27470
EPM 27806
EPM 27815
EPM 27861
EPM 28285
EPM 28903
Lease Name
Lease Status
Interest
Cameron River
Pelican
Dronfield
Cameron River 4
Enterprise
Sling Shot
Argylla
Mt Philp
Pilgrim North
Pilgrim Central
Pilgrim South
Marriage
Jady Jenny
Dingo Creek
Mount Moran
China Wall
Roos
Lady Vampire
Saint Mungo
The Plus
Pandora
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Application
Application
100%
100%
80%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
41
// Annual Report 2023HAMMER METALS LIMTED Tenement Interests
Mulga Minerals Pty Ltd
Lease
EPM 12205
EPM 14019
EPM 14022
EPM 14467
EPM 25145
EPM 25866
EPM 25867
EPM 26126
EPM 26127
EPM 26130
EPM 26512
EPM 27355
Lease 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%
Hammer Bulk Commodities Pty Ltd
Lease
Lease Name
Lease Status
EPM 28189
Resolve Extended
Granted
Interest
100%
▲ Yilgarn (Western Australia)
Carnegie Exploration Pty Ltd
Lease Name
Lease Status
Interest
Kens Bore
Granted
Granted
Granted
Granted
Granted
Granted
Application
Granted
100%
100%
100%
100%
100%
100%
100%
100%
Lease
E36/854
E36/868
E36/869
E36/870
E36/916
E36/996
E36/1006
E53/1989
42
// Annual Report 2023HAMMER METALS LIMITED Lease
E53/1996
E53/2030
E53/2085
E53/2112
E53/2113
E53/2114
E53/2115
E53/2116
E53/2117
E53/2118
E53/2127
E53/2128
P36/1857
P36/1858
P53/1682
P53/1683
P53/1684
P53/1685
P53/1686
P53/1687
P53/1688
P53/1689
P53/1690
P53/1691
P53/1692
P53/1693
P53/1694
P53/1695
P53/1696
P53/1697
Lease Name
Lease Status
Interest
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
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%
100%
100%
100%
100%
43
// Annual Report 2023HAMMER METALS LIMTED Directors
Report
44
// Annual Report 2023HAMMER METALS LIMITED 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 2023 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
DAVID CHURCH Non-Executive Director
LLB, BEc
Russell Davis is a Geologist with over 40 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 in 2005 and
continued as an Executive then Non-executive Director until June
2016. Mr Davis was also founding Director of Syndicated Metals
Limited in 2007 and Managing Director up to March 2012. Mr
Davis has been a Director of Hammer Metals (Australia) Pty Ltd
since its inception in 2012.
David Church is currently a Partner in the national legal firm
Thompson Geer and the Non-Executive Chairman of Caprice
Resources Limited. Mr Church is a qualified solicitor and has
previously practiced in England and Wales and Hong Kong
with Linklaters. Mr Church was also the head of mergers and
acquisitions for Regent Pacific Group Limited, a Hong Kong listed
investment company, for over 13 years.
DANIEL THOMAS Managing Director
BSc, 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.
JAMES CROSER
Non-Executive Director (appointed 8 September 2023)
BEng (Mining Engineering)
James Croser has over 25 years of experience in operational and
executive roles with a strong track record in guiding junior ASX
companies through periods of significant growth. Most recently,
Mr Croser was a founding Director in the establishment of Red Dirt
Metals (now Delta Lithium – ASX:DLI) and the discovery of the Mt
Ida lithium deposit in WA.
ZBIGNIEW LUBIENIECKI
Non-Executive Director (resigned 7 September 2023)
BSc (Applied Geology), MAIG
45
// Annual Report 2023HAMMER METALS LIMTED Directors Report
▲ 2. Directorships Of Other Listed Companies
Directorships of other ASX listed companies held by Directors in the 3 years
immediately before the end of the financial year are as follows:
Name
Russell Davis
Daniel Thomas
David Church
James Croser2
Zbigniew Lubieniecki3
Company
M3 Mining Limited
None
Caprice Resources Limited
Delta Lithium Limited
Greenstone Resources Limited
Cosmo Metals
Period of Directorship
July 2021 - current1
-
October 2019 - current
December 2020 - current
November 2022 - current
August 2021 - July 2023
1 – Mr Davis was a director of M3 Mining Limited prior to its listing on the Australian Securities Exchange in July 2021
2 – Mr Croser was appointed to the board on 8 September 2023
3 – Mr Lubieniecki resigned from the board on 7 September 2023
▲ 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.
▲ 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
5
5
5
5
5
5
5
4
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.
46
// Annual Report 2023HAMMER METALS LIMITED
▲ 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 $1,285,536 (2022: $645,270).
CORPORATE:
EXPLORATION ACTIVITIES:
The following issues of ordinary shares were completed during
the year:
→ On 3 August 2022, the Company issued 4,664,633
shares upon the successful exercise of 7,650,000 options
exercisable at $0.032 each on or before 30 November
2022 utilising a cashless exercise facility available to
holders of the options.
→ On 18 November 2022, the Company issued 348,093
shares upon the successful exercise of 700,000 options
exercisable at $0.032 each on or before 30 November
2022 utilising a cashless exercise facility available to
holders of the options.
→ On 20 December 2022, the Company issued 1,000,000
shares upon the successful exercise of options
exercisable at $0.035 each on or before 13 December
2022. These options were validly exercised prior to the
expiry date.
→ On 5 June 2023, the Company issued 58,333,333
ordinary shares under a placement at $0.06 per share,
raising $3,500,000 before costs of the offer.
Furthermore, the Company received funds totalling $105,000
relating to the exercise of 3,000,000 options exercisable at
$0.035 each on or before 30 June 2023. These funds and
the valid exercise notice were received prior to the end of the
financial year, with the conversion and issue of shares occurring
on 6 July 2023.
During the financial year no options expired or lapsed unexercised.
Since the end of the financial year, no options have been granted
or expired.
No performance rights were issued or expired during, or since
the end of the financial year.
Hammer is currently exploring in two great minerals provinces,
focused on the discovery of copper and gold deposits. In
the Mount Isa region, the Group embarked on an aggressive
exploration program with a significant increase to the Kalman
JORC resource in addition to unearthing a number of encouraging
copper/gold exploration targets. Hammer continues to advance
its exploration activities in the Yandal Belt in WA, with new lithium
targets emerging in addition to several prospective gold targets
near the former Bronzewing gold mine.
QUEENSLAND - MOUNT ISA REGION PROJECTS
In the Mount Isa base metals district, Hammer has five projects
with established copper gold JORC resources. The Group 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 Mount Isa East JV and 100%
funded activities.
Mt. Isa project – wholly-owned projects
Hammer’s activities during the year culminated in an update to the
Kalman JORC resource. The updated Mineral Resource Estimate
(MRE) completed for the 100%-owned Kalman copper-gold-
silver-molybdenum-rhenium deposit contains 39.2Mt at 1.07%
Recovered Copper Equivalent (“CuEq Rec”) at 0.53% Cu, 0.27g/t
Au, 0.10% Mo, 1.5g/t Ag and 2.1g/t Re. This equates to ~500,000t
of contained copper equivalent metal and represents a ~39%
increase in the contained metal within the deposit. Drilling at
Kalman delivered an additional 10Mt of material to the Indicated
categorisation within the MRE (a 141% increase on the 2016
MRE). The Kalman MRE contains 208,400t of copper, 343,200
oz of gold, 38,000t of molybdenum, 1.92m oz of silver and 84,100
kg of rhenium (refer ASX Announcement 8 May 2023).
47
// Annual Report 2023HAMMER METALS LIMTED Directors Report
▲ Kalman Deposit Jorc 2012 Mineral Resource Estimate (May, 2023)
Classification
Mining
Method
CuEq
Cut-off
Tonnes
Kt(1)
CuEq
Cont.
% (3)
CuEq
Rec.
%(2,3,4)
Cu
%
Au
g/t
Ag
g/t
Mo
%
Re
g/t
Contained
Cu Eq Metal
(Kt) (1)
Recovered
Cu Eq
Metal (Kt)(1)
Indicated
Open Pit
0.4% 17,120 1.04
0.87 0.43 0.22 1.2 0.08 1.7
Inferred
Inferred
Total
Open Pit
0.4% 10,540 1.11
0.93 0.40 0.21 1.3 0.10 2.2
Underground
1.0% 11,530 1.78
1.48 0.80 0.41 2.2 0.12 2.7
39,190 1.27
1.07 0.53 0.27 1.5 0.10 2.1
180
120
200
500
150
100
170
420
→ Note: (1) Rounded to nearest 10kt
→ Note: (2) The recovered copper equivalent equation is: CuEq Recovered = 0.86*Cu + (0.74*0.771051*Au)
+ (0.74*0.008336*Ag) + (0.86*4.857143*Mo) + (0.77*0.023334*Re)
→ Note: (3) Copper Equivalent Price assumptions are: Cu: US$7,714/t (US$3.50/lb); Au: US$1,850/oz; Ag: US$20/oz;
Mo: US$37,468/t (or US$17/lb); and Re: US$1,800/kg
→ Note: (4) Recovery assumptions are: Cu 86%; Au 74%; Ag 74%; Mo 86%; and Re 77%
→ Note: (5) Transition from Open to Underground Mining based on prior optimisation studies set at 75mRL.
Surface RL is approx 425mRL
Several other promising copper gold systems were unearthed
through drilling during the year with Hardway, South Hope and
Mascotte emerging as leading targets for future programs.
Hammer drill tested in excess of 15 different targets in 2022 –
many of which had never been previously drilled. Key results
achieved during the year include:
→ Hardway
o 57m at 1.0% Cu from surface in HMHWRC012 and
o 30m at 1.1% copper from 48m (oxide) and 26m at 0.14%
Total Rare Earth and Yttrium Oxides (TREYO) from 34m
in HMHWRC001
→ South Hope
o 25m at 2.41% Cu and 0.47g/t Au from 85m in
HMSHRC001
→ Mascotte
o 6m at 3.73% Cu and 1.47g/t Au from 50m in
HMMARC002
→ Mascotte Junction
o 6m at 2.04% Cu, 0.03g/t Au, 684ppm Co and 0.17% Ni
from 30m in HMMARC003 within a mineralised envelope
of 33m at 0.73% Cu
(Refer ASX Announcements – 9 March 2022, 29 June 2022 and
24 October 2022, 22 November 2022 and 23 December 2022)
Mt Isa East Joint Venture (“MIEJV”)
Work on the MIEJV continued throughout the year, including a
significant IP survey and drilling program at targets along the
Trafalgar and Pearl trends.
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 pass soil
sampling program across a number of prospective gold, nickel
and lithium targets. A follow up field review program was
completed whereby a number of outcropping pegmatite units
were sampled. A subsequent review of historical data showed
highly anomalous bottom of hole lithium results at Hammer’s
North Orelia Target 1 area. Future work programs are currently
being designed with a view to completing further geophysical
and drilling programs in the coming year.
RISK MANAGEMENT:
The Company takes a proactive approach to risk management.
The Board is responsible for ensuring that risks, including
emerging risks, and also opportunities, are identified on a timely
basis and the Company’s objectives and activities are aligned
with the risks and opportunities identified by the Board.
Given the size of the Company and its stage of development
all Board members are involved and have responsibility for
management of risk. Day to day management of risks are
delegated to the Managing Director.
48
// Annual Report 2023HAMMER METALS LIMITED Material business risks
There are inherent risks associated with the exploration
for minerals. The Group faces the usual risks encountered
by companies engaged in the exploration, evaluation and
development of minerals. The material business risks for the
Group include:
imposed on any granted exploration claims. Loss of
claims may adversely affect the financial position and /or
performance of the Group. Management maintains close
contact with relevant Departments and industry bodies to
monitor changes and proposed changes in regulation and
policy.
→ External Risks
Environmental risks
→ Operating Risks
Exploration and development risk
The Company’s operations and projects are subject to the
laws and regulations of the jurisdictions in which it has
interests and carries on business (Queensland and Western
Australia) regarding environmental compliance and relevant
hazards. There is also a risk that the environmental laws
and regulations may become more onerous, making the
Group’s operations more expensive which may adversely
affect the financial position and /or performance of the
Group. The Directors are not aware of any environmental
law that is not being complied with.
The exploration for and development of mineral deposits
involves significant risks that even a combination of careful
evaluation, experience and knowledge may not eliminate.
While the discovery of an ore body may result in substantial
rewards, not all exploration activity will lead to the discovery
of economic deposits. Major expenditure may be required
to locate and establish Ore Reserves, to establish rights to
mine the ground, to receive all necessary operating permits,
to develop metallurgical processes and to construct mining
and processing facilities at a particular site.
Government regulations and claims risks
Mineral Resources
Changes in law and regulations or government policy
may adversely affect the Group’s operations. There is
no guarantee that current or future exploration claim
applications or existing claim renewals will be granted,
that they will be granted without undue delay, or that the
Company can economically comply with any conditions
The Group’s estimates of Mineral Resources are based
on different levels of geological confidence and different
degrees of technical and economic evaluation, and no
assurance can be given that anticipated tonnages and
grades will be achieved or could be mined or processed
profitably.
In addition to the risks described above, the Group’s ability to successfully develop projects is contingent on the Group’s ability to
fund those projects through debt or equity raisings.
▲ 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:
→ As noted above, on 6 July 2023 a total of 3,000,000
options exercisable at $0.035 on or before 30 June
2023 were validly exercised and 3,000,000 new
ordinary shares were issued upon their conversion. The
funds for the exercise were received prior to the end of
the financial year; and
→ On 2 August 2023, the Company issued 3,666,667
ordinary shares to Directors of the Company at an issue
price of $0.06 per share. These shares were issued in
conjunction with the Share Placement completed on 5
June 2023, and the issue was approved by shareholders
at the General Meeting held on 13 July 2023.
→ On 7 September 2023, Zbigniew Lubieniecki resigned
as a non-executive director, and James Croser was
appointed as non-executive director on 8 September
2023. As part of his appointment, the Company issued
4,000,000 unquoted options exercisable at $0.08 on or
before 30 November 2026 to Mr Croser.
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.
49
// Annual Report 2023HAMMER METALS LIMTED
Directors Report
▲ 9. Likely Developments
The Company will continue planning and executing exploration and development work on its existing projects in Australia as well as
projects under review in Australia to complement and expand on existing tenement holdings.
▲ 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 D Church
Mr J Croser
Mr Z Lubieniecki
Ordinary shares
Unlisted options
Performance Rights
43,744,013
4,833,334
1,052,631
-
64,826,884
3,500,000
7,000,000
2,500,000
4,000,000
3,000,000
-
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.
▲ 12. Remuneration Report – Audited
12.1 PRINCIPLES OF COMPENSATION
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.
Consequences of performance on shareholder wealth
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.
50
// Annual Report 2023HAMMER METALS LIMITED 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)
2023
(0.16)
2022
(0.08)
2021
(0.08)
2020
(0.40)
2019
(0.29)
Net loss ($)
(1,285,536)
(645,270)
(611,525)
(1,978,610)
(852,517)
Share price at 30 June
$0.061
$0.045
$0.092
$0.043
$0.023
Service contracts
Daniel Thomas – Managing Director
Non-executive directors
The Company entered into an Executive Service agreement
with Mr Thomas on 1 August 2021. An Executive service fee of
$275,000 (plus superannuation) 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
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.
Mr Pitts is a Principal in the Company Secretarial and CFO
advisory divisions of the Automic Group providing secretarial
support and corporate and compliance advice, pursuant to a
contract with the Company. The 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.
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.
51
// Annual Report 2023HAMMER METALS LIMTED
Directors Report
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// Annual Report 2023HAMMER METALS LIMITED
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53
// Annual Report 2023HAMMER METALS LIMTED
Directors Report
▲ 12.3 Value of options to key management personnel
The value of options will only be realised if and when the market price of the Company shares, as quoted on the Australian Securities
Exchange, rises above the Exercise Price of the options. Further details of the options are contained below..
▲ 12.4 Options and rights over equity instruments granted as compensation
4,500,000 options were granted to the Non-Executive Directors during the 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.
Key Management Personnel
Number of
options granted
Date granted % Vested
% Forfeited
/ Lapsed
Financial year
in which grant
vested / will vest
Russell Davis
1,500,000 23 November 2022
Zbigniew Lubieniecki
1,500,000 23 November 2022
David Church
1,500,000 23 November 2022
100%
100%
100%
-
-
-
-
-
-
The fair value of the options issued during the year to Key Management Personnel was determined by reference to the Black-Scholes
option pricing model. The key inputs and valuations are summarised as follows:
Underlying security spot price on grant date
Exercise price
Grant date
Expiration date
Vesting date
Life (years)
Volatility
Risk free rate
Dividend Yield
Number of options
Valuation per option
Remaining life (years)
Total value
Value recognised to date
Value still to be recognised
Directors
$0.063
$0.07
23 November 2022
30 November 2026
Immediate
4
100%
3.17%
-
4,500,000
$0.0433
3.4
$194,850
$194,850
-
Granted during previous financial years
No options were granted as remuneration to key management personnel during the prior year
54
// Annual Report 2023HAMMER METALS LIMITED The following performance rights, which all expire on 21 December 2024, were issued to the Company’s Managing Director during
the previous financial 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 2023
No.
30 June 2022
No.
-
-
5,000,000
1,000,000
1,000,000
1,000,000
8,000,000
-
-
5,000,000
1,000,000
1,000,000
1,000,000
8,000,000
The fair value of the performance rights issued during the previous 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 (as at 30 June 2023)
Value still to be recognised (as at 30 June 2023)
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
1.4
$44,000
$23,204
$20,796
$0.044
1.4
$44,000
$23,204
$20,796
$0.044
1.4
$44,000
$23,204
$20,796
→ Note (1) All three tranches of performance rights issued during the previous 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.
55
// Annual Report 2023HAMMER 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
Held at
end of
period / on
resignation
Vested and
exercisable
at end of
period
Lapsed or
Expired
Mr R Davis
3,500,000 1,500,000
Mr D Thomas
7,000,000
-
Mr Z Lubieniecki
4,500,000 1,500,000
Mr D Church
1,000,000 1,500,000
Mr M Pitts
1,000,000
-
-
-
-
-
-
(1,500,000)
-
(3,000,000)
-
(500,000)
-
-
-
-
-
3,500,000
3,500,000
7,000,000
7,000,000
3,000,000
3,000,000
2,500,000
2,500,000
500,000
500,000
▲ 12.7 Equity holdings and transactions
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
40,179,289
150,000
Mr D Thomas
4,000,000
Mr Z Lubieniecki
62,664,283
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
914,724
41,244,013
-
4,000,000
1,829,268
64,493,551
-
1,052,631
304,878
1,729,959
56
// Annual Report 2023HAMMER 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
-
Mr R Davis
Mr D Thomas
8,000,000
Mr Z Lubieniecki
Mr D Church
Mr M Pitts
-
-
-
Other
movements
Held at end
of period / on
resignation
Vested and
exercisable
at end of
period
Granted
Exercised
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
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 2023
$
30 June 2022
$
30 June 2023
$
30 June 2022
$
39,919
42,375
7,299
8,500
-
-
-
8,500
Mr M Pitts
Accounting services
45,200
48,790
4,100
5,780
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
57
// Annual Report 2023HAMMER 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
Managing Director Options – Tranche 1
21 October 2023
Managing Director Options – Tranche 2
21 October 2023
Employee and Consultant Options
30 June 2024
Director Options
30 November 2024
Corporate Advisor Options – Tranche 3
13 May 2025
Non-Executive Director Options
30 June 2026
$0.05
$0.06
$0.05
$0.05
$0.04
$0.07
3,000,000
4,000,000
2,600,000
4,500,000
2,000,000
4,500,000
20,600,000
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 5,012,726 ordinary shares as a result of the exercise of 8,350,000 unquoted options
exercisable at 3.2 cents on or before 30 November 2022. These options were exercised using a cashless exercise facility in
accordance with the terms and conditions of the options.
Also during the year, the Company issued 1,000,000 ordinary shares as a result of the exercise of unquoted options exercisable at
3.5 cents each on or before 20 December 2022.
Subsequent to year end on 6 July 2023, a total of 3,000,000 options exercisable at 3.5 cents each ($0.035) were exercised.
▲ 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 did not issue any ordinary shares as a result of the exercise of performance rights (2022: 1,500,000).
58
// Annual Report 2023HAMMER 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 15 and forms part of the Directors’ report for the financial year ended
30 June 2023.
▲ 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
20 September 2023
59
// Annual Report 2023HAMMER METALS LIMTED Auditor’s Independence Declaration
60
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. -14- 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 2023, 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 ALEXANDRA CARVALHO PARTNER 20 SEPTEMBER 2023 WEST PERTH, WESTERN AUSTRALIA // Annual Report 2023HAMMER METALS LIMITED Consolidated Statement Of Financial Position
HAMMER METALS LIMITED
and its Controlled Entities
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2023
Current Assets
Cash and cash equivalents
Trade and other receivables
Total current assets
Non-current assets
Other financial assets
Plant and Equipment
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 2023
$
30 June 2022
$
10
11
12
13
14
15
16
16
17
18
4,357,140
252,649
4,609,789
227,529
3,981
162,012
24,678,290
25,071,812
29,681,601
443,893
68,892
512,785
95,701
95,701
608,486
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
29,073,115
26,747,267
66,593,958
1,382,293
(38,903,136)
62,965,503
1,399,364
(37,617,600)
29,073,115
26,747,267
The consolidated statement of financial position is to be read in conjunction with the accompanying notes.
- 15 -
61
// Annual Report 2023HAMMER METALS LIMTED
Consolidated Statement Of Profit Or Loss And Other
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 2023
Note
30 June 2023
$
Other income
Sale of tenement
Marketing expenses
Administrative expenses
Employee benefits expense
Share based payments
Occupancy expenses
Depreciation and amortisation
Fair value adjustment on financial assets
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
5
6
8
30 June 2022
$
214,863
322,727
(102,143)
(489,988)
(245,517)
(140,492)
(40,191)
(42,458)
(113,604)
190,974
-
(163,931)
(608,390)
(265,893)
(171,229)
(40,314)
(100,585)
(143,166)
(1,302,534)
(636,803)
24,367
(7,369)
16,998
(1,285,536)
-
(1,285,536)
-
-
1,303
(9,770)
(8,467)
(645,270)
-
(645,270)
-
-
Total Comprehensive loss for the year
(1,285,536)
(645,270)
Loss per share:
Basic and diluted loss per share (cents per share)
9(a)
(0.16)
(0.08)
The consolidated statement of profit or loss and other comprehensive income is to be read in conjunction with the
accompanying notes.
62
- 16 -
// Annual Report 2023HAMMER METALS LIMITED
HAMMER METALS LIMITED
and its Controlled Entities
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2023
Note
30 June 2023
30 June 2022
Other income
Sale of tenement
Marketing expenses
Administrative expenses
Employee benefits expense
Share based payments
Occupancy expenses
Depreciation and amortisation
Fair value adjustment on financial assets
Loss from operating activities
Finance income
Finance expenses
Net finance income / (expense)
Loss before income tax
Income tax benefit
4
5
5
5
6
8
$
190,974
-
(163,931)
(608,390)
(265,893)
(171,229)
(40,314)
(100,585)
(143,166)
$
214,863
322,727
(102,143)
(489,988)
(245,517)
(140,492)
(40,191)
(42,458)
(113,604)
(1,302,534)
(636,803)
24,367
(7,369)
16,998
1,303
(9,770)
(8,467)
(1,285,536)
(645,270)
-
-
-
-
-
-
Net loss for the year from continuing operations
(1,285,536)
(645,270)
Other comprehensive income
Other comprehensive loss for the year, net of income tax
Total Comprehensive loss for the year
(1,285,536)
(645,270)
Basic and diluted loss per share (cents per share)
9(a)
(0.16)
(0.08)
The consolidated statement of profit or loss and other comprehensive income is to be read in conjunction with the
Loss per share:
accompanying notes.
- 16 -
Consolidated Statement Of Changes In Equity
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-
63
// Annual Report 2023HAMMER 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 2023
Note
30 June 2023
$
30 June 2022
$
Cash flows from operating activities
Interest 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
Purchase of property, plant & equipment
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
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
24,367
4,021
(1,011,169)
(982,781)
(4,816,476)
(3,981)
-
349,909
1,104,678
148,676
1,303
8,197
(1,010,887)
(1,001,387)
(4,926,844)
-
322,727
233,500
615,195
-
-
(3,217,194)
175,000
(3,580,422)
3,500,000
105,000
35,000
-
(199,845)
(76,713)
3,363,442
(836,533)
5,193,673
4,357,140
150,000
-
12,800
(14,125)
(6,861)
(72,425)
69,389
(4,512,420)
9,706,093
5,193,673
The consolidated statement of cash flows is to be read in conjunction with the accompanying notes.
64
- 18 -
// Annual Report 2023HAMMER METALS LIMITED
HAMMER METALS LIMITED
and its Controlled Entities
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2023
Cash flows from operating activities
Interest received
Fuel rebate received
Payments to suppliers and employees
Net cash used in operating activities
Cash flows from investing activities
Payments for exploration expenditure
Purchase of property, plant & equipment
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
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
Note
30 June 2023
30 June 2022
$
$
24,367
4,021
(1,011,169)
(982,781)
(4,816,476)
(3,981)
349,909
1,104,678
148,676
(3,217,194)
3,500,000
105,000
35,000
(199,845)
(76,713)
3,363,442
(836,533)
5,193,673
4,357,140
-
-
-
1,303
8,197
(1,010,887)
(1,001,387)
(4,926,844)
322,727
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
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
The consolidated statement of cash flows is to be read in conjunction with the accompanying notes.
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 2023 comprises the Company and its subsidiaries (together referred to as the
“Group”).
23
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 20 September 2023.
(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) Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated entity
only. Supplementary information about the parent entity is disclosed in note 26.
(e) 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).
- 18 -
- 19 -
65
// Annual Report 2023HAMMER METALS LIMTED
Notes To The Consolidated Financial Statements
HAMMER METALS LIMITED
and its Controlled Entities
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2. BASIS OF PREPARATION (continued)
(e) 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.
66
- 20 -
// Annual Report 2023HAMMER METALS LIMITED
HAMMER METALS LIMITED
and its Controlled Entities
2. BASIS OF PREPARATION (continued)
(e) 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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
HAMMER METALS LIMITED
and its Controlled Entities
2. BASIS OF PREPARATION (continued)
(f) 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.
(g) 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 2023, the Group has incurred a consolidated loss before tax of $1,285,536 and net cash outflows
from operating and investing activities of $4,199,975. As at 30 June 2023, the Group had $4,357,140 in cash and cash
equivalents and net current assets of $4,097,004.
The ability of the Group to continue to pay its debts as and when they fall due is dependent upon the Group
successfully raising additional share capital and ultimately developing its mineral properties. The Directors believe that
they will continue to be successful in securing additional funds through equity issues as and when the need to raise
working capital arises. However, there is the existence of a material uncertainty that may cast significant doubt about
the Group’s ability to continue as a going concern and whether it can realise its assets and discharge its liabilities in
the normal course of business. The financial report does not include any adjustments in relation to the recoverability
and classification of recorded asset amounts or to the amounts and classification of liabilities that might be necessary
should the Group not continue as going concern.
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.
- 20 -
- 21 -
67
// Annual Report 2023HAMMER METALS LIMTED
Notes To The Consolidated Financial Statements
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.
68
- 22 -
// Annual Report 2023HAMMER METALS LIMITED
HAMMER METALS LIMITED
and its Controlled Entities
HAMMER METALS LIMITED
and its Controlled Entities
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
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
The Group measures any non-controlling interest at its proportionate interest in the identifiable net assets
vii. Non-controlling interest
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.
(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).
A contingent liability of the acquiree is assumed in a business combination only if such a liability represents a
(d) Financial instruments (continued)
present obligation and arises from a past event, and its fair value can be measured reliably.
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.
- 22 -
- 23 -
69
// Annual Report 2023HAMMER METALS LIMTED
Notes To The Consolidated Financial Statements
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.
70
- 24 -
// Annual Report 2023HAMMER METALS LIMITED
HAMMER METALS LIMITED
and its Controlled Entities
HAMMER METALS LIMITED
and its Controlled Entities
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
3. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(d)
Financial instruments (continued)
(f)
Impairment (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 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 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.
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.
(e) Cash and cash equivalents
(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.
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.
- 24 -
- 25 -
71
// Annual Report 2023HAMMER METALS LIMTED
Notes To The Consolidated Financial Statements
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.
72
- 26 -
// Annual Report 2023HAMMER METALS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
HAMMER METALS LIMITED
and its Controlled Entities
(g) Share capital
Ordinary shares
benefit.
(h) Interest bearing borrowings
(i) Employee benefits
Defined contribution plans
Transaction costs of an equity transaction are accounted for as a deduction from equity, net of any related income tax
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.
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
(k) Income tax
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.
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.
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) Trade and other payables and provisions
Trade payables and other payables are carried at amortised cost. They represent liabilities for goods and services
provided to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes obliged
to make future payments in respect of the purchase of these goods and services.
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event,
it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and
a reliable estimate can be made of the amount of the obligation.
Where the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the
reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense
relating to any provision is presented in the profit or loss net of any reimbursement.
If the effect of the time value of money 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 where appropriate,
the risks specific to the liability.
When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
(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.
- 26 -
- 27 -
73
// Annual Report 2023HAMMER METALS LIMTED
Notes To The Consolidated Financial Statements
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)
Accounting for exploration and evaluation expenditure is assessed separately for each area of interest. An area of
interest is an individual geological area which is considered to constitute a favourable environment for the presence
of a mineral deposit or has been proved to contain such a deposit.
Expenditure incurred on activities that precede exploration and evaluation of mineral resources, including all
expenditure incurred prior to securing legal rights to explore an area, is expensed as incurred.
For each area of interest, the expenditure is recognised as an exploration and evaluation asset where the following
conditions are satisfied:
a) The rights to tenure of the area of interest are current; and
b) At least one of the following conditions is also met:
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;
•
•
• Activities in relation to evaluating the technical feasibility and commercial viability of
Topographical, geological, geochemical and geophysical studies;
Exploratory drilling, trenching, and sampling and
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
- 28 -
74
// Annual Report 2023HAMMER METALS LIMITED
HAMMER METALS LIMITED
and its Controlled Entities
HAMMER METALS LIMITED
and its Controlled Entities
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
3. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(n) Exploration and evaluation expenditure (continued)
(n)
Exploration and evaluation expenditure (continued)
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.
•
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.
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.
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).
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.
The expenditure is expected to be recouped through successful development and commercial
exploitation of an area of interest, or alternatively by its sale; and
ii.
Exploration and evaluation activities in the area of interest have not, at reporting date, reached
a stage which permits a reasonable assessment of the existence or otherwise ‘economically
recoverable reserves’ and active and significant operations in, or in relation to, the area of
interest are continuing. Economically recoverable reserves are the estimated quantity of product
in an area of interest that can be expected to be profitably extracted, processed and sold under
current and foreseeable conditions.
Exploration and evaluation assets include
• Acquisition of rights to explore;
•
•
Topographical, geological, geochemical and geophysical studies;
Exploratory drilling, trenching, and sampling and
• Activities in relation to evaluating the technical feasibility and commercial viability of
extracting the mineral resource.
General and administrative costs are allocated to, and included in, the cost of exploration and evaluation assets only
to the extent that those costs can be related directly to the operational activities in the area of interest to which the
exploration and evaluation assets relate. In all other instances, these costs are expensed as incurred.
Exploration and evaluation assets are transferred to Development Assets once technical feasibility and commercial
viability of an area of interest is demonstrable. Exploration and evaluation assets are assessed for impairment, and
any impairment loss is recognised prior to being reclassified.
The carrying amount of the exploration and evaluation assets is dependent on successful development and
commercial exploitation, or alternatively, sale of the respective area of interest.
Impairment testing of exploration and evaluation assets
Exploration and evaluation assets are assessed for impairment if sufficient data exists to determine technical feasibility
and commercial viability or facts and circumstances suggest that the carrying amount exceeds the recoverable
amount.
Exploration and evaluation assets are tested for impairment when any of the following facts and circumstances exist:
•
•
•
The term of exploration licence in the specific area of interest has expired during the
reporting period or will expire in the near future, and is not expected to be renewed;
Substantive expenditure on further exploitation for and evaluation of mineral resources
in the specific area are not budgeted or planned;
Exploration for and evaluation of mineral resources in the specific area have not led to
the discovery of commercially viable quantities of mineral resources and the decision was
made to discontinue such activities in the specified are; or
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.
- 28 -
- 29 -
75
// Annual Report 2023HAMMER METALS LIMTED
Notes To The Consolidated Financial Statements
HAMMER METALS LIMITED
and its Controlled Entities
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(q) Lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the
present value of the lease payments to be made over the term of the lease, discounted using the interest rate implicit
in the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing rate. Lease payments
comprise of fixed payments less any lease incentives receivable, variable lease payments that depend on an index or
a rate, amounts expected to be paid under residual value guarantees, exercise price of a purchase option when the
exercise of the option is reasonably certain to occur, and any anticipated termination penalties. The variable lease
payments that do not depend on an index or a rate are expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are
remeasured if there is a change in the following: future lease payments arising from a change in an index or a rate
used; residual guarantee; lease term; certainty of a purchase option and termination penalties. When a lease liability
is remeasured, an adjustment is made to the corresponding right-of use asset, or to profit or loss if the carrying amount
of the right-of-use asset is fully written down.
(r) Earnings/loss per share
Basic earnings/loss per share is calculated as net profit/loss attributable to members of the Group, adjusted to exclude
any costs of servicing equity divided by the weighted average number of ordinary shares.
Diluted earnings/loss per share is calculated as net profit/loss attributable to members of the Group, adjusted for:
• Costs of servicing equity.
• The after-tax effect of dividends and interest associated with dilutive potential ordinary shares that
have been recognised as expenses.
• Other non-discretionary changes in revenues or expenses during the period that would result from
the dilution of potential ordinary shares.
divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any
bonus element.
(s) Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current
classification. An asset is classified as current when:
•
it is either expected to be realised or intended to be sold or consumed in the consolidated entity's
normal operating cycle; it is held primarily for the purpose of trading.
it is expected to be realised within 12 months after the reporting period.
•
• or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a
liability for at least 12 months after the reporting period.
All other assets are classified as non-current.
A liability is classified as current when:
it is either expected to be settled in the consolidated entity's normal operating cycle.
it is held primarily for the purpose of trading.
it is due to be settled within 12 months after the reporting period.
•
•
•
• or there is no unconditional right to defer the settlement of the liability for at least 12 months after
the reporting period.
All other liabilities are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
76
- 30 -
// Annual Report 2023HAMMER METALS LIMITED
HAMMER METALS LIMITED
and its Controlled Entities
HAMMER METALS LIMITED
and its Controlled Entities
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(q) Lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the
present value of the lease payments to be made over the term of the lease, discounted using the interest rate implicit
in the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing rate. Lease payments
comprise of fixed payments less any lease incentives receivable, variable lease payments that depend on an index or
a rate, amounts expected to be paid under residual value guarantees, exercise price of a purchase option when the
exercise of the option is reasonably certain to occur, and any anticipated termination penalties. The variable lease
payments that do not depend on an index or a rate are expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are
remeasured if there is a change in the following: future lease payments arising from a change in an index or a rate
used; residual guarantee; lease term; certainty of a purchase option and termination penalties. When a lease liability
is remeasured, an adjustment is made to the corresponding right-of use asset, or to profit or loss if the carrying amount
of the right-of-use asset is fully written down.
(r) Earnings/loss per share
Basic earnings/loss per share is calculated as net profit/loss attributable to members of the Group, adjusted to exclude
any costs of servicing equity divided by the weighted average number of ordinary shares.
Diluted earnings/loss per share is calculated as net profit/loss attributable to members of the Group, adjusted for:
• Costs of servicing equity.
have been recognised as expenses.
the dilution of potential ordinary shares.
• The after-tax effect of dividends and interest associated with dilutive potential ordinary shares that
• Other non-discretionary changes in revenues or expenses during the period that would result from
divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any
bonus element.
(s) Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current
classification. An asset is classified as current when:
it is either expected to be realised or intended to be sold or consumed in the consolidated entity's
normal operating cycle; it is held primarily for the purpose of trading.
it is expected to be realised within 12 months after the reporting period.
• or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a
liability for at least 12 months after the reporting period.
All other assets are classified as non-current.
A liability is classified as current when:
it is either expected to be settled in the consolidated entity's normal operating cycle.
it is held primarily for the purpose of trading.
it is due to be settled within 12 months after the reporting period.
• or there is no unconditional right to defer the settlement of the liability for at least 12 months after
•
•
•
•
•
the reporting period.
All other liabilities are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
4. OTHER INCOME
Management fee from farm-in partners
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 2023
$
170,990
19,984
190,974
30 June 2022
$
189,294
25,569
214,863
30 June 2023
$
30 June 2022
$
-
100,585
100,585
239,876
24,567
171,229
1,450
437,122
7,818
34,640
42,458
226,142
18,627
140,492
750
386,011
30 June 2023
$
30 June 2022
$
24,367
(7,369)
16,998
1,303
(9,770)
8,467
30 June 2023
$
30 June 2022
$
-
28,166
25,450
25,450
19,000
47,166
- 30 -
- 31 -
77
// Annual Report 2023HAMMER METALS LIMTED
Notes To The Consolidated Financial Statements
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%
(2022: 25%)
Adjusted for:
Non-deductible expenses / (Non-Assessable Income)
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 2023
$
30 June 2022
$
-
-
-
-
-
-
(1,285,536)
(645,270)
(321,384)
(177,449)
(44,059)
365,443
-
35,869
141,580
-
1,025
316,884
28,530
85,234
12,020,777
12,452,450
3,443
222,016
42,217
78,997
8,099,807
8,446,480
(c) Recognised deferred tax assets & liabilities
Temporary timing differences related to:
Exploration and evaluation expenditure
Income tax losses
(5,334,495)
5,334,495
-
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.
(6,169,573)
6,169,573
-
(d) Movement of temporary differences recognised during the year ended 30 June 2023:
Exploration and evaluation
expenditure
Carried-forward tax losses
Balance 1 July
2022
Profit or Loss
Other
comprehensive
income
Equity
Balance 30
June 2023
(5,334,495)
(835,078)
5,334,495
-
835,078
-
-
-
-
-
-
-
(6,169,573)
6,169,573
-
78
- 32 -
// Annual Report 2023HAMMER METALS LIMITED
HAMMER METALS LIMITED
and its Controlled Entities
HAMMER METALS LIMITED
and its Controlled Entities
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
8.
INCOME TAX
(a) Income tax benefit
Current tax
Deferred tax
Total income tax benefit
loss:
Loss before income tax
(2022: 25%)
Adjusted for:
Numerical reconciliation of income tax benefit to pre-tax accounting
Income tax benefit using the Company’s domestic tax rate of 25%
Non-deductible expenses / (Non-Assessable Income)
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
(c) Recognised deferred tax assets & liabilities
Temporary timing differences related to:
Exploration and evaluation expenditure
Income tax losses
30 June 2023
30 June 2022
$
$
-
-
-
-
-
-
(1,285,536)
(645,270)
(321,384)
(177,449)
(44,059)
365,443
-
35,869
141,580
-
1,025
316,884
28,530
85,234
12,020,777
12,452,450
3,443
222,016
42,217
78,997
8,099,807
8,446,480
(6,169,573)
6,169,573
-
(5,334,495)
5,334,495
-
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.
(d) Movement of temporary differences recognised during the year ended 30 June 2023:
Balance 1 July
Other
comprehensive
2022
Profit or Loss
income
Equity
Exploration and evaluation
expenditure
(5,334,495)
(835,078)
Carried-forward tax losses
5,334,495
835,078
-
-
-
-
-
Balance 30
June 2023
-
-
-
(6,169,573)
6,169,573
-
8.
INCOME TAX (CONTINUED)
(e) 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
-
541,398
-
-
-
-
-
-
-
(5,334,495)
5,334,495
-
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 2023
30 June 2022
(0.16) 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
824,347,048
814,035,632
10. CASH AND CASH EQUIVALENTS
Cash at bank and on hand
30 June 2023
$
4,357,140
30 June 2022
$
5,193,673
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 2023
$
30 June 2022
$
31,007
80,887
140,755
252,649
53,463
25,150
423,149
501,762
30 June 2023
$
30 June 2022
$
227,529
370,695
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”)
- 32 -
- 33 -
79
// Annual Report 2023HAMMER METALS LIMTED
Notes To The Consolidated Financial Statements
HAMMER METALS LIMITED
and its Controlled Entities
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
13.
RIGHT-OF-USE ASSETS
Right-of-use assets
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
Exploration grants received
Research and development grant received
Balance at 30 June
30 June 2023
$
30 June 2022
$
330,634
(168,622)
162,012
268,662
6,372
(113,022)
-
162,012
324,262
(55,600)
268,662
303,302
-
(34,640)
-
268,662
30 June 2023
$
30 June 2022
$
21,337,979
4,593,665
(148,676)
(1,104,678)
24,678,290
17,429,445
4,523,729
-
(615,195)
21,337,979
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.
80
- 34 -
// Annual Report 2023HAMMER METALS LIMITED
HAMMER METALS LIMITED
and its Controlled Entities
HAMMER METALS LIMITED
and its Controlled Entities
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
13.
RIGHT-OF-USE ASSETS
Right-of-use assets
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
Exploration grants received
Research and development grant received
Balance at 30 June
30 June 2023
30 June 2022
$
$
330,634
(168,622)
162,012
268,662
6,372
(113,022)
-
162,012
21,337,979
4,593,665
(148,676)
(1,104,678)
24,678,290
324,262
(55,600)
268,662
303,302
(34,640)
268,662
-
-
-
17,429,445
4,523,729
(615,195)
21,337,979
30 June 2023
30 June 2022
$
$
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.
15.
TRADE AND OTHER PAYABLES
Trade payables and accruals
Employee Leave Accruals
30 June 2023
$
30 June 2022
$
364,179
79,714
443,893
612,132
79,435
691,567
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.
16.
LEASE LIABILITIES
Current lease liabilities
Non-current lease liabilities
30 June 2023
$
30 June 2022
$
68,892
95,701
164,593
63,997
169,940
233,937
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
30 June 2023
30 June 2022
30 June 2023
30 June 2022
No.
No.
$
$
815,394,623
806,652,519
62,965,503
62,277,335
Shares issued for cash at $0.095 per share
Conversion of performance rights
Exercise of unlisted options – cash
Exercise of unlisted options – cashless1
Shares issued for cash at $0.06 per share
Funds for unlisted options – unexercised2
Share issue costs
-
-
1,000,000
5,012,726
58,333,333
-
-
6,842,104
1,500,000
400,000
-
-
-
-
-
-
46,000
100,200
3,500,000
182,100
(199,845)
650,000
27,429
17,600
-
-
-
(6,861)
On issue at 30 June – fully paid
879,740,682
815,394,623
66,593,958
62,965,503
1 – During the year a total of 8,350,000 unquoted options were exercised using a cashless exercise facility,
resulting in a total of 5,012,726 ordinary shares being issued in full settlement of the exercise.
2 – During the year ended 30 June 2023 the Company received a valid exercise notice for 3,000,000 unquoted
options exercisable at $0.035 each on or before 30 June 2023, however the exercise of these options and the
issue of shares was only completed on 6 July 2023.
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 (2022: Nil).
- 34 -
- 35 -
81
// Annual Report 2023HAMMER METALS LIMTED
Notes To The Consolidated Financial Statements
HAMMER METALS LIMITED
and its Controlled Entities
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
17.
(b)
ISSUED CAPITAL (CONTINUED)
Options outstanding over ordinary shares
Unlisted options (Share-based payment reserve)
Unlisted options exercisable at $0.032 on or before 30 Nov 2022
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 21 Oct 2023
Unlisted options exercisable at $0.06 expiring 21 Oct 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
Unlisted options exercisable at $0.07 expiring 30 Nov 2026
30 June 2023
No.
30 June 2022
No.
-
-
3,000,000
3,000,000
4,000,000
2,600,000
4,500,000
2,000,000
4,500,000
8,350,000
1,000,000
3,000,000
3,000,000
4,000,000
2,600,000
4,500,000
2,000,000
-
28,450,000
4,500,000 unlisted options were granted to directors, executives, and employees during the year (2022: nil).
Refer to Note 20.
9,350,000 unlisted options were exercised during the year (2022: 400,000).
No unlisted options were granted to consultants during the year (2022: 2,000,000)
No fully vested unlisted options expired unexercised during the period (2022: Nil).
Options carry no voting rights until converted to fully paid ordinary shares. All unlisted options were granted
for no cash consideration.
23,600,000
(c)
Performance rights outstanding
Performance rights (Share-based payment reserve)
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 2023
No.
30 June 2022
No.
5,000,000
1,000,000
1,000,000
1,000,000
8,000,000
5,000,000
1,000,000
1,000,000
1,000,000
8,000,000
The following performance rights were granted during the previous financial year (refer note 20):
Number of
options
Vesting Date
Vesting Condition
Expiry Date
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
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.
82
- 36 -
// Annual Report 2023HAMMER METALS LIMITED
HAMMER METALS LIMITED
and its Controlled Entities
HAMMER METALS LIMITED
and its Controlled Entities
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
30 June 2023
30 June 2022
No.
No.
18.
RESERVES
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
Reversal of previously recognised value relating to Tranche 5
Performance Rights (Note 17(c)) (2)
Further vesting expense of options and rights issued in previous
periods
30 June 2023
$
30 June 2022
$
1,399,364
194,850
-
-
(188,300)
-
(93,302)
1,291,101
-
78,000
25,653
(4,800)
(27,429)
-
69,681
36,839
1,399,364
(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) These rights expire on 21 October 2023, and therefore as they are currently unlikely to vest, the amount
recognised as an expense to-date has been reversed.
1,382,293
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 2023
$
30 June 2022
$
30 June 2023
$
30 June 2022
$
Annual minimum exploration expenditure
3,785,310
2,927,546
-
-
The annual minimum exploration expenditure disclosed above includes $1,717,540 which falls under
tenements related to the joint arrangements as set out in Note 22. Of this amount, $130,347 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 $1,587,193 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.
17.
(b)
ISSUED CAPITAL (CONTINUED)
Options outstanding over ordinary shares
Unlisted options (Share-based payment reserve)
Unlisted options exercisable at $0.032 on or before 30 Nov 2022
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 21 Oct 2023
Unlisted options exercisable at $0.06 expiring 21 Oct 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
Unlisted options exercisable at $0.07 expiring 30 Nov 2026
-
-
3,000,000
3,000,000
4,000,000
2,600,000
4,500,000
2,000,000
4,500,000
8,350,000
1,000,000
3,000,000
3,000,000
4,000,000
2,600,000
4,500,000
2,000,000
-
23,600,000
28,450,000
30 June 2023
30 June 2022
No.
No.
5,000,000
1,000,000
1,000,000
1,000,000
8,000,000
5,000,000
1,000,000
1,000,000
1,000,000
8,000,000
4,500,000 unlisted options were granted to directors, executives, and employees during the year (2022: nil).
Refer to Note 20.
9,350,000 unlisted options were exercised during the year (2022: 400,000).
No unlisted options were granted to consultants during the year (2022: 2,000,000)
No fully vested unlisted options expired unexercised during the period (2022: Nil).
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 5
Managing Director Performance Rights – Tranche 6
Managing Director Performance Rights – Tranche 7
Managing Director Performance Rights – Tranche 8
The following performance rights were granted during the previous financial year (refer note 20):
Managing Director Performance Rights
-
-
-
Tranche 6
Tranche 7
Tranche 8
Number of
options
1,000,000
1,000,000
1,000,000
Vesting Date
Vesting Condition
Expiry Date
N/A
N/A
N/A
Refer below
Refer below
Refer below
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.
- 36 -
- 37 -
83
// Annual Report 2023HAMMER METALS LIMTED
Notes To The Consolidated Financial Statements
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 2023
30 June 2022
No of unlisted
options
28,450,000
4,500,000
(9,350,000)
-
23,600,000
23,600,000
Weighted
average
exercise price
$0.043
$0.07
$0.032
-
$0.053
No of unlisted
options
26,850,000
2,000,000
(400,000)
-
28,450,000
28,450,000
Weighted
average
exercise price
$0.045
$0.04
$0.032
-
$0.043
The options outstanding at year end have exercise prices ranging from $0.035 to $0.07 and a weighted average
remaining contractual life of 1.28 years.
The following options were granted during the year.
Director Options
Number of
options
granted
4,500,000
Date granted
23 Nov 2022
% Vested
100%
% Forfeited
/ Lapsed
-
Financial year in
which grant
vested / will vest
-
The fair value of the options issued during the year to Directors 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)
84
Directors
$0.063
$0.07
23 Nov 2022
30 Nov 2026
Immediate
4
100%
3.17%
-
4,500,000
$0.0433
3.42
- 38 -
// Annual Report 2023HAMMER METALS LIMITED
HAMMER METALS LIMITED
and its Controlled Entities
20.
SHARE BASED PAYMENTS
Incentive Option Plan
features of this plan are:
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The Hammer Metals Incentive Option Plan was approved by shareholders on 14 November 2019. The key
Granted during previous financial year
(a) The plan will be available to directors, employees and other permitted persons of the Company and its
The following options were granted during the prior year.
20.
SHARE BASED PAYMENTS (CONTINUED)
HAMMER METALS LIMITED
and its Controlled Entities
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:
30 June 2023
30 June 2022
No of unlisted
No of unlisted
options
exercise price
options
exercise price
Weighted
average
Weighted
average
28,450,000
4,500,000
(9,350,000)
-
23,600,000
23,600,000
$0.043
$0.07
$0.032
-
$0.053
26,850,000
2,000,000
(400,000)
-
28,450,000
28,450,000
$0.045
$0.04
$0.032
-
$0.043
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
remaining contractual life of 1.28 years.
The following options were granted during the year.
The options outstanding at year end have exercise prices ranging from $0.035 to $0.07 and a weighted average
Director Options
Number of
options
granted
4,500,000
Financial year in
% Forfeited
which grant
Date granted
23 Nov 2022
% Vested
/ Lapsed
vested / will vest
100%
-
-
The fair value of the options issued during the year to Directors was determined by reference to the Black-Scholes
option pricing model. The key inputs and valuations are summarised as follows:
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 previous 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
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 2023
No.
8,000,000
-
-
-
8,000,000
-
30 June 2022
No.
6,500,000
3,000,000
(1,500,000)
-
8,000,000
-
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
$0.063
$0.07
23 Nov 2022
30 Nov 2026
Immediate
100%
3.17%
4
-
4,500,000
$0.0433
3.42
- 38 -
- 39 -
85
// Annual Report 2023HAMMER METALS LIMTED
Notes To The Consolidated Financial Statements
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 previous 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 previous 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 2023
$
30 June 2022
$
547,429
41,921
217,011
806,361
529,405
40,837
62,492
632,734
86
- 40 -
// Annual Report 2023HAMMER METALS LIMITED
HAMMER METALS LIMITED
and its Controlled Entities
HAMMER METALS LIMITED
and its Controlled Entities
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
20.
SHARE BASED PAYMENTS (CONTINUED)
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 2023
$
30 June 2022
$
30 June 2023
$
30 June 2022
$
39,313
42,375
7,299
8,500
-
-
45,200
48,790
4,100
-
8,500
5,780
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
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
Midas Metals Asia Pty Ltd (i)
(i) This subsidiary is dormant and has not traded during the year.
Australia
Australia
Australia
Australia
Australia
Australia
Percentage held
2023
Percentage held
2022
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.
- 40 -
- 41 -
87
The fair value of the performance rights issued during the previous 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 –
Mr D Thomas –
Mr D Thomas –
Tranche 6
$0.044
29 Nov 2021
21 Dec 2024
Tranche 7
$0.044
29 Nov 2021
21 Dec 2024
Tranche 8
$0.044
29 Nov 2021
21 Dec 2024
1,000,000
1,000,000
1,000,000
-
3
-
$0.044
2.4
$44,000
$8,551
$35,449
-
3
-
$0.044
2.4
$44,000
$8,551
$35,449
-
3
-
$0.044
2.4
$44,000
$8,551
$35,449
Note 1 – all three tranches of performance rights issued during the previous 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)
Short-term employee benefits
Post-employment benefits
Share-based payments
The key management personnel compensation comprised:
30 June 2023
30 June 2022
$
547,429
41,921
217,011
806,361
$
529,405
40,837
62,492
632,734
// Annual Report 2023HAMMER METALS LIMTED
Notes To The Consolidated Financial Statements
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 $599,195 at 30 June 2023 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 financial year ended 30 June 2021, 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 Fourth 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
Movements attributable to operating activities:
Decrease / (increase) in trade and other receivables
Increase / (decrease) in trade and other payables
Net cash used in operating activities
30 June 2023
$
30 June 2022
$
(1,285,536)
(645,270)
100,585
171,229
143,166
-
7,369
(178,147)
77,351
(18,798)
(982,781)
42,458
140,492
113,604
(322,727)
9,770
(189,649)
(62,229)
(212,294)
(1,001,387)
88
- 42 -
// Annual Report 2023HAMMER METALS LIMITED
HAMMER METALS LIMITED
and its Controlled Entities
HAMMER METALS LIMITED
and its Controlled Entities
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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 $599,195 at 30 June 2023 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 financial year ended 30 June 2021, 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 Fourth 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
$
$
30 June 2023
30 June 2022
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
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
(1,285,536)
(645,270)
100,585
171,229
143,166
-
7,369
(178,147)
77,351
(18,798)
(982,781)
42,458
140,492
113,604
(322,727)
9,770
(189,649)
(62,229)
(212,294)
(1,001,387)
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 2023.
Queensland
Exploration
$
Western Australia
Exploration
$
Corporate
$
Total
$
-
(3,819)
-
(360)
190,974
(1,281,357)
190,974
(1,285,536)
30 June 2023
Segment income
Segment profit /
(loss)
before income tax expense
Segment assets
Segment liabilities
18,522,627
(23,090)
6,155,663
(4,875)
5,003,311
(580,521)
29,681,601
(608,486)
30 June 2022
Segment income
Segment
loss
income tax expense
before
-
318,639
-
(271)
214,863
(963,638)
214,863
(645,270)
Segment assets
Segment liabilities
15,734,221
(52,344)
5,603,758
(9,215)
6,334,792
(863,945)
27,672,771
(925,504)
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.
- 42 -
- 43 -
89
// Annual Report 2023HAMMER METALS LIMTED
Notes To The Consolidated Financial Statements
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 2023
$
4,357,140
252,649
30 June 2022
$
5,193,673
501,762
Impairment losses
None of the Group’s trade and other receivables are past due and impaired (2022: 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(g)). 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 2023
Trade and Other Payables
Lease liabilities
30 June 2022
Trade and Other Payables
Lease liabilities
Carrying
Amount
Contractual
Cash-Flows
< 6 months
6-12
months
1-2 years
2-5 years
443,893
164,593
608,484
443,893
172,343
616,234
443,893
36,183
480,074
691,567
233,937
925,504
691,567
247,904
939,471
691,567
36,201
727,768
-
36,183
36,183
-
36,201
36,201
-
72,400
72,400
-
27,577
27,577
-
72,401
72,401
-
103,101
103,101
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.
90
- 44 -
// Annual Report 2023HAMMER 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:
Note
30 June 2023
30 June 2022
Carrying amount
10
11
$
4,357,140
252,649
$
5,193,673
501,762
Cash and cash equivalents
Trade and other receivables
Impairment losses
Liquidity risk
None of the Group’s trade and other receivables are past due and impaired (2022: Nil).
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due (refer
Note 2(g)). 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
Contractual
< 6 months
1-2 years
2-5 years
Carrying
Amount
Cash-Flows
6-12
months
443,893
164,593
608,484
443,893
172,343
616,234
443,893
36,183
480,074
36,183
36,183
72,400
72,400
27,577
27,577
-
-
-
-
-
-
691,567
233,937
925,504
691,567
247,904
939,471
691,567
36,201
727,768
36,201
36,201
72,401
72,401
103,101
103,101
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
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.
30 June 2023
Trade and Other Payables
Lease liabilities
30 June 2022
Trade and Other Payables
Lease liabilities
Market risk
optimising the return.
Currency risk
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 2023
$
30 June 2022
$
22,367
4.00%
22,256
0.25%
4,334,773
1.32%
5,171,417
0.20%
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 (2022: 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 2022 was performed on the
same basis.
Loss
Equity
Consolidated
30 June 2023
Variable rate instruments
30 June 2022
Variable rate instruments
50bp
increase
50bp
decrease
50bp
increase
50bp
decrease
$21,786
($21,786)
$21,786
($21,786)
$25,857
($25,857)
$25,857
($25,857)
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 2023
$
30 June 2022
$
227,529
370,695
4,357,140
252,649
(443,893)
(164,593)
5,193,673
501,762
(691,567)
(233,937)
- 44 -
- 45 -
91
// Annual Report 2023HAMMER METALS LIMTED
Notes To The Consolidated Financial Statements
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 2023 and
2022.
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 2023
Equity securities – listed on ASX and
TSXV at quoted prices
30 June 2022
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
$
227,529
227,529
370,695
370,695
-
-
-
-
Total
$
227,529
227,529
370,695
370,695
-
-
-
-
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.
92
- 46 -
// Annual Report 2023HAMMER METALS LIMITED
HAMMER METALS LIMITED
and its Controlled Entities
HAMMER METALS LIMITED
and its Controlled Entities
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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 2023 and
2022.
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.
Quoted Market
Observable
Valuation
Technique:
Market
Inputs
Level 2
$
Valuation
Technique:
Non-market
Observable
Inputs
Level 3
$
Consolidated
30 June 2023
Equity securities – listed on ASX and
TSXV at quoted prices
30 June 2022
Equity securities – listed on ASX and
TSXV at quoted prices
Price
Level 1
$
227,529
227,529
370,695
370,695
Total
$
227,529
227,529
370,695
370,695
-
-
-
-
-
-
-
-
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.
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 2022 was performed on the same basis.
Consolidated
30 June 2023
Equity securities – listed on TSXV
30 June 2022
Equity securities – listed on TSXV
Loss
Equity
10%
increase
10%
decrease
10%
increase
10%
decrease
$22,753
($22,753)
$22,753
($22,753)
$37,695
($37,695)
$37,695
($37,695)
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 2023
$
30 June 2022
$
23,208,159
6,465,856
29,674,015
20,982,882
6,624,615
27,607,497
463,173
137,727
600,900
29,073,115
690,290
169,940
860,230
26,747,267
66,593,958
(38,903,136)
1,382,293
29,073,115
62,965,503
(37,617,600)
1,399,364
26,747,267
- 46 -
- 47 -
93
// Annual Report 2023HAMMER METALS LIMTED
Notes To The Consolidated Financial Statements
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 2023
$
30 June 2022
$
(1,285,536)
-
(1,285,536)
(645,270)
-
(645,270)
There were no contingent liabilities of the parent entity at 30 June 2023 (2022: None), nor where there any
commitments of the parent entity (2022: None).
27.
CONTINGENCIES
The Group has no contingencies as at 30 June 2023 (2022: nil).
28.
EVENTS SUBSEQUENT TO BALANCE DATE
Subsequent to year end the following events have occurred:
As noted above, on 6 July 2023 a total of 3,000,000 options exercisable at $0.035 on or before 30 June 2023
were validly exercised and 3,000,000 new ordinary shares were issued upon their conversion. The funds for
the exercise were received prior to the end of the financial year.
On 2 August 2023, the Company issued 3,666,667 ordinary shares to Directors of the Company at an issue
price of $0.06 per share. These shares were issued in conjunction with the Share Placement completed on 5
June 2023, and the issue was approved by shareholders at the General Meeting held on 13 July 2023.
On 7 September 2023, Zbigniew Lubieniecki resigned as a non-executive director, and James Croser was
appointed as non-executive director on 8 September 2023. As part of his appointment, the Company issued
4,000,000 unquoted options exercisable at $0.08 on or before 30 November 2026 to Mr Croser.
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.
94
- 48 -
// Annual Report 2023HAMMER METALS LIMITED
Directors’ Declaration
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 2023
30 June 2022
$
$
(1,285,536)
(645,270)
-
-
(1,285,536)
(645,270)
There were no contingent liabilities of the parent entity at 30 June 2023 (2022: None), nor where there any
commitments of the parent entity (2022: None).
27.
CONTINGENCIES
The Group has no contingencies as at 30 June 2023 (2022: nil).
28.
EVENTS SUBSEQUENT TO BALANCE DATE
Subsequent to year end the following events have occurred:
As noted above, on 6 July 2023 a total of 3,000,000 options exercisable at $0.035 on or before 30 June 2023
were validly exercised and 3,000,000 new ordinary shares were issued upon their conversion. The funds for
the exercise were received prior to the end of the financial year.
On 2 August 2023, the Company issued 3,666,667 ordinary shares to Directors of the Company at an issue
price of $0.06 per share. These shares were issued in conjunction with the Share Placement completed on 5
June 2023, and the issue was approved by shareholders at the General Meeting held on 13 July 2023.
On 7 September 2023, Zbigniew Lubieniecki resigned as a non-executive director, and James Croser was
appointed as non-executive director on 8 September 2023. As part of his appointment, the Company issued
4,000,000 unquoted options exercisable at $0.08 on or before 30 November 2026 to Mr Croser.
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.
- 48 -
95
HAMMER METALS LIMITED and its Controlled Entities - 49 - DIRECTORS’ DECLARATION 1. In the opinion of the Directors of Hammer Metals Limited (“the Company”): (a) the consolidated financial statements and notes and the remuneration report in the Directors’ report, are in accordance with the Corporations Act 2001, including: i. giving a true and fair view of the Group’s financial position as at 30 June 2023 and of its performance for the financial year ended on that date; and ii. complying with Australian Accounting Standards and the Corporations Regulations 2001; (b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable. 2. The Directors have been given the declarations by the managing director and company secretary for the financial year ended 30 June 2023 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 20 September 2023 // Annual Report 2023HAMMER METALS LIMTED
Independent Auditor’s Report
96
PKF Perth 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. -50- 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”) and controlled entities (consolidated entity), which comprises the consolidated statement of financial position as at 30 June 2023, 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 2023 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. Material Uncertainty Related to Going Concern Without modifying our opinion, we draw attention to the financial report which indicates the consolidated entity has incurred an operating loss of $1,285,536 (2022: $645,270) and combined operating and investing cash outflows of $4,199,975 (2022: $4,581,809) for the year ended 30 June 2023. These conditions along with other matters in Note 2(g), indicate the existence of a material uncertainty that may cast significant doubt about the consolidated entity’s ability to continue as a going concern and therefore, the consolidated entity may be unable to realise its assets and discharge its liabilities in the normal course of business. The financial report of the consolidated entity does not include any adjustments in relation to the recoverability and classification of recorded asset amounts or to the amounts and classification of liabilities that might be necessary should the consolidated entity not continue as a going concern. // Annual Report 2023HAMMER METALS LIMITED 97
-51- PKF Perth 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. Key Audit Matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report for the current year. These matters were addressed in the context of our audit of the financial report, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matter described in the Material Uncertainty Related to Going Concern section, we have determined the matter described below to be a key audit matter to be communicated in our report. Carrying value of capitalised exploration expenditure Why significant How our audit addressed the key audit matter As at 30 June 2023, the carrying value of exploration and evaluation assets was $24,678,290 (2022: $21,337,979), as disclosed in note 14. The consolidated entity’s accounting policy in respect of exploration and evaluation expenditure is outlined in notes 3 and 14. 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 - Exploration for and Evaluation of Mineral Resources 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 programs. • 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 - Exploration for and Evaluation of Mineral Resources and the consolidated entity’s accounting policy; and // Annual Report 2023HAMMER METALS LIMTED Independent Auditor’s Report
98
-52- PKF Perth Why significant How our audit addressed the key audit matter • assessing the appropriateness of the related disclosures in Notes 3 and 14. 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 2023 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. // Annual Report 2023HAMMER METALS LIMITED 99
-53- PKF Perth • 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. • 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 2023. In our opinion, the Remuneration Report of Hammer Metals Limited for the year ended 30 June 2023, complies with section 300A of the Corporations Act 2001. // Annual Report 2023HAMMER METALS LIMTED Independent Auditor’s Report
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
ALEXANDRA CARVALHO
PARTNER
20 SEPTEMBER 2023
WEST PERTH,
WESTERN AUSTRALIA
-54-
100
// Annual Report 2023HAMMER METALS LIMITED
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 16 October 2023.
▲ (a) Ordinary Shareholders
Twenty largest holders of ordinary shares
Number
of shares
Held
%
CENTRAL MUTUAL (INVESTMENTS) PTY LTD
87,591,074
MR ZBIGNIEW WALDEMAR LUBIENIECKI
ZENITH PACIFIC LIMITED
DAVIS FAMILY CAPITAL PTY LTD
BNP PARIBAS NOMS PTY LTD
LUNDIE INVESTMENTS PTY LTD
BNP PARIBAS NOMINEES PTY LTD
SAMLISA NOMINEES PTY LTD
CITICORP NOMINEES PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
B & C WATSON HOLDINGS PTY LTD
BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
MR SHANE RONALD BRITTEN
MR PHILIP JOSEPH PARKINS
ANGIP NOMINEES PTY LTD
64,826,884
55,000,000
41,244,013
41,013,499
27,417,037
21,431,358
20,000,000
13,408,122
8,968,977
8,888,888
8,464,970
7,500,000
6,890,842
6,744,086
6,500,000
SACCHETTA GROUP HOLDINGS PTY LTD
6,473,000
MR ROBERT SPOONER
HINTON FAMILY HOLDINGS PTY LTD
MR BRYCE ROY SYMONS
4,700,000
4,666,125
4,400,000
9.88
7.31
6.20
4.65
4.63
3.09
2.42
2.26
1.51
1.01
1.00
0.95
0.85
0.78
0.76
0.73
0.73
0.53
0.53
0.50
446,128,875
50.33
Significant shareholders
Number
of shares
CENTRAL MUTUAL (INVESTMENTS) PTY LTD
87,591,074
MR ZBIGNIEW WALDEMAR LUBIENIECKI
ZENITH PACIFIC LIMITED
64,826,884
55,000,000
Held
%
9.88
7.31
6.20
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 886,407,349
The number of shareholders holding less than a marketable parcel is 914.
There is no current on market buy back.
The Company has no ordinary shares which are subject to voluntary escrow.
101
// Annual Report 2023HAMMER METALS LIMTED ASX Additional Information
▲ (a) Ordinary Shareholders
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
173
129
536
1,692
800
3,330
Number
of shares
31,397
472,279
4,307,038
71,053,324
Held
%
0.00
0.05
0.49
8.02
810,543,311
91.44
886,407,349
100.00
▲ (b) Unquoted Securities
The Company has the following unquoted securities on issue.
Category of security
Unlisted options exercisable at $0.05 on or before 21 October 2023
Unlisted options exercisable at $0.06 on or before 21 October 2023
Unlisted options exercisable at $0.05 on or before 30 June 2024
Unlisted options exercisable at $0.05 on or before 30 November 2024
Unlisted options exercisable at $0.04 on or before 13 May 2025
Unlisted options exercisable at $0.07 on or before 30 November 2026
Unlisted options exercisable at $0.08 on or before 30 November 2026
Performance rights expiring 13 December 2023, vesting on the satisfaction of
a suitable transaction
Performance rights, expiring 21 December 2024, 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
Performance rights, expiring 21 December 2024, 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
Performance rights, expiring 21 December 2024, 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
Number
3,000,000
4,000,000
2,600,000
4,500,000
2,000,000
4,500,000
4,000,000
5,000,000
1,000,000
1,000,000
1,000,000
Number of
holders
1
1
5
3
1
3
1
1
1
1
1
102
// Annual Report 2023HAMMER METALS LIMITED 103
// Annual Report 2023HAMMER METALS LIMTED Unit 1, 28-30
Mayfair Street
West Perth WA 6005
+61 8 6369 1195
info@hammermetals.com.au
www.hammermetals.com.au