ANNUAL
REPORT
2020
FOCUSED ON
HIGH-VALUE ZIRCON
ABOUT IMAGE RESOURCES
Image Resources NL (ASX: IMA) is a mineral sands focused mining company operating an open-cut mine and ore
processing facility at its 100%-owned, high-grade, zircon-rich Boonanarring Project, located 80km north of Perth
in the infrastructure rich North Perth Basin.
BOONANARRING PROJECT
OPERATIONAL PERFORMANCE
A uniquely rich and valuable mineral sands project.
Demonstrating a solid track record of operational performance.
SOCIAL LICENSE
Integrated into the local community with an
GROWTH
Exciting exploration upside and an enviable portfolio of
environmentally friendly ethos.
potential development projects.
IMAGE BUSINESS FLOWCHART
Social License and Community
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Mining
Processing
Trucking
Shipping
Classic dry, open-
3.7Mtpa conventional
HMC trucked to
Bulk shipments to China out
cut mining utilising
wet concentrate plant
Bunbury port.
of Bunbury WA under life-of-
standard truck and
producing a high-
shovel fleet.
quality HMC.
mine offtake contracts based
on market prices.
Rehabilitation
Solar Farm
Once mining is
On average 25% of
complete, overburden is
electricity requirements
returned (as required),
generated from solar.
topsoil is replaced and
the land is re-seeded.
Social License and Community
Global Markets for
Mineral Sands
Zircon and titanium
contained in Image HMC is
further processed into final
products with a wide range
of applications globally.
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2020 HIGHLIGHTS
A$176
million
CY2020 revenue
Up 21% year-on-year
312,000
tonnes
HMC tonnes sold
Up 31% year-on-year
A$86
million
Project EBITDA
Up 19% year-on-year
CONTENTS
2
2
5
8
16
20
21
26
32
33
34
35
36
37
38
61
62
66
68
Business Review
Chairman’s Report
Managing Director’s Report
Review of Operations
Resources and Reserves Schedule
Financial Report
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
MINING
Classic dry, open-cut mining utilising
standard truck and shovel fleet.
CHAIRMAN’S REPORT
Dear Shareholders,
On behalf of your Board of Directors,
I am pleased to report that your
Company has completed another
very successful year of operation
despite the challenges posed by
I am also pleased to report that despite
all the challenges posed by COVID-19,
your Company was able to achieve
its production and sales targets and
control its costs so as to meet all its
original market guidance ranges. This is
the onset and persistence of the
testimony to our operating team and their
COVID-19 pandemic.
outstanding efforts.
Your Company has now successfully
The emergence of the COVID-19 pandemic
completed its second full year (CY2020)
will almost certainly be recorded as one
of the most unexpected, life-changing
of mining operations and, as forecast,
results were better than those achieved in
events in recent history. The actions taken
CY2019.
by governments around the world to
minimise the spread of the virus and loss
of lives, affected the lives and livelihoods
of individuals and families, businesses
and organisations, in arguably every
community, city, state and nation on earth.
KEY HIGHLIGHTS:
•
Total revenue of A$176m
(up from A$146m in CY2019);
In Australia, we are perhaps luckier than
• Project EBITDA of A$86m
most other countries with limited exposure
(up from A$72m in CY2019);
to the virus, particularly in the mining
industry.
I am pleased to advise your Company
proactively responded to all the necessary
changes to day-to-day business
operations as required by State and
Commonwealth government mandates and
recommendations, and continues to do its
part to minimise the spread of the virus. We
also adapted to changing global economic
conditions as needed.
• Net Profit after Tax of A$25m
(up from A$21m in CY2019).
We finished the year in a very similar cash
position as CY2019 with A$51m in the
bank, however where CY2019 ended with
a net debt position of A$6m, CY2020
ended with a net cash position of A$34m.
“
DESPITE THE
CHALLENGES FROM
COVID-19, WE ACHIEVED
PRODUCTION AND
SALES TARGETS AND
CONTROLLED COSTS
TO MEET ALL OUR
ORIGINAL MARKET
GUIDANCE RANGES.
”
REHABILITATION
Once mining is complete, overburden
is returned (as required), topsoil is
replaced and the land is re-seeded.
Subsequent to the end of CY2020, on
land surface in accordance with license
I also want to thank my fellow Directors
10 February 2021, as a result of our
conditions and approved proposals and
for their leadership and guidance
strong cash position, the remaining high
plans. In CY2020 your company has
to direct the Company through the
interest debt was repaid and Image
successfully completed the rehabilitation
unprecedented challenges posed by
moved to a debt-free position three
of an initial 13-hectare section of the
COVID-19.
months earlier than originally scheduled.
mine, including revegetation.
This action has allowed your Board to
consider the payment of an inaugural
dividend to all shareholders.
Your Board places a strong emphasis
employees of your Company, I want to
on health and safety and is pleased to
say thank you to all our shareholders
report only a single lost time injury for
for your continuing support. Your
Finally, on behalf of the Board and
Your Board is particularly proud of the
CY2020.
Company’s environmental achievements.
Construction was finalised on a solar
farm at Boonanarring to incorporate
renewable energy for 25% of its
average electricity requirements, at no
additional cost to the Company. This
has established Image as one of the few
mining companies in Australia with the
green credentials of using direct solar
power to significantly reduce our carbon
footprint.
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 another very
productive year. I would also like to
acknowledge the strong leadership of
our senior executive Team under the
direction of our Managing Director Mr
Patrick Mutz. Your Team successfully
navigated the Company through the
Board is cognisant of the continuing
challenges facing the Company and
we are confident that with our proven
operational Team and your Company’s
debt-free position, unhindered by
lenders restrictions on investment
opportunities going forward, we will
continue to be successful in 2021 and
beyond.
In addition, while we are actively mining
novel challenges of CY2020, and they
we are also conducting progressive
are well positioned to lead the Company
Robert Besley
Non-Executive Chairman
rehabilitation to restore the original
through its next phase of ‘growth’.
2
Image Resources NL
2020 Annual Report
3
“
IN ADDITION TO MEETING
MARKET GUIDANCE, WE
HAVE INCORPORATED
RENEWABLE SOLAR
POWER AND COMPLETED
REHABILITATION OF
13-HECTARES OF INITIAL
MINE AREA.
”
MANAGING DIRECTOR’S REPORT
Dear Shareholders,
Despite the significant challenges
posed by COVID-19 during the 2020
calendar year, our Image Team was
able to successfully complete its
second full year as an active mining
With numerous companies throughout
Australia cancelling their annual guidance
due to the uncertainties of economic
impacts from the pandemic, Image
considered changing its guidance, but
refrained based on indications that China
company and tenaciously maintained
was proactively dealing with the virus and
and met its original market guidance,
its economy was showing early signs of
despite most other operating
recovery by the end of June.
companies cancelling their guidance
As a consequence of positive relations
due to global economic uncertainties.
with our off-take partners, our Team was
Following on the heels of the updated
Ore Reserve estimate for Boonanarring
published in December 2019, which
resulted in a significant increase in heavy
mineral ore grade, albeit with lower overall
ore tonnes, your Team delivered record
high heavy mineral concentrate (HMC)
production in Q1 and very similar results
in Q2.
These results were achieved despite
the significant challenges of having to
modify day-to-day work practices and
responding to the various travel restrictions
implemented by State and Commonwealth
government medical authorities and
regulators to prevent the spread of
COVID-19. However, due to the onset of
the virus, which triggered major declines in
global markets, HMC sales to our off-take
partners in China were curtailed to record
low levels in Q1. Sales improved to more
reasonable levels in Q2, but due to record
HMC production in 1H, HMC inventory
reached record highs at the end of Q2.
able to achieve record high HMC sales
in Q3, and then exceed that sales record
in Q4 to end the year within the original
market guidance sales range.
Tonnes of HMC sold in CY2020 were
31% higher than in CY2019, however
revenue was only 20% higher than 2019
due to circumstances outside of Image’s
control, being a softening of zircon prices
and quarter to quarter increase in the
USD:AUD foreign exchange rate, which
amounted to a 14% unfavourable increase
in the exchange rate for the year.
Our Team also achieved HMC production
for 2020 within its market guidance range
with production being 13% higher than in
CY2019. Importantly, from a cost control
standpoint, project operating costs in
dollar terms were 10% lower than the
lower end of the guidance range, and cash
costs per tonne of HMC sold were at the
lower end of their guidance ranges.
SOLAR FARM
On average 25% of
electricity requirements
generated from solar.
2020 Annual Report
5
PROCESSING
3.7Mtpa conventional wet
concentrate plant producing a
high-quality HMC.
4
Image Resources NL
The net result of meeting original sales guidance and
Your company has also taken the bold step of
successfully controlling costs, was completing the
successfully demonstrating concurrent mining and
year with a revenue to cost ratio of just under 2:1,
mine rehabilitation, by completing rapid rehabilitation
and having $51 million cash in the bank and a net
of the first thirteen-hectare area of the Boonanarring
cash position of $34 million.
mine, including re-establishment of the vegetation.
Subsequent to the end of the year, this strong cash
Topsoil was removed from this initial area of the mine
balance was the catalyst for early repayment of the
in April 2018, followed by mining, tailings disposal,
remaining debt and paving the way for your Board
overburden return, recontouring and topsoil return.
of Directors to consider offering shareholders an
This area was then reseeded and re-vegetation
inaugural dividend.
established in August 2020, just 28 months after
Your company may only be two years old as an
initial topsoil removal.
active miner, however management has from
Your company has also taken a proactive approach
the outset been focused on aspects of the
to reduce its carbon footprint by working with
business beyond just mining operations. These
Sunrise Energy Group to install a solar farm adjacent
include the health, safety and well-being of our
to the Boonanarring wet concentration plant. This
employees, consultants, contractors, visitors and
farm is designed to provide on average 25% of
members of the local community; protection of the
Boonanarring project electricity requirements from
environment; local employment; positive landowner
renewable solar energy.
and community relations and support for local
business and not-for-profit organisations. In short,
your company has been and remains focused on
maintaining its social license to operate.
The farm became operative in September 2020,
and for the full December quarter, 30% of the
project’s electricity requirements were supplied
from the solar farm, at unit costs slightly below
grid power costs. This makes your company
the only mineral sands mining company in
Australia with the green credentials of using
solar power directly to offset a significant portion
of its carbon emissions. CY2020 results have
cemented your company as a credible mining
operator, and this allows a greater focus on a
‘growth’ strategy for 2021. This will include:
•
continuing profitable operations and
growing total ore reserves inventory for
longer projected mine life;
•
scoping study on other project(s) in our
current portfolio such as Bidaminna, for
its potential as a second profitable mining
centre operating in parallel with current dry
mining operations;
•
evaluation of currently held Erayinia gold
tenement to determine economic viability;
and
•
assessment of projects outside of our
current portfolio for potential involvement
with targets with long-lived ore reserves.
I want to thank all our employees, contractors,
consultants, offtake partners and local
landowners and community members for all their
diligent effort and support to help our company
achieve such positive results for CY2020,
especially given the challenges of the COVID
pandemic.
Finally, I wish to thank our Board of Directors
and all our shareholders for their continuing
support over this very challenging past year.
The Image Team and I look forward to what
promises to be another very exciting year of
operations and opportunities for ‘growth’ for
Image Resources.
Patrick Mutz
Managing Director
6
Image Resources NL
2020 Annual Report
7
REVIEW OF
OPERATIONS
Image Resources NL (“Image” or “the
Company”) successfully completed its
second full year (CY2020) of operations
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 met
or beat market guidance despite the novel
challenges stemming from negative global
economic impacts following the emergence
of COVID-19 and the variety of restrictive
measures implemented by State and
Commonwealth governments to effectively
control the spread of the virus.
2020 IN REVIEW
Operations
In CY2020, the Company successfully completed
its second full year as an active mining company.
In the March 2020 quarterly report the Company
announced record high quarterly heavy mineral
concentrate (HMC) production at 84kt with mining
and processing activities relatively unaffected by
the emergence of COVID-19. HMC sales were
however impacted during the quarter with only
45kt shipped in total and with a 3rd shipment
planned for the quarter delayed in to early April
2020. Despite the uncertainties created by
COVID-19 the Company maintained its original
guidance on sales, production and costs.
During the March quarter, Sunrise Energy Group
commenced construction of a 2.3MW solar farm at
Boonanarring, designed to supply the project with,
on average, 25% of its electricity requirements.
In the June 2020 quarterly report, the Company
outlined another very strong HMC production
quarter at 84kt. Shipments increased moderately
to 65kt for the quarter with HMC inventory building
to 114kt. The average realised price for the
half-year of A$646/t HMC against C1 cash costs
of A$371/t, generated a strong margin of over
A$275/t HMC shipped.
8
Image Resources NL
TRUCKING
HMC trucked to Bunbury port.
ONE
LTI
Zero Image
Employee LTIs
A$76
million
Project Net
Cashflow
306,000
tonnes HMC produced
Up 13% year on year
SOLAR
POWER
Installed and supplying
on average 25% of
mine site power
REHABILITATION
Completed on initial 13 hectares mined
By the end of the June quarter the Company
had only a small remaining net debt with a cash
balance of A$36 million against outstanding
loan notes of A$38 million. Once again, despite
the ongoing effects of COVID-19 on the global
economy, the Company maintained its original
guidance on sales, production and costs.
In the September 2020 quarter sales increased
43% to a record high of almost 93kt resulting in
an improvement in the net cash position of the
Company to A$22 million. Higher sales resulted
in a reduction in HMC stocks to 83kt. C1 Costs
and AISC per tonne of HMC sold decreased
by around 25% compared to the June quarter
and, despite a fall in sales price per tonne HMC,
mainly due to lower zircon content in HMC sold,
margins, based on C1 costs, increased slightly to
A$279/t. Once again, original guidance on sales,
production and costs was maintained.
During the September quarter, Sunrise
Energy Group completed construction and
commissioning of the solar farm at Boonanarring
and the first supply of renewable power was
supplied to the mine.
The December 2020 quarter was highlighted
with new record high HMC sales of 110kt. The
net cash position increased to A$34 million
at year end with an additional A$11 million
being received in early January 2021 for a late
December shipment. The Australian dollar
price per tonne for HMC dropped slightly mainly
due to a strengthening AUD against the USD,
however strong sales maintained margins at
A$274/t HMC sold. The net result of record sales
in the September and December quarters was a
confirmation that the Company had met, or beat,
its original market guidance ranges in all areas
for CY2020.
For the full December quarter, the solar farm
supplied approximately 30% of total electricity
requirements at Boonanarring at a slightly lower
cost than grid power. The acceleration of HMC
sales in 2H to the Company’s off-take partners
resulted in total sales of 312kt for CY2020
(compared to 237kt in CY2019), and with HMC
production of 306kt, HMC stocks decreased to
51kt at 31 December 2020 (compared to 57kt at
the end of CY2019).
The average HMC realised price for the full
year was A$566 per tonne (CY2019: A$616/t)
reflecting slightly lower average zircon grades
in HMC sold and lower average zircon market
prices compared to 2019.The Boonanarring
project generated EBITDA of A$85.0 million for
2020 (2019: A$72.5 million) an increase of 17%
year on year.
Production and sales guidance for CY2021 are
290-320kt HMC production and 300-330kt HMC
sales; broadly in line with CY2020 guidance.
2020 Annual Report
9
Start of Rehabilitation on First Image Land Mined
Mineral Sands Commodity 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, and ilmenite) 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
Subsequent to the end of this reporting period, in February
2021, it was announced that the Company had fully repaid
its debt, three months earlier than scheduled under the
Loan Note Subscription Agreement. As a result, all loan note
securities have been, or are being, released, eliminating any
restrictions on the Company’s ability to consider an inaugural
dividend or consider potential investment opportunities.
SOCIAL LICENSE
was largely offset by increasing prices for ilmenite and rutile.
A softening in zircon prices continued into the first quarter
Safety
of 2020, however prices for ilmenite and rutile continued to
strengthen. For the remainder of 2020, zircon prices remained
stable whilst titanium prices continued to improve, However,
lower zircon grades in HMC sold in the second half of 2020
combined with a strengthening AUD against USD exchange
rate, resulted in a drop in average HMC realised prices.
HMC prices decreased from an average A$659 per tonne in
Q1 2020 to an average A$521 per tonne in Q4, for an overall
average A$566 per tonne for CY2020 due to shipments being
heavily weighted to the second half of the year.
Corporate
Image recorded one contractor related lost-time injury (LTI)
during calendar year 2020 (2019: 2 LTIs).
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 was
Sales revenue for the year was A$176 million (2019: A$146
reasonably steady for whole of CY2020 and in line with the
million) with project operating and selling costs of A$90
second half of in CY2019.
million (2019: A$74 million) and with full year CY2020 project
EBITDA of A$86 million (2019: A$72 million). During 2020 the
Community
Company generated a Net Profit After Tax of A$24.8 million
(2019: A$20.8 million).
As at 31 December 2020 Image had a cash position of
A$50.8 million (2019: A$49.9 million) and debt of A$17 million
(2019: A$56.4 million). For CY2020, the Company generated
net cash flow from mine operating activities of A$75.8 million
(2019: A$62.9 million).
Image continues to proudly contribute to the local
community, including through local employment. At year end
approximately 50% of the workforce at Boonanarring lived
locally to the operation or within local regional shires. In
addition, the Company has an active and varied community
support and engagement program.
As just one example, Image provides access to a local
community group to graze sheep and cattle on land owned
by the Company that is not being utilised for mining activities,
with proceeds from the sale of these animals being for the
benefit of the local community.
Cows grazing on Image land for the
benefit of the local Gingin community
Commissioning of the solar farm was completed in September
2020 and for the full December quarter, approximately 30%
of electricity requirements for Boonanarring were supplied as
renewable solar energy from the farm, at costs slightly below
grid power prices.
The use of solar power at Boonanarring provides Image
Resources with green credentials and positions the Company
as one of the very few mining companies in Australia to
directly utilise solar energy to offset a substantial portion of its
grid based energy supply, and thereby significantly reducing
its carbon emissions.
Solar farm
Environment
Image is committed to minimising any potential long-term
adverse impacts of its Operations on the environment. The
Company strives to maintain compliance with all of its license
requirements while it actively seeks to identify and incorporate
lasting improvements to certain aspects of the environment
such as soil water retention, by using terracing and blending
clayey materials in the topsoils.
In CY2020 the Company demonstrated its commitment to
concurrent mine rehabilitation by successfully completing
rehabilitation, including topsoil replacement and re-vegetation,
of 13 hectares of the mine, only 28 months following initial
topsoil removal.
The Company has also taken actions to minimise its carbon
footprint by working with Sunrise Energy Group to complete
the construction and commissioning of the 2.3MW solar
farm at Boonanarring, even though the project is fully and
adequately supplied with all its electricity requirements from
the grid.
10
Image Resources NL
2020 Annual Report
11
SHIPPING
Bulk shipments to China out of
Bunbury WA under life-of-mine offtake
contracts based on market prices.
Ore Reserves and Mineral Resources Statement
The goal was set with with expectations that additional Ore
It is important to point out that the potential quantity and
A number of other project areas are being investigated
The Company’s Ore Reserves and Mineral Resources
Statement has been updated for depletion of ore from mining
at Boonanarring through 31 December 2020 and is presented
below.
Estimated Ore Reserves at Boonanarring as at 31 December
2020, comprised 6.1Mt of ore, grading 7.8% total heavy
mineral (HM), with an assemblage of 24.6% zircon in HM, for
total contained zircon of 117kt. In addition, the company has
9.5Mt of Ore Reserves, grading 8.1% HM and 10.6% zircon
in HM at Atlas, with a planned move of the wet concentration
plant and other infrastructure to Atlas after the depletion of
reserves at Boonanarring.
Exploration
Reserves would be identified in the 3.5km long Boonanarring
Southern Extension area covering Boonanarring Blocks E and
F, which has existing access and would require only minimal
additional environmental approval. However, the mineralisation
in this area proved to be too low in heavy mineral grade and
zircon content (given its depth), to qualify as Ore Reserves.
Consequently, the Company’s focus was re-directed to other
surrounding target areas including Boonanarring Northern
Extension Area, Boonanarring Northwestern Extension Area
and Gingin North.
New mineralisation has been identified in all three target areas,
and preliminary study results provide sufficient confidence to
assign Exploration Targets as presented in Table 5. Preliminary
study results were conducted by an independent consultant
and were based on drill samples analysed by independent
grade in the Exploration Targets are conceptual in nature, that
including Regans Ford, Red Gully and Gingin South. These are
there has been insufficient exploration to estimate Mineral
currently being assessed for potential future development and
Resources and that it is uncertain if further exploration will
drilling programmes will be considered where a project area
result in the estimation of Mineral Resources or Ore Reserves.
has been determined to have sufficient high-level economics
Mineral Resources and Ore Reserves can only be determined
and prospects for permissibility for future mining.
with the rigor of detailed review and assessment by qualified
JORC Code Competent Persons. Such reviews were
commenced prior to the end of CY2020 for each of these
areas and will be reported separately in CY2021 when the
assessments are complete.
Subsequent to the end of the reporting period, on 2 March
2021, the Company announced the finalisation of a Farm-
in Agreement with the owners of the King Gold Prospect,
which is located within Image’s Erayinia gold tenement and
has historic gold drilling intercepts that outline a thick, gold
While the Company believes sufficient drilling and assaying,
bearing supergene layer that extends onto Erayinia. This
including composite analysis for mineralogy, have been
Farmin provides Image with a low risk, low-cost opportunity,
conducted to finalise Mineral Resources estimates, further
without obligation, to evaluate the King mineralisation and
drilling and assaying will be completed if and as required to
if deemed attractive to earn up to 80% ownership of the
enable the conversion of the Exploration Targets to Mineral
prospect. Full details of the Farmin were included in the ASX
The Company’s exploration portfolio remains almost
laboratories and included heavy mineral determination and
Resources estimates. In any case, Mineral Resources
announcement of 3 March 2021.
exclusively focused on heavy mineral sands, with the
XRF analysis. Composite samples were then created from
estimates are expected to be completed in Q1 2021.
exception being two adjoining tenements with a focus on gold.
the individual 1m drill sample sachets and were analysed for
All tenements are located in Western Australia and all mineral
mineralogy using a combination of internal XRF measurements
sands related tenements are located in the North Perth Basin
and QEMSCAN analysis by external laboratories.
across a combined area of 1,134 square kilometres. The
two gold tenements cover a combined area of 116 square
Table 5 – Exploration Targets
Tonnes
(million)
HM Grade
(%)
Zircon Grade
(% in HM)
Relative
Strip Ratio*
kilometres.
The vast majority of exploration expenditures during CY2020
involved drilling, analysis and study work under Project
‘MORE’ with the objective of rapidly assessing areas of
Project /
Deposit
Northern
Extension
potential new Ore Reserves, firstly within economic pumping
or hauling distance from the Boonanarring wet concentration
Northwestern
Extension
plant (WCP), and later in the year, within economic proximity
of the Atlas project.
The objective of project ‘MORE’ was achieved, however
the goal of identifying two years of new Ore Reserves at
Boonanarring was not achieved.
Gingin
North
Totals
3-4
4-5
8-9
15-18
10-12
18-20
Same
expected in 1H 2021.
5-6
4-6
6-7
8-10
Shallower
6-8
Shallower
10-11
Drilling programs are also being conducted on several other
project areas to meet minimum expenditure requirements,
investigate new mineralisation extensions, advance the
understanding of the mineralised system and enhance the size
of existing Mineral Resources.
Note: * - compared to current Boonanarring strip ratio (approx. 6:1)
Exploration also focussed on identifying additional Mineral
Resources and Ore Reserves within economic pumping or
hauling distance from the WCP once it is re-located to the
Atlas Project area, with the goal of extending the mine-life to
beyond the current Ore Reserves at Atlas. Preliminary results
appear promising from two nearby, 100%-owned projects,
Helene and Hyperion. Both projects have existing Mineral
“
Resources and Ore Reserves studies underway with reporting
THE COMPANY’S EXPLORATION PORTFOLIO
REMAINS ALMOST EXCLUSIVELY FOCUSED
ON HEAVY MINERAL SANDS, WITH THE
EXCEPTION BEING TWO ADJOINING
TENEMENTS WITH A FOCUS ON GOLD AND
ALL IN WESTERN AUSTRALIA.
”
12
Image Resources NL
2020 Annual Report
13
DELIVERING MINERAL
SANDS COMMODITIES
FOR SUSTAINABLE
GLOBAL GROWTH
ZrO 2 - ZIRCON
Zircon and its derivatives have a vast array of
applications. The largest market for zircon is the
ceramics industry. Approximately 54% of zircon
that is produced is used in finely ground form in
the ceramics industry. 14% is used by the foundry
industry, and approximately 11 - 14% is used in
refractory applications.
CERAMICS
The ceramics industry, by volume, is the largest market
for zircon, consuming over half of the zircon produced
globally. 85% of this is used in tile production.
FOUNDRY SANDS & COATINGS
Zircon is widely used in the foundry industry, mostly in the
form of SAND and FLOUR (milled sand) for casting and
refractory applications.
REFRACTORIES
Refractories are materials that are designed to maintain
strength, dimensional stability and chemical resistance at
high temperature. Some refractory applications include
refractory mortar, refractory linings for glass and metal
furnaces as well as fibres, nozzles, slide gates and valves.
OTHER
Other applications include: pigments in paints;
cosmetics and catalysts; heavy industry uses such
as continued advancement in casting and moulding
processes; and it has an increasing role in biomedical
implants and advanced ceramics.
14
Image Resources NL
GLOBAL MARKETS
FOR MINERAL SANDS
Zircon and titanium contained in
Image HMC is further processed into
final products with a wide range of
applications globally.
TiO 2 - TITANIUM DIOXIDE
Titanium dioxide is produced in two main forms.
The primary form, comprising over 98 percent of
total production, is pigment grade titanium dioxide.
The other form is as an ultrafine (nanomaterial)
product. This form is selected when different
properties, such as transparency and maximum
ultraviolet light absorption, are required.
NANOMATERIALS
Titanium dioxide nanoparticles are used in
sunscreens, self-cleaning windows, light emitting
diodes and solar cells.
PAINTS AND COATINGS
Titanium dioxide provides opacity and durability, while
helping to ensure the longevity of paint and protection of
the painted surface.
PLASTICS, PAPER, ADHESIVES
AND RUBBER
Titanium dioxide can help minimise the brittleness,
fading and cracking that can occur in plastics and other
materials as a result of light exposure. It can also make
paper whiter, brighter and more opaque.
COSMETICS
Pigment-grade titanium dioxide is used in some
cosmetics to aid in hiding blemishes and brightening skin.
Boonanarring High Grade HMC under the microscope
2020 Annual Report
15
MINERAL RESOURCES &
ORE RESERVES STATEMENT
ORE RESERVES – MATERIAL MINING PROJECTS
MINERAL RESOURCES – MATERIAL MINING PROJECT
The estimated Ore Reserves at Boonanarring have been updated to include depletion from mining through 31 December 2020
The estimated Mineral Resources at Boonanarring have been updated to include depletion from mining through 31 December
and thereby represent remaining Ore Reserves as at 31 December 2020.
2020 and thereby represent remaining Mineral Resources as at 31 December 2020.
Table 1 – Ore Reserves Summary – JORC Code 2012 – as at 31 December 2020
Table 3 – Mineral Resources Summary – JORC Code 2012 – as at 31 December 2020
Ore Reserves - Strand Deposits; in accordance with the JORC Code (2012)
Mineral Resources - Strand Deposits; in accordance with the JORC Code (2012) @ 2.0% HM Cut-off
Project / Deposit
Category
Tonnes
(million)
HM
(%)
Slimes
(%)
HM Tonnes
(million)
VHM
(%)
Ilmenite
(%)
Leucoxene
(%)
Rutile
(%)
Zircon
(%)
Project / Deposit
Category
Tonnes
(million)
HM
(%)
Slimes
(%)
HM Tonnes
(million)
VHM
(%)
Ilmenite
(%)
Leucoxene
(%)
Rutile
(%)
Zircon
(%)
Proved
Probable
Probable
Boonanarring1
Boonanarring1
Total Boonanarring
Atlas2
Total Atlas
Total Ore Reserves
3.9
2.2
6.1
9.5
9.5
15.6
8.1
7.3
7.8
8.1
8.1
8.0
13
18
15
15
15
15
0.32
0.16
0.5
0.8
0.8
1.3
81
81
81
73
73
76
52
44
49
50
50
50
3.0
4.8
3.6
4.5
4.5
4.1
2.9
4.6
3.5
7.5
7.5
6.0
23
28
24
11
11
16
1
2
Refer to Boonanarring Ore Reserves release 10 March 2021
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 2019 (Table 2). The
material changes arise from mining depletion from 1 October 2019 through 31 December 2020. Refer to the Company’s ASX
release dated 10 March 2021 for further information. For the period between 1 October 2019 and 31 December 2020 the
Company is not aware of any new information or data that materially affects the Ore Reserve at Boonanarring other than the
changes shown due to mining depletion.
Boonanarring
Boonanarring
Boonanarring
Boonanarring Total
Atlas
Atlas
Atlas
Total Atlas
Measured
Indicated
Inferred
Measured
Indicated
Inferred
Sub-Total Atlas/Boonanarring
7.4
7.1
1.4
15.9
9.9
6.4
1.8
18.1
34.0
7.3
5.4
3.5
6.1
7.9
3.7
4.0
6.0
6.0
13
17
18
15
16
17
20
17
16
0.54
0.38
0.05
1.0
0.8
0.2
0.1
1.1
2.1
77
79
78
78
71
56
41
66
72
51
48
53
50
49
42
29
46
48
4.0
8.3
5.0
5.7
4.2
3.4
3.3
4.0
4.8
3.1
4.7
4.1
3.8
7.2
4.7
4.4
6.5
5.2
19
18
16
19
11
6.8
4.8
9.3
14
The Company’s Mineral Resources at Boonanarring show changes from the Mineral Resources as at 1 October 2019 (Table 4).
The material changes arise primarily from mining depletion from 1 October 2019 through 31 December 2020, 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. For the period between 1 October 2019 and 31 December 2020 the Company is
not aware of any new information or data that materially affects the Mineral Resource Estimate at Boonanarring other than the
As shown in Tables 1 & 2, the Company’s Ore Reserves at Atlas are unchanged from 1 October 2019 and the Company is not
changes shown due primarily to normal mining depletion.
aware of any new information or data that materially affects this information for the period ending 31 December 2020.
Table 2 – Comparative Ore Reserves Summary – JORC Code 2012
Ore Reserves – Strand Deposits
Project / Deposit
As at 1 October 2019
Boonanarring
Atlas
Total Ore Reserves
As at 31 December 2020
Boonanarring
Atlas
Total Ore Reserves
Tonnes
(million)
HM
(%)
Slimes
(%)
HM Tonnes
(million)
VHM
(%)
Ilmenite
(%)
Leucoxene
(%)
Rutile
(%)
Zircon
(%)
10.7
9.5
20.2
6.1
9.5
15.6
8.9
8.1
8.5
7.8
8.1
8.0
16
15
16
15
15
15
0.9
0.8
1.7
0.5
0.8
1.3
80
73
77
81
73
76
46
50
48
49
50
50
3.2
4.5
3.8
3.6
4.5
4.1
2.5
7.5
4.7
3.5
7.5
6.0
28
11
20
24
11
16
DRILLING PROGRAMS ARE ALSO BEING CONDUCTED ON SEVERAL OTHER PROJECT
AREAS, INCLUDING BIDAMINNA, ATLAS, HYPERION AND HELENE TO ADVANCE THE
UNDERSTANDING OF THE MINERALISED SYSTEM AND ENHANCE THE SIZE OF EXISTING
MINERAL RESOURCES.
The Company’s Mineral Resources at Atlas are unchanged from 1 October 2019 (Tables 3 & 4) and the Company is not aware of
any new information or data that materially affects this information for the period ending 31 December 2020.
Table 4 – Comparative Mineral Resources Summary – JORC Code 2012
Mineral Resources – Strand Deposits @ 2.0% HM Cut-off
Project / Deposit
As at 1 October 2019
Boonanarring
Atlas
Total Ore Reserves
As at 31 December 2020
Boonanarring
Atlas
Total Ore Reserves
GOVERNANCE CONTROLS
Tonnes
(million)
HM
(%)
Slimes
(%)
HM Tonnes
(million)
VHM
(%)
Ilmenite
(%)
Leucoxene
(%)
Rutile
(%)
Zircon
(%)
30.3
18.1
48.4
15.9
18.1
34.0
6.0
6.0
6.0
6.1
6.0
6.0
17
17
17
15
17
16
1.8
1.1
2.9
1.0
1.1
2.1
73
66
70
79
66
72
46
46
46
50
46
48
3.6
4.0
3.7
5.7
4.0
4.8
2.7
6.5
4.1
3.8
6.5
5.2
20
9.3
16
19
9.3
14
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.
16
Image Resources NL
2020 Annual Report
17
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 2020 are shown in the tables below.
There has been no change in these Mineral Resources from 31 December 2019. 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
Helene
Hyperion
Indicated
Indicated
Cooljarloo Nth Total
Volume
(million)
Tonnes
(million)
HM
(%)
Slimes
(%)
HM Tonnes
(million)
VHM
(%)
Ilmenite
(%)
Leucoxene
(%)
Rutile
(%)
Zircon
(%)
6.4
2.4
8.8
13.2
5.0
18.2
4.3
6.3
4.8
19
19
19
0.57
0.32
0.88
89
69
82
75
56
68
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 Nth 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
78
77
79
91
92
89
90
89
89
88
57
57
57
51
68
67
65
66
65
66
65
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
Regans Ford
Regans Ford
Indicated
Inferred
Regans Ford Total
Volume
(million)
Tonnes
(million)
HM
(%)
Slimes
(%)
HM Tonnes
(million)
VHM
(%)
Ilmenite
(%)
Leucoxene
(%)
Rutile
(%)
Zircon
(%)
4.5
0.5
5.0
9.0
0.9
9.9
9.9
6.5
9.6
6.3
17
19
17
16
0.9
0.1
1.0
5.8
94
90
94
79
70
68
70
57
10.0
7.7
9.9
5.2
4.3
4.4
4.3
4.2
10
10
10
13
Grand Totals
49.1
93.0
Mineral Resources - Dredge deposits; in accordance with JORC Code (2012) @ 1.0% HM Cut-off
Project / Deposit
Category
Titan
Titan
Indicated
Inferred
Total Titan
Total
Telesto
Calypso
Bidaminna
Indicated
Inferred
Inferred
Volume
BCM
(million)
Tonnes
(million)
HM
(%)
Slimes
(%)
HM Tonnes
(million)
VHM
(%)
Ilmenite
(%)
Leucoxene
(%)
Rutile
(%)
Zircon
(%)
10.3
58.5
68.8
1.7
27.1
26.3
21.2
115.4
136.6
3.5
51.5
44.6
1.8
1.9
1.9
3.8
1.7
3.0
2.1
22
19
19
18
14
3.6
15
0.38
2.2
2.6
0.13
0.85
1.3
4.9
86
86
86
83
86
97
88
72
72
72
68
68
83
73
1.5
1.5
1.5
0.7
1.6
7.2
2.6
3.1
3.1
3.1
5.6
5.1
1.0
3.2
9.5
9.5
9.5
9.5
10.8
5.5
9.0
Total Dredge
123.9
236.2
This Mineral Resources and Ore Reserves Statement as
a whole has been approved by George Sakalidis who is the
Executive Advisor - Exploration 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.
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 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
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:
10 March 2021
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.
18
Image Resources NL
2020 Annual Report
19
FINANCIAL
REPORT
Your directors present their report on the Company for the year ended 31 December 2020.
DIRECTORS
The following persons were directors of Image Resources NL (“ Image”) during the year and up to the date of this report, unless
DIRECTOR’S REPORT
DDiirreeccttoorrss RReeppoorrtt
stated otherwise:
Robert Besley
Patrick Mutz
Chaodian Chen
Aaron Chong Veoy Soo
Huangcheng Li (Alternate: Dennis Lee )
Peter Thomas
George Sakalidis (Retired 29 May 2020)
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 $24,783,000 (for the year to 31 December 2019: Profit of
$20,832,000). Basic profit per share for the year was 2.53 cents (year to 31 December 2019: Profit of 2.14 cents). Diluted profit
/ loss per share for the year was 2.44 cents (year to 31 December 2019: Profit of 2.10 cents).
DIVIDENDS
No amounts have been paid or declared by way of dividend by the Company since the end of the previous financial year. On
March 10, 2021 the Company confirmed an intention to pay a final unfranked dividend of 2c per share.
Dividend Policy
The Company has a very basic dividend policy that provides for the Board of Directors, as soon as practicable after the end o f
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 Excess Cash defined as cash held by the Company, other than cash that the Board
considers is necessary or desirable to be retained b y 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 the year are discussed in detail above.
SIGNIFICANT EVENTS SUBSEQUENT TO REPORTING DATE
Other than the following matter s:
On 20 January 2021, the Company’s thirtieth shipment of 14,588 Metric Tonnes of HMC finished loading backed by a letter
of credit. Subsequently, on 28 January 2021 , full payment for the shipment was received by Image, in USD.
On 10 February 2021, the Company repaid the balance of the Senior Secured Loan Notes facilit y. The repayment amount
including interest was US$13,819,793.
On 11 February 2021, the Company’s thirty first and thirty second cargoes totalling 26,248 Metric Tonnes of HMC finished
loading backed by a letter of credit to two customers. Subsequently, on 18 and 23 February 2021, full payment for the
shipment was received by Image, in USD.
On 25 February 2021, the Company’s thirty third cargo totalling 19,398 Metric Tonnes of HMC finished loading backed by
a letter of credit. Subsequently, on 5 March 2021, full payment for the shipment was received by Image, in USD .
There were no other material significant events subsequent to the reporting date.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS
The Review of Operations se t out on pages 8 to 13 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.
21
Image Resources NL
- 7 -
2020 Annual Report
21
DIRECTOR’S REPORT (CONT.)
DDiirreeccttoorrss RReeppoorrtt ((ccoonntt..))
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, Head of Exploration, 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 significant breaches of these regulations.
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 Geoscientists. 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; and Australmin Holdings
Limited (acquired by Newcrest) which brought into production a gold mine in WA and mineral
sands mine in N S W. More recently he was a founding Director of KBL Mining Limited which operated
the Mineral Hill copper-gold mine in NSW and was Chairman of Silver City Minerals Limited, which
explored for silver-lead-zinc in the Broken Hill District. He was a Non -Executive and independent
Director of Murray Zircon from commencement of development and production of the Mindarie
Mineral Sands Project until June 2016. He also serves on the Company’s audit and remuneration
committees. During the past three years he has served as a director of the following other listed
companies:
Silver City Minerals Limited - appointed 5 March 2010, resigned effective 28 February
2019.
Patrick Mutz
Managing Director
Fei (Eddy) Wu
Non-Executive Director
Patrick Mutz has more than 40 years of international mining industry experience in technical
(metallurgist), managerial, consulting and executive roles in all aspects of the industry from
exploration 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 the USA in 1998, he
has served as CEO / Managing Director of a number of publicly listed a nd private mining companies
based in South Australia, Victoria and Western Australia, primarily involved with project
development and company transitioning from exploration 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 and processing operations of its 100% -owned Mindarie Mineral Sands
Project in South Australia, where he led the company on its goal of becoming a successful new
mining company in South Australia. Mr Mutz has not been a director of any other listed public
companies in the past 3 years.
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,
Middle
Island Resources Limited –
continuing.
continuing.
Peter Thomas
Non-Executive Director
DIRECTOR’S 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
Mr Chen founded Orient Zirconic in 1995 and has built the company into a leading company in the
zirconium industry. He served as President and Chairman of the company until mid -2013 when
China National Nuclear Corporation (CNNC) became the largest shareholder in Orient Zirconic.
He became the Chairman of Murray Zircon when the company was founded in 2011 as a result of
Orient Zirconic’s first investment in mining in Australia. Mr Chen is the Vice President of China
non- ferrous metals industry association titanium zirconium & Hafnium Bran ch. He holds an EMBA
degree and is a Certified Engineer. He also owns a number of patents involving the processing of
zircon. Mr Chen has not been a director of any other listed public companies in the past 3 years.
Guangdong Orient Zirconic Ind Sci & Tech Co., Ltd, resigned 9 November 2016 .
Reappointed 11 January 2020.
Mr Wu has solid operational experience in the Australian resource and mining industry. He
specialises in combining the strengths 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 appointed
as a Non-Executive Director of Murray Zircon in e arly 2013. He was the CEO of Queensland Mining
Corporation Limited (QMC) from August 2013 until January 2018. He is currently 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 School, 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.
22
Image Resources NL
- 8 -
- 9 -
2020 Annual Report
23
DIRECTOR’S REPORT (CONT.)
DDiirreeccttoorrss RReeppoorrtt ((ccoonntt..))
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 general merchandising, precious stones and certification businesses.
Mr Li graduated from Tamkang University and in 1981 founded Leecot ex 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 Group”)
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 executive 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
acquired by the group. He was also found ing 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 raising for, emerging companies in th e
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). During the year, the committee held one meeting. All members attended
this meeting.
REMUNERATION COMMITTEE
At the date of this report the Remuneration Committee (“ committee”) comprises Messrs Thomas, Wu (with Mr Wu undertaking
DIRECTOR’S REPORT (CONT.)
DDiirreeccttoorrss RReeppoorrtt ((ccoonntt..))
MEETINGS OF DIRECTORS
During the financial year ended 31 December 2020, there were six 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
6
6
6
6
3
6
6
6
6
6
6
6
6
3
6
0
0
6
1
-
-
1
-
1
-
-
-
1
-
-
1
-
1
-
-
-
2
-
2
-
-
2
-
-
-
2
-
2
-
-
2
-
-
-
Robert Besley
Patrick Mutz
Peter Thomas
Aaron Soo
George Sakalidis (Retired 29 May 2020)
Fei (Eddy) Wu
Chaodian Chen
Huangcheng Li
Dennis Lee (Alternate for 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 20 20.
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 d uties
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 matter with the chairman (where it is reasonable that the chairman be consu lted)
the role of the Chair of that committee) and Soo. During the year, the committee held two meetings. All members attended these
or, if it is the chairman that wishes to seek the advice or it is unreasonable that he be consulted, another director (if that be
meetings.
reasonable). The advice is to be made immediately available to all Board members other than to a director against whom privil ege
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 and officers of the
Company against all losses or liabilities incurred by each dire ctor and officer in their capacity as directors and officers of the
Company. During the year an amount of $121,704 (the year to 31 December 2019 : $70,902) was incurred in insurance premiums
for this purpose.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of
the Company, or to intervene in any proceedings to which the Company is a party, for the purpose of taking responsibility on
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 Corporations Act 2001 is set out in th is
annual report.
24
Image Resources NL
- 10 -
- 11 -
2020 Annual Report
25
RReemmuunneerraattiioonn RReeppoorrtt ((aauuddiitteedd))
REMUNERATION REPORT - AUDITED
RReemmuunneerraattiioonn RReeppoorrtt –– aauuddiitteedd ((ccoonntt..))
REMUNERATION REPORT - AUDITED (CONT.)
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 co ntrolling 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:
Employee Share Plan
The Image Employee Share Plan (ESP) was implemented after shareholder approval at the Shareholder General Meeting held
on 13 February 2018.
Key Management Personnel
Position
Robert Besley
Patrick Mutz
Peter Thomas
Aaron Soo
Fei (Eddy) Wu
Chaodian Chen
Huangcheng Li
George Sakalidis 1
John McEvoy
Todd Colton
Non-Executive Chairman
Managing Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Executive Technical Director / Head of Exploration
Chief Financial Officer
Chief Operating Officer
Note 1. Mr Sakalidis retired as Executive Technical Director on 29 May 2020 and subsequently became Head
of Exploration
The Company’s policy for determining the nature and amount of emoluments of key management personnel is set out below:
Key Management Personnel Remuneration an d 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 managemen t 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 thereof 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, includi ng 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 th ey are achieved; and
review and, if necessary, improve any existing benefit progra mmes established for employees.
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 considere d to be an
effective way to align the objectives of management with the interests of shareholders.
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
share price exceeds the share price after the offer is made to the employee. Furthermore, the plan does not give rise to a tax
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.
During the 31 December 2020 year 12,875,014, ESP shares were issued. Of these 1,013,163 shares were issued to Directors.
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 t o the Issue 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;
The Plan Shares rank pari passu with all issued fully paid shares in respect of voting rights, dividends and entitlement
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 repaid 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 listi ng for quotation on ASX.
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 t he Participant must pay any 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 is 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 contributions 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 requests. 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 performance 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 cond itions and to encourage the
continued services of key managemen t personnel.
Use of Remuneration Consultants
The Company did not employ the services of a remuneration consultant during the financial year ended 31 December 20 20 to
make a remuneration recomme ndation in relation to any Key Management Personnel.
26
Image Resources NL
- 12 -
- 13 -
2020 Annual Report
27
RReemmuunneerraattiioonn RReeppoorrtt –– aauuddiitteedd ((ccoonntt..))
REMUNERATION REPORT - AUDITED (CONT.)
RReemmuunneerraattiioonn RReeppoorrtt –– aauuddiitteedd ((ccoonntt..))
REMUNERATION REPORT - AUDITED (CONT.)
Current Board Remuneration Structure
The current remuneration structure for the board is as follows:
Director
Annual Directors Fees
Committee Fees
Mr R Besley
(Non-Executive Chairman)
$100,000 inclusive of super
Mr P Mutz
(Managing Director)
$501,000 inclusive of super
-
-
Mr P Thomas
(Non-Executive Director)
$60,000 inclusive of super
$6,000 inclusive of super
Mr A Soo
(Non-Executive Director)
$60,000 1
$6,000
Mr F Wu
(Non-Executive Director)
$60,000 inclusive of super
$12,000 inclusive of super
Mr C Chen
(Non-Executive Director)
Mr H Li
(Non-Executive Director)
$60,000 1
$60,000 1
-
-
Note 1: No super is required to be paid as the Directors are permanent foreign residents .
Key Management Personnel Remuneration
Table 1: Remuneration for the year ended 31 December 2020
Short-term benefits
Directors
Fees/Salary
($)
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
78,162
52,512
54,763
55,252
51,763
51,763
-
-
-
-
-
-
Patrick Mutz
464,691
132,431
George Sakalidis
196,372
19,160
Executive Officers
John McEvoy
Todd Colton
Total
334,279
36,000
337,000
100,702
1,676,557
288,293
-
-
-
-
-
-
-
-
-
-
-
7,425
4,989
-
5,249
-
-
25,309
20,442
22,841
25,000
111,255
-
-
-
-
-
-
-
-
-
-
-
Total
($)
85,587
57,501
54,763
60,501
51,763
51,763
622,431
235,974
393,120
462,702
2,076,105
28
Image Resources NL
- 14 -
Table 2: Remuneration for the year ended 31 December 201 9
Short-term benefits
Directors
Fees/Salary
($)
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
327,159
122,216
Todd Colton
Total
325,000
141,909
1,494,711
483,763
Compensation Options as at 31 December 2020
Nil
Key Management Personnel Contracts
-
-
-
-
-
-
-
-
-
-
-
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
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 - $501,000 per annum (from 1 July 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 and towards airfares for travel between Adela ide 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 exploration sites as and when necessary .
The agreement may be terminated by the Comp any by the provision of three months written notice. The employee may
terminate the contract by the provision of two months’ notice.
George Sakalidis – Head of Exploration (From 29 May 2020) and Executive Director – Exploration (Retired 29 May 2020)
•
•
•
Base Salary - $241,220 per annum (from 1 July 2020) 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 $1 66 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 n otice by either the Company or Mr Sakalidis.
John McEvoy – Chief Financial Officer
•
•
•
Base Salary - $364,23 9 per annum (from 1 July 2020) 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.
- 15 -
2020 Annual Report
29
RReemmuunneerraattiioonn RReeppoorrtt –– aauuddiitteedd ((ccoonntt..))
REMUNERATION REPORT - AUDITED (CONT.)
RReemmuunneerraattiioonn RReeppoorrtt –– aauuddiitteedd ((ccoonntt..))
REMUNERATION REPORT - AUDITED (CONT.)
Todd Colton – Chief Operating Officer
Shares held by Key Management Personnel
Constitution. Conditions are reviewed at least ann ually by the Remuneration Committee. There are no termination benefits for
Peter Thomas
2,104,306
•
•
•
Base Salary - $374,000 per annum (from 1 July 2020) 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. Shareholders approved the aggregate fees to be paid to Directors to be $ 500,000
per annum on 29 May 2020.
Each Non-Executive Director’s actual remuneration for the year ended 31 December 20 20 and the year to 31 December 201 9 is
shown above. Each Non-Executive Director has an unspecified term of appointment, which is subject to the Company’s
any Non-Executive Director.
Base fees for each non-executive director during their period in office were as follows:
Base Fees
per annum
$
82,850
51,763
51,763
51,763
51,763
51,763
Audit
Committee
Fee
$
Remuneration
Committee
Fee
$
-
-
3,000
3,000
-
-
2,738
5,738
-
5,738
-
-
Robert Besley
Peter Thomas
Aaron Soo
Fei (Eddy) Wu
Chaodian Chen
Huang Cheng Li
Fees are inclusive of superannuation where required.
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
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 related entities are set out below:
Name
Directors
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
Robert Besley
566,667
100,000
Aaron Soo
14,330,000
Fei Wu
Chaodian Chen
-
-
Huang Cheng Li
136,445,311
George Sakalidis
5,147,865
Patrick Mutz
2,641,343
Executive Officers
John McEvoy
Todd Colton
Totals
3,035,885
1,312,429
-
-
-
-
-
-
436,632
1,013,163
749,211
790,834
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
666,667
2,104,306
14,330,000
-
-
136,445,311
5,584,497
3,654,506
3,785,096
2,103,263
168,673,646
165,583,806
100,000
2,989,840
Other Equity-related KMP Transactions
There have been no other transactions involving equity ins truments, 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 conducted between the Company and KMP or their related partie s, 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 favourable than those reasonably expected under arm’s len gth dealings with unrelated
There are no guaranteed rate increases fixed in the contracts of any of the key management personnel.
persons.
Options and Rights Granted as Remuneration
During the financial year no options were iss ued 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.
This Report of Directors, incorporating the Remunera tion Report, is signed in accordance with a resolution of the directors
ROBERT BESLEY
CHAIRMAN
Perth, 10 March 202 1
30
Image Resources NL
- 16 -
- 17 -
2020 Annual Report
31
AUDITOR’S INDEPENDENCE DECLARATION
AAuuddiittoorr’’ss IInnddeeppeennddeennccee DDeeccllaarraattiioonn
CORPORATE GOVERNANCE STATEMENT
CCoorrppoorraattee ggoovveerrnnaannccee ssttaatteemmeenntt
Image Resources NL and the Board are committed to achieving and demonstrating the highest standards of corporate
governance. Image Resources NL has reviewed i ts corporate governance practices against the Corporate Governance Principles
and Recommendations (3rd edition) published by the ASX Corporate Governance Council.
The 2020 Corporate Governance Statement is dated at 5 February 202 1 and reflects the corporate governance practices in
place throughout the period ended 31 Decembe r 2020. The 20 20 Corporate Governance Statement was approved by the Board
on 5 February 202 1. A description of the Company’s current corporate governance practi ces is set out in the Company’s
Corporate Governance Statement which can be viewed at www.imageres.com.au.
Auditor's Independence Declaration
As auditor for the audit of Image Resources NL for the period ended 31 December
2020, 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.
Elderton Audit Pty Ltd
Nicholas Hollens
Managing Director
10 March 2021
Perth
32
Image Resources NL
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2020 Annual Report
33
SSttaatteemmeenntt ooff pprrooffiitt oorr lloossss aanndd ootthheerr
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
ccoommpprreehheennssiivvee iinnccoommee
For the Year Ended 31 December 2020
For the Year Ended 31 December 2020
SSttaatteemmeenntt ooff ffiinnaanncciiaall ppoossiittiioonn
STATEMENT OF FINANCIAL POSITION
As at 31 December 2020
As at 31 December 2020
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
Finance income
Financing costs
Profit before tax
Income tax expense
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 tax
Earnings per share
Basic earnings per share
Diluted earnings per share
Notes
3
3
3
3
6
5
5
Year to
31 Dec
2020
($000)
176,378
(104,224)
72,154
151
(8,262)
(10,248)
(4,684)
(4,980)
(44)
(1,896)
(1,887)
40,304
36
(5,817)
34,523
(9,740)
24,783
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
2
-
24,785
20,832
Cents
Cents
2.53
2.44
2.14
2.10
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
Income tax payable
Total current liabilities
Non-current liabilities
Provisions
Borrowings
Deferred tax liabilities
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.
The accompanying notes form part of these financial statements.
Notes
7
8
12
9
10
6
11
13
14
15
6
14
15
6
16
17
17
31 Dec
2020
($000)
50,761
12,191
20,441
392
83,785
82,806
-
4,951
87,757
171,542
19, 610
903
17,199
1,282
38,994
19,807
10
4,101
23,918
62,912
108,6 30
110,607
27,883
(29,860)
108,6 30
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
34
Image Resources NL
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2020 Annual Report
35
SSttaatteemmeenntt ooff cchhaannggeess iinn eeqquuiittyy
STATEMENT OF CHANGES IN EQUITY
For the Year Ended 31 December 2020
For the Year Ended 31 December 2020
Issued
Capital
($000)
Financial
Assets at
FVOCI
($000)
Warrants
Reserve
($000)
Profit
Reserve
Account
($000)
Accumulated
Losses
($000)
Total
($000)
Balance at 1 January 2019
103,170
10
4,314
Comprehensive Profit
Operating profit for the year
Other comprehensive income
Total comprehensive profit 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
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
Balance at 1 January 2020
108,553
10
3,088
Comprehensive profit
Operating profit for the year
Other comprehensive income
Transfer to profit reserve – dividend
Total comprehensive profit for the year
Transactions with owners
capacity as owners
in
their
Shares issued during the year
Shares cancelled during the year
Cost of share issue
Total transactions with owners in their
capacity as owners
-
-
-
-
2,511
(447)
(10)
2,054
-
2
-
2
-
-
-
-
-
-
-
-
-
-
-
-
(50,692)
56,802
20,832
20,832
-
-
20,832
20,832
-
-
-
-
4,179
(22)
-
4,157
(29,860)
81,791
(29,860)
81,791
24,783
24,783
-
-
-
-
-
-
-
-
-
-
-
-
-
24,783
(24,783)
24,783
-
-
-
-
-
-
-
-
-
2
-
24,785
2,511
(447)
(10)
2,054
STATEMENT OF CASH FLOWS
SSttaatteemmeenntt ooff ccaasshh fflloowwss
For the Year Ended 31 December 2020
For the Year Ended 31 December 2020
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Payments to suppliers and contractors
Interest received
Interest paid
Other income
Notes
Year to
31 Dec
2020
($000)
Year to
31 Dec
2019
($000)
164,854
145,409
(93,543)
(79,479)
36
50
(6,560)
(3,061)
151
-
Net cash from / (used in) operating activities
7
64,938
62,919
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of property, plant and equipment
Purchase of property, plant and equipment
Payments for exploration and evaluation
Net cash used in investing activities
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 used in financing activities
Net increase in cash held
Cash at beginning of the year
Effect of exchange fluctuations on cash held
Cash at the end of the year
1
(16,362)
(4,841)
76
(9,794)
(3,164)
(21,202)
(12,882)
-
(10)
-
-
1,534
(39)
109
566
(38,313)
(14,186)
(38,323)
(12,016)
5,413
49,935
(4,587)
50,761
38,021
11,886
28
49,935
16
15
15
7
Balance at 31 December 2020
110,607
12
3,088
24,783
(29,860)
108,630
The accompanying notes form part of these financial statements.
The accompanying notes form part of these financial statements .
36
Image Resources NL
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2020 Annual Report
37
NNootteess ttoo tthhee ffiinnaanncciiaall ssttaatteemmeennttss
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended 31 December 2020
For the Year Ended 31 December 2020
NNootteess ttoo tthhee ffiinnaanncciiaall ssttaatteemmeennttss ((ccoonntt..))
NOTES TO THE FINANCIAL STATEMENTS (CONT.)
For the Year Ended 31 December 2020
For the Year Ended 31 December 2020
This financial report includes the financial statements and notes of the Company .
Sale of goods
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 10 March 2021, subject to minor typographical amendments.
Revenue from the sale of goods is reco gnised at the point in time when the customer obtains control of the goods, which
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
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
The following is a summary of the material accounting policies adopted by the Company in the preparation of the financial report.
amortised cost of a financial asset and allocating the interest income over the relevant pe riod using the effective interest
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
rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset
to the net carrying amount of the financial asset.
Standards ensures that the financial statements and notes also comply with International Financial Reporting Standards. Material
Other revenue
accounting policies adopted in the preparation of this financial report are presented below and have been consistently applie d
Other revenue is recognised when it is received or when the right to receive payment is established.
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 basis of accounting has been applied.
Going Concern
These financial statements have been prepared on the going concern basis, which contemplates the continuity of normal
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
business activities and the realisation of assets and discharge of lia bilities in the normal course of business. The Directors
Functional and Presentation Currency
consider the going concern basis of preparation to be appropriate based on forecast future cash flows.
Both the functional and presentation currency of Image is Austra lian Dollars.
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. The following standards were applied
for the first time during the current reporti ng period:
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 cur rencies are retranslated at the rate
of exchange at balance date.
•
•
•
Conceptual Framework for Financial Reporting and AASB 2019 -1 References to the Conceptual Framework .
All translation differences relating to transactions and balances denominated in foreign currency are taken to the Statement
AASB 2018-6 Definition of a Business.
AASB 2018-7 Definition of Material.
of Profit and Loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange
The amendments listed above did not have any impact on the amounts r ecognised in prior periods, did not affect the current
rate as at the date of the initial transaction. Non -monetary items measured at fair value in a foreign currency are translated
period and is not expected to significantly affect future periods.
using the exchange rate at the date when the fair val ue was determined.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
d)
Exploration and Evaluation Expenditure
ACCOUNTING POLICIES
a)
Revenue Recognition
The Company recognises revenue as follows:
Revenue from contracts with customers
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 Statement 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.
Revenue is recognised at an amount that reflects the consideration to which the Company is expected to be entitled in
e) Asset Acquisitions
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 the transaction price which
takes into account estimates of variable consideration and t he 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 good or service to
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 acquisiti on 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
be delivered; and recognises revenue when or as each performance obli gation is satisfied in a manner that depicts the
mine properties based on the stage of development reached at the date of acquisition.
transfer to the customer of the goods or s ervices promised.
f)
Goods and Services Tax (GST)
Variable consideration within the transaction price, if any, reflects concessions provided to the customer such as discounts,
rebates and refunds, any potential bonuses receivable from the customer and any other contingent events. Such e stimates
are determined using either the 'expected value' or 'most likely amount' method. The measurement of variable consideration
Revenues, expenses and assets are recognised net of the amount of GST except where the GST incurred on a purchase
of goods and services is not recoverable from the taxation authority. In these circumstances, the GST is recogn ised as
part of the cost of acquisition of the asset or as part of the expense item as applicable. Receivables and payables in the
is subject to a constraining principle whereby revenue will only be recognised to the extent that it is highly probable that
Statement of Financial Position are shown inclusive of GS T.
a significant reversal in the amount of cumulative revenue recognised will not occur. The measurement constraint continues
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 form of a separate refund liability.
- 24 -
38
Image Resources NL
The net amount of GST recoverable from, or payable to, the taxat ion authority is included as part of receivables or payables
in the Statement of Financial Position.
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2020 Annual Report
39
NNootteess ttoo tthhee ffiinnaanncciiaall ssttaatteemmeennttss ((ccoonntt..))
NOTES TO THE FINANCIAL STATEMENTS (CONT.)
For the Year Ended 31 December 2020
For the Year Ended 31 December 2020
NNootteess ttoo tthhee ffiinnaanncciiaall ssttaatteemmeennttss ((ccoonntt..))
NOTES TO THE FINANCIAL STATEMENTS (CONT.)
For the Year Ended 31 December 2020
For the Year Ended 31 December 2020
Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component of investing and
k)
Inventory
financing activities, which are dis closed as operating cash flows.
Inventories of heavy mineral concentrate are valued at the lower of an average weighted cost and net realisable value
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation
(NRV). Cost comprises direct costs and an appropriate proportion of fixed and variable expenditure including depreciation
authority.
g)
Income Tax
The income tax expense for the year comprises current income tax expense and deferred t ax 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.
and amortisation.
Inventories of consumable supplies and spare par ts 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.
Current tax liabilities and assets are therefore measured at the amounts expected to be paid to or recovered from the
l)
Property, plant, and equipment
relevant taxation authority.
Property, plant and equipment is stated at historical cost, less accumulated depreciation and accumulated impairment
Deferred income tax expense reflects movement s in deferred tax asset and deferred tax liability balances during the year
losses, if any. Historical cost includes expenditure that is directly attributable to the acquisition of the items and costs
as well as unused tax losses, if any in fact are brought to account.
incurred in bringing the asset into us e.
Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax base s of assets
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when
and liabilities and their carrying amounts in the finan cial statements. Deferred tax assets also result where amounts have
it is probable that future economic benefits associated with the item flow to the Company a nd the cost of the item can be
been fully expensed but future tax deductions are available. No deferred income tax will be recognised from the initial
measured reliably.
recognition of an asset or liability, excluding a business combina tion, where there is no effect on accounting or taxable
profit or loss.
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
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the year when the a sset is
commissioning and production, and also includes other attributable costs incurred before production commences. These
realised or the liability is settled, based on tax rates en acted or substantively enacted at reporting date. Their measurement
costs are capitalised to the extent they are expected to be recouped through successful exploitation of the related mi ning
also reflects the manner in which management expects to recover or settle the carrying amount of the related asset or
project. Once production commences, these costs are amortised over the estimated economic life of the mine on a units
liability.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is
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 ag ainst the related production.
probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised.
At each reporting date, the entity assesses whether there is any indication that an asset may be impaired. Where an
Current tax assets and liabilities are offset where a legally enforce able right of set-off exists and it is intended that net
settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets
and liabilities are offset where a legally enforceable right of set -off exists, the deferred tax assets and liabilities relate to
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 us e.
income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where it
Depreciation
is intended that net settlement or simultaneous realisation and settlement o f the respective asset and liability will occur in
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
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
At each reporting date, the Company reviews the carrying values of its tangible and intangible assets to determine whether
the income statement when the asset is derecognised.
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 expensed to the Statement of Profit or Loss
The assets’ residual values, useful lives and depreciation methods are review ed at each reporting period and adjusted
prospectively, if appropriate.
and Other Comprehensive Income. This policy has no application where paragraph (d) Exploration and Evaluation
m) Borrowings
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 weig hted 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.
40
Image Resources NL
- 26 -
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 expe nsed 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.
- 27 -
2020 Annual Report
41
NNootteess ttoo tthhee ffiinnaanncciiaall ssttaatteemmeennttss ((ccoonntt..))
NOTES TO THE FINANCIAL STATEMENTS (CONT.)
For the Year Ended 31 December 2020
For the Year Ended 31 December 2020
NNootteess ttoo tthhee ffiinnaanncciiaall ssttaatteemmeennttss ((ccoonntt..))
NOTES TO THE FINANCIAL STATEMENTS (CONT.)
For the Year Ended 31 December 2020
For the Year Ended 31 December 2020
n)
Investments and other financial assets
p)
Leases
Investments and other financial assets are initially measured at fair value. Transaction costs are included as part of the
The Company adopted AASB 16 on the required effective date 1 Ja nuary 2019.
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.
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 being the present va lue
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
Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred and t he
recognition changes with a higher expense at lease commencement due to a higher lease liability at the time.
Company has transferred substantially all the risks and rewards of ownership. When there is no reasonable expectation of
recovering part or all of a financial asset, it's carrying value is written off.
Financial assets at fair value through profit or lo ss
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
Financial assets not measured at amortised cost or at fair value through other comprehensive income are classified as
leases on its balance sheet but to account for the lease expense on a straight-line basis over the remaining lease term.
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.
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
Financial assets at fair value through other comprehensive income
payments that existed at the date of transition.
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.
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
Impairment of financial assets
AASB 16.
The Company recognises a loss allowance for expected credit losses on financial assets which are either measured at
On transition to AASB 16 the weighted average incremental borrowing rate applied to lease liabilities recognised under
amortised cost or fair value through other comprehensive income. The measurement of the loss allowance depends upon
AASB 16 was 8%. The Company has benefited from the use of hindsight for determining the lease term when considering
the Company’s assessment at the end of each reporting period as to whether the financial instrument's credit risk has
options to extend and terminate leases. Thi s resulted in recognition a right-of-use asset $195,791 and a lease liability of
increased significantly since initial recognition, based on reasonable and supportable information that i s available, without
$195,791. It also resulted in recognition of additional expense for the year ended 31 December 2019 of $5,000.
undue cost or effort to obtain.
Where there has not been a significant increase 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 attributable
to a default event that is possible within the next 12 months. Where a financial asset has become credit impaired or where
q) Contributed Equity
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.
it is determined that credit risk has increased significantly, the loss allowanc e is based on the asset's lifetime expected
r)
Comparative Figures
credit losses. The amount of expected credit loss recognised is measured on the basis of the probability weighted present
value of anticipated cash shortfalls over the life of the instrument discounted at the ori ginal effective interest rate.
For financial assets measured at fair value through other comprehensive 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. Valuation techniques are applied to
determine the fair value for all unlisted securities, including recent arm’s length transactions, reference to similar
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.
instruments and option pricing models. The expression “fair value” – and derivatives thereof – wherever used in this report
t)
Critical Accounting Estimates, Assumptions and Judgements
bears the meaning ascribed to that expression by the Australian Accounting Standards Board.
Impairment
The Company makes estimates and assumptions c oncerning 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
At each reporting date, the Company assesses whether there is objective evidence that a financial instrument has been
a significant risk of causing a material adjustment to the ca rrying amounts of assets and liabilities within the next financial
impaired. In the case of available -for-sale financial instruments, a prolonged decline in the value of the instrument is
year are discussed below. Estimates and underlying assumptions are reviewed on an ongoing basis, with revisions
considered to determine whether an impairment has ar isen. Impairment losses are recognised in the profit or loss.
recognised in the period in which the estimates are revised and future period s affected.
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 s ignificant 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 fina ncial 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.
42
Image Resources NL
- 28 -
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 Gene rating Unit (CGU) is determined as the higher of value-in-use and
fair value less costs of disposal estimated on the basis of discounted present value of the future cash flows (a level 3 fair
value estimation method).
The estimates of discounted future cas h 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 sell that production
future product prices based on the Company’s assessment of forecast short and long term prices for each of the
key products
- 29 -
2020 Annual Report
43
NNootteess ttoo tthhee ffiinnaanncciiaall ssttaatteemmeennttss ((ccoonntt..))
NOTES TO THE FINANCIAL STATEMENTS (CONT.)
For the Year Ended 31 December 2020
For the Year Ended 31 December 2020
NNootteess ttoo tthhee ffiinnaanncciiaall ssttaatteemmeennttss ((ccoonntt..))
NOTES TO THE FINANCIAL STATEMENTS (CONT.)
For the Year Ended 31 December 2020
For the Year Ended 31 December 2020
•
•
•
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
Note 2 Operating Segments
Segment Information
Identification of reportable segments
Determination of Mineral Resources and Ore Reserves
The determination of reserves impacts the accounting for asset carrying values, depreciation and amortisation rates, and
provision for decommissioning and restoration. The information in this report as it relates to ore reserves, mineral resources
or mineralisation is reported in accordance with the AusIMM “Australian Code for Reporting of Identified Mineral Resources
and Ore Reserves 2012”. The information has been prepared by or under supervision of competent persons as identifi ed
by the Code.
There are numerous uncertainties inherent in estimating mineral resources and ore reserves 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.
Rehabilitation and Site Restoration Provision
Significant estimates and assumptions are made in determining the pro vision 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, technologi cal changes, regulatory changes, cost incre ases 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 management to assess
the likelihood that the Company will generate taxable earnings in future p eriods, 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 c ash flows and taxable income differ signifi cantly from estimates, the 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 f uture 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.
The income tax expense has bee n estimated and calculated based on managem ent’s best knowledge of current income
tax legislation. There may be differences with the treatment of individual jurisdiction provisions but these are not expected
to have any material impact on the amounts as re ported.
u) New Accounting Standards for Applic ation 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 standar ds 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
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 the 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 plus one buyer outside the primary offtake agreements .
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.
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
Realised foreign currency loss
Finance Income
Interest income
Finance Costs
Interest expense
Amortisation of capitalised borrowing costs
Other financing costs
Year to
31 Dec
2020
($000)
Year to
31 Dec
2019
($000)
176,378
146,196
(74,105)
(27,713)
(5,749)
3,343
(66,359)
(17,678)
(5,263)
7,089
(104,224)
(82,211)
72,154
63,985
(1,896)
(1,797)
36
48
(5,670)
-
(147)
(5,817)
(9,655)
-
(390)
(10,045)
Rounding of amounts All amounts i n the financial statements have been rounded to the nearest thousand dollars, except as
Note 4
Auditors Remuneration
indicated, in accordance with the ASIC Corporations Instrument 2016/191.
Amounts received or due and receivable by the auditors of the Company for:
-
Auditing and reviewing the financial reports – (Elderton Audit Pty Ltd)
54
54
44
Image Resources NL
- 30 -
- 31 -
2020 Annual Report
45
NNootteess ttoo tthhee ffiinnaanncciiaall ssttaatteemmeennttss ((ccoonntt..))
NOTES TO THE FINANCIAL STATEMENTS (CONT.)
For the Year Ended 31 December 2020
For the Year Ended 31 December 2020
NNootteess ttoo tthhee ffiinnaanncciiaall ssttaatteemmeennttss ((ccoonntt..))
NOTES TO THE FINANCIAL STATEMENTS (CONT.)
For the Year Ended 31 December 2020
For the Year Ended 31 December 2020
Note 5
Basic earnings per share
Earnings Per Share
Diluted earnings per share
Year to
31 Dec
2020
(Cents)
2.53
2.44
Year to
31 Dec
2019
(Cents)
2.14
2.10
($000)
($000)
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
24,783
20,832
Weighted average number of ordinary shares used in the calculation of basic
earnings per share at 31 December 2020
981,236,917
971,794,723
Number of
Number of
shares
shares
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
981,236,917
971,794,723
35,810,714
18,208,229
Weighted average number of ordinary shares (diluted) at 31 December 2020
1,017,047,631
990,003,952
The Company had Nil (2019: Nil) options over fully paid ordinary shares on issue at balance date.
Note 6
Income Tax
Income tax expense
Current tax
Deferred tax
Income tax expense in the statement of profit or loss
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 before tax
Prima facie tax on operating profit at statutory rate of 30% (20 19: 30%)
Non-deductible expenses
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
($000)
($000)
1,282
8,458
9,740
-
8,385
8,385
34,523
10,357
36
(30)
(3)
(620)
9,740
29,217
8,765
89
-
(7)
-
(462)
8,385
The Corporate tax rate payable by the Company if the Company was required to pay income tax in the year ended 31
December 2020 was 30% (31 December 2019: 30%). The deferred tax asset held on the balance sheet is calculated at the
30% income tax rate.
Deferred tax assets and liabilities
Deferred tax assets
Deferred tax liabilities
Net deferred tax assets / (liabilities)
46
Image Resources NL
Composition of and movements in deferred tax assets and liabilities during the year
Tax losses
Property, plant and equipment
Unrealised foreign exchange gains
Provisions and accruals
Capital raising costs
Mine rehabilitation
Borrowing costs
Receivables
Inventories
Investments
Net deferred tax assets /
(liabilities)
Assets
Liabilities
2020
($000)
-
-
1,940
366
245
2,787
-
-
-
-
2019
($000)
7,350
2020
($000)
-
2019
($000)
-
-
(5,578)
(1,988)
1,374
258
362
1,164
-
-
-
-
-
-
-
-
-
-
-
-
(2,869)
(3,799)
(4)
(984)
(4)
(4)
(355)
(4)
Net
2020
($000)
(5,578)
1,940
366
245
2,787
(2,869)
(4)
(984)
(4)
2019
($000)
7,350
(1,988)
1,374
258
362
1,164
(3,799)
(4)
(355)
(4)
5,338
10,508
(9,439)
(6,150)
(4,101)
4,358
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
Depreciation and amortisation expense
Exploration and evaluation expense
Loss on sale of property, plant and equipment
Realised foreign currency loss
Unrealised foreign currency (gain) / loss
Interest expense
Share based payments expense
Borrowing costs
Changes in operating assets and liabilities:
Increase in trade and other receivables relating to operating activities
Decrease in prepayments
Increase in inventory
Increase in trade and other payables relating to operating activities
Increase / (decrease) in current borrowings
Increase in provisions
Cash flow from operations
Note 8
Trade receivables
Trade and Other Receivables
GST and tax refundable
Other receivables
31 Dec
2020
($000)
50,745
16
50,761
24,783
9,740
33,496
4,980
44
2,978
617
-
-
(359)
(11,598)
77
(3,652)
3,662
(45)
215
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
64,938
62,919
11,342
792
57
12,191
-
592
1
593
2020 Annual Report
47
5,338
(9,439)
(4,101)
10,508
(6,150)
4,358
- 32 -
- 33 -
NNootteess ttoo tthhee ffiinnaanncciiaall ssttaatteemmeennttss ((ccoonntt..))
NOTES TO THE FINANCIAL STATEMENTS (CONT.)
For the Year Ended 31 December 2020
For the Year Ended 31 December 2020
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 i mmaterial to state separately.
Set out below are the leased assets carrying amounts recognised and the movements during the period.
Year ended 31 December 2019
Balance at 1 January 2019
Additions
Depreciation
Closing Net Book
Year ended 31 December 2020
Balance at 1 January 2020
Additions
Depreciation
Closing Net Book
Motor
Office
Vehicles
Equipment
($000)
($000)
Total
($000)
-
178
(67)
111
111
53
(86)
78
-
18
(7)
11
11
-
(6)
5
-
196
(74)
122
122
53
(92)
83
Set out below are the carrying amounts of lease liabilities (included under borrowings, Note 15)
Opening Net Book Value
Additions
Accretion of interest
Payments
Closing Net Book Value
Current
Non-Current
Note 11 Other Financial Assets
(11,855)
(5,749)
(33,530)
Non-Current
Loans to Employees – (Employee Share Plan)
Loans to Key Management Personnel (Employee Share Plan)
Equity investments at fair value – shares in listed corporations
31 Dec
2020
($000)
31 Dec
2019
($000)
127
57
16
(95)
105
95
10
3,391
1,532
28
4,951
-
196
12
(81)
127
72
55
1,909
949
27
2,885
NNootteess ttoo tthhee ffiinnaanncciiaall ssttaatteemmeennttss ((ccoonntt..))
For the Year Ended 31 December 2020
NOTES TO THE FINANCIAL STATEMENTS (CONT.)
For the Year Ended 31 December 2020
Note 9 Other Assets – Current
Restricted cash – security for guarantees
Prepayments
31 Dec
2020
($000)
57
335
392
31 Dec
2019
($000)
54
414
468
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.
Note 10 Property, Plant and Equipment
Plant and
Land and
Mine
Borrowing
Total
Equipment
Buildings
Development
($000)
($000)
($000)
Costs
($000)
($000)
Year ended 31 December 2019
Balance at 1 January 2019
Additions
Mine closure and rehabilitation asset
Disposals
Transfers
Depreciation
48,905
4,331
-
(901)
523
(13,256)
11,394
75
-
-
-
-
Closing Net Book Value
39,602
11,469
At 31 December 2019
Cost
Accumulated Depreciation
Net Book Value
Year ended 31 December 2020
Balance at 1 January 2020
Additions
Mine closure and rehabilitation asset
Disposals
Depreciation
53,720
(14,118)
11,469
-
39,602
11,469
39,602
1,713
-
(45)
(15,926)
11,469
6,919
-
-
-
19,131
3,374
10,655
-
(523)
(4,502)
28,135
32,978
(4,843)
28,135
28,135
7,386
4,781
-
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
16,376
-
-
-
95,582
16,018
4,781
(45)
Closing Net Book Value
25,344
18,388
28,447
10,627
82,806
At 31 December 2020
Cost
Accumulated Depreciation
55,351
(30,007)
18,388
-
45,145
(16,698)
21,968
(11,341)
140,852
(58,046)
Net Book Value
25,344
18,388
28,447
10,627
82,806
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 for 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 .
Borrowing costs incurred financing the senior debt facility were f ully capitalised to property, plant and equipment. Depreciation
on plant and equipment, mine development and borrowing costs is charged to the inventory cost base.
48
Image Resources NL
- 34 -
- 35 -
2020 Annual Report
49
NNootteess ttoo tthhee ffiinnaanncciiaall ssttaatteemmeennttss ((ccoonntt..))
NOTES TO THE FINANCIAL STATEMENTS (CONT.)
For the Year Ended 31 December 2020
For the Year Ended 31 December 2020
NNootteess ttoo tthhee ffiinnaanncciiaall ssttaatteemmeennttss ((ccoonntt..))
NOTES TO THE FINANCIAL STATEMENTS (CONT.)
For the Year Ended 31 December 2020
For the Year Ended 31 December 2020
Note 12
Inventory
Current
Ore stockpiles
Heavy mineral concentrate and other intermediate stockpiles
Stores and consumables
31 Dec
2020
($000)
2,259
16,689
1,493
20,441
31 Dec
2019
($000)
466
15,139
1,184
16,789
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.
A mine closure and rehabilitation provisio n is recognised at the commencement of a mining project and/or construction based
on the estimated costs necessary to m eet legislative requirements by estimating future costs and discounting these to a present
value. The provision is recognised as a liabil ity, separated into current (estimated costs arising within twelve months) and non-
current components based on the expe cted 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 t o 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. Adjustments to the esti mated amount and timing of future closure and rehabilitation
cash flows are a normal occurrence in light of the significant judgements an d estimates involved and are dealt with on a
prospective basis as they arise.
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 benefi ts 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 amorti sation charges.
The mine closure and rehabilitation provision does not include any amounts related to remediation cost s associated with
NRV is the estimated selling price in the ord inary course of business less the estimated costs of production and to complete the
unforeseen circumstances.
sale.
Note 13 Trade and Other Payables
Trade creditors
Accruals
GST and tax payable
Other payables
10,787
8,509
235
79
8,150
7,759
190
111
19,610
16,210
Trade creditors, accruals, GST and tax payables and other payables are normally settled on 30 Day term s.
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 liabilities unless payment is not due within 12 months from the
Note 15 Borrowings
Current
Lease liabilities
Interest bearing loan – Senior Secured Loan Notes
Non-Current
Lease liabilities
Interest bearing loan – Senior Secured Loan Notes
Interest
Rate
(8%)
(13%)
(8%)
(13%)
31 Dec
2020
($000)
95
17,104
17,199
10
-
10
31 Dec
2019
($000)
73
37,606
37,679
55
18,803
18,858
reporting date.
Note 14 Provisions
Current
Employee leave benefits
Non-Current
Employee leave benefits
Mine closure and rehabilitation
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
amounted to US$38,865,000 plus capitalised interest of US$7,257, 672. US$26,347,241 was repaid during the year ended 31
903
692
December 2020. (2019: US$6,586,810). US$13,173,620
is the balance at 31 December 2020 (31 December 2019:
US$39,520,861).
87
19,720
19,807
82
15,298
15,380
The key terms of the loan include a loan period of three years from 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 principal is be ing repaid in seven equal instalments starting in the 1 8 th
month following drawdown. Drawdown occurred on 25 May 2018.
Mine closure and rehabilitation obligations
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 reh abilitation obligations.
The mine closure and rehabilitation provis ion is recorded as a liability at fair value, assuming a risk -free discount rate equivalent
to the 5 year Australian US Government bond rate of 0.99% as at 31 December 2020 (31 December 2019: 0.99%) and an inflation
factor of 1.0% (31 December 2018: 2.1%). Although the ultimate amount to be incurred is uncertain, management has, at 31
December 2020, estimated the asset r etirement cost of work completed to date using an expected remaining mine life of 2 years
and a total undiscounted estimated cash flow of $19,718,091 (31 December 2019: $14,724,787). Management’s estimate of the
underlying asset retirement costs are indepe ndently reviewed by an external consultant on a regular basis for completeness.
Recognition and measurement of 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.
50
Image Resources NL
- 36 -
- 37 -
2020 Annual Report
51
NNootteess ttoo tthhee ffiinnaanncciiaall ssttaatteemmeennttss ((ccoonntt..))
For the Year Ended 31 December 2020
NOTES TO THE FINANCIAL STATEMENTS (CONT.)
For the Year Ended 31 December 2020
NNootteess ttoo tthhee ffiinnaanncciiaall ssttaatteemmeennttss ((ccoonntt..))
NOTES TO THE FINANCIAL STATEMENTS (CONT.)
For the Year Ended 31 December 2020
For the Year Ended 31 December 2020
108,553
957,247,598
103,170
The Company had the following warrants over un-issued fully paid ordinary share s at
Warrants
Year to 31 Dec 2020
Year to 31 Dec 2019
No.
($000)
No.
($000)
Note 16
Issued Capital
Contributed Equity – Ordinary Shares
At the beginning of the period
Employee share plan shares issued at $0.1 95
Employee shares cancelled
Shares issued on exercise of warrants at $0.11385
Employee share plan shares issued at $0.1 95
Employee share plan shares issued at $0. 267
Share issue costs
980,979,899
12,875,014
(1,715,220)
-
-
-
-
2,510
(446)
-
-
-
(10)
-
-
13,475,000
1,303,813
8,953,488
-
-
-
2,760
254
2,391
(22)
Balance at the end of the period
992,139,693
110,607
980,979,899
108,553
Terms and Conditions of Contributed E quity
Ordinary shares have the right to receive dividends as declared and, in the event of winding 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
thereon.
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 to profit reserve account
31 Dec
2020
No.
31 Dec
2019
No.
14,285,714
21,525,000
14,285,714
21,525,000
35,810,714
35,810,714
($000)
($000)
(29,860)
24,783
(24,783)
(29,860)
(50,692)
20,832
-
(29,860)
At a general meeting every shareholder present in person or by proxy, representative or attorney has: a) o n a show of hands,
one vote; and b) on a poll, one vote for each fully paid share held .
a)
Summaries of warrants granted
Note 17 Reserves and Accumulated Losses
Reserves
Fair value reserve of financial assets
Profit Reserve – Dividend
Warrants reserve
Closing balance
Fair Value Reserve of Financial Assets
Balance at the beginning of the period
Changes in the fair value of equity investments
Balance at the end of the period
Profit Reserve Account
Balance at the beginning of the period
Transfer from accumulated losses
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
2020
($000)
12
24,783
3,088
27,883
10
2
12
-
24,783
24,783
3,088
-
-
3,088
31 Dec
2019
($000)
10
-
3,088
3,098
10
-
10
-
-
-
4,314
-
(1,226)
3,088
The profits from the year ended 31 December 2020 was transferred to a profit reserve to be applied against future dividend
payments.
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.
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
2020
35,810,714
-
-
WAEP
2020
0.1204
-
-
Number
2019
35,810,714
-
-
WAEP
2019
0.1204
-
-
35,810,714
0.1204
35,810,714
0.1204
35,810,714
0.1204
35,810,714
0.1204
b) Weighted average remaining contractual life
The weighted average remaining contractual life for the warrants outstanding as at 31 December 20 20 is between 2 and 3 years
(31 December 2019: Between 3 and 4 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 2019 :
$0.11385 to $0.1365).
d) Weighted average fair value
The weighted average fair value of warrants granted during the year was Nil (31 December 2019: Nil).
52
Image Resources NL
- 38 -
- 39 -
2020 Annual Report
53
NNootteess ttoo tthhee ffiinnaanncciiaall ssttaatteemmeennttss ((ccoonntt..))
NOTES TO THE FINANCIAL STATEMENTS (CONT.)
For the Year Ended 31 December 2020
For the Year Ended 31 December 2020
NNootteess ttoo tthhee ffiinnaanncciiaall ssttaatteemmeennttss ((ccoonntt..))
NOTES TO THE FINANCIAL STATEMENTS (CONT.)
For the Year Ended 31 December 2020
For the Year Ended 31 December 2020
e) Warrants pricing model
Outside of the NPB Project the Company’s other tenements may contain dredge mining targets which c ould be subject to Native
The fair value of the warrants granted during the year ending 31 December 2018 was estimated as at the date of grant using a
Title claim.
Black-Scholes option pricing model taking into account the terms and conditions upon which the warrants were granted.
The Company is not in a position at this time to assess the likely effect of any Native Title claim impacting the Company.
The following table lists the inputs to the model used for the year ended 31 December 2018.
During 2020, the Company purchased two properties to the north of the Boonanarring project with a view to adding to the
31 Dec
2018
31 Dec
2018
Tranche A
Tranche B
Dividend yield (%)
Expected volatility (%)
Risk-free interest rate (%)
Expected life of warrants (years)
Warrant exercise prices ($)
Weighted average share price at grant
date ($)
Nil
85%
2.50%
5.02
$0.091
$0.13
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
reserve base.
Note 20 Significant Events Subsequent to Reporting Date
Other than the following matter s:
On 20 January 2021, The Company’s thirtieth shipment of 14,588 Metric Tonnes of HMC finished loading backed by a letter
of credit. Subsequently, on 28 January 2021, full payment for the shipment was received by Image, in USD.
On 10 February 2021, The Company repaid the balance of the Senior S ecured Loan Notes facility. The repayment amount
including interest was US$13,819,793.
On 9 and 10 February 2021, The Company’s thirty first and thirty second cargoes totalling 26,248 Metric Tonnes of HMC
finished loading backed by a letter of credit to two customers. Subsequently, on 18 and 23 February 2021, full payment for
the shipment was received by Image, in USD.
On 25 February 2021, the Company’s thirty third cargo totalling 19,398 Metric Tonnes of HMC finished loading backed by
a letter of credit. Subsequently, on 5 March 2021, full payment for the shipment was received by Image, in USD .
that the historical volatility was indica tive of future trends, which may also not necessarily be the actual outcome. No other
There were no other material significant events subsequent to the reporting date.
features of warrants granted were incorporated into the measurement of fair value.
Note 18 Tenement Expenditure and Leasing Commitments
The Company has certain obligation s to perform minimum exploration work on the tenements in which it has an interest. Thes e
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 $1,646,967.
Application for exemption from all or some of the prescribed expenditure con ditions 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.
Note 21 Employee Benefits
Employee Share Plan
Under the terms of the Image Share P lan (“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 loan granted
by the Company.
The issue price is determined by the Directors 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 plan 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 prescribed expenditure conditions are not met with respe ct to a tenement, that tenement is liable to forfeiture.
if the employee is currently employed.
The Company has the ability to diminish its exposure under these conditions through the application of a variety of techniques
including applying for exemptions (from the regulatory expenditure obli gations), surrendering tenements, relinquishing portions
of tenements or entering into farm-out agreements whereby third parties bear the burdens of such obligation in whole or in part.
The Company has leased office premises at 23 Ventnor Avenue, West Per th, WA. The lease expired on 31 July 2020 and was
renewed for twelve months to 31 July 202 1. The commitment for the 2021 financial year is $141,646 including all outgoings and
car parking.
Note 19 Tenement Access
The interests of holders of freehold land encroached by the Tenements are 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 secur ed 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 finalised negotiations with the Traditional Owners and their representatives in regard to the Native Title claim
affecting part of the Atlas deposit and being the subject of a regis tered (but undetermined) claim. The agreement is in the
process of being signed by all parties. 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 awar e, 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.
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
Number
2020
12,854,104
12,875,014
WASIP
2020
0.230
0.195
WASLP
2020
0.224
0.195
Number
2019
3,504,152
10,257,301
-
-
-
(907,349)
Cancelled during the year
(1,715,220)
0.260
0.260
-
WASIP
2019
0.120
0.260
0.120
-
Outstanding at 31 December
24,013,898
0.205
0.205
12,854,104
0.230
Exercisable at 31 December
11,138,884
0.225
0.217
3,900,616
0.150
WASLP
2019
0.120
0.250
0.120
-
0.224
0.120
Equity-Settled Share Based Payments
The Directors may, in their absolute discretion, grant options to Directors and full or part time employees of the Company for nil
consideration in accordance with guidelines established by the Directors. The exercise price of the option is set by the Boar d of
Directors. Unvested options may terminate upon cessation of employment in accordance with the terms on which the options
were granted.
The share-based payments expense for the year ending 31 December 2020 and year to 31 December 2019 was Nil.
There were no options issued during the year ended 31 December 2020 and year to 31 December 2019.
54
Image Resources NL
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- 41 -
2020 Annual Report
55
NNootteess ttoo tthhee ffiinnaanncciiaall ssttaatteemmeennttss ((ccoonntt..))
NOTES TO THE FINANCIAL STATEMENTS (CONT.)
For the Year Ended 31 December 2020
For the Year Ended 31 December 2020
NNootteess ttoo tthhee ffiinnaanncciiaall ssttaatteemmeennttss ((ccoonntt..))
NOTES TO THE FINANCIAL STATEMENTS (CONT.)
For the Year Ended 31 December 2020
For the Year Ended 31 December 2020
NOTE 22 RELATED PARTY AND RELATED ENTITY TRANSACTIONS
NOTE 23 CONTINGENT LIABILITIES
Other than those matters disclosed in Notes 1 8 and 19, there are no contingent liabilities or commitments.
Key Management Personnel Compensation
Short- term employee benefits
Post-employment benefits
Equity-settled share-based payments
Short-term employee benefits
31 Dec
2020
($000)
1,965
111
-
2,076
31 Dec
2019
($000)
1,979
102
-
2,081
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
These amounts include fees and benefits paid to non -executive Chair and non-executive directors as well as all salary and paid
The main risks the Company is exposed to throug h its financial instruments, are commodity price, interest rate and liquidity
leave benefits awarded to executive directors and other KMP.
Post-employment benefits
risks.
Interest Rate Risk
These amounts are the costs of superannuation contributions payable for the period.
Exposure to interest rate risk arises on financial assets and financial liabilities recognised at reporti ng date whereby a
Equity-settled share-based payments
future change in interest rates will affect future cash flows or the fair value of fixed rate financial instruments.
This amount is calculated as the fair value of the options and represents the value of the services received during the per iod
Liquidity Risk
the options are held over the financial period. This value 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 in formation has been included in the Remunerat ion Report section of the
Directors Report.
Transactions with other related parties
Transactions between related parties are on commercial terms and conditions, no more favourable than those available to other
parties unless otherwise stated. Transactions with directors, director -related parties and related entities other than those
disclosed elsewhere in this financial report are as follows:
The Company manages liquidity risk by monitoring forecast cash flows, cash reserves, liquid investments, r eceivables,
financial liabilities and commitmen ts.
Capital Risk
Management controls the capital of the Company in order to maintain the appropriate working capital position to ensure
that the Company can fund its operation, 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 adjusting its capital
structure in response to changes in these risks and in the market.
The working capital position of the Company at 31 December 2020 and 31 December 201 9 was as follows:
Revenue
Concentrate Sales - Orient Zirconic Resources (Australia) Pty Ltd
Expenses
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 – 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
2020
($000)
53,105
(1)
-
-
(10)
-
-
Year to
31 Dec
2019
($000)
-
-
(89)
(4,000)
(417)
75
1,116
(2)
(4)
53,092
(3,319)
Total amounts owing to directors and/or director -related parties and related entities at 31 December 2020 were Nil (31 December
2019: $Nil ). All transactions were incurred on normal commercial terms and were arm’s length transactions.
Orient Zirconic Resources (Australia) Pty Ltd is a related party due to its 5.22% interest in the shares of the Company and
Director Chaodian Chen being a director of its owner Guangdong Orient Zirconic In Sci & Tech Co., Ltd. Murray Zircon Pty Ltd
is a related party due to it holding a 20.53% interest in the shares of the Company.
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
2020
($000)
50,706
55
12,191
20,441
(19,610)
(17,199)
46,584
31 Dec
2019
($000)
49,935
55
593
16,789
(16,902)
(37,679)
12,791
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
Company. Credit risk arises from cas h and deposits with financial institutions as well as credit exposures to outstanding
receivables.
The Company is not exposed to credit risk through sales of mineral sands 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 collateral
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 St atement of Financial Position and notes to the financial statements.
The Company has lodged cash deposits (designated as restricted cash above) totalling $54,667 (201 9: $54,667) with the
bank as collateral security for office lease property managers for re ntal guarantees and also security for company credit
cards.
56
Image Resources NL
- 42 -
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2020 Annual Report
57
NNootteess ttoo tthhee ffiinnaanncciiaall ssttaatteemmeennttss ((ccoonntt..))
For the Year Ended 31 December 2020
NOTES TO THE FINANCIAL STATEMENTS (CONT.)
For the Year Ended 31 December 2020
NNootteess ttoo tthhee ffiinnaanncciiaall ssttaatteemmeennttss ((ccoonntt..))
NOTES TO THE FINANCIAL STATEMENTS (CONT.)
For the Year Ended 31 December 2020
For the Year Ended 31 December 2020
The following table provides information regarding the credit risk relating to cash and cash equivalents , term deposits and
restricted cash based on Standard & Poors credit ratings:
AA- rated
Financial Instruments
31 Dec
202 0
($000)
50,816
31 Dec
2019
($000)
49,990
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 instru ments.
Weighted
Average
Effective
Interest
Rate %
Fixed
Interest
Rate
($000)
Floating
Interest
Rate
($000)
Non-
Interest
Bearing
($000)
Net Financial Assets
(17,199)
50,816
(7,391)
26,226
31 December 2020
Financial Assets:
Cash and cash equivalents
Restricted cash
Trade and other receivables
Equity investments at fair value
Total Financial Assets
0.003%
Financial Liabilities:
Trade and other payables and provisions
Borrowings
Total Financial Liabilities
13%
31 December 2019
Financial Assets:
Cash and cash equivalents
Restricted cash
Trade and other receivables
Equity investments at fair value
Total Financial Assets
0.02%
Financial Liabilities:
Trade and other payables and provisions
Borrowings
Total Financial Liabilities
13%
Total
($000)
50,761
55
-
-
50,761
55
-
-
-
-
-
19,610
-
19,610
19,610
17,199
36,809
Floating
Interest
Rate
($000)
49,935
55
-
-
49,990
Non-
Interest
Bearing
($000)
-
-
593
27
620
-
-
-
16,983
-
16,983
Total
($000)
49,935
55
593
27
50,610
16,983
56,537
73,520
-
-
-
-
-
-
17,199
17,199
-
-
-
-
-
-
56,537
56,537
Weighted
Average
Effective
Interest
Rate %
Fixed
Interest
Rate
($000)
The table below summarises the maturity profile of the Company’s’ financial liabilities according to their contractual
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 2020
Trade and other payables and provisions
Borrowings
31 December 2019
Trade and other payables and provisions
Borrowings
Less than
3 months
($000)
19,610
8,552
28,162
Less than
3 months
($000)
16,902
9,402
26,304
3 to 12
Months
($000)
-
8,552
8,552
3 to 12
Months
($000)
-
28,205
28,205
1 to 5
years
($000)
-
-
-
1 to 5
years
($000)
-
18,803
18,803
Total
($000)
19,610
17,104
36,714
Total
($000)
16,902
56,410
73,312
Please refer to Note 15 for further details of the Senior Secured Debt Facility .
b)
Financial Instruments Measured at Fair Value
•
•
•
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 (derived 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 2020
Financial Assets:
Financial assets at fair value through profit or loss:
Equity investments at fair value:
-
Listed investments
31 December 2019
Financial Assets:
Financial assets at fair value through profit or loss:
Equity investments at fair value:
-
Listed investments
Level 1
($000)
Level 2
($000)
Level 3
($000)
Total
($000)
28
28
-
-
-
-
28
28
Level 1
($000)
Level 2
($000)
Level 3
($000)
Total
($000)
27
27
-
-
-
-
27
27
12,191
12,191
28
28
The financial instruments recognised at fair value in the sta tement 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
50,816
12,219
63,035
hierarchy consists of the following levels:
Net Financial Assets
(56,537)
49,990
(16,363)
(22,910)
58
Image Resources NL
2020 Annual Report
59
- 44 -
- 45 -
NNootteess ttoo tthhee ffiinnaanncciiaall ssttaatteemmeennttss ((ccoonntt..))
For the Year Ended 31 December 2020
NOTES TO THE FINANCIAL STATEMENTS (CONT.)
For the Year Ended 31 December 2020
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
2020
($000)
(1,015)
1,015
1,015
(1,015)
31 Dec
2019
($000)
(1,000)
1,000
1,000
(1,000)
(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 2020 and performance for the year ended
on that date of the Company; and
the audited remuneration disclosures set out in the Remun eration Report section of the Directors’ Report for
the year ended 31 December 2020 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)
the financial records of the company for the financial year have been properly maintained in acco rdance with
section 286 of the Corporations Act 2001;
(b)
the financial statements and the notes for the financial year comply with Accounting Standards; and
(c)
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 statem ent of
compliance with International Financial Reporting Standards.
This declaration is made in accordance with a resolution of the Board of Directors.
ROBERT BESLEY
CHAIRMAN
PERTH
Dated this 10 March 202 1
60
Image Resources NL
- 46 -
- 47 -
2020 Annual Report
61
IInnddeeppeennddeenntt AAuuddiittoorr’’ss RReeppoorrtt ((ccoonntt..))
INDEPENDENT AUDITOR’S REPORT
IInnddeeppeennddeenntt AAuuddiittoorr’’ss RReeppoorrtt ((ccoonntt..))
INDEPENDENT AUDITOR’S REPORT (CONT.)
Provision for Rehabilitation
Refer to Note 14, Provisions and accounting policy Notes 1o and 1t
Key Audit Matter
How our audit addressed the key audit matter
Independent Audit Report to the members of Image Resources NL
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Image Resources NL (the Company), which comprises the statement of financial
position as at 31 December 2020, 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.
In our opinion, the accompanying financial report of the Company is in accordance with the Corporations Act 2001,
including:
(i) giving a true and fair view of the Company's financial position as at 31 December 2020 and of its financial performance
for the year then ended; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are
further described 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.
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.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
financial report of the current 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.
62
Image Resources NL
- 48 -
As at 31 December 2020, the company has a
liability of $19,720,000
to
the
rehabilitation,
of
estimated
decommissioning and restoration relating to
areas
in
operation
Boonanarring but not yet rehabilitated.
disturbed
relating
during
cost
The provision is based upon current cost
estimates and has been determined on a
discounted basis with reference to current
legal requirements and technology. At each
reporting date the rehabilitation liability is
reviewed and
line with
re-measured
changes in observable assumptions, timing
and the latest estimates of the costs to be
incurred based on area of disturbance at
reporting date.
in
is a key audit matter as the
This area
determination of
liability
involves a level of complex calculations and
significant management judgement.
restoration
the
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 provision estimate.
• Testing
the accuracy of historical
rehabilitation
expenditure.
provisions
by
comparing
restoration and
actual
to
• Assessing the planned timing of environmental restoration
and demobilisation provisions through comparison to mine
plans and reserves.
• Assessing the competence, scope and objectivity of the
company’s external experts used in determination of the
provisions estimate.
• Analysed inflation rate and discount assumptions in t he
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.
Revenue Recognition
Refer to Note 3, Operating sale revenue and accounting policy Notes 1a
Key Audit Matter
How our audit addressed the key audit matter
The entity has reported revenue of AUD176
million from sales of minerals.
Our audit work included, but was not restricted to, the
following:
The application of
recognition
accounting standards is complex and involves
a number of key judgements and estimates.
revenue
There is also a risk around the timing of
revenue recognition, particularly focused on
the contractual terms of delivery and location
of the customers.
Based on these factors, we have identified
revenue recognition as a key risk for our audit
• considering the appropriateness of the revenue recognition
accounting policies.
• understanding the significant revenue processes including
performance of an end to end walkthrough of the revenue
assurance process and identifying the relevant controls.
• performing cut off procedures
• 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
- 49 -
2020 Annual Report
63
IInnddeeppeennddeenntt AAuuddiittoorr’’ss RReeppoorrtt ((ccoonntt..))
INDEPENDENT AUDITOR’S REPORT (CONT.)
INDEPENDENT AUDITOR’S REPORT (CONT.)
IInnddeeppeennddeenntt AAuuddiittoorr’’ss RReeppoorrtt ((ccoonntt..))
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.
• 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.
Our opinion on the financial report does not cover the other information and accordingly we do not express any form of
assurance conclusion thereon.
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.
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.
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.
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.
Responsibilities of Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in
accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the
directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free
from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the 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.
64
Image Resources NL
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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 19 to 24 of the directors’ report for the year ended 31
December 2020. 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.
Opinion
In our opinion, the Remuneration Report of Image Resources NL for the year ended 31 December 2020 complies with
section 300A of the Corporations Act 2001.
Elderton Audit Pty Ltd
Nicholas Hollens
Managing Director
10 March 2021
Perth
- 51 -
2020 Annual Report
65
AASSXX aaddddiittiioonnaall IInnffoorrmmaattiioonn
ASX ADDITIONAL INFORMATION
AASSXX aaddddiittiioonnaall IInnffoorrmmaattiioonn
ASX ADDITIONAL INFORMATION (CONT.)
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
Paradice Investment Management Pty Ltd
Number of Ordinary
Shares
203,663,951
172,770,065
64,183,760
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 option s
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 23 February 2021.
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
290
523
379
989
467
2,648
141,117
1,631,619
3,026,754
39,555,469
947,784,734
992,139,693
The number of shareholders holding less than a marketable parcel of
shares are:
586
779,643
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
Murray Zircon Pty Ltd
Vestpro International
HSBC Custody Nominees (Australia) Limited
Orient Zirconic Resources (Australia) Pty Ltd
J P Morgan Nominees Australia Pty Limited
Brazil Farming Pty Ltd
Citicorp Nominees Pty Limited
Perfect Well Industrial Limited
Brazil Farming Pty Ltd
10
10
Ava Cartel Sdn Bhd
TQ International
11 Miss Choy Fuan Ku
12
Pontian Orico Plantations Sdn Bhd
13 Mrs Shumei Chen
14
Delphi Unternehmensberatung Aktiengesellschaft
15 National Nominees Limited
16
17
Ribton Superannuation Fund Pty Ltd
Sparta AG
17 Mr Lim Pang Soo
18
BNP Paribas Nominees Pty Ltd
19 Miss Chong Yuen Soo
20
UBS Nominees Pty Ltd
Number of
shares
151,902,001
131,936,921
80,236,204
51,761,950
38,507,684
27,700,000
25,610,040
22,420,082
20,197,109
18,000,000
18,000,000
14,330,000
11,539,728
11,092,500
11,049,332
10,864,565
10,100,000
10,000,000
10,000,000
8,571,180
8,122,043
6,438,232
Percentage of
ordinary shares
15.31%
13.30%
8.09%
5.22%
3.88%
2.79%
2.58%
2.26%
2.04%
1.81%
1.81%
1.44%
1.16%
1.12%
1.11%
1.10%
1.02%
1.01%
1.01%
0.86%
0.82%
0.65%
698,379,571
70.39%
66
Image Resources NL
- 52 -
- 53 -
2020 Annual Report
67
SCHEDULE OF TENEMENTS
SScchheedduullee ooff TTeenneemmeennttss
Location
Tenement
Status
Tenement
Granted
ERAYINIA
Granted
Granted
Granted
MADOONIA DOWNS
COOLJARLOO
BIDAMINNA NTH
Granted
COOLJARLOO
Granted
GINGIN
Granted
REGANS FORD SOUTH
Granted
Granted
Granted
QUINNS HILL
BOOTINE
BIDAMINNA - PARK
Granted
BRYALANA
Granted
BLUE LAKE
Granted
CHAPMAN HILL
Granted
Granted
Granted
Granted
Granted
MUNBINIA
DARLING RANGE
WOOLKA
MUNBINIA WEST
WINOOKA NORTH
Granted
BIBBY SPRINGS
Granted
Granted
Granted
BOONANARRING WEST
MIMEGARRA
REGANS FORD NORTH
Other Holder
ARF Maslin 10%
Entity’s Interest
(%)
100
100
100
100
100
100
100
100
100
90
100
100
100
100
100
100
100
100
100
100
100
100
Application BIDAMINNA SOUTH
100% pending
Granted
ORANGE SPRINGS
Granted
RED GULLY NORTH
Granted
Granted
NAMMEGARRA
SADDLE HILL
100
100
100
100
Application WINOOKA SOUTH
100% pending
Granted
Granted
CHAPMAN HILL NORTH
GINGINUP HILL
Granted
WOOLKA SOUTH
Granted
BOONANARRING HILL
100
100
100
100
Application COOLJARLOO EAST
100% pending
Application BLUE LAKE WEST
Application COONABIDGEE
Granted
BOONANARRING
Granted
GINGIN SOUTH
Granted
Granted
RED GULLY
BOONANARRING
100% pending
100% pending
100
100
100
100
Application ATLAS
100% pending
Granted
BOONANARRING NORTH
100
E28/1895
E28/2742
E70/2636
E70/2844
E70/2898
E70/3032
E70/3041
E70/3100
E70/3192
E70/3298
E70/3494
E70/3720
E70/3892
E70/3997
E70/4077
E70/4244
E70/4631
E70/4656
E70/4663
E70/4689
E70/4779
E70/4794
E70/4795
E70/4919
E70/4946
E70/4949
E70/5034
E70/5192
E70/5193
E70/5213
E70/5268
E70/5306
E70/5552
E70/5646
E70/5661
G70/0250
M70/448
M70/1192
M70/1194
M70/1305
M70/1311
P28/1320
Granted
KING PROSPECT
Earning up to 100%
Westex Resources P/L –
Rocky Reef Mining P/L and
P28/1321
Granted
KING PROSPECT
Earning up to 100%
Westex Resources P/L –
100%
100%
Rocky Reef Mining P/L and
P70/1516
P70/1520
R70/0051
R70/0062
Granted
COOLJARLOO JV
100
Application COOLJARLOO
100% pending
Granted
Granted
COOLJARLOO
NAMBUNG
100
100
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
WA
WA
WA
WA
WA
WA
68
Image Resources NL
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CORPORATE DIRECTORY
DIRECTORS
Mr Robert Besley
Mr Patrick Mutz
Non-Executive Chairman
Managing Director
Mr Chaodian Chen
Non-Executive Director
Mr Huancheng Li
Non-Executive Director
Mr Aaron Chong Veoy Soo
Non-Executive Director
Mr Peter Thomas
Non-Executive Director
Mr Fei Wu
Non-Executive Director
COMPANY SECRETARY
Mr Dennis Wilkins (DW Corporate)
PRINCIPAL PLACE OF BUSINESS & REGISTERED OFFICE
Ground Floor
23 Ventnor Avenue
West Perth WA 6005
CONTACT DETAILS
+61 8 9485 2410
T:
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
+61 (0) 2 9698 5414 (International)
1300 288 664 (within Australia)
T:
T:
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
992,139,963 fully paid ordinary shares
www.imageres.com.au