Helix Energy Solutions Group
Annual Report 2020

Plain-text annual report

ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2020 TABLE OF CONTENTS CHAIRMAN’S REVIEW ...................................................................................................................................... 1 CORPORATE DIRECTORY .............................................................................................................................. 2 REVIEW OF OPERATIONS ............................................................................................................................... 3 CORPORATE GOVERNANCE ........................................................................................................................ 20 DIRECTORS’ REPORT .................................................................................................................................... 21 AUDITOR’S INDEPENDENCE DECLARATION ............................................................................................. 32 INDEPENDENT AUDITOR’S REPORT ........................................................................................................... 33 DIRECTORS’ DECLARATION ........................................................................................................................ 37 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME ......... 38 CONSOLIDATED STATEMENT OF FINANCIAL POSITION ......................................................................... 39 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY .......................................................................... 40 CONSOLIDATED STATEMENT OF CASH FLOWS ...................................................................................... 41 NOTES TO THE FINANCIAL STATEMENTS ................................................................................................. 42 ADDITIONAL ASX INFORMATION ................................................................................................................. 72 CHAIRMAN’S REVIEW Dear Shareholders, I am pleased to present Helix’s 2020 Annual Report. 2019/20 financial year saw your Company experience ongoing exploration success at the Collerina Copper and Cobar Gold Projects and raise sufficient funds to move aggressively on both projects, primarily on the Cobar Gold Project. As the 2020/21 financial year starts, the Company is pursuing these exploration activities, focussing on further resource definition of the Cobar region gold and copper projects. The Company’s low cash position at the end of the current financial year was boosted subsequently in July 2020, with a placement and entitlement offer that raised approximately $1.85m (before costs). The raising saw a number of new shareholders come on to the register with the Company being well funded to pursue the planned drilling campaign at the Cobar Gold Project amid a strong gold price environment. The Cobar Gold Project continues to demonstrate an exciting geological and structural framework indicative of the large high-grade gold systems present in the region. Helix currently has exploration programs across the Amity, Reward, Battery Tank, Lone Hand, Girl in Blue, Boundary, Link and Republic prospects, all of which have exhibited strong encouragement from earlier drilling. The objective of the program now underway is to determine scale and ultimately increase our gold JORC Resources, to allow decisions to be made on initial mining studies. Early 2020, the Company announced the identification of new copper zones at the Collerina Copper Project which have the potential to further extend the current copper resource at the deposit. The interim Indicated and Inferred resource estimate for the Collerina Deposit currently stands at 2.02 million tonnes grading 2.03% Copper, 0.1g/t Au containing 40,400 tonnes of copper, 9,400 ounces of gold within an additional, larger Exploration Target (see ASX announcement dated 11 June 2019). The new copper target zones confirm the Exploration Target, bolstered by high-grade copper intercepts and presence of strong off-hole EM responses in the drilling so far. Regionally, first pass auger sampling taken over 400x100m grids show a series of copper anomalies warranting further exploration work. A conceptual open pit mining study commenced at the end of the 2019/20 financial year and has continued into the new year. The purpose of the study is to identify the likely boundaries of a starter open pit and areas where additional drilling would be required to firm up shallow copper resources and suitable pit designs. Work continues at our other NSW prospects including regional targets such as Yathella on the Collerina Copper Trend, Bijoux on the Rochford Copper trend, south of the Canbelego copper deposit and the emerging VMS prospective Mundarlo Project near Gundagai. Shareholders continue to retain exposure to our projects in Chile, including the ByN Copper and Gold deposit, the Joshua Porphyry Copper Project and the Samuel Copper Project. Finally, the year has also been a challenging one for many with the spread of COVID-19 across the World. Your Company also felt the effects, with weaker equity markets in the last few months of the 2019/20 financial year. Temporary salary reductions for staff and the waiving of all board fees by directors were put in place for the 3 months April to June. I would like to thank my fellow Board members and our loyal staff for their support in these measures. Following the well supported capital raising, the year ahead looks to be one filled with some exciting news flow with the Cobar Gold Project drilling well underway and Collerina Copper Project progressing, including through initial studies. I would also like to acknowledge the patience and continued support of shareholders as Helix continues to unlock value from its internally generated exploration asset portfolio. Yours faithfully, Peter Lester Executive Chairman CORPORATE DIRECTORY Directors Peter Lester Jason Macdonald Timothy Kennedy Executive Chairman Non-Executive Director Non-Executive Director Share Registry Computershare Investor Services Pty Limited Level 11, 172 St Georges Terrace Perth, WA 6000 General Manager – Geology Michael Wilson Company Secretary Benjamin Donovan Australian Business Number 27 009 138 738 Head and Registered Office 78 Churchill Avenue Subiaco, WA 6008 PO Box 825 West Perth, WA 6872 Telephone: +61 8 9321 2644 Facsimile: +61 8 9321 3909 Email: helix@helix.net.au Website: www.helix.net.au Securities Exchange The Company securities are quoted on the Australian Securities Exchange Limited ASX Code: HLX GPO Box 2975 Melbourne, VIC 3001 Phone: 1300 850 505 (within Australia) +61 3 9415 4000 (outside Australia) Fax: +61 3 9473 2500 Email: www.investorcentre.com/contact Web: www.computershare.com Auditor HLB Mann Judd Level 4, 130 Stirling Street Perth, WA 6000 PO Box 8124 Perth BC, WA 6849 T: +61 8 9227 7500 F: +61 8 9227 7533 W: www.hlb.com.au E: mailbox@hlbwa.com.au REVIEW OF OPERATIONS The strategy of Helix Resources Limited (“Helix” or “the Company”) is to advance our internally generated asset portfolio, with a primary focus on our strategic commodities, copper and gold. Utilising the Company’s deep geological knowledge of its asset portfolio and corporate expertise, Helix creates and looks to extract intrinsic value for the benefit of its shareholders. During this financial year, Helix successfully identified new positions of copper mineralisation outside the maiden resource at Collerina. These new zones, both in the hanging wall and footwall of the Central Zone Resource envelope, illustrate the additional scale potential of this greenfield Helix discovery. A comprehensive geological review of the Cobar Gold Project was also undertaken, and access to the northern portion of the Battery Tank goldfield was negotiated for the first time this year. Whilst COVID-19 restrictions affected travel and fieldwork in the final quarter of the financial year, Helix used this time to complete several desktop studies, which will now focus our exploration strategy in Central NSW for the remainder of 2020 and onward into development studies. NSW COBAR REGION COPPER AND GOLD PROJECTS Background Helix holds a high-quality project portfolio in one of Australia’s best regions for recent mineral discoveries, the Cobar mining district – NSW. This district hosts long-lived operating mines (150 years of mining operations) and has excellent access to infrastructure. Helix is continuing to carry out targeted exploration programs to define further precious and base metal mineralisation to add to its established copper and gold resources in this highly prospective region. Figure 1: Helix’s Central NSW Projects – strategic asset portfolio in a richly endowed mineral province REVIEW OF OPERATIONS Cobar Gold Project The Cobar Gold Project is 30km east-southeast of Aurelia’s Peak Gold Operations and only 16km from the Mt Boppy Gold Mine (historic production 417,000oz at 12.2g/t average grade). The project shares similar geological and structural controls to the nearby Peak Trend deposits, being relatively short strike sediment hosted and structure related gold deposits. The Cobar Gold project resource estimate was defined below historic prospects (Sunrise, Good Friday and Battery Tank) and an internally generated greenfield discovery (Boundary). Whilst a high-level mining study assessment is yet to be conducted, the “from surface” nature of the gold mineralisation suggests the deposits may be amenable to initial open cut mining methods. There remains significant potential for locating additional gold mineralisation throughout the broader goldfield. The deposits were mostly delineated by Helix with RC and diamond drilling completed in drilling campaigns between 2011 and 2017.The Mineral Resource is defined by a total of 135 RC and diamond drill holes for 15,390m for a total discovery cost per ounce of approximately A$25 per ounce. The Mineral Resources have been classified as Inferred Mineral Resources in accordance with the JORC Code, 2012 Edition and are shown in Table A. This table represents the total resource from deposits and is reported using a cut-off grade of 0.4 g/t Au and a higher cut-off grade of 1.2g/t Au. Resource interpretations and wireframes were prepared using a nominal 0.3g/t Au cut-off grade. The boundaries were generally modelled as sharp for this resource. Table A: Cobar Gold Project 2019 Mineral Resource Estimate (0.4 g/t Au Cut-off) 1 Deposit Sunrise Good Friday Boundary Battery Tank Total Classification Inferred Inferred Inferred Inferred Type Oxide/Trans Oxide/Trans Oxide/Trans Oxide/Trans Million Tonnes 1.58 0.45 1.54 0.18 3.75 Au g/t 1.1 0.9 0.9 1.0 1.0 (Rounding discrepancies may occur in summary tables) Au oz 56,400 13,700 42,800 5,900 118,800 Table B: Cobar Gold Project 2019 Mineral Resource Estimate (1.2g/t Au Cut-off) 1 Deposit Sunrise Good Friday Boundary Battery Tank Total Classification Inferred Inferred Inferred Inferred Type Oxide/Trans Oxide/Trans Oxide/Trans Oxide/Trans Million Tonnes 0.50 0.10 0.22 0.05 0.87 Au g/t 2.1 1.7 1.8 1.9 2.0 (Rounding discrepancies may occur in summary tables) Au oz 33,100 5,300 12,900 3,000 54,300 1 Helix confirms that it is not aware of any new information or data that materially affects the Mineral Resource information included in Helix ASX release dated 25 November 2010, 22 February 2011, 24 May 2011, 13 July 2011, 17 August 2011, 4 October 2012, 24 January 2017, 17 July 2017, 23 August 2017, 6 November 2019, 25 May 2020, 23 July 2020, 6 August 2020 and 27 August 2020. All material assumptions and technical parameters underpinning the estimates in those releases continue to apply and have not materially changed. REVIEW OF OPERATIONS Key Features of Cobar Gold Project ▪ Potential for the delineation of substantial gold deposits as evidenced from previous drilling which has returned intersections including – o 20m @ 25.5g/t Au and 39m @ 2.4g/t Au1 – Good Friday, o 45m @ 3.4g/t Au, and 70m @ 1.1g/t Au1 - Boundary Prospect, o 28m @ 2.3 g/t Au1: Sunrise Prospect and o 43m @ 2.3g/t Au1 at Battery Tank. ▪ An Inferred 118,000oz gold JORC2012 oxide gold resource (refer to tables A & B) – derived from these four prospects, with opportunity to significantly expand with further drilling. ▪ Resource grade intersections from near surface in first-pass drilling, and high-grade rockchips at new prospects requiring immediate follow-up drilling. o 20m @ 1.1g/t Au1 at Reward Prospect, o 17.7g/t Au1 rockchip from historically mined lode at Lone Hand Prospect and o 2.2g/t Au1 from grab sample of spoil at the Girl in Blue Prospect. ▪ Several other historic prospects exist with shafts, pits and dry blowing activity evident, including Homeward Bound and Republic Prospects. Mapping along strike of the Reward Prospect has identified numerous zones of sub-cropping “chevron” folds, an important structural pathfinder also seen nearby to high-grade mineralisation at the Mt Boppy gold deposit. Figure 2: Left: Chevron folded sediments collected east of a series of substantial historic shafts at the Reward Prospect during recent mapping. Right: Chevron folds in sediments from a cross-cut on No. 3 Level in the Mt Boppy Mine (Source: NSW Mineral Resources Publication No.18 – 1913). Geology Review During the COVID19 lock-down, a comprehensive technical review was undertaken. Using high resolution satellite data (photo imagery and spectral data), our structural interpretation, overlaid with both Company and historic geology, geophysics and geochemical databases. A large gold system model was developed and a series of specific target areas were identified and prioritised. The exploration model shows common geological features to Aurelia’s nearby Peak Gold Trend (+4Moz gold endowment). There, short strike, near vertical deposits of gold and base metal mineralisation to depth over 1 kilometre, are also hosted in an anticline. The gold mines are typically located on or adjacent to large regional structures (see Figure 3). REVIEW OF OPERATIONS Source: NewGold/Aurelia Figure 3: Local Peak Trend geology and mines – Left, regional geophysics showing similarity in magnetic responses of the two host anticlines Narri (Peak Trend: AMI) and Restdown (Cobar Gold Project: HLX)- Right A recent positive development for Helix at the Cobar Gold Project has been gaining access to the northern portion of the goldfield, which encompasses the fold closure of the Restdown Anticline (see Figure 3). This part of the project had not been accessible since Helix’s involvement in the region. It is believed that no company has had access to the area since at least the early 2000’s, with only minor surface sampling evident from public domain data, mostly collected in the 1980’s. The limited and broad spaced surface sampling indicates pathfinder minerals (arsenic and antimony) are both present and elevated in the fold nose area. The fold nose target zone covers approximately 50km2. With COVID19 travel restrictions easing, field activities re-commenced in late April 2020. Ongoing mapping and sampling across the goldfield continued during the last quarter of the financial year, identifying the important geological pathfinders in the field for targeting further gold mineralisation. Mapping and collection of rock chip samples identified a strong N-S corridor of gold mineralisation linking prospects to the south (Lone Hand and Girl in Blue) heading north through Reward, the Link and Republic, to the emerging prospective areas in the north of the goldfield (see Figure 4). New rockchip results from the eastern flank of the Reward area (incl. up to 4.13g/t Au, 2.16g/t Au and 2.08g/t Au1) are highly encouraging, and a priority for drill testing along this local trend (2H2020). These rock chipped areas coincide with a cluster of strong surface gold results over a broader 1.3km trend, continuing to the NW, where the Link Prospect has returned further significant surface gold rock chip samples (incl. up to 2.49g/t Au, 2.13g/t Au and 1.14g/t Au1). In previous broader regional surface sampling, gold results away from mineralised zones were typically very low or absent. Therefore, any sample results returning over 20ppb Au, particularly when coincident with pathfinder elements including arsenic, antimony, copper, lead and zinc, warrant follow-up. Samples collected are currently in the laboratory being assayed for pathfinder elements. Preliminary pXRF readings indicate pathfinder elements will be important in vectoring toward gold mineralisation, both in regional sampling and the upcoming drilling. REVIEW OF OPERATIONS Figure 4: Broader goldfield image showing current rock chips (circles) previous rock chips (triangles), structural framework (white lines), northern goldfield target areas (yellow ovals), presence of an increasingly important NNW mineralising regional structure (yellow hashed line) and regional structural directions NNW, NW and NE (red arrows). Collerina Copper Project Helix’s 100%-owned Collerina Copper Project is located in the highly prospective copper/gold mining and exploration district known as the Central Lachlan Origin, within central NSW, Australia. The Collerina Copper Project comprises a tenement package in excess of 1,500km2, including over 85km of copper-prospective trend. It is surrounded by multiple operating base metal and gold mines within the broader Cobar Basin (Tritton, Hera, Peak, CSA). The Central Zone deposit is an internally generated, high-grade copper discovery within the Collerina Copper Project. High-grade results from previous drilling of the Central Zone deposit include: 11m @ 6.6% Cu, 12m @ 5.0% Cu, 14m @ 4.0% Cu and 10m @ 3.7% Cu2. REVIEW OF OPERATIONS In June 2019, Helix announced a maiden resource estimate for the Central Zone deposit of 2.02 Mt at 2.03% Cu and 0.1g/t Au for 40kt copper and 9.4koz gold (Indicated and Inferred) (refer Table C). Almost 50% of that resource tonnage sits in the Indicated categorisation, with the remainder classified as Inferred. Table C: Central Zone Mineral Resource Estimate (June 2019) (0.5% Cu Cut-off) Tonnes Mt Classification Type Cu % Au g/t Cu t Indicated Inferred Total Indicated Inferred Total Indicated Indicated Inferred Inferred Total Oxide / Transitional Oxide / Transitional Oxide / Transitional Fresh Fresh Fresh Oxide / Transitional Fresh Oxide / Transitional Fresh Combined 0.17 0.46 0.63 0.83 0.57 1.40 0.17 0.83 0.46 0.57 2.02 1.1 0.6 0.7 2.6 2.5 2.6 1.1 2.6 0.6 2.5 2.0 0.0 0.0 0.0 0.2 0.1 0.2 0.0 0.2 0.0 0.1 0.1 1,900 2,700 4,600 21,800 14,100 35,900 1,900 21,800 2,700 14,100 40,500 Au oz 200 100 300 6,600 2,500 9,100 200 6,600 100 2,500 9,400 Helix confirms that it is not aware of any new information or data that materially affects the Mineral Resource information included in Helix ASX release dated 11 June 2019, Interim Maiden Resource at Collerina Copper Project. All material assumptions and technical parameters underpinning the estimates in that release continue to apply and have not materially changed. The Central Zone resource lies within a larger Exploration Target envelope (which has been constrained between interpreted cross-cutting faults, coincident with the strike of the surface geochemical footprint and shallow copper oxide drilling). The Exploration Target consists of an additional 2 – 5Mt at similar grades of approximately 1.5 – 3.0% Cu (representing a potential additional 30 – 150kt contained copper)*. *While the near-surface strike continuity of the Collerina mineralisation is now well understood, the potential quantity and grade of the Exploration Target remains conceptual until drill tested. Geophysical and structural evidence provides confidence in the geometry and dimensions, however there has been insufficient drilling within these new plunge extensions to estimate Mineral Resources in the broader shape. It should be considered uncertain as to whether further exploration drilling will result in the definition of additional Mineral Resources within or beyond the Exploration Target envelope. In 2016, Helix was awarded the inaugural NSW Minerals Council Explorer of the Year award for the discovery of the Collerina Deposit. Copper systems in this area tend to have relatively limited strikes at surface (<300m) and have significant plunge/dip extents. In the following years from discovery, the Company has carefully and frugally explored the deposit, to develop a robust geological model, before committing funds to a full drill-out and testing the depth extents. The Collerina deposit plunge has now been tested to a depth from surface of approximately 420m (over 1km down plunge), beyond which the Collerina copper system remains open. The identification of two new target zones outside the Central Zone Resource envelope, and their parallel plunge extent potential, provides us with confidence that increases in resource inventory should now be expected with additional drilling at Collerina Recent Drilling and Geophysics Downhole Electromagnetic (DHEM) analysis has proven to be a highly effective tool for targeting thicker, higher grade copper sulphide mineralisation within the Central Zone Resource envelope at Collerina. Following the 2019-20 drilling, DHEM surveys have continued to be undertaken in select holes. A number of strong on-hole and off-hole responses have been identified and plates modelled in the new target zones. The positions of the new plates are consistent with the geological interpretation and boost confidence in the plunge targets on both the new Northern Target Zone and the new Southern Target Zone (refer Figure 5). REVIEW OF OPERATIONS Figure 5: Plan view of the Collerina Deposit, showing the current resource (Orange) within the sulphide ribbon (Blue) geological interpretation. DHEM modelled plates (White shaded boxes) derived from EM surveys in CORC111, 116, 117 and 121. New Northern Target Zone A strong off-hole conductor down-plunge and down-dip from the key intercept of 4m @ 3.18% Cu and 0.4g/t Au from 218m, incl. 1m @ 6.44% Cu and 0.8g/t Au from 218m in CORC116, is very encouraging and a priority target. Both on-hole and off-hole responses were detected in the survey of CORC116, with a localised 500- 600S plate modelled slightly lower and east of the copper mineralisation intersected. This modelled plate approximates the interpreted position of structurally thickened copper-rich sulphide mineralisation (refer Figure 6). Further, a partially constrained broad off-hole conductor has been modelled below and extending northwest from CORC117 and under CORC118. This is directly up plunge from the key of Intercept 4m @ 3.18% Cu, 0.4g/t Au from 218m in CORC116 (refer Figure 6 and 8). This is consistent with the presence of an interpreted fold repeat of the copper bearing sulphide target. The plate was modelled as a broad elongate shape striking toward the northwest, with a conductance of 100 Siemens. This is lower than the down plunge target from CORC116, however, is consistent with the conductance in the broader Central Zone DHEM surveys (100-250S). This conductor was at the effective limit of DHEM systems search radius. REVIEW OF OPERATIONS Figure 6: Cross section showing down dip Northern Target Zone located over 180m down dip from current Central Zone Resource envelope Importantly these conductors indicate that further drilling and diamond tail extensions to test these deeper target positions, are required as a matter of priority. Similar to the nearby Central Zone, Helix expects to see zones of copper-bearing sulphide thickening associated with cross-cutting kink bands along the entire plunge of the Northern Target Zone (refer Figures 6 and 7). Figure 7: Schematic long section of the Central Zone Resource envelope showing selected intercepts along the plunge extent of the resource (refer Table C) REVIEW OF OPERATIONS Figure 8: Schematic long section of the Northern Target Zone showing selected intercepts and new EM positions along the plunge extent of the zone down to the FLEM target at depth (Refer Table C) When combined with the recent drill results, these modelled conductors add confidence to the potential of the parallel Northern Target Zone target. This copper bearing target zone extends from surface to an untested Fixed Loop EM (FLEM) target 1.5km down plunge (which is approximately 550m from surface). New Southern Target Zone Strong off-hole responses in CORC111 and CORC121 were modelled as converging plates with high conductance, the off-hole plates from CORC111 have a high conductance of 600-800 Siemens and the plate modelled from CORC121 had a conductance of 700-900 Siemens. These plates model below and down plunge of the near-surface oxide/transition copper mineralisation recently intersected in CORC111, 112 and 120, and based on our geological model, are likely to represent a localised fold closure. Importantly, these Southern Target Zone EM plates confirm a target corridor within the plunge extension of the footwall copper mineralisation behind/below the Central Zone resource (refer Table C). This position has been poorly drill tested to date. This breakthrough in understanding may also help Helix vector toward the footwall EM response that was identified early in the Collerina Deposit’s discovery, yet never satisfactorily tested with drilling. Collerina Regional Copper Exploration A mapping and surface sampling program assessing the potential for additional copper systems along the Collerina Trend is ongoing on the Collerina regional trend. Assays returned from earlier broad geochemical sampling shows the presence significant anomalous copper and gold results taken at the various prospects that also display geological similarities to the Collerina Deposit. Helix has continued to work-up regional targets along the broader Collerina Copper Trend with over 1,000 first pass auger soil samples collected using the Company’s Landcruiser mounted hydraulic auger rig. All samples collected have been initially tested with a pXRF. Samples from anomalous areas are being sent to a certified laboratory to assay for precious and base metals. This pXRF work is being utilised during the programs to prioritise areas for infill, fast-tracking targeting for follow-up drilling. REVIEW OF OPERATIONS Collerina South Prospect Auger sampling has covered the south east extension of the host rocks of the Collerina Deposit, by approximately another 2km. Whilst sampling to date is on a 100m x 200m grid, and much broader than the surface sampling over the Collerina Deposit, a pattern of complex folding (mimicking the complexity noted in the magnetics) appears to be emerging in the copper-in-soil anomalism at this Prospect. This pattern is very similar to the folding seen at the micro-scale in Collerina Deposit core (refer Figure 9). Thickening of sulphides on fold noses will be the priority areas to follow-up and infill at the Collerina South Prospect. Figure 9: Collerina South Prospect: initial copper-in-soils readings mimic the complex folding noted in the magnetics. Inset: fractal representation showing intense folding of a chalcopyrite vein in drill core from the Collerina Deposit. Widgelands NE Prospect First-pass auger sampling has been undertaken on a 400m x 100m grid over the northern end of the Collerina Copper trend. Helix has previously reported surface rockchips returning up to 7.3% Cu and 0.5g/t Au from sub- cropping ironstones in this area (refer ASX ann 13 Feb 2018). The Collerina Copper Trend bifurcates here with two prospective trends present. These trends continue NNW on Helix’s Quanda and Honeybugle tenements to become the Tritton Mine and Kurrajong Deposit trends in Aeris’ Tritton-Girilambone mine camp. Surface sampling across this target area identified a series of elongate copper-in-soil anomalies that coincide with geological, magnetic and subtle airborne EM trends. Infill sampling to refine anomalies is planned. REVIEW OF OPERATIONS Figure 10: Soil Auger in Widgelands area: copper-in soil anomalism on 400m x 100m sampling is coincident with the split of the Collerina trend into the regionally extensive Tritton and Kurrajong Trends Tindalls Prospect At the Tindalls Prospect area, two historic shafts (approximately 50m deep) are located on a favourable geological and structural trend (refer Figure 11). An Ironstone breccia similar to that seen at the Collerina Deposit has been mapped at surface along this trend. Interpretation of the local Magnetics suggests evidence for multiple deformation events across this area, a key component to developing structural thickening and copper enrichment at the Collerina Copper Deposit. The recent auger sampling has confirmed a continuous trend of copper in soil anomalism between the Yathella Prospect to the North and Max’s Folly to the south (refer Figure 12). Figure 11: Tindall’s Prospect: Yellow arrows define positions in photos of the two +50m deep historic shafts approximately 40m apart (E-W strike). Brecciated Ironstones sub-crops along this trend (similar to Collerina Deposit) - foreground of third photo. REVIEW OF OPERATIONS Figure 12: Recent Soil Auger on Collerina Copper Trend with copper in soil anomalies emerging from ongoing regional soil programs. New copper targets areas circled in yellow. Further sampling is planned, testing areas including the Homeville Trend, a trend north of the Collerina Deposit and infill target areas identified from the auger programs so far. This work continues to illustrate the high value potential targets that are being generated from within Helix’s asset portfolio. The new prospect areas being targeted have not been subject to modern exploration. Regional Copper Projects – NSW Scout mapping was undertaken within the 1.7km x 0.7km copper in soil anomaly called Rochford, 7.5km SE of the Canbelego Deposit. The prospective zone was initially identified from a cluster of pXRF readings from the Auger soils completed in 2019, with readings of up to 580ppm Cu. Importantly the copper anomaly is coincident with the subtle ridgeline hosting a brecciated ironstone. Initial pXRF readings taken from the sub-cropping brecciated ironstone returned Cu (up to 0.17%), Pb (up to 0.18%), Zn (up to 0.08%) and Bi (up to 0.12%). Figure 13: photos of gossan from locations flanking a subtle ridge line running NW, within the Rochford copper in soil anomaly. REVIEW OF OPERATIONS Scout mapping has identified several additional areas where ironstones sub-crop. Including an area with an historic prospector pit, close to an anomalous copper-in-soil reading. Further mapping was completed early 2020, with infill auger soils and surface geophysics also completed. A work program for drilling at Rochford has been submitted to the mines department for approval. The presence of the anomaly over the strike of the host ridgeline all the way to the south eastern boundary of the tenement led to Helix applying and obtaining interest in a small tenement (EL 8948) directly east of EL8633. The 12-unit application covers the extensions of this copper trend for approximately another 6km. The tenement was granted in the first quarter of 2020. Figure 14: New Copper Target(Rochford Prospect) – Sub-copping ironston, anomalous in Cu, Pb, Zn & Bi, approximately 7.5km southeast of the Canbelego Copper Deposit (new auger soils – squares - pXRF, previous soils – circles- Lab assays). Mundarlo Joint Venture An initial Moving Loop Electro Magnetic (MLEM) survey was completed at Mundarlo identified a large but discrete bedrock conductor in this favourable setting for precious and base metal systems. The conductor sat below a zone of copper-in-soil anomalism hosted in a mixed sedimentary/volcanoclastic basin sequence. During 2018, the Company completed an infill auger soil sampling program over the MLEM target area with assays confirming the presence of copper and associated zinc and gold anomalism in soils above the MLEM conductor. Helix followed up this initial work with a three-hole RC drill program (two holes extended in May 2018). The initial drilling confirmed the EM conductor is sulphide related. Subsequent geological studies and new information from the NSW Geological Survey (GNSW) has confirmed the project to be of a similar age to the VMS systems Helix is targeting at Collerina, and the geological setting is prospective for the style of VMS target being pursued. REVIEW OF OPERATIONS In September 2018, Helix drilled a deep diamond hole to provide an initial test of the 750m x 600m modelled EM conductor plate. A DHEM survey was also undertaken in this hole. Massive iron sulphide (pyrrhotite) was intersected at the target depth, and further off-hole and below hole targets were identified in the DHEM survey. A geological review of the core by GNSW in the first half of 2019 identified that the sequence drilled is over- turned and is younging down hole. A revised geological model targeting the feeder structure and potentially multiple sulphide lenses is now being considered. Helix has satisfied the expenditure requirements securing 80% ownership of the Mundarlo project, with our JV partner planning to contribute at 20% to future programs. Figure 15: Coincident copper-in-soil anomalism and modelled EM conductors in a favorable geological setting for VMS style mineralisation at Mundarlo NSW. The project has seen limited fieldwork during 2019-20 as the Company has focussed on the Cobar Region projects. NSW Geological survey is reviewing drill core as part of a broader VMS study in NSW. REVIEW OF OPERATIONS Canbelego JV Copper Project (HLX 70% Manager: Aeris 30%) and Regional Copper Projects (HLX 100%) The JV Participants are assessing the previous work at the Canbelego Project, with exploration programs and budgets being considered to test additional copper targets on the property as part of Helix’s broader exploration campaign. Recent work by Helix on 100% owned adjoining project (Rochford EL8633) identified an area of sub-cropping gossan approximately 7km SE of the Canbelego Deposit. Auger soil sampling along the trend is underway and will be assessed as part of the other regional copper targeting, including regional targets at the Collerina Project. Figure 16: Location of new gossan zone in a north-west copper bearing trend, approximately 7km along strike from the Canbelego Copper Deposit. Chile Projects Helix maintains exposure to three copper exploration properties, close to infrastructure in Region IV Chile. With the outbreak of COVID, field activities are currently not possible and the Chilean team has been reduced and is working to a care and maintenance budget. Samuel Project Japanese Oil, Gas and Metals National Corporation (“JOGMEC”) funded and completed Stage 2 of the exploration drilling phase of the Samuel Copper Project Joint Venture, and commenced Stage 3, funding a further US$435,000 before COVID shut down exploration activities. Drilling to date at the Samuel project shows the system to be both fertile and prospective for porphyry and manto style of copper mineralization over the 19km2 target area. REVIEW OF OPERATIONS Figure 17: Cutting-edge Drone-based aeromagnetic surveys undertaken on Joshua and Samuel Projects. Joshua Project Helix retains 100% ownership of the Joshua project. Work completed to date has identified a large copper porphyry system, with several drill-ready targets present. Helix is seeking a strategic partner to advance this copper asset. ByN (Blanco Y Negro) Project The ByN copper deposit is on a granted mining lease within trucking distance to several copper production facilities. Helix is seeking a trade sale or partner to advance this copper asset. Resources Commodity Category Copper Indicated and Inferred Project Collerina Interest 100% Helix Copper (+Gold) Indicated and Inferred Blanco Y Negro, Chile 100% Helix Copper Inferred Gold Inferred Canbelego JV, NSW Cobar Gold (Aeris 70% 30%) 90% (Glencore moving to 1% NSR) Resource Oxide: 0.63Mt @ 0.7% Cu, for 4,600t Cu Fresh: 1.4Mt @ 2.6% Cu, 0.2g/t Au for 35,800t Cu and 9,100oz Au Total Resource: 2.02Mt @ 2.03% Cu, 0.1g/t Au for 40,400t Cu & 9,400oz Au (at 0.5% Cut-off) – 2012 JORC7 Indicated: 0.8Mt @ 1.5% Cu, 0.5 g/t Au for 12,000t Cu & 12,000oz Au Inferred: 0.7Mt @ 1.3% Cu, 0.6g/t Au for 8,000t Cu & 12,000oz Au Total Resource: 1.5Mt @ 1.4% Cu, 0.5g/t Au for 20,000t Cu & 24,000oz Au (at 0.5% Cut-off) – 2012 JORC4 1.5Mt @ 1.2% Cu for 18,000t Contained Cu (at 0.3% Cu Cut-off) –JORC 20045 2.6Mt @ 1.2g/t Au for 100,000oz (0.3 g/t Au cut off) JORC 20046 Governance Controls All Mineral Resource Estimates are prepared by qualified professionals following JORC-compliant procedures that ensure representative and unbiased samples are obtained with appropriate QA/QC practices in place. REVIEW OF OPERATIONS Competent Persons Statement The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Mr M Wilson, a Competent Person and a Member of The Australasian Institute of Mining and Metallurgy. Mr M Wilson is a General Manager, shareholder and full-time employee of Helix Resources Limited. Mr M Wilson has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 and 2012 Editions of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr M Wilson consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. Notes 1. For full details of exploration results refer to ASX announcement dated 5 April 2018 and 13 June 2018. Helix Resources is not aware of any new information or data that materially effects the information in these announcements. 2. For full details of exploration results refer to ASX on 29 March 2018 and 23 May 2018. Helix Resources is not aware of any new information or data that materially effects the information in these announcements. 3. For full details of exploration results refer to ASX announcement dated 23 August 2017. Helix Resources is not aware of any new information or data that materially effects the information in these announcements. 4. The information in this report that relates to the Mineral Resource Estimation for Blanco y Negro is based on information compiled by Mr Byron Dumpleton a Consultant Resource Geologist from his company BKD Resources Pty Ltd. Mr Dumpleton is a member of the Australian Institute of Geoscientist. Mr Dumpleton has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration to qualify as a Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Mineral Exploration Results, Mineral Resources and Ore Reserves” (JORC Code). Mr Dumpleton consents to the inclusion in this report of the matters based on their information in the form and context in which they appear. 5. For more information on the Canbelego JV resource estimate, refer to ASX announcement dated 7 October 2010. Helix is not aware of any new information or data that materially effects the information included in the said announcement. 6. For more information on the Cobar Gold resource estimate, refer to ASX announcement dated 17 August 2011. Helix is not aware of any new information or data that materially effects the information included in the said announcement. 7. For more information on the Collerina resource estimate, refer to ASX announcement dated 11 June 2019. Helix is not aware of any new information or data that materially effects the information included in the said announcement. CORPORATE GOVERNANCE Helix Resources Limited has made it a priority to adopt systems of control and accountability as the basis for the administration of corporate governance. Commensurate with the spirit of the ASX Corporate Governance Council's Corporate Governance Principles and Recommendations ("Principles & Recommendations") fourth edition, the Company has followed each recommendation where the Board has considered the recommendation to be an appropriate benchmark for its corporate governance practices. Where the Company's corporate governance practices follow a recommendation, the Board has made appropriate statements reporting on the adoption of the recommendation. Where, after due consideration, the Company's corporate governance practices depart from a recommendation, the Board has offered full disclosure and reason for the adoption of its own practice, in compliance with the "if not, why not" regime. The Company’s Corporate Governance Statement for the year ended 30 June 2020 is available on the Company’s website at www.helix.net.au. The directors of Helix Resources Limited believe that effective corporate governance improves company performance, enhances corporate social responsibility and benefits all stakeholders. Changes and improvements are made in a substance over form manner, which appropriately reflect the changing circumstances of the company as it grows and evolves. Accordingly, the Board has established a number of practices and policies to ensure that these intentions are met and that all shareholders are fully informed about the affairs of the Company. DIRECTORS’ REPORT The Directors of Helix Resources Limited (“Helix” or “the Company”) present their Report together with the financial statements of Helix Resources Limited and its controlled entities (“the Group”) for the year ended 30 June 2020. DIRECTORS The following persons held office as Directors of Helix Resources Limited during or since the end of the financial year and up to the date of this report: Peter Lester Executive Chairman Mr Lester is a qualified Mining Engineer and has over 40 years of experience in the mining industry. Mr Lester has held senior executive positions with North Ltd, Newcrest Mining Limited, Oxiana/Oz Minerals Limited and Citadel Resource Group Limited. Mr Lester’s experience covers operations, project and business development and general corporate activities including financial services. Mr Lester has served on several ASX listed and private mining boards and is currently a Non-Executive Director of Millennium Minerals Ltd and White Rock Minerals Ltd. Jason Macdonald LLB, BCom Non-Executive Director Mr Macdonald has practiced law in both mining corporate/commercial and commercial litigation. Mr Macdonald is also a Director of several private resource companies and has a diverse range of corporate, equity capital market and mining related experience. Timothy Kennedy BAppSc(Geol), GDip(Comp), MBA, MAIMM Non-Executive Director Mr Kennedy is a geologist with a successful 30-year career in the mining industry, including extensive involvement in the exploration, feasibility and development of gold, nickel, platinum group elements, base metals and uranium projects throughout Australia. His most recent role was as Exploration Manager with Independence Group NL, which during his 11 years grew from a junior explorer to a multi-asset and multi- commodity mining company. Prior to that, Mr Kennedy held several senior positions with global diversified miner, Anglo American, including as Exploration Manager – Australia, Principal Geologist / Team Leader – Australia and Principal Geologist. He also held a technical position with Resolute Limited, Hunter Resources and PNC Exploration. Michael Wilson B Ec, B Sc (Hons), MAusIMM Managing Director – Resigned 12 March 2020 to assume the position of General Manager - Exploration Mr Wilson established the Company’s current copper and gold asset portfolios in Australia and Chile, securing tenement holdings and JV’s with incumbent mine operators in these strategically selected infrastructure-rich regions. Michael’s experience includes project management; mineral exploration using geology, geochemistry, geophysics and drilling; ore resource drilling, ore resource estimation and evaluation programs; and monitoring joint venture projects. Michael’s corporate skills include broker and stakeholder engagement, commercial negotiations, acquisitions and divestitures. DIRECTORS’ REPORT Directorships Of Other Listed Companies Directorships of other listed companies held by Directors in the 3 years immediately before the end of the financial year are as follows: Name Peter Lester Timothy Kennedy Company Current: White Rock Minerals Ltd, Kingrose Mining Limited Previous: Millennium Minerals Limited (Until February 2020) Current: Sipa Resources Limited Previous: Millennium Minerals Limited (Until February 2020) Interests In The Shares And Options Of The Company And Related Bodies Corporate As at the date of this report, the interests of the Directors in the shares and options of Helix Resources Limited were: P Lester J Macdonald T Kennedy Number of Ordinary Securities Number of Options over Ordinary Shares 1,105,342 15,635,514 450,000 3,000,000 3,000,000 3,000,000 COMPANY SECRETARY Benjamin Donovan Mr Donovan is an experienced Company Secretary, providing Helix with corporate advisory and consultancy services. Mr Donovan is a member of the Governance Institute of Australia and provides corporate advisory, IPO and consultancy services to a number of companies. Mr Donovan is currently a company secretary of several ASX listed and public unlisted companies and has gained experience across resources, agritech, biotech, media and technology industries. He has extensive experience in listing rules compliance and corporate governance, having served as a Senior Adviser at the ASX in Perth for nearly 3 years, where he managed the listing of nearly 100 companies on the ASX. In addition, Mr Donovan has experience in the capital markets having raised capital and assisted numerous companies on achieving an initial listing on the ASX, as well as for a period of time, as a private client adviser at a boutique stock broking group. CORPORATE Principal Activities The principal activity of the Group constituted by Helix Resources Limited and the entities it controlled during the year consisted of copper, gold, iron ore and other base metal mineral exploration in Australia and Chile. There has been no significant change in the nature of these activities during the year. Financial Results The net consolidated loss of the Group for the financial period, after provision for income tax was $480,596 (30 June 2019: $720,037) and reported net cash outflows from operating activities of $493,318 (30 June 2019: $673,436). As at 30 June 2020, the Group had a net asset position of $9,904,434 (30 June 2019: $9,176,184). Dividends No dividend has been paid since the end of the previous financial year and no dividend is recommended for the current period. Review Of Operations The Group’s activities are contained in releases to the ASX on a quarterly basis, discussed in a separate section of this Annual Report as well as on our website at www.helix.net.au. The Company’s strategy continues to focus on prospective gold and copper regions in Australia and Chile and utilising our corporate and geological expertise to create and extract value for the benefit of our shareholders. DIRECTORS’ REPORT Review Of Operations (Continued) Mineral Asset Project Highlights Refer to the Review of Operations. Corporate Major corporate events include: ▪ ▪ The Company completed a share placement to raise $1,000,000 on 28 November 2019. The placement was undertaken at $0.016 per share. Morgans Corporate was the lead manager with the funds raised from institutional, sophisticated and strategic investors. 62,500,000 ordinary shares were issued using the Company’s 15% placement capacity under ASX Listing Rule 7.1. In March 2020, Mr Wilson stepped down as Managing Director and appointed as General Manager of Geology to focus on the rapidly advancing exploration of the Collerina Copper Project. In May 2020, 2,000,000 Class C options expired unexercised. In June 2020, a Placement Offer was completed, raising approximately $0.3 million (before costs) through the issue of 42,446,669 ordinary shares at $0.007 per share. In June 2020, a Non-Renounceable Entitlement issue of 1 share for every 2 shares held by eligible shareholders was announced to raise an additional $1.85 million (before costs). This was completed in July 2020 through the issuance of 264,706,567 ordinary shares at $0.007 per share. ▪ ▪ ▪ Significant Changes In State Of Affairs In the opinion of the Directors, other than disclosed elsewhere in this Report, there were no significant changes in the state of affairs of the Group that occurred during the period under review. Subsequent Events On 10 July 2020, the Company issued 264,706,567 ordinary shares at $0.007 per share, raising a total of $1.85 million (before costs), completing the Non-Renounceable Entitlement issue of 1 share for every 2 shares held by eligible shareholders as announced on 5 June 2020. No other matter or circumstance has arisen since 30 June 2020 that has significantly affected or may significantly affect the Group’s operations, the results of those operations or the Group’s state of affairs in future years. Future Developments A discussion of likely developments in the Group’s operations in future financial years and the expected results of those operations are set out in the Review of Operations above. Share Options As at the date of this report, there were 15,000,000 options on issue at various exercise prices and expiry periods. Refer to the remuneration report for further details of the options held by Key Management Personnel (KMP). Option holders do not have any right, by virtue of the option, to participate in any share issue of the Company or any related body corporate. No shares were issued as a result of the exercise of options during the year or until the date of this report. DIRECTORS’ REPORT REMUNERATION REPORT [AUDITED] This remuneration report sets out the remuneration information for Directors and other Key Management Personnel (‘KMP’) of the Company for the year ended 30 June 2020. KMP are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Group, directly or indirectly including any Director (whether executive or otherwise) of the parent. The information provided within this remuneration report has been audited as required by section 308(3C) of the Corporations Act 2001. To help preserve the company’s cash position, the Board spent considerable time focusing on its remuneration framework and policy reflecting on past feedback from stakeholders and significant cost reduction measures. All Directors and KMP held their positions for the entire financial year and up to the date of this report unless otherwise stated. The individuals included in this report are: Executive Director Mr P Lester Mr M Wilson Non-Executive Directors Mr P Lester Mr J Macdonald Mr T Kennedy Executive Chairman (Appointed 13 March 2020) Managing Director (Resigned 12 March 2020) Non-Executive Chairman (Resigned 13 March 2020) Non-Executive Director Non-Executive Director Key Management Personnel Mr M Wilson General Manager – Geology (Appointed 12 March 2020) Remuneration Governance The Board has determined that given the size of the Company, that the current Board members will carry out the roles that would otherwise be undertaken by a remuneration committee with each Director excluding themselves from matters in which they have a personal interest and that Mr Timothy Kennedy will chair such discussions. The Board (operating under the formal charter of the Nomination and Remuneration Committee) is responsible for reviewing and recommending the remuneration arrangements for the Executive and Non-Executive Directors and KMP each year in accordance with the Company’s remuneration policy approved by the Board. This includes an annual remuneration review and performance appraisal for the Managing Director and other executives, including their base salary, short and long-term incentives, bonuses, superannuation, termination payments and service contracts. Further information relating to the role of the Nomination & Remuneration Committee, which is assumed by the Board, can be found within the Corporate Governance section of the Company’s website, www.helix.net.au. Overall Remuneration Framework The Board recognises that the Company’s performance and ultimate success in project delivery depends very much on its ability to attract and retain highly skilled, qualified and motivated people. At the same time, remuneration practices must be transparent to shareholders and be fair and competitive taking into account the nature, complexity and size of the organisation. DIRECTORS’ REPORT Overall Remuneration Framework (Continued) The approach to remuneration has been structured with the following objectives: ▪ To attract and retain a highly skilled executive team who are motivated and rewarded for successfully delivering the short and long-term objectives of the Company, including successful project delivery; ▪ To link remuneration with performance, based on long-term objectives and shareholder return, as well as critical short-term objectives which are aligned with the Company’s business strategy; ▪ To set clear goals and reward performance for successful project development in a way which is sustainable, including in respect of health & safety, environment and community based objectives; ▪ To be fair and competitive against the market; ▪ To preserve cash where necessary for exploration, by having the flexibility to attract, reward or remunerate executives with an appropriate mix of equity based incentives; ▪ To reward individual performance and group performance - thus promoting a balance of individual performance and teamwork across the executive management team and the organisation; ▪ To have flexibility in the mix of remuneration, including offering a balance of conservative LTI instruments such as options to ensure executives are rewarded for their efforts, but also share in the upside of the Company’s growth and are not adversely affected by tax consequences. The remuneration framework provides a mix of fixed and variable “at risk” remuneration and a blend of short and long-term incentives. The remuneration for executives has three components: ▪ Fixed remuneration, inclusive of superannuation and allowances; ▪ STIs under a performance based cash bonus incentive plan; and ▪ LTIs through participation in the Company’s shareholder approved equity incentive plan. These three components comprise each executive’s total annual remuneration. Executive Remuneration All executives receive a fixed base cash salary and other associated benefits. All executives also receive a superannuation guarantee contribution required by Australian legislation, which was 9.5%. No executives receive any retirement benefits. Fixed remuneration of executives are set by the Board each year and is based on market relativity and individual performance. In setting fixed remuneration for executives, individual performance, skills, expertise and experience are also taken into account to determine where the executive’s remuneration should sit within the market range. Where appropriate, external remuneration consultants will be engaged to assist the Board to ensure that fixed remuneration is set to be consistent with market practices for similar roles. Fixed remuneration for executives are reviewed annually to ensure each executive’s remuneration remains fair and competitive. However, there is no guarantee that fixed remuneration will be increased in any service contracts for executives. Short Term Incentives The Managing Director and other executives were eligible to earn short-term cash bonuses upon achievement of significant performance based outcomes aligned with the Company’s strategic objectives at that time. These performance based outcomes are considered to be an appropriate link between executive remuneration and the potential for creation of shareholder wealth. Given market conditions for exploration companies, no short- term incentives were paid during the year. Long Term Incentives LTI awards are generally limited to Directors, executives, senior in-country managers and other key employees approved by the Board who influence or drive the strategic direction of the Company. No options were issued as LTI’s to Directors during the year (2019: 9,000,000 options). DIRECTORS’ REPORT Long Term Incentives (Continued) Value of Options Awarded, Exercised and Lapsed During the Year 2019 Value of Options Granted During the Year $ Fair Value Per Option $ Grant Date Exercise Price $ Expiry Date Mr P Lester 34,426 30 Nov 2018 0.0115 0.065 30 Nov 2021 Mr G Lethridge - - - - - Mr M Wilson 34,426 30 Nov 2018 0.0115 0.065 30 Nov 2021 Mr J Macdonald 34,426 30 Nov 2018 0.0115 0.065 30 Nov 2021 Value of Options Exercised during the year $ Value of Options Lapsed or Forfeited During the Year $ Number of Options Lapsed or Forfeited During the Year Number of Options Held at Date of Resignation - - - - - - - 10,475 1,000,000 2,000,000 68,433 3,000,000 68,433 3,000,000 - - Grant of Long Term Incentives The following options over ordinary shares were issued to KMP: P Lester J MacDonald M Wilson 30 June 2020 30 June 2019 - - - 3,000,000 3,000,000 3,000,000 All options issued to Directors and KMP are issued for nil consideration. All options issued carry no dividend or voting rights. When exercised, each option is converted into one ordinary share pari passu with existing ordinary shares. Non-Executive Remuneration The policy of the Board is to remunerate Non-Executive Directors in the form of Directors’ fees at market rates for comparable companies based on their time, commitment and responsibilities. Fees for Non-Executive Directors are not linked to the performance of the Company to maintain independence and impartiality. In determining competitive remuneration rates, the Board have historically reviewed local trends among comparative companies and the industry generally. Non-Executive Director fees are also determined within an aggregate fee pool which is subject to approval by shareholders. The aggregate fee pool is currently set at $150,000 per annum which was last approved at the Annual General Meeting in April 2006. As at the date of this report the level of total Non-Executive Director remuneration actually paid remains below the maximum amount payable. DIRECTORS’ REPORT Details of Remuneration Salaries and fees paid do not include any superannuation payments. The Company does not pay retirement allowances to Non-Executive Directors in line with ASX Corporate Governance Recommendations. Director’s salaries were waived in full and management salaries were reduced by 20% for the three months April to June as part of cost conservation during the COVID-19 crisis. Short Term Employee Benefits Post- Employm ent Benefits 2020 Salary & Fees Bonus Non- Monetary Superann uation Long- Term Benefits Annual & Long Service Leave Share Based Payments Shares Options (3) % of Remune ration Total Performance Related $ $ $ $ $ $ $ $ $ Non-Executive Directors P Lester (1) 37,671 J Macdonald 28,919 T Kennedy 28,919 Executive Directors M Wilson (2) 150,000 P Lester (1) 2,093 Key Management Personnel M Wilson (2) 41,818 Total 289,420 - - - - - - - - - - - - - - 3,579 2,747 2,747 - - - 14,250 10,385 199 - 3,973 (18,278) 27,495 (7,893) - - - - - - - 7,477 10,556 7,496 15% 25% 19% 48,727 42,222 39,162 7,477 4% 182,112 3,079 57% 5,371 3,079 10% 30,592 39,164 348,186 - - - - - - (1) Mr Lester was appointed as Executive Chairman on 13 March 2020, having been Non-Executive Chairman up to that date, at no additional salary to his non-executive fees. (2) Mr Wilson resigned as Managing Director and was appointed as General Manager – Geology on 12 March 2020. (3) The fair value of options is calculated at the date of grant using the Black Scholes option pricing model and allocated to each reporting period over the period from grant date to vesting date. The value disclosed in the above table is the portion of the fair value of the options recognised in the reporting period. DIRECTORS’ REPORT Details of Remuneration (Continued) Short Term Employee Benefits Post- Employm ent Benefits 2019 Salary & Fees Bonus Non- Monetary Superann uation Long- Term Benefits Annual & Long Service Leave Share Based Payments Shares Options (3) % of Remune ration Total Performance Related $ $ $ $ $ $ $ $ $ Non-Executive Directors P Lester (1) 32,858 G Lethridge (2) 20,320 J Macdonald 36,530 T Kennedy 36,530 Executive Directors M Wilson 200,000 Key Management Personnel D Hanna (4) - Total 326,238 - - - - - - - - - - - - - - 3,121 1,930 3,470 3,470 - - - - 19,000 17,394 - - 30,991 17,394 - - - - - - - 21,469 37% 57,448 - - 22,250 21,469 27,719 35% 41% 61,469 67,719 21,469 8% 257,863 - - - 92,126 466,749 - - - - - - - (1) Mr Lester was appointed on the 25 October 2018. (2) Mr Lethridge resigned on the 25 October 2018. (3) The fair value of options is calculated at the date of grant using the Black Scholes option pricing model and allocated to each reporting period over the period from grant date to vesting date. The value disclosed in the above table is the portion of the fair value of the options recognised in the reporting period. (4) Mr Hanna resigned as Company Secretary on the 1 August 2018. No short-term cash bonuses were paid or accrued for during the year ended 30 June 2020 (2019: nil). Whilst the level of remuneration is not dependent on the satisfaction of any performance condition, the performance of Executives is reviewed on an annual basis against a number of qualitative and quantitative factors. Additional Information In considering the Group’s performance and benefits for shareholder wealth, the Board have regard to the following indices in respect of the current financial year and the previous four financial years: Item 2015 2016 2017 2019 2020 Other income Net (loss) Share price Loss per share (cents) Dividends 27,720 22,495 43,940 63,995 144,636 (1,502,964) (6,312,894) (348,200) (720,037) (480,596) $0.07 (0.54) $0.037 (1.94) $0.037 (0.09) $0.014 (0.17) $0.014 (0.10) Nil Nil Nil Nil Nil DIRECTORS’ REPORT Service Agreements On appointment to the Board all Non-Executive Directors enter into a service agreement in the form of a letter of appointment. The letter sets out the Company’s policies and terms including compensation relevant to the Director. Remuneration and other key terms of employment for the Managing Director and other executives are formalised in executive service agreements. The agreements provide for payment of fixed remuneration, performance related cash bonuses where applicable, other allowances and confirm eligibility to participle in the Company’s STI and LTI plans. The major provisions of the agreements relating to remuneration are set out below. Name Base Salary / Fee (1) P Lester M Wilson J Macdonald T Kennedy 55,000 219,000 40,000 40,000 Term of Agreement Notice Period by Company Notice Period from Executive Not specified Not Specified Not specified Not specified Not specified Not specified Not specified Not specified Not specified Not specified Not specified Not specified (1) Inclusive of 9.5% Superannuation guarantee contributions Options held by Directors and Key Management Personnel The number of options over ordinary shares in the Company held during the financial year by each Director of Helix Resources Limited and other KMP of the Company, including their personally related parties, are set out below. Director/Key Management Personnel Balance as at 1 July 2019 P Lester M Wilson 3,000,000 3,000,000 J Macdonald 3,000,000 T Kennedy 3,000,000 Options Granted during year as remuneration Options Exercised during year Other changes during year Balance as at 30 June 2020 Options vested & exercisable at end of year - - - - - - - - - - - - 3,000,000 2,000,000 3,000,000 2,000,000 3,000,000 2,000,000 3,000,000 3,000,000 Shares Held by Directors and Key Management Personnel The number of ordinary shares in the Company held during the financial year by each Director of Helix Resources Limited and other KMP of the Company, including their personally related parties, are set out below. No shares were issued as part of remuneration. Director/Key Management Personnel P Lester M Wilson J Macdonald T Kennedy Balance as at 1 July 2019 Purchased Disposed Other Movements Balance as at 30 June 2020 - 736,895 3,505,434 10,846,764 300,000 - - - - - - - - - - - 736,895 3,505,434 10,846,764 300,000 Subsequent to 30 June 2020, shares held by the Directors and Key Management Personnel increased in-line with the Non-Renounceable Entitlement issue of 1 share for every 2 shares held on 10 July 2020. DIRECTORS’ REPORT Related Party Transactions The Company has adopted a policy to contract the services of certain Director Related entities to retain access to relevant expertise. The policy provides that Helix will only enter into a transaction with a Director Related entity in the following circumstances: a) Any proposed transaction is at arm’s length and on normal commercial terms; and b) Where it is believed that the Director Related entity is the best equipped to undertake the work after taking into account: experience, expertise, knowledge of the Group; and value for money. Use of Remuneration Consultants During the year ended 30 June 2020, whilst the Board did not engage the formal services of external remuneration consultants, it did hold informal discussions with such consultants. In addition, the Board utilised publicly available remuneration benchmarking surveys prepared by an international recruitment agency. Voting and comments made at the Company’s last Annual General Meeting Helix received approximately 69% of “yes” votes on its Remuneration Report for the financial year ended 30 June 2019 at its 2019 Annual General Meeting. This was decided by way of poll called by the Chairman of the meeting, as even though the resolution was passed by a majority, a “First Strike” had resulted as more than 25% of the votes cast were against the adoption of the Remuneration Report. The Company received no specific feedback on its Remuneration Report at the Annual General Meeting. END OF AUDITED REMUNERATION REPORT Officers’ Indemnity and Insurance During the year the Company paid an insurance premium to insure the Directors and Officers of the Company and related bodies corporate. The Officers of the Company covered by the insurance policy include the Directors named in this report. The Directors’ and Officers’ Liability insurance provides cover against all costs and expenses that may be incurred in defending civil or criminal proceedings that fall within the scope of the indemnity and that may be brought against the officers in their capacity as officers of the Company or a related body corporate. The insurance policy does not contain details of the premium paid in respect of individual officers of the Company. Disclosure of the nature of the liability cover and the amount of the premium is subject to a confidentiality clause under the insurance policy. The Company has entered into an agreement with the Directors and Officers to indemnify them against any claim and related expenses, which arise as a result of work completed in their respective capacities. The Company has not otherwise, during or since the financial year indemnified or agreed to indemnify an officer or auditor of the Company or of any related body corporate against a liability incurred as such an officer or auditor. Environmental Regulations The Group is subject to environmental regulations under laws of the Commonwealth and State. The Group has a policy of complying with its environmental performance obligations and at the date of this report, is not aware of any breach of such regulations. DIRECTORS’ REPORT Meetings of Directors The number of meetings held during the year by Company Directors (including meetings of committees of Directors) and the number of those meetings attended by each Director was: Board of Directors’ Meetings Remuneration Committee Meetings Audit Committee Meetings Entitled to Attend Attended Entitled to Attend Attended Entitled to Attend Attended P Lester J Macdonald T Kennedy M Wilson 11 11 11 8 11 11 11 11* 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 * Invited to attend as observer post resignation from Board Non-Audit Services The auditors did not provide any non-audit services during the financial year. Auditor’s Independence Declaration The auditor’s independence declaration is included on page 32 of the financial report. This report is made and signed in accordance with a resolution of Directors made pursuant to s.298(2) of the Corporations Act 2001. On behalf of the Directors. Peter Lester Executive Chairman 24 September 2020 AUDITOR’S INDEPENDENCE DECLARATION As lead auditor for the audit of the consolidated financial report of Helix Resources Limited for the year ended 30 June 2020, I declare that to the best of my knowledge and belief, there have been no contraventions of: a) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and b) any applicable code of professional conduct in relation to the audit. Perth, Western Australia 24 September 2020 N G Neill Partner INDEPENDENT AUDIT REPORT To the members of Helix Resources Limited Report on the Audit of the Financial Report Opinion We have audited the financial report of Helix Resources Limited (“the Company”) and its controlled entities (“the Group”), which comprises the consolidated statement of financial position as at 30 June 2020, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the 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 30 June 2020 and of its financial performance for the year then ended; 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 1(u) in the financial report, which indicates that a material uncertainty exists that may cast significant doubt on the Group’s ability to continue as a going concern. Our opinion is not modified in respect of this matter. 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 above, 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 asset Refer to Note 4 In accordance with AASB 6 Exploration for and Evaluation of Mineral Resources, the Group capitalises all exploration and evaluation including acquisition costs and expenditure, subsequently applies the cost model after recognition. Our procedures included but were not limited to the following: • We obtained an understanding of the key processes associated with management’s review of the carrying values of each area of interest; Our audit focused on the Group’s assessment of the carrying amount of the capitalised exploration and evaluation asset, as this is one of the most significant assets of the Group. We planned our work to address the audit risk that the capitalised expenditure may no longer meet the recognition criteria of the standard. In addition, we considered it necessary facts and circumstances existed to suggest that the carrying amount of an exploration and evaluation asset may exceed its recoverable amount. to assess whether • We considered the Directors’ assessment of potential indicators of impairment; • We obtained evidence that the Group has current rights to tenure of its areas of interest; • We examined the exploration budget for the year ending 30 June 2021 and discussed with management the nature of planned ongoing activities; • We enquired with management, reviewed ASX announcements and reviewed minutes of Directors’ meetings to ensure that the Group had not resolved to discontinue exploration and evaluation at any of its areas of interest; and • We examined the disclosures made in the financial report. 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 consolidated annual report for the year ended 30 June 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 accordingly 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. 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 ability of the Group 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 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. As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: - Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. - - - Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern. Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation. - We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the financial report of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Report on the Remuneration Report Opinion on the Remuneration Report We have audited the Remuneration Report included within the directors’ report for the year ended 30 June 2020. In our opinion, the Remuneration Report of Helix Resources Limited for the year ended 30 June 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. HLB Mann Judd Chartered Accountants Perth, Western Australia 24 September 2020 N G Neill Partner DIRECTORS’ DECLARATION The Directors of the company declare that: 1. The consolidated financial statements and notes, as set out on pages 38 to 71 are in accordance with the Corporations Act 2001 and: a) the Australian Accounting Comply with Australian Accounting Standards Interpretations) and the Corporations Regulations 2001 and other mandatory reporting requirements; and Give a true and fair view of the financial position as at 30 June 2020 and of the performance for the year ended on that date of the Group; and Complies with International Financial Reporting Standards as disclosed in Note 1. (including b) c) 2. 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; This declaration is made in accordance with a resolution of the Board of Directors as required by section 295A of the Corporations Act 2001. On behalf of the Directors Peter Lester Executive Chairman Signed at Perth on 24 September 2020 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2020 Other income Employment costs Audit and accountancy Corporate marketing Directors’ fees Depreciation expense Exploration expenditure Foreign exchange gain / (loss) Information technology costs Premises costs Professional fees Travel expenses Share based payments Share registry and listing costs Other expenses Loss before income tax Income tax benefit Loss for the year Other Comprehensive Income Other comprehensive income, after tax Total Comprehensive Loss attributable to members of Helix Resources Limited Loss Per Share Basic (cents per share) Diluted (cents per share) Note 15 16 20 CONSOLIDATED 2020 $ 144,636 (67,155) 2019 $ 63,995 (35,595) (76,434) (102,686) (13,085) (25,140) (129,695) (239,388) (58,486) (38,193) 31,393 (4,010) (20,068) (54,581) (3,280) (13,469) - (6,345) (5,984) (36,593) (49,761) (2,956) (49,719) (124,932) (18,212) (23,862) (123,707) (117,321) (480,596) (720,037) - - (480,596) (720,037) - - (480,596) (720,037) 24 24 (0.10) (0.10) (0.17) (0.17) This statement should be read in conjunction with the Notes to the Financial Statements CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2020 Current Assets Cash and Cash Equivalents Trade and Other Receivables Other Assets Total Current Assets Non-Current Assets Exploration and Evaluation Asset Financial Assets Plant and Equipment Right-of-use Asset Total Non-Current Assets Total Assets Current Liabilities Trade and Other Payables Other Liabilities Provisions Lease Liabilities Total Current Liabilities Non-Current Liabilities Lease Liabilities Total Non-Current Liabilities Total Liabilities Net Assets Equity Share Capital Reserves Accumulated Losses Total Equity Note CONSOLIDATED 2020 $ 2019 $ 2 3 9 4 5 6 7 8 9 10 11 11 12 13 14 155,356 113,101 237,565 506,022 366,391 80,823 - 447,214 10,059,074 9,272,553 244,902 233,436 33,114 65,598 43,275 - 10,402,688 9,549,264 10,908,710 9,996,478 830,642 - 106,493 46,624 348,836 337,632 133,826 - 983,759 820,294 20,517 20,517 - - 1,004,276 820,294 9,904,434 9,176,184 67,676,147 66,517,020 186,595 190,979 (57,958,308) (57,531,815) 9,904,434 9,176,184 This statement should be read in conjunction with the Notes to the Financial Statements CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2020 Note Share Capital $ Reserves Accumulated Losses $ $ Total $ Balance at 1 July 2018 65,677,689 395,415 (57,141,815) 8,931,289 (720,037) (720,037) - - (720,037) (720,037) Loss for the year Other comprehensive loss Total comprehensive loss Transactions with owners Issue of shares Share issue costs Options vested Options issued Options expired Options forfeited - - - 12 12,13 900,000 (60,669) 13 13 13 13 - - - - - - - - 669 39,058 85,874 - - - - 900,000 (60,000) 39,058 85,874 - - (319,562) 319,562 (10,475) 10,475 Balance at 30 June 2019 66,517,020 190,979 (57,531,815) 9,176,184 Loss for the year Other comprehensive Total comprehensive loss Transactions with owners Issue of shares Share issue costs Options vested Options expired - - - 1,297,127 (138,000) - - - - - - - 49,719 (54,103) (480,596) (480,596) - - (480,596) (480,596) - - - 1,297,127 (138,000) 49,719 54,103 - 12 12 13 13 Balance at 30 June 2020 67,676,147 186,595 (57,958,308) 9,904,434 This statement should be read in conjunction with the Notes to the Financial Statements CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2020 Cash Flow From Operating Activities Payments to suppliers and employees Interest received Interest paid on right-of-use asset CONSOLIDATED Note 2020 $ 2019 $ (489,561) (676,381) 2,268 (6,025) 2,945 - Net cash (used in) operating activities 2(b) (493,318) (673,436) Cash Flow From Investing Activities Payments for capitalised exploration & evaluation expenditure (701,918) (1,128,387) Proceeds from JV 9 1,231,113 2,240,121 Payments for JV explorations expenditure Payments from purchase of plant & equipment Payments for security deposits Net cash (used in) investing activities Cash Flow From Financing Activities Proceeds from issue of shares Share issue costs Payment of lease principal Net cash provided by financing activities Net (decrease) in cash and cash equivalents held Exchange differences on cash and cash equivalents Cash and cash equivalents at beginning of financial year Cash and cash equivalents at end of financial year 2(a) (1,430,908) (1,794,691) - (1,500) (10,000) (10,000) (911,713) (694,457) 1,306,927 900,000 (97,542) (60,000) (46,782) - 1,162,603 840,000 (242,428) (527,893) 31,393 366,391 155,356 (6,345) 900,629 366,391 This statement should be read in conjunction with the Notes to the Financial Statements NOTES TO THE FINANCIAL STATEMENTS 1) Summary of Accounting Policies Financial Reporting Framework The financial report is a general-purpose financial report that has been prepared in accordance with the Corporations Act 2001, Australian Accounting Standards and Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and complies with other requirements of the law. The financial report includes financial statements for Helix Resources Limited as the Consolidated Entity (“Group”) consisting of Helix Resources Limited (“Helix” or “the Company”) and its controlled entities. The Group is a for-profit entity for financial reporting purposes. Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a financial report containing relevant and reliable information about transactions, events and conditions. Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with International Financial Reporting Standards. Accounting policies Material accounting policies adopted in the preparation of the financial report are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated. Historical cost convention These financial statements have been prepared under the historical cost convention, as modified where applicable by the revaluation of available-for-sale financial assets, financial assets and liabilities (including derivative instruments) at fair value through profit or loss, certain classes of plant and equipment. A summary of the Group’s significant accounting policies is set out below. Principles of Consolidation a) The Group financial statements consolidate those of the Company and all of its subsidiaries as of 30 June 2020. The Company controls a subsidiary if it is exposed, or has rights, to variable returns from its involvement with the subsidiary and has the ability to affect those returns through its power over the subsidiary. All subsidiaries have a reporting date of 30 June. All transactions and balances between Group companies are eliminated on consolidation, including unrealised gains and losses on transactions between Group companies. Where unrealised losses on intra-group asset sales are reversed on consolidation, the underlying asset is also tested for impairment from a group perspective. Amounts reported in the financial statements of subsidiaries have been adjusted where necessary to ensure consistency with the accounting policies adopted by the Group. Profit or loss and other comprehensive income of subsidiaries acquired or disposed of during the year are recognised from the effective date of acquisition, or up to the effective date of disposal, as applicable. Non-controlling interests, presented as part of equity, represent the portion of a subsidiary’s profit or loss and net assets that is not held by the Group. The Group attributes total comprehensive income or loss of subsidiaries between the owners of the parent and the non-controlling interests based on their respective ownership interests. Cash and Cash Equivalents b) Cash on hand and in banks and short term deposits are stated at nominal value. For the purposes of the Statement of Cash Flows, cash includes cash on hand and in banks, and money market investments readily convertible to cash within 90 days, net of outstanding bank overdrafts. NOTES TO THE FINANCIAL STATEMENTS 1) Summary of Accounting Policies (Continued) Income Tax c) The income tax expense or revenue for the period is the tax payable on the current period's taxable income based on the national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements, and to unused tax losses. Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the assets are recovered or liabilities are settled, based on those tax rates which are enacted or substantively enacted for each jurisdiction. The relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary differences to measure the deferred tax asset or liability. An exception is made for certain temporary differences arising from the initial recognition of an asset or a liability. No deferred tax asset or liability is recognised in relation to these temporary differences if they arose in a transaction, other than a business combination, that at the time of the transaction did not affect either accounting profit or taxable profit or loss. Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in subsidiaries where the parent entity is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future. Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in equity. Amounts receivable from the Australian Tax Office in respect of research and development tax concession claims are recognised when management have a reasonable basis to estimate the claim proceeds. Plant and Equipment d) Plant and equipment are measured on the cost basis. The carrying amount of plant and equipment is reviewed annually by Directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the asset’s employment and subsequent disposal. The depreciation rates used for each class of depreciable assets are: Plant and equipment: - Straight line 10% - 33% - Diminishing Value 20% - 40% - Diminishing Value 22.5% Motor Vehicles: De-recognition and disposal An item of plant and equipment is derecognised on disposal or when no further future economic benefits are expected from its use or disposal. Any gain or loss arising on the de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the year the asset is derecognised. NOTES TO THE FINANCIAL STATEMENTS 1) Summary of Accounting Policies (Continued) Exploration and Evaluation e) Exploration and evaluation expenditure incurred is accumulated in respect of each identifiable area of interest. These costs are only carried forward to the extent that they are expected to be recouped through the successful development of the area or where activities in the area have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves. Accumulated costs in relation to an abandoned area are written off in full against profit in the year in which the decision to abandon the area is made. When production commences, the accumulated costs for the relevant area of interest are amortised over the life of the area according to the rate of depletion of the economically recoverable reserves. A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest. Leases f) As described below, the Group has applied AASB 16 using the modified retrospective approach and therefore comparative information has not been restated. This means comparative information is still reported under AASB 117 and IFRIC 4. Accounting policy applicable from 1 July 2019 The Group as a lessee For any new contracts entered into on or after 1 July 2019, the Group considers whether a contract is, or contains a lease. A lease is defined as ‘a contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time in exchange for consideration’. To apply this definition the Group assesses whether the contract meets three key evaluations which are whether: • The contract contains an identified asset, which is either explicitly identified in the contract or implicitly specified by being identified at the time the asset is made available to the Group • The Group has the right to obtain substantially all of the economic benefits from use of the identified asset throughout the period of use, considering its rights within the defined scope of the contract • The Group has the right to direct the use of the identified asset throughout the period of use. The Group assess whether it has the right to direct ‘how and for what purpose’ the asset is used throughout the period of use. Measurement and recognition of leases as a lessee At lease commencement date, the Group recognises a right-of-use asset and a lease liability on the statement of financial position. The right-of-use asset is measured at cost, which is made up of the initial measurement of the lease liability, any initial direct costs incurred by the Group, an estimate of any costs to dismantle and remove the asset at the end of the lease, and any lease payments made in advance of the lease commencement date (net of any incentives received). The Group depreciates the right-of-use assets on a straight-line basis from the lease commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The Group also assesses the right-of-use asset for impairment when such indicators exist. At the commencement date, the Group measures the lease liability at the present value of the lease payments unpaid at that date, discounted using the interest rate implicit in the lease if that rate is readily available or the Group’s incremental borrowing rate. Lease payments included in the measurement of the lease liability are made up of fixed payments (including in substance fixed), variable payments based on an index or rate, amounts expected to be payable under a residual value guarantee and payments arising from options reasonably certain to be exercised. NOTES TO THE FINANCIAL STATEMENTS 1) Summary of Accounting Policies (Continued) Leases (Continued) f) Subsequent to initial measurement, the liability will be reduced for payments made and increased for interest. It is remeasured to reflect any reassessment or modification, or if there are changes in in- substance fixed payments. When the lease liability is remeasured, the corresponding adjustment is reflected in the right-of-use asset, or profit and loss if the right-of-use asset is already reduced to zero. The Group has elected to account for short-term leases and leases of low-value assets using the practical expedients. Instead of recognising a right-of-use asset and lease liability, the payments in relation to these are recognised as an expense in profit or loss on a straight-line basis over the lease term. On the statement of financial position, right-of-use assets have been included in property, plant and equipment (except those meeting the definition of investment property) and lease liabilities have been included in trade and other payables. Accounting policy applicable before 1 July 2019 The Group as a lessee Management applies judgment in considering the substance of a lease agreement and whether it transfers substantially all the risks and rewards incidental to ownership of the leased asset. Key factors considered include the length of the lease term in relation to the economic life of the asset, the present value of the minimum lease payments in relation to the asset’s fair value, and whether the Group obtains ownership of the asset at the end of the lease term. Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset, but not the legal ownership, is transferred to entities in the Group are classified as finance leases. Finance leases are capitalised by recording an asset and a liability at the lower of the amounts equal to the fair value of the leased property or the present value of the minimum lease payments, including any guaranteed residual values. Lease payments are allocated between the reduction of the lease liability and the lease interest expense for the period. Leased assets are depreciated over the shorter of their estimated useful lives or the lease term. Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are charged as expenses in the periods in which they are incurred. Lease incentives under operating leases are recognised as a liability and amortised on a straight-line basis over the life of the lease term. Financial Instruments g) Recognition, initial measurement and derecognition Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the financial instrument and are measured initially at fair value adjusted by transactions costs, except for those carried at fair value through profit or loss, which are measured initially at fair value. Subsequent measurement of financial assets and financial liabilities are described below. Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or when the financial asset and all substantial risks and rewards are transferred. A financial liability is derecognised when it is extinguished, discharged, cancelled or expires. Classification and subsequent measurement of financial assets Except for those trade receivables that do not contain a significant financing component and are measured at the transaction price in accordance with AASB 15, all financial assets are initially measured at fair value adjusted for transaction costs (where applicable) NOTES TO THE FINANCIAL STATEMENTS 1) Summary of Accounting Policies (Continued) Financial Instruments (Continued) g) For the purpose of subsequent measurement, financial assets other than those designated and effective as hedging instruments are classified into the following categories upon initial recognition: • Amortised cost • Fair value through profit or loss (FVPL) • Equity instruments at fair value through other comprehensive income (FVOCI) • Debt instruments at fair value through other comprehensive income (FVOCI) All income and expenses relating to financial assets that are recognised in profit or loss are presented within finance costs, finance income or other financial items, except for impairment of trade receivables which is presented within other expenses. Classifications are determined by both: • The entities business model for managing the financial asset • The contractual cash flow characteristics of the financial assets Financial assets at amortised cost Financial assets are measured at amortised cost if the assets meet the following conditions (and are not designated as FVPL): • They are held within a business model whose objective is to hold the financial assets and collect its contractual cash flows • The contractual terms of the financial assets give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding After initial recognition, these are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial. The Group’s cash and cash equivalents, trade and most other receivables fall into this category of financial instruments as well as security deposits that were previously classified as held-to-maturity under AASB 139. There are no FVPL and FVOCI instruments for the Group. Impairment of financial assets AASB 9’s impairment requirements use more forward-looking information to recognize expected credit losses – the ‘expected credit losses (ECL) model’. Instruments within the scope of the requirements included loans and other debt-type financial assets measured at amortised cost and FVOCI, trade receivables, contract assets recognised and measured under AASB 15 and loan commitments and some financial guarantee contracts (for the issuer) that are not measured at fair value through profit or loss. The Group considers a broader range of information when assessing credit risk and measuring expected credit losses, including past events, current conditions, reasonable and supportable forecasts that affect the expected collectability of the future cash flows of the instrument. In applying this forward-looking approach, a distinction is made between: • Financial instruments that have not deteriorated significantly in credit quality since initial recognition or that have low credit risk (‘Stage 1’) and • Financial instruments that have deteriorated significantly in credit quality since initial recognition and whose credit risk is not low (‘Stage 2’). ‘Stage 3’ would cover financial assets that have objective evidence of impairment at the reporting date. ‘12-month expected credit losses’ are recognised for the first category while ‘lifetime expected credit losses’ are recognised for the second category. Measurement of the expected credit losses is determined by a probability-weighted estimate of credit losses over the expected life of the financial instrument. NOTES TO THE FINANCIAL STATEMENTS 1) Summary of Accounting Policies (Continued) Financial Instruments (Continued) g) Trade and other receivables The Group makes use of a simplified approach in accounting for trade and other receivables and records the loss allowance at the amount equal to the expected lifetime credit losses. In using this practical expedient, the Group uses its historical experience, external indicators and forward-looking information to calculate the expected credit losses using a provision matrix. Classification and measurement of financial liabilities The Group’s financial liabilities include trade and other payables. Financial liabilities are initially measured at fair value, and, where applicable, adjusted for transaction costs unless the Group designated a financial liability at fair value through profit or loss. Subsequently, financial liabilities are measured at amortised cost using the effective interest method except for derivatives and financial liabilities designated at FVPL, which are carried subsequently at fair value with gains or losses recognised in profit or loss (other than derivative financial instruments that are designated and effective as hedging instruments). All interest-related charges and, if applicable, changes in an instrument’s fair value that are reported in profit or loss are included within finance costs or finance income. Impairment of Non-Financial Assets h) Non-financial assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units). Employee Benefits i) Provision is made for benefits accruing to employees in respect of wages and salaries, annual leave and long service leave when it is probable that settlement will be required and they are capable of being measured reliably. Provision is made in respect of wages and salaries, annual leave and other employee benefits expected to be settled wholly within 12 months, are measured at their nominal values using the remuneration rate expected to apply at the time of settlement. Provision made in respect of long service leave which is not expected to be settled within 12 months is measured as the present value of the estimated future cash outflows to be made by the Group in respect of services provided by the employees up to reporting date. Share-based payments Share-based compensation benefits are provided to employees via various Share Option Plans. The fair value of options granted is recognised as an employee benefit expense with a corresponding increase in equity. The fair value is measured at grant date and recognised over the period during which the employees become unconditionally entitled to the options. NOTES TO THE FINANCIAL STATEMENTS 1) Summary of Accounting Policies (Continued) Employee Benefits (Continued) i) The fair value at grant date is independently determined using a Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the vesting and performance criteria, the impact of dilution, the non-tradable nature of the option, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk-free interest rate for the term of the option. The fair value of the options granted excludes the impact of any non-market vesting conditions (for example, profitability and sales growth targets). Non-market vesting conditions are included in assumptions about the number of options that are expected to become exercisable. At each reporting date, the entity revises its estimate of the number of options that are expected to become exercisable. The employee benefit expense recognised each period takes into account the most recent estimate. Upon the exercise of options, the balance of the share-based payments reserve relating to those options is transferred to share capital. The market value of shares issued to employees for no cash consideration under the Share Plans is recognised as an employee benefits expense with a corresponding increase in equity when the employees become entitled to the shares. Interest in Joint Venture Operations j) Associates are those entities over which the Group is able to exert significant influence but which are not subsidiaries. A joint venture is an arrangement that the Group controls jointly with one or more other investors, and over which the Group has rights to a share of the arrangement’s net assets rather than direct rights to underlying assets and obligations for underlying liabilities. A joint arrangement in which the Group has direct rights to underlying assets and obligations for underlying liabilities is classified as a joint operation. Investments in associates and joint ventures are accounted for using the equity method. Interests in joint operations are accounted for by recognising the Group’s assets (including its share of any assets held jointly), its liabilities (including its share of any liabilities incurred jointly), its revenue from the sale of its share of the output arising from the joint operation, its share of the revenue from the sale of the output by the joint operation and its expenses (including its share of any expenses incurred jointly). Any goodwill or fair value adjustment attributable to the Group’s share in the associate or joint venture is not recognised separately and is included in the amount recognised as investment. The carrying amount of the investment in associates and joint ventures is increased or decreased to recognise the Group’s share of the profit or loss and other comprehensive income of the associate and joint venture, adjusted where necessary to ensure consistency with the accounting policies of the Group. Unrealised gains and losses on transactions between the Group and its associates and joint ventures are eliminated to the extent of the Group’s interest in those entities. Where unrealised losses are eliminated, the underlying asset is also tested for impairment. Details of interests in joint ventures are shown at Note 25. NOTES TO THE FINANCIAL STATEMENTS 1) Summary of Accounting Policies (Continued) Revenue k) Income from the disposal of assets is recognised when the Group has passed control of the goods or other assets to the buyer. Interest on bank deposits is recognised as income as it accrues. Interest revenue is recognised using the effective interest rate method, which, for floating rate financial assets, is the rate inherent in the instrument and is net of GST. Other income is recognised when it is received or when the right to receive payment is established. Goods and Services Tax l) Revenues, expenses and assets are recognised net of the amount of goods and services tax 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 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 tax authority. Fair Value Estimation m) The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes. The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and trading and available-for-sale securities) is based on quoted market prices at the reporting date. The quoted market price used for financial assets held by the Group is the current bid price; the appropriate quoted market price for financial liabilities is the current ask price. The fair value of financial instruments that are not traded in an active market (for example, over-the- counter derivatives) is determined using valuation techniques. The Group uses a variety of methods and makes assumptions that are based on market conditions existing at each reporting date. Quoted market prices or dealer quotes for similar instruments are used for long-term debt instruments held. Other techniques, such as estimated discounted cash flows, are used to determine fair value for the remaining financial instruments. The nominal value less estimated credit adjustments of trade receivables and payables are assumed to approximate their fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the Group for similar financial instruments. NOTES TO THE FINANCIAL STATEMENTS 1) Summary of Accounting Policies (Continued) Provisions n) Mine restoration and rehabilitation costs are provided for at the present value of future expected expenditures required to settle the Group’s obligations on commencement of commercial production, discounted using a rate specified to the liability. When this provision is recognised a corresponding asset is also recognised as part of the development costs of the mine to the extent that it is considered that the provision gives access to future economic benefits. On an ongoing basis, the rehabilitation liability is re-measured at each reporting period in line with the changes in the time value of money (recognised as an expense in the statement of profit or loss and other comprehensive income and an increase in the provision), and additional disturbances or changes in rehabilitation costs will be recognised as additions or changes to the corresponding asset and rehabilitation liability. Foreign Currency Translation o) Functional and Presentation Currency The consolidated financial statements are presented in Australian dollars (AUD), which is also the functional currency of all entities in the Group. Foreign Currency Transactions and Balances Foreign currency transactions are translated into the functional currency of the respective Group entity, using the exchange rates prevailing at the dates of the transactions (spot exchange rate). Foreign exchange gains and losses resulting from the settlement of such transactions and from the re- measurement of monetary items at year end exchange rates are recognised in profit or loss. Non- monetary items are not retranslated at year-end and are measured at historical cost (translated using the exchange rates at the date of the transaction), except for non-monetary items measured at fair value which are translated using the exchange rates at the date when fair value was determined. Operating Segment p) Operating segments are presented using the ‘management approach’ where the information presented is on the same basis as the internal reports provided to the Chief Operating Decision Makers (‘CODM’) who are the Board of Directors. The CODM is responsible for the allocation of resources to operating segments and assessing their performance. Current and Non-Current Classification q) An asset is classified as current when it is either expected to be realised; it is expected to be realised within 12 months after the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period. All other assets are classified as non-current. A liability is classified as current when it is either expected to be settled in the Group’s normal operating cycle; due to be settled within 12 months after the reporting period; or there is no unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities are classified as non-current. New and Amended Accounting Standards adopted by the Group r) The Group has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian Accounting Standards Board that are mandatory for the current reporting period. Accounting Standards and Interpretations adopted by the Group that are mandatory for the current reporting period: NOTES TO THE FINANCIAL STATEMENTS 1) Summary of Accounting Policies (Continued) New and Amended Accounting Standards adopted by the Group (Continued) r) AASB 16 Leases AASB 16 replaces AASB 117 Leases and introduces a single lessee accounting model that requires a lessee to recognise right-of-use assets and lease liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value. Right-of-use assets are initially measured at cost and lease liabilities are initially measured on a present value basis. Subsequent to initial recognition: (a) Right-of-use assets are accounted for on a similar basis to non-financial assets, whereby the right- of-use asset is accounted for on a cost basis unless the underlying asset is accounted for on a revaluation basis, in which case if the underlying asset is: i. Investment property, the lessee applies the fair value model in AASB 140 Investment Property to the right-of-use asset; or ii. Property, plant or equipment, the lessee applies the revaluation model in AASB 116 Property, Plant and Equipment to all of the right-of-use assets that relate to that class of property, plant and equipment; and (b) Lease liabilities are accounted for on a similar basis to other financial liabilities, whereby interest expense is recognised in respect of the lease liability and the carrying amount of the lease liability is reduced to reflect the principal portion of lease payments made. The Group has applied AASB 16 from 1 July 2019 using the modified retrospective approach, with no restatement of corporative information. The Group applied the practical expedient for short-term leases exemptions to leases with lease terms that end within 12 months of the date of initial application. The Group recognises right-of-use assets totalling $123,621 (net of straight line lease liability upon implementation) representing its right to use the underlying asset and lease liabilities representing its obligations to make lease payments with exemptions for short-term leases and leases of low-value items. The recognised right-of-use assets are 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. In calculating the present value of lease payments, the Group uses the incremental borrowing rate of 4.75%. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in lease term, a change in the in-substance fixed lease payments or a change in the assessment to purchase the underlying asset. The following is a reconciliation of total operating lease commitments at 30 June 2019 to the lease liabilities recognised at 1 July 2019: Total operating lease commitments disclosed at 30 June 2019 Recognition exemptions Variable lease payments not recognised Operating lease liabilities before discounting Discounted using incremental borrowing rate Operating lease liabilities Reasonably certain extension options Total lease liabilities recognised under AASB 16 at 1 July 2019 $ 21,762 (2,608) 19,154 (1,843) 17,311 106,636 123,947 NOTES TO THE FINANCIAL STATEMENTS 1) Summary of Accounting Policies (Continued) s) New Accounting Standards and Interpretations not yet Mandatory or Early Adopted New and revised accounting standards and amendments that are currently issued for future reporting periods have not been early adopted. The Group has not yet assessed the impact of these new or amended Accounting Standards and Interpretations. Critical Accounting Estimates and Other Accounting Judgements t) Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the application of the Australian Accounting Standards, management is required to make judgments, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the year in which the estimate is revised if the revision affects only that year or in the year of the revision and future years if the revision affects both current and future years. The Group is of the view that there are no critical accounting estimates and judgements in this financial report, other than accounting estimates and judgements in relation to the following: Exploration and Evaluation Expenditure The Group capitalises expenditure relating to exploration and evaluation where it is considered likely to be recoverable or where the activities have not reached a stage which permits a reasonable assessment of the existence of resources or reserves. Fair Value of Options Issued Management apply valuation techniques to determine the fair value of financial instruments where active market quotes are not available. This requires management to develop estimates and assumptions based on market inputs, using observable data that market participants would use in pricing the instrument. Where such data is not observable, management uses its best estimate. Estimated fair values of financial instruments may vary from the actual prices that would be achieved in an arm’s length transaction at the reporting date. Lease term The lease term is a significant component in the measurement of both the right-of-use asset and lease liability. Judgement is exercised in determining whether there is reasonable certainty that an option to extend the lease or purchase the underlying asset will be exercised, or an option to terminate the lease will not be exercised, when ascertaining the periods to be included in the lease term. In determining the lease term, all facts and circumstances that create an economical incentive to exercise an extension option, or not to exercise a termination option, are considered at the lease commencement date. Factors considered may include the importance of the asset to the consolidated entity's operations; comparison of terms and conditions to prevailing market rates; incurrence of significant penalties; existence of significant leasehold improvements; and the costs and disruption to replace the asset. The consolidated entity reassesses whether it is reasonably certain to exercise an extension option, or not exercise a termination option, if there is a significant event or significant change in circumstances. NOTES TO THE FINANCIAL STATEMENTS 1) Summary of Accounting Policies (Continued) Incremental borrowing rate Where the interest rate implicit in a lease cannot be readily determined, an incremental borrowing rate is estimated to discount future lease payments to measure the present value of the lease liability at the lease commencement date. Such a rate is based on what the consolidated entity estimates it would have to pay a third party to borrow the funds necessary to obtain an asset of a similar value to the right- of-use asset, with similar terms, security and economic environment. Going Concern u) These financial statements have been prepared on the going concern basis, which contemplates continuity of normal business activities and the realisation of assets and the settlement of liabilities in the ordinary course of business. The Company incurred an operating loss after income tax for the year ended 30 June 2020 of $480,596 (2019: $720,037) and reported net cash outflows from operating and investing activities of $1,405,031 (2019: $1,367,893). As at 30 June 2020, the Group had available cash and cash equivalents of $155,356 (2019: $366,391). The Company has the ability to defer or reduce its operating expenditure and commitments, or to dispose of assets. However, based on its current projected work program it is anticipated that it will be necessary for the Company to raise additional equity capital during the next twelve months. The Directors are of the opinion that the Company's projects are very prospective and that the ongoing copper and gold potential of its projects will enable the Company to secure fresh capital as and when required. As announced on 10 July 2020, the Company completed the Non-Renounceable Entitlement issue of 1 share for every 2 shares held by eligible shareholders, raising a total of $1.85 million (before costs). The Directors have reviewed the Company’s financial position and are of the opinion that the going concern basis of accounting is appropriate having regard to the matters outlined above. Should the Group be unable to obtain additional funding as described above, there is a material uncertainty that may cast significant doubt on whether the Group will be able to continue as a going concern, and therefore, whether it will be required to realise its assets and extinguish its liabilities other than in the normal course of business and at amounts different from those stated in the financial report. The financial report does not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that may be necessary should the Group be unable to continue as a going concern. NOTES TO THE FINANCIAL STATEMENTS 2) Cash and Cash Equivalents Reconciliation of Cash a) For the purposes of the statement of cash flows and statement of financial position, cash and cash equivalents include cash on hand and in banks, and investments in money market instruments, net of outstanding bank overdrafts. Cash at the end of the financial year as shown in the statement of cash flows is reconciled to the related items in the statement of financial position as follows: Cash on Hand Cash at Bank Total Cash and Cash Equivalents CONSOLIDATED 2020 $ 80 155,276 155,356 2019 $ 954 365,437 366,391 Cash on hand is non-interest bearing. Cash at bank bears floating interest rates between 0.00% and 0.25% (2019: between 0.00% and 0.50%). b) Reconciliation of Loss after Income Tax to Cash Flows Provided by Operating Activities Loss after income tax Non-cash flows in Loss Depreciation (Gain) / Loss on foreign exchange transactions Share based payments Revenue from JV Changes in Net Assets and Liabilities (Increase) in trade and other receivables Increase / (decrease) in trade and other payables (Decrease) / increase in provisions Net cash (used in) operating activities CONSOLIDATED 2020 $ 2019 $ (480,596) (720,037) 58,486 (31,393) 49,719 (117,321) (33,744) 88,864 (27,333) 13,469 6,345 124,932 (57,273) (20,029) (50,631) 29,788 (493,318) (673,436) Non-Cash Financing Activities c) During the year ended 30 June 2020, $49,719 options vested (30 June 2019: $125,601). This balance included $49,719 options that were issued in prior years (30 June 2019: $39,058). Funding from Exploration Partners d) Included in the statement of cash flows is $1,231,113 (30 June 2019: $2,240,121) proceeds from Chilean projects being farmed in, and resultant cash outflows of $1,430,908 (30 June 2019: $1,794,691). Refer to Note 9. NOTES TO THE FINANCIAL STATEMENTS 3) Trade and Other Receivables CURRENT RECEIVABLES Prepayments Other Receivables CONSOLIDATED 2020 $ 51,002 62,099 113,101 2019 $ 2,965 77,858 80,823 No current or past due receivables were impaired at the end of the financial year. 4) Exploration and Evaluation Asset Balance at 1 July Expenditure incurred during the year Impairment losses Balance at 30 June CONSOLIDATED 2020 $ 2019 $ 9,272,553 7,954,697 786,521 1,317,856 - - 10,059,074 9,272,553 The Directors' assessment of carrying amount was after consideration of prevailing market conditions; previous expenditure carried out on the tenements; and the potential for mineralisation based on both the entity's and independent geological reports. The ultimate value of these assets is dependent upon recoupment by commercial development or the sale of the whole, or part, of the Group's interests in those areas for an amount at least equal to the carrying value. There may exist, on the Group’s exploration properties, areas subject to claim under native title or containing sacred sites or sites of significance to Aboriginal people. As a result, exploration properties or areas within the tenements may be subject to exploration and mining restrictions. As a result of the assessment of the economic recoverability of certain tenements, no provision for impairment was required (2019: $nil) against the carrying value of its exploration and evaluation expenditure. 5) Financial Assets Security Deposits CONSOLIDATED 2020 $ 2019 $ 244,902 233,436 Security deposits relates to deposits held to secure exploration tenement holdings. NOTES TO THE FINANCIAL STATEMENTS 6) Plant and Equipment 2020 Cost Plant & Equipment $ Motor Vehicles Total $ $ Balance at 1 July 2019 125,627 161,054 286,681 Additions Disposals - - - - - - Balance at 30 June 2020 125,627 161,054 286,681 Accumulated Depreciation Balance at 1 July 2019 Depreciation Depreciation write off on disposal Balance at 30 June 2020 Net Book Value 30 June 2020 2019 Cost Balance at 1 July 2018 Additions Disposals 120,084 1,671 - 123,322 8,490 - 243,406 10,161 - 121,755 131,812 253,567 3,872 29,242 33,114 124,263 1,364 - 161,054 - - 285,317 1,364 - Balance at 30 June 2019 125,627 161,054 286,681 Accumulated Depreciation Balance at 1 July 2018 Depreciation Depreciation write off on disposal 117,570 2,514 - 112,367 10,955 - 229,937 13,469 - Balance at 30 June 2019 120,084 123,322 243,406 Net Book Value 30 June 2019 5,543 37,732 43,275 NOTES TO THE FINANCIAL STATEMENTS 7) Right-of-use Asset Right-of-use asset Movements in Right-Of-Use Asset Cost Balance at 1 July Adjustment on transition to AASB 16 Revaluation 1 Additions Balance at 30 June Accumulated Depreciation Balance at 1 July Depreciation expense Revaluation 1 Balance at 30 June Net Book Value 30 June CONSOLIDATED 2020 $ 65,598 2019 $ - 123,621 (31,012) - 92,609 - 48,325 (21,314) 27,011 65,598 - - - - - - - - - - 1 On 1 December 2019, the Group exercised its option as lessee to extend the term of the leasing agreement for the office premises in Subiaco, WA. At this time, the terms of the agreement were renegotiated and differed from those at the date of initial application. The Group has determined this to be a modification of the agreement under AASB 16 Leases and a reassessment of the resulting lease liability and right-of-use asset was performed at that time. The revaluation was based on the present value of lease payments, using an incremental borrowing rate of 6.11%. 8) Trade and Other Payables Trade Payables Other Payables CONSOLIDATED 2020 $ 423,384 407,258 830,642 2019 $ 236,976 111,860 348,836 All amounts are current and are expected to be settled within 12 months. NOTES TO THE FINANCIAL STATEMENTS 9) Other Assets / (Liabilities) Other assets / (liabilities) CONSOLIDATED 2020 $ 2019 $ 237,565 (337,632) Other assets / (liabilities) represent advances to / (from) Manhattan and JOGMEC to fund Chilean exploration expenditure on the Joshua and Samuel projects respectively. Joshua Project Manhattan Corporation Limited (ASX:MHC) was funding this exploration program as part of its Option commitment under a Heads of Agreement (“HOA”) with Helix’s Chilean technical team managing the work. The HOA provided an avenue for Manhattan to earn up to an 80% interest in the Joshua project in exchange for Helix being free-carried through to completion of a BFS. Manhattan contributed a total of $1,040,000 for Stage 1 of the earn-in, and elected not to proceed past that Stage in June 2019. Samuel Project Joint Venture A Joint Venture agreement was entered with Japanese Oil, Gas and Metals National Corporation (“JOGMEC”) to fund exploration of up to US$2.4 million through 3 stages, enabling them to earn a 60% interest in the Samuel Copper Project. Helix is currently receiving a fee to manage the Joint Venture. The Joint Venture terms are: • Stage 1: Contribute US$0.4 million by 31 March 2019 primarily for the purpose of undertaking large- scale geophysical surveys and mapping of the Samuel porphyry and manto-style copper systems. • Stage 2: Contribute US$0.8 million by 31 March 2020 primarily for the purpose of undertaking initial diamond drilling to drill test the identified mineralized systems. • Stage 3: Contribute US$1.2 million by 31 March 2021 primarily for the purpose of undertaking a second phase diamond drilling to establish scale and continuity of an identified mineralized system. • At completion of Stage 3, JOGMEC will earn an option to acquire 60% equity in the project and have the right to sell their Joint Venture interest by tender to a Japanese company. • Helix’s Chilean team will manage the project until the completion of Stage 3 with Helix receiving a management fee for those services. • JOGMEC has funded and completed Stage 2 in September 2019 and has approved and commenced Stage 3, funding a further US$435,000. • Funds received during the year amounted to $1,231,113 (30 June 2019: $1,200,121). 10) Provisions Annual Leave Provision Long Service Leave Provision CONSOLIDATED 2020 $ 2019 $ 66,593 39,900 67,850 65,976 106,493 133,826 NOTES TO THE FINANCIAL STATEMENTS 11) Lease Liabilities Current Non-current Amounts recognised in the statement of profit or loss Depreciation expense on right-of-use asset (Note 7) Interest expense Movements in Lease Liabilities Balance at 1 July Recognition on adoption of AASB 16 Lease modification Lease repayments Balance at 30 June Future minimum lease payments at 30 June are as follows: CONSOLIDATED 2020 $ 2019 $ 46,624 20,517 67,141 48,325 5,107 - 123,947 (10,024) (46,782) 67,141 - - - - - - - - - - 30 June 2020 Lease payments Finance charges 12) Share Capital Minimum Lease Payments Within 1 Year 1-5 Years After 5 Years Total $ 49,369 (2,745) 46,624 $ $ 20,823 (306) 20,517 $ 70,192 (3,051) 67,141 - - - Fully Paid Ordinary Shares 529,413,361 424,466,692 67,676,147 66,517,020 Jun 2020 Shares Jun 2019 Shares Jun 2020 $ Jun 2019 $ Fully paid ordinary shares have no par value, carry one vote per share and carry the right to dividends. Options carry no voting rights until converted to fully paid ordinary shares. NOTES TO THE FINANCIAL STATEMENTS 12) Share Capital (Continued) 2020 2019 No $ No $ Fully Paid Ordinary Shares Balance at 1 July 424,466,692 66,517,020 394,466,692 65,677,689 Share Issue @ $0.03 (1) - - 30,000,000 900,000 Share Issue @ $0.016 (2) 62,500,000 1,000,000 Share Issue @ $0.007 (3) 42,446,669 297,127 Share Issue Costs Balance at 30 June - (138,000) 529,413,361 67,676,147 424,466,692 66,517,020 - - - - - (60,669) (1) On 19 October 2018, 30,000,000 fully paid ordinary shares were issued to institutional and sophisticated investors at an issue price of $0.03 per share. The Placement was to raise funds for exploration expenditure at the Collerina Projects and for working capital. (2) On 28 November 2019, 62,500,000 fully paid ordinary shares were issued to institutional and sophisticated investors at an issue price of $0.016 per share. The Placement was to raise funds for exploration expenditure at the Collerina Copper Deposit and for working capital. (3) On 5 June 2020, 42,446,669 fully paid ordinary shares were issued to institutional and sophisticated investors at an issue price of $0.007 per share. The Placement was to raise funds for exploration expenditure at the Collerina Copper Deposit and for working capital. Capital Management Management controls the capital of the Group in order to maximise the return to shareholders and ensure that the group can fund its operations and continue as a going concern. Management effectively manages the Group’s capital by assessing the Group’s financial risks and adjusting its capital structure in response to changes in these risks and in the market. These responses include the management of expenditure and debt levels, distributions to shareholders and share and option issues. There have been no changes in the strategy adopted by management to control the capital of the Group since the prior year. NOTES TO THE FINANCIAL STATEMENTS 13) Reserves Unlisted Options Balance at 1 July Options issued to consultants (1) Options issued to directors and employees (2) Options issued in prior years vesting Options expired Options forfeited 2020 2019 No. $ No. $ 17,000,000 190,979 19,650,000 395,415 - - - - - 1,750,000 669 12,000,000 85,874 49,719 - 39,058 (2,000,000) (54,103) (15,400,000) (319,562) - - (1,000,000) (10,475) 190,979 Balance at 30 June 15,000,000 186,595 17,000,000 (1) On 19 October 2018, 1,750,000 unlisted options were issued to the Lead Manager (Peloton Capital) upon successful Placement. The options were exercisable at $0.08 each with an expiry date of 19 April 2019. Refer to Note 30 for more details. (2) On 10 December 2018, 12,000,000 unlisted options were issued to director and employees. The options are exercisable at $0.065 each with an expiry date of 30 November 2021. Refer to Note 30 for more details. The following table illustrates the options on issue at the end of the financial year. Grant Date Expiry Date Exercise Price 2020 2019 3 May 2017 3 May 2020 6 Apr 2018 6 Apr 2021 30 Nov 2018 30 Nov 2021 $0.0673 $0.0607 $0.065 - 3,000,000 2,000,000 3,000,000 12,000,000 12,000,000 15,000,000 17,000,000 Option Reserve The option reserve recognises the fair value of options issued but not exercised. Upon the exercise, lapsing or expiry of options, the balance of the option reserve relating to those options is transferred to accumulated losses if the options had vested. Otherwise, the value is reversed to profit or loss. 14) Accumulated Losses Balance at 1 July Net loss attributable to members of the parent entity Unlisted options expired / forfeited Balance at 30 June CONSOLIDATED 2020 $ 2019 $ (57,531,815) (57,141,815) (480,596) (720,037) 54,103 330,037 (57,958,308) (57,531,815) NOTES TO THE FINANCIAL STATEMENTS 15) Other Income Interest income Rental income Samuel project – management fee 16) Other Expenses Bank Fees Insurance Listing costs Office costs Other 17) Commitments CONSOLIDATED 2020 $ 4,036 23,279 117,321 144,636 2019 $ 6,722 - 57,273 63,995 CONSOLIDATED 2020 $ 2019 $ 16,227 43,185 39,087 13,195 12,013 8,358 33,854 49,913 17,835 7,361 123,707 117,321 Operating Lease Commitments a) At 30 June 2020, it is anticipated that operating lease commitments for the next twelve months will be $3,536 for short-term leases. At 30 June 2019, the Group disclosed operating lease commitments of $21,762. From the date of initial application of AASB 16 Leases, being 1 July 2019, all future amounts payable under leasing contracts previously classified as operating leases have been accounted for under the provisions of the new Leases standard. These amounts were reflected in the lease liability, of which $123,947 was recognised on 1 July 2019 (Note 11). Exploration Expenditure Commitments b) In order to maintain current rights of tenure to exploration tenements, the Group is required to perform minimum exploration work to meet the requirements specified by various State governments. These obligations can be reduced by selective relinquishment of exploration tenure or application for expenditure exemptions. Expenditure commitments are based on tenement rentals . No other minimum work expenditure commitments exist over any of the Company’s tenements. Less than 1 year 1 – 5 years More than 5 years CONSOLIDATED 2020 $ 2019 $ 21,599 21,331 - 13,735 9,435 - 42,930 23,170 NOTES TO THE FINANCIAL STATEMENTS 18) Key Management Personnel’s Remuneration The totals of remuneration paid to key management personnel of the Group during the year are as follows: Short term employee benefits Salaries and fees Long term employee benefits Long service leave entitlements Annual leave entitlements Superannuation Total long term employee benefits Share based payments Options Shares Total CONSOLIDATED 2020 $ 2019 $ 289,420 326,238 (5,790) (2,103) 27,495 19,602 5,933 11,461 30,991 48,385 39,164 92,126 - - 39,164 92,126 348,186 466,749 As at 30 June 2020, there were $17,228 director fees accrued for and unpaid (2019: $6,667). 19) Related Party and Directors’ Disclosures a) Other Transactions with key management personnel There were no items of expenses that resulted from transactions other than remuneration with key management personnel or their personally-related entities as shown in the remuneration report. Transactions between related parties are on normal commercial terms and conditions unless otherwise stated. b) Parent entity The ultimate parent entity in the Group is Helix Resources Limited. NOTES TO THE FINANCIAL STATEMENTS 20) Income Tax CONSOLIDATED 2020 $ 2019 $ Accounting (loss) before tax from continuing operations (480,596) (720,037) Accounting (loss) before tax (480,596) (720,037) Reconciliation of Income Tax (Benefit) to Accounting (Loss) Prima facie tax (benefit) at Australian rate of 27.5% (2019: 27.5%) (132,164) (198,010) Prima facie tax (benefit) at Chilean rate of 25% (2019: 25%) - - Adjusted for tax effect of the following: - taxable / non-deductible items - non-taxable / deductible items - adjustment for change of Chilean tax rate - income tax benefit not brought to account Income tax (benefit) (1,252) 72,629 (251,797) (381,948) - 385,213 - (62,453) 569,782 - Statement of Profit or Loss and Other Comprehensive Income Deferred income tax Relating to origination and reversal of temporary differences Australian temporary differences not brought to account Income tax (benefit) reported in statement of profit or loss & other comprehensive income 259,230 (259,230) 373,721 373,721 - - Unrecognised Deferred Tax Balances: Australian deferred tax asset losses Chilean deferred tax asset losses Net Unrecognised deferred tax assets Recognised Deferred Tax Balances: Deferred tax assets: Deferred tax assets in relation to tax losses Deferred tax assets Deferred tax liabilities: Deferred tax liabilities in relation to exploration and evaluation expenditure Deferred tax liabilities Net deferred tax 12,037,736 11,869,678 2,477,362 2,025,784 14,515,098 13,895,462 2,455,613 2,239,403 2,455,613 2,239,403 (2,455,613) (2,239,403) (2,455,613) (2,239,403) - - Helix Resources Limited currently satisfies the conditions to be a small business entity. NOTES TO THE FINANCIAL STATEMENTS 21) Segment Information The Group has identified its operating segments based on the internal reports that are reviewed and used by the Board of Directors (Chief Operating decision makers) in assessing performance and determining the allocation of resources. The Group is managed on the basis it is a mineral exploration company operating predominately in the geographical regions of Australia, mainly in New South Wales, and Chile. Decisions are made on a geographical basis. Current Assets Cash Trade and other receivables Non-Current Assets Exploration and evaluation asset Financial assets Australia Chile Total 2020 2019 2020 2019 2020 2019 81,245 323,853 74,111 42,538 155,356 366,391 113,101 78,147 237,565 2,676 350,666 80,823 10,059,074 9,272,553 - - 10,059,074 9,272,553 232,284 220,419 12,618 13,017 244,902 233,436 Plant and equipment Right-of-use Asset 33,114 65,598 43,275 - - - - - 33,114 65,598 43,275 - Total Assets 10,584,416 9,938,247 324,294 58,231 10,908,710 9,996,478 Current Liabilities Trade and other payables Other liabilities Provisions 106,493 133,826 Lease liabilities 46,624 Non-Current Liabilities Lease liabilities 20,517 - - 522,036 298,311 308,606 50,525 830,642 348,836 - - 337,632 - 337,632 - - - - 106,493 133,826 - - 46,624 - 20,517 - - Total Liabilities 695,670 432,137 308,606 388,157 1,004,276 820,294 Revenue Depreciation (Loss) / profit before tax 143,921 63,781 (58,486) (13,469) 715 - 214 144,636 63,995 - (58,486) (13,469) (507,836) (711,034) 27,240 (9,003) (480,596) (720,037) 22) Contingent Assets and Liabilities There are no contingent assets or liabilities of the Group (2019: nil). NOTES TO THE FINANCIAL STATEMENTS 23) Subsequent Events On 10 July 2020, the Company issued 264,706,567 ordinary shares at $0.007 per share, raising a total of $1.85 million (before costs), completing the Non-Renounceable Entitlement issue of 1 share for every 2 shares held by eligible shareholders as announced on 5 June 2020. No matter or circumstance has arisen since 30 June 2020 that has significantly affected or may significantly affect the Group’s operations, the results of those operations or the Group’s state of affairs in future years. 24) Loss Per Share Basic loss per share Diluted loss per share COMPANY 2020 2019 Cents Per share Cents Per share (0.10) (0.10) (0.17) (0.17) Basic & Diluted Loss per Share The earnings and weighted average number of ordinary shares used in the calculation of basic and diluted loss per share are as follows: Loss after tax 2020 $ 2019 $ (480,596) (720,037) No. No. Weighted average number of ordinary shares 464,189,067 415,343,404 The following unlisted options are all out the money and are therefore not considered to be dilutive and have been excluded from the weighted average number of ordinary shares and potential ordinary shares used in the calculation of diluted earnings per share: Unlisted Options 2020 No. 2019 No. 15,000,000 17,000,000 Since the Group made a loss during the year, the potential ordinary shares were not considered to be dilutive. NOTES TO THE FINANCIAL STATEMENTS 25) Interest in Joint Operations The parent entity has entered into the following unincorporated joint operations: Joint Operations Project Cobar Gold Project Percentage Interest 90% (Glencore moving to 1% NSR Royalty) (2019: 90%) (Glencore) Principal Exploration Activities Gold Canbelego 70% (2019: 70%) (Aeris Resources) Copper The joint operations are not separate legal entities but are contractual arrangements between the participants for sharing costs and output and do not in themselves generate revenue and profit. Capitalised exploration expenditure is the only asset of the joint operations. The Group’s interest in capitalised exploration expenditure in the above mentioned joint operations is as follows: Non-Current Assets Mineral Assets Additions Carrying Amount 26) Financial Instruments Restdown Joint Operation 90% Canbelego Joint Operation 70% 2,723,541 79,471 2,803,012 1,147,209 5,034 1,152,243 Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which revenues and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in Note 1 to the financial statements. Financial Risk Exposures and Management The main risks the Group is exposed to through its financial instruments are interest rate risk, foreign currency risk, liquidity risk and credit risk. The Board is responsible for the financial risk management. Interest Rate Risk Sensitivity Analysis At 30 June 2020, the effect on loss and equity as a result of a 50% increase in the interest rate, with all other variables remaining constant would be a decrease in loss by $2,018 (2019: $3,361) and an increase in equity by $2,018 (2019: $3,361). The effect on loss and equity as a result of a 50% decrease in the interest rate, with all other variables remaining constant would be an increase in loss by $2,018 (2019: $3,361) and a decrease in equity by $2,018 (2019: $3,361). NOTES TO THE FINANCIAL STATEMENTS 26) Financial Instruments (Continued) The Group's exposure to interest rate risk and effective weighted average interest rate for classes of financial assets is set out below: Floating Interest Rate Maturity Average Interest Rate Fixed Interest Rate % $ Less than 1 year $ More than 1 Year $ Non Interest Bearing Total $ $ 2020 Financial Assets Cash and cash equivalents 0.40% Trade and other receivables Financial assets 1.25% Financial Liabilities Trade payables Lease liabilities 6.11% - - - - - - - 82,249 - 244,902 327,151 - - - - - - 73,107 155,356 113,101 113,101 - 244,902 186,208 513,359 423,384 423,384 46,624 20,517 - 60,141 46,624 20,517 423,384 490,525 Floating Interest Rate Maturity Average Interest Rate Fixed Interest Rate % $ Less than 1 year $ More than 1 Year $ Non Interest Bearing Total $ $ 2019 Financial Assets Cash and cash equivalents 0.45% Trade and other receivables Financial assets 1.71% Financial Liabilities Trade payables Lease liabilities . - - - - - - - 337,449 - - - - 28,942 366,391 80,823 80,823 233,436 - 233,436 337,449 233,436 109,765 680,650 - - - - - - 236,976 236,976 - - 236,976 236,976 Foreign Currency Risk The Group is exposed to fluctuations in foreign currencies arising from expenditure in currencies other than the Group’s measurement currency. The Group is exposed to currency exposures to the United States Dollar and Chilean Pesos. The Group has not formalised a foreign currency risk management policy, however it monitors its foreign currency expenditure subject to exchange rate movements and retains the right to withdraw from the foreign exploration commitments after minimum expenditure targets have been met. NOTES TO THE FINANCIAL STATEMENTS 26) Financial Instruments (Continued) The Group’s exposures to foreign currency risk at the end of the reporting period, expressed in Australian dollars, were as follows: Cash and cash equivalents Trade and other payables 2020 CLP 73,027 (308,606) (235,579) 2019 CLP 27,988 (50,525) (22,537) Liquidity Risk The Group manages liquidity risk by monitoring forecast cash flows and ensuring that sufficient cash and financial assets are available to meet the current and future commitments of the Group. The Group’s operations require it to raise capital on an on-going basis to fund its planned exploration program and to commercialise its tenement assets. If the Group does not raise capital in the short term, it can continue as a going concern by reducing planned but not committed exploration expenditure until funding is available and/or entering into joint venture arrangements where exploration is funded by the joint venture partner. 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 the policy of only dealing with credit worthy counterparties and obtaining sufficient collateral or other security where appropriate, as a means of mitigating the risk of financial loss from defaults. All cash and cash equivalents are held with financial institutions with a credit rating of AA3 or above. The Group measures risk on a fair value basis. The maximum credit risk on financial assets of the Group which have been recognised on the statement of financial position, other than investments in shares, is generally the carrying amount, net of any provisions for doubtful debts. 27) Remuneration of Auditors Auditing and reviewing the financial reports 2020 $ 2019 $ 26,865 29,586 The auditor of Helix Resources Limited for the 2020 financial year is HLB Mann Judd (2019: Grant Thornton Audit Pty Ltd). NOTES TO THE FINANCIAL STATEMENTS 28) Parent Company Information Assets Current assets Non-current assets Total Assets Liabilities Current liabilities Non-current liabilities Total Liabilities Equity Share capital Reserves Accumulated losses Total Equity Financial Performance (Loss) for the year 29) Subsidiaries 2020 $ 2019 $ 192,986 400,640 10,407,118 9,207,681 10,600,104 9,608,321 675,153 432,137 20,517 - 695,670 432,137 67,676,147 66,517,020 186,595 190,979 (57,958,308) (57,531,815) 9,904,434 9,176,184 (480,596) (390,000) Name Country of Incorporation Principal Activity Percentage Held Percentage Held Oxley Exploration Pty Ltd Australia Leichhardt Resources (QLD) Pty Ltd Helix Resources (Overseas) Pty Ltd Australia Australia McClatchie Mining Pty Ltd 1 Australia Helix Resources Chile Limitada Chile 1 Company was established on 11 February 2019 Mineral Exploration Mineral Exploration Mineral Exploration Mineral Exploration Mineral Exploration 2020 100% 2019 100% 100% 100% 100% 100% 100% 100% 100% 100% NOTES TO THE FINANCIAL STATEMENTS 30) Share Based Payments Options On 19 October 2018, 1,750,000 unlisted options were issued to the Lead Manager (Peloton Capital) upon successful Placement. The options are exercisable at $0.08 each with an expiry date of 19 April 2019. All the options vested on grant date. The Black Scholes option pricing model was used to value these options and inputs used are as stated in the table below. As options expired, balance was transferred into accumulated losses. Grant Date 19 Oct 2018 Expiry Date 19 Apr 2019 Exercise Price Share Price $0.08 $0.031 Volatility 75% Risk Free Rate 1.49% On 30 November 2018, 12,000,000 unlisted options were granted to director and employees. The options are exercisable at $0.065 each with an expiry date of 30 November 2021. Options vest 1/3 on grant date, 1/3 on 30 November 2019, and 1/3 on 30 November 2020. The Black Scholes option pricing model was used to value these options and inputs used are as stated in the table below. Grant Date 30 Nov 2018 Expiry Date 30 Nov 2021 Exercise Price Share Price $0.065 $0.031 Volatility 84% Risk Free Rate 1.93% The following table illustrates the options exercisable at the end of the financial year. Grant Date Expiry Date Exercise Price 2020 2019 3 May 2017 3 May 2020 6 Apr 2018 6 Apr 2021 30 Nov 2018 30 Nov 2021 $0.0673 $0.0607 $0.065 - 3,000,000 8,000,000 11,000,000 2,000,000 2,000,000 4,000,000 8,000,000 At 30 June 2020, there were 4,000,000 options that has yet to fully vest, and thus not exercisable. The weighted average remaining contractual life for the share-based payment options outstanding as at 30 June 2020 was 1.29 years (2019: 2.12 years). The range of exercise prices for share-based payment options outstanding as at the end of the year was $0.0607 to $0.065 (2019: $0.0607 to $0.0673). Weighted average exercise price as at 30 June 2020 is 6.41 cents (2019: 6.45 cents). ADDITIONAL ASX INFORMATION AS AT 10 SEPTEMBER 2020 Number Of Shares Held Range 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 Over Total Total holders 102 147 213 696 591 1,749 Units 29,177 440,034 1,839,859 28,864,546 762,946,312 794,119,928 % Units 0.00 0.06 0.23 3.63 96.07 100.00 Minimum $500.00 parcel at $0.017 per unit 29,412 763 7,792,857 Minimum Parcel Size Holders Units Percentage Held By 20 Largest Shareholders Rank Name Units % of Units 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. YANDAL INVESTMENTS PTY LTD PONDEROSA INVESTMENTS (WA) PTY LTD GEE VEE PTY LTD MR ROBERT PATRICK HEARNE MR BULENT BESIM GEMTAZ PTY LIMITED GEE VEE PTY LTD MS OLIVIA KIDON MR CHRIS CARR + MRS BETSY CARR GOTHA STREET CAPITAL PTY LTD JETOSEA PTY LTD CREEKWOOD NOMINEES PTY LTD MR GEOFFREY JAMES HARRIS SHUKHRA PTY LTD MR GREGORY JOHN MUNYARD + MRS MARIA ANN MUNYARD + MISS CARMEN HELENE MUNYARD ROCK THE POLO PTY LTD MR GREGORY JOHN MUNYARD AQUILA RESOURCES LTD MRS MELANIE JANE CHESSELL MR STANLEY ALLAN MACDONALD 44,030,201 24,125,000 23,653,257 21,900,000 19,999,999 19,295,105 17,938,230 17,807,742 15,000,000 12,821,590 11,551,332 10,875,000 9,244,881 9,000,000 8,629,194 8,375,000 8,323,354 7,681,293 7,200,000 6,998,750 5.54 3.04 2.98 2.76 2.52 2.43 2.26 2.24 1.89 1.61 1.45 1.37 1.16 1.13 1.09 1.05 1.05 0.97 0.91 0.88 Totals: Top 20 holders of Ordinary Fully Paid Shares (TOTAL) 304,449,928 38.33 ADDITIONAL ASX INFORMATION AS AT 10 SEPTEMBER 2020 Voting Rights One vote for each ordinary share held in accordance with the Company's Constitution. Substantial Shareholders Shareholder Yandal Investments Pty Ltd Gee Vee Pty Ltd Directors' Interest In Share Capital Director P Lester J Macdonald T Kennedy Total Number Of Options Held Range 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 Over Total Number of Shares 44,030,201 41,591,487 % of Issued Capital 5.54 5.24 Fully Paid Ordinary Shares Unlisted Options 1,105,342 15,635,514 450,000 17,190,856 3,000,000 3,000,000 3,000,000 9,000,000 Total holders Units % Units - - - - 10 10 - - - - 15,000,000 15,000,000 - - - - 100.00 100.00 No option holders hold more than 20% of a particular class of the Company’s unlisted options. The Company has the following classes of options on issue at 10 September 2020 as detailed below. Options do not carry the rights to vote. Class Terms No. of Options Class D Unlisted Options Class F Unlisted Options Exercisable at 6.07 cents, expiring on or before 6 April 2021 3,000,000 Exercisable at 6.5 cents, expiring on or before 30 November 2021 12,000,000 15,000,000 ADDITIONAL ASX INFORMATION AS AT 10 SEPTEMBER 2020 Tenement Schedule Tenement Name Mineral Ownership NSW COPPER & GOLD PROJECTS (INCL. JV's) EL8768 (Formerly EL6336) Collerina Copper/Gold Helix 100% precious and base metals EL6140 EL6501 EL6739 EL7438 EL7439 EL7482 EL8433 EL8633 EL8608 EL8845 EL8710 EL8096 EL6105 EL8948 Restdown (Cobar Gold) South Restdown (Cobar Gold) Muriel Tank (Cobar Gold) Gold Gold Gold Quanda Fiveways Copper/Gold Copper/Gold Little Boppy Copper/Gold Boundary Rochford Copper/Gold Copper/Gold Yanda Creek Copper/Gold Darbalara Copper/Gold Honeybugle Copper/Gold Helix 90%, Glencore moving to 1% NSR royalty Helix 90%, Glencore moving to 1% NSR royalty Helix 90%, Glencore moving to 1% NSR royalty Helix 100% Helix 100% Helix 100% Helix 100% Helix 100% Helix 100% Helix 100% Helix 100% Mundarlo Copper/Basemetals Helix 80%, Private Partner 20% Canbelego Copper/Gold Helix 70%, Aeris Resources 30% Bijoux Copper/Gold Helix 100% CHILE PROJECTS EXPLORATION CONCESSIONS Joshua (13 concessions) Bogarin (13 concessions) Joshua Copper/Gold Samuel Copper/Gold EXPLOITATION CONCESSIONS Blanco Y Negro 1/20 Joshua (5 concessions) Bogarin (6 concessions) Blanco Y Negro Copper/Gold Joshua Copper/Gold Samuel Copper/Gold Abbreviations and Definitions used in Schedule: EL or E Exploration License Helix 100% Helix 100% Helix 100% Helix 100% Helix 100% 

Continue reading text version or see original annual report in PDF format above