ANNUAL REPORT 2019
FOCUSED ON
HIGH-VALUE ZIRCON
IN PURSUIT OF
KNOWLEDGE
INNOVATION
EXCELLENCE
ABOUT US
Image Resources NL (ASX: IMA) is Australia’s newest mineral sands
mining company focused on operating open-cut mining and ore
processing operations at its 100%-owned, high-grade and zircon rich
Boonanarring Project located 80km north of Perth in the infrastructure-
rich North Perth Basin in Western Australia.
CONTENTS
Chairman’s Report
Managing Director’s Report
Review of Operations
Resources and Reserves Schedule
Directors’ Report
Remuneration Report
Auditor’s Independence Declaration
Corporate Governance Statement
Statement of Profit or Loss and Other
Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to and forming part of the Financial
Statements
Directors’ Declaration
Independent Auditor’s Report
ASX Additional Information
Schedule of Tenements
2
4
6
12
16
21
27
28
29
30
31
32
33
57
58
62
64
2019 Annual Report
1
CHAIRMAN’S
REPORT
Our path of developing the Boonanarring Project and transitioning into
production has been a short, but very successful one.
Dear Shareholders,
On behalf of your Board of Directors, I am
proud to report that in 2019 your Company has
completed a very successful transition from
We finished the year in very strong fashion with A$50m cash
in the bank and completed the 1st quarterly debt repayment in
the November to end the year with a total debt of A$56m.
We are already assessing options for the early retirement
exploration company to a profitable mining
of our high yield debt and the opportunities this may allow,
company, has performed beyond our original
expectations and has a very bright future.
Across the past two years, your Company has gone from
strength to strength. Our path of developing the Boonanarring
Project and transitioning into production has been a short,
but very successful one. The project was constructed on
time and on budget in 2018, and it was then catapulted into
full production in an extraordinarily short ramp-up period of
just two months. This type of performance is very rare and it
added tremendous value to the Company’s bottom line.
Your Company has now successfully completed its inaugural
full year (CY2019) of operating as an active mining company,
and the results were better than expected.
Key highlights:
• Profitability achieved in March quarter;
• Positive cashflow achieved in June quarter;
•
Total revenue of A$146m;
• Project EBITDA of A$73m;
• Net Profit after Tax of A$21m
including consideration of a dividend payment and/or
investment into a potential second operating centre.
On behalf of your Board, I would like to thank and
congratulate all our employees, (operations, exploration and
corporate) as well as our contractors and consultants on a
very productive 2019. I would also like to acknowledge the
senior executive team of our COO, Mr Todd Colton, CFO, Mr
John McEvoy, Exploration Director, Mr George Sakalidis, and
our Managing Director Mr Patrick Mutz who led the Company
through these very exciting times.
I also want to thank my fellow Directors for their leadership
and guidance to direct the Company through the many
decisions required to pave the way for the development and
operation of the Boonanarring Project.
And finally, on behalf of the Board and employees of your
Company, I want to say thank you to all our shareholders
for your continuing support. Your Board believes that while
we have had a very productive year, the journey for Image
Resources has only just begun, and we look forward to
continuing success through 2020 and beyond.
Robert Besley
Non-Executive Chairman
28 February 2020
IN PURSUIT OF KNOWLEDGE
2
Image Resources NL
2019 Annual Report
3
MANAGING DIRECTOR’S
REPORT
Dear Shareholders,
During the 2019 calendar year your Company
successfully completed its inaugural full year as
an active mining company and proactively met or
exceeded market guidance which was increased
twice during the year.
The launch into active ore processing and heavy mineral
concentrate (HMC) production at Boonanarring in December
2018, following the strong performance of completing
construction on-time and on-budget, set your Company on a
firm path to transition into a profitable mining company. During
CY2019 our Team (which includes all our employees, contractors
and consultants) capitalised on that successful launch and
delivered a banner performance operationally and financially.
Your Team hit the ground running in January by demonstrating
how a great ore deposit, married with the right plant and
equipment and operated by a very competent and experienced
team can achieve very positive and rare results; that being the
ramp-up to exceed full production levels in only the second
month of operation. The Team went on to exceed production
expectations for the full year.
In Q1 2019 it became evident that the ore grade in the 2017 Ore
Reserve had been underestimated. We determined that a very
high-grade core within the eastern strand of the deposit had
not been adequately delineated with the standard 20m drilling
spacing. In Q2 we embarked on a close-spaced drilling program
to reassess the Mineral Resources and Ore Reserve.
As a result of the higher than expected ore grade and strong
operational performance, your Company became profitable in
Q1, and cashflow positive in Q2. This allowed the start of an
accelerated exploration program in Q3 to identify additional
mineralisation for conversion to Mineral Resources and Ore
Reserves to extend the mine life at Boonanarring.
STRIVING FOR EXCELLENCE
We are proud that our operational achievements occurred in conjunction with strong local community
support and with very credible performance under our health, safety and environmental programs.
Our Team went on to complete the year with total production of
By almost every measure, the performance of your Company
270k tonnes of HMC; significantly higher than originally forecast.
can be considered stellar for a start-up mining company, which
They also did so at slightly below forecast operating costs, and
rapidly transitioned to a profitable enterprise in its inaugural year
significantly below forecast HMC unit costs. And, as importantly
of production, and growing its cash reserves to within striking
as the operating results, the Team maintained very credible
distance of being able to retire its debt. We closed the year with
performance in the area of health, safety and environment, as
A$50m of cash in the bank and total debt of A$56m.
well as proactive community engagement, while we continue
to pursue the installation of a solar farm; all to ensure your
Company maintains its social licence to operate.
Your Team also successfully marketed the Company’s high
quality HMC through our off-take partners. We completed the
sale of 12 bulk shipments of HMC during the year, for total
revenue of A$146m. We also ended the year with a very healthy
HMC inventory of 57k tonnes with an estimated market value of
over A$30m.
In December, we published our updated Ore Reserve, which
resulted in a very positive 24% higher heavy mineral ore grade
and 50% higher in-situ zircon grade. The updated Ore Reserve
also resulted in a decrease in total ore tonnes in the reserve,
which was an unexpected and disappointing result. However, as
demonstrated by the identification of new mineralisation in the
50mRL Strandline in December, drilling in this area will almost
certainly provide the basis for additional Mineral Resources
and Ore Reserves. To that end we have sharpened our focus
This provides a very solid base on which to continue to grow
your Company in 2020 and beyond, with forecast higher
production and improved economics.
I would like to thank all our employees, contractors, consultants,
offtake partners and local landowners and community members
for all the amazing work and support that has made the results
of this past year possible.
Finally, thank you to our Board of Directors and shareholders for
your continuing support over the past year. We look forward to
reporting on what we believe will be another very positive year of
operations for Image Resources.
and elevated the priority to add new Ore Reserves as rapidly
Patrick Mutz
as practicable and extend the mine life at Boonanarring under
a formal project codenamed Project ‘MORE’, which has the full
Managing Director
28 February 2020
support of the Board and executive management.
4
Image Resources NL
2019 Annual Report
5
REVIEW OF OPERATIONS
RESEARCHING INNOVATION
Image Resources NL (“Image” or “the Company”) successfully completed its first full year (CY2019) as an active mining
company operating at the Company’s 100%-owned, high-grade, zircon-rich Boonanarring Mineral Sands Project (Boonanarring)
in the North Perth Basin located 80 Kilometres north of Perth. During the year the Company achieved profitability in Q1, positive
cashflow in Q2 and met market guidance for the full year, which was raised twice during the year.
2019 in Review
Safety
Operations
•
Image experienced zero reported lost-time injuries (LTI)
•
In CY2019, the Company successfully completed its
throughout the construction; and commissioning period
inaugural full year as an active mining company. The year
of 2018, and ramp-up and active mining and processing
was highlighted by a number of unexpected, but positive
through September 2019 (total 18 months). However,
developments.
in October 2019 the Company recorded its first LTI
associated with the rapidly evolving and very important
area of mental health. And in November, a second LTI
was recorded as a result of a minor shoulder injury
which occurred in June 2019, but which did not improve
with restricted duties and eventually required corrective
surgery and was assessed as an LTI.
•
Image maintains its proactive promotion of a positive
safety culture which includes safety programs and
procedures that encourage job safety analysis and
planning as well as active incident reporting for the
purpose of continuous improvement of the health, safety
and well-being of all employees, contractors, visitors
and members of the community as well as protection
of the environment. The success of these programs is
monitored through the use of regular internal Health,
Safety and Environment audits and monthly Positive
Performance Indicator (PPI) scoring. PPI scoring
improved quarter on quarter in CY2019.
•
In January 2019, in only the second month of operations
following the start of ore processing operations at
Boonanarring in December 2018, heavy mineral
concentrate (HMC) production ramped up to exceed the
forecast long-term average monthly HMC production of
20kt.
•
In the March quarter, it was determined that the
Boonanarring eastern strand of the deposit contained a
very high-grade core of ore that had not been adequately
delineated by the drilling used to determine Mineral
Resources and Ore Reserves. This led to a detailed,
close-space drilling program commencing in April 2019,
to delineate the eastern strand and culminated with
updated Mineral Resources and Ore Reserves estimates
published in December 2019. The updated Ore Reserves
outlined 24% higher heavy mineral ore grade and 50%
higher in-situ zircon grade. The downside to the updated
Ore Reserves was a loss of ore tonnes due to the
identification, during active mining and ore processing,
of the presence of iron-rich laterite within the ore zones,
which assays as heavy mineral.
Community
•
In May 2019, an unexpected ore horizon located just
•
Image continues to proudly contribute to the local
community, including through local employment. At year
end 59% of the workforce at Boonanarring lived locally
to the operation or within regional shires. In addition, the
Company has an active and varied community support
and engagement program.
•
In September 2019 the Company hosted a formal
event at Boonanarring to commemorate the opening of
the mine. The event was attended by over 250 invited
guests including local landowners, local community
representatives, Shire representatives, government
officials, Image shareholders (domestic and international),
plus Image contractors and consultants as well as Image
employees and directors.
below the modelled base of the mine was discovered and
found to contain ‘ultra’ high-grade (UHG) ore or direct
shipping ore, as it contained up to 95% heavy minerals
(HM) and up to 75% zircon in the HM. The zircon has
been determined to be all premium grade, with low iron
content. A total of approximately 3kt of UHG ore was
mined and added to the HMC storage pad. This material
is being stockpiled for the addition of additional UHG
that may be mined in the future, before determining the
best market outlet for this high-grade and high-quality
material.
Image maintains proactive health, safety
and environmental protection programs
6
Image Resources NL
2019 Annual Report
7
ZIRCON
PRODUCTS & APPLICATIONS
Zircon sand is processed into zirconium compounds and intermediate products for a variety
of applications including ceramics (tiles and sanitary ware), foundry sands (metal castings),
refractories (furnace linings), as well as zirconium metal and many other uses.
Operations (continued)
•
In July 2019, following the achievement of positive cashflow in the June quarter, an expanded
exploration budget was approved to allow drilling to commence with the purpose of identifying
additional mineralisation for conversion to Mineral Resources and Ore Reserves with the goal of
increasing mine-life at Boonanarring. As a result of this drilling, in December 2019, the Company
announced the identification of a new mineralised strandline located to the west of the current
Boonanarring deposit, with the potential to extend for up to 40km from Image’s Gingin South
tenement to the northern part of the Boonanarring Northern Extension Area (NEA) identified
in 2017. If mineralisation in this new area can be converted to Mineral Resources and Ore
Reserves, the norther half of this area could be within economic pumping distance of the current
location of the Boonanarring wet concentration plant.
•
In August 2019, Image successfully completed a replacement of the trommel unit associated
with the ore feed preparation plant (FPP) so as to increase ore throughput during times of higher
clay content of the ore. This low-cost modification proved to be effective in increasing the ore
processing rate to meet and exceed the design rate of 500 dry tonnes per hour. In November
2019, very low-cost modifications were also made to the HMC cleaning and dewatering circuits
to allow increased HMC processing capacity.
•
In August 2019, Image also executed a purchase option agreement to acquire a block of land
with a 1.3km long section of mineralised strike-length in the Boonanarring NEA with immediate
access for drilling. Additional access for drilling is being sought from surrounding landowners.
•
In November 2019, the Boonanarring operations team completed the successful relocation of
the FPP from Block ‘C’ to Block ‘B’. With higher grades encountered in Block B production
for December 2019 was a new monthly record high at 31.4kt of HMC produced. This new
production record demonstrated that the new trommel added to the FPP and modifications
made to the HMC cleaning and dewatering circuits achieved their objective.
•
As a result of the higher than expected HM ore grades and zircon grades in the HM, HMC
production for CY2019 exceeded expectations such that market guidance was raised twice
during the year. The Company met that higher guidance with the production of 270kt of HMC.
•
HMC sales to the Company’s off-take partners averaged one shipment per month, in line with
expectations, for total sales of 237.5kt for the year. The higher HMC production level compared
to sales resulted in HMC stocks of 57kt at the end of December.
•
The average HMC realised price for the full year was $616 per tonne, compared to C1 cash
costs (which include mining, processing, general and administration and concentrate transport
costs) of $327 per tonne. The Boonanarring project reported EBITDA of $72.5 million for the full
calendar year, which was 4% above the upper limit of guidance.
• Guidance for calendar years 2020 and 2021 has been increased and set at 300-330kt of HMC
production and sales, due mainly to the higher HM ore grades forecast in Blocks A and B.
Mineral Sands Prices and FX
•
Boonanarring HMC prices are based on the underlying content of zircon (as ZrO2+HfO2) and
titanium dioxide (as TiO2) and benchmark prices for the various products (zircon, rutile, ilmenite
and leucoxene) at appropriate quality specifications. The majority of the value of Boonanarring
HMC is derived from the zircon content, with underlying zircon prices remaining strong and
broadly flat for calendar year 2019, but with some price softening during the December quarter,
which was largely offset by increasing prices for ilmenite, leucoxene and rutile.
• Overall HMC prices increased from an average $517 per tonne in Q1 to an average $661 per
tonne in Q4, for an overall average $616 per tonne for the year. The increasing HMC unit prices
during the year were primarily due to increasing zircon grades in the HMC.
•
AUD/USD foreign exchange rate remained below 0.70 for much of the year whilst, having
opened and closed the year at 0.70.
8
Image Resources NL
2019 Annual Report
2019 Annual Report
9
9
Corporate
Sales revenue for the year was $146.2 million with project operating and selling costs of $73.7 million
and with full year project EBITDA of $72.5 million.
During 2019 the Company generated a Net Profit After Tax of $20.8 million (2018: $3.3 million).
As at 31 December 2019 Image had a cash position of A$49.9 million and debt of A$56.4 million. The
Company generated net cash flow from operating activities of A$62.9 million.
In November 2019 the Company completed its first scheduled loan note repayment, including interest,
totalling US$8.15 million (A$12.17 million). The remaining debt is scheduled to be repaid in six further
quarterly instalments with the next repayment due in February 2020. A loan associated with the June
2016 Asset Sale and Purchase Agreement from Murray Zircon Pty Ltd of A$4 million was fully repaid
in July 2019.
Updated Ore Reserves and Mineral Resources Estimates
Updated Ore Reserves and Mineral Resources estimates were announced to the ASX on 20
December 2019.
Estimated Ore Reserves as at 1 October 2019, comprises 10.7Mt of ore, grading 8.9% total heavy
mineral (THM), with an assemblage of 27.5% zircon, for total contained zircon of 0.26Mt. This
represents a 24% increase in THM grade, a 21% increase in zircon assemblage and a 50% increase
in the in-situ zircon grade. Excluding depletion from production, there was a 33% reduction in ore
tonnes due primarily to the identification of iron-rich laterite material which assayed as heavy mineral,
and a 3% increase in total tonnes of contained zircon.
Exploration
During 2019 significant effort was directed at work associated with a close-spaced (5m) drilling
program designed to adequately delineate the high grade core in the Eastern Strand, which was used
to update the Mineral Resources and Ore Reserves Estimates at Boonanarring.
In addition, a new mineralised area was identified in the north western portion of the Boonanarring
Northern Extension Area (NEA). A drilling programme was completed late in 2019. Initial results are
very promising outlining two shallow high-grade strands of 1.2km in length which will be followed
up promptly in 2020 with additional work expected to include composites for evaluation of the
assemblages to be used in a new Mineral Resources estimate of this area.
An initial programme was also completed over a 1.3km length of the NEA. This programme has
shown that the high-grade core within the eastern strand of the current Ore Reserves extends under
the Brand Highway (Brand). Additional drilling is being planned to determine the exact position of
the deposit relative to the Brand and will require drilling along the Brand and to the east. Additional
drilling is expected to add significantly to the delineation of mineralization in the NEA and its possible
linkage with the Red Gully Deposit 5km to the north.
Other drilling aimed at extending the mine-life at Boonanarring identified a new mineralized shoreline
trend to the west of and parallel to the Boonanarring Ore Reserves area and may potentially extend
for up to 40 km on the 48-55m RL. This includes previously identified mineralisation in the western
sections of Image’s Gingin South and Gingin North projects and has now been found to include the
recently identified Boonanarring West mineralisation and the Boonanarring Northwest Extension. In
December 2019, the identification of this new mineralised area, dubbed the 510mRL Strandline, was
announced, and additional promising, shallow, high-grade results were announced in January 2020.
Drilling results in the NEA were sufficiently positive that the Board approved the exercise of a land
purchase option over a 1.3km section of the NEA target area. Subsequent to the end of the year the
purchase option was exercised and the purchase was finalised in February 2020.
TITANIUM DIOXIDE
PRODUCTS & APPLICATIONS
Titanium dioxide (TiO2) from rutile and ilmenite is processed into titanium-based products, primarily as an ultra-
white pigment for use in paint, paper and plastics, but also in welding rods (flux coating), as well as titanium
metal for a variety of applications including in aircraft, spacecraft, motor vehicles and medical implants.
10
10
Image Resources NL
Image Resources NL
2019 Annual Report
11
MINERAL RESOURCES &
ORE RESERVES STATEMENT
Ore Reserves – Material Mining Projects
Mineral Resources – Material Mining Project
In December 2019, the Company provided an update of the estimated Ore Reserves at Boonanarring (refer to the Company’s
In December 2019, the Company provided an update of the Mineral Resources at Boonanarring (refer to the Company’s ASX
ASX release dated 20 December 2019 and Table 1).
release dated 20 December 2019 and Table 3).
Table 1 – Ore Reserve Summary – JORC Code 2012 – as at 1 October 2019
Table 3 – Mineral Resource Summary – JORC Code 2012 – as at 1 October 2019
High Grade Ore Reserves - Strand Deposits; in accordance with the JORC Code (2012)
High Grade Mineral Resources - Strand Deposits; in accordance with the JORC Code (2012) @ 2.0% HM Cut-off
Project / Deposit
Category
Boonanarring1
Boonanarring1
Total Boonanarring
Atlas2
Total Atlas
Total Ore Reserves
Proved
Probable
Probable
Tonnes
(million)
3.5
7.1
10.7
9.5
9.5
20.2
HM
(%)
13.9
6.4
8.9
8.1
8.1
8.5
Slimes
(%)
HM Tonnes
(million)
VHM
(%)
Ilmenite
(%)
Leucoxene
(%)
Rutile
(%)
Zircon
(%)
16.0
16.0
16.0
15.5
15.5
15.8
0.5
0.5
0.9
0.8
0.8
1.7
82.7
76.6
79.6
73.3
73.3
76.8
44
49
46
50.7
50.7
48.3
4.6
1.7
3.2
4.5
4.5
3.8
2.2
2.8
2.5
7.5
7.5
4.7
31.9
23.1
27.5
10.6
10.6
19.9
1. Refer to Boonanarring Ore Reserves release 20 December 2019
2. Atlas Reserves refer to the 30 May 2017 release “Ore Reserves Update for 100% Owned Atlas Project”
The Company’s Ore Reserves at Boonanarring show changes from the Ore Reserves as at 1 October 2018 (Table 2). The material
changes arise from mining depletion as well as changes in the Mineral Resources resulting from the elimination of low grade,
low-zircon ore in the overlying layer found to contain a significant proportion of iron-rich laterite which assays as heavy mineral,
and the elimination of laterite-rich zones in the main ore strands. Refer to the Company’s ASX release dated 20 December 2019
for further information. For the period between 1 October 2019 and 31 December 2019 the Company is not aware of any new
information or data that materially affects the Ore Reserve at Boonanarring other than changes due to normal mining depletion.
Project / Deposit
Category
Tonnes
(million)
Boonanarring
Boonanarring
Boonanarring
Boonanarring Total
Atlas
Atlas
Atlas
Total Atlas
Measured
Indicated
Inferred
Measured
Indicated
Inferred
Sub-Total Atlas/Boonanarring
8.8
14.6
6.9
30.3
9.9
6.4
1.8
18.1
48.4
HM
(%)
10.3
4.6
3.5
6.0
7.9
3.7
4.0
6.0
Slimes
(%)
HM Tonnes
(million)
VHM
(%)
Ilmenite
(%)
Leucoxene
(%)
Rutile
(%)
Zircon
(%)
14
17
20
17.0
16.1
17.3
19.9
16.9
0.9
0.7
0.2
1.8
0.8
0.2
0.1
1.1
78.1
71.2
59.4
72.7
71.0
56.5
41.5
65.9
46
48
45
46
49.1
41.6
29.0
46.1
3.8
2.6
4.9
3.6
4.2
3.4
3.3
4.0
2.3
2.7
3.9
2.7
7.2
4.7
4.4
6.5
26.0
17.9
5.6
20.4
10.5
6.8
4.8
9.3
6.0
17.0
2.9
70.1
46.1
3.7
4.1
16.2
The Company’s Mineral Resources at Boonanarring show changes from the Mineral Resources as at 1 October 2018 (Table
4). The material changes arise from mining depletion as well as changes resulting from the elimination of low grade, low-zircon
ore in the overlying layer found to contain a significant proportion of iron-rich laterite which assays as heavy mineral, and the
elimination of laterite-rich zones in the main ore strands. Refer to the Company’s ASX release dated 20 December 2019 for
further information. For the period between 1 October 2019 and 31 December 2019 the Company is not aware of any new
information or data that materially affects the Mineral Resource Estimate at Boonanarring other than changes due to normal
As shown in Table 2the Company’s Ore Reserves at Atlas are unchanged from 1 October 2018 and the Company is not aware of
mining depletion.
any new information or data that materially affects the information for the three months ended 31 December 2019.
Table 2 – Comparative Ore Reserves Summary – JORC Code 2012
Project / Deposit
As at 1 October 2018
Boonanarring
Atlas
Total Ore Reserves
As at 1 October 2019
Boonanarring
Atlas
Total Ore Reserves
High Grade Ore Reserves – Strand Deposits
Tonnes
(million)
HM
(%)
Slimes
(%)
HM Tonnes
(million)
VHM
(%)
Ilmenite
(%)
Leucoxene
(%)
Rutile
(%)
Zircon
(%)
19.86
9.5
29.3
10.7
9.5
20.2
7.2
8.1
7.5
8.9
8.1
8.5
16.1
15.5
15.9
16.0
15.5
15.8
1.43
0.8
2.19
0.9
0.8
1.7
77.2
73.3
75.8
79.6
73.3
76.8
50.4
50.7
50.5
46
50.7
48.3
1.8
4.5
2.7
3.2
4.5
3.8
2.4
7.5
4.2
2.5
7.5
4.7
22.7
10.6
18.4
27.5
10.6
19.9
The updated Ore Reserve in 2019 included a 24% increase in total heavy mineral
(HM) ore grade and a 50% increase in the in-situ zircon grade of the ore, and 9.2Mt
less ore tonnes (post depletion for production) due to the removal of iron-rich
laterite assaying as heavy mineral in the previous Ore Reserve.
12
Image Resources NL
The Company’s Mineral Resources at Atlas are unchanged from 1 October 2018 (Table 4) and the Company is not aware of any
new information or data that materially affects the information for the three months ended 31 December 2019.
Table 4 – Comparative Mineral Resources Summary – JORC Code 2012
Project / Deposit
As at 31 December 2018
Boonanarring
Atlas
Total Ore Reserves
As at 31 December 2019
Boonanarring
Atlas
Total Ore Reserves
High Grade Mineral Resources – Strand Deposits @ 2.0% HM Cut-off
Tonnes
(million)
HM
(%)
Slimes
(%)
HM Tonnes
(million)
VHM
(%)
Ilmenite
(%)
Leucoxene
(%)
Rutile
(%)
Zircon
(%)
43.49
18.1
61.6
30.3
18.1
48.4
5.6
6.0
5.7
6.0
6.0
6.0
18
16.9
17.7
17.0
16.9
17.0
2.45
1.09
3.54
1.8
1.09
2.9
72.2
65.9
70.3
72.7
65.9
70.1
49.0
46.1
48.1
46
46.1
46.1
2.2
4.0
2.8
3.6
4.0
3.7
2.6
6.5
3.8
2.7
6.5
4.1
18.4
9.3
15.6
20.4
9.3
16.2
Governance Controls
Mineral Resources and Ore Reserves are compiled by qualified Image Resources personnel and / or independent consultants
following industry standard methodology and techniques. The underlying data, methodology, techniques and assumptions on
which estimates are prepared are subject to internal peer review by senior Company personnel, as is JORC compliance. Where
deemed necessary or appropriate, estimates are reviewed by independent consultants. Competent Persons named by the
Company are members of the Australasian Institute of Mining and Metallurgy and / or the Australian Institute of Geoscientists and
qualify as Competent Persons as defined in the JORC Code 2012.
2019 Annual Report
13
Mineral Resources – Non-Material Projects
Competent Person Statement And Previously Reported Information
The Mineral Resources for the Company’s non-material mining projects as at 31 December 2019 are show in the tables below.
There has been no change in these Mineral Resources from 31 December 2018. There are no Ore Reserves reported in relation
to these non-material projects.
Mineral Resources - Strand Deposits; in accordance with JORC Code (2012) @ 2.0% HM Cut-off
Project / Deposit
Category
Volume
(million)
Tonnes
(million)
HM
(%)
Slimes
(%)
HM Tonnes
(million)
VHM
(%)
Ilmenite
(%)
Leucoxene
(%)
Rutile
(%)
Zircon
(%)
Helene
Hyperion
Indicated
Indicated
Cooljarloo Nth Total
6.4
2.4
8.8
13.2
5.0
18.2
4.3
6.3
4.8
18.6
19.0
18.7
0.57
0.32
0.88
88.7
69.4
81.8
74.6
55.8
67.9
0.0
0.0
0.0
3.6
6.3
4.6
10.5
7.3
9.4
Previously Reported Mineral Resources - Strand Deposits; in accordance with JORC Code (2004) @ 2.5% HM Cut-off
Project / Deposit
Category
Volume
(million)
Tonnes
(million)
HM
(%)
Slimes
(%)
HM Tonnes
(million)
VHM
(%)
Ilmenite
(%)
Leucoxene
(%)
Rutile
(%)
Zircon
(%)
Gingin Nth
Gingin Nth
Gingin Nth4 Total
Gingin Sth
Gingin Sth
Gingin Sth
Gingin Sth Total
Red Gully
Red Gully
Red Gully Total
Indicated
Inferred
Measured
Indicated
Inferred
Indicated
Inferred
Sub-Total Gingin & Red Gully
0.7
0.6
1.3
0.9
3.2
0.4
4.5
1.9
1.5
3.4
9.2
1.3
1.1
2.4
1.5
5.8
0.7
8.1
3.4
2.6
6.0
16.5
5.7
5.2
5.5
4.4
6.5
6.5
6.1
7.8
7.5
7.7
6.6
15.7
14.0
15.0
7.2
7.1
8.4
7.3
11.5
10.7
11.2
9.8
0.1
0.1
0.1
0.1
0.4
0.0
0.5
0.3
0.2
0.5
1.1
75.4
78.4
76.7
79.4
90.6
91.6
89.2
89.7
89.0
89.4
87.8
57.4
57.3
57.3
50.7
67.6
67.4
65.3
66.0
65.4
65.7
64.5
9.3
11.3
10.2
15.3
9.8
7.5
10.3
8.3
8.2
8.2
9.4
3.2
3.7
3.4
5.6
5.1
5.8
5.2
3.1
3.0
3.1
4.1
5.5
6.0
5.7
7.8
8.1
10.9
8.3
12.4
12.3
12.4
9.7
Historic Deposit Mineral Resources - Strand deposit; in accordance with JORC Code (2004) @ 2.5% HM Cut-off
Project / Deposit
Category
Volume
(million)
Tonnes
(million)
HM
(%)
Slimes
(%)
HM Tonnes
(million)
VHM
(%)
Ilmenite
(%)
Leucoxene
(%)
Rutile
(%)
Zircon
(%)
Regans Ford
Regans Ford
Regans Ford Total
Grand Totals
Indicated
Inferred
4.5
0.5
5.0
9.0
0.9
9.9
49.1
93.0
9.9
6.5
9.6
6.3
16.8
18.5
17.0
16.0
0.9
0.1
1.0
5.8
94.3
90.5
94.1
79.1
70.0
68.3
69.9
56.7
10.0
7.7
9.9
5.2
4.3
4.4
4.3
4.2
10.0
10.1
10.0
13.0
Mineral Resources - Dredge deposits; in accordance with JORC Code (2012) @ 1.0% HM Cut-off
Project / Deposit
Category
Volume
BCM
(million)
Tonnes
(million)
HM
(%)
Slimes
(%)
HM Tonnes
(million)
VHM
(%)
Ilmenite
(%)
Leucoxene
(%)
Rutile
(%)
Zircon
(%)
Titan
Titan
Total Titan
Telesto
Calypso
Indicated
Inferred
Indicated
Inferred
10.3
58.5
68.8
1.7
27.1
21.2
115.4
136.6
3.5
51.5
1.8
1.9
1.9
3.8
1.7
22.1
18.9
19.4
18.4
13.7
0.38
2.2
2.6
0.13
0.85
86.0
85.9
85.9
83.3
85.6
71.9
71.8
71.8
67.5
68.1
1.5
1.5
1.5
0.7
1.6
3.1
3.1
3.1
5.6
5.1
9.5
9.5
9.5
9.5
10.8
Mineral Resources - Dredge deposits; in accordance with JORC Code (2004) @ 1.0% HM Cut-off
Project / Deposit
Category
Volume
BCM
(million)
Tonnes
(million)
HM
(%)
Slimes
(%)
HM Tonnes
(million)
VHM
(%)
Ilmenite
(%)
Leucoxene
(%)
Rutile
(%)
Zircon
(%)
Bidaminna
Total Dredge
Inferred
26.3
44.6
123.9
236.2
3.0
2.1
3.6
15.2
1.3
4.9
96.8
87.8
83.1
73.1
7.2
2.6
1.0
3.2
5.5
9.0
as defined in the 2004 Edition of the ‘Australasian Code for Reporting
of Exploration Results, Mineral Resources and Ore Reserves’. This
information was prepared and first disclosed under the JORC Code
2004. It has not been updated since to comply with the JORC Code
2012 on the basis that the information has not materially changed since
it was last reported.
The information in this table that relates to tonnes, grades and mineral
assemblage for Regans Ford Deposit (not part of the Company’s
material mining projects) is based on historic information published
by Iluka Resources Limited and indicating the mineral resources were
compiled in accordance with the 2004 Edition of the ‘Australasian
Code for Reporting of Exploration Results, Mineral Resources and Ore
Reserves’. This information was prepared and first disclosed under the
JORC Code 2004. It has not been updated since to comply with the
JORC Code 2012 on the basis that the information has not materially
changed since it was last reported.
This report includes information that relates to Ore Reserves and
Mineral Resources which were prepared and first disclosed under
JORC Code 2012. The information was extracted from the Company’s
previous ASX announcements as follows:
•
•
•
•
•
•
•
•
Boonanarring Mineral Resources and Ore Reserves: 20 December
2019
Atlas Ore Reserves: 30 May 2017
Atlas Mineral Resources: 8 May 2017
Helene Mineral Resources: 31 Oct 2019
Hyperion Mineral Resources: 31 Oct 2019
Titan Mineral Resources: 31 Oct 2019
Telesto South Mineral Resources: 31 Oct 2019
Calypso Mineral Resources: 31 Oct 2019
The Company confirms it is not aware of any new information or
data that materially affects the information included in the original
market announcements and, in the case of reporting of Ore Reserves
and Mineral Resources, that all material assumptions and technical
parameters underpinning the estimates in the relevant market
announcements continue to apply and have not materially changed.
The Company confirms that the form and context in which any
Competent Person’s findings are presented have not been materially
modified from the original market announcement.
This report includes information that relates to Ore Reserves and
Mineral Resources for non-material mining projects of the Company
which were prepared and first disclosed under JORC Code 2004.
The information was extracted from the Company’s previous ASX
announcements as follows:
•
•
•
•
Gingin North Mineral Resources: 31 Mar 2011
Gingin South Mineral Resources: 21 Jul 2011
Red Gully Mineral Resources: 9 Mar 2011
Bidaminna Mineral Resources: 23 Jun 2008
The Company confirms it is not aware of any new information or
data that materially affects the information included in the original
market announcements and, in the case of reporting of Ore Reserves
and Mineral Resources, that all material assumptions and technical
parameters underpinning the estimates in the relevant market
announcements continue to apply and have not materially changed.
The Company confirms that the form and context in which any
Competent Person’s findings are presented have not been materially
modified from the original market announcement. This information
was prepared and first disclosed under the JORC Code 2004. It has
not been updated since to comply with the JORC Code 2012 on the
basis that the information has not materially changed since it was last
reported.
This Mineral Resources and Ore Reserves Statement as
a whole has been approved by George Sakalidis who is the
Exploration Director of Image Resources NL. George Sakalidis is
a Member of the Australasian Institute of Mining and Metallurgy
(AusIMM) and 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 2012 Edition of the ‘Australasian Code
for Reporting of Exploration Results, Mineral Resources and Ore
Reserves’. George Sakalidis has given his prior written consent
to the inclusion in this report of the Mineral Resources and Ore
Reserves statement in the form and context in which it appears.
The information in this report that relates to the Boonanarring Ore
Reserves estimate is based on and fairly represents, information which
has been prepared by Mr Per Scrimshaw, Member of the Australasian
Institute of Mining and Metallurgy (AusIMM). Mr Scrimshaw is a full-
time employee of Entech Pty Ltd and 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 2012 Edition of the ‘Australasian
Code for Reporting of Exploration Results, Mineral Resources and Ore
Reserves’.
The information in this report that relates to the Atlas Ore Reserves
estimate is based on and fairly represents, information which has
been prepared by Mr Jarrod Pye, Mining Engineer and then full-time
employee of Image Resources, under the direction of Andrew Law, then
of Optiro, who is a Fellow of the Australasian Institute of Mining and
Metallurgy. Mr Law 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 2012 Edition of the ‘Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves’.
The information in this report that relates to the Boonanarring and
Atlas Mineral Resource estimates is based on and fairly represents,
information which has been prepared by Mrs Christine Standing, who
is a Member of the Australasian Institute of Mining and Metallurgy
(AusIMM) and the Australian Institute of Geoscientists (AIG). Mrs
Standing is a full-time employee of Optiro Pty Ltd and has sufficient
experience which is relevant to the style of mineralisation and type of
deposit under consideration and to the activity which she is undertaking
to qualify as a Competent Person as defined in the 2012 Edition of
the ‘Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves’.
The information in this report that relates to the Helene, Hyperion,
Titan, Telesto and Calypso Mineral Resource estimates is based on
and fairly represents, information which has been prepared by Mr Lynn
Widenbar BSc, MSc, DIC MAusIMM MAIG employed by Widenbar &
Associates who is a consultant to the Company. Lynn Widenbar 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 2012
Edition of the ‘Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves’.
The information in this report that relates to the Gingin North, Gingin
South and Red Gully Mineral Resource estimates (not part of the
Company’s material mining projects) is based on and fairly represents,
information which has been prepared by Mr Lynn Widenbar BSc, MSc,
DIC MAusIMM MAIG employed by Widenbar & Associates who is a
consultant to the Company. Lynn Widenbar 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 Edition of the ‘Australasian
Code for Reporting of Exploration Results, Mineral Resources and Ore
Reserves’. This information was prepared and first disclosed under the
JORC Code 2004. It has not been updated since to comply with the
JORC Code 2012 on the basis that the information has not materially
changed since it was last reported.
The information in this report that relates to the Bidaminna Mineral
Resource estimate (not part of the Company’s material mining
projects) is based on and fairly represents, information which has
been prepared by Mr Lynn Widenbar BSc, MSc, DIC MAusIMM
MAIG employed by Widenbar & Associates who is a consultant to the
Company. Lynn Widenbar 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
14
Image Resources NL
2019 Annual Report
15
FINANCIAL REPORT
STRIVING FOR EXCELLENCE
Directors’ Report
DDiirreeccttoorrss RReeppoorrtt
Your directors present their report on the Company for the year ended 31 December 2019 .
DIRECTORS
The following persons were directors of Image Resources NL (“ Image”) during the year and up to the date of this report, unless
stated otherwise:
Robert Besley
Patrick Mutz
Chaodian Chen
Aaron Chong Veoy Soo
Huangcheng Li (Alternate: Dennis Lee appointed 5 February 2020)
Peter Thomas
George Sakalidis
Fei Wu
PRINCIPAL ACTIVITIES
The principal activities of the Company during the year was the operation of the 100%-owned, high-grade, zircon-rich
Boonanarring mineral sands project located 80km north of Perth in WA and exploration of tenements in the North Perth basin .
RESULTS FROM OPERATIONS
During the year the Company recorded an operating profit of $20,832,000 (for the year to 31 December 2018: profit of
$3,311,000). Basic profit per share for the year was 2.14 cents (year to 31 December 2018: Profit of 0.39 cents). Diluted profit
/ loss per share for the year was 2.10 cents (year to 31 December 2018: Profit of 0.39 cents).
DIVIDENDS
No amounts have been paid or declared by way of dividend by the Company since the end of the previous financial year and the
directors do not recommend the payment of any dividend.
Dividend Policy
The Company has a very basic dividend pol icy that provides for the Board of Directors, as soon as practicable after the end of
a Company financial year, and to the extent permitted by law, to distribute to Shareholders as a dividend, all Excess Cash held
at the end of that Financial Year; with Ex cess Cash defined as cash held by the Company, other than cash that the Board
considers is necessary or desirable to be retained by the Company for the Company’s existing liabilities and future activities.
REVIEW OF OPERATIONS
A review of operations is covered elsewhere in this Annual Report.
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
All significant changes in the state of affairs of the Company during th e year are discussed in detail above.
SIGNIFICANT EVENTS SUBSEQUENT TO REPORTING DATE
Other than the following matters:
On 30 January 2020, The Company’s thirteenth shipment of 20, 475 Dry Metric Tonnes of HMC finished loading backed by
a letter of credit. Subsequently, on 6 February 2020, full payment for the shipment was received by Image, in USD.
On 10 February 2020, The Company completed its second scheduled loan note repayment including interest of
US$7,871,238 for the Senior Secured Loan Notes facility.
There were no other material significant events subsequent to the reporting date.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS
The Review of Operations and Mineral Resources and Ore Reserves Statement sections set out on pages 3 to 15 of this Annual
Financial Report, provide an indication of the company’s likely development and expected results. In the opinion of the Directors,
disclosure of any further information about these matters and the impact on Image Resources operations could result in
unreasonable prejudice to the Company and has not been included in this report .
ENVIRONMENTAL ISSUES
The Company carries out operations in Australia which are subject to environmental regulations under both Commonwealth and
State legislation in relation to those activities. The Company’s MD, Exploration Director, COO and Operations Manager are
responsible for monitoring and reporting on compliance with all environmental regulations. During or since the financial year
there have been no known signif icant breaches of these regulations.
- 15 -
2019 Annual Report
17
Directors’ Report (cont.)
DDiirreeccttoorrss RReeppoorrtt ((ccoonntt..))
INFORMATION ON DIRECTORS AND COMPANY SECRETARIES
Robert Besley
Chairman
Appointed as Director and Chair on 8 June 2016 Robert Besley and has more than 40 years’ experience in the mining industry.
Mr Besley has served in a number of Government and industry advisory roles including several years as Deputy Chairman of the
NSW Minerals Council. He holds a BSc (Hons) in Economic Geology from the University of Adelaide and is a Member of the
Australian Institute of Geoscientis ts. He managed the creation, listing and operation of two successful mining companies; CBH
Resources Limited which he led as Managing Director from a small exploration company to Australia’s 4th largest zinc producer ;
Directors’ Report (cont.)
DDiirreeccttoorrss RReeppoorrtt ((ccoonntt..))
Aaron Chong Veoy Soo
Non-Executive Director
Mr Soo has been a long term supporter and shareholder in Image Resources. Mr Soo is an advocate & solicitor practising in
West Malaysia with 20 years of experience in legal practice and currently a partner in Stanley Ponniah, Ng & Soo, Advocates &
Solicitors. He also serves on the Company’s audit committee. Mr Soo has not been a director of any other listed public companies
in the past 3 years.
Chaodian Chen
Non-Executive Director
and Australmin Holdings Limited (acqui red by Newcrest) which brought into production a gold mine in WA and mineral sands
Mr Chen founded Orient Zirconic in 1995 and has built the company into a leadi ng company in the zirconium industry. He served
mine in NSW. More recently he was a founding Director of KBL Mining Limited which operated the Mineral Hill copper -gold mine
as President and Chairman of the company until mid -2013 when China National Nuclear Corporation (CNNC) became the largest
in NSW and was Chairman of Silver City Minerals Limited, which explor ed for silver-lead-zinc in the Broken Hill District. He was
shareholder in Orient Zirconic. He became the Chairman of Murray Zircon when the compa ny was founded in 2011 as a result
a Non-Executive and independent Director of Murray Zircon from commencement of development and production of the Mindarie
of Orient Zirconic’s first investment in mining in Australia. Mr Chen is the Vice President of China non -ferrous metals industry
Mineral Sands Project until June 2016. He also serves on the Company’s audit and remuneration committees. During the past
association titanium zirconium & Hafnium Bran ch. He holds an EMBA degree and is a Certified Engineer. He also owns a number
three years he has served as a director of the following other listed companies:
of patents involving the processing of zircon . Mr Chen has not been a director of any other listed public companies in the past
Silver City Minerals Limited - appointed 5 March 2010, resigned effective 28 February 2019.
3 years.
Patrick Mutz
Managing Director
Patrick Mutz has more than 30 years of international mining industry experience in technical (metallurgist), managerial,
consulting and executive roles in all aspects of the industry from explorat ion through project development, mining and mine
rehabilitation. He has operational experience in open cut, underground, and in -situ mining and related processing, on projects
in the USA, Germany, Africa and Australia. Since his arrival in Australia from t he USA in 1998, he has served as CEO / Managing
Director of a number of publicly listed and private mining companies based in South Australia, Victoria and Western Australia ,
primarily involved with project development and company transitioning from explor ation to production. Mr Mutz is a Fellow of
the AusIMM. He holds a Bachelor of Science (Honours) and an MBA from the University of Phoenix in the US. Prior to joining
Image Patrick was CEO of Murray Zircon Pty Ltd focusing on the development and mining an d processing operations of its 100%-
owned Mindarie Mineral Sands Project in South Australia, where he led the company on its goal of becoming South Australia’s
newest mineral sands mining company at that time. Mr Mutz has not been a director of any other listed public companies in the
past 3 years.
Peter Thomas
Non-Executive Director
Mr Thomas, having served on ASX listed company boards for over 30 years, has been a non -executive director of Image
Resources NL since 10 April 2002. For over 30 years until June 2011, he ran a legal practise on his own account specialising in
the delivery of wide ranging legal, corporate and commercial advice to listed explorers and miners. He serves on the Company’s
remuneration committee. During the past three years he has served as a director of the following other listed companies:
Emu NL – appointed August 2007, continuing.
Middle Island Resources Limited – continuing.
George Sakalidis
Executive Director - Exploration
Mr Sakalidis is an exploration geophysicist with over 35 years’ industry experience. His career has included extensive gold,
diamond, base metals and mineral sands exploration. Mr Sakalidis has been involved in a number of significant mineral
discoveries in Western Australia, including the Three Rivers and Rose gold deposits, the Dongara Mineral Sands Deposits, the
Boonanarring-Gingin South-Hyperion Mineral Sands Deposits and he was involved in the tenement applications over the Silver
Swan nickel deposit. He was also involved with the tenement application for the recently discovered Monty Copper mineralisation
adjacent to the Degrussa Copper deposit. He was the founding Director of Magnetic Minerals Limited, which was taken over in
March 2003 after he was instrumental in the discovery of the Dongara mineral sand deposits north of Eneabba. He is a founding
Director and is currently an Executive Director of this Company (since listing on 4 July 2002) and is Managing Director of
Magnetic Resources NL (which listed on 5 April 2007). Mr Sakalidis is also a founding director of ASX listed companies Meteoric
Resources NL, Emu NL, and Potash West NL. During the past three years he has also served as a director of the following other
listed companies:
Meteoric Resources NL - appointed February 2004,
Magnetic Resources NL - appointed August 2006,
resigned November 2017.
resigned October 2014, reappointed 29 January 2016.
Guangdong Orient Zirconic Ind Sci & Tech Co., Ltd, resigned 9 November 2016. Reappointed 11 January 2020.
Fei (Eddy) Wu
Non-Executive Director
Mr Wu has solid operational experience in the Australian resource and mining industry. He specialises in combining the streng ths
of Australian upstream mining with Chinese downstream processing and end use to optimise the strategy for resource
development and maximise the resource value. As the first CEO of Murray Zircon, he built and led the team to complete the
development and start-up at the Mindarie mineral sands project in late 2012. Mr Wu was app ointed as a Non-Executive Director
of Murray Zircon in early 2013. He was the CEO of Queensland Mining Corporation Limited (QMC) from August 2013 until
January 2018. He is currently a Non -Executive Director of QMC and the CEO of WIM Resources Pty Ltd. Eddy graduated from
the University of Science and Technology, Beijing. He holds a Master’s Degree in Commerce (Finance) from the Australian
National University and a Master’s Degree in Science from Cass Business S chool, City University London. He also serves on the
Company’s audit and remuneration committees as Chair of both. During the past three years he has also served as a director of
the following other listed company:
Queensland Mining Corporation Limited. Appointed 9 August 2013, resigned 31 January 2018.
Huangcheng Li
Non-Executive Director
Mr Li is an investor from Taiwan, with more than 30 years of experience investing in various industries ranging from the gene ral
merchandising, precious stones and certification businesses. Mr Li graduated from Tamka ng University and in 1981 founded
Leecotex International Limited in Taiwan and Capital 88 International Limited in Hong Kong in 1993 where he served as the
Managing Director. In 2015 Mr Li acquired a 49% ownership interest in Giochi Preziosi Group (“GP Gro up”) and served as the
Vice President until July 2017. GP Group is a leading global toy company and has undergone a process of diversification and
has expanded into new sectors and markets where it has successfully operated. Currently, Mr Li is the co -founder of Lee & Wu
Company Limited, a company focusing support towards high-tech industries in the development of new material applications .
Mr Li has not been a director of any other listed public companies in the past 3 years.
Dennis Wilkins
Company Secretary (Appointed 25 September 2012)
Mr Wilkins is the founder and principal of DW Corporate Pty Ltd, a leading privately held corporate advisory firm servicing the
natural resources industry. Since 1994 he has been a director of, and involved in the executiv e management of, several publicly
listed resource companies with operations in Australia, PNG, Scandinavia and Africa. From 1995 to 2001 he was the Finance
Director of Lynas Corporation Ltd during the period when the Mt Weld Rare Earths project was acquire d by the group. He was
also founding director and advisor to Atlas Iron Limited at the time of Atlas’ initial public offering in 2006. Since July 2001 Mr
Wilkins has been running DW Corporate Pty Ltd, where he advises on the formation of, and capital rais ing for, emerging
companies in the Australian resources sector.
AUDIT COMMITTEE
At the date of this report the members of the Company’s audit committee comprise Messrs Besley, Soo and Wu (with Mr Wu
undertaking the role of the Chair of that committee). D uring the year, the committee held one meeting. All members attended
this meeting.
18
Image Resources NL
- 16 -
- 17 -
2019 Annual Report
19
Directors’ Report (cont.)
DDiirreeccttoorrss RReeppoorrtt ((ccoonntt..))
RReemmuunneerraattiioonn RReeppoorrtt ((aauuddiitteedd))
Remuneration Report - audited
REMUNERATION COMMITTEE
At the date of this report the Remuneration Committee (“ committee”) comprises Messrs Besley, Thomas and Wu (with Mr Wu
undertaking the role of the Chair of that committee). During the year, the committee held one meeting . All members attended
Names and positions held of key management personnel (defined by the Australian Accounting Standards as being “those people
having authority and responsibility for planning, directing, and controlling the activities of an entity, either directly or indirectly.
This includes an entity's directors”) in office at any time during the financial year were:
this meeting.
MEETINGS OF DIRECTORS
During the financial year ended 31 December 2019, there were seven meetings of directors held. Attendances by each director
during the year were as follows:
Directors’ Meetings
Audit Committee
Remuneration
Committee
Number
Number
Number
Number
Number
Number
eligible
attended
eligible
attended
eligible
attended
to
attend
to
attend
to
attend
7
7
7
7
7
7
7
7
7
7
7
7
7
7
7
6
1
-
-
1
-
1
-
-
1
-
-
1
-
1
-
-
1
-
1
-
-
1
-
-
1
-
-
-
-
1
-
-
Robert Besley
Patrick Mutz
Peter Thomas
Aaron Soo
George Sakalidis
Fei (Eddy) Wu
Chaodian Chen
Huangcheng Li
OPTIONS
At the date of this report, there were no options held over ordinary paid shares. No options were issued to directors or executives
as remuneration during the year ended 31 December 201 9.
CORPORATE STRUCTURE
Image is a no liability company incorporated and domiciled in Australia.
ACCESS TO INDEPENDENT ADVICE
Each director has the right, so long as he is acting reasonably in the interests of the Company and in the discharge of his duties
as a director, to seek independent professional advice and recover the reasonable costs thereof from the Company. The advice
shall only be sought after consultation about the mat ter with the chairman (where it is reasonable that the chairman be consulted)
or, if it is the chairman that wishes to seek the advice or it is unreasonable that he be consulted, another director (if tha t be
reasonable). The advice is to be made immediately available to all Board members other than to a director against whom privilege
is claimed.
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
The Company has entered into agreements indemnifying, to the extent permitted by law, all the directors an d officers of the
Company against all losses or liabilities incurred by each director and officer in their capacity as directors and officers o f the
Company. During the year an amount of $70,902 (the year to 31 December 2018 : $46,426) was incurred in insurance premiums
for this purpose.
Key Management Personnel
Position
Robert Besley
Patrick Mutz
Peter Thomas
Aaron Soo
Non-Executive Chairman
Managing Director
Non-Executive Director
Non-Executive Director
George Sakalidis
Executive Director – Exploration
Fei (Eddy) Wu
Chaodian Chen
Huangcheng Li
John McEvoy
Todd Colton
Non-Executive Director
Non-Executive Director
Non-Executive Director
Chief Financial Officer
Chief Operating Officer
The Company’s policy for determining the nature and amount of emoluments of key management personnel is set out below:
Key Management Personnel Remuneration and Incentive Policies
The Remuneration committee’s mandate is to make recommendations to the Boar d with respect to appropriate and competitive
remuneration and incentive policies (including basis for paying and the quantum of any bonuses), for key management personnel
and others as considered appropriate to be singled out for special attention, which:
•
•
•
•
motivates them to contribute to the growth and success of the Company within an appropriate control framework;
aligns the interests of key leadership with the interests of the Company’s shareholders;
are paid within any limits imposed by the Constitution and make recommendations to the Board with respect to the need
for increases to any such amount at the Company’s annual general meeting; and
in the case of directors, only permits participation in equity -based remuneration schemes after appropriate disclos ure
to, due consideration by and with the approval of the Company’s shareholders.
Non-Executive Directors
•
•
The committee is to ensure that non-executive directors are not provided with retirement benefits other than statutory
superannuation entitlements.
To the extent that the Company adopts a remuneration structure for its non -executive directors other than in the form
of cash and superannuation, the disclosure there of shall be made to stakeholders and approvals obtained as required
by law and the ASX listing rules.
Incentive Plans and Benefits Programs
The committee is to:
•
•
•
review and make recommendations concerning long -term incentive compensation plans, including the use of equity -
based plans. Except as otherwise delegated by the Board, the committee will act on behalf of the Board to administer
equity-based and employee benefit plans, and as such will discharge any responsibilities under those plans, including
making and authorising grants, in accordance with the terms of those plans;
ensure that, where practicable, incentive plans are designed around appropriate and realistic performance targets that
measure relative performance and provide remuneration when they are achieved; and
review and, if necessary, improve any existing benefit programmes establish ed for employees.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of
Employee Share Plan
The Image Employee Share Plan (ESP) was implemented after shareholder approval at the Shareholder General Meeting held
the Company, or to intervene in any proceedings to which the Company is a party, for the purpose of taking responsibility on
on 13 February 2018.
behalf of the Company for all or part of those proceedings.
AUDITOR’S INDEPENDENCE DECLARATION
A copy of the auditor’s independence declaration as required under section 307C of the Corporati ons Act 2001 is set out in this
annual report.
The purpose of the ESP is to give an additional incentive to employees of the Company to provide dedicated and ongoing
commitment and effort to the Company, and for the Company to reward its employees for their efforts. It is considered to be a n
effective way to align the objectives of management with the interests of shareholders.
20
Image Resources NL
- 17 -
- 18 -
2019 Annual Report
21
RReemmuunneerraattiioonn RReeppoorrtt –– aauuddiitteedd ((ccoonntt..))
Remuneration Report - audited (cont.)
RReemmuunneerraattiioonn RReeppoorrtt –– aauuddiitteedd ((ccoonntt..))
Remuneration Report - audited (cont.)
The plan rewards share price growth. The plan shares are of value to the holder of the shares only to the extent to which the
Current Board Remuneration Structure
share price exceeds the share price after the offer is made to the employee. Furthermore, the plan does not give rise to a ta x
The current remuneration structure for the board is as follows:
liability on issue (unlike some options) therefore encouraging long term holdings.
Issue of Plan Shares to Directors of the Company requires prior approval of Shareholder in accordance with Listing Rule 10.14 .
Director
Annual Directors Fees
Committee Fees
Mr R Besley
(Non-Executive Chairman)
$60,000 + statutory super
$5,000 + statutory super
During the 31 December 2019 year 10,257,301 ESP shares were issued. Of these 1,303,813 shares were issued to Directors.
Mr P Mutz
(Managing Director)
$479,000 inclusive of super
-
•
•
•
•
•
•
•
•
•
The principal provisions of the plan include:
The Plan is available to all executive Directors and employees of the Company;
The Company may at any time, in its absolute discretion, make an offer to an Eligible Employee;
The number of Plan Shares issued to an Eligible Employee is determined by the Directors of the Company;
The issue price is the volume weighted average price of shares in the 5 trading days prior to the Iss ue Date;
The person accepting the offer (“Participant”) is deemed to have agreed to borrow from the Company on the terms of
the loan agreement referred to below an amount to fund the purchase of the Plan Shares;
Mr P Thomas
(Non-Executive Director)
$43,526 inclusive of super
$5,000 + statutory super
Mr A Soo
(Non-Executive Director)
$43,526 1
-
Mr F Wu
(Non-Executive Director)
$43,526 inclusive of super
$5,000 + statutory super
Mr C Chen
(Non-Executive Director)
Mr H Li
(Non-Executive Director)
$43,526 1
$43,526 1
-
-
-
The Plan Shares rank pari passu with all iss ued fully paid shares in respect of voting rights, dividends and entitlement
Mr G Sakalidis
(Executive Technical Director)
$225,000 inclusive of super
to participate in any bonus or rights issues;
Plan participants may not dispose of any ESP Shares within 12 months of the issue date;
Until the loan to the Participant is fully re paid the Company has control over the disposal of the Plan Shares; and
Application will be made as soon as practicable after the allotment of the Plan Shares for listing for quotation on ASX.
Note 1: No super is required to be paid as the Directors are permanent foreign residents .
Key Management Personnel Remuneration
Table 1: Remuneration for the year ended 31 December 201 9
The principal provisions of the loan agreement include:
•
•
•
•
The amount lent will be an advance equal to the issue price of the Plan Shares multiplied by the number of Plan Shares
issued:
The repayment date is the date falling 3 years after the Issue Date.
The loan can be repaid at any time but the Participant must pay an y amount outstanding on the date the employee
ceases to be an employee of Image (or such late date as determined by Image at its discretion. All dividends declared
and paid on the Plan Shares will be applied towards the repayment of the advance and there i s no interest on the
advance.
A holding lock will be placed on the Plan Shares until the loan is fully repaid.
Retirement and Superannuation Payments
Prescribed benefits were provided by the Company to direct ors by way of superannuation contribut ions to externally managed
complying superannuation funds during the year. These benefits were paid as superannuation contributions to satisfy (at least)
the requirements of the Superannuation Contribution Guarantee Act and in satisfaction of any salary sacrifice re quests. All
contributions were made to accumulation type funds selected by the director and accordingly actuarial assessments were not
required.
Relationship between Company Performance and Remuneration
There is no relationship between the financial perfor mance of the Company for the current or previous financial year and the
remuneration of the key management personnel. Remuneration is set having regard to market conditions and to encourage the
continued services of key management personnel.
Use of Remuneration Consultants
The Company did not employ the services of a remuneration consultant during the financial year ended 31 December 201 9 to
make a remuneration recommendation in relation to any Key Management Personnel.
Short-term benefits
Directors
Fees/Salary
($)
Other Fees &
contractual
payments
($)
Non-
monetary
benefits
($)
Post-
employment
Share-based
payments
Statutory
superann
uation
($)
Equity-
settled
share based
payments
($)
Non-Executive Directors
Robert Besley
Peter Thomas
Aaron Soo
Fei (Eddy) Wu
Chaodian Chen
Huang Cheng Li
Executive Directors
53,333
36,625
32,254
36,625
32,254
32,254
-
-
-
-
-
-
Patrick Mutz
426,133
202,500
George Sakalidis
193,074
17,138
Executive Officers
John McEvoy
Todd Colton
Total
327,159
122,216
325,000
141,909
1,494,711
483,763
-
-
-
-
-
-
-
-
-
-
-
5,067
3,479
-
3,479
-
-
23,867
18,342
22,840
25,000
102,074
-
-
-
-
-
-
-
-
-
-
-
Total
($)
58,400
40,104
32,254
40,104
32,254
32,254
652,500
228,554
472,215
491,909
2,080,548
- 19 -
22
Image Resources NL
- 21 -
2019 Annual Report
23
RReemmuunneerraattiioonn RReeppoorrtt –– aauuddiitteedd ((ccoonntt..))
Remuneration Report - audited (cont.)
RReemmuunneerraattiioonn RReeppoorrtt –– aauuddiitteedd ((ccoonntt..))
Remuneration Report - audited (cont.)
Table 1: Remuneration for the year ended 31 December 2018
John McEvoy – Chief Financial Officer
Short-term benefits
Directors
Fees/Salary
($)
Other Fees &
contractual
payments
($)
Non-
monetary
benefits
($)
Post-
employment
Share-based
payments
Statutory
superann
uation
($)
Equity-
settled
share based
payments
($)
Non-Executive Directors
Robert Besley
Peter Thomas
Aaron Soo
Fei (Eddy) Wu
Chaodian Chen
Huang Cheng Li
Executive Directors
45,000
35,000
30,000
35,000
30,000
22,151
-
-
-
-
-
-
Patrick Mutz
319,821
110,663
George Sakalidis
147,821
-
Executive Officers
John McEvoy
Todd Colton 1
Total
274,062
40,000
27,084
-
965,939
150,663
Note 1 Mr Colton became a KMP on 1 December 2018.
Compensation Options as at 31 December 2019
Nil
Key Management Personnel Contracts
-
-
-
-
-
-
-
-
-
-
-
4,275
3,325
-
3,325
-
-
20,167
14,043
21,420
2,083
68,638
-
-
-
-
-
-
-
-
-
-
-
Total
($)
49,275
38,325
30,000
38,325
30,000
22,151
450,651
161,864
335,482
29,167
1,185,240
Remuneration arrangements for Key Management Personnel are formalised in employment agreements. The following outlines
the details of contracts:
Executives
Patrick Mutz – Managing Director
•
•
•
•
Base Salary - $479,000 per annum (from 1 January 2020) inclusive of superannuation
Performance bonus – participates in a Company-wide executive performance incentive scheme.
Allowances – from 1 January 2019, the Company will contribute up to $ 40,000 per 12 month period or proportion thereof
for accommodation whilst located in Perth a nd towards airfares for travel between Adelaide and Perth. The Company
provides a Company vehicle for use on Company business and commuting between his place of residence in the Perth
area and the corporate office and the Company’s various mining and explo ration sites as and when necessary .
The agreement may be terminated by the Company by the provision of three months written notice. The employee may
terminate the contract by the provision of two months’ notice.
George Sakalidis – Executive Director – Exploration
•
•
•
Base Salary - $225,000 per annum (from 1 December 2018) inclusive of superannuation based on a 70% commitment
of time being an average of 28 hours work per week. Salary is paid monthly based on a rate of $155 per hour inclusive
of 9.5% superannuation.
Performance bonus – participates in a Company-wide executive performance incentive scheme.
The agreement may be terminated by the provision of one month’s written notice by either the Company or Mr Sakalidis.
•
•
•
Base Salary - $350,000 per annum (from 1 December 2018) inclusive of superannuation.
Performance bonus – participates in a Company-wide executive performance incentive scheme.
The agreement may be terminated by the provision of three month’s written notice by either the Company or Mr McEvoy.
Todd Colton – Chief Operating Officer
•
•
•
Base Salary - $350,000 per annum (from 1 December 2018) inclusive of superannuation.
Performance bonus – participates in a Company-wide executive performance incentive scheme.
The agreement may be terminated by the provision of three month’s written notice by either the Company or Mr Colton.
Non-Executives
Clause 91 (1) of the Company’s Constitution provides that Directors are entitled to receive Directors’ fees within the limits
approved by shareholders in general meeting. Shareholde rs approved the aggregate fees to be paid to Directors to be $300,000
per annum on 30 November 2009.
Each Non-Executive Director’s actual remuneration for the year ended 31 December 201 9 and the year to 31 December 201 8 is
shown above. Each Non-Executive Director has an unspecified term of appointment, which is subject to the Company’s
Constitution. Conditions are reviewed at least annually by the Remuneration Committee. There are no termination benefits for
any Non-Executive Director.
Base fees for each non- executive director during their period in office were as follows:
Base Fees
per annum
$
48,333
31,625
32,254
31,625
32,254
32,254
Audit
Committee
Fee
$
Remuneration
Committee
Fee
$
-
-
-
-
-
-
5,000
5,000
-
5,000
-
-
Superannuation
%
9.5
9.5
-
9.5
-
-
Robert Besley
Peter Thomas
Aaron Soo
Fei (Eddy) Wu
Chaodian Chen
Huang Cheng Li
Consultant Agreements
DW Corporate Services Pty Ltd: provides the services of Dennis Wilkins as Company Secretary. These services are provided
under a services agreement for a fixed monthly retainer fee of $2,000 plus additional services charged at specified hourly ra tes.
Four months’ written notice of term ination is required from either party.
Guaranteed Rate Increases
There are no guaranteed rate increases fixed in the contracts of any of the key management personnel.
Options and Rights Granted as Remuneration
During the financial year no options were issued to key management personnel to acquire fully paid ordinary shares.
Options held by Key Management Personnel
No Key Management Person or their related entities held options in the Com pany during the financial year.
24
Image Resources NL
- 22 -
- 22 -
2019 Annual Report
25
RReemmuunneerraattiioonn RReeppoorrtt –– aauuddiitteedd ((ccoonntt..))
Remuneration Report - audited (cont.)
Auditor’s Independence Declaration
Shares held by Key Management Personnel
The number of shares in the company held at the beginning and end of the year and net movements during the financial year by
key management personnel and/or their r elated entities are set out below:
Balance at
Beginning of
Year or Date of
Appointment
Purchased
during the
Year
Award under
Employee
Share Plan
Other
Changes
during the
Year
Balance at
End of Year or
Date of
Retirement
Name
Directors
Robert Besley
Peter Thomas
566,667
2,104,306
-
-
Aaron Soo
12,473,000
1,857,000
Fei Wu
Chaodian Chen
-
-
Huang Cheng Li
136,445,311
-
-
-
-
-
-
-
-
-
George Sakalidis
4,378,489
25,024
744,352
Patrick Mutz
1,000,000
1,641,343
Executive Officers
John McEvoy
Todd Colton
Totals
2,425,887
716,860
609,999
605,569
-
160,110,520
1,882,024
3,601,263
-
-
-
-
-
-
-
-
-
-
-
566,667
2,104,306
14,330,000
-
-
136,445,311
5,147,865
2,641,343
3,035,885
1,312,429
165,583,806
Auditor's Independence Declaration
As auditor for the audit of Image Resources NL for the period ended 31 December 2019, I declare that, to
the best of my knowledge and belief, there have been:
I)
II)
no contraventions of the independence requirements of the Corporations Act 2001 in
relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
Other Equity-related KMP Transactions
There have been no other transactions involving equity instruments, apart from those described in the tables above, relating to
options, rights and shareholdings.
Other Transactions with KMP and/or their Related Parties
There were no other transactions conduc ted between the Company and KMP or their related parties, apart from those disclosed
above relating to equity, compensation and loans, that were conducted other than in accordance with normal employee, customer
or supplier relationships on terms no more fa vourable than those reasonably expected under arm’s length dealings with unrelated
persons.
This Report of Directors, incorporating the Remuneration Report, is s igned in accordance with a resolution of the directors
Elderton Audit Pty Ltd
Nicholas Hollens
Managing Director
28 February 2020
Perth
ROBERT BESLEY
CHAIRMAN
Perth, 28 February 2020
26
Image Resources NL
- 24 -
2019 Annual Report
27
T +61 8 6324 2900 E info@eldertongroup.com A Level 2, 267 St Georges Terrace, Perth WA 6000
ABN 51 609 542 458 W www.eldertongroup.com P PO Box 983 West Perth WA 6872
Corporate governance statement
CCoorrppoorraattee ggoovveerrnnaannccee ssttaatteemmeenntt
SSttaatteemmeenntt ooff pprrooffiitt oorr lloossss aanndd ootthheerr
Statement of profit or loss and other comprehensive income
ccoommpprreehheennssiivvee iinnccoommee
For the Year Ended 31 December 2019
For the Year Ended 31 December 2019
Image Resources NL and the Board are committed to achieving and demonstrating the highest standards of corporate
governance. Image Resources NL has reviewed its corporate governance practices against the Corporate Governance Principles
and Recommendations (3rd edition) published by the ASX Corporate Governance Council.
The 2019 Corporate Governance Statement is dated at 25 February 2020 and reflects the corporate governance practices in
place throughout the period ended 31 December 2019. The 2019 Corporate Governance Statement was approved by the Board
on 25 February 2020. A description of the Company’s current corporate governance practices is set out in the Company’s
Corporate Governance Statement which can be viewed at www.imageres.com.au.
Continuing operations
Operating sales revenue
Cost of sales
Gross profit
Other income
Government royalties
Shipping and other selling costs
Corporate expenses
Exploration and evaluation expenses
Other expenses
Realised foreign currency gain / (loss)
Unrealised foreign currency gain / (loss)
Operating profit / (loss)
Finance income
Financing costs
Profit / (loss) before tax
Income tax (expense) / benefit
Net profit after tax
Other comprehensive income
Changes in the fair value of available -for-sale financial assets
Total comprehensive income for the period, net of t ax
Earnings per share
Basic earnings per share
Diluted earnings per share
The accompanying notes form part of these financial statements.
Notes
3
3
3
3
6
5
5
Year to
31 Dec
2019
($000)
146,196
(82,211)
63,985
-
(6,932)
(7,500)
(4,627)
(3,345)
(1,009)
(1,797)
439
39,214
48
(10,045)
29,217
(8,385)
20,832
-
20,832
Year to
31 Dec
2018
($000)
-
-
-
15
-
-
(3,211)
(1,371)
(733)
706
(4,015)
(8,609)
426
(1,250)
(9,433)
12,743
3,310
10
3,320
Cents
Cents
2.14
2.10
0.39
0.39
28
Image Resources NL
- 26 -
- 27 -
2019 Annual Report
29
Statement of financial position
SSttaatteemmeenntt ooff ffiinnaanncciiaall ppoossiittiioonn
As at 31 December 2019
As at 31 December 2019
SSttaatteemmeenntt ooff cchhaannggeess iinn eeqquuiittyy
Statement of changes in equity
For the Year Ended 31 December 2019
For the Year Ended 31 December 2019
Current assets
Cash and cash equivalents
Trade and other receivables
Inventory
Other assets
Total current assets
Non-current assets
Property, plant and equipment
Deferred Tax Assets
Other financial assets
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Provisions
Borrowings
Total current liabilities
Non-Current Liabilities
Provisions
Borrowings
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
The accompanying notes form part of these financial statements.
Notes
7
8
12
9
10
6
11
13
14
15
14
15
16
17
17
31 Dec
2019
($000)
49,935
593
16,789
468
67,785
95,582
4,358
2,885
102,825
170,610
16,210
692
37,679
54,581
15,380
18,858
34,238
88,819
81,791
108,553
3,098
(29,860)
81,791
31 Dec
2018
($000)
11,886
1,463
9,247
536
23,132
101,062
12,743
447
114,252
137,384
11,667
454
12,565
24,686
4,508
51,388
55,896
80,582
56,802
103,170
4,324
(50,692)
56,802
Issued
Capital
($000)
Financial
Assets at
FVOCI
($000)
Warrants
Reserve
($000)
Employee
Benefit
Reserve
($000)
Accumulated
Losses
($000)
Total
($000)
Balance at 1 January 2018
68,917
Comprehensive Profit
Operating profit for the year
Other comprehensive income
Total comprehensive loss for the year
Transactions with owners
capacity as owners
in
their
Shares issued during the year
Cost of share issue
Warrants issued during the year
Options expired during the year
-
-
-
35,735
(1,482)
-
-
Total transactions with owners in their
capacity as owners
34,253
-
-
10
10
-
-
-
-
-
-
-
-
-
-
-
4,314
42
(54,044)
14,915
-
-
-
-
-
-
3,310
3,310
-
10
3,310
3,320
-
-
-
35,735
(1,482)
4,314
-
(42)
42
-
4,314
(42)
42
38,567
Balance at 31 December 2018
103,170
10
4,314
Balance at 1 January 2019
103,170
10
4,314
Comprehensive profit
Operating profit for the year
Other comprehensive income
Total comprehensive loss for the year
Transactions with owners
capacity as owners
in
their
Shares issued during the year
Cost of share issue
Warrants exercised during the year
Options expired during the year
Total transactions with owners in their
capacity as owners
-
-
-
4,179
(22)
1,226
-
5,383
-
-
-
-
-
-
-
-
-
-
-
-
(1,226)
-
(1,226)
Balance at 31 December 2019
108,553
10
3,088
-
-
-
-
-
-
-
-
-
-
-
(50,692)
56,802
(50,692)
56,802
20,832
20,832
-
-
20,832
20,832
-
-
-
-
-
4,179
(22)
-
-
4,157
(29,860)
81,791
The accompanying notes form part of these financial statements .
30
Image Resources NL
- 28 -
- 29 -
2019 Annual Report
31
Statement of cash flows
SSttaatteemmeenntt ooff ccaasshh fflloowwss
For the Year Ended 31 December 2019
For the Year Ended 31 December 2019
Notes
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Payments to suppliers and contractors
Interest received
Interest paid
Net cash from / (used in) operating activities
7
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of property, plant and equipment
Purchase of property, plant and equipment
Payments for exploration and evaluation
Proceeds from sale of investments
Year to
31 Dec
2019
($000)
145,409
(79,479)
50
(3,061)
62,919
76
(9,794)
(3,164)
-
Year to
31 Dec
2018
($000)
7
(2,630)
425
(201)
(2,399)
2
(64,144)
(1,435)
15
Net cash (used in) investing activities
(12,882)
(65,562)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from new issues of shares
Payments for share issue costs
Proceeds from employee loan repayments
Proceeds from interest bearing loan
Repayment of borrowings
Net cash inflows (used in) / from financing activities
Net increase in cash held
Cash at beginning of the year
Effect of exchange fluctuations on cash held
16
15
15
1,534
(39)
109
566
(14,186)
(12,016)
38,021
11,886
28
25,085
(1,484)
-
51,386
(47)
74,940
6,979
4,423
484
Cash at the end of the year
7
49,935
11,886
The accompanying notes form part of these financial statements.
NNootteess ttoo tthhee ffiinnaanncciiaall ssttaatteemmeennttss
Notes to the financial statements
For the Year Ended 31 December 2019
For the Year Ended 31 December 2019
This financial report includes the financial statements and notes of the Company .
Note 1 Statement of Significant Accounting Policies
Basis of Preparation
The financial report is a general -purpose financial report that has been prepared in accordance with Australian Accounting
Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards
Board (AASB) and the Corporations Act 2001.
The financial statements were authorised for issue on 6 February 2020, subject to minor typographical amendments.
The following is a summary of the material accounting policies adopted by the Company in the preparation of the financial rep ort.
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. Material
accounting policies adopted in the preparation of this financial report are presented below and have been consistently applie d
unless otherwise stated.
Reporting Basis and Conventions
The financial report has been prepared on an accruals basis and is based on historical costs modified by the revaluation of
selected non-current assets, financial assets and financial liabilities for which the fair value ba sis of accounting has been applied.
Going Concern
These financial statements have been prepared on the going concern basis, which contemplates the continuity of normal
business activities and the realisation of assets and discharge of liabilities in the no rmal course of business. The Directors
consider the going concern basis of preparation to be appropriate based on forecast future cash flows.
New or amended Accounting Standards and Interpretations adopted
The Company has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian
Accounting Standards Board ('AASB') that are mandatory for the current reporting period.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
New or Amended Accounting Standards and Interpretations Adopted
The following Accounting Standards and Interpretations are most relevant to the Company:
AASB 16 Leases
The AASB issued a new standard which, amongst other things, has the impact of requiring the Company to account for material
operating leases in a similar manner to which it already accounts for finance leases. The Company adopted AASB 16 on the
required effective date 1 January 2019.
The adoption of the AASB resulted in equipment that was previously being classified as operating lease now recognised on the
balance sheet. This resulted in recognition of a right -of-use asset and a corresponding liability bei ng the present value of future
lease payments. Over the life of the lease, the lease liability will incur interest expense and is reduced as lease payments are
made. The right-of-use asset is amortised on a straight-line basis over its lease term. The pattern of expense recognition changes
with a higher expense at lease commencement due to a higher lease liability at the time.
Image Resources adopted AASB 16 using the modified retrospective approach. There is no restatement of comparative periods
and the lease liability has been set to the same value as the right -of-use asset. Image Resources has elected to apply practical
expedients allowed under the modified retrospective approach and not recognise short -term or low-value leases on its balance
sheet but to account for the lease expense on a straight line basis over the remaining lease term.
The Company has elected not to include initial direct costs in the measurement of the right -of-use asset for operating leases in
existence at the date of initial appli cation of AASB 16, being 1 January 2019. At this date, the Company has also elected to
measure the right-of-use assets at an amount equal to the lease liability adjusted for any prepaid or accrued lease payments
that existed at the date of transition.
Instead of performing an impairment review on the right -of-use assets at the date of initial application, the Company has relied
on its historic assessment as to whether leases were onerous immediately before the date of initial application of AASB 16.
32
Image Resources NL
- 29 -
- 31 -
2019 Annual Report
33
NNootteess ttoo tthhee ffiinnaanncciiaall ssttaatteemmeennttss ((ccoonntt..))
Notes to the financial statements (cont.)
For the Year Ended 31 December 2019
For the Year Ended 31 December 2019
NNootteess ttoo tthhee ffiinnaanncciiaall ssttaatteemmeennttss ((ccoonntt..))
Notes to the financial statements (cont.)
For the Year Ended 31 December 2019
For the Year Ended 31 December 2019
On transition to AASB 16 the weighted average incremental borrowing rate applied to lease liabilities recognised under AASB
All translation differences relating to transactions and balances denominated in foreign curr ency are taken to the Statement
16 was 8%. The Company has benefited from the use of hindsight for determining the lease term wh en considering options to
of Profit and Loss.
extend and terminate leases. This resulted in recognition a right-of-use asset $195,791 and a lease liability of $195,791. It also
resulted in recognition of additional expense for the year ended 31 December 2019 of $5,000.
Refer to notes 15 and 18 for the Company’s lease commitments.
ACCOUNTING POLICIES
a)
Revenue Recognition
The Company recognises revenue as follows:
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which th e Company is expected to be entitled in
exchange for transferring goods or services to a customer. For each contract with a customer, the Company: identifies the
contract with a customer; identifies the performance obligations in the contract; determines t he transaction price which
takes into account estimates of variable consideration and the time value of money; allocates the transaction price to the
separate performance obligations on the basis of the relative stand -alone selling price of each distinct g ood or service to
be delivered; and recognises revenue when or as each performance obligation is satisfied in a manner that depicts the
transfer to the customer of the goods or services promised.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange
rate as at the date of the initial transaction. Non -monetary items measured at fair value in a foreign currency are translated
using the exchange rate at the date when the fair value was determined.
d)
Exploration and Evaluation Expenditure
All exploration and evaluation expenditure is expensed to the Statement of Profit or Loss and other Comprehensive Income
as incurred. The effect of this write -off is to decrease the profit incurred from continuing operations as disclosed in the
Statement of Profit or Loss and other Comprehensive Income and to decrease the carrying values in the Statemen t of
Financial Position. That the carrying value of mineral assets, as a result of the operation of this policy, is zero does not
necessarily reflect the board’s view as to the market value of that asset.
e) Asset Acquisitions
The cost method is used for all acquisitions of assets regardless of whether shares or other assets are acquired. Cost is
determined as the fair value of assets given up at the date of acquisition plus costs incidental to the acquisition.
Costs relating to the acquisition of new areas of interest are classified as either exploration and evaluation expenditure or
mine properties based on the stage of development reached at the date of acquisition.
Variable consideration within the transaction price, if any , reflects concessions provided to the customer such as discounts,
f)
Goods and Services Tax (GST)
rebates and refunds, any potential bonuses receivable from the customer and any other contingent events. Such estimates
Revenues, expenses and assets are recognised net of the amount of GST except where the GST incurred on a purchase
are determined using either the 'expected value' or 'most likely amou nt' method. The measurement of variable consideration
of goods and services is not recoverable from the taxation authority. In these circumstances, the GST is recognised as
is subject to a constraining principle whereby revenue will only be recognised to the extent that it is highly probable that
part of the cost of acquisition of the asset or as part of the expense item as appli cable. Receivables and payables in the
a significant reversal in the amount of cumulative revenue recognised will no t occur. The measurement constraint continues
Statement of Financial Position are shown inclusive of GST.
until the uncertainty associated with the variable consideration is subsequently resolved. Amounts received that are subject
to the constraining principle are initially recognised as deferred revenue in the for m of a separate refund liability.
Sale of goods
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables
in the Statement of Financial P osition.
Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component of investing and
Revenue from the sale of goods is recognised at the point in time when the customer obtains control of the goods, which
financing activities, which are disclosed as operating cash flows.
is generally at the time of delivery.
Rendering of services
Revenue from a contract to provide services is recognised over time as the services are rendered based on either a fixed
Commitments and contingencies are disclosed net of the amoun t of GST recoverable from, or payable to, the taxation
authority.
g)
Income Tax
price or an hourly rate.
Interest
Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the
amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest
rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asse t
to the net carrying amount of the financial asset.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
b)
Employee Benefits
Provision is made for the Company’s liability for employee benefits arising from services rendered by non-casual employees
to balance date. Employee benefits that are expected to be settled within one year have been measured at the amounts
expected to be paid when the liability is settled.
c)
Foreign Currency Translation
Functional and Presentation Currency
Both the functional and presentation currency of Image is Australian Dollars.
Foreign Currency Translation
Transactions in foreign currencies are initially recorded in the functional currency by applying the exchange rates ruling
at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rat e
of exchange at balance date.
34
Image Resources NL
- 32 -
The income tax expense for the year comprises current income tax expense and deferred tax expense.
Current income tax expense charged to the Statement of Profit or Loss and Other Comprehensive Income is the tax payable
on taxable income calculated using applicable income tax rates enacted, or substantially enacted, as at reporting date.
Current tax liabilities and assets are therefore measured at the amounts expected to be p aid to or recovered from the
relevant taxation authority.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year
as well as unused tax losses, if any in fact are brought to account.
Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of assets
and liabilities and their carrying amounts in the financial statements. Deferred tax assets also result where amounts have
been fully expensed but future tax deductions are available. No deferred income tax will be recognised from the initial
recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable
profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the year when the asset is
realised or the liability is settled, based on tax rates enacted or substantively enacted at reporting date. Their measureme nt
also reflects the manner in which management expects to recover or settle the carrying amount of the related asset or
liability.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is
probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised.
Current tax assets and liabilities are offset where a legally enforceable right of set -off exists and it is intended that net
settlement or simultaneous re alisation and settlement of the respective asset and liability will occur. Deferred tax assets
- 33 -
2019 Annual Report
35
Notes to the financial statements (cont.)
NNootteess ttoo tthhee ffiinnaanncciiaall ssttaatteemmeennttss ((ccoonntt..))
For the Year Ended 31 December 2019
For the Year Ended 31 December 2019
and liabilities are offset where a legally enforceable right of set -off exists, the deferred tax assets and liabilities relate to
income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where it
is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur i n
future periods in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled.
h) Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks and other short -term highly liquid
investments with original maturities of three months or less.
i)
Impairment of Assets
At each reporting date, the Company reviews the carrying values of its tangible and intangible assets to determine whether
there is any indication that those assets have been impaired. If such an indication exists, the recoverable amount of the
asset, being the higher of the asset’s fair value less costs to sell and value in use, is compared to the asset’s carrying
value. Any excess of the asset’s carrying value over its recoverable amount is expe nsed to the Statement of Profit or Loss
and Other Comprehensive Income. This policy has no application where paragraph ( d) Exploration and Evaluation
Expenditure applies.
j)
Earnings per Share
(i)
Basic Earnings per Share – Basic earnings per share (EPS) is determined by dividing the loss from continuing
operations after related income tax expense by the weighted average number of ordinary shares outstanding during
the financial year.
(ii) Diluted Earnings per Share – Options that are considered to be dilutive are taken into consideration when calculating
the diluted earnings per share.
k)
Inventory
Inventories of heavy mineral concentrate are valued at the lower of an average weighted cost and net realisable value
(NRV). Cost comprises direct costs and an appropriate proportion of fixed and variable expenditure including depreciation
and amortisation.
Inventories of consumable supplies and spare parts to be used in production are valued at weighted average cost.
NRV is the estimated selling price in the ordinary course of business less the estimated costs of production and to complete
the sale.
l)
Property, plant, and equipment
Property, plant and equipment is stated at historical cost, less accumulated depreciation and accumulated impairment
losses, if any. Historical cost includes expenditure that is directly attributable to the acquisition of the items and costs
incurred in bringing the asset into use.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as a ppropriate, only when
it is probable that future economic benefits associated with the item flow to the Company and the cost of the item can be
measured reliably.
Mine development costs are capitalised to property, plant and equipment only once a decision to mine is made and the
development is fully funded. Mine development expenditure represents the cost incurred in preparing mines for
commissioning and production, and also includes other attributable costs incurred before production commences. These
costs are capitalised to the extent they are expected to be recouped through successful exploitation of the related mining
project. Once production commences, these costs are amortised over the estimated economic life of the mine on a units
of production basis. Mine development costs are written off if the mine property is abandoned. Development costs incurred
to maintain production are expensed as incurred against the related production.
At each reporting date, the entity assesses whether there is any indicatio n that an asset may be impaired. Where an
indicator of impairment exists, the entity makes a formal assessment of recoverable amount. Where the carrying amount
of an asset exceeds its recoverable amount the asset is considered impaired and is written down to its recoverable amount.
Recoverable amount is the greater of fair value less costs of disposal and value in use.
- 34 -
36
Image Resources NL
NNootteess ttoo tthhee ffiinnaanncciiaall ssttaatteemmeennttss ((ccoonntt..))
Notes to the financial statements (cont.)
For the Year Ended 31 December 2019
For the Year Ended 31 December 2019
Depreciation
Depreciation is provided on a straight-line or units of production basis on all plant and equipment commencing from the
time the asset is held ready for use. Major depreciation periods are:
•
•
Plant and equipment – 1 to 5 years
Motor vehicles – 3 to 5 years
An item of property, plant and equipment and any significant part initially recognised is derecognised upon disposal or
when no future economic benefits are expected from its use or disposal. Any gain or loss arising on de -recognition of the
asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in
the income statement when the asset is derecognised.
The assets’ residual values, useful lives and depreciation methods are reviewed at each reporting period and adjusted
prospectively, if appropriate.
m) Borrowings
Recognition and Measurement
Borrowings are initially recognised at fair value and revalued where the borrowings are denominated in a foreign currency.
Transaction costs paid on the establishment of loan facilities are capitalised to property, plant and equipment to the extent
that it is probable that some or all of the facility will be drawn down and that the borrowings are directly related to the
purchase of property, plant and equipment. Where there is no evidence that it is probable that some or all of the facility
will be drawn down, the fee is expensed to profit and loss. Borrowing costs incurred after the property, plant and equipment
is installed and operating are expensed to the profit and loss statement directly.
Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the
liability for at least 12 months after the reporting period.
The fair value of financial liabilities carried at amortised cost approximates their carrying values.
n)
Investments and other financial assets
Investments and other financial assets are initially measured at fair value. Transaction costs are included as part of the
initial measurement, except for financial assets at fair value through profit or loss. Such assets are subsequently measured
at either amortised cost or fair value depending on their classification. Classification is determined based on both the
business model within which such assets are held and the contractual cash flow characteristics of the financial asset
unless, an accounting mismatch is being avoided.
Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred and the
Company has transferred substantially all the risks and rewards of ownership. When there is no reasonable expectat ion of
recovering part or all of a financial asset, it's carrying value is written off.
Financial assets at fair value through profit or loss
Financial assets not measured at amortised cost or at fair value through other comprehensive income are classified as
financial assets at fair value through profit or loss. Typically, such financial assets will be either: (i) held for trading, where
they are acquired for the purpose of selling in the short -term with an intention of making a profit, or a derivative; or (ii)
designated as such upon initial recognition where permitted. Fair value movements are recognised in profit or loss.
Financial assets at fair value through other comprehensive income
Financial assets at fair value through other comprehensive income include equity investments which the Company intends
to hold for the foreseeable future and has irrevocably elected to classify them as such upon initial recognition.
Impairment of financial assets
The Company recognises a loss allowance for expected credit losses on financial assets which are either measured at
amortised cost or fair value through other comprehensive income. The measurement of the loss allowance depends upon
the Company’s assessment at the end of each reporting period as to whether the financial instrument's credit risk has
increased significantly since initial recognition, based on reasonable and supportable information that is available, without
undue cost or effort to obtain.
Where there has not been a significant i ncrease in exposure to credit risk since initial recognition, a 12 -month expected
credit loss allowance is estimated. This represents a portion of the asset's lifetime expected credit losses that is attribut able
to a default event that is possible within t he next 12 months. Where a financial asset has become credit impaired or where
- 35 -
2019 Annual Report
37
NNootteess ttoo tthhee ffiinnaanncciiaall ssttaatteemmeennttss ((ccoonntt..))
Notes to the financial statements (cont.)
For the Year Ended 31 December 2019
For the Year Ended 31 December 2019
NNootteess ttoo tthhee ffiinnaanncciiaall ssttaatteemmeennttss ((ccoonntt..))
Notes to the financial statements (cont.)
For the Year Ended 31 December 2019
For the Year Ended 31 December 2019
it is determined that credit risk has increased significantly, the loss allowance is based on the asset's lifetime expected
credit losses. The amount of expected credit loss rec ognised is measured on the basis of the probability weighted present
Instead of performing an impairment review on the right -of-use assets at the date of initial application, the Comp any has
relied on its historic assessment as to whether leases were onerous immediately before the date of initial application of
value of anticipated cash shortfalls over the life of the instrument discounted at the original effective interest rate.
AASB 16.
For financial assets measured at fair value through other comprehe nsive income, the loss allowance is recognised within
other comprehensive income. In all other cases, the loss allowance is recognised in profit or loss.
Fair Value
Fair value is determined based on closing market prices for all quoted investments. Valuat ion techniques are applied to
On transition to AASB 16 the weighted average incremental borrowing rate applied to lease liabilities recognised und er
AASB 16 was 8%. The Company has benefited from the use of hindsight for determining the lease term when considering
options to extend and terminate leases. This resulted in recognition a right -of-use asset $195,791 and a lease liability of
$195,791. It also resulted in recognition of additional expense for the year ended 31 December 2019 of $5,000.
determine the fair value for all unlisted securities, including recent arm’s length transactions, reference to similar
q) Contributed Equity
instruments and option pricing models. The expression “fair value” – and derivatives thereof – wherever used in this report
bears the meaning ascribed to that expression by the Australian Accounting Standards Board.
Impairment
At each reporting date, the Company assesses whether there is objective evidence that a financial instrument has been
impaired. In the case of available-for-sale financial instruments, a prolonged decline in the value of the instrument is
considered to determine whether an impairment has arisen. Impairment losses are recognised in the profit or loss.
Financial Guarantees
Where material, financial guarantees issued, which require the issuer to make specified payments to reimburse the holder
for a loss it incurs because a specified debtor fails to make payment when due, are recognised as a financial liability at
fair value on initial recognition.
The guarantee is subsequently measured at the higher of the best estimate of the obligation and the amount initially
recognised less, when appropriate, cumulative amortisation in accordance with AASB 118: Revenue. Where the entity
gives guarantees in exchange for a fee, revenue is recognised under AASB 118.
The fair value of financial guarantee contracts has been assessed using a probability weighted discounted cash flow
approach. The probability has been based on:
•
•
•
the likelihood of the guaranteed party defaulting in a year period;
the proportion of the exposure that is not expected to be recovered due to the guaranteed party defaulting; and
the maximum loss exposed if the guaranteed party were to default.
De-recognition
Financial assets are derecognised where the contractual rights to receipt of cash flows expires or the asset is transferred
to another party whereby the entity no longer has any significant continuing involvement in the risks and benefits associated
with the asset. Financial liabilities are derecognised where the related obligations are either discharged, cancelled or
expired. The difference between the carrying value of the financial liability extinguished or transferred to another party
and the fair value of consideration paid, including the transfer of non-cash assets or liabilities assumed, is recognised in
profit or loss.
o)
Provisions
Provisions are recognised when the Company has a legal or constructive obligation, as a result of past events, for which
it is probable that an outflow of economic benefits will result and that outflow can be reliably measured.
p)
Leases
The Company adopted AASB 16 on the required effective date 1 January 2019.
The adoption of the AASB resulted in equipment that was previously being classifi ed as operating lease now recognised on
the balance sheet. This resulted in recognition of a right -of-use asset and a corresponding liability being the present value
of future lease payments. Over the life of the lease, the lease liability will incur inter est expense and is reduced as lease
payments are made. The right-of-use asset is amortised on a straight-line basis over its lease term. The pattern of expense
recognition changes with a higher expense at lease commencement due to a higher lease liability at the time.
Image Resources adopted AASB 16 using the modified retrospective approach. There is no restatement of comparative
periods and the lease liability has been set to the same value as the right -of-use asset. Image Resources has elected to
apply practical expedients allowed under the modified retrospective approach and not recognise short -term or low-value
leases on its balance sheet but to account for the lease expense on a straight -line basis over the remaining lease term.
The Company has elected not to include initial direct costs in the measurement of the right -of-use asset for operating leases
in existence at the date of initial application of AASB 16, being 1 January 2019. At this date, the Company has also elected
to measure the right-of-use assets at an amount equal to the lease liability adjusted for any prepaid or accrued lease
payments that existed at the date of transition.
38
Image Resources NL
- 36 -
Ordinary share capital is recognised at the fair value of the consideration received by the Company. Any transaction costs
arising on the issue of ordinary shares are recognised directly in equity as a reduction of the share proceeds received.
r)
Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation
for the current financial year.
s)
Segment Reporting
Operating segments are reported in a manner that is consistent with the internal reporting to the chief operating decision
maker (“CODM”), which has been identified by the Company as the Managing Director and other members of the Board of
directors.
t)
Critical Accounting Estimates, Assumptions and Judgements
The Company makes estimates and assumptions concerning the future in applying its accounting policies. The resulting
accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have
a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financi al
year are discussed below. Estimates and underlying assumptions are reviewed on an ongoing basis, with revisions
recognised in the period in which the estimates are revised and future periods affected.
Impairment of Property, Plant and Equipment and Mine Development Expenditure
Non-current assets are assessed for impairment when there is an indication that their carrying amount may not be
recoverable. The recoverable amount of each Cash Generating Unit (CGU) is determined as the higher of value -in-use and
fair value less costs of disposal es timated on the basis of discounted present value of the future cash flows (a level 3 fair
value estimation method).
The estimates of discounted future cash flows for each CGU are based on significant assumptions including:
•
•
•
•
•
•
estimates of the quantities of mineral reserves and ore resources for which there is a high degree of confidence
of economic extraction and the timing of access to these reserves and ore resources:
future production levels and the ability to s ell that production
future product prices base d on the Company’s assessment of forecast short and long term prices for each of the
key products
future exchange rates for the Australian dollar compared to the US dollar using external forecasts by recognised
economic forecasters
future cash costs of production, sustaining capital expenditure, rehabilitation and mine closure
the asset specific discount rate applicable to the CGU
Determination of Mineral Resources and Ore Reserves
The determination of reserves impacts the accounting for asset carrying val ues, depreciation and amortisation rates, and
provision for decommissioning and restoration. The information in this report as it relates to ore reserves, mineral resource s
or mineralisation is reported in accordance with the AusIMM “Australian Code for Re porting of Identified Mineral Resources
and Ore Reserves 2012”. The information has been prepared by or under supervision of competent persons as identified
by the Code.
There are numerous uncertainties inherent in estimating mineral resources and ore rese rves and assumptions that are
valid at the time of estimation may change significantly when new information becomes available. Changes in the forecast
prices of commodities, exchange rates, production costs or recovery rates may change the economic status of reserves
and may ultimately result in the reserves being restated.
- 37 -
2019 Annual Report
39
NNootteess ttoo tthhee ffiinnaanncciiaall ssttaatteemmeennttss ((ccoonntt..))
Notes to the financial statements (cont.)
For the Year Ended 31 December 2019
For the Year Ended 31 December 2019
NNootteess ttoo tthhee ffiinnaanncciiaall ssttaatteemmeennttss ((ccoonntt..))
Notes to the financial statements (cont.)
For the Year Ended 31 December 2019
For the Year Ended 31 December 2019
Rehabilitation and Site Restoration Provision
Significant estimates and assumptions are made in determining the provision for rehabilitation of the mine as there are
numerous factors that will affect the ultimate liability payable. These factors include estimates of the extent and costs of
rehabilitation activities, technological changes, regulatory changes, cost increases as compared to inflation rates, and
changes in discount rates. These uncertainties may result in future actual expenditure differing from amounts currently
provided.
Recovery of Deferred Tax Assets
Judgement is required in determining whether deferred tax assets are recognised in the Consolidated Statement of
Financial Position. Deferred tax assets, including those arising from unutilised tax losses, require manag ement to assess
the likelihood that the Company will generate taxable earnings in future periods, in order to utilise recognised deferred tax
assets. Estimates of future taxable income are based on forecast cash flows from operations and the application of existing
tax laws. To the extent that future cash flows and taxable income differ significantly from estimates, t he ability of the
Company to realise net deferred tax assets could be impacted. Additionally, future changes in tax laws could limit the
ability of the Company to obtain tax deductions in future periods.
The Company has unrecognised deferred tax assets arising from tax losses and other temporary differences. The ability
of the Company to utilise its tax losses is subject to meeting the relevant statutory tests.
Note 3 Revenue and Expenses
Sales Revenue
Concentrate sales
Operating Expenses
Mine operating costs
Depreciation and amortisation
Amortisation of capitalised borrowing costs
Inventory movement
Cost of sales
Gross Profit
Other Expenses
The income tax expense has been estimated and calculated based on management’s best knowledge of current income
tax legislation. There may be differences with the treatment of individual jurisdiction provisions but these are not expected
Realised foreign currency (loss) / gain
to have any material impact on the amounts as reported.
u) New Accounting Standards for Application in Future Years
There are a number of new Accounting standards and Interpretations issued by the AASB that are not yet mandatorily
applicable to the Company and have not been applied in preparing these financial statements. The Company does not
plan to adopt these standards early.
These standards are not expected to have a material impact on the Company in the current or future period until mandatory
adoption.
v)
Rounding
Rounding of amounts All amounts in the financial statements have been rounded to the nearest thousand dollars, except as
indicated, in accordance with the ASIC Corporations Instrument 2016/191.
Note 2 Operating Segments
Segment Information
Identification of reportable segments
The Company has identified that it operates in only one segment based on the internal reports that are reviewed and used by
the board of directors (chief operating decision makers) in assessing performance and determining t he allocation of resources.
The Company is a minerals sands production and exploration company. Currently all the Company’s mineral sands tene ments
and resources are located in Western Australia.
Revenue and assets by geographical region
The Company's revenue is derived from sources and assets located wholly within Australia .
Major customers
The Company currently provides products to two off -takers.
Financial information
Reportable items required to be disclosed in this note are consistent with the information disclosed in the Statement of Profit or
Loss and Other Comprehensive Income and Statement of Financial Position and are not duplicated here.
40
Image Resources NL
- 38 -
Year to
31 Dec
2019
($000)
Year to
31 Dec
2018
($000)
146,196
-
(66, 359)
(17,678)
(5,263)
7,089
(82,211)
63,985
(1,797)
48
(9,655)
-
(390)
(4,302)
(974)
-
5,276
-
-
706
426
(917)
(4)
(329)
(10,045)
(1,250)
54
40
(Cents)
(Cents)
2.14
2.10
0.39
0.39
($000)
($000)
20,832
3,311
Number of
Number of
shares
shares
Finance Income
Interest income
Finance Costs
Interest expense
Amortisation of capitalised borrowing costs
Other financing costs
Note 4
Auditors Remuneration
Amounts received or due and receivable by the auditors of the Company for:
-
Auditing and reviewing the financial reports – Eldertons Audit Pty Ltd (formerly
Greenwich & Co Audit Pty Ltd)
Note 5
Basic earnings per share
Earnings Per Share
Diluted earnings per share
Reconciliation of earnings used in calculating earnings per share
Profit attributable to ordinary equity holders of the Company used in calculating basic
and diluted earnings per share
Weighted average number of ordinary shares used in the calculation of basic
earnings per share at 31 December 2019
971,794,723
859,218,824
Weighted average number of ordinary shares used in the calculation of diluted
earnings per share
Weighted average number of ordinary shares (basic)
Effect of warrants on issue
971,794,723
859,218,824
18,208,229
-
Weighted average number of ordinary shares (diluted) at 31 December 2019
990,003,952
859,218,824
The Company had Nil (2018: Nil) options over fully paid ordinary shares on issue at balance date.
- 39 -
2019 Annual Report
41
NNootteess ttoo tthhee ffiinnaanncciiaall ssttaatteemmeennttss ((ccoonntt..))
Notes to the financial statements (cont.)
For the Year Ended 31 December 2019
For the Year Ended 31 December 2019
Note 6
Income Tax
Reconciliation of income tax expense to prima facie tax payable
The prima facie tax payable on profit / (loss) from ordinary activities before tax is
reconciled to the income tax (expense) / benefit as follows:
Accounting profit / (loss) before tax
Prima facie tax on operating profit / (loss) at statutory rate of 30% (2018: 27.5%)
Non-deductible expenses
Tax effect on temporary differences brought to account
Non-assessable income
Capital raising costs charged to equity
Tax losses brought to account as a deferred tax asset
Under provision in prior year
Income tax (expense) / benefit
Year to
31 Dec
2019
($000)
Year to
31 Dec
2018
($000)
29,217
(8,765)
(89)
-
-
7
-
462
(8,385)
(8,609)
2,583
(1,286)
2,030
4
-
9,412
-
12,743
The Corporate tax rate payable by the Company if the Company was required to pay income tax in the year ended 31
December 2019 was 30% (31 December 2018 It was 27.5% as it was a Base Rate Entity for taxation purposes). Company
NNootteess ttoo tthhee ffiinnaanncciiaall ssttaatteemmeennttss ((ccoonntt..))
For the Year Ended 31 December 2019
Notes to the financial statements (cont.)
For the Year Ended 31 December 2019
Note 7 Cash and Cash Equivalents
Cash at bank
Deposits at call
Cash flows from operating activities reconciliation
Operating profit after income tax
Income tax expense / (benefit)
Depreciation and amortisation expense
Exploration and evaluation expense
(Profit) / loss on sale of property, plant and equipment
Impairment of property, plant and equipment
Realised foreign currency (gain) / loss
Unrealised foreign currency (gain) / loss
Profit on sale of available for sale financial assets
Interest expense
Share based payments expense
Borrowing costs
budgets indicate that the company will not be a Base Rate Entity in future years and will be required to pay income tax at the
Changes in operating assets and liabilities:
standard income tax rate of 30%. The deferred tax asset held o n the balance sheet is calculated at the 30% income tax rate
Increase in trade and other receivables relating to operating activities
Recognised deferred tax assets and liabilities
(Increase) in prepayments
Increase in inventory
Assets
Liabilities
Net
Increase in trade and other payables relating to operating activities
Tax losses
Property, plant and equipment
2019
($000)
(7,350)
-
2018
($000)
(16,131)
-
Unrealised foreign exchange gains
(1,374)
(1,204)
Provisions and accruals
Capital raising costs
Mine rehabilitation
Borrowing costs
Receivables
Inventories
Investments
(258)
(362)
(1,164)
-
-
-
-
(181)
(503)
-
-
-
-
-
2019
($000)
-
1,988
-
-
-
-
2018
($000)
-
521
-
-
-
-
3,799
4,750
4
355
4
1
-
4
2019
($000)
(7,350)
1,988
(1,374)
(258)
(362)
(1,164)
3,799
4
355
4
2018
($000)
(16,131)
521
(1,204)
(181)
(503)
-
4,750
1
-
4
Net tax (assets) / liabilities
(10,508)
(18,019)
6,150
5,276
(4,358)
(12,743)
Deferred tax assets of $12,742,798 at 31 December 2018 were recognised in relation to unused tax losses at 30%, due to taxable
income being forecast from the Boonanarring project.
Increase in current borrowings
Increase in provisions
Cash flow from operations
Note 8
GST and tax refundable
Trade and Other Receivables
Other receivables
Other receivables (At 31 December 2018) represented an amount expected to be recovered for expenses incurred dismantling
the wet concentrator plant at Mindarie, South Australia offset by additional equipment purchased from Murray Zircon Pty Ltd.
Note 9 Other Assets – Current
Restricted cash – security for guarantees
Prepayments
54
414
468
54
482
536
Restricted cash represents term deposits held by the Company’s bank as security for a bank guarantee ($34,667) in favour of
the property manager in relation to operating lease commitments for the office premises and security for the Company credit
card ($20,000).
Deposits at call consist of term deposits with maturity dates greater than three months.
42
Image Resources NL
- 40 -
- 40 -
2019 Annual Report
43
31 Dec
2019
($000)
49,920
15
49,935
20,832
8,385
22,948
3,345
1,011
-
1,094
(439)
-
5,394
98
246
(105)
70
(7,542)
7,366
6
210
31 Dec
2018
($000)
11,871
15
11,886
3,311
(12,743)
355
1,371
(1)
734
(684 )
4015
(15)
693
-
4
(2)
(7)
(4,301)
4,466
-
405
62,919
(2,399)
592
1
593
487
976
1,463
NNootteess ttoo tthhee ffiinnaanncciiaall ssttaatteemmeennttss ((ccoonntt..))
Notes to the financial statements (cont.)
For the Year Ended 31 December 2019
For the Year Ended 31 December 2019
NNootteess ttoo tthhee ffiinnaanncciiaall ssttaatteemmeennttss ((ccoonntt..))
For the Year Ended 31 December 2019
Notes to the financial statements (cont.)
For the Year Ended 31 December 2019
Note 10 Property, Plant and Equipment
Set out below are the carrying amounts recognised and the movements during the period.
Plant and
Land and
Mine
Borrowing
Total
Equipment
Buildings
Development
($000)
($000)
($000)
Year ended 31 December 2018
Balance at 1 January 2018
Additions
Mine closure and rehabilitation asset
Disposals
Impairments
Transfer to inventory
Depreciation
12,701
37,892
-
(1)
(734)
(293)
(660)
1,941
9,453
-
-
-
-
-
Closing Net Book Value
48,905
11,394
At 31 December 2018
Cost
Accumulated Depreciation
Net Book Value
Year ended 31 December 2019
Balance at 1 January 2019
Additions
Mine closure and rehabilitation asset
Disposals
Transfers
Depreciation
49,767
(862)
48,905
48,905
4,331
-
(901)
523
(13,256)
11,394
-
11,394
11,394
75
-
-
-
-
Closing Net Book Value
39,602
11,469
At 31 December 2019
Cost
Accumulated Depreciation
Net Book Value
53,720
(14,118)
11,469
-
39,602
11,469
-
15,074
4,398
-
-
-
(341)
19,131
19,472
(341)
19,131
19,131
3,374
10,655
-
(523)
(4,502)
28,135
32,978
(4,843)
28,135
Costs
($000)
-
21,961
-
-
-
-
($000)
14,642
84,380
4,398
(1)
(734)
(293)
(329)
(1,330)
21,632
101,062
21,961
(329)
21,632
102,594
(1,532)
101,062
21,632
101,062
7
-
-
-
7,787
10,655
(901)
-
(5,263)
(23,021)
16,376
95,582
21,968
(5,592)
16,376
120,135
(24,553)
95,582
Property, plant and equipment includes the purchase of a wet concentration mineral sands processing plant and ancillary mining
and processing equipment from Murray Zircon on 8 June 2016 for $11,935,028 and construction costs incurred building the
Boonanarring Mine. Mine development expenditure represents the cost incurred in preparing mines fo r commissioning and
production, other attributable costs incurred before production commences and mine closure and rehabilitation costs.
Land represents farm lots at Boonanarring which the company has acquired .
Impairments of plant and equipment represent the write down in the value of plant and equipment purchased from Murray Zircon
Pty Ltd and not used in the construction of the Boonanarring mine.
Borrowing costs incurred financing the senior debt facility were fully capitalised to property, plant and equ ipment. Depreciation
on plant and equipment, mine development and borrowing costs is charged to the inventory cost base.
Leases
The Company has lease contracts for motor vehicles and office equipment used in its operations. The leases have lease terms
between 3 and 5 years. The company’s obligations under its leases are secured by the lessor’s title to the leased assets. The
right of use assets is included in Plant and Equipment above as their values are too immaterial to state separately .
Year ended 31 December 2019
Balance at 1 January 2019
Additions
Depreciation
Closing Net Book
Motor
Office
Total
Vehicles
Equipment
($000)
($000)
($000)
-
178
(67)
111
-
18
(7)
11
Set out below are the carrying amounts of lease liabilities (included under borrowings, Note 15)
As at 1 January 2019
Additions
Accretion of interest
Payments
As at 31 December 2019
Current
Non-Current
Note 11 Other Financial Assets
Non-Current
Loans to Employees – (Employee Share Plan)
Loans to Key Management Personnel (Employee Share Plan)
Available-for-sale financial assets – shares in listed corporations
Note 12
Inventory
Current
Ore stockpiles
Heavy mineral concentrate and other intermediate stockpiles
Stores and consumables
31 Dec
2019
($000)
196
12
(81)
127
72
55
1,909
949
27
2,885
466
15,139
1,184
16,789
-
196
(74)
122
31 Dec
2018
($000)
-
-
-
-
-
-
241
179
27
447
1,254
7,262
731
9,247
Inventories of heavy mineral concentrate are valued at the lower of an average weighted cost and net realisable value (NRV).
Cost comprises direct costs and an appropriate proportion of fixed and variable expenditure including depreciation a nd
amortisation.
Inventories of consumable supplies and spare parts to be used in production are valued at weighted average cost.
NRV is the estimated selling price in the ordinary course of business less the estimated costs of production and to complete the
sale.
44
Image Resources NL
- 41 -
- 42 -
2019 Annual Report
45
NNootteess ttoo tthhee ffiinnaanncciiaall ssttaatteemmeennttss ((ccoonntt..))
For the Year Ended 31 December 2019
Notes to the financial statements (cont.)
For the Year Ended 31 December 2019
Note 13 Trade and Other Payables
Trade creditors
Accruals
GST and tax payable
Other payables
31 Dec
2019
($000)
8,150
7,759
190
111
31 Dec
2018
($000)
7,527
3,899
186
55
16,210
11,667
Trade creditors, accruals, GST and tax payables and other payables are normally settled on 30 Day terms.
These amounts represent liabilities for goods and services provided to the Company prior to the end of financial year which a re
unpaid. Trade and other payables are presented as current liab ilities unless payment is not due within 1 2 months from the
reporting date.
Note 14 Provisions
Current
Employee leave benefits
Non-Current
Employee leave benefits
Mine closure and rehabilitation
692
454
82
15,298
15,380
110
4,398
4,508
Mine closure and rehabilitation obligation s
The calculation of the mine closure and rehabilitation provision requires assumptions such as application of environmental
legislation, plant closure dates, available technologies, engineering costs and inflation and discount rates. A change in any of
the assumptions used may have a material impact on the carrying value of mine closure and rehabilitation obligations.
The mine closure and rehabilitation provision is recorded as a liability at fair val ue, assuming a risk-free discount rate equivalent
to the 5 year Australian US Government bond rate of 0.99% as at 31 December 2019 (31 December 2018 : N/A) and an inflation
factor of 2.1% (31 December 2018: 2.25%). Although the ultimate amount to be incurre d is uncertain, management has, at 31
December 2019, estimated the asset retirement cost of work completed to date using an expected remaining mine life of 3 years
and a total undiscounted estimated cash flow of $ 14,724,787 (31 December 2018 : $4,517,185). Management’s estimate of the
underlying asset retirement costs are independently reviewed by an external consultant on a regular basis for completeness.
Recognition and measurement of provisions
probable that an outflow of economic benefits will result and that outflow can be reliably measured.
A mine closure and rehabilitation provision is recognised at the commencement of a minin g project and/or construction based
on the estimated costs necessary to meet legislative requirements by estimating future costs and discounting these to a present
value. The provision is recognised as a liability, separated into current (estimated costs arising within twelve months) and non-
current components based on the expected timing of these cash flows. A corresponding asset is included property, plant and
equipment (mine development assets section), only to the extent that it is probable that future economic benefits associated
with the restoration expenditure will flow to the entity, and is amortised over the life of the mine.
At each reporting date the mine closure and rehabilitation provision is re -measured in line with changes in discount rates and
timing or amounts of the costs to be incurred. Adjus tments to the estimated amount and timing of future closure and rehabilitation
cash flows are a normal occurrence in light of the significant judgements and estimates involved and are dealt with on a
NNootteess ttoo tthhee ffiinnaanncciiaall ssttaatteemmeennttss ((ccoonntt..))
Notes to the financial statements (cont.)
For the Year Ended 31 December 2019
For the Year Ended 31 December 2019
Note 15 Borrowings
Current
Lease liabilities
Interest bearing loan – Murray Zircon Pty Ltd
Interest bearing loan – Senior Secured Loan Notes
Non-Current
Lease liabilities
Interest bearing loan – Senior Secured Loan Notes
Interest
Rate
(8%)
(5%)
(13%)
(8%)
(13%)
31 Dec
2019
($000)
31 Dec
2018
($000)
73
-
37,606
37,679
55
18,803
18,858
-
4,000
8,565
12,565
-
51,388
51,388
Loan – Murray Zircon Pty Ltd
a)
The loan was with Murray Zircon Pty Ltd and was fully drawn down on 8 June 2016 on completion of the transaction with Murray
Zircon and Orient Zirconic. Murray Zircon is a related party due to it holding a 19.56% interest in the shares of the Company.
The loan was repaid on 1 July 2019.
b)
Senior Secured Debt Facility.
A senior secured debt facility which raised A$50,000,000 from the issue of senior secured loan notes. The senior loan notes
amount to US$38,865,000 plus capitalised interest of US$7,257, 672. US$6,586,810 was repaid on 12 November 2019.
US$37,606,681 is the current portion of the loan at 31 December 201 9 (31 December 2018: US$6,117,808).
The key terms of the loan include a loan period of three years f rom draw down, an interest rate of 14% for the first fifteen months
following draw down and 13% thereafter for the balance of the loan. Interest for the first fifteen months was added to the loan
amount and thereafter paid quarterly in arrears. The princip al is being repaid in seven equal instalments starting in the 18 th
month following drawdown. Drawdown occurred on 25 May 2018.
Note 16
Issued Capital
Contributed Equity – Ordinary Shares
Year to 31 Dec 2019
Year to 31 Dec 2018
No.
($000)
No.
($000)
At the beginning of the period
957,247,598
103,170
611,289,987
Underwritten issue of shares at $0.10
Loan note holder bonus shares valued at $0.1111
Shares issued for decision to mine valued at
Employee share plan shares issued at $0.12
Shares issued on exercise of options at $0.085
Shares issued on exercise of warrants at $0.11385
13,475,000
Employee share plan shares issued at $0.195
Employee share plan shares issued at $0. 267
Share issue costs
1,303,813
8,953,488
-
2,760
254
2,391
(22)
250,000,000
56,255,000
35,198,459
3,504,152
1,000,000
-
68,917
25,000
6,252
3,977
421
85
(1,482)
103,170
Balance at the end of the period
980,979,899
108 ,653
957,247,598
Terms and Conditions of Contributed Equity
Ordinary shares have the right to receive dividends as declared and, in the event of windi ng up of the Company, to participate
in the proceeds from the sale of all surplus assets in proportion to the number of shares held, regardless of the amount paid up
Provisions are recognised when the Company has a legal or constructive obligation, as a result of past events, for w hich it is
$0.1130
prospective basis as they arise.
thereon.
Changes in the liability relating to mine closure and rehabilitation obligations are added to or deducted from the related asset
(where it is probable that future economic benefits will flow to the entity), other than the unwinding of the discount which is
recognised as a financing expense in the Statement of Profit and Loss and Other Comprehensive Income. Changes in the asset
value have a corresponding adjustment to future amortisation charges.
The mine closure and rehabilitation provision does not include any amounts related t o remediation costs associated with
unforeseen circumstances.
46
Image Resources NL
- 44 -
At a general meeting every shareholder present in person or by proxy, representat ive or attorney has: a) on a show of hands,
one vote; and b) on a poll, one vote for each fully paid share held .
- 45 -
2019 Annual Report
47
NNootteess ttoo tthhee ffiinnaanncciiaall ssttaatteemmeennttss ((ccoonntt..))
Notes to the financial statements (cont.)
For the Year Ended 31 December 2019
For the Year Ended 31 December 2019
Note 17 Reserves and Accumulated Losses
Reserves
Available-for-sale financial assets reserve
Share based payments reserve
Warrants reserve
Closing balance
Reserve – Available for Sale Financial Assets
Balance at the beginning of the period
Changes in the fair value of available for sale financial assets
Balance at the end of the period
Reserve – Share Based Payments
Balance at the beginning of the period
Options expired
Exercise of options
Balance at the end of the period
Reserve – Warrants
Balance at the beginning of the period
Issue of warrants
Exercise of warrants
Balance at the end of the period
31 Dec
2019
($000)
10
-
3,088
3,098
10
-
10
-
-
-
-
4,314
-
(1,226)
3,088
31 Dec
2018
($000)
10
-
4,314
4,324
-
10
10
42
(29)
(13)
-
-
4,314
-
4,314
a)
The employee benefits reserve is used to recognise the fair value of options issued. During the year to 31 December
2018, the value previously ascribed to options that lapsed and exercised during the year was transferred to retained
losses.
b)
The warrants reserve is used to recognise the fair value of warrants issued. During the year to 31 December 2019, the
value previously ascribed to warrants that were exercised during the year was transferred to retained losses.
Warrants
The Company had the following warrants over un-issued fully paid ordinary shares at
the end of the year:
Exercisable at $0.1365 on or before 20 May 2023
Exercisable at $0.11385 on or before 24 May 2023
Accumulated Losses
Opening balance
Profit / (loss) for the year
Transfer from share-based payments
31 Dec
2019
No.
31 Dec
2018
No.
14,285,714
21,525,000
14,285,714
35,000,000
35,810,714
49,285,714
($000)
($000)
(50,692)
20,832
-
(54,045)
3,311
42
(29,860)
(50,692)
48
Image Resources NL
- 45 -
NNootteess ttoo tthhee ffiinnaanncciiaall ssttaatteemmeennttss ((ccoonntt..))
Notes to the financial statements (cont.)
For the Year Ended 31 December 2019
For the Year Ended 31 December 2019
a)
Summaries of warrants granted
The following table details the number and weighted average exercise prices (WAEP) and movements in warrants issued during
the year.
Outstanding at 1 January
Issued during the year
Exercised during the year
Outstanding at 31 December
Exercisable at 31 December
Number
2019
49,285,714
-
(13,475,000)
WAEP
2019
0.1204
-
-
Number
2018
-
WAEP
2018
-
49,285,714
0.1204
-
-
35,810,714
0.1204
49,285,714
0.1204
35,810,714
0.1204
49,285,714
0.1204
b) Weighted average remaining contractual life
The weighted average remaining contractual life for the warrants outstanding as at 31 December 201 9 is between 3 and 4 years
(31 December 2018: Between 4 and 5 years).
c)
Range of exercise price
The range of exercise prices for warrants outstanding at the end of the year was $0.11385 to $0.1365 (31 December 2018 :
$0.11385 to $0.1365).
d) Weighted average fair value
The weighted average fair value of warrants granted during the year was Nil (31 December 2018: $0.0875).
e) Warrants pricing model
The fair value of the warrants granted during the year ending 31 December 2018 was estimated as at the date of grant using a
Black-Scholes option pricing model taking into account th e terms and conditions upon which the warrants were granted.
The following table lists the inputs to the model used for the year ended 31 December 2018.
31 Dec
2018
31 Dec
2018
Tranche A
Tranche B
Dividend yield (%)
Expected volatility (%)
Risk-free interest rate (%)
Expected life of warrants (years)
Warrant exercise prices ($)
Nil
85%
2.50%
5.02
$0.091
Weighted average share price at grant
$0.13
date ($)
Nil
85%
2.47%
4.95
$0.79
$0.12
The minimum life of the Warrants is the length of any vesting period. The maximum life is based on the expiry date. For the
purposes of these warrants the exercise date is estimated as the expiry date. The expected volatility reflects the assumption
that the historical volatility was indicative of future trends, whic h may also not necessarily be the actual outcome. No other
features of warrants granted were incorporated into the measurement of fair value.
Note 18 Tenement Expenditure and Leasing Commitments
The Company has certain obligations to perform minimum explor ation work on the tenements in which it has an interest. These
obligations vary from time to time. The aggregate of the prescribed expenditure conditions applicable to the granted tenemen ts
for the next twelve months amounts to $1,578,300 .
Application for exemption from all or some of the prescribed expenditure conditions will be made but no assurance is given that
any such application will be granted. Nevertheless, the Company is optimistic, given it s level of expenditure in the North Perth
Basin, that it would likely be granted exemptions , on a project basis, in respect of the prescribed expenditure conditions
applicable to many of its North Perth Basin tenements.
If the prescribed expenditure condit ions are not met with respect to a tenement, that tene ment is liable to forfeiture.
- 47 -
2019 Annual Report
49
NNootteess ttoo tthhee ffiinnaanncciiaall ssttaatteemmeennttss ((ccoonntt..))
Notes to the financial statements (cont.)
For the Year Ended 31 December 2019
For the Year Ended 31 December 2019
NNootteess ttoo tthhee ffiinnaanncciiaall ssttaatteemmeennttss ((ccoonntt..))
Notes to the financial statements (cont.)
For the Year Ended 31 December 2019
For the Year Ended 31 December 2019
The Company has the ability to diminish its exposure under these conditions through the application of a variety of technique s
Equity-Settled Share Based Payments
including applying for exemptions (from the regulatory expenditure obligations), surrendering tene ments, relinquishing portions
The Directors may, in their absolute discretion, grant options to Directors and full or part time employees of the Company for nil
of tenements or entering into farm -out agreements whereby third parties bear the burdens of such obligation in whole or in part.
consideration in accordance with guidelines established by the Directors. The exercise price of the option is set by the Board of
The Company has leased office premises at 23 Ventnor Avenue, West Perth, WA. The lease expired on 31 January 2020 and
was renewed for six months to 31 July 2020. The commitment for the 20 20 financial year is $97,908 including all outgoings and
Directors. Unvested options may terminate upon cessation of employment in accordance with the terms on which the options
were granted.
car parking.
The share-based payments expense for the year ending 31 December 2019 and year to 31 December 2018 was Nil.
Note 19 Tenement Access
The interests of holders of freehold land encroached by the Tenements a re given special recognition by the Mining Act (WA).
As a general proposition, a tenement holder must obtain the consent of the owner of freehold before conducting operations on
such freehold land. Unless it already has secured such rights, there can be no assurance that the Company will secure rights
to access those portions of the Tenements encroaching freehold land.
The Company has commenced negotiations with the Traditional Owners and their represe ntatives in regard to the Native Title
claim affecting part of the Atlas deposit and being the subject of a registered (but undetermined) claim. This is the only deposit
forming part of the high grade dry mining targets within the North Perth Basin (NPB) Project which has, insofar as the Company
is aware, any potential to be subject to Native Title. However, heritage aspects of the remaining areas of the project still have
to be taken into consideration.
Outside of the NPB Project the Company’s other tenements may contain dredge mining targets which could be subject to Native
Title claim.
The Company is not in a position at this time to assess the likely effect of any Native Title claim impacting the Company.
The Company is in advanced negotiations wi th a number of landholders with a view to signing purchase agreements on properties
required to expand reserves at the Boonanarring project to the north.
Note 20 Significant Events Subsequent to Reporting Date
Other than the following matter:
On 30 January 2020, The Company’s thirteenth shipment of 20, 475 Dry Metric Tonnes of HMC finished loading backed by
a letter of credit. Subsequently, on 6 February 2020, full payment for the shipment was received by Image, in USD.
On 10 February 2020, The Company completed its second scheduled loan note repayment including i nterest of
a)
Summaries of options granted
The following table details the number and weighted average exercise prices (WAEP) and movements in employee share options
issued during the year.
Outstanding at 1 January
Granted during the year
Converted to shares during the year
Expired during the year
Outstanding at 31 December
Exercisable at 31 December
b) Weighted average remaining contractual life
Not applicable.
c)
Range of exercise price
Number
2019
WAEP
2019
-
-
-
-
-
-
-
-
-
-
-
-
Number
2018
WAEP
2018
3,000,000
0.09250
-
-
(1,000,000)
0.08500
(2,000,000)
0.09625
-
-
-
-
The range of exercise prices for options outstanding at the end of the year was $0 as no employee options were outstanding (31
December 2018: $0).
d) Weighted average fair value
The weighted average fair value of options gr anted during the year was Nil (the year to 31 December 2017 : Nil).
US$7,871,238 for the Senior Secured Loan Notes facility.
e) Option pricing model
There were no other material significant events subsequent to the reporting date.
There were no share options granted during the year ending 31 December 2019 or 31 December 2018.
Note 21 Employee Benefits
Employee Share Plan
Under the terms of the Image Share Plan (“ESP”), as approved by shareholders, Image may, in its absolute discretion, make an
offer of ordinary fully paid shares in Image to any Eligible Employee, to be funded by a limited recourse interest free l oan granted
by the Company.
The issue price is determined by the Direc tors and is not to be less than the volume weighted average price of shares in the 5
trading days prior to the Issue Date. Eligible Employees use the abovementioned loan to acquire the p lan shares. The loan
amount per share may in certain circumstances be more than the issue price where shareholder approval is required for the
issue and the share price is more than the issue price. The shares may be sold 12 months after their issue date generally only
if the employee is currently employed.
The following table illustrates the number, weighted average share loan prices (WASLP) and weighted average share issue price
(WASIP), and movements in plan shares during the year.
Outstanding at 1 January
Granted during the year
Sold during the year
3,504,152
10,257,301
(907,349)
Outstanding at 31 December
12,854,104
Exercisable at 31 December
3,900,616
50
Image Resources NL
0.12
0.26
0.12
0.23
0.15
- 48 -
Number
2019
WASIP
2019
WASLP
2019
Number
2018
-
3,504,152
-
3,504,152
0.12
0.25
0.12
0.22
0.12
3,504,152
WASIP
2018
WASLP
2018
-
0.12
-
0.12
0.12
-
0.12
-
0.12
0.12
f)
Details of options
31 December 2018
Balance at
Beginning
of Year
No.
Exercised
Lapsed
Balance at
End of Year
No.
No.
No.
Managing Director
3,000,000
(1,000,000)
(2,000,000)
Total
3,000,000
(1,000,000)
(2,000,000)
-
-
i)
Details of Managing Director Options
Number
1,500,000
1,500,000
Grant Date
30 November 2016
30 November 2016
Expiry
4 December 2018
4 December 2018
Vesting Date
30 November 2016
30 April 2017
Exercise Price
$0.085
$0.10
The options can be exercised at any time after t he vesting date and prior to the expiry date.
- 49 -
2019 Annual Report
51
NNootteess ttoo tthhee ffiinnaanncciiaall ssttaatteemmeennttss ((ccoonntt..))
For the Year Ended 31 December 2019
Notes to the financial statements (cont.)
For the Year Ended 31 December 2019
NNootteess ttoo tthhee ffiinnaanncciiaall ssttaatteemmeennttss ((ccoonntt..))
Notes to the financial statements (cont.)
For the Year Ended 31 December 2019
For the Year Ended 31 December 2019
NOTE 22 RELATED PARTY AND RELATED ENTITY TRANSACTIONS
Transactions with directors, director -related parties and related entities other than those disclosed elsewhere in this financial
NOTE 23 CONTINGENT LIABILITIES
Other than those matters disclosed in Notes 1 8 and 19, there are no contingent liabilities or commitments.
report are as follows:
Orient Zirconic Resources (Australia) Pty Ltd – Chaodian Chen
Leeman Pty Ltd, a George Sakalidis related party, hire of specialised equipment
Magnetic Resources NL, a George Sakalidis related party, purchase of stationary
Murray Zircon Pty Ltd – Interest on $4,000,000 loan (Note 17)
Murray Zircon Pty Ltd – Vehicle repairs, flights & camp meals, car hire
Murray Zircon Pty Ltd – Loan Repayment
Murray Zircon Pty Ltd – Additional equipment – poly pipe
Murray Zircon Pty Ltd – Purchase of Image Resources Equipment
Murray Zircon Pty Ltd – Refund of Wet Concentrator Plant dismantling costs incurred
by Image Resources
Spouse of Patrick Mutz – The Company purchases travel expenses from a national travel
agency of which his spouse is an agent and receives a commission. The amount
disclosed is an estimate of the fees and commissions which is shared between the
agency and the spouse of Patrick Mutz
Year to
31 Dec
201 9
($)
-
-
(238)
(88,697)
-
(4,000,000)
(417,500)
75,230
1,116,368
Year to
31 Dec
2018
($)
-
(3,150)
(1,996)
(200,000)
(5,955)
-
-
-
-
NOTE 24 FINANCIAL INSTRUMENTS DISCLOSURE
a)
Financial Risk Management Policies
The Company’s financial instruments consist of deposits with banks, receivables, available-for-sale financial assets,
payables and borrowings.
Risk management policies are approved and reviewed by the board. The use of hedging derivative instruments is not
contemplated at this stage of the Company’s development.
Specific Financial Risk Exposure and Management
The main risks the Company is exposed to through its financial instruments, are commodity price, interest rate and liquidity
risks.
Interest Rate Risk
Exposure to interest rate risk arises on financial assets and fina ncial liabilities recognised at reporting date whereby a
future change in interest rates will affect future cash flows or the fair value of fixed rate financial instruments.
Liquidity Risk
(3,583)
(3,730)
(3,318,420)
(214,831)
The Company manages liquidity risk by monitoring forecast cash flow s, cash reserves, liquid investments, receivables,
financial liabilities and commitments.
Total amounts owing to directors and/or director -related parties and related entities at 31 December 2019 were Nil (31 December
2018 : $Nil ). All transactions were incurred on normal commercial terms and were arm’s length transactions.
Murray Zircon Pty Ltd is a related party due to it holding a 19.56% interest in the shares of the Company.
Compensation of key management personnel of the Company
Short- term employee benefits
Post-employment benefits
Equity-settled share-based payments
Short-term employee benefits
31 Dec
2019
($000)
31 Dec
2018
($000)
1,978,474
102,074
-
1,116,602
68,638
-
2,080,548
1,185,240
These amounts include fees and benefits paid to non -executive Chair and non-executive directors as well as all salary and paid
leave benefits awarded to executive directors and other KMP.
Post-employment benefits
These amounts are the costs of superannuation contributions payable for the period.
Equity-settled share-based payments
Capital Risk
Management controls the capital of the Company in order to maintain the appropriate worki ng capital position to ensure
that the Company can fund its oper ation, continue as a going concern and continue to provide returns for shareholders
and benefits for other stakeholders. Capital is managed by assessing the Company’s financial risks and adjus ting its capital
structure in response to changes in these risks and in the market.
The working capital position of the Company at 31 December 2019 and 31 December 201 8 was as follows:
Cash and cash equivalents
Restricted cash
Trade and other receivables
Inventory
Trade and other payables and provisions
Borrowings
Working capital position
Credit Risk
31 Dec
2019
($000)
49,935
55
593
16,789
(16,902)
(37,679)
12,791
31 Dec
2018
($000)
11,886
55
1,463
9,247
(12,232)
(12,565)
(2,146)
Credit risk refers to the risk that a counterparty will default on its contractua l obligations resulting in financial loss to the
Company. Credit risk arises from cash and deposits with financial institutions as well as credit exposures to outstanding
This amount is calculated as the fair value of the options and represents the value of the services received during the perio d
receivables.
the options are held over the financial period. This v alue was calculated using the Black -Scholes option pricing model. Further
information on the share-based payment transaction is disclosed in Note 21.
Further key management personnel remuneration information has been included in the Remuneration Report
section of the Directors Report.
The Company is not exposed to credit risk through sales of mineral sand s product due to a letter of credit being in place
prior to a mineral sands shipment leaving port. The maximum exposure to credit risk, excluding the value of any collate ral
or other security, at balance date to recognised financial assets, is the carrying amount, net of any provisions for
impairment of those assets, as disclosed in the Statement of Financial Position and notes to the financial statements.
The Company has lodged cash deposits (designated as restricted cash above) totalling $54,667 (201 8: $54,667) with the
bank as collateral security for office lease property managers for rental guarantees and also security for company credit
cards.
52
Image Resources NL
- 49 -
- 51 -
2019 Annual Report
53
NNootteess ttoo tthhee ffiinnaanncciiaall ssttaatteemmeennttss ((ccoonntt..))
For the Year Ended 31 December 2019
Notes to the financial statements (cont.)
For the Year Ended 31 December 2019
NNootteess ttoo tthhee ffiinnaanncciiaall ssttaatteemmeennttss ((ccoonntt..))
For the Year Ended 31 December 2019
Notes to the financial statements (cont.)
For the Year Ended 31 December 2019
The following table provides information regarding the credit risk relating to cash and cash equivalents , term deposits and
The table below summarises the maturity profile of the Company’s’ financial liabilities according to their contractual
restricted cash based on credit ratings:
A rated
Financial Instruments
31 Dec
2019
($000)
49,990
31 Dec
2018
($000)
11,941
The Company holds no derivative instruments, forward exchange contracts or interest rate swaps.
Financial Instrument composition and maturity analysis
The table below reflects the undiscounted contractual settlement terms for financial instruments .
Weighted
Average
Effective
Interest
Rate %
Fixed
Interest
Rate
($000)
Floating
Interest
Rate
($000)
Non-
Interest
Bearing
($000)
31 December 2019
Financial Assets:
Cash and cash equivalents
Restricted cash
Trade and other receivables
Available-for-sale financial assets
Total Financial Assets
0.02%
Financial Liabilities:
Trade and other payables and provisions
Borrowings
Total Financial Liabilities
13%
-
-
-
-
-
-
56,537
56,537
49,935
55
-
-
49,990
-
-
593
27
620
-
-
-
16,983
-
16,983
Total
($000)
49,935
55
593
27
50,610
16,983
56,537
73,520
Net Financial Assets
(56,537)
49,990
(16,363)
(22,910 )
31 December 2018
Financial Assets:
Cash and cash equivalents
Restricted cash
Trade and other receivables
Available-for-sale financial assets
Total Financial Assets
0.57%
Financial Liabilities:
Trade and other payables and provisions
Borrowings
Total Financial Liabilities
12.5%
Weighted
Average
Effective
Interest
Rate %
Fixed
Interest
Rate
($000)
Floating
Interest
Rate
($000)
11,886
55
-
-
Non-
Interest
Bearing
($000)
-
-
1,463
27
Total
($000)
11,886
55
1,463
27
11,941
1,490
13,431
-
-
-
12,232
-
12,232
12,232
63,953
76,185
-
-
-
-
-
-
63,953
63,953
maturities. The amounts disclosed are based on contractual undiscounted cash flows. As a result, these balances may not
agree with the amounts disclosed in the statement of financial position:
31 December 2019
Trade and other payables and provisions
Borrowings
31 December 2018
Trade and other payables and provisions
Borrowings
Less than
3 months
($000)
16,902
9,402
26,304
Less than
3 months
($000)
12,232
4,000
16,232
3 to 12
Months
($000)
-
28,205
28,205
3 to 12
Months
($000)
-
8,565
8,565
1 to 5
years
($000)
-
18,803
18,803
1 to 5
years
($000)
-
51,388
51,388
Total
($000)
16,902
56,410
73,312
Total
($000)
12,232
63,953
76,185
Please refer to Note 15 for further details of the Senior Secured Debt Facility .
b)
Financial Instruments Measured at Fair Value
The financial instruments recognised at fair value in the statement of financial position have been analysed and classified
using a fair value hierarchy reflecting the significance of the inputs used in making the measurements. The fair value
hierarchy consists of the following levels:
•
•
•
Quoted prices in active markets for identical assets or liabilities (Level 1);
Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly
(as prices) or indirectly (der ived from prices) (Level 2); and
Inputs for the asset or liability that are not based on observable market data (unobservable inputs) (Level 3).
31 December 2019
Financial Assets:
Financial assets at fair value through profit or loss:
Available-for-sale financial assets:
-
Listed investments
31 December 2018
Financial Assets:
Financial assets at fair value through profit or loss:
Available-for-sale financial assets:
-
Listed investments
Level 1
($000)
Level 2
($000)
Level 3
($000)
Total
($000)
27
27
-
-
-
-
27
27
Level 1
($000)
Level 2
($000)
Level 3
($000)
Total
($000)
27
27
-
-
-
-
27
27
Net Financial Assets
(63,953)
11,941
(10,742)
(62,754)
54
Image Resources NL
- 52 -
- 52 -
2019 Annual Report
55
NNootteess ttoo tthhee ffiinnaanncciiaall ssttaatteemmeennttss ((ccoonntt..))
For the Year Ended 31 December 2019
Notes to the financial statements (cont.)
For the Year Ended 31 December 2019
DDiirreeccttoorrss DDeeccllaarraattiioonn
Directors’ Declaration
Sensitivity Analysis – Interest rate risk
The directors of the Company declare that:
The Company has performed a sensitivity analysis relating to its exposure to interest rate risk at balance date. The
sensitivity analysis demonstrates the effect on the financial period results and equity which could result from a change in
1.
the accompanying financial statements and notes are in accordance with the Corporations Act 2001 and:
this risk.
As at balance date, the effect on loss and equity as a result of changes in the interest rate on financial assets, with all
other variables remaining constant would be as follows:
Change in loss – increase/(decrease):
-
-
Increase in interest rate by 2%
Decrease in interest rate by 2%
Change in equity – increase/(decrease):
Increase in interest rate by 2%
-
-
Decrease in interest rate by 2%
31 Dec
2019
($000)
(500)
500
500
(500)
31 Dec
2018
($000)
(119)
119
119
(119)
(a)
(b)
(c)
comply with Accounting Standards and the Corporations Act 2001;
give a true and fair view of the financial position as at 31 December 201 9 and performance for the year ended
on that date of the Company; and
the audited remuneration disclosures set out in the Remuneration Report section of the Directors’ Report for
the year ended 31 December 2019 complies with section 300A of the Corporations Act 2001;
2.
the Chief Financial Officer has declared pursuant to section 295A(2) of the Corporations Act 2001 that :
(a)
(b)
(c)
the financial records of the company for the financial year have been properly maintained in accordance with
section 286 of the Corporations Act 2001;
the financial statements and the notes for the financial year comply with Accounting Standards; and
the financial statements and notes for the financial year give a true and fair view;
3.
4.
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;
the directors have included in the notes to the financial statements an explicit and unreserved statement of
compliance with International Financial Reporting Standa rds.
This declaration is made in accordance with a resolution of the Board of Directors.
ROBERT B ESLEY
CHAIRMAN
PERTH
Dated this 28 February 2020
56
Image Resources NL
- 53 -
- 55 -
2019 Annual Report
57
Independent Auditor’s Report
Independent Auditor’s Report (cont.)
Independent Audit Report to the members of Image Resources NL
Report on the Audit of the Financial Report
Opinion
Independent Audit Report to the members of Image Resources NL
We have audited the financial report of Image Resources NL (the Company), which comprises the statement of financial
position as at 31 December 2019, the statement of profit or loss and other comprehensive income, the statement of changes
in equity, the 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.
Report on the Audit of the Financial Report
In our opinion, the accompanying financial report of the Company is in accordance with the Corporations Act 2001, including:
Opinion
in line with changes in observable assumptions,
timing and the latest estimates of the costs to be
incurred based on area of disturbance at reporting
date.
This area is a key audit matter as the determination
of the restoration liability involves a level of complex
calculations
significant management
judgement.
and
• Assessing the planned timing of environmental restoration and
demobilisation provisions through comparison to mine plans and
reserves.
• Assessing
the competence, scope and objectivity of
company’s external experts used in determination of
provisions estimate.
the
the
• Analysed inflation rate and discount assumptions in the provision
calculation to current market data and economic forecasts.
• Evaluating the completeness of the provisions estimate to the
company’s analysis of each operating location to identify where
disturbance requires rehabilitation or demobilisation and our
understanding of the company’s operations.
(i) giving a true and fair view of the Company's financial position as at 31 December 2019 and of its financial performance
We have audited the financial report of Image Resources NL (the Company), which comprises the statement of financial
position as at 31 December 2019, the statement of profit or loss and other comprehensive income, the statement of changes
for the year then ended; and
in equity, the 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.
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001.
In our opinion, the accompanying financial report of the Company is in accordance with the Corporations Act 2001, including:
Basis for Opinion
(i) giving a true and fair view of the Company's financial position as at 31 December 2019 and of its financial performance
for the year then ended; and
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are
further described as in the Auditor's Responsibilities for the Audit of the Financial Report section of our report. We are
independent of the Company 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.
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are
further described as in the Auditor's Responsibilities for the Audit of the Financial Report section of our report. We are
independent of the Company 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.
Key Audit Matters
In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001.
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
report of the current year. 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. We have determined the matter
described below to be a key audit matter to be communicated in our report.
Key Audit Matters
Provision for Rehabilitation
Refer to Note 14, Provisions and accounting policy Notes 1o and 1t
Key Audit Matter
As at 31 December 2019, the company has a
liability of $15,298,000 relating to the estimated
rehabilitation, decommissioning and
cost of
restoration relating
to areas disturbed during
operation in Boonanarring but not yet rehabilitated.
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 year. 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. We have determined the matter
described below to be a key audit matter to be communicated in our report.
How our audit addressed the key audit matter
Our audit work included, but was not restricted to, the following:
• Obtaining an Independent expert valuation report and external
underlying documentation for their determination of future required
activities, their timing and associated cost estimations. We also
determined the nature and quantum of costs contained in the
How our audit addressed the key audit matter
provision estimate.
Our audit work included, but was not restricted to, the following:
Provision for Rehabilitation
Refer to Note 14, Provisions and accounting policy Notes 1o and 1t
The provision is based upon current cost estimates
Key Audit Matter
and has been determined on a discounted basis
As at 31 December 2019, the company has a
with reference to current legal requirements and
liability of $15,298,000 relating to the estimated
the
technology. At each
rehabilitation, decommissioning and
cost of
rehabilitation liability is reviewed and re-measured
to areas disturbed during
restoration relating
operation in Boonanarring but not yet rehabilitated.
reporting date
• Testing the accuracy of historical restoration and rehabilitation
provisions by comparing to actual expenditure.
• Obtaining an Independent expert valuation report and external
underlying documentation for their determination of future required
activities, their timing and associated cost estimations. We also
determined the nature and quantum of costs contained in the
provision estimate.
58
Image Resources NL
The provision is based upon current cost estimates
and has been determined on a discounted basis
with reference to current legal requirements and
the
technology. At each
reporting date
rehabilitation liability is reviewed and re-measured
• Testing the accuracy of historical restoration and rehabilitation
provisions by comparing to actual expenditure.
Revenue Recognition
Refer to Note 3, Operating sale revenue and accounting policy Notes 1a
Key Audit Matter
The entity has reported revenue of AUD146 million
from sales of minerals.
How our audit addressed the key audit matter
Our audit work included, but was not restricted to, the following:
• considering the appropriateness of the revenue recognition
The application of revenue recognition accounting
standards is complex and involves a number of key
judgements and estimates.
There is also a risk around the timing of revenue
recognition, particularly focused on the contractual
terms of delivery and location of the customers. In
the entity has first time recognized
addition,
revenue in its financial statements.
accounting policies.
• understanding
including
performance of an end to end walkthrough of the revenue
assurance process and identifying the relevant controls.
revenue processes
the significant
• testing the design and operating effectiveness of the relevant
controls
• performing cut off procedures
Based on these factors, we have identified revenue
recognition as a key risk for our audit
• assessing the transfer of control to the customer by reviewing
contracts and shipping documentation.
• verifying a sample of transactions with supporting documents
• ensuring adequate disclosure in the financial statements
Other Information
The directors are responsible for the other information. The other information obtained at the date of this auditor's report is
included in the annual report, 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 on the other information obtained prior to the date of this auditor's report, 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.
2019 Annual Report
59
Independent Auditor’s Report (cont.)
Independent Auditor’s Report (cont.)
INDEPENDENT AUDITOR’S REPORT
Responsibilities of Directors for the Financial Report
Opinion
In our opinion, the Remuneration Report of Image Resources NL for the year ended 31 December 2019 complies with
section 300A of the Corporations Act 2001.
Elderton Audit Pty Ltd
Nicholas Hollens
Managing Director
28 February 2020
Perth
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 Company’s ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless
the directors either intend to liquidate the Company 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 the 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 Company’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 Company’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 Company 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 year 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
We have audited the Remuneration Report included in pages 21 to 26 of the directors’ report for the year ended 31 December
2019. The directors of Image Resources NL 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 in accordance with Australian Auditing Standards.
60
Image Resources NL
- 55 -
2019 Annual Report
61
ASX Additional Information
ASX ADDITIONAL INFORMATION
ASX Additional Information (cont.)
ASX ADDITIONAL INFORMATION
Image Resources NL (ASX: IMA) provides the following information as required by the ASX Listing Rules. The information is
Substantial shareholders:
The names of substantial shareholders who have notified the Company in accordance with section 617B of the Corporations Act
2001 are:
Murray Zircon Pty Ltd together with Orient Zirconic Resources (Australia) Pty Ltd, Guangdong
Orient Zirconic Ind. Sci. Tech. Co. Ltd. And XQ (HK) Enterprises Limited
Li Huang Cheng and Vestpro International Limited
Number of Ordinary
Shares
266,084,033
172,770,065
Voting Rights
The voting rights attaching to ordinary shares are governed by the Constitution. On a show of hands every person present who
is a Member or representative of a member shall have one vote, and on a poll, every member present in person or by proxy or
by attorney or duly authorised representative shall have one vote for each fully paid ordinary share held. None of the options
have any voting rights.
Unquoted Securities
Class
Holders of 20% or more of the class
Number of
Securities
Number of
Holders
Holder Name
Number of
Securities
Warrants exercisable at $0.1365 expiring
14,285,714
20/05/2023
Warrants exercisable at $0.11385 expiring
21,525,000
2
1
Jett Capital Advisors
12,035,714
LLC
UBS Nominees Pty
21,525,000
24/05/2023
Ltd
current as at 14 February 2020.
Distribution of Equity Securities
1
1,001
5,001
10,001
100,001
-
-
-
-
1,000
5,000
10,000
100,000
and over
Ordinary shares
Number of holders
Number of shares
285
518
318
856
398
2,375
151,942
1,571,123
2,615,312
35,173,576
941,467,946
980,979,899
The number of shareholders holding less than a marketable parcel of
shares are:
481
489,006
Twenty Largest Shareholders:
The names of the twenty largest holders of quoted ordinary shares are:
Listed ordinary shares
1
2
3
4
5
6
7
8
9
9
Murray Zircon Pty Ltd
Vestpro International
HSBC Custody Nominees (Australia) Limited
Orient Zirconic Resources (Australia) Pty Ltd
Million Up Ltd
National Nominees Limited
Citicorp Nominees Pty Limited
Perfect Well Industrial Limited
Ava Cartel Sdn Bhd
TQ International
10 Miss Choy Fuan Ku
11
Pontian Orico Plantations Sdn Bhd
12 Mrs Shumei Chen
13
14
15
Delphi Unternehmensberatung Aktiengesellschaft
Brazil Farming Pty Ltd
Ribton Superannuation Fund Pty Ltd
16 Mr Lim Pang Soo
17
18
UBS Nominees Pty Ltd
J P Morgan Nominees Australia Pty Limited
19 Miss Chong Yuen Soo
20
Target Range Pty Ltd
Number of
shares
191,902,001
131,936,921
62,305,125
51,761,950
40,624,754
26,370,821
22,971,964
22,420,082
18,000,000
18,000,000
14,330,000
11,539,728
11,050,000
11,049,332
10,500,000
10,100,000
10,000,000
9,350,147
8,418,936
8,122,043
7,300,000
Percentage of
ordinary shares
19.56%
13.45%
6.35%
5.28%
4.14%
2.69%
2.34%
2.29%
1.83%
1.83%
1.46%
1.18%
1.13%
1.13%
1.07%
1.03%
1.02%
0.95%
0.86%
0.83%
0.74%
698,053,804
71.16%
62
Image Resources NL
- 59 -
- 60 -
2019 Annual Report
63
Schedule of Tenements
SCHEDULE OF TENEMENTS
Location
Tenement
Status
Project
Equity (%)
Holder/Manager
Other
CORPORATE
DIRECTORY
Directors
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
E28/1895
Granted
ERAYINIA
E70/2636
Granted
COOLJARLOO
E70/2844
Granted
BIDAMINNA NTH
E70/2898
Granted
COOLJARLOO
E70/3032
Granted
GINGIN
E70/3041
Granted
REGANS FORD SOUTH
E70/3100
Granted
QUINNS HILL
E70/3192
Granted
BOOTINE
E70/3298
Granted
BIDAMINNA -PARK
E70/3494
Granted
BRYALANA
E70/3720
Granted
BLUE LAKE
E70/3892
Granted
CHAPMAN HILL
E70/3997
Granted
MUNBINIA
E70/4077
Granted
DARLING RANGE
E70/4244
Granted
WOOLKA
E70/4245
Granted
WINOOKA
M70/0448
Granted
GINGIN SOUTH
M70/1192
Granted
RED GULLY
M70/1194
Granted
BOONANARRING
P70/1516
Granted
COOLJARLOO
M70/1311
Granted
BOONANARRING NORTH
G70/0250
Granted
BOONANARRING
R70/0051
Granted
COOLJARLOO NORTH
M70/1305
Application
ATLAS
P70/1520
Application
COOLJARLOO
E70/4631
Granted
MUNBINIA WEST
E70/4656
Granted
WINOOKA NORTH
E70/4663
Granted
BIBBY SPRINGS
E70/4689
Granted
BOONANARRING WEST
E70/4779
Granted
MIMEGARRA
E70/4794
Granted
REGANS FORD NORTH
E70/4795
Application
BIDAMINNA SOUTH
E70/4919
Granted
ORANGE SPRINGS
E70/4946
Granted
RED GULLY NORTH
E70/4949
Granted
NAMMEGARRA
E28/2742
Granted
MADOONIA DOWNS
E70/5192
Application
WINOOKA SOUTH
E70/5193
Granted
CHAPMAN HILL NORTH
E70/5213
Application
GINGINUP HILL
E70/5268
Granted
WOOLKA SOUTH
E70/5306
Application
BOONANARRING HILL
100%
100%
100%
100%
100%
100%
100%
100%
90%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100% pending
grant
100% pending
grant
100%
100%
100%
100%
100%
100%
100% pending
grant
100%
100%
100%
100%
100% pending
grant
100%
100% pending
grant
100%
100% pending
grant
64
Image Resources NL
- 61 -
Mr Robert Besley
Mr Patrick Mutz
Mr Chaodian Chen
Mr Aaron Chong Veoy Soo
Mr Huancheng Li
Mr Peter Thomas
Mr George Sakalidis
Mr Fei Wu
Non-Executive Chairman
Managing Director
Non-Executive Director
Non-Executive Director
Non-Executive Director (Alternate: Dennis Lee appointed 5 February 2020)
Non-Executive Director
Executive Director - Exploration
Non-Executive Director
ARF Maslin 10%
DORAL JV
Company Secretary
Mr Dennis Wilkins (DW Corporate)
Principal Place of Business & Registered Office
Ground Floor
23 Ventnor Avenue
West Perth WA 6005
Contact Details
T: +61 8 9485 2410
E:
info@imageres.com.au
W: www.imageres.com.au
Australian Business Number
Auditors
ABN: 57 063 977 579
Share Registry
Automic Pty Ltd
Level 5
126 Phillip Street,
Sydney NSW 2000
T: 1300 288 664 (within Australia)
T: +61 (0) 2 9698 5414 (International)
E: hello@automic.com.au
W: www.automicgroup.com.au
Elderton Audit Pty Ltd
(Formerly Greenwich & Co Audit Pty Ltd)
Level 2
267 St Georges Terrace
Perth WA 6000
T: +61 8 6324 2900
Stock Exchange
Australian Securities Exchange (ASX)
ASX Code - IMA (Fully paid shares)
Issued Capital
980,979,899 fully paid ordinary shares
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