Invesco Mortgage Capital
Annual Report 2019

Plain-text annual report

Investigator Resources Limited ABN 90 115 338 979 Annual Report 2019 Investigator Resources Limited Corporate Directory 30 June 2019 Directors D.M. Ransom (Chairman) K.J. Wilson (Non-Executive Director) A. McIlwain (Director and Acting Chief Executive Officer) Joint company secretaries Ms Melanie Leydin Ms Anita Addorisio Notice of annual general meeting Thursday, 28 November 2019 at 11.30am Grant Thornton Level 22, Collins Square, Tower 5 727 Collins Street Melbourne VIC 3008 Registered office 18 King Street, Norwood SA 5067 Principal place of business 18 King Street Norwood SA 5067 Share register Auditor Solicitors Computershare Limited Level 5, 115 Grenfell Street Adelaide SA 5000 Grant Thornton Audit Pty Ltd Level 3, 170 Frome Street Adelaide SA 5000 Baker & McKenzie L19, CBW, 181 William Street Melbourne VIC 3000 Stock exchange listing Investigator Resources Limited shares and options are listed on the Australian Securities Exchange (ASX code: IVR and IVROA) Website www.investres.com.au 1 Investigator Resources Limited Contents 30 June 2019 Chairman’s Letter Review of Operations Tenement Schedule Financial Report Directors’ Report Auditors Independence Declaration Financial Statements Directors Declaration Independent Auditor’s Report Shareholder Information 3 4 10 11 21 22 49 50 54 2 Investigator Resources Limited Chairman’s Letter 30 June 2019 In my Chairman’s Letter for 2017-2018 I promised the following plan would guide activities for Investigator for the 2019 financial year, as follows: • We would change the prevailing grass-roots exploration strategy to generation of more advanced exploration projects. • We would rationalise tenement holdings. This would entail a reduction in tenement holdings in South Australia, • • particularly those with high geological risk. The Paris Silver Project would remain a core asset of the Company, irrespective of the outcome of the PFS. It has size, grade and optionality to the silver price. The high risk/high reward Maslins IOCG Project would be de-risked by way of a farm-out/joint venture arrangement with a suitable partner. This plan necessitated a tightening of the cash outgoings and restructuring of the material and human resources of the Company. All these objectives except for the acquisition of an advanced exploration project were initiated within the 2018-2019 financial year. Moreover, the plan was prescient given the financial environment within which the Company operated. Risk capital was difficult to raise owing to stagnating commodity prices, and farm-out opportunities were limited by the financial management strategies of mid-and large-cap companies. The stampede by microcaps into industrial minerals, notably cobalt, lithium and graphite, which Investigator chose to ignore, hurt investors in that market. Our share price sank to its perigee of $0.08/share in May 2019, essentially reflecting the low point in the Materials Sector market. Ironically, the macro environment for commodities changed significantly in June 2019, when the international markets started to perceive risk arising from low interest rate settings and the trade imbroglio between the USA and China. Gold broke out of its holding pattern which had prevailed from January 2019 and commenced its current bull market. Silver followed, but the base metals generally remain stagnant despite the optimistic projections of the commodities analysts. With respect to our efforts to generate a project to carry Investigator forward, we have reviewed about 80 opportunities, both local and international which have ranged from desk to field investigations. It was concluded that cost and country risk militated against acquisitions offshore. Despite a tightening regulatory environment and somewhat higher geological risk, our project generation efforts would be confined to Australia. This process is continuing and we would expect that the final objective will be fulfilled by the end of calendar 2019. On behalf of the Board, I wish to acknowledge the exploration team in Adelaide for their loyalty and dedication to the Company in a market which has been generally unsupportive. I also acknowledge the contributions of my fellow directors, notably Andrew McIlwain, whose efforts in the thankless task of restructuring the Company as Acting CEO, were carried out with competence and good humour. Dr David Ransom Chairman 3 Investigator Resources Limited Review of Operations 30 June 2019 MASLINS Investigator 100%) IOCG PROJECT (Whittata - EL5705; The Maslins Iron Oxide Copper Gold (“IOCG”) Project is located approximately 50km south of OZ Minerals’ Carrapateena mine and lies within the Olympic Dam Belt of IOCG deposits. Maslins is an undrilled gravity anomaly interpreted as having a shallower depth to basement (estimated to be up to 600m) than the BHP’s recently announced Oak Dam discovery 80kms to the North West. The Maslins anomaly is complex, estimated to be 6km in length and 1km wide and comprises a curved gravity and partly magnetic trend with a prominent gravity high at its northern end. Originally granted to Investigator in 2016, the area was identified using regional gravity in conjunction with the 2015 Magneto-Telluric (“MT”) data which defined a deep MT conductivity corridor connecting Prominent Hill, Olympic Dam, Carrapateena and the recently discovered Oak Dam IOCG deposits (see Figure 1). It is relevant in that Oak Dam was a revisited target evidently modelled solely on gravity and lies below about 1km of cover. The MT surveys by Geoscience Australia (GA) and proprietary data compiled by Investigator defined a drillable to be target considered by management analogous to Olympic Dam. Figure 1: Geoscience Australia’s AusLAMP MT 20km depth slice smoothed image showing the Olympic Domain MT corridor and location of major IOCG deposits and Investigator’s tenement holdings. 4 Investigator Resources Limited Review of Operations 30 June 2019 In January 2018, Investigator joined with GA and the Geological Survey of South Australia to undertake an infill MT geophysical survey across the Maslins target area. The combined data from both the Investigator stations and the GA survey was processed and 3D modelled by a geophysical consultant. (GSSA) The MT data indicated a complex geoelectrical regime, requiring three-dimensional (3D) inversion to provide reliable results. This 3D inversion showed two large mid crustal conductors imaged to the north and south of the survey area. A key anomaly was a conductive zone interpretable as a “pipe”, or “flare”, originating from the southern mid-crustal conductor and extending towards the Maslins gravity target, shown in Figure 2. Figure 2: 3D model resistivity slices of MT data across the Maslins target, identifying a conductive pipe trending from mid-crustal regional conductor towards Maslins gravity target. Investigator also engaged a geophysical consultant to independently review, reassess and verify the previous gravity and magnetic modelling, including a focus on assessing the gravity target in relation to known magnetic bodies in the region. Data from the recently released GSSA’s Gawler Craton Airborne Survey was included in this magnetic modelling. This detailed database enabled previously identified anomalies to be modelled at a greater level of confidence and, significantly, has improved the interpreted locations of Gairdner dykes that pervade the magnetic data. Comprehensive modelling of the gravity and magnetic data using a variety of scenarios has concluded that the Maslins Target is not related to the Gairdner dykes themselves but is a valid magnetic and gravity target in its own right. The modelling of regional gravity data identified a number of gravity targets at relatively shallow depths along its trend. The closest drill hole previously drilled deep enough to intersect prospective basement is some 7km northeast of the Maslins Target. This work has enabled Investigator to produce more refined 3D models which will enhance drill hole targeting (see Figure 3). 5 Investigator Resources Limited Review of Operations 30 June 2019 Figure 3: 3D modelled gravity shell looking to the NW over Maslins with previous drilling and tenement boundary indicated. Investigator’s proposed drill holes shown in green. Geophysical data collection, interpretation and modelling provided further insight into the prospectivity of the Maslins anomaly, and Investigator determined that the scale of the Maslins anomaly and scope of the geological potential requires a minimum 3,000m diamond drilling programme to test it, as a high risk, high reward target. Post year-end, Investigator announced signing of a binding Heads of Agreement (HOA) with OZ Minerals Limited (ASX: OZL or OZ Minerals) whereby OZ Minerals will fund up to a $10 million, three-stage program to explore Investigator’s Maslins IOCG Project. Through this multistage program, OZ Minerals committed to undertake further geophysical surveys, including gravity and Magneto-Telluric (“MT”), in order to better define target locations in the Maslins Project prior to drilling. The initial diamond drill program of approximately 3,000m will commence in early 2020 and be completed by mid-year. Upon the completion of this first-stage option period, with a committed expenditure of $1.4 million, OZ Minerals will then decide whether to commit to further exploration and expenditure towards earning a joint venture interest or withdraw with no project interest earned. The Maslins Project is located on EL 5705 (100% owned by Gawler Resources Pty Ltd, a wholly owned subsidiary of Investigator) that is subject of this HOA. Investigator retains 100% of its adjacent tenements in the area, including the recent EL Application 2019/00055 which adjoins EL 5705 to the south. HOA key elements: Stage 1 Program or Option Period - - - - - Infill MT and gravity surveys – to be completed in 2019; Diamond drilling - to commence in early 2020; Investigator to manage the Stage 1 exploration work program; Expenditure of $1.4 M before withdrawal; If early withdrawal, OZ Minerals is obliged to pay the balance of the $1.4 million commitment in cash; and - On completion of Stage 1 expenditure, and before 12th July 2020, OZ Minerals will commit to progress to Stage 2 or withdraw with no project interest earned. Stage 2 Program - Further expenditure to a total of $4 million (including Stage 1 expenditure) within a two-year period to earn a right to a 51% interest in the Joint Venture. Stage 3 Program - - A Joint Venture (OZL 51%, IVR 49%) is formed; and For a further expenditure of $6 million over a two- year period, OZ Minerals can earn an additional 19% Joint Venture interest for a total of 70%. 6 Investigator Resources Limited Review of Operations 30 June 2019 Further work programs - - Post completion of Stage 3, and with a 70% Joint Venture interest earned by OZ Minerals, Investigator may elect to either fund further exploration and development costs on a pro-rata basis or dilute to a 20% Joint Venture interest until a positive decision to mine is made; and If diluted to 20%, Investigator’s share of the further work programs and development cost will be treated as a loan from OZ Minerals to be repaid from future production revenues. Additional gravity and MT surveys, as part of OZ Minerals’ Earn-In commitment and complementing the previously completed detailed surveys, will commence shortly and be used in the final design of the proposed diamond drill program commencing in early 2020. PETERLUMBO (EL5368: Investigator 100%) Paris Silver Project The Paris Silver Project lies within the Company’s 100% held Peterlumbo tenement, 60km northwest of the town of Kimba, on the well-serviced northern Eyre Peninsula of South Australia. The Paris Silver Project has an estimated Indicated and Inferred Mineral Resource of 9.3million tonnes at 139 g/t silver and 0.6% lead (at a 50 g/t silver cut-off) for a contained resource of 42 million ounces of silver and 55 thousand tonnes of lead. Paris is one of the best undeveloped silver projects in Australia. In the September 2018 quarter, Investigator completed a review of the results of the metallurgical testwork completed by Core Metallurgy as part of the Paris Pre- testwork was Feasibility Study. improve commissioned to metallurgical recoveries. enhance lead recoveries and improve the gross revenue of the product, however silver recoveries remained at about 74%. It identified alternatives to define opportunities further This to Investigator ceased metallurgical testwork and flowsheet optimisation and contacted several North American silver specialist metallurgists to review the findings of Core’s final report with the aim of defining any future work that can improve the project’s performance when silver economics improve. In the March 2019 quarter, Investigator applied for and was granted a further three-year term for the Peterlumbo tenement (EL 5368) from the licence expiry. Towards year-end, there was renewed market interest in precious metals and a corresponding improvement in silver price, meaning Investigator’s decision to retain the project will continue the Company with significant to provide exposure and leverage to silver. 7 Investigator continued environmental and groundwater monitoring and rehabilitation works in accordance with licence conditions. Cartarpo Cobalt-Copper project Investigator collected more than 300 soil samples across the historic Cartarpo cobalt-copper mine and surrounds in the December quarter. These samples returned some anomalous copper and gold results and a work program to follow up has been developed, however work has been deferred to conserve Investigator’s cash position. OTHER TENEMENTS In the June 2019 quarter, Investigator pegged an area immediately south of EL 5705 (within which the Maslins Project sits) after it became vacant. This application (ELA 2019/00055) will add to Investigator’s strategic tenement holdings within the Olympic Domain IOCG belt. During the September 2018 quarter, Investigator was granted the Screechowl tenement (EL6226). This will allow exploration activities to assess magnesite potential northwest of Leigh Creek. Additionally, Bulloo Creek (EL6253) was granted, which is part of the Wiawera and Plumbago tenement holding. Surface rock sampling by Aztec Mining in 1990 of narrow mine exposures returned maximum assays of 47% copper, 32g/t gold, 760g/t silver and 1.5% lead (Aztec Mining - SAMREF ENV8235). The plan is to follow up on undrilled historic workings and a structurally associated large magnetic anomaly in Wiawera that has driven new target concepts and opportunities in the Olary District. The Company continued the engagement process with the Traditional Owners of the eastern region of the Wiawera tenement with the aim of reaching an agreement to enable early and non-ground disturbing exploration activities to be undertaken. Applications at Boondina (ELA2018/008) and Cooper East Penong (ELA2018/112) tenements were offered but were not taken up due to the Company’s decision to rationalise tenement holdings. Thurlga Joint Venture Investigator held 75% of the Thurlga project, about 10km west of the Paris silver deposit, in a Joint Venture with Andromeda Metals Limited (ASX: ADN), however a review of the project early in the year led to the Company deciding to terminate the JV. CORPORATE Review of Corporate Strategy Early in the year, Investigator’s Board completed a review of corporate strategy and management structure of the Company and determined the Company needed change to better position itself for success in the current challenging financial environment. Investigator Resources Limited Review of Operations 30 June 2019 The Board concluded that the near-term focus was to acquire a high-profile advanced exploration project, without particular to commodity or restriction as jurisdiction, and it reviewed numerous opportunities. By year end, it had review more than 80 projects, from desk top studies through to site visits, across most several jurisdictions, commodities and promising domestic gold targets. Investigator expects to announce news on this early in FY2020. including Board Changes In August 2018, long-time Investigator Managing Director John Anderson announced he would step down from the role after more than 10 years. Investigator thanked him for his tireless work while in the role and wished him well in future endeavours. Andrew McIlwain, who was a Non-executive Director of Investigator since June 2018, was appointed in the interim as Acting Chief Executive Officer. Management Appointments Ms Melanie Leydin was appointed Chief Financial Officer and Joint Company Secretary following the resignation of Angelo Gaudio from the roles, while Ms Anita Addorisio was appointed Joint Company Secretary. Ms Leydin has more than 25 years’ experience in the accounting profession and nearly 15 years’ experience as a Company Secretary for ASX-listed companies. She is a Chartered Accountant and a Registered Company Auditor. Her company responsibilities includes ASX and ASIC compliance, control and implementation of corporate governance, statutory financial reporting, re-organisation of companies and shareholder relations. experience public in Ms Addorisio is an experienced finance professional with more than 15 years’ senior finance experience and six years’ experience as a Company Secretary for ASX-listed companies within several industry sectors including resources. She is a Fellow of CPA and holds a Masters in Accounting. JMEI tax credits In July 2019, Investigator was advised by the Australian Taxation Office (ATO) that its application for tax credits under the Federal Government’s Junior Minerals Exploration Incentive (JMEI) scheme was successful. The JMEI scheme, passed as legislation in March 2018 dating to 1 July 2017, enables eligible exploration back companies to create refundable tax credits to distribute to eligible shareholders by forgoing a portion of their carried forward tax losses that have arisen from allowable expenditure on "greenfield" exploration. 8 The JMEI applies to Shareholders who acquire new shares in a greenfields minerals explorer before the end of an income year in which the Commissioner has made an exploration credits allocation. The shares must be equity interests for the purposes of the debt and equity tax rules. Australian resident shareholders that are issued with JMEI credits will generally be entitled to refundable tax offsets (for individual shareholders or superannuation funds) or franking credits (for companies). Investigator’s application The ATO confirmed to participate in the JMEI scheme for the 2019/2020 tax year was accepted. As a result, the ATO allocated 100% of the $687,500 which Investigator applied for in exploration credits. This will be allocated to the Company for distribution to shareholders who acquire new Investigator shares after 1 July 2019 and prior to 30 June 2020. Investigator has not determined the timing of any future equity raising. The actual number of JMEI credits to be received by each Eligible Shareholder for the 2019/20 income year will depend on a number of factors including but not limited to: - - - The actual amount of allowable greenfields exploration expenditure incurred by the Company during the 2019/20 financial year; The total number of Investigator shares issued during the 2019/20 financial year; and Investigator’s tax losses for 2019/20 financial year following the lodgement of its 30 June 2020 tax return. Research & Development Tax Refund In November 2018, the Company announced the receipt of A$657,958 as a tax concession for the 2017/18 year under the Federal Government’s Research and Development (R&D) Tax Incentive program. The R&D Tax Incentive program assists businesses offset a portion of costs relating to certain R&D activities. The incentive is jointly administered by AusIndustry (on behalf of Innovation Australia) and the Australian Taxation Office. it was Post year-end, AusIndustry advised undertaking an examination of the registration for that concession. that Investigator engaged Ernst & Young (EY) to assist with the preparation of this submission and the Company submitted a comprehensive response to AusIndustry on 26 August 2019 and has received no response on the matter as at the date of this report. Investigator Resources Limited Review of Operations 30 June 2019 FY20 OUTLOOK The year ahead will be focused on a number of tasks. With the inception of the OZ Minerals earn-in/joint venture post year end, Investigator have completed the additional geophysical gravity survey at Maslins. This will be complemented with a further infill MT program and final drill hole designs will be proposed from the modeling of this newly acquired data. Diamond drilling of the Maslins anomaly is planned to commence in January 2020. Subsequent to year end, $2.2m was raised through a share placement led by PAC Partners, thereby securing funds that will enable Investigator to continue the search for an additional value accretive project. As noted in the Chairman’s Letter above, the focus is to secure a project within Australia and we are well advanced in this objective. COMPETENT PERSON STATEMENT The information in this report relating to exploration results is based on information compiled by Mr. Jason Murray who is a full-time employee of the company. Mr. Murray is a member of the Australian Institute of Geoscientists. Mr. Murray has sufficient experience of relevance to the styles of mineralisation and the types of deposits under consideration, and to the activities undertaken, to qualify as a Competent Person as defined in the 2012 Edition of the Joint Ore Reserves Committee (JORC) Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr. Murray consents to the inclusion in this report of the matters based on information in the form and context in which it appears. The information in this report that relates to Mineral Resources Estimates at the Paris Silver Project is extracted from the report entitled “Significant 26% upgrade for Paris Silver Resource to 42Moz contained silver” dated 19 April 2017 and is available to view on the Company website www.investres.com.au . The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement and that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. The company confirms the Competent Person’s findings are presented have not been materially modified the original market announcement. form and context in which from that the 9 Registered Holder Tenement Area (Km2) 583 583 343 78 98 167 26 26 1,969 491 901 492 85 719 492 189 20 18 386 112 274 355 355 4,381 - 169 169 Investigator Resources Limited Tenement Schedule 30 June 2019 All tenements are in South Australia as below: Tenement Number Tenement Name Project: Peterlumbo (IVR 100%) 6347 Peterlumbo Sunthe Project: Uno/Morgans (IVR 100%) 5845 5933 5913 Uno Range Morgans Harris Bluff Project: West Eyre Peninsula (IVR 100%) 5512 Googs Lake Project: Maslins (IVR 100%) 5704 5705 5706 5738 Project: Curnamona (IVR 100%) 5938 6192 6345 6253 Yalymboo-Oakden Hills Whittata Yudnapinna Birthday Wiawera Plumbago Treloars Olary/Bulloo Creek Project: Adelaide Geosyncline (IVR 100%) 5999 6226 Cartarpo Screechowl Creek Project: Northern Craton (IVR 100%) 6187 Algebuckina Total Granted Project Tenement Area GRL GRL GRL IVR GRL GRL GRL GRL GRL GRL GRL GRL GRL GRL GRL Applications ELA2019/00055 Kootaberra GRL Total Project Tenement Application Area Note: IVR - Investigator Resources Ltd. IVR 100% - Investigator Resources Ltd and its wholly owned subsidiaries. Sunthe - Sunthe Uranium Pty Ltd, a wholly owned subsidiary of Investigator Resources Ltd. GRL - Gawler Resources Pty Ltd, a wholly owned subsidiary of Investigator Resources Ltd. 10 Investigator Resources Limited Directors' report 30 June 2019 The Directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as the 'Consolidated Entity') consisting of Investigator Resources Limited (referred to hereafter as the 'Company' or 'Parent Entity') and the entities it controlled at the end of, or during, the year ended 30 June 2019. DIRECTORS The following persons were Directors of Investigator Resources Limited during the whole of the financial year and up to the date of this report, unless otherwise stated: D.M. Ransom Non-Executive Chairman K.J. Wilson A. McIlwain J. A. Anderson Managing Director (Resigned 16 August 2018) Non-Executive Director Director and Acting Chief Executive Officer (effective 16 August 2018) PRINCIPAL ACTIVITIES The principal activity of the Company during the year was mineral exploration. DIVIDENDS There were no dividends paid, recommended or declared during the current or previous financial year. REVIEW OF OPERATIONS The loss for the consolidated entity after providing for income tax amounted to $2,868,319 (2018: $581,461). The net result for the year includes receipt of the Research and Development tax incentive of $657,958 for the 2018 tax period and an impairment charge, associated with the relinquishment of tenements (detailed below), for exploration and evaluation assets of $1,797,782. During the year, the Company incurred $907,442 expenditure on exploration activities across the Company’s tenements, compared with $2,775,835 for the prior year. At 30 June 2019, the Company had a cash position of $1,204,981 (2018: $2,889,752). SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS There were no significant changes in the state of affairs of the consolidated entity during the financial year. MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR On 14 July 2019, the Company entered into a Heads of Agreement (HOA) with OZ Minerals Limited whereby OZ Minerals will fund up to $10 million on a three-stage exploration program to explore and farm-in to the Company’s Maslins Project. The Maslins Project is located on EL 5705 (100% owned by Gawler Resources Pty Ltd, a wholly owned subsidiary of Investigator) that is subject of this HOA. OZ Minerals may earn up to 70% of the Maslins Project. Subsequent to the year end, AusIndustry advised that it was undertaking an examination of the registration for tax concession received under Research & Development Tax Incentive program for the financial year 2018. The Company submitted a comprehensive response to AusIndustry on 26 August 2019 and has received no response on the matter as at the date of this report. On 2 September 2019, the Company announced it undertook a share placement to raise $2.2 million via the issue of 91.67 million fully paid ordinary shares at $0.024 a share with a 1 for 3 free attaching listed option, totalling 30.6m exercisable at 3.5 cents, with an expiry date of 31 December 2020. No other matter or circumstance has arisen since 30 June 2019 that has significantly affected, or may significantly affect the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future financial years. 11 Investigator Resources Limited Directors' report 30 June 2019 LIKLEY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS During the next financial year, the Company will pursue the strategy set out in the Review of Operations. ENVIRONMENTAL REGULATION The Company's operations are subject to significant environmental regulation under Commonwealth, State and Territory legislation in relation to the discharge of hazardous waste and minerals arising from exploration activities conducted by the Company in any of its tenements. At the date of this report there have been no known breaches of any environmental obligation. INFORMATION ON DIRECTORS Name: Title: Qualifications: Experience and expertise: David Meldrum Ransom Non-Executive Chairman BSc Geology) (Hons) and PhD Structural Geology Dr Ransom has over 45 years of experience within the mining industry in Australia and abroad. Dr Ransom is a graduate of the University of Sydney (BSc Geology) (Hons) and Australian National University (PhD 1968 Structural Geology). His earlier experience included roles as a project geologist with the Aberfoyle Group in Australia and Cominco Ltd in Canada. Dr Ransom also worked as a specialist consultant for 20-years with a clientele including majors such as CRA, BHP, Newmont and numerous companies in the microcap sector, specialising in structural geology. More recently over the past 17 years, Dr Ransom was employed by Acorn Capital Ltd being an early investor with the role of resource analyst/portfolio manager focusing on the microcap materials and energy sectors. He is well known and highly regarded in the fund management industry. He retired from Acorn Capital Ltd in September 2016, but remains as a consultant. Dr Ransom has extensive board experience gained over the past 25 years in small mining and exploration companies and served as non-executive director on ASX listed company Unity Mining Limited (ASX: UML) for almost 7 years from 2007 to 2014. None Other current directorships: Former directorships (last 3 years): None Interests in shares: Interests in options: 1,125,375 575,375 (listed), 2,500,000 (unlisted) Name: Title: Qualifications: Experience and expertise: Kevin Wilson Non-Executive Director BSc (Hons), ARSM, MBA Kevin has over 30 years’ knowledge and experience in the minerals and finance industries. Previously Kevin was the Managing Director of Rey Resources Limited (ASX: REY), an Australian energy exploration company, from 2008 to 2016 and Leviathan Resources Limited, a Victorian gold mining company, from its initial public offering in 2005 through to its sale in 2006. He has prior experience as a geologist with the Anglo American Group in Africa and North America and as a stockbroking analyst and investment banker with CS First Boston and Merrill Lynch in Australia and USA. Mr Wilson currently serves as Non-Executive Chairman of Navarre Minerals Limited (ASX: NML) and Non- Executive Chairman of Metminco Limited (ASX: MNC). Navarre Minerals Limited and Metminco Limited. Other current directorships: Former directorships (last 3 years): None Interests in shares: Interests in options: Nil Nil 12 Investigator Resources Limited Directors' report 30 June 2019 Name: Title: Qualifications: Experience and expertise: Andrew McIlwain Director and Acting Chief Executive Officer (effective 16 August 2018) BE (Mining) Melb, MAusIMM, MAICD Andrew has over 30 years’ experience in the mining industry. He is a qualified mining engineer and has held operational, technical, senior management and executive roles within Mount Isa Mines Limited, Central Norseman Gold Corp, WMC Resources, Lafayette Mining and Unity Mining. More recently, an independent consultant for a number of Australian resource companies focusing on corporate transactions and has acted as an independent Non-Executive director of numerous resource companies including Kidman Resources (ASX: KDR) and Tusker Gold. Andrew brings operational and corporate experience in a variety of fields including establishment of operational sustainability, project development and both equity and conventional debt financing. Andrew also serves as Non-Executive Chairman of Emmerson Resources Ltd (ASX: ERM). Emmerson Resources Ltd (ASX: ERM). Other current directorships: Former directorships (last 3 years): None Interests in shares: Interests in options: Nil Nil Name: Title: Qualifications: Experience and expertise: John Alexander Anderson (Resigned 16 August 2018) Managing Director BSc Hons, MAusIMM, MSEG, MAIG, MGSA John was a Director of Investigator Resources since its inception as Southern Uranium in July 2005 and was appointed the Managing Director in December 2006. A geologist by training and exploration manager of 40 years’ experience, John initiated the Company’s strategy and development of its strong ground and innovative resource opportunities in the southern Gawler Craton of South Australia. In his previous roles with Aberfoyle and then as General Manager Exploration Australia for Mt Isa Mines Exploration, he has explored in most Australian jurisdictions for a wide range of commodities with an emphasis on the major lead, zinc, silver, copper, gold, tin and nickel mining centres including Kalgoorlie, Broken Hill, McArthur River, Tasmania, central New South Wales, Mount Isa / Ernest Henry and the Gawler Craton. John led teams in the discoveries of the Paris silver, Angas zinc and White Dam gold deposits in South Australia and several mineral sands deposits in the Murray Basin. He served as a Non-Executive Director of Southern Gold Limited from 2004 to 2008. He is a former President of the South Australian Chamber of Mines and Energy 2000 to 2002 and is a current member of the South Australian Government’s Mining and Energy Advisory Council and the Advisory Board for the University of Adelaide’s Institute for Minerals and Energy Research. None Other current directorships: Former directorships (last 3 years): None Interests in shares: Interests in options: Nil Nil 'Other current directorships' quoted above are current directorships for listed entities only and excludes directorships of all other types of entities, unless otherwise stated. 'Former directorships (last 3 years)' quoted above are directorships held in the last 3 years for listed entities only and excludes directorships of all other types of entities, unless otherwise stated. 13 Investigator Resources Limited Directors' report 30 June 2019 COMPANY SECRETARIES Melanie Leydin Ms Leydin was appointed Joint Company Secretary on 17 December 2018 and CFO on 31 December 2018. She is a Chartered Accountant and the founding director of Leydin Freyer, an independent firm specialising in company secretarial and accounting services for ASX listed companies, with over 25 years’ experience in the accounting profession and over 13 years’ experience as a Company Secretary for ASX listed companies. Anita Addorisio Ms Addorisio was appointed Joint Company Secretary on 31 December 2018. She is an experienced finance professional with over 15 years’ senior finance experience and 6 years’ experience as a Company Secretary for ASX listed companies within several industry sectors including Resources. She is a Fellow of CPA and holds a Masters in Accounting. Angelo Gaudio Mr Gaudio resigned as Company Secretary and CFO on 31 December 2018. Mr Gaudio has significant experience in senior financial positions within the resource sector. Previous roles include; the Chief Financial Offer and Company Secretary for Renascor Resources, as well as Vice President, Finance and Administration with Heathgate Resources. MEETINGS OF DIRECTORS The number of meetings of the company's Board of Directors (the Board) held during the year ended 30 June 2019, and the number of meetings attended by each Director were: Directors D. M. Ransom K. J. Wilson A. McIlwain J. A. Anderson ** Full Board Attended Held* 11 11 11 1 11 11 11 1 * ** Held: represents the number of meetings held during the time the director held office. J. A. Anderson (Managing Director) resigned effective 16 August 2018. Due to its size and activities the Company does not have separate Board committees. REMUNERATION REPORT (AUDITED) The remuneration report details the Key Management Personnel remuneration arrangements for the consolidated entity, in accordance with the requirements of the Corporations Act 2001 and its Regulations. Key Management Personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including all directors. The remuneration report is set out under the following main headings: ● ● ● ● ● Principles used to determine the nature and amount of remuneration Details of remuneration Service agreements Share-based compensation Additional disclosures relating to Key Management Personnel Principles used to determine the nature and amount of remuneration The objective of the consolidated entity's executive reward framework is to ensure reward for performance is competitive and appropriate for the results delivered. The framework aligns executive reward with the achievement of strategic objectives and the creation of value for shareholders, and it is considered to conform to the market best practice for the delivery of reward. The Board ensures that executive reward satisfies the following key criteria for good reward governance practices: ● ● ● ● competitiveness and reasonableness acceptability to shareholders performance linkage / alignment of executive compensation Transparency. 14 Investigator Resources Limited Directors' report 30 June 2019 The Board is responsible for determining and reviewing remuneration arrangements for its directors and executives. The performance of the consolidated entity depends on the quality of its directors and executives. The remuneration philosophy is to attract, motivate and retain high performance and high-quality personnel. In consultation with external remuneration consultants (refer to the section 'Use of remuneration consultants' below), the Board has structured an executive remuneration framework that is market competitive and complementary to the reward strategy of the consolidated entity. The reward framework is designed to align executive reward to shareholders' interests. The Board have considered that it should seek to enhance shareholders' interests by: ● ● having economic profit as a core component of plan design focusing on sustained growth in shareholder wealth, consisting of dividends and growth in share price, and delivering constant or increasing return on assets as well as focusing the executive on key non-financial drivers of value attracting and retaining high calibre executives. ● Additionally, the reward framework should seek to enhance executives' interests by: ● ● ● rewarding capability and experience reflecting competitive reward for contribution to growth in shareholder wealth providing a clear structure for earning rewards. In accordance with best practice corporate governance, the structure of Non-executive Director and Executive Director remuneration is separate. Non-executive Directors’ remuneration Fees and payments to Non-executive Directors reflect the demands and responsibilities of their role. Non-executive Directors' fees and payments are reviewed annually by the Board. The Board may, from time to time, receive advice from independent remuneration consultants to ensure Non-executive Directors' fees and payments are appropriate and in line with the market. The Chairman's fees are determined independently to the fees of other Non-executive Directors based on comparative roles in the external market. The Chairman is not present at any discussions relating to the determination of his own remuneration. Non-executive Directors do not receive share options or other incentives. ASX listing rules require the aggregate non-executive directors' remuneration be determined periodically by a general meeting. The most recent determination was at the Annual General Meeting held on 18 November 2013, where the shareholders approved a maximum annual aggregate remuneration of $500,000. Executive remuneration The consolidated entity aims to reward Executives based on their position and responsibility, with a level and mix of remuneration which has both fixed and variable components. The Executive remuneration and reward framework has four components: ● ● ● ● base pay and non-monetary benefits short-term performance incentives share-based payments other remuneration such as superannuation and long service leave. The combination of these comprises the Executive's total remuneration. Fixed remuneration, consisting of base salary, superannuation and non-monetary benefits, are reviewed annually by the Board based on individual and business unit performance, the overall performance of the consolidated entity and comparable market remunerations. Executives may receive their fixed remuneration in the form of cash or other fringe benefits (for example motor vehicle benefits) where it does not create any additional costs to the consolidated entity and provides additional value to the executive. The short-term incentives (STI) are payable to Executives based upon the attainment of agreed corporate and individual milestones and are reviewed and approved by the Board of Directors. During the year, no STI were paid to the Executives. 15 Investigator Resources Limited Directors' report 30 June 2019 The long-term incentives (LTI) include long service leave and share-based payments. Executives are issued with equity instruments as LTIs in a manner that aligns this element of remuneration with the creation of shareholder wealth. LTI grants are made to Executives who are able to influence the generation of shareholder wealth and thus have a direct impact on the creation of shareholder wealth. During the year, no equity instruments were issued to the Executives as LTI. Consolidated entity performance and link to remuneration The Company is a minerals exploration entity and as such there is no direct relationship between the remuneration policy and the Company’s financial performance. Share prices at the end of the current financial year and the previous four financial years were: Share price (cents per share) 2019 1.1 2018 1.1 2017 3.0 2016 3.4 2015 1.3 Share prices are subject to market sentiment and the international metal prices which may move independently of the performance of the Key Management Personnel. Use of remuneration consultants During the financial year ended 30 June 2019, the consolidated entity has not engaged any remuneration consultants. Voting and comments made at the company's 29 November 2018 Annual General Meeting ('AGM') At the 29 November 2018 AGM, 78.5% of the votes received supported the adoption of the remuneration report for the year ended 30 June 2018. The company did not receive any specific feedback at the AGM regarding its remuneration practices. Details of remuneration Amounts of remuneration Details of the remuneration of Key Management Personnel (KMP) of the consolidated entity are set out in the following tables. Short-term benefits Post- employment benefits Long-term benefits Share- based payments Cash salary and fees $ 2019 Non-Executive Directors: D. M. Ransom K.J. Wilson 59,361 54,795 Executive Directors: A. McIlwain* J. A. Anderson** Other KMP: A. McIlwain* A. R. T. Thin*** M. A. Gaudio*** 29,072 107,019 122,500 83,881 60,000 516,628 Cash Termination Non- bonus $ payment monetary annuation $ Super- $ Long service leave $ Equity- settled $ Total $ - - - - - - - - - - - 137,812 - - - 137,812 - - - - - - - - 5,639 5,205 - - - - 65,000 60,000 2,762 31,008 - 75,797 31,834 - - 351,636 - 7,137 - 51,751 - - - 75,797 - 122,500 91,018 - - 60,000 - 781,988 * Andrew McIlwain was appointed Acting Chief Executive Officer from 16 August 2018. The cash salary of $122,500 for the year ended 30 June 2019 is for Mr McIlwain's role as Acting Chief Executive Officer. J.A. Anderson resigned as the Manager Director on 16 August 2018. ** *** (i) A.R.T. Thin resigned as the commercial manager effective 16 November 2018. (ii) M.A. Gaudio resigned as the Company Secretary and Chief Financial Officer effective 31 December 2018. 16 Investigator Resources Limited Directors' report 30 June 2019 Short-term benefits Post- employment benefits Long-term benefits Share- based payments Cash salary Cash Termination Non- Super- 2018 and fees bonus payment monetary annuation $ $ $ $ Long service leave $ Equity- settled $ Total $ Non-Executive Directors: D. M. Ransom K. J. Wilson* A. McIlwain** D. G. Jones*** B. E. Foy**** 59,361 43,414 1,674 20,548 54,795 - - - - - Executive Directors: J. A. Anderson 275,625 42,000 Other KMP: M. A. Gaudio A. R. T. Thin - 120,000 200,000 - 775,417 42,000 - - - - - - - - - - - - - - - - - - 5,639 4,124 159 1,952 5,205 - - - - - 10,913 75,913 47,538 1,833 22,500 60,000 - - - - 41,344 8,562 - 367,531 - 19,000 77,423 - - 8,562 - 120,000 - 219,000 10,913 914,315 K. J. Wilson was appointed as a Non-executive Director effective 15 September 2017. A. McIlwain was appointed as a Non-executive Director effective 20 June 2018 * ** *** D. G. Jones (Non-executive Director) retired effective 20 September 2017. **** B. E. Foy (Non-executive Director) retired effective 30 June 2018. Service agreements Remuneration and other terms of employment for Key Management Personnel are formalised in service agreements. Details of these agreements are as follows: Name: Title: Agreement commenced: Term of agreement: Name: Title: Agreement commenced: Term of agreement: Name: Title: Agreement commenced: Term of agreement: David Ransom Non-executive Chairman 23 January 2017 Annual Non-executive Chairman inclusive of superannuation contribution. As part of his appointment, Dr Ransom was granted 2,500,000 unlisted options exercisable at $0.048 and expiring on 23 January 2020 as approved by shareholders at the Annual General Meeting held on 30 November 2017. fees of $65,000 per annum Kevin Wilson Non-executive Director 20 September 2017 Annual Non-executive Director’s superannuation. fees of $60,000 per annum inclusive of Andrew McIlwain Director and Acting Chief Executive Officer (effective 16 August 2018) 20 June 2018 Director’s fees of $30,000 per annum inclusive of any superannuation and from 15 August 2018 additional fee of $140,000 per annum for Acting Chief Executive Officer role. 17 Investigator Resources Limited Directors' report 30 June 2019 Name: Title: Agreement commenced: Term of agreement: J. A. Anderson Managing Director (resigned on 16 August 2018) 11 May 2010 Base salary of $275,625 per annum with superannuation entitlement at 15% of the base salary and annual short-term incentives of up to $100,000 with the quantum to be assessed in accordance with KPIs to be agreed with the Board. Long term incentives through the annual issue of share options having a value of up to $80,000. Name: Title: Agreement commenced: Term of agreement: Name: Title: Agreement commenced: Term of agreement: Angelo Gaudio Company Secretary and Chief Financial Officer (resigned on 31 December 2018) 2 March 2016 $10,000 per month plus GST plus expenses. A. R. T. Thin Commercial Manager (resigned on 16 November 2018) 12 February 2013 Base salary of $200,000 per annum and superannuation 9.5% of base salary Key Management Personnel have no entitlement to termination payments in the event of removal for misconduct. Share-based compensation Issue of shares There were no shares issued to Directors and other Key Management Personnel as part of compensation during the year ended 30 June 2019. Options There were no options over ordinary shares issued to Directors and other Key Management Personnel as part of compensation that were outstanding as at 30 June 2019. There were no options over ordinary shares granted to or vested by Directors and other Key Management Personnel as part of compensation during the year ended 30 June 2019. Additional disclosures relating to key management personnel Shareholding The number of shares in the company held during the financial year by each Director and other members of Key Management Personnel of the consolidated entity, including their personally related parties, is set out below: Ordinary shares D. M. Ransom J. A. Anderson* A. R. T. Thin** Balance at the start of the year 1,125,375 6,202,438 983,574 8,311,387 Received as part of remuneration Additions Disposals/ other Balance at the end of the year - - - - - - - - - (6,202,438) (983,574) (7,186,012) 1,125,375 - - 1,125,375 * ** J.A. Anderson resigned as the Managing Director effective 16 August 2018 and disposals represents shares held as at the date of resignation. A. R. T. Thin resigned as the Commercial Manager effective 16 November 2018 and disposals represents shares held as at the date of resignation. Subsequent to year end on 16 July 2019, Andrew McIlwain, Director and Acting Chief Executive Officer, acquired through an on-market purchase 1,100,000 ordinary fully paid shares. 18 Investigator Resources Limited Directors' report 30 June 2019 Option holding The number of options over ordinary shares in the company held during the financial year by each Director and other members of Key Management Personnel of the consolidated entity, including their personally related parties, is set out below: Options over ordinary shares D. M. Ransom1 J. A. Anderson2 A. R. T. Thin3 Balance at the start of the year 3,075,375 3,990,375 575,375 7,641,125 Granted Exercised Expired/ forfeited/ disposal Balance at the end of the year - - - - - - - - - (3,990,375) (575,375) (4,565,750) 3,075,375 - - 3,075,375 1 The balance includes 575,375 listed options acquired by D.M, Ransom in 2018 as part of the Share Purchase Plan announced on 19 October 2017. 2 The balance includes 575,375 listed options acquired by J. A. Anderson in 2018 as part of the Share Purchase Plan announced on 19 October 2017. J.A. Anderson resigned as the Managing Director effective 16 August 2018 and disposals represents options held at the date of resignation. 3 A. R. T. Thin resigned as the Commercial Manager effective 16 November 2018 and disposals represents options held as at the date of resignation. This concludes the remuneration report, which has been audited. SHARES UNDER OPTION There were no unissued ordinary shares of Investigator Resources Limited under option outstanding at the date of this report. SHARES ISSUED ON THE EXERCISE OF OPTIONS There were no ordinary shares of Investigator Resources Limited issued on the exercise of options during the year ended 30 June 2019 and up to the date of this report. INDEMNITY AND INSURANCE OF OFFICERS The company has indemnified the Directors and executives of the company for costs incurred, in their capacity as a Director or Executive, for which they may be held personally liable, except where there is a lack of good faith. During the financial year, the company paid a premium in respect of a contract to insure the Directors and Executives of the company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium. INDEMNITY AND INSURANCE OF AUDITOR The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the company or any related entity against a liability incurred by the auditor. During the financial year, the Company has not paid a premium in respect of a contract to insure the auditor of the company or any related entity. 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. NON-AUDIT SERVICES Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year by the auditor are outlined in Note 25 to the financial statements. 19 Investigator Resources Limited Directors' report 30 June 2019 The Directors are satisfied that the provision of non-audit services during the financial year, by the auditor (or by another person or firm on the auditor's behalf), is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The Directors are of the opinion that the services as disclosed in Note 25 to the financial statements do not compromise the external auditor's independence requirements of the Corporations Act 2001 for the following reasons: ● all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity of the auditor; and none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants issued by the Accounting Professional and Ethical Standards Board, including reviewing or auditing the auditor's own work, acting in a management or decision-making capacity for the company, acting as advocate for the company or jointly sharing economic risks and rewards. ● 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 immediately after this Directors' report. AUDITOR Grant Thornton Audit Pty Ltd continues in office in accordance with section 327 of the Corporations Act 2001. This report is made in accordance with a resolution of Directors, pursuant to section 298(2)(a) of the Corporations Act 2001. On behalf of the Directors ___________________________ D.M Ransom Chairman 2 September 2019 ___________________________ A McIlwain Acting Chief Executive Officer 20 Level 3, 170 Frome Street Adelaide SA 5000 Correspondence to: GPO Box 1270 Adelaide SA 5001 T +61 8 8372 6666 F +61 8 8372 6677 E info.sa@au.gt.com W www.grantthornton.com.au Auditor’s Independence Declaration To the Directors of Investigator Resources Limited In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of Investigator Resources Limited for the year ended 30 June 2019, I declare that, to the best of my knowledge and belief, there have been: a no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and b no contraventions of any applicable code of professional conduct in relation to the audit. GRANT THORNTON AUDIT PTY LTD Chartered Accountants J L Humphrey Partner – Audit & Assurance Adelaide, 2 September 2019 Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389 www.grantthornton.com.au ‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited. Liability limited by a scheme approved under Professional Standards Legislation. 21 Investigator Resources Limited Statement of profit or loss and other comprehensive income For the year ended 30 June 2019 Interest income Other income Research and development incentive Expenses Employee benefit expenses Corporate and other expenses Exploration and evaluation expenses written off Loss before income tax expense Income tax expense Consolidated Note 2019 $ 2018 $ 5 6 7 14 8 44,443 24,182 23,572 73,567 227 1,492,392 (433,545) (729,189) (1,797,782) (607,566) (725,107) (814,974) (2,868,319) (581,461) - - Loss after income tax expense for the year attributable to the owners of Investigator Resources Limited 21 (2,868,319) (581,461) Other comprehensive income for the year, net of tax - - Total comprehensive income for the year attributable to the owners of Investigator Resources Limited Basic earnings per share Diluted earnings per share (2,868,319) (581,461) Cents Cents 33 33 (0.39) (0.39) (0.08) (0.08) The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes 22 Investigator Resources Limited Statement of financial position As at 30 June 2019 Assets Current assets Cash and cash equivalents Trade and other receivables Inventories Other assets Total current assets Non-current assets Property, plant and equipment Exploration and evaluation Other assets Total non-current assets Total assets Liabilities Current liabilities Trade and other payables Provisions Total current liabilities Non-current liabilities Provisions Total non-current liabilities Total liabilities Net assets Equity Issued capital Reserves Accumulated losses Total equity Consolidated Note 2019 $ 2018 $ 9 10 11 12 13 14 15 16 17 18 1,204,981 18,451 - 37,007 1,260,439 2,889,752 655,395 12,679 33,443 3,591,269 2,722 29,700,636 24,202 29,727,560 7,066 30,590,976 24,202 30,622,244 30,987,999 34,213,513 117,669 176,537 294,206 249,816 332,481 582,297 - - 69,104 69,104 294,206 651,401 30,693,793 33,562,112 19 20 21 53,070,322 243,519 (22,620,048) 53,070,322 243,519 (19,751,729) 30,693,793 33,562,112 The above statement of financial position should be read in conjunction with the accompanying notes 23 Investigator Resources Limited Statement of changes in equity For the year ended 30 June 2019 Consolidated Balance at 1 July 2017 Transactions with owners: Shares issued during the year Share issue costs Listed Options issued to Fundraising Manager Options issued to Key Management Personnel Expired Options adjusted to accumulated losses Issued capital $ Reserves $ Accumulated losses $ Total equity $ 50,082,204 962,451 (20,070,338) 30,974,317 3,400,001 (411,883) - - - - - 170,225 10,913 (900,070) - - - - 900,070 3,400,001 (411,883) 170,225 10,913 - Total transactions with owners: 53,070,322 243,519 (19,170,268) 34,143,573 Loss after income tax expense for the year Total comprehensive income for the year - - - - (581,461) (581,461) (581,461) (581,461) Balance at 30 June 2018 53,070,322 243,519 (19,751,729) 33,562,112 Consolidated Balance at 1 July 2018 Issued capital $ Reserves $ Accumulated losses $ Total equity $ 53,070,322 243,519 (19,751,729) 33,562,112 Loss after income tax expense for the year Total comprehensive income for the year - - - - (2,868,319) (2,868,319) (2,868,319) (2,868,319) Balance at 30 June 2019 53,070,322 243,519 (22,620,048) 30,693,793 The above statement of changes in equity should be read in conjunction with the accompanying notes 24 Investigator Resources Limited Statement of cash flows For the year ended 30 June 2019 Cash flows from operating activities Payments to suppliers and employees Interest received Research and development refund Other income Net cash used in operating activities Cash flows from investing activities Exploration expenditure Payments for property, plant and equipment PACE Grant funding received Proceeds from disposal of property, plant and equipment Net cash used in investing activities Cash flows from financing activities Proceeds from issue of shares Share issue transaction costs Net cash from financing activities Consolidated Note 2019 $ 2018 $ (1,421,276) 48,643 657,958 - (1,317,204) 73,377 858,006 227 32 (714,675) (385,594) (996,005) - - 25,909 (2,948,354) (6,324) 237,994 - (970,096) (2,716,684) - - - 3,400,001 (241,658) 3,158,343 Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the financial year (1,684,771) 2,889,752 56,065 2,833,687 Cash and cash equivalents at the end of the financial year 9 1,204,981 2,889,752 The above statement of cash flows should be read in conjunction with the accompanying notes 25 Investigator Resources Limited Notes to the financial statements 30 June 2019 Note 1. General information The financial statements cover Investigator Resources Limited (Investigator) as a consolidated entity consisting of Investigator Resources Limited and the entities it controlled at the end of, or during, the year. The financial statements are presented in Australian dollars, which is Investigator's functional and presentation currency. Investigator is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of business are: Registered office Principal place of business 18 King Street, Norwood SA 5067 18 King Street, Norwood SA 5067 A description of the nature of the consolidated entity's operations and its principal activities are included in the directors' report, which is not part of the financial statements. The financial statements were authorised for issue, in accordance with a resolution of Directors, on 2 September 2019. The Directors have the power to amend and reissue the financial statements. Note 2. Significant accounting policies The principal accounting policies adopted in the preparation of the financial statements are set out either in the respective notes or below. These policies have been consistently applied to all the years presented, unless otherwise stated. New or amended Accounting Standards and Interpretations adopted The consolidated entity 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 impact of the AASB 15 and AASB 9 are referenced later in this note, Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted. The impact of the AASB 16 is referenced later in this note. Basis of preparation These general-purpose financial statements have been prepared in accordance with Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (AASB) and the Corporations Act 2001, as appropriate for for-profit oriented entities. These financial statements also comply with International Financial Reporting Standards as issued by the International Accounting Standards Board (IASB). Historical cost convention The financial statements have been prepared under the historical cost convention, except for, where applicable, the revaluation of financial assets and liabilities at fair value through profit or loss, financial assets at fair value through other comprehensive income, investment properties, certain classes of property, plant and equipment and derivative financial instruments. Critical accounting estimates The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the consolidated entity's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in Note 3. Going Concern These financial statements have been prepared on a going concern basis which contemplates the continuity of normal business activities and the realisation of assets and discharge of liabilities in the normal course of business. This includes the realisation of capitalised exploration expenditure of $29,700,636 (2018: $30,590,976). The consolidated group has incurred a net loss after tax for the year ended 30 June 2019 of $2,868,319 (2018: $581,461) and operations were funded by a net cash outflow, from operating and investing activities of $1,684,771 (2018: $3,102,278). At 30 June 2019, the consolidated group had net current assets of $966,233 (2018: $3,008,972). 26 Investigator Resources Limited Notes to the financial statements 30 June 2019 Note 2. Significant accounting policies (continued) The consolidated group’s ability to continue as a going concern is contingent on raising additional capital and/or the successful exploration and subsequent exploitation of its areas of interest through sale or development. Should the consolidated entity not achieve the matters set out above, there would then be significant uncertainty over the ability of the consolidated entity to continue as a going concern, and, therefore, it may have to realise its assets and extinguish its liabilities, other than in the ordinary course of business and at amounts different from those stated in the 2019 annual financial report. The 2019 annual financial report does not include any adjustments that may be necessary if the consolidated group is unable to continue as a going concern. Parent entity information In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated entity only. Supplementary information about the parent entity is disclosed in Note 28. Principles of consolidation The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Investigator Resources Limited ('Company' or 'Parent Entity') as at 30 June 2019 and the results of all subsidiaries for the year then ended. Investigator Resources Limited and its subsidiaries together are referred to in these financial statements as the 'Consolidated Entity'. Subsidiaries are all those entities over which the consolidated entity has control. The consolidated entity controls an entity when the consolidated entity is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the consolidated entity. They are de-consolidated from the date that control ceases. Intercompany transactions, balances and unrealised gains on transactions between entities in the consolidated entity are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the consolidated entity. The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest, without the loss of control, is accounted for as an equity transaction, where the difference between the consideration transferred and the book value of the share of the non-controlling interest acquired is recognised directly in equity attributable to the parent. Where the consolidated entity loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-controlling interest in the subsidiary together with any cumulative translation differences recognised in equity. The consolidated entity recognises the fair value of the consideration received and the fair value of any investment retained together with any gain or loss in profit or loss. Functional and Presentation Currency The financial statements are presented in Australian dollars, which is the Company’s functional and presentation currency. Revenue recognition AASB 15 Revenue from Contracts with Customers The Consolidated Entity has adopted this standard from 1 July 2018. The adoption of this standard has had no effect on comparatives. The standard provides a single standard for revenue recognition. The core principle of the standard is that an entity shall recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard requires: contracts (either written, verbal or implied) to be identified, together with the separate performance obligations within the contract; determine the transaction price, adjusted for the time value of money excluding credit risk; allocation of the transaction price to the separate performance obligations on a basis of relative stand-alone selling price of each distinct good or service, or estimation approach if no distinct observable prices exist; and recognition of revenue when each performance obligation is satisfied. 27 Investigator Resources Limited Notes to the financial statements 30 June 2019 Note 2. Significant accounting policies (continued) Credit risk is presented separately as an expense rather than adjusted to revenue. Contracts with customers are presented in an entity's statement of financial position as a contract liability, a contract asset, or a receivable, depending on the relationship between the entity's performance and the customer's payment. Sufficient quantitative and qualitative disclosure is required to enable users to understand the contracts with customers; the significant judgements made in applying the guidance to those contracts; and any assets recognised from the costs to obtain or fulfil a contract with a customer. There is no impact to the Group’s historical financial results given the company is not currently in production. Interest and other income Interest Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset. Other income Other income is recognised when it is received or when the right to receive payment is established. Grant income Research and Development tax credits are recognised in accordance with AASB 120: Accounting for Government Grants and Government Assistance. The Research and development tax credit is recognised when there is reasonable assurance that the grant will be received, and all conditions have been complied with. The Grant has been recognised as other income within the period. AASB 9 Financial Instruments The Consolidated Entity has adopted this standard from 1 July 2018. The standard replaces all previous versions of AASB 9 and completes the project to replace AASB139 'Financial Instruments: Recognition and Measurement. AASB 9 introduces new classification and measurement models for financial assets. A financial asset is measured at amortised cost, if it is held within a business model whose objective is to hold assets in order to collect contractual cash flows, which arise on specified dates and solely principal and interest. All other financial instrument assets are classified and measured at fair value through profit or loss unless the entity makes an irrevocable election on initial recognition to present gains and losses on equity instruments (that are not held-for-trading) in other comprehensive income ('OCI'). There has been no change to the classification of financial assets as a result of the adoption of AASB 9. For financial assets, new impairment requirements will use an 'expected credit loss' ('ECL') model to recognise an allowance. Impairment will be measured under a 12-month ECL method unless the credit risk on a financial instrument has increased significantly since initial recognition in which case the lifetime ECL method is adopted. There has been no change to the carrying value of the allowance for impairment as a result of the transition to the new standard. The standard introduces additional new disclosures. Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains or losses are included in the income statement. There is no effect on the consolidated entity of this standard. Reconciliation of financial instruments on adoption of AASB 9: The table below shows the classification of each class of financial assets and liabilities under AASB 139 and AASB 9 as at 1 July 2018: AASB 139 Carrying classification AASB 9 Carrying classification AASB 139 Carrying Amount ($) AASB 9 Carrying Amount ($) Loans and receivables Amortised cost 655,395 655,395 Financial assets Trade and other receivables Financial liabilities Trade and other payables Amortised cost Amortised cost 249,816 249,816 28 Investigator Resources Limited Notes to the financial statements 30 June 2019 Note 2. Significant accounting policies (continued) Restoration Costs Costs of site restoration are provided over the life of the facility from when exploration commences and are included in the costs of that stage. Site restoration costs include the dismantling and removal of mining plant, equipment and building structures, waste removal, and rehabilitation of the site in accordance with clauses of the exploration and mining permits. Such costs are determined using estimates of future costs, current legal requirements and technology on a discounted basis Any changes in the estimates for the costs are accounted on a prospective basis. In determining the costs of site restoration, there is uncertainty regarding the nature and extent of the restoration due to community expectations and future legislation. Accordingly, the costs have been determined on the basis that the restoration will be completed within one year of abandoning the site. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Income tax The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the applicable income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable to temporary differences, unused tax losses and the adjustment recognised for prior periods, where applicable. Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied when the assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted, except for: ● When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting nor taxable profits; or ● When the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures, and the timing of the reversal can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred tax assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be available for the carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent that it is probable that there are future taxable profits available to recover the asset. Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets against current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable authority on either the same taxable entity or different taxable entities which intend to settle simultaneously. Current and non-current classification Assets and liabilities are presented in the statement of financial position based on current and non-current classification. An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the consolidated entity's normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months after the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period. All other assets are classified as non-current. A liability is classified as current when: it is either expected to be settled in the consolidated entity's normal operating cycle; it is held primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities are classified as non-current. Deferred tax assets and liabilities are always classified as non-current. 29 Investigator Resources Limited Notes to the financial statements 30 June 2019 Note 2. Significant accounting policies (continued) Joint operations A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement. The consolidated entity has recognised its share of jointly held assets, liabilities, revenues and expenses of joint operations. These have been incorporated in the financial statements under the appropriate classifications. Impairment of non-financial assets Goodwill and other intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other non- financial assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. Recoverable amount is the higher of an asset's fair value less costs of disposal and value-in-use. The value-in-use is the present value of the estimated future cash flows relating to the asset using a pre-tax discount rate specific to the asset or cash-generating unit to which the asset belongs. Assets that do not have independent cash flows are grouped together to form a cash-generating unit. Goods and Services Tax ('GST') and other similar taxes Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part of the expense. Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the tax authority is included in other receivables or other payables in the statement of financial position. Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the tax authority, are presented as operating cash flows. Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority. New Accounting Standards and Interpretations not yet mandatory or early adopted Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory, have not been early adopted by the consolidated entity for the annual reporting period ended 30 June 2019. The consolidated entity's assessment of the impact of these new or amended Accounting Standards and Interpretations, most relevant to the consolidated entity, are set out below. AASB 16 Leases This standard is applicable to annual reporting periods beginning on or after 1 January 2019. The standard replaces AASB 117 'Leases' and for lessees will eliminate the classifications of operating leases and finance leases. Subject to exceptions, a 'right-of-use' asset will be capitalised in the statement of financial position, measured at the present value of the unavoidable future lease payments to be made over the lease term. The exceptions relate to short-term leases of 12 months or less and leases of low-value assets (such as personal computers and small office furniture) where an accounting policy choice exists whereby either a 'right-of-use' asset is recognised or lease payments are expensed to profit or loss as incurred. A liability corresponding to the capitalised lease will also be recognised, adjusted for lease prepayments, lease incentives received, initial direct costs incurred and an estimate of any future restoration, removal or dismantling costs. Straight-line operating lease expense recognition will be replaced with a depreciation charge for the leased asset (included in operating costs) and an interest expense on the recognised lease liability (included in finance costs). In the earlier periods of the lease, the expenses associated with the lease under AASB 16 will be higher when compared to lease expenses under AASB 117. However, EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) results will be improved as the operating expense is replaced by interest expense and depreciation in profit or loss under AASB 16. For classification within the statement of cash flows, the lease payments will be separated into both a principal (financing activities) and interest (either operating or financing activities) component. For lessor accounting, the standard does not substantially change how a lessor accounts for leases. 30 Investigator Resources Limited Notes to the financial statements 30 June 2019 Note 2. Significant accounting policies (continued) The consolidated entity will adopt this standard from 1 July 2019. As at reporting date, the Group has assessed the impact of the standard and the expected impacts are as follows: 1. 2. 3. Increase in assets and liabilities amounting to $131,664 and $132,052 respectively. Increase in the loss position on the consolidated statement of comprehensive income in the amount of $388. It is not expected that there will be any net impact on the consolidated statement of cash flows. Note 3. Critical accounting judgements, estimates and assumptions The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and assumptions on historical experience and on other various factors, including expectations of future events, management believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal the related actual results. The judgements, estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within the next financial year are discussed below. Share-based payment transactions The consolidated entity measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by using either the Binomial or Black- Scholes model taking into account the terms and conditions upon which the instruments were granted. The accounting estimates and assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts of assets and liabilities within the next annual reporting period but may impact profit or loss and equity. Research and development incentive The Group currently recognises Research and Development incentive on an accrual basis of costs incurred during the year. Management complete a detailed estimate of the expected claim relating to the financial year based on current projects lodged with AusIndustry. Impairment of non-financial assets other than goodwill and other indefinite life intangible assets The consolidated entity assesses impairment of non-financial assets other than goodwill and other indefinite life intangible assets at each reporting date by evaluating conditions specific to the consolidated entity and to the particular asset that may lead to impairment. If an impairment trigger exists, the recoverable amount of the asset is determined. This involves fair value less costs of disposal or value-in-use calculations, which incorporate a number of key estimates and assumptions. Income tax The consolidated entity is subject to income taxes in the jurisdictions in which it operates. Significant judgement is required in determining the provision for income tax. There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. The consolidated entity recognises liabilities for anticipated tax audit issues based on the consolidated entity's current understanding of the tax law. Where the final tax outcome of these matters is different from the carrying amounts, such differences will impact the current and deferred tax provisions in the period in which such determination is made. Recovery of deferred tax assets Deferred tax assets are recognised for deductible temporary differences only if the consolidated entity considers it is probable that future taxable amounts will be available to utilise those temporary differences and losses. Employee benefits provision As discussed in Note 2, the liability for employee benefits expected to be settled more than 12 months from the reporting date are recognised and measured at the present value of the estimated future cash flows to be made in respect of all employees at the reporting date. In determining the present value of the liability, estimates of attrition rates and pay increases through promotion and inflation have been taken into account. 31 Investigator Resources Limited Notes to the financial statements 30 June 2019 Note 3. Critical accounting judgements, estimates and assumptions (continued) Exploration and evaluation costs Exploration and evaluation costs have been capitalised on the basis that the consolidated entity will commence commercial production in the future, from which time the costs will be amortised in proportion to the depletion of the mineral resources. Key judgements are applied in considering costs to be capitalised which includes determining expenditures directly related to these activities and allocating overheads between those that are expensed and capitalised. In addition, costs are only capitalised that are expected to be recovered either through successful development or sale of the relevant mining interest. Factors that could impact the future commercial production at the mine include the level of reserves and resources, future technology changes, which could impact the cost of mining, future legal changes and changes in commodity prices. To the extent that capitalised costs are determined not to be recoverable in the future, they will be written off in the period in which this determination is made. Note 4. Operating segments Identification of reportable operating segments The consolidated entity has identified its operating segments based on the internal reports that are reviewed and used by the Board of Directors (chief operating decision makers) in assessing performance and determining the allocation of resources. The consolidated entity operates in a single operating segment: that of the mineral exploration industry in Australia. Note 5. Other income Net gain on disposal of property, plant and equipment Other Other income Note 6. Employee benefit expenses Benefits provided to employees Charged to exploration and evaluation expenses Employee options expense Consolidated 2019 $ 2018 $ 24,182 - 24,182 - 227 227 Consolidated 2019 $ 2018 $ 943,412 (509,867) 1,683,896 (1,087,243) - 10,913 433,545 607,566 32 Investigator Resources Limited Notes to the financial statements 30 June 2019 Note 7. Corporate and other expenses Audit fees Tax and compliance services Company secretarial fees Consulting fee Depreciation Directors fees Insurance and legal Minimum lease rental payment Shareholders communications Office expenses Other expenses Expenditure allocated to exploration and evaluation projects Note 8. Income tax expense Numerical reconciliation of income tax expense and tax at the statutory rate Loss before income tax expense Tax at the statutory tax rate of 27.5% Tax effect amounts which are not deductible/(taxable) in calculating taxable income: Adjustment for non-deductible expenses Temporary differences: Deductible capital raising costs Allowable exploration and evaluation expenditure Prior period exploration and evaluation expenses written off Net non-allowable expenses Research and development incentive Reduction of losses in prior periods Effects due to change in company tax rate Tax effect of deferred tax assets not brought to account as they do not meet the recognition criteria Income tax expense Tax losses not recognised Unused tax losses for which no deferred tax asset has been recognised Potential tax benefit @ 27.5% 33 Consolidated 2019 $ 2018 $ 39,780 12,700 88,000 156,720 2,617 155,001 64,038 16,680 65,164 232,157 42,014 (145,682) 48,483 6,900 120,000 3,812 6,728 179,951 46,526 21,765 94,870 308,137 118,102 (230,167) 729,189 725,107 Consolidated 2019 $ 2018 $ (2,868,319) (581,461) (788,788) (159,902) 357 (788,431) 3,231 (156,671) (36,429) (249,547) 494,391 (61,669) (6,482) 415,951 - (37,558) (735,699) 196,463 (2,636) (410,408) 550,196 1,199,130 232,216 (602,817) - - Consolidated 2019 $ 2018 $ (50,978,023) (50,133,596) (14,018,956) (13,786,739) Investigator Resources Limited Notes to the financial statements 30 June 2019 Note 8. Income tax expense (continued) The above potential tax benefit for tax losses has not been recognised in the statement of financial position. These tax losses can only be utilised in the future if the continuity of ownership test is passed, or failing that, the same business test is passed. Note 9. Current assets - cash and cash equivalents Cash at bank Cash on deposit Consolidated 2019 $ 2018 $ 34,981 1,170,000 1,134,744 1,755,008 1,204,981 2,889,752 At balance date, the ANZ bank provided the Company with a business credit card facility with a limit of $50,000. Credit card transactions are reconciled monthly and credit card balances payable are included in trade and other payables. Accounting policy for cash and cash equivalents Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Note 10. Current assets - trade and other receivables Research and Development incentive receivable Other receivables Consolidated 2019 $ 2018 $ - 18,451 634,386 21,009 18,451 655,395 Any Research and Development tax refunds are recognised on accruals basis as a credit to income tax expense. Accounting policy for trade and other receivables Other receivables are recognised at amortised cost, less any allowance for expected credit losses. Note 11. Current assets - inventories Diesel fuel Accounting policy for inventories Inventories is stated at the lower of cost and net realisable value. Consolidated 2019 $ 2018 $ - 12,679 Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. 34 Investigator Resources Limited Notes to the financial statements 30 June 2019 Note 12. Current assets - Other assets Insurance prepayments Note 13. Non-current assets - property, plant and equipment Plant and equipment - at cost Less: Accumulated depreciation Consolidated 2019 $ 2018 $ 37,007 33,443 Consolidated 2019 $ 2018 $ 512,225 (509,503) 564,671 (557,605) 2,722 7,066 Reconciliations Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below: Consolidated Balance at 1 July 2017 Additions Depreciation expense Balance at 30 June 2018 Disposals Depreciation expense Balance at 30 June 2019 Total $ 7,471 6,323 (6,728) 7,066 (1,727) (2,617) 2,722 Accounting policy for property, plant and equipment Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Depreciation is calculated on a straight-line basis to write off the net cost of each item of property, plant and equipment (excluding land) over their expected useful lives as follows: Plant and equipment 1- 5 years The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date. Leasehold improvements and plant and equipment under lease are depreciated over the unexpired period of the lease or the estimated useful life of the assets, whichever is shorter. An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to the consolidated entity. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss. Any revaluation surplus reserve relating to the item disposed of is transferred directly to retained profits. 35 Investigator Resources Limited Notes to the financial statements 30 June 2019 Note 14. Non-current assets - exploration and evaluation Exploration and evaluation Asset Opening – net book value Capitalised exploration expenditure Impairment Closing- net book value Consolidated 2019 $ 2018 $ 29,700,636 30,590,976 $ $ 30,590,976 907,442 (1,797,782) 28,630,115 2,775,835 (814,974) 29,700,636 30,590,976 A review of the consolidated entity's exploration licenses was undertaken during the period and, as a result of which, nine licenses were relinquished and the company withdrew from the Thurlga Joint Venture. As a consequence, an impairment charge against the exploration and evaluation assets was booked as at 30 June 2019. The licenses that were relinquished, or applications withdrawn during the period, were as follows: EL5512, EL5908, EL4827, EL5872, EL5913, EL6048, EL6034, EL6047, ELA2018/008 and ELA2018/009. Accounting policy for exploration and evaluation assets Exploration and evaluation expenditure in relation to separate areas of interest for which rights of tenure are current is carried forward as an asset in the statement of financial position where it is expected that the expenditure will be recovered through the successful development and exploitation of an area of interest, or by its sale; or exploration activities are continuing in an area and activities have not reached a stage which permits a reasonable estimate of the existence or otherwise of economically recoverable reserves. Where a project or an area of interest has been abandoned, the expenditure incurred thereon is written off in the year in which the decision is made. Note 15. Non-current assets - other assets Security deposits Note 16. Current liabilities - trade and other payables Trade payables Sundry payables Consolidated 2019 $ 2018 $ 24,202 24,202 Consolidated 2019 $ 2018 $ 96,028 21,641 197,147 52,669 117,669 249,816 Refer to Note 23 for further information on financial instruments. Accounting policy for trade and other payables These amounts represent liabilities for goods and services provided to the consolidated entity prior to the end of the financial year and which are unpaid. Due to their short-term nature they are measured at amortised cost and are not discounted. The amounts are unsecured and are usually paid within 30 days of recognition. 36 Investigator Resources Limited Notes to the financial statements 30 June 2019 Note 17. Current liabilities - provisions Annual leave Long service leave Accounting policy for employee benefits Consolidated 2019 $ 2018 $ 98,490 78,047 201,181 131,300 176,537 332,481 Short-term employee benefits Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be settled wholly within 12 months of the reporting date are measured at the amounts expected to be paid when the liabilities are settled. Note 18. Non-current liabilities - provisions Long service leave Consolidated 2019 $ 2018 $ - 69,104 Accounting policy for other long-term employee benefits The liability for annual leave and long service leave not expected to be settled within 12 months of the reporting date are measured at the present value of expected future payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the reporting date on national government bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows. Note 19. Equity - issued capital Ordinary shares - fully paid 739,972,032 739,972,032 53,070,322 53,070,322 Consolidated 2019 Shares 2018 Shares 2019 $ 2018 $ Movements in ordinary share capital Details Balance Placement shares issued Share Purchase Plan (SPP) shares issued Less: Share issue cost Balance Balance Date 1 July 2017 Shares $ 585,426,577 109,090,910 45,454,545 - 50,082,204 2,400,000 1,000,001 (411,883) 30 June 2018 739,972,032 53,070,322 30 June 2019 739,972,032 53,070,322 37 Investigator Resources Limited Notes to the financial statements 30 June 2019 Note 19. Equity - issued capital (continued) Listed Options Details Balance Listed Options issued during the year unexercised Balance Listed Options issued during the year unexercised Balance Date 1 July 2017 30 June 2018 28 February 2019 30 June 2019 Options - 160,660,226 160,660,226 1,363,636 162,023,862 During the year, 1,363,636 listed fully vested options (exercisable at $0.035, expiring on 31 December 2020) were issued with the same terms and conditions as announced on 19 October 2017. During the 2018 financial year, 20,000,000 listed fully vested options (exercisable at $0.035, expiring on 31 December 2020) were issued to PAC Partners Pty Ltd or its nominees in consideration for lead manager services provided to the Company (Lead Manager Options). The fair value of the Lead Manager Options issued was $170,225 and was determined using the Black Scholes model (refer Note 34 for further information). During the 2018 financial year, a further 140,660,226 listed fully vested options (exercisable at $0.035, expiring on 31 December 2020) were issued as free attaching options in conjunction with the capital raising activities as announced on 19 October 2017. The options are listed on the ASX with an exercise price of $0.035 per share and expiring on 31 December 2020. During the reporting period no listed options were exercised. Unlisted Options Details Balance Options issued to Key Management Personnel (KMP) during the period KMP Options lapsed during the period Employee options lapsed during the period Balance Balance Date 1 July 2017 30 June 2018 30 June 2019 Options 11,015,000 2,500,000 (2,340,000) (5,260,000) 5,915,000 5,915,000 The Company issued 2,500,000 unlisted options to KMP during the 2018 financial year. The options are fully vested, unlisted and have an exercise price and expiry date as set out in Note 34 below. During the reporting period no KMP options were exercised. There were no unlisted options issued to employees during the reporting period. Subsequent to year ended 30 June 2019, no unlisted options have been exercised. Ordinary shares Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the company in proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the company does not have a limited amount of authorised capital. On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have one vote. Share buy-back There is no current on-market share buy-back. 38 Investigator Resources Limited Notes to the financial statements 30 June 2019 Note 19. Equity - issued capital (continued) Capital risk management The consolidated entity's objectives when managing capital is to safeguard its ability to continue as a going concern, so that it can provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to reduce the cost of capital. Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is calculated as total borrowings less cash and cash equivalents. In order to maintain or adjust the capital structure, the consolidated entity may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. The consolidated entity would look to raise capital when an opportunity to invest in a business or company was seen as value adding relative to the current company's share price at the time of the investment. The consolidated entity is not actively pursuing additional investments in the short term as it continues to integrate and grow its existing businesses in order to maximise synergies. The capital risk management policy remains unchanged from the 2018 Annual Report. Accounting policy for issued capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. Note 20. Equity - reserves Share options reserve Consolidated 2019 $ 2018 $ 243,519 243,519 Share options reserve The share options reserve records items recognised as expenses or issue costs on valuation of options. Refer to Note 34 for share based payments made during the year ended 30 June 2019 and 30 June 2018. Movements in reserves Movements in each class of reserve during the current and previous financial year are set out below: Consolidated Balance at 1 July 2017 Share-based payment expense Expired and lapsed options adjusted to Retained Earnings Balance at 30 June 2018 Balance at 30 June 2019 $ Total $ 962,451 181,138 (900,070) 962,451 181,138 (900,070) 243,519 243,519 243,519 243,519 39 Investigator Resources Limited Notes to the financial statements 30 June 2019 Note 21. Equity - accumulated losses Accumulated losses at the beginning of the financial year Expired options adjusted to retained earnings Loss after income tax expense for the year Accumulated losses at the end of the financial year Note 22. Equity - dividends Consolidated 2019 $ 2018 $ (19,751,729) - (2,868,319) (20,070,338) 900,070 (581,461) (22,620,048) (19,751,729) There were no dividends paid, recommended or declared during the current or previous financial year. Note 23. Financial instruments Financial risk management objectives The consolidated entity's activities expose it to a variety of financial risks: market risk (including foreign currency risk, price risk and interest rate risk), credit risk and liquidity risk. The consolidated entity uses different methods to measure different types of risk to which it is exposed. These methods include sensitivity analysis in the case of interest rate and ageing analysis for credit risk. Risk management is carried out by senior finance executives ('finance') under policies approved by the Board of Directors ('the Board'). These policies include identification and analysis of the risk exposure of the consolidated entity and appropriate procedures, controls and risk limits. Finance identifies, evaluates and hedges financial risks within the consolidated entity's operating units. Finance reports to the Board on a monthly basis. The consolidated entity’s financial instruments consist mainly of deposits with banks, short-term investments, accounts receivable, accounts payable and loans to related parties. Market risk Foreign currency risk The consolidated entity is not exposed to foreign currency risk through foreign exchange rate fluctuations. Price risk The consolidated entity is not exposed to any significant price risk. Interest rate risk The consolidated entity's main interest rate risk arises interest income it can potentially earn on surplus cash deposits. The Company has no interest-bearing borrowings from long-term borrowings and hence not exposed to any interest rate risk from related variable rates. The consolidated entity has cash and cash equivalents totalling $1,204,981 (2018: $2,889,752). An official increase/decrease in interest rates of 0.5% (2018: 0.5%) basis points would have an adverse/favourable effect on profit before tax of $6,024 (2018: $14,448) per annum. Credit risk 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 balance sheet and notes to the financial statements The credit risk for cash and cash equivalents is considered negligible as the consolidated entity invests its surplus funds with reputable Australian banks with high quality external credit ratings. The consolidated entity does not have any other material credit risk exposure to any single material credit risk exposure to any single receivable or group of receivables under financial instruments entered into by the consolidated entity. 40 Investigator Resources Limited Notes to the financial statements 30 June 2019 Note 23. Financial instruments (continued) Liquidity risk Vigilant liquidity risk management requires the consolidated entity to maintain sufficient liquid assets (mainly cash and cash equivalents) and available borrowing facilities to be able to pay debts as and when they become due and payable. The consolidated entity manages liquidity risk by maintaining adequate cash reserves and forecast cash flows and matching the maturity profiles of financial assets and liabilities. Fair value of financial instruments Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value. Note 24. Key management personnel disclosures Directors The following persons were Directors of Investigator Resources Limited during the financial year: D.M. Ransom K.J. Wilson A. McIlwain J. A. Anderson Chairman Non-Executive Director Director and Acting Chief Executive Officer (effective 16 August 2018) Managing Director (Resigned 16 August 2018) Compensation The aggregate compensation made to Directors and other members of Key Management Personnel of the consolidated entity is set out below: Short-term employee benefits Post-employment benefits Long-term benefits Share-based payments Note 25. Remuneration of auditors Consolidated 2019 $ 2018 $ 654,440 51,751 75,797 - 817,417 77,423 8,562 10,913 781,988 914,315 During the financial year the following fees were paid or payable for services provided by, the auditor of the company: Audit services - Audit or review of the financial statements Other services - Tax compliance and advisory services 41 Consolidated 2019 $ 2018 $ 39,780 48,483 12,700 6,900 52,480 55,383 Investigator Resources Limited Notes to the financial statements 30 June 2019 Note 26. Commitments The consolidated entity has certain obligations to perform exploration work and expend minimum amounts of money on such works on mineral exploration tenements. These obligations will vary from time to time, subject to statutory approval. The terms of current and future joint ventures, the grant or relinquishment of licences and changes to licence areas at renewal or expiry, will alter the expenditure commitments of the consolidated entity. To keep tenements in good standing, work programs should meet certain minimum expenditure requirements. If the minimum expenditure requirements are not met, the Company has the option to negotiate new terms or relinquish the tenements. The Company also has the ability to meet expenditure requirements by joint venture or farm-in agreements. Total expenditure commitments at balance date in respect of minimum expenditure requirements not provided for in the financial statements are approximately: Consolidated 2019 $ 2018 $ 1,974,268 291,332 1,635,842 840,905 2,265,600 2,476,747 75,540 69,410 3,465 105,169 1,980 5,940 148,415 113,089 Exploration Expenditure Commitments Committed at the reporting date but not recognised as liabilities, payable: Not later than one year Later than one year but not later than two years Office and Storage Shed Rentals Committed at the reporting date but not recognised as liabilities, payable: Not later than one year Later than one year but not later than two years Later than two years but not later than five years Note 27. Related party transactions Parent entity Investigator Resources Limited is the Parent Entity. Subsidiaries Interests in subsidiaries are set out in Note 29. Joint operations Interests in joint operations are set out in Note 30. Key management personnel Disclosures relating to Key Management Personnel are set out in Note 24 and the remuneration report included in the directors' report. 42 Investigator Resources Limited Notes to the financial statements 30 June 2019 Note 27. Related party transactions (continued) Transactions with related parties The following transactions occurred with related parties: Payment for other expenses: Consulting fees paid to Andrew McIlwain & Associates Pty Ltd* Consolidated 2019 $ 2018 $ 30,000 - * Mr A. McIlwain is a director of Andrew McIlwain & Associates Pty Ltd (“AM&A”). From 1st July 2018, AM&A and Mr McIlwain have been engaged to provide corporate advisory services to the company. The services to be provided are based on normal commercial terms and conditions. Receivable from and payable to related parties There were no trade receivables from or trade payables to related parties at the current and previous reporting date. Loans to/from related parties There were no loans to or from related parties at the current and previous reporting date. Terms and conditions All transactions were made on normal commercial terms and conditions and at market rates. Note 28. Parent entity information Set out below is the supplementary information about the parent entity. Statement of profit or loss and other comprehensive income Loss after income tax Total comprehensive income Statement of financial position Total current assets Total assets Total current liabilities Total liabilities Equity Issued capital Share options reserve Accumulated losses Total equity 43 Parent 2019 $ 2018 $ (2,868,319) (581,461) (2,868,319) (581,461) Parent 2019 $ 2018 $ 1,260,439 3,591,269 30,987,999 34,213,513 294,206 582,297 294,206 651,401 53,070,322 243,519 (22,620,048) 53,070,322 243,519 (19,751,729) 30,693,793 33,562,112 Investigator Resources Limited Notes to the financial statements 30 June 2019 Note 28. Parent entity information (continued) Commitments for the Parent Entity are the same as those for the consolidated entity. The Parent Entity has not entered into a deed of cross guarantee nor are there any contingent liabilities at year end. Note 29. Interests in subsidiaries The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the accounting policy described in Note 2: Name Sunthe Uranium Pty Ltd Gilles Resources Pty Ltd Silver Eyre Pty Ltd Kimba Minerals Pty Ltd Goyder Resources Pty Ltd Gawler Resources Pty Ltd Principal place of business / Country of incorporation Australia Australia Australia Australia Australia Australia Ownership interest 2018 2019 % % 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% Note 30. Interests in joint operations and farm-in arrangements The consolidated entity has recognised its share of jointly held assets, liabilities, revenues and expenses of joint operations. These have been incorporated in the financial statements under the appropriate classifications. Information relating to joint operations that are material to the consolidated entity are set out below: Name Principal place of business / Country of incorporation Ownership interest 2018 2019 % % Thurlga – Pursuant to a farm-in agreement with Peninsula Resources Pty Ltd Australia - 75% Pursuant to a farm-in agreement with Peninsula Resources Pty Ltd, a wholly owned subsidiary of Andromeda Metals Limited, the Company earned a 75% interest in the Thurlga tenement (EL 5419) by meeting the expenditure commitment of $750,000 during the year ended 30 June 2017. Gawler Resources Limited, a wholly owned subsidiary of Investigator Resources, is the manager of the Joint Venture. The drilling on this tenement was contingent on the soil results. A detailed soil geochemical sampling and soil results indicated towards low prospects in this tenement. During the period the company has discontinued further exploration on this tenement and has withdrawn from the joint venture and the Company recognised an impairment charge of $802,692 relating to the Thurlga tenement. At the date of this report, other than disclosed in Note 31, the Company has no other interest in joint operations or farm-in arrangements. 44 Investigator Resources Limited Notes to the financial statements 30 June 2019 Note 31. Events after the reporting period On 14 July 2019, the Company entered into a Heads of Agreement (“HOA”) with OZ Minerals Limited whereby Oz Minerals will fund a $10 million three-stage exploration program to explore the Company’s Maslins Project. The Maslins Project is located on EL 5705 (100% owned by Gawler Resources Pty Ltd, a wholly owned subsidiary of Investigator) that is subject of this HOA. OZ Minerals Limited may earn up to 70% of the Maslins Project. Subsequent to the year end, AusIndustry advised that it was undertaking an examination of the registration for tax concession received under Research & Development (R&D) Tax Incentive program for the financial year 2018. The Company submitted a comprehensive response to AusIndustry on 26 August 2019 and has received no response on the matter as at the date of this report. On 2 September 2019, the Company announced it undertook a share placement to raise $2.2 million via the issue of 91.67 million fully paid ordinary shares at $0.024 a share with a 1 for 3 free attaching listed option, totalling 30.6m, exercisable at 3.5 cents, with an expiry date of 31 December 2020. No other matter or circumstance has arisen since 30 June 2019 that has significantly affected, or may significantly affect the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future financial years. Note 32. Cash flow information Reconciliation of loss after income tax to net cash used in operating activities Loss after income tax expense for the year (2,868,319) (581,461) Consolidated 2019 $ 2018 $ Adjustments for: Depreciation and amortisation Profit on disposal of plant and equipment Employee options expense Exploration expenditure written off Change in operating assets and liabilities: (Increase)/Decrease in trade and other receivables (Increase)/Decrease in inventory (Increase)/Decrease in other assets (Decrease)/Increase in Provisions - current (Decrease)/Increase in Provisions – non-current (Decrease)/Increase in creditors and accruals Net cash used in operating activities Note 33. Earnings per share 2,617 (24,182) - 1,797,782 6,728 - 10,913 814,974 626,903 12,679 6,477 (155,944) (69,104) (43,584) (613,778) (8,611) (2,953) (18,872) 9,756 (2,290) (714,675) (385,594) Consolidated 2019 $ 2018 $ Loss after income tax attributable to the owners of Investigator Resources Limited (2,868,319) (581,461) 45 Investigator Resources Limited Notes to the financial statements 30 June 2019 Note 33. Earnings per share (continued) Weighted average number of ordinary shares used in calculating basic earnings per share 739,972,032 685,501,297 Weighted average number of ordinary shares used in calculating diluted earnings per share 739,972,032 685,501,297 Number Number Basic earnings per share Diluted earnings per share Accounting policy for earnings per share Cents Cents (0.39) (0.39) (0.08) (0.08) Basic earnings per share Basic earnings per share is calculated by dividing the profit attributable to the owners of Investigator Resources Limited, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the financial year. Diluted earnings per share Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares. Note 34. Share-based payments During the reporting period there were no share-based payments issued to Directors or KMP (2018: nil). Listed Options During the 2018 financial year, 20,000,000 listed fully vested options (exercisable at $0.035, expiring on 31 December 2020) were issued to PAC Partners Pty Ltd or its nominees in consideration for lead manager services provided, as approved by shareholders at the Annual General Meeting held on 30 November 2017. Details of the listed options issued are set out at Note 19 above. The fair value of the options was determined as of $170,225 using the Black Scholes option pricing model using the following inputs: Weighted average share price at date of grant ($) Weighted average exercise price ($) Weighted average volatility % Weighted average risk-free rate % Days to expiry Fair value of options $ Unlisted Options 0.022 0.035 74.852 2.015 1,163 170,225 During 2018 financial year, 2,500,000 unlisted fully vested options (exercisable at $0.048, expiring on 23 January 2020) were issued to the Investigator’s Chairman, D. M. Ransom, as approved by shareholders at the Annual General Meeting held on 30 November 2017. Details of the options issued are set out at Note 19 above. The fair value of the options was determined as of $10,913 using the Black Scholes option pricing model using the following inputs: 46 Investigator Resources Limited Notes to the financial statements 30 June 2019 Note 34. Share-based payments (continued) Weighted average share price at date of grant ($) Weighted average exercise price ($) Weighted average volatility % Weighted average risk-free rate % Days to expiry Fair value of options $ 0.021 0.048 75.137 1.750 785 10,913 Details of unlisted share options on issue to KMP and other employees and weighted average exercise prices were as follows: Outstanding at 30 June 2017 Granted / Issued Lapsed Exercised Outstanding at 30 June 2018 Granted / Issued Lapsed Exercised Outstanding at 30 June 20191 KMP Weighted average exercise price $ Employees No. of Options Employees Weighted average exercise price $ 0.030 0.048 0.020 - 0.041 - - - 0.041 5,260,000 - (5,260,000) - - - - - - 0.038 - 0.038 - - - - - - KMP No. of Options 5,755,000 2,500,000 (2,340,000) - 5,915,000 - - - 5,915,000 1Includes 3,415,000 unlisted options held by J. A. Anderson who is no longer a KMP. Accounting policy for share-based payments Equity-settled and cash-settled share-based compensation benefits are provided to employees. Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in exchange for the rendering of services. Cash-settled transactions are awards of cash for the exchange of services, where the amount of cash is determined by reference to the share price. The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined using either the Binomial or Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option, together with non-vesting conditions that do not determine whether the consolidated entity receives the services that entitle the employees to receive payment. No account is taken of any other vesting conditions. The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over the vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the best estimate of the number of awards that are likely to vest and the expired portion of the vesting period. The amount recognised in profit or loss for the period is the cumulative amount calculated at each reporting date less amounts already recognised in previous periods. The cost of cash-settled transactions is initially, and at each reporting date until vested, determined by applying either the Binomial or Black-Scholes option pricing model, taking into consideration the terms and conditions on which the award was granted. The cumulative charge to profit or loss until settlement of the liability is calculated as follows: ● during the vesting period, the liability at each reporting date is the fair value of the award at that date multiplied by the expired portion of the vesting period. from the end of the vesting period until settlement of the award, the liability is the full fair value of the liability at the reporting date. ● 47 Investigator Resources Limited Notes to the financial statements 30 June 2019 Note 34. Share-based payments (continued) All changes in the liability are recognised in profit or loss. The ultimate cost of cash-settled transactions is the cash paid to settle the liability. Market conditions are taken into consideration in determining fair value. Therefore, any awards subject to market conditions are considered to vest irrespective of whether or not that market condition has been met, provided all other conditions are satisfied. If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made. An additional expense is recognised, over the remaining vesting period, for any modification that increases the total fair value of the share-based compensation benefit as at the date of modification. If the non-vesting condition is within the control of the consolidated entity or employee, the failure to satisfy the condition is treated as a cancellation. If the condition is not within the control of the consolidated entity or employee and is not satisfied during the vesting period, any remaining expense for the award is recognised over the remaining vesting period, unless the award is forfeited. If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining expense is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled and new award is treated as if they were a modification. 48 Investigator Resources Limited Directors' declaration 30 June 2019 In the Directors' opinion: ● ● ● ● the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; the attached financial statements and notes comply with International Financial Reporting Standards as issued by the International Accounting Standards Board as described in Note 2 to the financial statements; the attached financial statements and notes give a true and fair view of the consolidated entity's financial position as at 30 June 2019 and of its performance for the financial year ended on that date; and 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 been given the declarations required by section 295A of the Corporations Act 2001. Signed in accordance with a resolution of Directors made pursuant to section 295(5)(a) of the Corporations Act 2001. On behalf of the Directors ___________________________ D.M Ransom Chairman 2 September 2019 ___________________________ A McIlwain Acting Chief Executive Officer 49 Level 3, 170 Frome Street Adelaide SA 5000 Correspondence to: GPO Box 1270 Adelaide SA 5001 T +61 8 8372 6666 F +61 8 8372 6677 E info.sa@au.gt.com W www.grantthornton.com.au Independent Auditor’s Report To the Members of Investigator Resources Limited Report on the audit of the financial report Opinion We have audited the financial report of Investigator Resources Limited (the Company) and its subsidiaries (the Group), which comprises the consolidated statement of financial position as at 30 June 2019, the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies, and the Directors’ declaration. In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: a giving a true and fair view of the Group’s financial position as at 30 June 2019 and of its financial performance for the year ended; and b complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389 www.grantthornton.com.au ‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited. Liability limited by a scheme approved under Professional Standards Legislation. 50 Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matter described below to be the key audit matter to be communicated in our report. Key audit matter How our audit addressed the key audit matter Exploration and evaluation assets - Note 14 At 30 June 2019 the carrying value of Exploration and Evaluation Assets was $29,700,636. In accordance with AASB 6 Exploration for and Evaluation of Mineral Resources, the Group is required to assess at each reporting date if there are any triggers for impairment which may suggest the carrying value is in excess of the recoverable value. The process undertaken by management to assess whether there are any impairment triggers in each area of interest involves an element of management judgement. This area is a key audit matter due to the significant judgement involved in determining the existence of impairment triggers. Our procedures included, amongst others:       obtaining the management reconciliation of capitalised exploration and evaluation expenditure and agreeing to the general ledger; reviewing management’s area of interest considerations against AASB 6; conducting a detailed review of management’s assessment of trigger events prepared in accordance with AASB 6 including;  tracing projects to statutory registers, exploration licenses and third party confirmations to determine whether a right of tenure existed;  enquiry of management regarding their intentions to carry out exploration and evaluation activity in the relevant exploration area, including review of management’s budgeted expenditure; and  understanding whether any data exists to suggest that the carrying value of these exploration and evaluation assets are unlikely to be recovered through development or sale; assessing the accuracy of impairment recorded for the year as it pertained to exploration interests; evaluating the competence, capabilities and objectivity of management’s experts in the evaluation of potential impairment triggers; and assessing the appropriateness of the related financial statement disclosures. 51 Information other than the financial report and auditor’s report thereon The Directors are responsible for the other information. The other information comprises the information included in the Group’s annual report for the year ended 30 June 2019, but does not include the financial report and our auditor’s report thereon. Our opinion on the financial report does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the Directors’ for the financial report The Directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the Directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In preparing the financial report, the Directors are responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so. Auditor’s responsibilities for the audit of the financial report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf. This description forms part of our auditor’s report. Report on the remuneration report Opinion on the remuneration report We have audited the Remuneration Report included in the directors’ report for the year ended 30 June 2019. In our opinion, the Remuneration Report of Investigator Resources Limited, for the year ended 30 June 2019, complies with section 300A of the Corporations Act 2001. 52 Responsibilities The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. GRANT THORNTON AUDIT PTY LTD Chartered Accountants J L Humphrey Partner – Audit & Assurance Adelaide, 2 September 2019 53 Investigator Resources Limited Shareholder information 30 June 2019 The shareholder information set out below was applicable as at 27 August 2019. DISTRIBUTION OF EQUITABLE SECURITIES Analysis of number of equitable security holders by size of holding: Range 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 Over Total Total holders 221 377 351 1,453 800 3,202 Units 21,434 1,280,082 2,866,700 62,133,560 673,670,256 739,972,032 % Units 0.00 0.17 0.39 8.40 91.04 100.00 EQUITY SECURITY HOLDERS The names of the twenty largest security holders of listed equity securities are listed below: Twenty Largest Shareholders Name CITIC AUSTRALIA PTY LTD 1 CITICORP NOMINEES PTY LIMITED 2 LAURIUM INVESTMENTS PTY LTD 3 GREGMAL NOMINEES PTY LIMITED 4 MR BRIAN JOHN ANDERSON 5 MR DIMITRI EMIL LAJOVIC 6 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 7 VALLEYTECH INSTRUMENTATION PTY LTD 8 EST MR MALCOLM THOM 9 10 WILLOW GLENN PTY LIMITED 11 12 13 CMC MARKETS STOCKBROKING NOMINEES PTY LIMITED TAIPAN INVESTMENT MANAGEMENT PTY LIMITED BNP PARIBAS NOMINEES PTY LTD 14 14 REVEDOR PTY LTD ROBERTSON ARCHITECTURAL SERVICES PTY LTD 16 AUSTRIKE RESOURCES PTY LTD 17 MAPT PTY LIMITED 18 MR BRUCE EDWARD FOY + MRS ELIZABETH MARY FOY 19 MR MARK CRAIG 20 COMSEC NOMINEES PTY LIMITED Total Top 20 Shareholders 54 No. of shares % Units 55,400,000 49,469,548 25,213,092 12,710,633 9,902,696 8,893,625 8,328,214 8,000,000 6,575,375 6,330,694 5,331,289 5,299,915 5,017,272 5,000,000 5,000,000 4,763,843 4,575,375 4,526,713 4,157,593 3,949,581 7.49 6.69 3.41 1.72 1.34 1.20 1.13 1.08 0.89 0.86 0.72 0.72 0.68 0.68 0.68 0.64 0.62 0.61 0.56 0.53 238,445,458 32.25 Investigator Resources Limited Shareholder information 30 June 2019 Substantial Shareholders Details of substantial shareholders are set out below: Name 1 2 CITIC AUSTRALIA PTY LTD CITICORP NOMINEES PTY LIMITED Twenty Largest Option Holders Name CITICORP NOMINEES PTY LIMITED MRS LESLEY LORD MR ADAM ANTHONY MIOCEVICH VALLEYTECH INSTRUMENTATION PTY LTD TAYLOR FAMILY INVESTMENTS PTY LTD MR WARWICK DYSON MR MICHAEL REPS PAC PARTNERS PTY LTD MR IAN HEMBROW + MRS CLARE HEMBROW ALEXIOS ADAMIDES NEUROSURGERY PTY LTD MR IAN HEMBROW MR DAVID JOHN IKIN + MRS ILDIKO IKIN 1 2 3 4 5 6 6 8 9 10 11 12 MR CRAIG RUSSELL STRANGER 12 14 WILLOW GLENN PTY LIMITED MRS LYNN PORTEUS 15 BENRIE PTY LTD 16 MR JOHN RICHARD PAPWORTH 16 16 PG SUPERANNUATION FUND PTY LTD 19 20 MRS BROOKE LAUREN PICKEN EST MR MALCOLM THOM Total Top 20 Listed Option Holders VOTING RIGHTS The voting rights attached to ordinary shares are set out below: No. of shares % Units 7.49 55,400,000 49,469,548 6.69 Units % Units 14,438,358 11,950,000 7,635,909 7,000,000 6,000,000 5,000,000 5,000,000 4,500,000 3,592,371 3,500,000 3,024,566 3,000,000 3,000,000 2,575,375 2,542,616 2,000,000 2,000,000 2,000,000 8.91 7.38 4.71 4.32 3.70 3.09 3.09 2.78 2.22 2.16 1.87 1.85 1.85 1.59 1.57 1.23 1.23 1.23 1,600,000 1,575,375 91,934,570 0.99 0.97 56.74 Ordinary shares On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have one vote. 55