HAVILAH RESOURCES LIMITED
ABN 39 077 435 520
ANNUAL REPORT
2020
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
Contents
About Havilah
Letter from the Board of Directors
Directors’ Report
Auditor’s Independence Declaration
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Directors’ Declaration
Independent Auditor’s Report to the Members of Havilah Resources Limited
Additional Securities Exchange Information
Tenement Schedule as at 31 July 2020
Glossary
Corporate Directory
Page
2
4
5
31
32
33
34
35
36
68
69
72
74
76
78
Forward-looking Statements
This Annual Report prepared by Havilah Resources Limited includes forward-looking statements. Often, but not
always, forward-looking statements can generally be identified by the use of forward-looking words such as
‘may’, ‘will’, ‘expect(s)’, ‘intend(s)’, ‘plan(s)’, ‘estimate(s)’, ‘anticipate(s)’, ‘continue(s)’, and ‘guidance’, or other
similar words and may include, without limitation, statements regarding plans, strategies and objectives of
management, anticipated production or construction commencement dates and expected costs or production
outputs.
Forward-looking statements inherently involve known and unknown risks, uncertainties and other factors that
may cause the Group’s actual results, performance and achievements to differ materially from any future
results, performance or achievements. Relevant factors may include, but are not limited to, changes in
commodity prices, foreign exchange fluctuations and general economic conditions, increased costs and demand
for production inputs, the speculative nature of exploration and project development, including the risks of
obtaining necessary licences and permits and diminishing quantities or grades of reserves, political and social
risks, changes to the regulatory framework within which the Company operates or may in the future operate,
environmental conditions including extreme weather conditions, recruitment and retention of personnel,
industrial relations issues and litigation.
Forward-looking statements are based on the Group and its management’s good faith assumptions relating to
the financial, market, regulatory and other relevant environments that will exist and affect the Group’s business
and operations in the future. The Group does not give any assurance that the assumptions on which forward-
looking statements are based will prove to be correct, or that the Group’s business or operations will not be
affected in any material manner by these or other factors not foreseen or foreseeable by the Group or
management or beyond the Group’s control. Given the ongoing uncertainty relating to the duration and extent of
the global COVID-19 pandemic, and the impact it may have on the demand and price for commodities (including
gold), on our suppliers and workforce, and on global financial markets, the Company continues to face
uncertainties that may impact on its operating activities, financing activities and/ or financial results.
Although the Group attempts and has attempted to identify factors that would cause actual actions, events or
results to differ materially from those disclosed in forward-looking statements, there may be other factors that
could cause actual results, performance, achievements or events not to be as anticipated, estimated or
intended, and many events are beyond the reasonable control of the Group. Accordingly, readers are cautioned
not to place undue reliance on forward-looking statements. Forward-looking statements in this Annual Report
speak only at the date of issue. Subject to any continuing obligations under applicable law or the ASX Listing
Rules, in providing this information the Group does not undertake any obligation to publicly update or revise any
of the forward-looking statements or to advise of any change in events, conditions or circumstances on which
any such statement is based.
Page 1
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
ABOUT HAVILAH
Key Strengths
• An advanced stage multi-commodity mineral portfolio located in northeastern South Australia, near Broken
Hill.
• A successful exploration discovery track record combined with an unmatched ground position in a
proven world class geological terrain-the Curnamona Craton that is host to the giant Broken Hill orebody.
Key Assets
Copper–gold–cobalt
• Kalkaroo: Positive independent pre-feasibility (‘PFS’) study confirms Kalkaroo as one of the largest
undeveloped open pit copper-gold deposits in Australia, based on a 100.1 million tonne JORC Ore Reserve
(90% Proved) at a copper equivalent grade of 0.89%.
• Mutooroo: Comparatively high-grade open pit and underground copper deposit (1.53%) with appreciable
cobalt (20,200 tonnes). One of the largest sulphide cobalt deposits in Australia with associated copper.
• Considerable exploration discovery upside for resource expansion of both Kalkaroo and Mutooroo deposits
along strike, down-dip and in adjacent areas.
Iron ore
• Maldorky and Grants: Combined JORC Mineral Resource of 451 million tonnes of iron ore in close proximity
to the transcontinental railway line. With its high yields (40%) and high iron recoveries (85%) the Maldorky iron
ore is amenable to efficient upgrading to 65% Fe low impurity product that potentially could be suitable for
pelletising.
• Grants Basin: An Exploration Target* of 3.5-3.8 billion tonnes with a grade range of 24-28% Fe (using an
18% iron assay cut-off grade) covering only 25% of the known iron ore basin area.
* the potential quantity and grade of the Exploration Target is conceptual in nature, there has been insufficient
exploration to estimate a Mineral Resource and it is uncertain if further exploration will result in the
estimation of a Mineral Resource.
Conflict-free, strategic and critical minerals
• Rare earth element (‘REE’), molybdenum and tungsten potential, in association with existing JORC Mineral
Resources for copper, gold, cobalt, tin, iron ore and uranium oxide.
Exploration upside
• Over 16,000 km2 of mineral tenements in the Curnamona Craton, covering some of the most prospective and
under-explored geological terrain in Australia for copper, gold, cobalt and iron ore. Refer to havilah-resources-
projects.com/exploration for further information.
Favourable logistics and infrastructure, low sovereign risk jurisdiction
• Located in northeastern South Australia in close proximity to the transcontinental railway line, Barrier highway
and regional mining centre of Broken Hill with its skilled workforce. South Australia is a low sovereign risk
jurisdiction, with a mining friendly government that actively encourages mineral exploration and development.
Experienced technical team
• Havilah’s current technical team has an exceptional track record of exploration success (including discovery of
the Portia gold mine.
8 JORC Mineral Resources) and has developed and previously operated
Havilah operates its own drilling crew, which has been one of the keys to its successful exploration.
Key Strategic Objectives
Havilah’s underlying objective that guides all of its activities is to optimise returns to shareholders via strategic
management of its multi-commodity mineral portfolio in South Australia, which is being achieved by:
• Progressing and de-risking its advanced mineral projects to attract investment partners via farm-out or asset
sale.
• Making new exploration discoveries on the large and highly prospective Curnamona Craton mineral tenement
holding.
Key Risks
Section 4 of the Non-Renounceable Pro-Rata Entitlement Offer dated 17 October 2019 sets out key risks
identified by the Board of Directors as being specific to the Company and its operations and reasonably
anticipated by the Board. It is important to note that the risks listed are not an exhaustive list of the risks relevant
to the Company.
Cover: Drilling at West Kalkaroo (drone photograph courtesy of Sean Burgan – Drilling Supervisor)
Unless otherwise stated, items in photographs shown in this Annual Report are not assets of Havilah Resources
Limited or its subsidiaries.
Page 2
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
Havilah’s deposit, prospect and tenement portfolio in northeastern South Australia, near Broken Hill.
Page 3
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
LETTER FROM THE BOARD OF DIRECTORS
The commitment last year by the restructured Board to reduce corporate overheads, rejuvenate exploration,
repay the Investec loan and recapitalise the Company via a rights issue have been successfully achieved with
the support of shareholders. As a consequence, Havilah has been able to continue with its strategic drilling
program at West Kalkaroo in spite of unprecedented restrictions and hardships experienced by many
businesses and individuals caused by the COVID-19 pandemic.
The collateral escalation in the gold price, and more recently the copper price, have been beneficial to Havilah
in improving project mining economics and investor sentiment. The copper and gold combination in Havilah’s
projects is highly advantageous, as these metals are natural hedges against each other – gold being driven to a
large extent by uncertainty and instability and copper by stable industrial production and economic
development.
Given Kalkaroo is a large gold deposit in its own right (resources >3.1 million ounces), and recognising the high
Australian dollar gold price, the Board considered it prudent to focus the initial 2020 drilling campaign on better
defining the shallow gold resources at Kalkaroo. This was the right decision because Kalkaroo provides Havilah
shareholders with significant leverage to current high gold prices and anticipated future improved copper prices.
Havilah’s strategy to focus on fast-track development of the gold-only starter open pit at West Kalkaroo is
designed to capitalise on gold mining profitability and financing ability at the present time.
We note that low sovereign risk, advanced, large-scale open pit copper-gold development opportunities like
Kalkaroo, with associated land ownership, are rare at a time when renewable energy and electric vehicles are
adding to the demand for copper and cobalt.
Moreover, South Australia’s low sovereign risk, mining friendly government and high ESG (environmental, social
and governance) ranking makes the Kalkaroo copper-gold project a potentially more attractive mining
investment proposition compared to many offshore copper-gold projects. This has been brought more sharply
into focus by the COVID-19 pandemic, which has forced the suspension of many offshore projects in higher risk
locations.
We are excited by the fact that the Curnamona Craton is shaping as a potentially major new source for the
critical minerals REE, cobalt and tungsten. These critical minerals are all closely associated with widespread
copper-gold mineralisation discovered in the region by Havilah. Subject to the results of studies in progress,
these critical minerals could be produced as by-products of large-scale open pit copper-gold mining operations
(such as the Kalkaroo copper-gold project), which could underpin continuity of supply. This is of paramount
importance for critical minerals, which are the feedstock for downstream modern age products that in many
cases are of key strategic importance for national security. Again, when COVID-19 emerged, it reminded
industry and nations why supply chain diversification and self-reliance are important.
The Board remains committed to maximising the returns to shareholders through judicious management of its
multi-commodity mineral portfolio. Our objective of attracting major joint venture or acquisition partners for
Havilah’s projects has been temporarily delayed by the COVID-19 linked travel restrictions that have prevented
visits by technical evaluation personnel from overseas or interstate, including site visits. While frustrating, the
assets remain intact and are likely to become more attractive as metal prices rise.
We are resolved, at the appropriate time, to achieving the technical objectives stated last year, that have been
delayed by COVID-19 restrictions, namely:
•
•
•
delineation of a >0.5 billion tonne iron ore resource at the ‘West End’ of the Grants Basin to allow
design of an open pit with minimal waste;
completion of the Mutooroo PFS as a standalone open pit copper deposit, with studies of the
underground mining potential; and
drilling of several high conviction copper-gold exploration targets and better geophysical definition of
the Jupiter MT (‘Magnetotelluric’) anomaly target.
The Board continues to believe that in spite of the present world upheavals and economic uncertainty, we are
likely heading into a favourable commodities cycle, especially for copper with its many uses and constrained
production upside capacity. Havilah continues to be ideally leveraged to benefit from this potential up-cycle with
its large JORC Mineral Resources and its two advanced copper mineral projects, with substantial gold and
cobalt resources, along with its large and highly prospective exploration acreage.
We thank all shareholders, contractors and employees for their support and patience as we continue to position
Havilah to realise the latent value in its mineral resources portfolio.
Victor Previn, Simon Gray and Chris Giles
Page 4
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
DIRECTORS’ REPORT
The Board of Directors submits its Directors’ Report on Havilah Resources Limited and its subsidiaries
(the ‘Group’) for the financial year ended 31 July 2020 (the ‘financial year’). All amounts are presented in
Australian dollars. Havilah Resources Limited (‘Havilah’ or ‘Company’) is a public company limited by shares
and is listed on the ASX. It is incorporated and domiciled in Australia.
Directors
The Directors of the Company at the date of this Directors’ Report are:
Mr Victor Previn (Independent Non-Executive Director) appointed 9 October 2019
Mr Simon Gray (Executive Director – Chairman) appointed 9 October 2019
Dr Christopher Giles (Executive Director – Technical Director)
Detailed below are the Directors who held office during or since the end of the financial year:
Mr Victor Previn (Appointed 9 October 2019) B.Eng
Victor Previn is a professional engineer and one of the original founders of Nova Eye Medical Limited (formerly
Ellex Medical Lasers Limited). It is listed on the Australian Securities Exchange (‘ASX’) as EYE. His career
spans more than 32 years in the laser industry. Victor was responsible for developing and commercialising the
technology platform that is now the core of Nova Eye Medical Limited’s current production. He has spent more
than 31 years in the ophthalmic laser industry travelling widely throughout Asia, Europe and the USA in a
business development capacity. Victor is a long-term shareholder of Havilah Resources Limited and resides in
Adelaide.
Special Responsibilities
Chairman of the Audit & Risk, Nomination and Remuneration Committees.
Directorships of Other ASX Listed Entities During the Last Three Years
Nova Eye Medical Limited.
Havilah Ordinary Shares and Share Options
2,275,153 fully paid ordinary shares.
Mr Simon Gray (Appointed 9 October 2019) B.Ec (Com) CA
Simon Gray has over 35 years' experience as a Chartered Accountant and 20 years as a Partner with
Grant Thornton, a national accounting firm. During his last five years at the firm, he was responsible for the
Grant Thornton Mining and Energy group. Simon retired from active practice during July 2015. His key expertise
lies in audit and risk, valuations, due diligence and ASX Listings. Simon currently serves as the Company
Secretary of Nova Eye Medical Limited (ASX: EYE), and Company Secretary and Chief Financial Officer of
Vintage Energy Ltd (ASX: VEN). Simon is also Chair of the Audit and Finance Committee of the Flinders
Medical Research Foundation and a Member of the Audit and Finance Committee of the South Australian
Medical Research Foundation and is a Director of several unlisted companies. Simon is a resident of Adelaide.
Special Responsibilities
Member of the Audit & Risk, Nomination and Remuneration Committees.
Directorships of Other ASX Listed Entities During the Last Three Years
None.
Havilah Shares and Share Options
100,000 fully paid ordinary shares.
40,000 unlisted employee share options with an exercise price of $0.22 expiring on 11 July 2023.
Page 5
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
DIRECTORS’ REPORT
Directors (continued)
Dr Christopher Giles B.Sc (Hons), PhD, MAIG
Chris Giles is an internationally experienced exploration Geologist having been directly involved in exploration
programs resulting in the discovery of several operating gold mines in various parts of the world, including
Indonesia, Tanzania, and the Tanami and the Eastern Goldfields regions of Australia. Chris was a founding
member of Havilah Resources Limited and has played a key role in the strategic accumulation of the Group’s
mineral tenement holding in the Curnamona Craton region of northeastern South Australia. As the Technical
Director for Havilah Resources Limited, Chris has been responsible for ground selection and overseeing
exploration programs contributing to the delineation of eight new mineral deposits within this tenement area,
resulting in Havilah’s JORC Mineral Resources. Chris is an Executive Director and continues to provide
technical guidance within the business. Chris is a member of the Australian Institute of Geoscientists and is a
resident of Adelaide.
Special Responsibilities
Member of the Audit & Risk, Nomination and Remuneration Committees.
Directorships of Other ASX Listed Entities During the Last Three Years
None.
Havilah Shares and Share Options
41,945,674 fully paid ordinary shares.
2,400,000 unlisted share options with an exercise price of $0.36 expiring 12 December 2021.
Mr Mark Stewart (Ceased to be a Director on 9 October 2019)
Mr Stewart had been appointed to the Board on 12 December 2017. Mr Stewart is a practicing commercial and
corporate lawyer. Mr Stewart is a member of the Australian Institute of Company Directors.
Mr Martin Janes (Ceased to be a Director on 9 October 2019)
Mr Janes had been appointed to the Board on 2 January 2019. Mr Janes has a Bachelor of Economics and is
member of the Australian Institute of Company Directors. He is a director of ASX Listed Maximus Resources
Limited, and was formerly a director of Twenty Seven Co. Limited.
Directors held office during and since the end of the financial year unless otherwise stated.
Meetings of Directors
The following table sets out the number of Directors’ meetings (including meetings of committees of Directors)
held during the financial year and the number of meetings attended by each Director (while they were a Director
or Committee Member).
Meeting
Board of Directors
Audit and Risk
Committee
Nomination
Committee
Remuneration
Committee
A
B
A
B
A
B
A
B
Director
Mr Victor Previn *
Mr Simon Gray *
Dr Christopher Giles
Mr Mark Stewart **
Mr Martin Janes **
8
8
10
3
3
8
8
10
3
3
2
2
2
-
-
2
2
2
-
-
1
1
1
-
-
1
1
1
-
-
1
1
1
-
-
1
1
1
-
-
A. The number of meetings held during the time the Director held office during the financial year.
B. The number of meetings attended during the time the Director held office during the financial year.
* Messrs Previn and Gray were appointed Directors on 9 October 2019.
** Messrs Stewart and Janes resigned as Directors on 9 October 2019.
Page 6
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
DIRECTORS’ REPORT
Company Secretary
Mr Simon Gray was appointed as Company Secretary on 29 January 2019.
Ms Claire Redman resigned as a Company Secretary effective 30 September 2019.
Principal Activity
The principal activity of the Group during the financial year was exploration for minerals (predominantly copper,
gold, cobalt and iron ore) on its extensive mineral tenement holdings in the Curnamona Craton region of
northeastern South Australia. The objective is to translate exploration success into shareholder value by
developing the JORC Ore Reserves and Mineral Resources into profitable operating mines and/ or via sale or
farm-out with suitable well-funded partners.
The Group’s activities during the financial year are outlined in the Review of Operations below.
Significant Changes in the State of Affairs
Significant changes in the state of affairs of the Group during the financial year were as follows:
Contributed equity increased by $5,231,769 as the result of a successful non-renounceable pro-rata entitlement
offer, issue of Shortfall Shares, the issue of ordinary shares via share placements and the issue of ordinary
shares on the exercise of listed options. Details of the changes in contributed equity are disclosed in Note 19(b)
to the consolidated financial statements.
Other than the matter noted above and those arising from the impacts of the COVID-19 pandemic discussed
elsewhere in this Directors' Report, no other significant changes in the state of affairs of the Group have
occurred.
Dividends
No dividends were paid or declared since the start of the financial year, and the Directors do not recommend the
payment of dividends in respect of the financial year.
Shares and Share Options
At the date of this Directors’ Report there are 270,945,680 ordinary shares and 17,319,255 unlisted share
options outstanding. Details of share options outstanding over unissued ordinary shares in the Company are as
follows:
Grant date
11 December 2017 (Director 1)
1 November 2018 (Investec 2)
12 December 2018 (Director 1)
20 December 2018 (Investec 2)
11 July 2019 (Employee 3)
11 July 2019 (Employee 3)
Total
Number of
share options
Exercise price per
share option
600,000
5,000,000
2,400,000
2,500,000
3,317,651
3,501,604
17,319,255
$0.40
$0.234
$0.36
$0.22
$0.22
$0.28
Expiry date
12 December 2020
1 November 2021
12 December 2021
20 December 2021
11 July 2023
11 July 2023
1 Unlisted share options issued to Directors.
2 Unlisted share options issued under a funding agreement.
3 Unlisted share options issued under the Performance Rights and Share Option Plan.
For details of share options issued to Directors and other key management personnel of the Group as
remuneration, refer to the Remuneration Report in this Directors’ Report.
Further details of the employee share option plan and share options granted during the current and prior
financial years are disclosed in Note 27 to the consolidated financial statements.
Page 7
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
DIRECTORS’ REPORT
Review of Operations
Upon the appointment of two new Directors during October 2019, the Board of Directors moved promptly to
recapitalise the Company via a non-renounceable pro-rata entitlement offer to eligible shareholders, which
allowed the outstanding loan from Investec Australia Finance Pty Limited (‘Investec’) to be fully repaid. In turn,
there was a major reduction in corporate overheads, and a re-direction of the management team’s focus on
value-adding technical activities, including drilling and project de-risking studies.
Most activities during the second half of the financial year centred around drilling of shallow gold resources at
West Kalkaroo, which has been unhindered by the COVID-19 pandemic restrictions. Upon resumption of Native
Title heritage clearance surveys of drilling sites, it will be possible to move to other drilling targets in the region.
Kalkaroo and Mutooroo provide Havilah shareholders with significant leverage to current high gold prices and
anticipated future improved copper prices. The Board of Directors considers the outlook for copper as positive
based on the likely increased demand associated with the shift to copper-intensive renewable energy sources,
and the fundamental need for copper in the economy.
Kalkaroo Copper-Gold-Cobalt Project
https://www.havilah-resources-projects.com/kalkaroo)
(HAV 100% ownership, refer
to Kalkaroo web page
The Kalkaroo project is Havilah’s flagship mineral project, located approximately 400 kilometres (‘km’) northeast
of Adelaide and 95 km northwest of the regional mining centre of Broken Hill with its skilled workforce, in
proximity to the transcontinental railway line and Barrier highway. The project comprises several Mining Leases
and hosts a 100.1 million tonne (‘Mt’) JORC Ore Reserve (classification: proved 90.2 Mt; probable 9.9 Mt) at a
copper equivalent grade of 0.89%. It contains 474,000 tonnes of copper and 1.4 million ounces of gold that is
capable of supporting a large-scale open pit mining operation. Havilah also owns the Kalkaroo Station pastoral
lease, a non-mineral asset on which the Kalkaroo project is located, reducing land access risks for the project.
During the financial year Havilah continued updating the Kalkaroo PFS with improved metal recoveries (resulting
from extensive new metallurgical studies), revised Australian dollar metal prices and re-optimised mining
schedules and plant throughputs. This work was overtaken to some extent by the rapid escalation in the gold
price during early 2020, which had more effect on the project economics than any other factor, particularly given
the markedly improved gold recoveries in the oxidised ore types. Using the recent spot gold price of US$1,900
per ounce and the existing PFS financial model, it indicated an almost doubling of the Kalkaroo project PFS pre-
tax NPV7.5% to $1 billion (refer to ASX announcement of 29 July 2020).
Table 1 Pre-tax NPV7.5% value matrix in AUD million for variable USD copper and gold prices at AUD:USD 0.75.
Gold price USD/oz and AUD/oz (at AUD:USD exchange rate of 0.75)
USD
$1,200
$1,300
$1,400
$1,500
$1,600
$1,700
$1,800
$1,900
$2,000
$2,100
$2,200
AUD
$1,600
$1,733
$1,867
$2,000
$2,133
$2,267
$2,400
$2,533
$2,667
$2,800
$2,933
2.50
3.33
$308
$376
$445
$514
$582
$651
$719
$788
$857
$925
$994
2.70
3.60
$438
$506
$575
$643
$712
$781
$849
$918
$986
$1055
$1124
2.89
3.85
$564*
$633
$701
$770*
$839
$907
$976
$1044*
$1113
$1182
$1250
3.10
4.13
$698
$766
$835
$903
$972
$1040
$1109
$1178
$1246
$1315
$1383
3.30
4.40
$827
$896
$965
$1033
$1102
$1170
$1239
$1308
$1376
$1445
$1513
3.50
4.67
$957
$1026
$1094
$1163
$1232
$1300
$1369
$1437
$1506
$1575
$1643
3.70
4.93
$1087
$1156
$1224
$1293
$1362
$1430
$1499
$1567
$1636
$1705
$1773
3.90
5.20
$1217
$1286
$1354
$1423
$1491
$1560
$1629
$1697
$1766
$1834
$1903
4.10
5.47
$1347
$1416
$1484
$1553
$1621
$1690
$1759
$1827
$1896
$1964
$2033
b
l
/
D
U
A
&
b
l
/
D
S
U
e
c
i
r
p
r
e
p
p
o
C
* NPV7.5% from Kalkaroo project PFS (green) compared with that at recent long-term forecast (orange) and
recent spot gold price (yellow), as calculated by the PFS financial model. NPV (‘Net Present Value’) is a
measure of discounted cash flow valuation in this case using a discount rate of 7.5%.
Page 8
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
DIRECTORS’ REPORT
Review of Operations (continued)
Kalkaroo Copper-Gold-Cobalt Project (continued)
1. The above pre-tax NPV7.5% value matrix exchange rate was set at an earlier long-term forecast AUD:USD
0.75 exchange rate, whereas over the past 12 months the AUD:USD exchange rate has mostly been below
that rate.
2. No account has been taken of improved gold recoveries in the oxidised ore types, namely saprolite gold
and native copper, from around 50% in the PFS to >90% based on Havilah’s more recent metallurgical test
work (refer to ASX announcement of 9 May 2019).
3. Open pit optimisations have not been re-run for higher long-term forecast gold prices. On the basis that
lower grades of ore can be profitably treated if metal prices are higher, it is reasonable to assume (based on
constant cost inputs) that re-optimisation would result in a larger open pit and hence improved mining
economics and a longer mine life. For Table 1, the published PFS open pit optimisation and PFS financial
model have been used.
4. The potential revenue contribution from other by-product commodities such as cobalt, REE and
molybdenum has not been considered as yet due to uncertain recovery pathways.
The higher Australian gold price has meant that commencement of West Kalkaroo as a shallow gold-only open
pit potentially became a realistic development option. Accordingly, Havilah focused its drilling efforts during the
financial year at West Kalkaroo where it has completed over 90 aircore drillholes for a total of over 8,000
metres, mostly within the limits of a conceptual starter open pit (Figure 1). The objective was to gain greater
confidence in the shallow gold resources (particularly the gold grade and gold distribution) at West Kalkaroo,
which has now largely been achieved with drilling nominally on 25 metre x 25 metre spacing for the shallowest
saprolite gold zone. This area was chosen because of the comparatively shallow overburden and extensive
faulting and associated brecciation that has enhanced gold (and copper) grades. Recent ASX announcements
have reported many encouraging gold intersections from this drilling, that are generally above the estimated
resource grades for this area (refer to ASX announcements of 12 May 2020 and 24 June 2020).
Figure 1 Area of drilling during the financial year within the confines of the conceptual starter open pit at
West Kalkaroo in relation to the greater Kalkaroo copper-gold deposit.
Page 9
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
DIRECTORS’ REPORT
Review of Operations (continued)
Kalkaroo Copper-Gold-Cobalt Project (continued)
Havilah has incorporated the new drilling results into the design of a 3 stage gold-only starter open pit at
West Kalkaroo, based on the published Kalkaroo JORC Ore Reserve. The stage 3 optimised open pit design is
estimated to contain approximately 80,000-90,000 ounces of gold (plus some native copper) after removal of an
estimated 7-8 million cubic metres of soft free-dig overburden (Figure 2). Presently, this technical information is
being used to obtain firm mining quotes from mining contractors to assist in determining project feasibility.
Figure 2 Stages 1, 2 and 3 of the gold-only starter open pit at West Kalkaroo.
The results of Havilah’s comprehensive metallurgical studies for the oxidised saprolite gold and native copper
ores have enabled design of a preferred gold processing plant. Capital and operating costs for the gold plant are
being determined by a Melbourne-based mining process engineering firm. In parallel, Havilah’s technical
personnel are currently working towards completion and lodgement of the final environmental approvals
documentation for the gold-only starter open pit option, which closely aligns with the scope of the
September 2014 approved Kalkaroo Copper-Gold Mining Lease Proposal and Management Plan. Havilah has a
robust understanding of the mining, geotechnical and materials handling aspects of the oxidised overburden
and ore based on its earlier Portia gold mining experience.
It should be noted that Havilah has already secured the required mining permits for Kalkaroo (Mining Leases
and Miscellaneous Purposes Licences). It also owns the surrounding Kalkaroo Station pastoral lease, providing
unrestricted access.
Directors consider this gold-only, lower capital expenditure strategy is more likely to attract financing for West
Kalkaroo and could in turn enhance the future development prospects of the much larger Kalkaroo copper-gold
sulphide mining project. This approach has a high degree of optionality as the Kalkaroo project sulphide copper
production could be initiated at any time after completion of the West Kalkaroo Stage 3 open pit, subject only to
sufficient capital being available.
Page 10
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
DIRECTORS’ REPORT
Review of Operations (continued)
Mutooroo Copper-Cobalt-Gold Project
https://www.havilah-resources-projects.com/mutooroo)
(HAV 100% ownership, refer
to Mutooroo web page
The Mutooroo project is a lode-style massive sulphide copper and cobalt deposit, located approximately 60 km
southwest of Broken Hill, and 16 km south of the transcontinental railway line and Barrier highway. It contains
195,000 tonnes of copper, 20,200 tonnes of cobalt and 82,100 ounces of gold in Measured, Indicated and
Inferred JORC Mineral Resources. The project comprises three main tenements, in addition to a number of
surrounding exploration tenements, collectively referred to as the Mutooroo Copper-Cobalt District.
During the financial year a new cobalt and gold Inferred JORC Mineral Resource was estimated for Mutooroo of
6.683 Mt of 0.17% cobalt and 0.17 g/t gold. When added to the existing Measured and Indicated JORC Mineral
Resources (refer to ASX announcement of 18 October 2010), the total combined Mutooroo sulphide resource is
12.53 Mt of 1.53% copper, 0.16% cobalt and 0.20 g/t gold for a total 20,000 tonnes of cobalt and 80,600 ounces
of gold. The 0.16% cobalt grade confirms Mutooroo as one of the highest grade sulphide cobalt deposits
associated with copper in Australia. It also expands Havilah’s total cobalt metal inventory to 43,400 tonnes
(Kalkaroo + Mutooroo), with appreciable upside potential.
This new resource estimate was based on re-sampling and re-assaying of drillcore from five historic Mines
Exploration Pty Ltd (‘MEPL’) diamond drillholes that were available in the South Australian Drill Core Reference
Library that is maintained by the South Australian government (refer to ASX announcement of 5 June 2020).
There is good potential to convert the deeper Inferred JORC Mineral Resources to Indicated and Measured
JORC Mineral Resources by infill drilling between the earlier widely spaced, diamond drill intersections. Thus
far, only approximately 700 metres of the more than 2,000 metres strike of the sulphide mineralisation at
Mutooroo has been drilled to JORC Measured and Indicated resource status by Havilah, predominantly to a
depth of less than 200 metres.
Cobalt within the Mutooroo resource is contained within the iron sulphide minerals, pyrite and pyrrhotite. These
minerals can be separated and concentrated during the copper sulphide concentration process. The cobalt-
bearing iron sulphides are potentially an attractive grade cobalt feedstock for subsequent processing to recover
cobalt, and also if feasible, significant amounts of associated gold and sulphur.
Like Kalkaroo, Mutooroo has high exploration potential for the discovery of additional copper-cobalt resources
both along strike and at depth of the existing JORC Mineral Resource and in the immediately surrounding area.
This was highlighted by several bedrock conductors, potentially representing massive sulphide bodies, identified
by a consultant geophysicist who interpreted the results of a detailed, high resolution, airborne electromagnetic
survey that was flown over Havilah’s priority targets in the vicinity of the Mutooroo deposit (refer to ASX
announcement of 12 August 2019).
The economics of Mutooroo as an open pit, and later as an underground, mining operation are favoured by
comparatively high grades of copper (1.53%) and cobalt (0.16%) in the sulphide ore. The proposed Mutooroo
PFS would focus on advancing Mutooroo as a standalone open pit copper-cobalt-gold mine by increasing the
shallow open pit sulphide resource through further drilling. Additionally, Havilah will continue to investigate the
best options for recovery of cobalt contained in the iron sulphide concentrates, to capture additional project
revenue and so potentially improve returns from the Mutooroo project.
Page 11
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
DIRECTORS’ REPORT
Review of Operations (continued)
Mutooroo Copper-Cobalt-Gold Project (continued)
Figure 3 Oblique 3D view of the Mutooroo deposit, showing the location of earlier MEPL diamond drillholes
used for defining the Inferred JORC Mineral Resource envelope.
Grants Basin, Maldorky and Grants Iron Ore Projects (HAV 100% ownership)
The Maldorky project has a 147 Mt of 30.1% iron JORC Mineral Resource (Indicated) at an 18% iron cut-off. It is
located approximately 90 km southwest of Broken Hill, and 26 km south of the transcontinental railway line and
Barrier highway. The iron ore resource is contained in a flat tabular deposit with a thin overburden, making it well
suited to an open pit mining operation. The Mining Lease application has been accepted by the Department for
Energy and Mining, pending finalisation of a Native Title Mining Agreement.
The Grants iron ore deposit contains 304 Mt of 24% iron JORC Mineral Resource (Inferred) at an 18% iron cut-
off. The lack of overburden and geometry of the deposit is favourable for an open pit mining operation. It is
located approximately 80 km west-southwest of Broken Hill, and 8-10 km south of the transcontinental railway
line and Barrier highway. Only 1 km east is the potentially large Grants Basin iron ore deposit containing an
Exploration Target* of 3.5-3.8 billion tonnes of 24-28% iron. The western end of this exploration target crops out
as a solid mass of iron ore at least 270 metres thick from surface. In order to convert a portion of this
Exploration Target to a JORC Mineral Resource, Havilah plans to undertake a resource delineation drilling
program before year end pending re-commencement of Native Title heritage surveys in the region, currently
suspended due to COVID-19 pandemic concerns. The purpose is to delineate a maiden JORC Mineral
Resource for an open pit to approximately 200 metres depth that can form the basis for a scoping study.
* Note that the potential quantity and grade of the Exploration Target is conceptual in nature, there has been
insufficient exploration to estimate a Mineral Resource and it is uncertain if further exploration will result in the
estimation of a Mineral Resource.
Page 12
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
DIRECTORS’ REPORT
Review of Operations (continued)
Exploration Strategy
Havilah has a large under-explored tenement holding in the Curnamona Craton in northeastern South Australia
that is prospective for a variety of commodities including several critical minerals such as cobalt, REE and
tungsten (refer to ASX announcement of 28 July 2020). Havilah’s objective is to maintain an active program of
exploration work on its projects and prospects that have the most potential for new discoveries. Due to
unexpected COVID-19 pandemic restrictions, much of the intended exploration drilling program planned for
2020 has been delayed due to an inability to carry out Native Title heritage clearance surveys for the drill sites.
Fortunately, drilling at Kalkaroo and other exploration project work have been able to continue, with positive
outcomes on several fronts as summarised below.
Rare Earth Potential Highlighted for Kalkaroo Project and Other Prospects (HAV 100% ownership, refer
to REE web page www.havilah-resources-projects.com/rareearthelements)
During the financial year, re-assaying selected retained drill samples from the Kalkaroo project and the
Croziers copper prospect has confirmed significantly elevated levels of REE (refer to ASX announcement of 7
January 2020). The REE re-assaying was prompted by Havilah’s new management team’s technical review of
limited REE data that was available from earlier MMG Limited joint venture diamond drillholes on several
Havilah prospects (including Eurinilla and Birksgate), along with compilation of Lanthanum and Neodymium data
from a limited number of Havilah drillholes.
This was subsequently confirmed in a twinned aircore drillhole from West Kalkaroo (KKAC0491) that returned
20 metres of 4,152 ppm TREO*, 1.57 g/t gold and 0.58% copper from 62-82 metres. This included 10 metres of
6,746 ppm TREO from 62 to 72 metres, with the higher value REE, namely Dysprosium (Dy) + Neodymium (Nd)
+ Praseodymium (Pr) + Terbium (Tb), comprising 29% of the TREO (refer to ASX announcement of 23 April
2020).
*Total rare earth oxides (‘TREO’) is the industry standard and accepted norm for reporting REE and is based on
the sum of the estimated grades for the following 15 rare earth oxides: La2O3, CeO2, Pr6O11, Nd2O3, Sm2O3,
Eu2O3, Gd2O3, Tb4O7, Dy2O3, Ho2O3, Er2O3, Tm2O3, Yb2O3, Lu2O3 and Y2O3. (Refer to Appendix 1 in ASX
announcement of 23 April 2020 for further details).
Havilah was awarded an Accelerated Discovery Initiative (‘ADI’) grant by the South Australian government that
provides matching funding of $150,000 to drill, sample and test REE mineralisation at Kalkaroo and in the
vicinity of the Croziers copper prospect (refer to ASX announcement of 26 June 2020). An important aspect of
this work is a collaborative research project with the Future Industries Institute at the University of
South Australia to determine the mineral phase that is hosting the REE and what separation methods can be
effectively applied to recover the REE-hosting minerals to produce a saleable product (refer to ASX
announcement of 1 June 2020).
This proposal is closely aligned with the Commonwealth government's Critical Minerals Strategy 2020, which
recognised security of the critical minerals supply chain (including REE, cobalt and tungsten) as a high priority
for government backing and support. It also accords with the South Australian government's ambition to grow
future battery and emerging minerals industries and transform them into a significant source of economic
development, diversification, jobs and skills.
The value upside for Havilah is that if REE can be economically recovered in a mineral concentrate as a by-
product of the standard copper and gold recovery processes it potentially provides a further revenue stream for
the Kalkaroo copper-gold project. This could potentially happen at an early stage in the project because of the
comparatively shallow depths of the combined REE and copper-gold mineralisation.
Page 13
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
DIRECTORS’ REPORT
Review of Operations (continued)
Jupiter MT Anomaly Target (HAV 100% ownership)
Jupiter is a major unexplained MT conductive zone located in the north of Havilah’s tenement holding that is
analogous to that seen extending to depth below Olympic Dam. During the financial year a gravity survey in the
vicinity of the Jupiter MT target was undertaken that covered the Jupiter C2 conductive zone (the interpreted
mineralising fluid pathway). Interpretation of this new gravity survey data confirms an earlier recognised circular
gravity anomaly and highlights several other features of potential exploration interest. It also provides
independent corroborative support for Jupiter as an exciting conceptual copper-gold target (refer to ASX
announcement of 24 January 2020).
Havilah was successful in obtaining a further ADI grant that provided matching funding of $125,000 primarily to
collect more detailed MT data over the Jupiter conductive zone that will assist in drill-targeting, plus orientation
MT data over the major mineralised Kalkaroo fault zone (refer to ASX announcement of 26 June 2020).
This work will involve collaboration with Professor Graham Heinson's University of Adelaide team who will
conduct the MT survey work and process and interpret the data as an extension of their previous collaborative
research work with Havilah during 2017. Havilah will provide the logistical and financial support for this work as
well as be responsible for gathering the other independent geophysical data sets.
The basic premise is that the geological setting of the poorly explored northern Curnamona Craton is highly
conducive to the formation of major copper deposits. The ultimate objective of this work is to determine whether
Jupiter is indicative of a mineralisation feeder to a copper-gold deposit as on the Gawler Craton. Discovery of
new copper-gold mineralisation by this method would be a major breakthrough and give impetus to new
exploration initiatives in the Curnamona Craton, with important future economic benefits for the State of
South Australia.
Business Strategies and Prospects, Likely Developments and Expected Results of Operations
The Review of Operations sets out information on the business strategies and prospects for future financial
years, refers to likely developments in operations and the expected results of those operations in future financial
years. Information in the Review of Operations is provided to enable shareholders to make an informed
assessment about the business strategies and prospects for future financial years of the Group. Other than the
matters included in this Directors’ Report or elsewhere in this Annual Report, information about other likely
developments in the Group’s operations and the expected results of those operations have not been included.
Details that could give rise to likely material detriment to Havilah, for example, information that is confidential,
commercially sensitive or could give a third party a commercial advantage has not been included.
Page 14
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
DIRECTORS’ REPORT
JORC Ore Reserves as at 31 July 2020
Project
Classification
Tonnes
(Mt)
Copper
%
Gold
g/t
Copper tonnes
(Kt)
Gold ounces
(Koz)
Kalkaroo
1
Proved
Probable
Total
90.2
9.9
100.1
0.48
0.45
0.47
0.44
0.39
0.44
430
44
474
1,282
125
1,407
JORC Mineral Resources as at 31 July 2020
Project
Classification
Resource
Category
Tonnes
Copper
%
Cobalt
%
Gold
g/t
Copper
tonnes
Cobalt
tonnes
Gold
ounces
Measured
Oxide
Oxide
Sulphide
Copper-
Cobalt-Gold
Sulphide
Copper-
Cobalt-Gold
Sulphide
Copper-
Cobalt-Gold
Sulphide
Copper-
Cobalt-Gold
Total
Mutooroo
Oxide Gold
Cap
Oxide Gold
Cap
Oxide Gold
Cap
Oxide Gold
Cap
Sulphide
Copper-Gold
Sulphide
Copper-Gold
Sulphide
Copper-Gold
Sulphide
Copper-Gold
Total
Kalkaroo
Cobalt
Sulphide4
All
Categories
(rounded)
Mutooroo
2
Kalkaroo
3
Total
Measured
Indicated
Inferred
Total
Measured
Indicated
Inferred
Total
Measured
Indicated
Inferred
Total
Inferred
Total All Projects
Project
Classification
Maldorky
5
Grants 6
Total all
projects
Indicated
Inferred
All categories
Project
Classification
Oban 7
Inferred
598,000
598,000
0.56
0.56
0.04
0.08
0.04
0.08
3,300
3,300
200
200
1,500
1,500
4,149,000
1.23
0.14
0.18
51,000
5,800
24,000
1,697,000
1.52
0.14
0.35
25,800
2,400
19,100
6,683,000
1.71
0.17
0.17
114,300
ISD
ISD
12,529,000
1.53
0.16
0.20
191,700
20,000
80,600
13,127,000
12,000,000
6,970,000
2,710,000
21,680,000
195,000
20,200
82,100
316,400
138,900
59,200
514,500
0.82
0.62
0.68
0.74
85,600,000
0.57
0.42
487,900
1,155,900
27,900,000
0.49
0.36
136,700
322,900
110,300,000
0.43
0.32
474,300
1,134,800
223,800,000
0.49
0.36
1,096,600
245,480,000
1,096,600
2,590,300
3,104,800
193,000,000
0.012
23,200
258,607,000
1,291,600
43,400
3,186,900
Tonnes
(Mt)
147
304
451
Tonnes
(Mt)
8
Iron
(%)
30.1
24
Fe concentrate
(Mt)
59
100
159
Estimated
yield
40%
33%
eU3O8 (ppm)
Contained eU3O8 (Tonnes)
260
2,100
Numbers in above tables are rounded.
Footnotes to 2020 JORC Ore Reserve and Mineral Resource Tables
¹ Details released to the ASX: 18 June 2018 (Kalkaroo)
² Details released to the ASX: 18 October 2010 and 5 June 2020 (Mutooroo)
³ Details released to the ASX: 30 January 2018 and 7 March 2018 (Kalkaroo)
4 Note that the Kalkaroo cobalt Inferred Resource is not added to the total tonnage
5 Details released to the ASX: 10 June 2011 applying an 18% Fe cut-off (Maldorky)
6 Details released to the ASX: 5 December 2012 applying an 18% Fe cut-off (Grants)
7 Details released to the ASX: 4 June 2009 a grade-thickness cut-off of 0.015 metre % eU3O8 (Oban)
Page 15
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
DIRECTORS’ REPORT
JORC Ore Reserves as at 31 July 2019
Project
Classification
Tonnes
(Mt)
Copper
%
Gold
g/t
Copper tonnes
(Kt)
Gold ounces
(Koz)
Kalkaroo 1
Proved
Probable
Total
90.2
9.9
100.1
0.48
0.45
0.47
0.44
0.39
0.44
430
44
474
1,282
125
1,407
JORC Mineral Resources as at 31 July 2019
Project
Classification
Resource
Category
Tonnes
Copper
%
Cobalt
%
Gold
g/t
Copper
tonnes
Cobalt
tonnes
Gold
ounces
Mutooroo 2
Measured
Oxide
Total
Measured
Indicated
Inferred
Total
Oxide
Sulphide
Copper-Cobalt-
Gold
Sulphide
Copper-Cobalt-
Gold
Sulphide
Copper-Cobalt-
Gold
Sulphide
Copper-Cobalt-
Gold
Total Mutooroo
598,000
598,000
0.56
0.56
0.04
0.08
0.04
0.08
3,300
3,300
200
200
1,500
1,500
4,149,000
1.23
0.14
0.18
51,000
5,800
24,000
1,697,000
1.52
0.14
0.35
25,800
2,400
19,100
6,683,000
1.71
ISD
ISD
114,300
ISD
ISD
12,529,000
1.53
191,700
8,200
43,100
13,127,000
195,000
8,400
44,600
Measured
Oxide Gold Cap
12,000,000
Indicated
Oxide Gold Cap
Inferred
Oxide Gold Cap
Oxide Gold Cap
Sulphide
Copper-Gold
Sulphide
Copper-Gold
Sulphide
Copper-Gold
Sulphide
Copper-Gold
Total Kalkaroo
Cobalt Sulphide4
All Categories
(rounded)
Kalkaroo 3
Total
Measured
Indicated
Inferred
Total
Inferred
Total All Projects
Project
Classification
Maldorky5
Grants 6
Total all
projects
Indicated
Inferred
All
categories
Project
Classification
Oban 7
Inferred
Numbers in above tables are rounded.
ISD = Insufficient data.
6,970,000
2,710,000
21,680,000
245,480,000
193,000,000
258,607,000
Tonnes
(Mt)
147
304
451
Tonnes
(Mt)
8
0.82
0.62
0.68
0.74
316,400
138,900
59,200
514,500
85,600,000
0.57
0.42
487,900
1,155,900
27,900,000
0.49
0.36
136,700
322,900
110,300,000
0.43
0.32
474,300
1,134,800
223,800,000
0.49
0.36
1,096,600
1,096,600
0.012
23,200
2,590,300
3,104,800
1,291,600
31,600
3,149,400
Iron
(%)
30.1
24
Fe concentrate
(Mt)
59
100
159
Estimated
yield
40%
33%
eU3O8 (ppm)
Contained eU3O8 (Tonnes)
260
2,100
Footnotes to 2019 JORC Ore Reserve and Mineral Resource Tables
¹ Details released to the ASX: 18 June 2018 (Kalkaroo)
² Details released to the ASX: 18 October 2010 (Mutooroo)
³ Details released to the ASX: 30 January 2018 and 7 March 2018 (Kalkaroo)
4 Note that the Kalkaroo cobalt Inferred Resource is not added to the total tonnage
5 Details released to the ASX: 10 June 2011 applying an 18% Fe cut-off (Maldorky)
6 Details released to the ASX: 5 December 2012 applying an 18% Fe cut-off (Grants)
7 Details released to the ASX: 4 June 2009 a grade-thickness cut-off of 0.015 metre % eU3O8 (Oban)
Page 16
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
DIRECTORS’ REPORT
Summary of Governance Arrangements and Internal Controls in Place for the Reporting of Ore Reserves
and Mineral Resources
Ore Reserves and Mineral Resources are estimated by suitably qualified employees and consultants in
accordance with the JORC Code, using industry standard techniques and internal guidelines for the estimation
and reporting of Ore Reserves and Mineral Resources. These estimates and the supporting documentation
were reviewed by a suitably qualified Competent Person prior to inclusion in this Annual Report.
Competent Person’s Statements
The information in this Annual Report that relates to Exploration Targets, Exploration Results, Mineral
Resources and Ore Reserves is based on data compiled by geologist Dr Christopher Giles, a Competent
Person who is a member of The Australian Institute of Geoscientists. Dr Giles is a Director of the Company, a
full-time employee and is a substantial shareholder. Dr Giles has sufficient experience, which is relevant to the
style of mineralisation and type of deposit and activities described herein, to qualify as a Competent Person as
defined in the 2012 Edition of ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and
Ore Reserves’. Dr Giles consents to the inclusion in this Annual Report of the matters based on his information
in the form and context in which it appears. Information for the Kalkaroo Ore Reserve & Mineral Resource and
the Mutooroo Inferred cobalt & gold Mineral Resources complies with the JORC Code 2012. All other
information was prepared and first disclosed under the JORC Code 2004 and is presented on the basis that the
information has not materially changed since it was last reported. Havilah confirms that all material assumptions
and technical parameters underpinning the reserves and resources continue to apply and have not materially
changed.
Except where explicitly stated, this Annual Report contains references to prior Exploration Targets and
Exploration Results, all of which have been cross-referenced to previous ASX announcements made by Havilah.
The Company confirms that it is not aware of any new information or data that materially affects the information
included in the relevant ASX announcements.
COVID-19 Pandemic
During March 2020, the World Health Organisation declared the outbreak of COVID-19 as a pandemic. The
spread of COVID-19 has caused significant volatility in Australian and international markets. There is significant
uncertainty around the breadth and duration of business disruptions related to COVID-19, as well as its impact
on the Australian and international economies. The imposition of governmental measures such as travel
restrictions and border closings, stay-at-home and quarantine notices, and country lockdowns may have an
impact on the Group’s plans in terms of delays and the Group is unable to determine if it will have a material
impact to its operations. Given the ongoing uncertainty relating to the duration and extent of the COVID-19
crisis, and the impact it may have on the demand and price for commodities (including gold), on our suppliers
and workforce, and on global financial markets, the Company continues to face uncertainties that may impact its
operating activities, financing activities and/ or financial results.
Havilah is abiding by all official directives, and continues to closely monitor the impacts of the COVID-19 virus
on the health and wellbeing of its personnel, contractors and stakeholders. It has in place COVID-19 protocols
and response plans to minimise the potential transmission of COVID-19. However, there are no guarantees that
in the future further restrictions will not be required, or government mandated, as events continue to unfold
relating to the COVID-19 pandemic.
On 2 April 2020 the South Australian government announced that committed exploration expenditure would be
waived for twelve months, combined with a six month deferral of mineral exploration and geothermal licence
fees, due to the impact of COVID-19 containment measures on the mining and exploration industry.
Issues associated with the COVID-19 pandemic have necessitated a re-evaluation of Havilah’s exploration
plans and priorities for the remainder of calendar year 2020 based in part on where its field personnel can safely
and legally work. Drilling gold and copper resources on the mining lease at Kalkaroo continues to be the priority
and indeed the only field activity that Havilah can safely undertake at the present time. The drilling crew is
operating out of Havilah’s exploration basecamp on Kalkaroo Station, which is a remote and relatively isolated
location in northeastern South Australia, with minimal external contact.
Unfortunately, the above resulted in a delay in the other exploration activities as described in the Company’s
Interim Financial Report for the financial half-year ended 31 January 2020 (refer to ASX announcement of 14
April 2020) and as elaborated on in the 2019 AGM Technical Review presentation (refer to ASX announcement
of 18 December 2019).
With the recent relaxation of COVID-19 travel restrictions imposed by the South Australian government, it is
anticipated that Havilah will soon be able move to exploration activities outside of the mining lease at Kalkaroo
and preparations are being made for this eventuality.
Page 17
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
DIRECTORS’ REPORT
Cash Flows
Operating activities resulted in net cash outflows of $3,693,060 (2019: $1,825,921) for the financial year,
predominantly for payments to suppliers and employees, which included staff redundancy payments of
$342,752.
Net cash outflows from investing activities of $1,086,493 (2019: net cash inflows $1,714,579) for the financial
year were primarily associated with payments for exploration and evaluation expenditure of $966,946 on the
Group’s exploration projects. The prior financial year net cash inflows were influenced from proceeds of
$6,000,000 from the sale of the Benagerie Gold Pty Limited subsidiary (Portia mine and North Portia project).
Financing activities resulted in net cash inflows of $2,443,631 (2019: $2,085,084) for the financial year,
predominantly associated with proceeds from issue of new ordinary shares of $5,273,978 and proceeds from
borrowings of $79,291; partially offset by principal element of lease payments of $205,734 and repayment of
loans including the Investec loan of $2,500,000 that was fully repaid during the financial year.
The financial year ended with a net decrease in cash and cash equivalents of $2,335,922 (2019: net increase
$1,973,742).
Financial Position
At the end of the financial year the Group had a cash and cash equivalents balance of $1,483,724
(31 July 2019: $3,819,646).
The Group’s working capital, being current assets less current liabilities, increased from a net current asset
deficiency of $2,050,297 as at 31 July 2019 to a surplus of $69,013 as at 31 July 2020 predominantly as a result
of the funds raised from the Entitlement Offer and the deferred income liability being de-recognised.
Exploration and evaluation expenditure carried forward increased during the financial year to $36,244,499,
primarily due to $966,946 incurred on exploration tenements; partially offset by impairment of $106,687 and
amounts received from SIMEC Mining for iron ore project costs no longer reimbursable.
The ownership of the Crown land on which the Kalkaroo project is situated, via the Kalkaroo Station pastoral
lease, continues to be carried at cost ($2,241,043) in property, plant and equipment.
The carrying value of non-current financial assets, mainly the receivable due from Consolidated Mining & Civil
Pty Ltd (‘CMC’), has been reassessed resulting in a write-down of the CMC receivable amount to $Nil
(31 July 2019 CMC receivable balance: $2,595,451). In making this decision the Group has reviewed the
likelihood that the conditions required to be completed, in order for the amount to be payable, will occur (i.e. that
the North Portia mine achieves $3,500,000 of production revenue). Given that Havilah has not been formally
informed by CMC of any significant progress in developing the North Portia mine, the Directors are still not able
to predict with any certainty the time period when the amount will become payable.
The Group’s equity investment in ASX listed Auteco Minerals Ltd as at 31 July 2020 was valued at $860,417
(31 July 2019: $34,420). Auteco Minerals Ltd has gold exploration tenements including an interest in the Pickle
Crow gold project in Canada.
The Group’s total liabilities decreased predominantly due to full repayment of the Investec loan of $2,500,000
during the financial year and the current liability for deferred income being de-recognised on 1 January 2020;
partially offset by the recognition of current liabilities from 1 August 2019 and a loan for the purchase of a heavy-
duty field vehicle to be used by the Company’s Drilling Supervisor.
On 25 October 2019 the Company opened a non-renounceable pro-rata entitlement offer of ordinary shares to
eligible shareholders on the basis of 1 new ordinary share for every 4 ordinary shares held at an offer price of
$0.10 per new ordinary share (the ‘Entitlement Offer’). The Entitlement Offer closed on 11 November 2019.
The Directors reserved the right to issue ‘Shortfall Shares’ (the number of new ordinary shares under the
Entitlement Offer not applied for by eligible shareholders under their entitlement or offered to shareholders
because they are ineligible shareholders) at their discretion.
The Company issued 52,696,628 new ordinary shares during the financial year. Contributed equity increased by
$5,231,769 as the result of a successful non-renounceable pro-rata entitlement offer, issue of Shortfall Shares,
the issue of ordinary shares via share placements and the issue of ordinary shares on the exercise of listed
options.
Page 18
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
DIRECTORS’ REPORT
Financial Results
The consolidated result of the Group for the financial year was a loss after tax of $4,726,429 (2019: $7,337,693).
This loss includes the full write-down of the CMC receivable of $2,595,451.
Expenses for the financial year includes gross employee benefits expense of $1,736,465 (2019: $2,859,137),
which includes $342,752 (2019: $Nil) of staff redundancy payments. Expenses also included $360,289 in
external legal, other consultants, public relations and other costs associated with the proposed investment by
SIMEC Mining and $44,552 costs associated with the cancelled Extraordinary General Meeting that was to have
been held on 12 November 2019. Directors’ remuneration increased as a result of Dr Giles being paid as an
employee for the financial year rather than as a contractor (2019: Dr Giles was disclosed in Employee and
benefits expense), although his net payment remains unchanged.
The loss for the financial year also includes exploration and evaluation impairment expense of $106,687
(2019: $1,133,157) and share-based payments expense of $321,801 (2019: $589,502) associated with unlisted
share options provided in prior financial periods to Directors and KMP’s $106,394 (2019: $108,812), employees
$97,468 (2019: $105,434) and Investec $117,939 (2019: $375,256). The share-based amounts expensed with
respect to employees was principally the result of vesting of options on redundancies made during the financial
year.
Lease costs are now recognised in profit or loss over the lease term in the form of depreciation on the right-of-
use asset and finance charges representing the unwind of the discount on the lease liability, replacing operating
lease expenses previously reported under Australian Accounting Standard AASB 117 ‘Leases’. Under AASB 16
‘Leases’, the Group recognised depreciation expense of $212,489 on right-of-use assets.
Partially offsetting the loss for the financial year was revenue associated with Portia Gold Mine royalty revenue
of $120,993 (2019: $191,391); and other income associated with interest income of $9,298 (2019: $10,473),
government grants received $147,852 (2019: $33,807) and recognition of $1,000,000 (2019: $Nil) of deferred
income in relation to the SIMEC Mining exclusivity extension on the Group’s Maldorky and Grants iron ore
projects. On 1 January 2020 the income impact of the $1,000,000 was recognised by Havilah as other income,
on de-recognition of the current liability for deferred income, as no transaction was completed with SIMEC
Mining during calendar year 2019. Also offsetting the loss for the financial year was the fair value gain of
$825,996 (2019: $14,000) from its equity investment in Auteco Minerals Ltd, designated as fair value through
profit or loss (‘FVTPL’).
From 9 October 2019, the new Board of Directors acted promptly to reduce corporate overheads and it is an
ongoing goal of the Board, in consultation with management, to identify and pro-actively realise further cost
reductions to preserve, as far as possible, the Company’s cash resources.
Corporate Governance
The Group has adopted fit for purpose systems of control and accountability as the basis for the administration
and compliance of effective and practical corporate governance. These systems are reviewed regularly and
revised if appropriate.
The Board is committed to administering the Group’s policies and procedures with transparency and integrity,
pursuing the genuine spirit of good corporate governance practice. To the extent they are applicable, the Group
has early adopted the ASX Corporate Governance Council’s Corporate Governance Principles and
Recommendations 4th Edition. As the Group’s activities transform in size, nature and scope, additional
corporate governance structures will be considered by the Board and assessed as to their relevance.
In accordance with the ASX Listing Rules, the Corporate Governance Statement and Appendix 4G checklist are
released to the ASX on the same day the Annual Report is released. The Corporate Governance policies and
charters can be found on the Company's website.
Page 19
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
DIRECTORS’ REPORT
External Auditor’s Independence Declaration
A copy of the external Auditor’s Independence Declaration for the financial year, as required under
Section 307C of the Corporations Act 2001, is included on page 31.
Indemnification of Directors, Officers and External Auditor
During the financial year the Group paid a premium in respect of a contract insuring Directors and officers of the
Group against a liability incurred as such by a Director or officer to the extent permitted by the Corporations Act
2001. The contract of insurance specifically prohibits disclosure of the nature of the liability and the amount of
the premium.
The Company has entered into an agreement with Directors to indemnify these individuals against any claims
and related expenses which arise as a result of their work in their respective capacities.
The Group has not otherwise, during or since the end of the financial year, indemnified or agreed to indemnify
an officer or external auditor of the Group or of any related body corporate, against a liability, incurred as such
by an officer or external auditor.
Proceedings on Behalf of the Company
No person has applied to the Court under Section 237 of the Corporations Act 2001 for leave to bring
proceedings on behalf of the Group, or to intervene in any proceedings to which the Group is a party, for the
purpose of taking responsibility on behalf of the Group for all or part of those proceedings.
Environmental Regulations
The Group carries out exploration activities on its mineral exploration tenements in South Australia.
The Group’s operations, exploration and evaluation activities are subject to a range of South Australian and
Commonwealth environmental legislation and associated regulations, as well as site-specific environmental
criteria. No material breaches of these compliance conditions occurred during the financial year and operational
non-compliances, minor in nature, were addressed and resolved satisfactorily.
Page 20
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
DIRECTORS’ REPORT
Remuneration Report (Audited)
This Remuneration Report, which forms part of this Directors’ Report, sets out information about the
remuneration of the Group’s key management personnel for the financial year ended 31 July 2020. The term
‘key management personnel’ refers to those persons having authority and responsibility for planning, directing
and controlling, directly or indirectly, the activities of the consolidated entity.
The information provided in this Remuneration Report has been audited by the Company’s external auditor, as
required by Section 308(3C) of the Corporations Act 2001.
The prescribed details for each person covered by this Remuneration Report are detailed below under the
following sections:
Section 1. Key Management Personnel Details
Section 2. Remuneration Policy
Section 3. Relationship Between the Remuneration Policy and Group Performance
Section 4. Remuneration of Key Management Personnel
Section 5. Key Terms of Employment Contracts
Section 6. Statutory Reporting
Section 1. Key Management Personnel Details
The following persons acted as Directors or other key management personnel of the Group during the financial
year:
Position
Term
Directors
Mr Victor Previn
Independent Non-Executive Director
Appointed 9 October 2019
Mr Simon Gray
Executive Director – Chairman, Company
Secretary, Chief Financial Officer
Appointed 9 October 2019
Dr Christopher Giles
Executive Director – Technical Director
Full financial year
Mr Mark Stewart
Independent Non-Executive Director
Resigned 9 October 2019
Mr Martin Janes
Independent Non-Executive Director
Resigned 9 October 2019
Other Key Management Personnel
Mr Richard Buckley
Senior Mine Planning Engineer
Full financial year
Mr Walter Richards
Chief Executive Officer
Made redundant 2 October 2019
Except as noted, the named persons held their current position for the whole of the financial year and since the
end of the financial year.
No key management personnel appointed during the financial year received a payment as part of their
consideration for agreeing to hold the position.
Section 2. Remuneration Policy
The Group embodies the following criteria in its remuneration framework:
(i) performance-based and aligned with the Company’s vision, values and overall business objectives;
(ii) designed to motivate Directors and executives to pursue the Company’s long-term growth and success; and
(iii) demonstrate a clear relationship between the Company’s overall performance and the performance of
executives and employees.
The objectives of the Remuneration Committee are to support and advise the Board of Directors on
remuneration matters and oversee the setting of remuneration policy, fees and remuneration packages for
Directors and senior executives. Where possible, the Remuneration Committee should comprise at least
3 members, the majority being Independent Non-Executive Directors. In response to circumstances presented
to it during the financial year, Havilah significantly reduced its operating costs. This resulted in consolidation of
the roles of management, with a Board which is more involved in the operations. As a result, it has been unable
to meet the criteria for having a majority of Remuneration Committee members being independent.
Page 21
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
DIRECTORS’ REPORT
Remuneration Report (Audited) (continued)
Section 2. Remuneration Policy (continued)
It is the responsibility of the Remuneration Committee to review and make recommendations to the Board on:
(a) the remuneration packages of all Directors and senior executives, including terms and conditions offered to
all new appointees to these roles;
(b) the adoption of appropriate long-term and short-term incentive and bonus plans, including regular review of
the plans and the eligible participants; and
(c) staff remuneration and incentive policies and practices.
The full objectives and responsibilities of the Remuneration Committee are documented in the charter approved
by the Board of Directors and available on the Company’s website.
Non-Executive Directors’ fees are determined within an aggregate Directors’ fee pool limit, which is periodically
approved by shareholders. Total remuneration for all Non-Executive Directors, last voted upon by shareholders
at the 2016 Annual General Meeting (‘AGM’), is not to exceed $300,000 per annum.
At the AGM held on 18 December 2019, a resolution that the Remuneration Report for the financial year ended
31 July 2019 be adopted was put to the vote, and received a vote in favour of 84%. Feedback was not received
on the Remuneration Report during the 2019 AGM. However, the Company did seek and received specific
financial year ended 31 July 2020.
feedback
Views expressed during these meetings have contributed to Havilah’s 2020 reward practices.
retail shareholders during
institutional and
from
the
Section 3. Relationship Between the Remuneration Policy and Group Performance
There is no link between remuneration and Group performance.
The tables below set out summary information about the Group’s earnings and movements in shareholder
wealth to 31 July 2020:
Financial Year Ended 31 July:
2020
2019
2018
2017
2016
Revenue
123
843
4,811
16,860
(Loss)/ profit for the financial year
(4,726)
(7,338)
(2,990)
(4,229)
$’000
$’000
$’000
$’000
$’000
2,745
1,210
Financial Year Ended 31 July:
2020
2019
2018
2017
2016
Cents
Cents
Cents
Cents
Cents
Share price at beginning of financial year
Share price at end of financial year
15
19
22
15
36
22
41
36
Basic (loss)/ profit per ordinary share
(1.90)
(3.36)
(1.43)
(2.45)
Diluted (loss)/ profit per ordinary share
(1.90)
(3.36)
(1.43)
(2.45)
25
41
0.70
0.60
Page 22
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
DIRECTORS’ REPORT
Remuneration Report (Audited) (continued)
Section 4. Remuneration of Key Management Personnel
$
-
-
$
-
-
-
Financial Year
31 July 2020
Directors
Mr Victor Previn*
Mr Simon Gray*
$
13,846
58,651
Dr Christopher Giles
174,326
Mr Mark Stewart**
Mr Martin Janes**
34,919
16,771
Other Key Management Personnel
Mr Richard Buckley
250,004
Short-term employee benefits
Post-
employment
benefits
Long-term
employee
benefits
Share-
based
payments
Salary &
fees
Termin-
ation
pay
Non-
monetary
Other
Super-
annuation
Long
service
leave
Share
options1
$
-
-
-
-
-
-
$
-
-
6,2163
-
-
-
-
$
-
-
-
-
-
-
-
-
$
1,664
4,384
16,560
3,317
1,205
23,780
22,548
73,458
Total
$
15,510
63,035
36,8045
233,906
-
-
38,236
17,976
$
-
-
-
-
-
6,500
-
16,0268
53,5646
296,310
376,925
6,500
106,394 1,041,898
Mr Walter Richards#
72,347
228,466
Total
620,864
228,466
6,216
* Messrs Previn and Gray were appointed Directors on 9 October 2019.
** Messrs Stewart and Janes resigned as Directors on 9 October 2019.
# Mr Walter Richards was made redundant 2 October 2019.
Financial Year
31 July 2019
Short-term employee benefits
Post-
employment
benefits
Long-term
employee
benefits
Share-
based
payments
Salary &
fees
Cash
bonus
Non-
monetary
Other
Super-
annuation
Long
service
leave
Share
options1
Total
$
93,635
40,789
44,300
Non-Executive Directors
Mr Mark Stewart
Mr Martin Janes
Mr Kenneth Williams#
Executive Officers
$
85,511
37,250
40,457
Dr Christopher Giles
174,9842
Mr Walter Richards
Mr Richard Buckley7
330,000
135,417
$
-
-
-
-
-
-
$
-
-
-
$
-
-
-
6,2163
1004
-
-
-
-
100
$
8,124
3,539
3,843
-
38,405
12,865
66,776
$
-
-
-
-
9,580
6,250
Total
803,619
6,216
# Mr Williams resigned as a Director on 3 January 2019.
-
33,8365
46,0096
28,9678
215,136
423,994
183,499
15,830
108,812 1,001,353
1 The value of the share options and rights granted to key management personnel as part of their remuneration is calculated
as at the grant date using a binomial option pricing model. The amounts disclosed as part of remuneration for the financial
year have been determined by allocating the grant date value on a straight-line basis over the period from grant date to
vesting date. Share options do not represent cash payments to Directors and other key management personnel.
Share options granted may or may not be exercised by Directors and other key management personnel.
2 Consulting fees paid to a nominated company in which the Director has a controlling interest.
3 Provision of Company funded vehicle inclusive of fringe benefits tax payable.
4 Approximate cost of insurance coverage for private vehicle owned by Dr Christopher Giles.
5 Issue of 2,400,000 unlisted share options financial year amortisation value.
6 Issue of 1,950,845 unlisted share options financial year amortisation value.
7 Reflects period as key management personnel in prior financial year (from 14 January 2019 to 31 July 2019).
8 Issue of 941,389 unlisted share options financial year amortisation value.
Page 23
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
DIRECTORS’ REPORT
Remuneration Report (Audited) (continued)
Section 4. Remuneration of Key Management Personnel (continued)
The relative proportions of those elements of remuneration of key management personnel that are fixed and
those consisting of share options are as follows:
Fixed remuneration
Remuneration as share options ##
2020
2019
2020
2019
Directors
Mr Victor Previn
Mr Simon Gray
Dr Christopher Giles
Mr Mark Stewart
Mr Martin Janes
Mr Kenneth Williams#
Other Key Management Personnel
Mr Richard Buckley
Mr Walter Richards
100%
100%
84.3%
100%
100%
-
94.6%
85.8%
-
-
84.3%
100%
100%
100%
84.2%
89.1%
# Mr Williams resigned as a Director on 3 January 2019.
0%
0%
15.7%
0%
0%
-
5.4%
14.2%
-
-
15.7%
0%
0%
0%
15.8%
10.9%
## The percentage of total remuneration consisting of share options, based on the value of share options and
expensed in the consolidated statement of profit or loss and other comprehensive income during the financial year
and prior financial year.
Performance Rights and Share Option Plan
The Board of Directors approved a Performance Rights and Share Option Plan (‘Plan’) during the financial year
ended 31 July 2019.
The Plan’s purposes are to:
(a) provide incentive to eligible executives and employees by enabling them to participate in the profits and
financial performance of the Company;
(b) attract, motivate and retain eligible executives and employees; and
(c) align the interests of eligible executives and employees more closely with shareholders in the Company and
provide greater incentive for the eligible executives and employees to focus on longer-term goals of the
Company.
The Plan is open to all employees but excludes Directors of the Company.
Each employee share option converts into one ordinary share of Havilah Resources Limited on exercise.
No amounts are paid or payable by the recipient on receipt of the share option. The share options carry neither
dividend nor voting rights. Share options may be exercised at any time from the date of vesting to the date of
their expiry.
During the financial year ended 31 July 2019, the Board of Directors approved the issue of unlisted share
options to employees under the Performance Rights and Share Option Plan. Share options were issued in
satisfaction of contractual employment conditions and short-term incentive plan awards.
During the financial year ended 31 July 2020, there was no issue of unlisted share options to employees.
The number of share options granted to employees is set by the Board of Directors at its discretion but
consideration is given to employment contract terms.
Page 24
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
DIRECTORS’ REPORT
Remuneration Report (Audited) (continued)
Section 4. Remuneration of Key Management Personnel (continued)
The Company’s short-term incentive plan annual award is subject to the absolute discretion of the Board of
Directors. Payment of any short-term incentive plan bonus can be satisfied in cash or share options, subject to
the discretion of the Board of Directors.
The share options granted expire within the option period set by the Board of Directors at its discretion.
Share options expire one month after the resignation of the Director or employee but this condition can be
waived at the discretion of the Board of Directors. The Board at the time the Company made significant
redundancies exercised its discretion not to require the relevant share options to lapse but allow them to
continue for their full term.
Any performance bonus awarded is calculated based on the Group’s performance objectives and individual
performance objectives related to the annual business plan as approved by the Board of Directors. The formula
rewards management and salaried employees against the extent of the Group’s and individual’s achievement
against both qualitative and quantitative criteria. The Group’s performance objective measurements are:
•
•
•
•
•
•
•
safety;
environmental stakeholder engagement;
team performance;
reporting, planning & management;
investors/ shareholders engagement;
risk/ opportunity management; and
funding success.
No performance bonuses were rewarded during 2020.
Terms and conditions of share-based payment arrangements affecting remuneration of key management
personnel in the current financial year or future financial years:
Grant date
Grant date
fair value
Exercise
price
Expiry date
Vesting date
Directors
Dr Christopher Giles
12 Dec 2018
$0.03
$0.36
12 December 2021
100% vested
Other Key Management Personnel
Mr Richard Buckley
26 June 2019
$0.05
$0.22
11 July 2023
Mr Richard Buckley
26 June 2019
$0.05
$0.28
11 July 2023
50% vested
25% 11 July 2021
25% 11 July 2022
75% vested
25% 11 July 2021
Mr Walter Richards#
26 June 2019
$0.05
$0.22
11 July 2023
100% vested
Mr Walter Richards#
26 June 2019
$0.05
$0.28
11 July 2023
100% vested
# Mr Walter Richards was made redundant 2 October 2019 but retained his employee share options.
The total value of share options included in remuneration for the financial year is calculated in accordance with
Australian Accounting Standard AASB 2 ‘Share-based Payment’. Share options granted during the current or
prior financial years are recognised in remuneration in profit or loss over their vesting period.
Value of share options – basis of calculation:
•
the fair value of share options granted is calculated as at the grant date using a binomial option pricing
model. This grant date value is allocated to remuneration of key management personnel on a straight-line
basis over the period from grant date to vesting date; and
value of share options lapsed at the lapse date is calculated by multiplying the grant date value of the
share options by the number of share options lapsed during the financial year.
•
Page 25
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
DIRECTORS’ REPORT
Remuneration Report (Audited) (continued)
Section 4. Remuneration of Key Management Personnel (continued)
There has been no alteration of the terms and conditions of the above share-based payment arrangements
since the grant date.
During the financial year, no key management personnel exercised share options that were granted to them as
part of their remuneration.
For each grant of share options in the current or prior financial years which resulted in share-based payment
expense to Directors or other key management personnel, the percentage of the grant that vested and the
number vested is set out below:
Name
Number granted Number vested % of grant vested
Maximum total value
of grant yet to vest
Directors
Dr Christopher Giles
2,400,000
2,400,000
100%
-
Other Key Management Personnel
Mr Richard Buckley
Mr Richard Buckley
150,000
791,389
75,000
593,541
Mr Walter Richards##
1,350,000
1,350,000
Mr Walter Richards##
600,845
600,845
50%
75%
100%
100%
$1,381
$3,287
-
-
# Mr Gray’s 40,000 employee share options were issued prior to his appointment as a Director on 9 October 2019, and
therefore before he became a key management personnel.
## Mr Walter Richards was made redundant 2 October 2019 but retained his employee share options.
The maximum value of share options and performance rights yet to vest was determined as the amount of the
grant date fair value of the share options that is yet to be expensed in profit or loss.
No share options will vest if the service conditions are not met, therefore the minimum value of the share option
yet to vest is $Nil.
All share options issued to Directors are made pursuant to approval by shareholders at relevant AGMs.
There were no share options that lapsed or that were forfeited during the financial year, in relation to share
options granted to key management personnel as part of their remuneration.
Share Trading Policy
Under Havilah’s Share Trading Policy, an individual may not limit their exposure to risk in relation to securities
(including unlisted share options). Directors and executives are prohibited from entering into any hedging
arrangements over unvested share options.
Havilah’s Share Trading Policy can be found under the Governance tab on the Company’s website.
Page 26
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
DIRECTORS’ REPORT
Remuneration Report (Audited) (continued)
Section 5. Key Terms of Employment Contracts
During the current financial year, there has been no increase to the base remuneration of any of the
key management personnel.
All termination payments are subject to the limits prescribed under Section 200B of the Corporations Act 2001.
Non-Executive Directors
Contract:
Duration:
Period of Notice:
Termination Payments:
Remuneration (exclusive
of superannuation):
Mr Victor Previn*
Non-Executive Director
No expiration
None
None
$30,000 per annum
Mr Mark Stewart**
Non-Executive Director
No expiration
None
None
$107,000 per annum
Mr Martin Janes**
Non-Executive Director
No expiration
None
None
$65,000 per annum
* Mr Previn was appointed a Director on 9 October 2019.
** Messrs Stewart and Janes resigned as Directors on 9 October 2019.
Executive Directors
Contract:
Title:
Mr Christopher Giles
Executive agreement
Executive Director – Technical Director
Mr Simon Gray***
Executive agreement
Executive Director – Chairman,
Company Secretary, Chief Financial
Officer
No fixed term
1 month, in writing
Payment in lieu of notice
No
No fixed term
6 months, in writing
Payment in lieu of notice
No
$174,984 per annum
$80,000 per annum
Yes
No
At the discretion of the Board
At the discretion of the Board
Duration:
Period of Notice:
Termination Payments:
Change of Control
Clause:
Remuneration – Base
Salary (exclusive of
superannuation):
Vehicle provided for
Company use:
Remuneration – Short-
term incentive:
Plan Eligible:
No
*** Mr Gray was appointed a Director on 9 October 2019. His employment agreement was effective from 1 December
2019. His previous remuneration arrangement was terminated on 1 December 2019. This previous agreement entitled
him to $4,166 per month to act as Company Secretary.
No
Other Key Management Personnel
Contract:
Title:
Duration:
Period of Notice:
Termination Payments:
Change of Control
Clause:
Remuneration – Base
Salary (exclusive of
superannuation):
Vehicle provided for
Company use:
Remuneration – Short-
term incentive:
Remuneration – Long-
term incentive:
Mr Richard Buckley
Employment agreement
Senior Mine Planning Engineer
No fixed term
5 weeks, in writing
Payment in lieu of notice
No
Mr Walter Richards#
Executive agreement
Chief Executive Officer
No fixed term
6 months, in writing
Payment in lieu of notice
No
$250,000 per annum
$330,000 per annum
No
No
Up to 30% of the Base Salary, payable
at the discretion of the Board
Eligible to participate in any Company
long-term incentive plan
Up to 50% of the Base Salary, payable
at the discretion of the Board
Eligible to participate in any Company
long-term incentive plan
# Mr Walter Richards was made redundant 2 October 2019.
Page 27
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
DIRECTORS’ REPORT
Remuneration Report (Audited) (continued)
Section 6. Statutory Reporting
Loans to Key Management Personnel
During the current financial year there have been no loans made to any of the key management personnel.
Key Management Personnel Ordinary Share Holdings
The number of Havilah Resources Limited ordinary shares held by Directors and other key management
personnel, including their personally related parties, as at 31 July 2020, was as follows:
Balance at
31 July
2019
Granted as
remuneration
Ordinary
shares
purchased1
Net other
change
Balance at
31 July
2020
Balance
held
nominally2
Directors
Mr Victor Previn*
Mr Simon Gray*
-
-
Dr Christopher Giles
41,945,674
Mr Mark Stewart**
Mr Martin Janes**
105,000
200,000
Other Key Management Personnel
Mr Richard Buckley
100,000
Mr Walter Richards#
409,907
-
-
-
-
-
-
-
1,500,000
775,153*
2,275,153
100,000
-
-
-
-
-
100,000
41,945,674
(105,000)**
(200,000)**
N/A**
N/A**
457,500
-
557,500
-
(409,907)#
N/A#
-
-
-
-
-
-
-
* Messrs Previn and Gray were appointed Directors on 9 October 2019.
** Messrs Stewart and Janes resigned as Directors on 9 October 2019.
# Mr Walter Richards was made redundant 2 October 2019.
1 Represents ordinary shares purchased on market or via Entitlement Offer.
2 ‘Held nominally’ refers to the situation where the ordinary shares are in the name of the Director or
other key management personnel, but they are not the beneficial owner.
During the financial year no share options were exercised by Directors or other key management personnel.
Page 28
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
DIRECTORS’ REPORT
Remuneration Report (Audited) (continued)
Section 6. Statutory Reporting (continued)
Key Management Personnel Share Option Holdings
The number of share options (listed and unlisted) held by Directors and other key management personnel,
including their personally related parties, as at 31 July 2020, was as follows:
Balance
at 31 July
2019
Granted as
remuneration
Net other
change1
Balance at
31 July
2020
Total vested &
exercisable at
31 July 2020
Total
unvested at
31 July 2020
Options
vested
during year
Directors
Mr Victor Previn*
Mr Simon Gray*
-
-
Dr Christopher Giles
3,122,066
Mr Mark Stewart**
600,000
Mr Martin Janes**
-
Other Key Management Personnel
Mr Richard Buckley
941,389
Mr Walter Richards#
1,953,345
-
-
-
-
-
-
-
-
-
-
-
-
40,0002
40,000
20,000
20,000
10,000
(722,066)
2,400,000
2,400,000
-
-
-
-
-
2,400,000
-
-
(600,000)**
-
-
(1,953,345)#
N/A**
-
941,389
N/A#
668,541
272,847
235,347
-
-
1,312,922
* Messrs Previn and Gray were appointed Directors on 9 October 2019.
** Messrs Stewart and Janes resigned as Directors on 9 October 2019.
# Mr Walter Richards was made redundant 2 October 2019.
1 Represents listed share options purchased on market or expiration of share options.
2 Mr Simon Gray became a Director on 9 October 2019. Prior to that date, he was the Company Secretary and had
been granted 40,000 share options during the prior financial year. Therefore, these share options do not form part of
his Director remuneration.
During the financial year, no share options were exercised by Directors or other key management personnel.
Other Transactions with Key Management Personnel of the Group
Transactions between related parties are on normal commercial terms and conditions, no more favourable than
those available to other parties, unless otherwise stated.
During the financial year ended 31 July 2020 the Group incurred the following amounts as a result of
transactions with Directors and other key management personnel, including their personally related parties
(excluding amounts paid as remuneration to Directors and other key management personnel which are
addressed elsewhere in this Remuneration Report):
•
•
•
•
•
$2,565 (2019: $151,000) for legal services provided by a company (Arion Legal) that is a related party of
Mr Mark Stewart. The balance outstanding included in trade and other payables is $Nil (2019: $21,101);
$Nil (2019: $20,000) for advisory services to a related entity (Balmoral Consulting) controlled by a former
Havilah Director (Mr Kenneth Williams). The balance outstanding included in trade and other payables is
$Nil (2019: $Nil);
$Nil (2019: $11,000) for accounting services to a company (ITABA Pty Ltd) controlled by a related party of
Mr Walter Richards. The balance outstanding included in trade and other payables is $Nil (2019: $Nil);
$2,400 (2019: $9,000) for marketing and public relations support to a related party (William Giles) of
Dr Christopher Giles. The balance outstanding included in trade and other payables is $Nil (2019: $Nil); and
$37,600 (2019: $3,000) for marketing and public relations services to a social media company (Filtrd) in
which a related party (William Giles) of Dr Giles has an interest. The balance outstanding included in trade
and other payables is $11,000 (2019: $Nil).
The Group also sold gold nugget inventory for $Nil (2019: $30,000) to Dr Christopher Giles on terms and
conditions equivalent to those offered to an arms’ length purchaser during the financial year ended
31 July 2019.
Page 29
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
DIRECTORS’ REPORT
Matters Arising Subsequent to the End of the Financial Year
Other than the matters disclosed in Note 29 of the consolidated financial statements, there has been no matter
or circumstance that has arisen since the end of the financial year, 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 years.
This Directors’ Report is made in accordance with a resolution of the Board of Directors.
On behalf of the Board of Directors:
Dr Christopher Giles
Executive Director
27 October 2020
Mr Simon Gray
Executive Chairman
Page 30
Level 3, 170 Frome Street
Adelaide SA 5000
Correspondence to:
GPO Box 1270
Adelaide SA 5001
T +61 8 8372 6666
Auditor’s Independence Declaration
To the Directors of Havilah Resources Limited
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of Havilah
Resources Limited for the year ended 31 July 2020, I declare that, to the best of my knowledge and belief, there have been:
a no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
b no contraventions of any applicable code of professional conduct in relation to the audit.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
J L Humphrey
Partner – Audit & Assurance
Adelaide, 27 October 2020
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
www.grantthornton.com.au
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients
and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International
Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are
delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one
another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to
Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to
Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation.
Page 31
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
Financial Year Ended
Note
31 July 2020
31 July 2019
$
$
Revenue
Other income
Fair value gains on financial assets
Employee benefits expense (net)
Depreciation expense
Impairment of plant and equipment
Write-down of CMC receivable
Extraordinary General Meeting expenses
Finance costs
Exploration and evaluation expenditure expensed
Impairment of capitalised exploration & evaluation expenditure
Movement in inventory
Other expenses
Loss before income tax
Income tax expense
4
4
12(b)
4
4
10
4(c)
4(d)
4
9
123,213
1,170,083
825,996
843,178
62,280
14,000
(2,069,925)
(1,538,118)
(309,864)
(200,000)
(119,746)
-
(2,595,451)
(2,048,174)
(404,841)
(177,724)
(374,322)
(106,687)
-
(606,907)
(4,726,429)
-
(688,182)
-
(1,133,157)
(571,468)
(2,158,306)
(7,337,693)
-
5(a)
-
Loss for financial year attributable to equity holders of the
Company
(4,726,429)
(7,337,693)
Other comprehensive income for financial year, net of income
tax
Total comprehensive loss for financial year attributable to
equity holders of the Company
-
-
(4,726,429)
(7,337,693)
Loss per share attributable to equity holders of the
Company:
Basic loss per ordinary share
Diluted loss per ordinary share
Cents
(1.90)
(1.90)
Cents
(3.36)
(3.36)
21
21
The accompanying notes form an integral part of these consolidated financial statements.
Page 32
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 JULY 2020
Current assets
Cash and cash equivalents
Trade and other receivables
Other assets
Total current assets
Non-current assets
Exploration and evaluation expenditure
Property, plant and equipment
Other financial assets
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Borrowings
Provisions
Other financial liabilities
Deferred income
Total current liabilities
Non-current liabilities
Borrowings
Provisions
Deferred income
Total non-current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Accumulated losses
Share-based payments reserve
Buy-out reserve
Total equity
Note
31 July 2020
$
31 July 2019
$
6(a)
1,483,724
3,819,646
7
8
9
10
12
13
14
16
17
18
14
16
18
102,358
89,193
46,672
121,588
1,675,275
3,987,906
36,244,499
2,667,508
920,417
39,832,424
41,507,699
35,524,097
2,841,336
2,704,871
41,070,304
45,058,210
469,253
75,361
519,308
542,340
-
1,606,262
63,869
-
675,909
739,778
764,628
2,632,486
616,150
885,082
1,139,857
6,038,203
-
9,580
675,909
685,489
2,346,040
6,723,692
39,161,659
38,334,518
19
76,906,563
71,674,794
(36,090,969)
(31,421,839)
945,862
681,360
(2,599,797)
(2,599,797)
39,161,659
38,334,518
The accompanying notes form an integral part of these consolidated financial statements.
Page 33
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Contributed
Equity
Accumulated
Losses
Share-
based
Payments
Reserve
Buy-out
Reserve Total Equity
$
$
$
$
$
Balance as at 1 August 2018
71,674,794
(24,506,419)
514,131
(2,599,797)
45,082,709
Loss for financial year
Other comprehensive income
Total comprehensive loss for
financial year
Transactions with owners in their
capacity as owners:
Issue of 5,000,000 unlisted options to
Investec
Issue of 2,500,000 unlisted options to
Investec
Issue of 6,819,255 unlisted share
options to employees
Issue of 2,400,000 unlisted share
options to a Director
Unlisted options lapsed
-
-
-
-
-
-
-
-
(7,337,693)
-
(7,337,693)
-
-
-
-
-
-
-
242,497
132,758
180,411
33,836
422,273
(422,273)
-
-
-
-
-
-
-
-
(7,337,693)
-
(7,337,693)
242,497
132,758
180,411
33,836
-
Balance as at 31 July 2019
71,674,794
(31,421,839)
681,360
(2,599,797)
38,334,518
Loss for financial year
Other comprehensive income
Total comprehensive loss for
financial year
Transactions with owners in their
capacity as owners:
Ordinary shares issued
Transaction costs arising on ordinary
shares issued
Unlisted options lapsed
Share-based payments expense
-
-
-
(4,726,429)
-
(4,726,429)
5,273,978
(42,209)
-
-
-
-
-
-
-
-
-
57,299
(57,299)
-
321,801
-
-
-
-
-
-
-
(4,726,429)
-
(4,726,429)
5,273,978
(42,209)
-
321,801
Balance as at 31 July 2020
76,906,563
(36,090,969)
945,862
(2,599,797)
39,161,659
The accompanying notes form an integral part of these consolidated financial statements.
Page 34
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
CONSOLIDATED STATEMENT OF CASH FLOWS
Cash flows from operating activities
Receipts from customers
Interest received
Payments to suppliers and employees
Payments for exploration and evaluation expenditure expensed
Repayment of Research & Development
Interest and other costs of finance paid
Financial Year Ended
Note
31 July 2020
31 July 2019
$
$
233,610
9,298
385,428
-
(3,041,180)
(1,969,996)
(374,322)
(342,742)
(177,724)
-
-
(241,353)
Net cash flows used in operating activities
6(b)
(3,693,060)
(1,825,921)
Cash flows from investing activities
Interest received
Payments for exploration and evaluation expenditure capitalised
Payments for property, plant and equipment
Proceeds from disposal of non-current assets
Proceeds from sale of subsidiary in a prior financial period
Payments associated with sale of subsidiary in a prior financial
period
-
(966,946)
(123,547)
4,000
-
-
10,473
(3,736,790)
(90,964)
-
6,000,000
(468,140)
Net cash flows provided by/ (used in) investing activities
(1,086,493)
1,714,579
Cash flows from financing activities
Proceeds from issue of ordinary shares
Payment of ordinary share issue costs
Proceeds from borrowings
Payment for borrowing costs
Repayments of borrowings
Principal element of lease payments
Net cash flows provided by financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of financial year
5,273,978
(42,209)
79,291
-
(2,661,695)
(205,734)
2,443,631
(2,335,922)
3,819,646
-
-
2,500,000
(261,841)
(153,075)
-
2,085,084
1,973,742
1,845,904
Cash and cash equivalents at end of financial year
6(a)
1,483,724
3,819,646
The accompanying notes form an integral part of these consolidated financial statements.
Page 35
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Basis of Preparation of the Consolidated Financial Statements
Havilah Resources Limited (‘Havilah’, ‘Company’ or ‘Parent Company’) is a for-profit entity for the purpose of
preparing financial statements.
The consolidated financial statements are for the consolidated entity consisting of the Company and its
subsidiaries (the ‘Group’). Information on the nature of the operations and principal activities of the Group are
described in the Directors’ Report. Interests in subsidiaries are set out in Note 22.
This note sets out the basis upon which the consolidated financial statements are prepared as a whole.
Significant accounting policies adopted by the Group in the preparation of these consolidated financial
statements, and relevant to an understanding thereof, are described in selected notes to the consolidated
financial statements or are otherwise provided in this note. The accounting policies have been consistently
applied to all the financial years presented, unless otherwise stated.
These general purpose financial statements have been prepared in accordance with Australian Accounting
Standards and Interpretations issued by the Australian Accounting Standards Board (the ‘AASB’) and the
Corporations Act 2001.
The consolidated financial statements have been prepared on the basis of historical cost, except for the
revaluation of certain non-current assets and financial instruments. Cost is based on the fair values of the
consideration given in exchange for assets.
Where necessary, comparative information has been reclassified to achieve consistency in disclosure with
financial year amounts and other disclosures.
Functional and Presentation Currency
The consolidated financial statements are presented in Australian dollars, which is the Parent Company’s
functional and presentation currency. Amounts are rounded to the nearest dollar.
Significant Accounting Estimates, Assumptions and Judgements
The preparation of financial statements requires the use of certain significant accounting estimates. It also
requires management to exercise its judgement in the process of applying Group accounting policies. The areas
involving a high degree of judgement or complexity, or areas where assumptions and estimates are significant to
the consolidated financial statements are disclosed in Notes 5, 9, 12 and 27.
Statement of Compliance with International Financial Reporting Standards
Compliance with Australian Accounting Standards ensures that the consolidated financial statements comply
with International Financial Reporting Standards as issued by the International Accounting Standards Board.
Adoption of New or Revised Australian Accounting Standards and Interpretations that are First Effective
in the Current Reporting Period
The Group has adopted all the new and/ or revised Australian Accounting Standards and Interpretations issued
by the Australian Accounting Standards Board that are relevant to its operations and effective for the
financial year ended 31 July 2020. The Group has not elected to apply any new or revised Australian Accounting
Standards before their operative dates during the financial year.
Significant new and/ or revised Australian Accounting Standards and amendments thereof and Interpretations
effective for the financial year that are relevant to the Group include:
(i)
(ii)
AASB 16 ‘Leases’; and
AASB Interpretation 23 ‘Uncertainty over Income Tax Treatments’.
A number of other Australian Accounting Standards and Interpretations, along with revisions to the
Conceptual Framework for Financial Reporting, have been issued and will be applicable in future periods.
While these remain subject to ongoing assessment, no significant impacts have been identified to date.
These standards have not been applied in the preparation of consolidated financial statements.
The adoption of all of the relevant new and/ or revised Australian Accounting Standards and Interpretations has
not resulted in any changes to the Group’s significant accounting policies and has had no effect on either the
amounts reported for the current or previous financial years, except for AASB 16 ‘Leases’ as disclosed below.
Page 36
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Basis of Preparation of the Consolidated Financial Statements (continued)
Adoption of New or Revised Australian Accounting Standards and Interpretations that are First Effective
in the Current Reporting Period (continued)
AASB 16 ‘Leases’
AASB 16 eliminates the distinction between operating and finance leases and brings all operating leases (other
than short-term and low value leases) onto the consolidated statement of financial position. As a lessee, the
Group recognises a right-of-use asset representing its right to use the underlying asset and a lease liability
representing its obligation to make lease payments.
The Group has applied AASB 16 from 1 August 2019. The Group has adopted the simplified transition approach
without restatement of comparative information for the financial year prior to first adoption. The Group also
elected under AASB 16 not to apply the new standard to contracts that were not identified as containing a lease
under AASB 117 ‘Leases’ and AASB Interpretation 4 ‘Determining whether an Arrangement contains a Lease’.
There was no change in accumulated losses as a result of applying AASB 16 as at 1 August 2019.
Note 2. Going Concern
The consolidated financial statements are prepared on the going concern basis, which assumes continuity of
normal business activities and the realisation of assets and settlement of liabilities and commitments in the
normal course of business.
During the financial year ended 31 July 2020, the Company recognised a loss of $4,726,429, had net cash
outflows from operating and investing activities of $4,779,553 and had accumulated losses of $36,090,969 as at
31 July 2020. In addition, the impacts of the COVID-19 pandemic, which occurred during the financial year, are
uncertain and it is possible that there may be subdued activity over the next 12 months from the date of signing
the Directors’ Declaration.
The continuation of the Group as a going concern is dependent upon its ability to generate sufficient net cash
inflows from operating and financing activities and manage the level of exploration and other expenditure within
available cash resources. The Directors consider that the going concern basis of accounting is appropriate as
the Group has the following options:
•
•
•
•
the ability to issue share capital under the Corporations Act 2001, by a share purchase plan, share
placement or rights issue;
the option of farming out all or part of its assets;
the option of selling interests in the Group’s assets; and
the option of relinquishing or disposing of rights and interests in certain assets.
In the event that the Group is unsuccessful in implementing one or more of the funding options listed above,
such circumstances would indicate that a material uncertainty exists that may cast significant doubt as to
whether the Company will continue as a going concern and therefore whether it will realise its assets and
discharge its liabilities in the normal course of business and at the amounts stated in the Group’s financial
statements and notes.
The consolidated financial statements do not include any adjustments relating to the recoverability and
classification of recorded asset amounts or to the amounts and classification of liabilities that might be
necessary should the Company not continue as a going concern.
Note 3. Segment Information
There was a change in the operating segments during the financial year.
The Group has a number of exploration tenements in South Australia, which it manages on a portfolio basis.
The decision to allocate resources to individual projects in the portfolio is predominantly based on available cash
assets, technical data and the expectation of future metal prices. Accordingly, the Group now operates as one
segment being exploration for minerals in South Australia. This is the basis on which its internal reports are
reviewed and used by the Board of Directors (the ‘chief operating decision maker’) in monitoring, assessing
performance and in determining the allocation of resources.
The results, assets and liabilities from this segment are equivalent to the consolidated financial statements.
The Group’s operations are all undertaken in South Australia.
Page 37
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 4. Results for the Financial Year
The results for the financial year include the following specific revenues and expenses:
Revenue and Other Income
Royalty revenue from Portia Gold Mine
Sales revenue associated with gold inventory
Total revenue
Interest income from unrelated entities
Government grants received
COVID-19 grants received
Diesel fuel rebates received
SIMEC Mining exclusivity payment (refer (a) below)
Gain on disposal of plant and equipment
Total other income
Expenses
Employee benefits expense (net):
Financial Year Ended
31 July 2020
31 July 2019
$
$
120,993
2,220
123,213
9,298
-
147,852
8,933
1,000,000
4,000
1,170,083
191,391
651,787
843,178
10,473
33,807
-
18,000
-
-
62,280
- Employee benefits expense (refer (b) below)
(1,736,465)
(2,859,137)
- Capitalisation of employee benefits expense to exploration
320,200
2,089,245
expenditure
- Directors’ remuneration
- Share-based payments expense (refer Note 27)
Total employee benefits expense (net)
Depreciation expense:
- Depreciation expense – Property, plant and equipment
- Depreciation expense – Right-of-use assets
Total depreciation expense
Finance costs:
- Amortisation of Investec loan establishment costs
- Interest expense
- Interest element on lease liabilities
- Bank fees
Total finance costs
(331,859)
(321,801)
(178,724)
(589,502)
(2,069,925)
(1,538,118)
(97,375)
(212,489)
(309,864)
-
(142,565)
(18,992)
(16,167)
(177,724)
(119,746)
-
(119,746)
(56,429)
(594,606)
-
(37,147)
(688,182)
(a) During the previous financial year, SIMEC Mining elected to extend the exclusivity period to complete its due
diligence on the Group’s Maldorky and Grants iron ore projects until 31 March 2019. In accordance with the
extension agreement entered into during December 2018, the Group received $1,000,000 from SIMEC Mining
during February 2019. As the $1,000,000 payment together with any SIMEC Mining exploration funding
($139,857) could have been deducted from any amount payable by SIMEC Mining to the Group under any
potential future transaction that may have been concluded between the parties during calendar year 2019 it was
recognised as deferred income (liability) on the consolidated statement of financial position. On 1 January 2020
$1,000,000 was recognised by Havilah as other income and the $139,857 as a reduction from exploration and
evaluation expenditure carried forward, as no transaction was completed with SIMEC Mining during calendar
year 2019.
Page 38
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 4. Results for the Financial Year (continued)
At the Extraordinary General Meeting of the Company held on 12 September 2019, the resolution for the
approval of the proposed investment in Havilah Resources Limited of up to $100 million by SIMEC Mining was
not passed by shareholders. In a letter dated 13 September 2019, SIMEC Mining advised that it had terminated
the Share Subscription Agreement as it was conditional on shareholders’ approval and that SIMEC Mining
reserved its rights under the Share Subscription Agreement.
(b) Represents employee benefits expenses (short-term, post-employment and long-term). Includes staff
redundancy payments of $342,752 (2019: $Nil) during the financial year.
(c) The Directors conducted a review of the amount owing from Consolidated Mining & Civil Pty Limited (‘CMC’).
The current agreement with CMC allows for a payment of $3,800,000 once the first $3,500,000 of production
revenue from the North Portia mine is achieved. Given that Havilah has not been formally informed by CMC of
any significant progress in developing the North Portia mine, the Directors are still not able to predict with any
certainty the time period when the amount will become payable. As a consequence, the CMC receivable on sale
of subsidiary of $2,595,451 has been written-down to $Nil during the financial year. During the financial year
ended 31 July 2019 a revision of the CMC receivable carrying value was recognised of $2,048,174.
(d) Costs associated with the SIMEC Mining Share Subscription Agreement and Extraordinary General Meeting
(held on 12 September 2019) includes external legal fees $156,361, costs relating to independent expert reports
$21,491, other consultants $50,000, public relations $76,912, and printing and postage costs $55,525.
In addition, $44,552 was paid for costs associated with the cancelled Extraordinary General Meeting that was to
have been held on 12 November 2019.
Remuneration of External Auditor
Remuneration received or due and receivable by the external auditor of the Company:
(i) Grant Thornton Audit Pty Ltd
Audit or review of financial reports
Total remuneration for audit and other assurance services
(ii) Deloitte Touche Tohmatsu
Audit or review of financial reports
Additional costs invoiced by Deloitte for the 2019 financial year audit
Total remuneration for audit and other assurance services
Financial Year Ended
31 July 2020
31 July 2019
$
48,100
48,100
-
23,195
23,195
$
-
-
84,000
-
84,000
Total remuneration of external auditor
71,295
84,000
Significant Accounting Policy: Impairment of Assets (except exploration & evaluation; financial assets)
At each reporting date, the Group reviews the carrying amounts of its tangible and intangible assets to
determine whether there is any indication that those assets have suffered an impairment loss. If any such
indication exists, the recoverable amount of the asset is estimated to determine the extent of the impairment
loss, if any. Where the asset does not guarantee cash flows that are independent from other assets, the Group
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the
estimated future cash flows are discounted to their present value using a pre-tax interest rate that reflects
current market assessments of the time value of money and the risks specific to the asset for which the
estimates of future cash flows have not been adjusted. If the recoverable amount of an asset (or cash-
generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-
generating unit) is reduced to its recoverable amount. An impairment loss is recognised in profit or loss
immediately, unless the relevant asset is carried at fair value, in which case the impairment loss is treated as a
revaluation decrease.
Page 39
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 5. Income Tax
(a) Income Tax Recognised in Profit or Loss
The prima facie consolidated tax on loss before income tax is reconciled
to income tax expense as follows:
Prima facie tax payable on loss before income tax, calculated at the
Australian tax rate of 27.5 % (2019 30%)
Share-based payments expense
Other
Revenue tax losses not recognised
Prior under (over) provision
Income tax expense
(b) Deferred Tax Balances
Deferred tax assets and (liabilities) are attributable to the following:
Temporary differences
Exploration and evaluation expenditure
Plant and equipment
Other financial assets
Deferred gain on sale
Employee benefit provisions
Deferred income
Transaction costs arising on ordinary shares issued
Total
Offset by deferred tax assets relating to operating losses
Net deferred tax assets and (liabilities) unrecognised
Financial Year Ended
31 July 2020
31 July 2019
$
$
(1,299,767)
(2,201,308)
88,495
53,142
330,858
827,272
-
176,851
78,002
2,978,038
(1,031,583)
-
(9,967,237)
(12,367,729)
16,132
(231,205)
22,713
218,169
-
(142,723)
142,810
185,600
-
187,719
187,614
68,302
(9,853,900)
(11,825,935)
9,853,900
11,825,935
-
-
(c) Unrecognised Deferred Tax Assets
Deferred tax assets have not been recognised in respect of the following items:
Revenue tax losses
Capital tax losses
Total
9,622,878
9,613,272
-
-
9,622,878
9,613,272
Deferred tax assets have not been recognised in respect of these items because it is not probable, at this time,
that future taxable profit will be available against which the Group can utilise the tax benefits.
Page 40
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 5. Income Tax (continued)
(d) Tax Consolidation
Relevance of tax consolidation to the Group
With effect from 1 July 2003, the Company and its wholly-owned Australian resident subsidiaries formed a tax-
consolidated group and are taxed as a single entity. The head entity within the tax-consolidated group is Havilah
Resources Limited. The members of the tax-consolidated group are identified at Note 22.
Nature of tax funding arrangements and tax sharing agreements
Entities within the tax-consolidated group have entered into a tax-funding arrangement and a tax-sharing
arrangement with the head entity. Under the terms of the tax-funding arrangement, Havilah Resources Limited
and each of the entities in the tax-consolidated group has agreed to pay a tax equivalent payment to or from the
head entity based on the current tax liability or current tax asset of the entity. Such amounts are reflected in
amounts receivable from or payable to other entities in the tax-consolidated group.
The tax-sharing agreement entered into between members of the tax-consolidated group provides for the
determination of the allocation of income tax liabilities between the entities should the head entity default on its
tax payment obligations or if an entity should leave the tax-consolidated group. The effect of the tax-sharing
agreement is that each member’s liability for tax payable by the tax-consolidated group is limited to the amount
payable to the head entity under the tax-funding agreement.
(e) Significant Accounting Policies:
Income Taxes
Tax expense recognised in profit or loss comprises the sum of deferred tax and current tax not recognised in
other comprehensive income or directly in equity.
Calculation of current tax is based on tax rates and tax laws that have been enacted or substantively enacted by
the end of the reporting period. Deferred income taxes are calculated using the balance sheet liability method.
Deferred tax assets are recognised to the extent that it is probable that the underlying tax loss or deductible
temporary difference will be utilised against future taxable income. This is assessed based on the Group’s
forecast of future operating results, adjusted for significant non-taxable income and expenses and specific limits
on the use of any unused tax loss.
Deferred tax liabilities are generally recognised in full.
Goods and Services Tax (‘GST’)
Revenues, expenses and assets are recognised net of the amount of GST, except: where the amount of GST
incurred is not recoverable from the taxation authority, it is recognised as part of the cost of acquisition of an
asset or as part of an item of expense; or for receivables and payables which are recognised inclusive of GST.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables
or payables. Cash flows are included in the consolidated statement of cash flows on a gross basis. The GST
component of cash flows arising from investing and financing activities which is recoverable from, or payable to,
the taxation authority is classified as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the
taxation authority.
(f) Significant Accounting Estimates, Assumptions and Judgements: Deferred Tax Assets
The Group’s ability to recognise deferred tax assets relies on assumptions about the generation of future
taxable profits. These taxable profit estimates are based on estimated future production, commodity prices,
exchange rates, operating costs, rehabilitation costs and capital expenditures. To the extent that future
utilisation of these tax losses and temporary tax differences become probable, this could result in significant
changes to deferred tax assets recognised, which would in turn impact future financial results.
Page 41
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 6. Cash and Cash Equivalents
(a) For the purposes of the consolidated statement of cash flows, cash and cash equivalents comprise:
Cash at banks and on hand
Bank deposits
Total cash and cash equivalents
31 July 2020
31 July 2019
$
1,483,724
-
1,483,724
$
63,231
3,756,415
3,819,646
Financial Risk Management
Information concerning the Group’s exposure to financial risks on cash and cash equivalents is set out in
Note 20.
(b) Reconciliation of Cash Flows from Operating Activities
Loss for financial year
Non-cash items included in loss for financial year:
Fair value gains on financial assets
Write-down of CMC receivable
SIMEC Mining exclusivity payment
Impairment of capitalised exploration & evaluation expenditure
Share-based payments expense
Depreciation expense property plant and equipment
Impairment of plant and equipment
Depreciation expense right-of-use assets
Security deposit forfeited
Items classified as investing/ financing activities:
Interest income from unrelated entities
Payment of borrowing costs
Proceeds from sale fixed assets
Amortisation of insurance premium funding
Amortisation of debt establishment costs
Changes in operating assets and liabilities:
(Increase)/ decrease in assets
Trade and other receivables
Inventory
Other current assets
Increase/ (decrease) in liabilities:
Trade and other payables
Provisions
Other financial liabilities
Financial Year Ended
31 July 2020
31 July 2019
$
$
(4,726,429)
(7,337,693)
(825,996)
2,595,451
(1,000,000)
106,687
321,801
97,375
200,000
212,489
15,000
-
-
(4,000)
156,649
-
(55,686)
-
(41,862)
(295,375)
(106,422)
(342,742)
(14,000)
2,048,174
-
1,133,157
589,502
119,746
-
-
-
(10,473)
261,841
-
153,075
56,429
207,970
571,468
451,306
(64,307)
(357,768)
365,652
Net cash flows used in operating activities
(3,693,060)
(1,825,921)
Page 42
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 6. Cash and Cash Equivalents (continued)
(c) Total Liabilities from Financing Activities
Investec loan
Insurance premium funding
Balance as at 31 July 2018
Recognised upon origination (non-cash)
Proceeds from borrowing
Repayment of borrowing
Balance as at 31 July 2019
$
-
-
2,500,000
-
2,500,000
$
171,000
114,561
-
(153,075)
132,486
Insurance
premium
funding
$
132,486
Lease
liabilities
$
-
-
526,470
89,148
-
-
-
-
Investec loan
$
2,500,000
-
-
-
Hire purchase
loan
$
-
-
-
79,291
(2,500,000)
(5,046)
(156,649)
-
-
-
-
-
-
-
(205,734)
(320,736)
74,245
64,985
-
31 July 2020
$
31 July 2019
$
38,876
63,482
-
102,358
-
32,227
14,445
46,672
Balance as at 31 July 2019
Recognised upon AASB 16 transition as at
1 August 2019 (non-cash)
Recognised upon origination (non-cash)
Proceeds from borrowing
Repayment of borrowing
Principal element of lease payments
Re-evaluation of lease term (non-cash)
Balance as at 31 July 2020
Note 7. Trade and Other Receivables
Current
Trade receivables
GST recoverable
Other receivables
Total current trade and other receivables
Financial Risk Management
Information concerning the Group’s exposure to financial risks on trade and other receivables is set out in
Note 20.
Note 8. Other Assets
Current
Prepayments
Total current other assets
31 July 2020
$
31 July 2019
$
89,193
89,193
121,588
121,588
Page 43
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 9. Exploration and Evaluation Expenditure
Cost brought forward
Expenditure incurred during the financial period
Costs reimbursed by SIMEC Mining
Impairment of capitalised exploration and evaluation expenditure
Total expenditure and evaluation expenditure carried forward
Intangible
31 July 2020
31 July 2019
$
35,524,097
966,946
(139,857)
(106,687)
36,244,499
36,244,499
$
32,984,095
3,673,159
-
(1,133,157)
35,524,097
35,524,097
A review of the Group’s exploration and evaluation tenement portfolio was conducted during the financial year,
which resulted in impairments from tenement expiry and/ or relinquishment. Prior financial year expenditure
impairment related to ongoing expenditure to maintain iron ore, uranium and geothermal tenements.
The expenditure is carried forward on the basis that exploration and evaluation activities in the areas of interest
have not reached a stage that permits reasonable assessment of the existence or otherwise of economically
recoverable reserves and active and significant operations in, or in relation to, the areas is continuing. The future
recoverability of the carrying amount of capitalised exploration and evaluation expenditure is dependent on
successful development and commercial exploitation or, alternatively, the sale of the respective areas of
interest.
Significant Accounting Policy: Exploration and Evaluation Expenditure
Exploration and evaluation expenditures in relation to each separate area of interest are recognised as
exploration and evaluation expense in the reporting period in which they are incurred, except where the
following conditions are satisfied:
•
•
the rights to tenure of the area of interest are current; and
at least one of the following conditions is also met:
−
−
the exploration and evaluation expenditures are expected to be recouped through successful
development and exploration of the area of interest, or alternatively, by its sale; or
exploration and evaluation activities in the area of interest have not at the reporting date reached a
stage which permits a reasonable assessment of the existence or otherwise of economically
recoverable reserves, and active and significant operations in, or in relation to, the area of interest are
continuing.
Exploration and evaluation assets are initially measured at cost, as an intangible, and include acquisition of
rights to explore, costs of studies, exploration drilling, trenching and sampling and associated activities. General
and administrative costs are only included in the measurement of exploration and evaluation costs where they
relate directly to operational activities in a particular area of interest.
Exploration and evaluation assets are assessed for impairment when facts and circumstances (as defined in
AASB 6 ‘Exploration for and Evaluation of Mineral Resources’), suggest that the carrying amount of exploration
and evaluation assets may exceed their recoverable amount. The recoverable amount of the exploration and
evaluation assets (or the cash-generating unit(s) to which they have been allocated, being no larger than the
relevant area of interest) is estimated to determine the extent of the impairment loss, if any.
Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised
estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed
the carrying amount that would have been determined had no impairment loss been recognised for the asset in
prior financial years.
Where a decision is made to proceed with development in respect of a particular area of interest, the relevant
exploration and evaluation asset is tested for impairment and reclassified to mine development expenditure.
Page 44
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 9. Exploration and Evaluation Expenditure (continued)
Significant Accounting Estimates, Assumptions and Judgements: Exploration & Evaluation Expenditure
The application of the Group’s accounting policy for exploration and evaluation expenditure requires judgement
in determining whether future economic benefits are likely either from future exploitation or sale or where
activities have not reached a stage that permits a reasonable assessment of the existence of economically
recoverable reserves. The determination of a JORC Mineral Resource is itself an estimation process that
requires varying degrees of uncertainty depending on sub-classification and these estimates directly impact the
point of deferral of exploration and evaluation expenditure. The deferral policy requires management to make
certain estimates and assumptions about future events or circumstances, in particular whether an economically
viable extraction operation can be established. Estimates and assumptions made may change if new information
becomes available.
Information on the reasonable existence or otherwise of economically recoverable reserves is progressively
gained through geological analysis and interpretation, drilling activity and prospect evaluation during a normal
exploration tenement term. A reasonable assessment of the existence or otherwise of economically recoverable
reserves can generally only be made, therefore, at the conclusion of those exploration and evaluation activities.
To the extent that capitalised exploration and evaluation expenditure is determined not to be recoverable in the
future, the relevant capitalised amount will be impaired in profit or loss and net assets will be reduced during the
financial period in which this determination is made.
Note 10. Property, Plant and Equipment
Pastoral lease
at cost 1
Plant and
equipment at
cost
Equipment
under finance
lease at cost
$
$
$
Gross carrying amount
Balance as at 31 July 2018
Additions
Disposals
Transfers
Balance as at 31 July 2019
Additions
Impairment
Balance as at 31 July 2020
Accumulated depreciation
Balance as at 31 July 2018
Depreciation expense
Disposals
Transfers
Balance as at 31 July 2019
Depreciation expense
Balance as at 31 July 2020
Net Book Value:
As at 31 July 2019
As at 31 July 2020
2,241,043
-
-
-
2,241,043
-
-
2,241,043
-
-
-
-
-
-
-
3,910,788
1,206
(14,210)
54,526
3,952,310
123,546
(200,000)
3,875,856
3,196,375
119,746
(1,724)
37,619
3,352,016
97,375
3,449,391
2,241,043
2,241,043
600,293
426,465
54,526
-
-
(54,526)
-
-
-
-
37,619
-
-
(37,619)
-
-
-
-
-
Total
$
6,206,357
1,206
(14,210)
-
6,193,353
123,546
(200,000)
6,116,899
3,233,994
119,746
(1,724)
-
3,352,016
97,375
3,449,391
2,841,336
2,667,508
1 The Group has bank guarantee and overdraft facilities with the National Australia Bank Limited secured by a
$1,000,000 mortgage over the Kalkaroo Station pastoral lease (classified as ‘Pastoral lease at cost’ in this
Note).
Page 45
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 10. Property, Plant and Equipment (continued)
Significant Accounting Policy: Property, Plant and Equipment
Pastoral leases are stated at cost less impairment. Cost includes expenditure that is directly attributable to the
acquisition of the pastoral lease. The Group considers its pastoral lease rights to be indefinite and cost is not
depreciated.
Plant and equipment is stated at cost less accumulated depreciation and impairment. Cost includes expenditure
that is directly attributable to the acquisition of the item. In the event that settlement of all or part of the purchase
consideration is deferred, cost is determined by discounting the amounts payable in the future to their present
value as at the date of acquisition.
Plant and equipment under lease are stated at cost less accumulated depreciation and impairment. Cost
includes expenditure that is directly attributable to the acquisition of the item. In the event that settlement of all or
part of the purchase consideration is deferred, cost is determined by discounting the amounts payable in the
future to their present value as at the date of the acquisition.
Depreciation is provided on plant and equipment. Depreciation is calculated on a straight-line basis so as to
write-off the net cost of each asset over its expected useful life to its estimated residual value. The estimated
useful lives, residual values and depreciation method are reviewed at the end of each annual reporting period.
The following estimated useful lives are used in the calculation of depreciation:
computer and office equipment: 2.5 – 10 years
•
• motor vehicles: 8 – 10 years
•
•
•
•
operating equipment: 2.5 – 10 years
heavy equipment: 8 – 10 years
rail, water and other infrastructure: 8 – 10 years
portable dewatering infrastructure: 7 – 25 years
The estimated useful lives, residual values and depreciation method are reviewed at the end of each annual
reporting period and adjusted if appropriate.
Note 11. Right-of-Use Assets
The following table provides the movement during the financial year in the Group’s right-of-use assets:
Property (office lease at 164 Fullarton Road Dulwich South Australia)
Recognised upon AASB 16 transition as at 1 August 2019
Re-evaluation of lease term
Depreciation expense during the financial year
Total right-of-use assets as at 31 July 2020
$
526,470
(320,736)
(205,734)
-
On 30 November 2019 the Company advised the owner of the right-of-use asset that it would exercise its
discretion in the lease agreement to terminate with 6 months’ notice and agreed to pay a termination fee of
approximately $75,000 as the property no longer met the ongoing requirements of the Company. The right-of-
use asset had been reassessed based on the new term, which ended during May 2020.
The lease liability has been reassessed accordingly using the same interest rates as used when the asset and
liability were initially recognised. This has resulted in a write-down of the liability of $320,736 to $122,238
(refer Note 15).
Page 46
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 12. Other Financial Assets
Non-current
At amortised cost:
Bank term deposit (refer Note 25(a))
Security deposit
Receivable on sale of subsidiary (refer (a) below)
31 July 2020
31 July 2019
$
$
60,000
-
-
60,000
15,000
2,595,451
At fair value (investment in equity instruments designated FVTPL):
Shares in listed ASX entity (refer (b) below)
Total non-current other financial assets
860,417
920,417
34,420
2,704,871
(a) The CMC receivable on sale of subsidiary of $2,595,451 was written-down to $Nil during the financial year.
See Note 4(c) for further details. The receivable had been discounted during the prior financial year from its
carrying amount of $3,800,000 using a rate of 10% and an expected date of receipt of July 2023.
(b) The Group’s financial assets designated as fair value through profit or loss (‘FVTPL’) comprise 4,916,667
fully paid ordinary shares held in ASX listed Auteco Minerals Ltd (formerly Monax Mining Limited). Fair value is
based on the last traded price (ASX issuer code: AUT) at the reporting date. The FVTPL gain through profit or
loss for the financial year was $825,996 (2019: $14,000).
Significant Accounting Estimates, Assumptions and Judgements: Impairment of Financial Assets
In assessing impairment, management estimates the recoverable amount of each asset or cash-generating unit
based on expected future cash flows and uses an estimated interest rate to discount them. Estimation
uncertainty relates to assumptions about future operating results and the determination of a suitable interest
rate.
The loss allowance for a financial asset is based on assumptions about risk of default and expected loss rates.
The Group uses judgement in making these assumptions and selecting the inputs to the impairment calculation
based on its assessment of available external credit ratings, historical loss rates and/ or days past due.
Financial Risk Management
Information concerning the Group’s exposure to financial risks on other financial assets is set out in Note 20.
Note 13. Trade and Other Payables
Current (unsecured)
Trade payables
Sundry payables and accruals
Total current trade and other payables
31 July 2020
31 July 2019
$
$
348,739
120,514
469,253
527,456
237,172
764,628
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial
year, which are unpaid. The amounts are unsecured and are usually paid according to supplier term.
Financial Risk Management
Information concerning the Group’s exposure to financial risks on trade and other payables is set out in Note 20.
Page 47
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 14. Borrowings
Current (secured)
Investec loan (refer (a) below)
Hire purchase loan (refer (b) below)
Current (unsecured)
Insurance premium funding (refer (c) below)
Total current borrowings
Non-current (secured)
Hire purchase loan (refer (b) below)
Total non-current borrowings
31 July 2020
31 July 2019
$
-
10,376
64,985
75,361
63,869
63,869
$
2,500,000
-
132,486
2,632,486
-
-
(a) During the financial year, the secured Investec loan was repaid in full. The loan security formerly held by
Investec over the Kalkaroo and Mutooroo assets lapsed.
(b) Hire purchase loan is a secured loan at a lending rate of 4.23% p.a. for the purchase of a heavy-duty field
vehicle used by the Company’s Drilling Supervisor. It expires during December 2022. The hire purchase loan is
secured over the vehicle.
(c) Insurance premium funding was an unsecured fixed interest rate debt at 4.10% p.a. with Hunter Premium
Funding, with a repayment period not exceeding one year. The facility expires May 2021.
The Group also has access to a $500,000 secured bank guarantee facility provided by the National Australia
Bank Limited, of which $216,000 is currently being utilised to secure a bank guarantees for an office lease
security deposit and a rehabilitation bond. The facility expires January 2022. See Note 25 for further details.
The Group also has access to a $500,000 secured overdraft facility with the National Australia Bank Limited at a
business lending rate of 3.0% p.a. plus a customer margin of 2.2% if drawn down. As at the end of the financial
year, the Group has no balance owing on this facility and the full amount is available for use. The facility expires
January 2022.
The bank guarantee and overdraft facilities with the National Australia Bank Limited are secured by a
$1,000,000 mortgage over the Kalkaroo Station pastoral lease (refer Note 10).
Financial Risk Management
Information concerning the Group’s exposure to financial risks on borrowings is set out in Note 20.
Page 48
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 15. Lease Liabilities
During May 2020 the Company terminated its office lease at 164 Fullarton Road Dulwich South Australia, as it
no longer met the ongoing requirements of the Company. Post COVID-19, and when justified by Havilah’s
financial position, new longer-term office premises will be sought.
The following table provides the movement during the financial year in the Group’s lease liabilities:
Secured
Recognised upon AASB 16 transition as at 1 August 2019
Principal element of lease payments
Re-evaluation of lease term (refer Note 11)
Total lease liabilities as at 31 July 2020
Reconciliation
$
526,470
(205,734)
(320,736)
-
Significant Accounting Policy: Right-of-Use Assets and Lease Liabilities
The Group recognises a right-of-use asset and a lease liability at the lease commencement date (i.e. the date
the underlying asset is available for use). The right-of-use asset is initially measured at cost (present value of
the lease liability plus deemed cost of acquiring the asset less any lease incentives received). The recognised
right-of-use asset is depreciated on a straight-line basis over the shorter of its estimated useful life and the lease
term. Right-of-use assets are subject to impairment.
The lease liability is initially measured at the present value of the lease payments expected to be paid over the
lease term, discounted using the interest rate implicit in the lease or, if the rate cannot be readily determined, the
Group’s estimated incremental borrowing rate. The lease liability is subsequently increased by the interest cost
on the lease liability and decreased by lease payments made. The lease liability is further remeasured if the
estimated future lease payments change as a result of index or rate changes, residual value guarantees or
likelihood of exercise of purchase, extension or termination options. When lease contracts are terminated or
altered, the unpaid lease liability and net carrying value of the right-of-use asset is de-recognised.
Short-term (12 months or less) leases and low value (below $5,000) leases continue to be expensed in profit or
loss.
At transition, all relevant lease liabilities were measured at the present value of the remaining lease payments,
discounted using the interest rate implicit in the lease or, where that rate was not readily determined, the
Group’s estimated incremental borrowing rate as at 1 August 2019. When measuring lease liabilities for leases
that were classified as operating leases, the Group discounted lease payments using an average rate of 5.6%
as at 1 August 2019.
The following table provides a reconciliation of non-cancellable operating lease commitments as at
31 July 2019, disclosed in Note 29(e) ‘Operating Lease Rental Commitments’ in the 2019 Annual Report, to the
total lease liabilities recognised as at 1 August 2019:
Operating lease rental commitments as at 31 July 2019 (undiscounted)
Less: prior financial period overstatement
Less: effect of discounting
Total lease liabilities recognised as at 1 August 2019
All right-of-use assets were measured at the amount of the lease liability on transition.
Reconciliation
$
728,093
(157,861)
(43,762)
526,470
Page 49
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 16. Provisions
Current
Employee benefits
Total current provisions
Non-current
Employee benefits
Total non-current provisions
31 July 2020
31 July 2019
$
$
519,308
519,308
616,150
616,150
-
-
9,580
9,580
Significant Accounting Policy: Employee Benefits
A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave,
long service leave, and sick leave when it is probable that settlement will be required and they are capable of
being measured reliably.
Liabilities recognised in respect of short-term employee benefits are measured at their nominal values using the
remuneration rate expected to apply at the time of settlement.
Liabilities recognised in respect of long-term employee benefits are measured as the present value of the
estimated future cash outflows.
Note 17. Other Financial Liabilities
Current (unsecured)
Research & Development income amendment (refer (a) below)
Total current other financial liabilities
31 July 2020
31 July 2019
$
$
542,340
542,340
885,082
885,082
(a) Industry Science Australia carried out a review of the Group’s Research & Development projects registered
for the income tax years ended 31 July 2013 and 31 July 2014. Certain registered activities for both income tax
years were found not to meet the requirements of the Income Tax Assessment Act 1997. During the financial
year ended 31 July 2019, the Company entered into a payment plan with the ATO in respect of the amount
outstanding due to amended income tax returns for 2013 and 2014 for Research & Development claims
disallowed. The amount included interest and penalties imposed.
The Company lodged an appeal to the Administrative Appeals Tribunal against the decisions and argued its
case at an Administrative Appeals Tribunal hearing, which concluded during June 2019. Havilah’s appeal to the
Administrative Appeals Tribunal was dismissed during the financial year. While the decision was disappointing,
the amounts claimed by the Australian Taxation Office had been fully provided for in Havilah’s consolidated
financial statements. The Company has decided against appealing the decision because of the cost and
management time involved. The Company is, however, investigating other options open to it to potentially claw
back some funds
Financial Risk Management
Information concerning the Group’s exposure to financial risks on other financial liabilities is set out in Note 20.
Page 50
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 18. Deferred Income
Current
SIMEC Mining exclusivity payment (refer (a) below)
SIMEC Mining exploration funding (refer (a) below)
Total current deferred income
Non-current
Government grants received for exploration
Total non-current deferred income
31 July 2020
31 July 2019
$
-
-
-
$
1,000,000
139,857
1,139,857
675,909
675,909
675,909
675,909
(a) During the prior financial year, SIMEC Mining elected to extend the exclusivity period to complete its due
diligence on the Group’s Maldorky and Grants iron ore projects until 31 March 2019. In accordance with the
extension agreement entered into during December 2018, the Group received $1,000,000 from SIMEC Mining
during February 2019. As the $1,000,000 payment together with any SIMEC Mining exploration funding
($139,857) could have been deducted from any amount payable by SIMEC Mining to the Group under any
potential future transaction that may have been concluded between the parties during calendar year 2019 it was
recognised as deferred income (liability) on the consolidated statement of financial position as at 31 July 2019.
On 1 January 2020 $1,000,000 was recognised by Havilah as other income and the $139,857 as a reduction
from exploration and evaluation expenditure carried forward, as no transaction was completed with
SIMEC Mining during calendar year 2019.
Significant Accounting Policy: Government Grants
Government grants are assistance by government in the form of transfers of resources to the Group in return for
past or future compliance with certain conditions relating to the operating activities of the Group.
Government grants are not recognised until there is reasonable assurance that the Group will comply with the
conditions attached to them and the grant will be received. Government grants, the primary condition of which is
to assist with exploration and evaluation activities, are recognised as deferred income in the consolidated
statement of financial position and recognised as income on a systematic basis when the related exploration
and evaluation expenditure is written-off or amortised.
Other government grants are recognised as income over the reporting periods necessary to match them with the
related costs, which they are intended to compensate on a systematic basis. Government grants receivable as
compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to
the Group with no future related costs are recognised as income in the reporting period in which the funds
become receivable.
Page 51
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 19. Contributed Equity and Reserves
(a) Contributed Equity
Ordinary shares, fully paid
Total contributed equity
(b) Movement in Ordinary Shares
Date
Details
31 July 2020
31 July 2019
$
$
76,906,563
76,906,563
71,674,794
71,674,794
Number of
ordinary shares
$
1 August 2018
Opening balance in previous financial year
218,249,052
71,674,794
31 July 2019
Balance at end of previous financial year
218,249,052
71,674,794
10 October 2019
Ordinary shares issued – listed options exercised
14,286
5,714
18 November 2019 Ordinary shares issued – Entitlement Offer
31,353,622
3,135,362
22 November 2019 Ordinary shares issued – Shortfall Shares
4 December 2019 Ordinary shares issued – Shortfall Shares
4 December 2019 Ordinary shares issued – listed options exercised
30 January 2020
Ordinary shares issued – Shortfall Shares
12 March 2020
Ordinary shares issued – share placement
25 May 2020
Ordinary shares issued – share placement
5,000,000
350,000
100
878,620
10,100,000
5,000,000
500,000
35,000
40
87,862
1,010,000
500,000
Transaction costs arising on ordinary shares
issued
-
(42,209)
31 July 2020
Balance at end of financial year
270,945,680
76,906,563
No ordinary shares were issued during the financial year ended 31 July 2019.
The Company does not have a limited amount of authorised capital and ordinary shares have no par value.
Ordinary shares participate in dividends as declared and the proceeds on winding up of the Company in
proportion to the number of fully paid ordinary shares held. Voting rights of shareholders are governed by the
Company’s Constitution.
(c) Dividends
There were no ordinary dividends declared or paid during the financial year by the Company (2019: $Nil).
(d) Capital Management
The Group manages its capital to ensure that the Group will be able to continue as a going concern while
maximising the return to shareholders through the optimisation of the debt and equity balance.
The capital structure of the Group consists of debt, which includes borrowings disclosed in Note 14, cash and
cash equivalents, and equity attributable to equity holders of the Company comprising contributed equity,
accumulated losses and reserves.
Due to the nature of the Group’s activities, that is exploration and evaluation, the Board of Directors believes
that due to the different stages of its projects, and their differing capital requirements and risks, it is not possible
to define what funding method is optimal from the range of options available to the Group, namely: equity, debt,
joint venture or sell down of project equity or some combination. At all times, the Group’s proposed activities are
monitored to ensure optimal funding arrangements are put in place that are appropriate to the particular
circumstance of each project or activity being undertaken.
Page 52
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 19. Contributed Equity and Reserves (continued)
(e) Significant Accounting Policies:
Contributed Equity
Ordinary shares are classified as equity. Contributed equity represents the fair value of ordinary shares that
have been issued. Any transaction costs directly attributable to the issue of new ordinary shares are deducted
from issued share capital, net of any related income tax.
Reserves Within Equity
Share-based payments reserve: is used to recognise the grant date fair value of share-based payments
expense. Amounts are transferred out of this reserve and into accumulated losses when share options lapse.
Buy-out reserve: resulted from the purchase of Curnamona Energy Pty Limited’s and Geothermal Resources
Pty Limited’s non-controlling interests by Havilah Resources Limited. It represented the difference between the
consideration paid and the carrying value of the non-controlling interest.
Note 20. Financial Instruments (including Financial Risk Management)
The Group’s activities expose it to a variety of financial risks: market risk (interest rate risk and equity price risk);
credit risk; and liquidity risk. The Group’s overall financial risk management program focuses on the
unpredictability of financial markets and seeks to minimise potential adverse effects on the financial
performance of the Group. The Group uses different methods to measure the different types of financial risk to
which it is exposed. These methods include sensitivity analysis in the case of interest rates and equity price.
The overall financial risk management strategy of the Group is governed by the Board of Directors, and is
primarily focused on ensuring the Group is able to finance its business plans, whilst minimising potential adverse
effects on financial performance. Risk management policies and systems are regularly reviewed to reflect
changes in market conditions and Group activities.
The totals for each category of financial instruments in the consolidated statement of financial position are:
Categories of financial instruments:
Financial assets
Cash and cash equivalents
Trade and other receivables
Bank term deposit
Security deposit
Shares in listed entity designated as FVTPL
Receivable on sale of subsidiary
Financial liabilities
Trade and other payables
Borrowings
Other financial liabilities
Note
31 July 2020
31 July 2019
$
$
6(a)
1,483,724
3,819,646
7
12
12
12
12
13
14
17
102,358
60,000
-
860,417
46,672
60,000
15,000
34,420
-
2,595,451
469,253
139,230
542,340
764,628
2,632,486
885,082
The Group had no off-balance sheet financial assets or financial liabilities during the financial year ended
31 July 2020.
(a) Market Risk
(i) Interest Rate Risk
Interest rate risk is the risk that the fair value of future cash flows of financial assets and financial liabilities will
fluctuate because of changes in market interest rates. As at 31 July 2020 and 31 July 2019 there was no
interest rate hedging in place.
Page 53
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 20. Financial Instruments (including Financial Risk Management) (continued)
(a) Market Risk (continued)
(i) Interest Rate Risk (continued)
The Group is exposed to interest rate risk as it earns interest at floating rates from a portion of its cash and cash
equivalents. When relevant, the Group places a portion of its funds into short-term fixed interest bank deposits
that provide short-term certainty over the interest rate earned.
The Group’s exposures to interest rates on financial assets and financial liabilities are detailed in the liquidity
risk management section of this note.
Interest rate sensitivity analysis
The sensitivity analysis below has been determined based on the exposure to interest rates for both derivative
and non-derivative instruments at the reporting date and the stipulated change taking place at the beginning of
the financial year and held constant throughout the reporting year.
If interest rates had been 50 basis points higher or lower throughout the financial year, and all other variables
were held constant, the Group’s result would decrease/ increase by $13,259 (2019: $7,134). This is attributable
to interest rates on a bank term deposits and trading accounts (2019: bank term deposits and balances drawn
on standby debt facilities).
This sensitivity should not be used to forecast the future effect of movements in interest rates on future cash
flows.
(ii) Equity Price Risk
The Group is exposed to equity price risks arising from its equity investment in fully paid ordinary shares held in
ASX listed Auteco Minerals Ltd. Equity investments are held for strategic rather than trading purposes.
Equity price sensitivity
The sensitivity analysis below has been determined based on the exposure to equity price risks at the reporting
date. This sensitivity should not be used to forecast the future effect of movements in equity price on future cash
flows.
At the reporting date, if Auteco Minerals Ltd’s last traded price on the ASX had been 5% higher or lower, the
Group’s result would have increased/ decreased by $43,020 (2019: $1,721).
The Group’s sensitivity to equity prices has changed significantly from the prior financial year, as a result of the
significant increase in Auteco Minerals Ltd’s share price since 1 February 2020.
(b) Credit Risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss
to the Group. The Group has adopted a policy of only dealing with creditworthy counterparties and obtaining
sufficient collateral where appropriate, as a means of mitigating the risk of financial loss from activities.
The Group has a significant credit risk exposure to CMC, with a gross receivable balance of $3,800,000
(31 July 2019: $3,800,000). The Group’s exposure is secured by a registered charge over Mining Lease
ML6346 and the assets of Benagerie Gold & Copper Pty Ltd. The credit rating of CMC is monitored on a
periodic basis for credit deterioration. As at financial year end the Group has written-down the carrying value of
this asset, see Note 4(c) for further details. The Group does not have any significant credit risk exposure to any
other counterparty, other than deposits with the Group’s banks. The credit risk on liquid funds is limited because
the counterparties are Australian banks with investment grade credit ratings assigned by international credit
rating agencies.
Where commercially practical, the Group seeks to limit the amount of credit exposure to any one bank or
financial institution. The Group is exposed to concentration of credit risk in relation to cash and cash
equivalents, bank term and security deposits held with the National Australia Bank Limited, the maximum
exposure as at 31 July 2020 was $1,543,724 (31 July 2019 $3,879,646).
The carrying amount of financial assets recorded in the consolidated financial statements and relevant notes,
net of any allowances for losses and/ or impairments, represents the Group’s maximum exposure to credit risk
without taking account of the value of any collateral obtained.
Page 54
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 20. Financial Instruments (including Financial Risk Management) (continued)
(c) Liquidity Risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting obligations associated with financial
liabilities.
Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has built an
appropriate liquidity risk management framework for the management of the Group’s short, medium and long-
term funding and liquidity management requirements. The Group manages liquidity risk by ensuring there are
sufficient funds available to meet financial obligations on a day-to-day basis and to meet unexpected liquidity
needs in the normal course of business. Emphasis is placed on ensuring there is sufficient funding in place to
meet the ongoing requirements of the Group’s exploration and evaluation activities.
Liquidity and interest risk tables
The following tables detail the Group’s remaining contractual maturity for its non-derivative financial assets and
financial liabilities. The tables have been prepared based on the undiscounted cash flows expected to be
received/ paid by the Group. The tables include both interest and principal cash flows.
Financial assets
Weighted average
effective interest rate
Less than one year
One to two years
2020
Non-interest bearing
Variable interest rate
instruments
2019
Non-interest bearing
Variable interest rate
instruments
%
-
0.75
-
1.75
$
860,417
1,603,724
81,092
3,894,646
$
-
-
2,595,451
-
Financial liabilities
Weighted average
effective interest rate
Less than one year
One to two years
2020
Non-interest bearing
Variable interest rate
instruments
Fixed interest rate instruments
2019
Non-interest bearing
Fixed interest rate instruments
%
-
7.9
4.1
-
12.72
$
469,253
542,340
75,361
764,628
3,517,568
$
-
-
63,869
-
-
Page 55
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 20. Financial Instruments (including Financial Risk Management) (continued)
(d) Fair Value Measurement of Assets and Liabilities
The fair values of financial assets and financial liabilities are determined in accordance with generally accepted
pricing models based on discounted cash flow analysis using prices from observable current market
transactions. The fair value of the financial assets and financial liabilities are not materially different to their
carrying amount.
Fair value hierarchy
AASB 13 ‘Fair Value Measurement’ requires disclosure of fair value measurements by level of the following fair
value measurement hierarchy (consistent with the hierarchy applied to financial assets and financial liabilities):
•
•
•
quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1);
inputs other than quoted prices included within level 1 that are observable for the asset or liability, either
directly or indirectly (level 2); and
inputs for the asset or liability that are not based on observable market data (unobservable inputs) (level 3).
The following table presents the Group’s financial assets and financial liabilities measured and recognised at fair
value on a recurring basis:
Total
$
860,417
860,417
Total
$
34,420
31 July 2020
Level 1
Level 2
Level 3
Financial assets
Shares in listed entity designated as FVTPL
Total net assets
$
860,417
860,417
$
-
-
$
-
-
31 July 2019
Level 1
Level 2
Level 3
Financial assets
Shares in listed entity designated as FVTPL
Receivable on sale of subsidiary
Total net assets
$
34,420
-
34,420
$
-
-
-
$
-
2,595,451
2,595,451
2,595,451
2,629,871
The Group did not measure any financial assets or financial liabilities on a non-recurring basis as at
31 July 2020 or as at 31 July 2019.
There have been no transfers between levels of the fair value hierarchy used in measuring the fair value of
financial instruments. There have also been no changes in the classification of financial assets as a result of a
change in the purpose or use of those assets.
Valuation techniques
The fair value of financial instruments traded in active markets (such as publicly traded listed securities) is
based on quoted market prices at the end of the reporting period. The quoted market price used for financial
assets by the Group is the last sales price. These instruments are included in level 1. The fair value of financial
instruments that are not traded in an active market is determined using valuation techniques. These valuation
techniques maximise the use of observable market data where it is available and rely as little as possible on
entity specific estimates. If all significant inputs required to fair value an instrument are observable, the
instrument is included in level 2. If one or more of the significant inputs is not based on observable market data,
the instrument in included in level 3.
Page 56
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 20. Financial Instruments (including Financial Risk Management) (continued)
Significant Accounting Policy: Financial Instruments
The classification depends on the nature and purpose of the financial asset or financial liability and is
determined at the time of initial recognition.
All income and expenses relating to financial assets that are recognised in profit or loss are presented within
finance costs, interest income or other financial items, except for impairment of trade receivables which is
presented within other expenses.
Cash and cash equivalents
Cash and cash equivalents in the consolidated statement of financial position and for presentation in the
consolidated statement of cash flows comprise cash on hand, cash in banks and short-term bank deposits that
are readily convertible to known amounts of cash and which are subject to insignificant risk of changes in value.
Trade and other receivables
Receivables, which normally have 30-day terms, are generally non-interest-bearing amounts. They are
recognised initially at the amount of the consideration that is unconditional unless they contain significant
financing components, when they are recognised initially at fair value. The Group holds receivables with the
objective to collect the contractual cash flows. They are presented as current assets unless collection is not
expected for more than 12 months after reporting date. For receivables expected to be settled within 12 months,
these are subsequently measured at amortised cost using the effective interest method, less any loss
allowance.
For receivables expected to be settled later than 12 months, these are subsequently measured at amortised
cost based on discounted cash flows using an effective interest rate, less any loss allowance. Cash flows
relating to non-current receivables are not discounted if the effect of discounting would be immaterial.
Financial assets at fair value through profit or loss (‘FVTPL’)
Certain shares held by the Group are classified as being available-for-sale and are stated at fair value less
impairment. Gains and losses arising from changes in fair value are recognised directly in profit or loss for the
reporting period. Fair value has been determined based on quoted market prices.
Impairment of financial assets
The Group has applied the AASB 9 ‘Financial Instruments’ general model approach to measuring expected
credit losses for all financial assets.
While cash and cash equivalents are also subject to the impairment requirements of AASB 9 ‘Financial
Instruments’, the identified impairment loss was considered not significant given the counterparties and/ or the
short maturity.
When required, the carrying amount of the relevant financial asset is reduced through the use of a loss
allowance account and the amount of any loss is recognised in profit or loss. When measuring expected credit
losses, balances are reviewed based on available external credit ratings, historical loss rates and/ or the days
past due.
Classification and measurement of financial liabilities
The Group’s financial liabilities include borrowings, trade and other payables, and other financial liabilities.
Financial liabilities are initially measured at fair value, and, where applicable, adjusted for transaction costs
unless the Group designated a financial liability as FVTPL.
Subsequently, financial liabilities are measured at amortised cost using the effective interest method except for
financial liabilities designated as FVTPL, which are carried subsequently at fair value with gains or losses
recognised in profit or loss.
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.
Page 57
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 21. Earnings Per Share
The Group presents basic and diluted earnings per share data for its ordinary shares. Basic is calculated by
dividing the profit or loss attributable to equity holders of the Company by the weighted average number of
ordinary shares outstanding during the financial year. Diluted is determined by adjusting the profit or loss
attributable to equity holders of the Company and the weighted average number of ordinary shares outstanding,
for the effects of all dilutive potential ordinary shares, which comprise unlisted share options granted to
Directors, employees and Investec.
The Company’s potential ordinary shares, being 17,319,255 unlisted share options granted, are not considered
dilutive as these share options were ‘out of the money’ as at 31 July 2020 and 31 July 2019.
Loss for financial year attributable to equity holders of the Company
used to calculate basic and diluted earnings per ordinary share:
Financial Year Ended
31 July 2020
31 July 2019
$
$
(4,726,429)
(7,337,693)
Weighted average number of ordinary shares on issue during the
financial year used in calculating basic earnings per ordinary share:
249,252,740
218,249,052
Basic loss per ordinary share
Diluted loss per ordinary share *
Cents
(1.90)
(1.90)
Cents
(3.36)
(3.36)
* Diluted loss per ordinary share equates to basic loss per ordinary share because a loss per ordinary share is
not considered dilutive for the purposes of calculating earnings per share pursuant to AASB 133 ‘Earnings per
Share’.
Page 58
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 22. Composition of the Group
Havilah Resources Limited, the Group’s ultimate Parent Company, is a public company limited by shares and is
listed on the ASX. The Company is incorporated and domiciled in Australia. Its registered office and principal
place of business is 107 Rundle Street, Kent Town, South Australia 5067.
Country of
incorporation
& activities
carried on in Principal activity
Ownership and
voting interest
held by the Group
2020
2019
Name
Parent Company:
Havilah Resources Limited
Australia
Subsidiaries:
Copper Aura Pty Ltd
Australia
Iron Genesis Pty Ltd
Australia
Havilah Royalties Pty Ltd
Australia
Curnamona Energy Pty Limited
Australia
Parent Company. Owner of various
exploration licences and Mutooroo Mining
Lease
Owner of various tenements in the
Mutooroo copper-cobalt district
Owner of various tenements related to
the Group’s iron ore assets
Owner of Benagerie Mining Lease royalty
for the Portia Gold Mine
Owner of Oban Energy Pty Limited and
various uranium exploration licences
Geothermal Resources Pty
Limited
Australia
Owner of Neo Oil Pty Ltd and a
geothermal exploration licence
Kalkaroo Copper Pty Ltd
Australia
Kalkaroo Pastoral Company Pty
Limited
Lilydale Iron Pty Ltd
Maldorky Iron Pty Ltd
Australia
Australia
Australia
Mutooroo Metals Pty Ltd
Australia
Owner of the Kalkaroo copper-gold-
cobalt project (3 Mining Leases granted)
Owner of the Kalkaroo Station pastoral
lease
No current tenements
Owner of the Maldorky iron ore project (5
Mineral Claims and Mining Lease
application in process)
Owner of the Mutooroo copper-cobalt
project (2 Mineral Claims)
Neo Oil Pty Ltd
Oban Energy Pty Limited
Australia
Australia
No current tenements
No current tenements
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Havilah Resources Limited is the head entity of the tax-consolidated group and all the subsidiaries listed above
are members of the tax-consolidated group.
Significant Accounting Policy: Basis of Consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of the Company as
at 31 July 2020 and the results of all subsidiaries for the financial year then ended.
Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group 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 to direct the activities of the entity. Subsidiaries are fully consolidated from the
date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.
Accounting policies of subsidiaries have been changed, where necessary, to ensure consistency with the
accounting policies applied by the Group.
Intercompany transactions, balances and unrealised gains on transactions between Group companies are
eliminated on consolidation. Unrealised losses are also eliminated, unless the transaction provides evidence of
the impairment of the asset transferred.
Page 59
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 23. Joint Arrangements
The Group undertakes a number of business activities through joint arrangements, which exist when two or
more parties have joint control. Joint arrangements are classified as either joint operations or joint ventures,
based on the contractual rights and obligations between the parties to the arrangement.
(a) Joint Venture Arrangements
The Group had no joint venture arrangements as at 31 July 2020 (or 31 July 2019).
(b) Joint Operation Arrangements
The Group’s interests in joint operation arrangements are as follows:
Prospect Hill farm-in agreement
Earning up to 85%
Earning up to 85%
Pernatty Lagoon farm-in agreement
10.0%, carried interest Surrendering up to 90%
31 July 2020
31 July 2019
There are no amounts (2019: $Nil) represented in the Group’s share of assets, liabilities, revenues or expenses
in respect of joint operations.
There are $Nil (31 July 2019: $Nil) exploration expenditure commitments in respect of joint operations.
Contingent liabilities in respect of joint operations are set out in Note 25(a).
Prospect Hill farm-in agreement with Teale and Associates Pty Ltd and Mr Adrian Mark Brewer
On 26 March 2007 the Group entered into a farm-in agreement with Teale and Associates Pty Ltd and
Mr Adrian Mark Brewer relating to exploration on EL5891 that allows the Group to earn a participating interest in
the tenement.
The Group undertook to fund an exploration program on the tenement over a three-year period from
26 March 2007 to earn a 65% interest in the tenement, and this has been met. The Group is able to earn an
additional 20% interest in the tenement by completing a bankable feasibility study, which has not been met.
Pernatty Lagoon farm-in agreement with Red Metal Limited
On 15 October 2004 the Group entered into a farm-in agreement with Red Metal Limited relating to exploration
on EL6014. Under the above farm-in agreement, the Group’s interest has now been diluted to 10.0%
(31 July 2019: 12.6%) and the Group has converted its interest into a 10.0% carried interest.
Significant Accounting Policy: Joint Arrangements
A joint operation is an arrangement in which the Group shares joint control, primarily via contractual
arrangements with other parties. In a joint operation, the Group has rights to the assets and obligations for the
liabilities relating to the arrangement. This includes situations where the parties benefit from the joint activity
through a share of the output, rather than by receiving a share of the results of trading. In relation to the Group’s
interest in a joint operation, the Group recognises: its share of assets and liabilities; revenue from the sale of its
share of the output and its share of any revenue generated from the sale of the output by the joint operation;
and its share of expenses. All such amounts are measured in accordance with the terms of the arrangement,
which is usually in proportion to the Group’s interest in the joint operation.
Page 60
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 24. Commitments
(a) Exploration Expenditure Commitments
The Group has certain obligations to perform exploration work and expend minimum amounts of money, known
as exploration expenditure commitments, on exploration tenements it holds. The exploration expenditure
commitments of the Group will vary from time to time, subject to statutory approval. The terms of current and
future farm-out arrangements (which are typical of the normal operating activities of the Group), the grant or
relinquishment of licences, and changes to licence areas at renewal or expiry, will alter the expenditure
commitments of the Group.
The Amalgamated Expenditure Agreement (‘AEA’) with the Department for Energy and Mining (‘DEM’) expired
on 31 December 2019 and all conditions were met. The Group had been in discussions with the DEM regarding
an AEA commencing effective from 1 January 2020. During April 2020, the South Australian government
announced an immediate deferral of mineral exploration licence fees and geothermal licence fees due in the
next 6 months to help alleviate the impact of COVID-19 on the mining and exploration industry. These licence
fees are now not due until 31 December 2020. In addition, there is a 12 month waiver of committed exploration
expenditure for all mineral exploration licence holders. Subsequently, the Group agreed in-principle the terms of
two new AEAs with the DEM, both for the 2 year period ending 31 December 2021, for an overall
expenditure commitment of $10,085,000 across relevant mineral exploration tenements.
The minimum expenditure commitment on mineral and geothermal exploration tenements not covered by an
AEA is approximately:
No later than 1 year
Later than 1 year but not later than 2 years
Total exploration expenditure commitments
31 July 2020
31 July 2019
$
190,000
-
190,000
$
333,000
58,000
391,000
(b) Kalkaroo Mining Lease and Miscellaneous Purposes Licence Rental Commitments
Non-cancellable Kalkaroo mining lease ('ML') and miscellaneous purposes licence ('MPL') rentals not provided
for in the consolidated financial statements and payable:
No later than 1 year
Later than 1 year but not later than 5 years
Later than 5 years
Total MLs and MPLs rental commitments
(c) Kalkaroo Pastoral Lease Rental Commitment
31 July 2020
31 July 2019
$
131,539
526,156
1,841,554
2,499,249
$
131,539
526,156
1,973,093
2,630,788
Non-cancellable annual Kalkaroo pastoral lease rentals for future financial years have not been provided for in
the consolidated financial statements. The current Kalkaroo pastoral lease rental payment is $5,157 per annum;
and will be payable annually for an indefinite period of time. During March 2020 the South Australian
government, supported by the Pastoral Board, applied an across the board 50% rebate to the 2018-19 Kalkaroo
pastoral lease rent and issued a subsequent refund.
(d) Capital Expenditure Commitments
The Group has no contractual capital expenditure commitments outstanding at 31 July 2020 (31 July 2019: $Nil).
(e) Operating Lease Rental Commitments
The Group’s non-cancellable operating leases are now recognised and disclosed as lease liabilities as set out in
Note 15.
Page 61
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 25. Contingent Liabilities and Contingent Assets
By their nature, contingencies will only be resolved when one or more uncertain future events occur or fail to
occur. Determination of contingent liabilities disclosed requires the exercise of significant judgement regarding
the outcome of future events.
(a) Contingent Liabilities
Future production
The Group has a contingent liability to Glencore International AG in relation to payments based on 10% of the
Group’s share of any future mining profits from the Kalkaroo project, until the total amount paid reaches
$7,000,000. There is no indexation.
Production royalties
The Group has a liability for royalties contingent on projects advancing into production, see notes to Tenement
Table on page 75 for royalty arrangements. In addition, South Australian Mining Leases held by the Group are
subject to the payment of production royalties to the South Australian government, the rate of such royalties
varies depending upon the minerals produced and sold and other factors.
Native title
During December 2018, a Native Title Mining Agreement (‘NTMA’) for Kalkaroo was executed between the
Ngadjuri Adnyamathanha Wilyakali Native Title Aboriginal Corporation (‘NAWNTAC’) and Havilah. Annual floor
payments, adjusted for CPI, are due to NAWNTAC from when the Kalkaroo project reaches commercial
production. In addition, annual profits payment based on a percentage of EBITDA (earnings before interest, tax,
depreciation and amortisation), if EBITDA is positive, are due to NAWNTAC from when the Kalkaroo project
reaches commercial production, but are capped until the cumulative EBITDA exceeds the cumulative capital
costs of the project. The NTMA also includes employment, training, and business development opportunities for
the native title holders over the life of the mine.
Native title claims also exist over all exploration tenements in South Australia in which the Group has interests.
The Group is unable to determine the prospects for success or otherwise of the claims on these exploration
tenements and, in any event, whether or not and to what extent the claims may significantly affect the Group or
its projects, as such any contingent liability is unknown.
Bank guarantees
The Group has provided restricted cash deposits of $60,000 as security for a number of unconditional
irrevocable bank guarantees for the provision of various rehabilitation bonds to the Minister for Mineral
Resource Development and security for a purchase card facility provided to the Group by its banker.
Additionally, the Group has utilised $216,000 of a non-cash backed National Australia Bank Limited guarantee
facility of $500,000 as security for the following unconditional irrevocable bank guarantees:
•
•
a security deposit on the lease of the Group’s former office premises to the South Australian Tourism
Commission for $116,000; and
a rehabilitation bond issued by Geothermal Resources Pty Ltd for $100,000 to the Minister for Mineral
Resource Development.
Joint operations
In accordance with normal industry practice, the Group has entered into joint operations with other parties for
the purpose of exploring and evaluating its exploration tenements. If a participant to a joint operation defaults
and does not contribute its share of joint operation obligations, then the remaining joint operation participants
are jointly and severally liable to meet the obligations of the defaulting participant. In this event, the equity
interest in the exploration tenements held by the defaulting participant may be redistributed to the remaining joint
operation participants.
In the event of a default, a contingent liability exists in respect of expenditure commitments due to be met by the
Group in respect of the defaulting joint operation participant.
(b) Contingent Assets
Pursuant to an agreement with CMC, the Group has a contingent payment of $3,800,000 due to it on the
development of the North Portia mine and that mine achieving production revenue of $3,500,000. There is no
indexation.
Page 62
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 26. Related Party Disclosures
Transactions between related parties are on normal commercial terms and conditions, no more favourable than
those available to other parties, unless otherwise stated.
(a) Subsidiaries
The ultimate Parent Company within the Group is Havilah Resources Limited. Details of the percentage
ownership of ordinary shares in subsidiaries are disclosed in Note 22.
(b) Remuneration of Key Management Personnel
During the financial ended 31 July 2020, several changes to the position of Key Management Personnel
occurred.
Mr Walter Richards was made redundant from his role as Chief Executive Officer effective 2 October 2019.
A redundancy payment (inclusive of superannuation) of $244,141 was paid during the financial year.
Messrs Mark Stewart and Martin Janes resigned as Directors of the Company on 9 October 2019.
Messrs Victor Previn and Simon Gray were appointed Directors of the Company on 9 October 2019.
On 18 December 2019, shareholders overwhelmingly approved the election of Messrs Victor Previn and
Simon Gray as Directors at the Company’s Annual General Meeting held in Adelaide.
Mr Victor Previn is entitled to $30,000 per year as a Non-Executive Director, exclusive of superannuation.
As an Executive Director, Mr Simon Gray is entitled to $80,000 per year, exclusive of superannuation, effective
from 1 December 2019. Mr Gray’s previous remuneration arrangement was terminated on 1 December 2019.
This previous agreement entitled him to $4,166 per month to act as Company Secretary. Mr Gray’s current role
includes Executive Chairman at meetings, Chief Financial Officer and Company Secretary of the Group.
During the financial year, Dr Christopher Giles (Executive Director – Technical Director) became a full-time
employee of the Company. Previously, Havilah had employed him on a consultancy agreement, which expired
on 31 July 2019. Dr Giles current remuneration is $174,984 exclusive of superannuation. Dr Giles is also
provided a fully maintained four-wheel drive vehicle for Company use. The executive agreement can be
terminated by either party with 6 months’ notice in writing.
Directors and other key management personnel remuneration is summarised as follows:
Short-term employee benefits
Post-employment benefits
Long-term employee benefits
Share-based payments expense
Financial Year Ended
31 July 2019
31 July 2020
$
855,546
73,458
6,500
106,394
$
809,935
66,776
15,830
108,812
Total key management personnel remuneration
1,041,898
1,001,353
Detailed remuneration disclosures for key management personnel are provided in the audited Remuneration
Report on page 23.
Apart from the details disclosed in this note, no Director or other key management personnel has entered into a
material contract with the Group since the end of the prior financial year and there were no material contracts
involving Directors’ or other key management personnel interests subsisting as at 31 July 2020.
Page 63
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 26. Related Party Disclosures (continued)
(c) Other Related Party Transactions with Directors and Related Entities
During the financial year ended 31 July 2020 the Group incurred the following other amounts as a result of
transactions with Directors and other key management personnel, including their personally related parties:
•
•
•
•
•
$2,565 (2019: $151,000) for legal services provided by a company (Arion Legal) that is a related party of
Mr Mark Stewart. The balance outstanding included in trade and other payables is $Nil (2019: $21,101);
$Nil (2019: $20,000) for advisory services to a related entity (Balmoral Consulting) controlled by a former
Havilah Director (Mr Kenneth Williams). The balance outstanding included in trade and other payables is
$Nil (2019: $Nil);
$Nil (2019: $11,000) for accounting services to a company (ITABA Pty Ltd) controlled by a related party of
Mr Walter Richards. The balance outstanding included in trade and other payables is $Nil (2019: $Nil);
$2,400 (2019: $9,000) for marketing and public relations support to a related party (William Giles) of
Dr Christopher Giles. The balance outstanding included in trade and other payables is $Nil (2019: $Nil); and
$37,600 (2019: $3,000) for marketing and public relations services to a social media company (Filtrd) in
which a related party (William Giles) of Dr Giles has an interest. The balance outstanding included in trade
and other payables is $11,000 (2019: $Nil).
The Group also sold gold nugget inventory for $Nil (2019: $30,000) to Dr Christopher Giles on terms and
conditions equivalent to those offered to an arms’ length purchaser during the financial year ended 31 July 2019.
(d) Superannuation Contributions
During the financial year the Group contributed to accumulation type benefit funds administered by external fund
managers or an employee’s self-managed superannuation fund. The funds cover all employees and Directors of
the Company.
Note 27. Share-based Payments
The share-based payments plan is described below.
The Company established a Performance Rights and Share Option Plan that was approved by the Board during
March 2019. The Plan is open to all employees but excludes Directors of the Company. In accordance with the
provisions of the Plan, the Board of Directors may issue share options to purchase ordinary shares to eligible
executives and employees. Each share option is to subscribe for one fully paid ordinary share in the Company.
Share options can be exercised in the year of vesting, and share options not exercised during a particular year
will accumulate and may be exercised in subsequent years until their expiry.
Other relevant details are:
•
•
•
•
•
no consideration is payable by the recipient on receipt of share options issued;
the share options will only be issued following acceptance of a written application by the employee in
response to an invitation to participate in the Plan being issued by the Board;
the share options have various time and/ or performance related vesting conditions;
the share options expire at the earlier of either three or four years from the issue date or one month from
the date the share option holder ceases to be an employee of the Company; and
share options granted carry no dividend or voting rights.
During the financial year, the Company did not grant any share options.
Share options issued to Directors in satisfaction of performance-based awards or Investec in satisfaction of
contractual obligations were issued pursuant to resolutions approved by shareholders at relevant AGMs.
Share options do not represent cash payments and share options granted may or may not be exercised by the
holder.
Page 64
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 27. Share-based Payments (continued)
The following summary reconciles the outstanding share options over unissued ordinary shares in the Company
at the beginning and end of the financial year:
Year ended 31 July 2020
Year ended 31 July 2019
Number of
share options
Weighted
average
exercise
price
Number of
share options
Weighted
average
exercise price
Balance at beginning of financial year
17,319,255
Issued during financial year
Exercised during financial year
Expired during financial year
Balance at end of financial year
Exercisable at end of financial year
-
-
-
17,319,255
17,026,407
$
0.26
-
-
-
0.26
0.25
4,250,000
16,719,255
-
(3,650,000)
17,319,255
3,180,215
$
0.37
0.26
-
0.36
0.26
0.29
Details of share options outstanding at the end of the financial year are:
Grant date
11 December 2017 (Director 1)
1 November 2018 (Investec 2)
12 December 2018 (Director 1)
20 December 2018 (Investec 2)
11 July 2019 (Employee 3)
11 July 2019 (Employee 3)
Total
Number
600,000
5,000,000
2,400,000
2,500,000
3,317,651
3,501,604
17,319,255
Grant date
fair value
$0.06
$0.06
$0.03
$0.07
$0.05
$0.05
Exercise price
Expiry date
$0.40
12 December 2020
$0.234
1 November 2021
$0.36
$0.22
$0.22
$0.28
12 December 2021
20 December 2021
11 July 2023
11 July 2023
1 Unlisted share options issued to Directors.
2 Unlisted share options issued to Investec under a prior financial year funding agreement.
3 Unlisted share options issued to employees under the Performance Rights and Share Option Plan.
Share options outstanding at the end of the financial year had a weighted average exercise price of $0.26
(31 July 2019: $0.26), a range of exercise prices from $0.40 to $0.22 (31 July 2019: $0.22 to $0.40), with a
weighted average remaining contractual life of 735 days (31 July 2019: 1,068 days).
Significant Accounting Estimates, Assumptions and Judgements: Share-based Payments
The share options issued by Havilah during the prior financial year were priced using the binomial option pricing
model, the assumptions and inputs used in estimating fair value at grant date of the unlisted share options were:
Issue date
11 July 2019
Share price
at grant date
$0.14
Exercise
price
$0.22/ $0.28
Expected
volatility
64.8%
Share option
life
3 years
Expected
dividends
-
Risk free
interest rate
1.25%
The fair value determined at the issue date of the equity-settled share-based payments is expensed on a
straight-line basis over the vesting period, based on the Group’s estimate of ordinary shares that will eventually
vest.
Historical volatility was the basis for determining expected share price volatility as it is assumed that this is
indicative of future trends, which may not eventuate.
Page 65
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 27. Share-based Payments (continued)
Share-based payments expense:
Director share options
Employee share option plan
Investec
Total share-based payments expense
Financial Year Ended
31 July 2019
31 July 2020
$
$
(36,804)
(167,058)
(117,939)
(321,801)
(33,836)
(180,410)
(375,256)
(589,502)
Significant Accounting Policy: Share-based Payments
Equity-settled share-based payments expense relates to the value of share options allocated to particular
financial periods in accordance with Australian Accounting Standard AASB 2 ‘Share-based Payment’,
which requires the fair value of a share option at grant date to be allocated equally over the period from grant
date to vesting date based on the Group’s estimate of ordinary shares that will eventually vest, adjusted for not
meeting the vesting condition. For share options that vest immediately, the value is disclosed as an expense
immediately.
Fair value is measured by use of the binomial option pricing method. Share options do not represent cash
payments and share options granted may or may not be exercised by the holder.
Note 28. Parent Company Financial Information
Statement of Financial Position
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Contributed equity
Share-based payments reserve
Accumulated losses
Total equity
Loss for financial year
Other comprehensive income
Total comprehensive loss
Parent Company
31 July 2020
31 July 2019
$
$
1,734,923
31,651,724
33,386,647
1,995,574
63,869
2,059,443
216,813
43,651,952
43,868,765
5,777,227
397,893
6,175,120
31,327,204
37,693,645
76,906,563
71,674,794
945,862
681,360
(46,525,221)
(34,662,509)
31,327,204
37,693,645
(11,920,011)
(7,496,936)
-
-
(11,920,011)
(7,496,936)
Page 66
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 28. Parent Company Financial Information (continued)
Commitments for Expenditure and Contingent Liabilities of Parent Company
(a) Exploration Expenditure Commitments
The exploration expenditure commitments are similar to that of the Group as disclosed in Note 24(a).
(b) Guarantees
The circumstances around guarantees for the Parent Company are similar to that of the Group as disclosed in
Note 25(a).
(c) Native Title
The circumstances around native title for the Parent Company are similar to that of the Group as disclosed in
Note 25(a).
Note 29. Subsequent Events
The Annual Report was authorised for issue by the Board of Directors on 27 October 2020. The Board of
Directors has the power to amend and reissue this Annual Report.
There has been no other matter or circumstance that has arisen since the end of the financial year, 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 years.
Page 67
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
DIRECTORS’ DECLARATION
The Directors’ declare that:
(a) in the Directors’ opinion, the consolidated financial statements and notes, set out on pages 32 to 67, are in
accordance with the Corporations Act 2001, including:
(i)
complying with relevant Australian Accounting Standards and the Corporations Regulations 2001;
and
(ii) giving a true and fair view of the Group’s financial position as at 31 July 2020 and of its performance
for the financial year ended on that date; and
(b) in the Directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its
debts as and when they become due and payable.
Note 1 confirms that the consolidated financial statements also comply with International Financial Reporting
Standards as issued by the International Accounting Standards Board.
The Directors have been given the declarations by the Technical Director and Chief Financial Officer required
by Section 295A of the Corporations Act 2001.
This Directors’ Declaration is made in accordance with a resolution of the Board of Directors.
On behalf of the Board of Directors:
Dr Christopher Giles
Executive Director
27 October 2020
Mr Simon Gray
Executive Chairman
Page 68
Level 3, 170 Frome Street
Adelaide SA 5000
Correspondence to:
GPO Box 1270
Adelaide SA 5001
T +61 8 8372 6666
Independent Auditor’s Report
To the Members of Havilah Resources Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Havilah Resources Limited (the Company) and its subsidiaries (the Group), which
comprises the consolidated statement of financial position as at 31 July 2020, the consolidated statement of profit or loss
and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows
for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting
policies, and the Directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including:
a giving a true and fair view of the Group’s financial position as at 31 July 2020 and of its performance for the year ended
on that date; and
b complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are
further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are
independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and
the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled
our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Material uncertainty related to going concern
We draw attention to Note 2 in the financial report, which indicates that the Group incurred a net loss from continuing
operations of $4,726,429 and a cash outflow from operating and investing activities of $4,779,553 during the year ended
31 July 2020. As stated in Note 2, these events or conditions, indicate that a material uncertainty exists that may cast doubt on
the Group’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
www.grantthornton.com.au
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients
and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International
Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are
delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one
another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to
Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to
Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation.
Page 69
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 of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
In addition to the matter described in the material uncertainty related to going concern section, we have determined the
matters described below to be the key audit matters to be communicated in our report.
Key audit matter
How our audit addressed the key audit matter
Exploration and evaluation assets – Note 9
At 31 July 2020 the carrying value of exploration and
evaluation assets was $36,244,499.
In accordance with AASB 6 Exploration for and Evaluation of
Mineral Resources, the Group is required to assess at each
reporting date if there are any triggers for impairment which
may suggest the carrying value is in excess of the recoverable
value.
The process undertaken by management to assess whether
there are any impairment triggers in each area of interest
involves an element of management judgement.
This area is a key audit matter due to the significant
judgement involved in determining the existence of
impairment triggers.
Our procedures included, amongst others:
obtaining management’s reconciliation of capitalised
exploration and evaluation expenditure and agreeing to the
general ledger;
reviewing management’s area of interest considerations
against AASB 6;
conducting a detailed review of management’s
assessment of trigger events prepared in accordance with
AASB 6 including;
tracing projects to statutory registers, exploration
licenses and third party confirmations to determine
whether a right of tenure existed;
enquiry of management regarding their intentions to
carry out exploration and evaluation activity in the
relevant exploration area, including review of
management’s budgeted expenditure;
understanding whether any data exists to suggest that
the carrying value of these exploration and evaluation
assets are unlikely to be recovered through
development or sale;
assessing the accuracy of impairment recorded for the
year as it pertained to exploration interests;
evaluating the competence, capabilities and objectivity of
management’s experts in the evaluation of potential
impairment triggers; and
assessing the appropriateness of the related financial
statement disclosures.
Information other than the financial report and auditor’s report thereon
The Directors are responsible for the other information. The other information comprises the information included in the
Group’s Directors report for the year ended 31 July 2020, 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 we do not express any form of assurance
conclusion thereon.
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.
Page 70
Responsibilities of the 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 Group’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the
Directors either intend to liquidate the Group or 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 the Australian Auditing
Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions
of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance
Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar1_2020.pdf. This description forms part of
our auditor’s report.
Report on the remuneration report
Opinion on the remuneration report
We have audited the Remuneration Report included the Directors’ report for the year ended 31 July 2020.
In our opinion, the Remuneration Report of Havilah Resources Limited, for the year ended 31 July 2020 complies with
section 300A of the Corporations Act 2001.
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.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
J L Humphrey
Partner – Audit & Assurance
Adelaide, 27 October 2020
Page 71
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
ADDITIONAL SECURITIES EXCHANGE INFORMATION
Additional information required by the ASX Listing Rules and not disclosed elsewhere in this Annual Report is
set out below. The information was applicable for the Company as at 19 October 2020.
Distribution of Shareholding
The number of shareholders ranked by size of holding is set out below:
Size of Holding
Less than 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 to 1,000,000
More than 1,000,000
Total
Number of
Holders
Number of
Ordinary Shares on
Issue
248
945
576
1,193
226
31
3,219
71,515
2,954,517
4,441,897
42,412,881
58,929,880
162,134,990
270,945,680
There were 656 shareholders holding less than a marketable parcel of ordinary shares to the value of $500.
Twenty Largest Shareholders: Ordinary Shares (ASX Issuer Code: HAV)
The names of the twenty largest shareholders of the Company’s ordinary shares are listed below:
Shareholder
Number Held
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
FIRST NAMES (JERSEY) LIMITED
TRINDAL PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
TRINDAL PTY LTD
GLENCORE AUSTRALIA HOLDINGS PTY LTD
TRINDAL PTY LTD
MR PAUL CLARK
WOOLSTHORPE INVESTMENTS LIMITED
EST MR BRIAN KENNETH MURPHY
MISS KRYSTYNA HELENA KASPEROWICZ
TRINDAL PTY LTD
STATSMIN NOMINEES PTY LTD
CITICORP NOMINEES PTY LIMITED
HNC HOLDINGS PTY LTD
CRAIG PARK PTY LTD
STATSMIN NOMINEES PTY LTD
JETOSEA PTY LTD
TALAGER PTY LTD
DIANNE PEARL INVESTMENTS PTY LTD
21,053,710
18,014,442
17,457,718
14,611,950
11,073,918
10,153,756
9,716,599
8,000,000
6,480,514
3,687,554
3,525,000
3,437,357
3,224,632
2,766,594
2,625,000
2,563,669
2,470,802
2,205,096
1,996,434
1,935,851
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Total
% of Total
Issued
Ordinary
Shares
7.77
6.65
6.44
5.39
4.09
3.75
3.59
2.95
2.39
1.36
1.30
1.27
1.19
1.02
0.97
0.95
0.91
0.81
0.74
0.71
147,000,596
54.25
Page 72
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
ADDITIONAL SECURITIES EXCHANGE INFORMATION (continued)
Substantial Shareholders
The number of ordinary shares held by substantial shareholders and their associates (who held 5% or more of
total fully paid ordinary shares on issue), as disclosed in substantial holder notices given to the Company, is set
out below:
Shareholder
Trindal Pty Ltd
IQ EQ (Jersey) Limited (formerly, First Names (Jersey) Limited)
as Trustee for The Ayscough Trust
Republic Investment Management Pte. Ltd.
Total
Number Held
41,945,674
40,467,686
15,898,489
98,311,849
% of Total Issued
Ordinary Shares
15.48
14.94
5.87
36.28
Unlisted Equity Securities: Share Options
The following share options over unissued ordinary shares of the Company are not quoted:
Director share options
Employee share option plan
Investec
Total
Voting Rights
Number of
Holders
Number of Unlisted
Share Options
2
19
1
22
3,000,000
6,819,255
7,500,000
17,319,255
(a) Ordinary Shares, Fully Paid
Voting rights of shareholders are governed by the Company’s Constitution. The Constitution can be found on
the Company’s website.
(b) Unlisted Share Options
No voting rights.
Other Information
The Company was incorporated as a public company on 11 February 1997.
The Company was admitted to the ASX official list and quotation of its ordinary shares commenced on
21 March 2002.
The register of securities is held at Computershare Investor Services Pty Limited Level 5, 115 Grenfell Street,
Adelaide, South Australia 5000.
Page 73
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
TENEMENT SCHEDULE AS AT 31 JULY 2020
Location
South Australia
South Australia
South Australia
South Australia
South Australia
South Australia
South Australia
South Australia
South Australia
South Australia
South Australia
South Australia
South Australia
South Australia
South Australia
South Australia
South Australia
South Australia
South Australia
South Australia
South Australia
South Australia
South Australia
South Australia
South Australia
South Australia
South Australia
South Australia
South Australia
South Australia
South Australia
South Australia
South Australia
South Australia
South Australia
South Australia
South Australia
South Australia
South Australia
South Australia
South Australia
South Australia
South Australia
South Australia
South Australia
South Australia
South Australia
South Australia
South Australia
South Australia
South Australia
South Australia
South Australia
South Australia
South Australia
South Australia
South Australia
South Australia
South Australia
South Australia
South Australia
South Australia
South Australia
Tenement No
5578
5593
5703
5753
5754
5755
5760
5764
5785
5800
5801
5802
5803
5824
5831
5848
5853
5873 ²
5882
5891 ³
5903
5904
5915 ²
5940
5951
5952
5956
5964
5966
Project Name
Curnamona
Curnamona
Curnamona
Curnamona
Curnamona
Curnamona
Curnamona
Curnamona
Curnamona
Curnamona
Curnamona
Curnamona
Curnamona
Curnamona
Curnamona
Curnamona
Curnamona
Curnamona
Curnamona
Curnamona
Curnamona
Curnamona
Curnamona
Curnamona
Curnamona
Curnamona
Curnamona
Curnamona
Curnamona
Gawler Craton 6014 ⁴
6041
Curnamona
6054
Curnamona
6056
Curnamona
6099
Curnamona
6161
Curnamona
6163
Curnamona
6164
Curnamona
6165
Curnamona
6194
Curnamona
6203
Curnamona
6211
Curnamona
6258
Curnamona
6271
Curnamona
6280 ⁵
Curnamona
6298
Curnamona
6323
Curnamona
6355
Curnamona
6356
Curnamona
6357
Curnamona
6358
Curnamona
6359
Curnamona
6360
Curnamona
6361
Curnamona
6370
Curnamona
6408
Curnamona
6409
Curnamona
6410
Curnamona
6411
Curnamona
6415
Curnamona
6428
Curnamona
Curnamona
6434
Gawler Craton 6468
Frome
GEL181
Tenement Name
Kalabity
Billeroo West
Bundera
Mutooroo Mine
Mundi Mundi
Bonython Hill
Bumbarlow
Maljanapa
Moko
Kalkaroo
Mutooroo West
Mulyungarie
Telechie North
Coolibah Dam
Bonython Hill (2)
Mingary (2)
Oratan
Benagerie
Mutooroo(2)
Prospect Hill
Border Block
Mundaerno Hill
Emu Dam
Coonarbine
Jacks Find
Thurlooka
Wompinie
Yalkalpo East
Moolawatana
Pernatty
Cutana
Bindarrah
Frome
Lake Carnanto
Chocolate Dam
Mutooroo South
Cootabarlow
Poverty Lake
Bundera Dam
Watsons Bore
Cochra
Kidman Bore
Prospect Hill SW
Mingary
Yalkalpo
Lake Charles
Olary
Lake Namba
Swamp Dam
Telechie
Yalu
Woodville Dam
Tepco
Carnanto
Lake Yandra
Tarkarooloo
Lucky Hit Bore
Coombs Bore
Eurinilla
Collins Tank
Lake Frome
Sandstone
Frome
Registered Owner ¹ % Interest
Havilah
Havilah
Copper Aura
Copper Aura
Havilah
Copper Aura
Havilah
Havilah
Havilah
Havilah
Copper Aura
Havilah
Havilah
Havilah
Copper Aura
Iron Genesis
Havilah
Havilah
Copper Aura
Teale & Brewer
Havilah
Havilah
Havilah
Havilah
Curnamona Energy
Curnamona Energy
Havilah
Curnamona Energy
Curnamona Energy
Red Metal Limited
Iron Genesis
Iron Genesis
Curnamona Energy
Havilah
Havilah
Copper Aura
Havilah
Havilah
Havilah
Havilah
Havilah
Havilah
Havilah
Iron Genesis
Curnamona Energy
Havilah
Havilah
Havilah
Havilah
Havilah
Havilah
Havilah
Iron Genesis
Havilah
Havilah
Havilah
Havilah
Havilah
Havilah
Havilah
Havilah
Havilah
Geothermal
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
65
100
100
100
100
100
100
100
100
100
10
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
100
100
100
Status
Current
Current
Current
Current
Current
Current
Current
Current
Current
Current
Current
Current
Current
Current
Current
Current
Current
Current
Current
Current
Current
Current
Current
Current
Current
Current
Current
Current
Current
Current
Current
Current
Current
Current
Current
Current
Current
Current
Current
Current
Current
Current
Current
Current
Current
Current
Current
Current
Current
Current
Current
Current
Current
Current
Current
Current
Current
Current
Current
Current
Current
Current
Current
Page 74
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
Project Name
Location
Kalkaroo
South Australia
Kalkaroo
South Australia
Kalkaroo
South Australia
Kalkaroo
South Australia
Kalkaroo
South Australia
South Australia
Kalkaroo
South Australia Maldorky
South Australia Maldorky
South Australia Maldorky
South Australia Maldorky
South Australia Maldorky
South Australia Mutooroo
South Australia Mutooroo
South Australia Mutooroo
Tenement No
ML6498
ML6499
ML6500
MPL158
MPL159
MC3828
MC4271
MC4272
MC4273
MC4274
MC4364
ML5678
MC3565
MC3566
Tenement Name
Kalkaroo
Kalkaroo
Kalkaroo
Kalkaroo
Kalkaroo
Kalkaroo
Maldorky
Maldorky
Maldorky
Maldorky
Maldorky
Mutooroo
Mutooroo
Mutooroo
Registered Owner ¹ % Interest
Kalkaroo
Kalkaroo
Kalkaroo
Kalkaroo
Kalkaroo
Kalkaroo
Maldorky
Maldorky
Maldorky
Maldorky
Maldorky
Havilah
Mutooroo
Mutooroo
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Status
Current
Current
Current
Current
Current
Current
Current
Current
Current
Current
Current
Current
Current
Current
Notes to Tenement Table as at 31 July 2020
Note 1
Havilah:
Copper Aura:
Curnamona
Energy:
Geothermal:
Havilah Resources Limited
Copper Aura Pty Ltd, a wholly owned subsidiary of Havilah Resources Limited
Curnamona Energy Pty Limited, a wholly owned subsidiary of Havilah Resources Limited
Geothermal Resources Pty Limited, a wholly owned subsidiary of Havilah Resources Limited
Iron Genesis:
Iron Genesis Pty Ltd, a wholly owned subsidiary of Havilah Resources Limited
Kalkaroo:
Maldorky:
Mutooroo:
Red Metal:
Teale &
Brewer:
Kalkaroo Copper Pty Ltd, a wholly owned subsidiary of Havilah Resources Limited
Maldorky Iron Pty Ltd, a wholly owned subsidiary of Havilah Resources Limited
Mutooroo Metals Pty Ltd, a wholly owned subsidiary of Havilah Resources Limited
Red Metal Limited
Teale and Associates Pty Ltd, Adrian Mark Brewer
Note 2 - 1% NSR royalty payable to MMG Limited
Note 3 - Agreement – farm-in to earn 85% interest in tenement
Note 4 - Agreement – farm-in, carried interest 10%
Note 5 - 1.25% NSR royalty payable to Exco Operations (SA) Pty Limited, Polymetals (White Dam) Pty Ltd
Page 75
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
GLOSSARY
Term
Definition
AUD, A$, $ or cents Units of Australian currency.
AASB
ADI
AEA
AGM
ASX
ATO
CMC
Australian Accounting Standards Board.
Accelerated Discovery Initiative.
Amalgamated Expenditure Agreement.
Annual General Meeting.
ASX Limited ABN 98 008 624 691, trading as Australian Securities Exchange.
Australian Taxation Office.
Consolidated Mining & Civil Pty Ltd.
Company
Havilah Resources Limited.
consolidated entity
the consolidated entity consists of Havilah Resources Limited and its subsidiaries. The
provisions of the Corporations Act 2001 use the term ‘consolidated entity’, rather than
‘Group’, to refer to the Parent Company and the subsidiaries included in the
consolidated financial statements.
COVID-19
coronavirus disease 2019.
CPI
DEM
EBITDA
ELA
EL
Consumer price index.
Department for Energy and Mining. The regulator in South Australia.
Earnings before interest, tax, depreciation and amortisation.
Exploration Licence Application.
Exploration Licence.
Entitlement Offer
On 25 October 2019 the Company opened a non-renounceable pro-rata entitlement
offer of ordinary shares to eligible shareholders on the basis of 1 new ordinary share
for every 4 ordinary shares held at an offer price of $0.10 per new ordinary share.
The Entitlement Offer closed on 11 November 2019.
eU3O8
Fe
FVTPL
equivalent uranium oxide.
iron.
fair value through profit and loss.
financial year
the financial year ended 31 July 2020.
GEL
Group
GST
g/t
Havilah
Investec
ISD
JORC
Geothermal Exploration Licence.
Havilah Resources Limited and its subsidiaries.
Goods and Services Tax.
gram/tonne.
Havilah Resources Limited.
Investec Australia Finance Pty Limited.
Insufficient Data.
Joint Ore Reserves Committee.
JORC Code
Australasian Code for reporting of exploration results, Mineral Resources and
Ore Reserves.
km
Km2
Koz
kilometres.
square kilometre.
thousand troy ounces.
Page 76
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
GLOSSARY (continued)
Term
Kt
MC
MEPL
ML
MPL
MT
Mt
Definition
thousand tonnes.
Mineral Claim.
Mines Exploration Pty Ltd.
Mining Lease.
Miscellaneous Purposes Licence.
magnetotelluric.
million tonnes.
NAWNTAC
Ngadjuri Adnyamathanha Wilyakali Native Title Aboriginal Corporation.
NPV
NSR
NTMA
oz
Net Present Value. NPV is based on 100% equity, real (2019) terms and ungeared.
The model is based on calendar years.
Net Smelter Return.
Native Title Mining Agreement.
troy ounces.
Parent Company
Havilah Resources Limited.
PFS
Plan
ppm
REE
Shortfall Shares
pre-feasibility study.
Performance Rights and Share Option Plan.
parts per million (1 ppm = 1 g/t).
rare earth elements.
The number of new ordinary shares under the Entitlement Offer not applied for by
eligible shareholders under their entitlement or offered to shareholders because they
are ineligible shareholders, provided that the Company makes the issue within three
months after the close of the Entitlement Offer and the issue price is not less than
$0.10 per new ordinary share.
SIMEC Mining
OneSteel Manufacturing Pty Ltd (trading as SIMEC Mining), a member of
GFG Alliance.
t
TREO
tonnes.
Total rare earth oxides.
USD or US$
United States dollars.
Page 77
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
CORPORATE DIRECTORY
Board of Directors
Mr Victor Previn (Non-Executive Director)
Mr Simon Gray (Executive Director – Chairman)
Dr Christopher Giles (Executive Director – Technical Director)
Company Secretary
Mr Simon Gray
Havilah Contact Details
Havilah Resources Limited
ASX issuer code: HAV
Registered Office: 107 Rundle Street, Kent Town, South Australia 5067
Telephone: +61 8 7111 3627
Website: www.havilah-resources.com.au
Email: info@havilah-resources.com.au
ABN: 39 077 435 520
External Auditor
Grant Thornton Audit Pty Ltd
Level 3, 170 Frome Street, Adelaide, South Australia 5000
Correspondence to: GPO Box 1270 Adelaide, South Australia 5001
Share Registrar
Computershare Investor Services Pty Limited
Level 5, 115 Grenfell Street, Adelaide, South Australia 5000
Telephone: +61 8 8236 2300
Page 78
ASX CODE: HAV
HAVILAH RESOURCES LIMITED
ABN: 39 077 435 520 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2020
Sunset over the Kalkaroo exploration basecamp owned by the Havilah Group (drone photograph courtesy of
Reece Singleton, a former Havilah Group employee)
Page 79