2023
FOR THE YEAR ENDED 30 JUNE 2023
01 SHAREHOLDER ADDRESS
08 DIRECTORS’ REPORT
27 AUDITORS INDEPENDENCE DECLARATION
28 CONSOLIDATED STATEMENT OF
PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
29 CONSOLIDATED STATEMENT OF
FINANCIAL POSITION
30 CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY
31 CONSOLIDATED STATEMENT OF
CASH FLOWS
32 NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
1.
2.
3.
4.
5.
6.
7.
8.
9.
SUMMARY OF ACCOUNTING POLICIES
NEW AND AMENDED STANDARDS NOT
YET ADOPTED BY THE GROUP
FINANCIAL RISK MANAGEMENT
CRITICAL ACCOUNTING ESTIMATES
AND JUDGEMENTS
SEGMENT INFORMATION
EXPENSES
AUDITOR REMUNERATION
TAXATION
GAIN/(LOSS) PER SHARE
10. CASH AND CASH EQUIVALENTS
11. EXPLORATION AND EVALUATION EXPENDITURE
12. TRADE AND OTHER PAYABLES
13. SHARE CAPITAL
14. RESERVES
15.
INTERESTS IN OTHER ENTITIES
16. RECONCILIATION OF LOSS AFTER INCOME TAX
TO NET CASH OUTFLOW USED
17. PARENT ENTITY
18. RELATED PARTY TRANSACTIONS
19. SHARE-BASED PAYMENTS
20. EVENTS OCCURRING AFTER REPORTING DATE
21. CAPITAL AND OTHER COMMITMENTS
22. CONTINGENCIES
59 DIRECTORS’ DECLARATION
60 INDEPENDENT AUDIT REPORT
64 OTHER ADDITIONAL ASX INFORMATION
Invictus Energy Limited
ABN 21 150 956 773
Corporate Directory
DIRECTORS
John Bentley
Non-Executive Chairman
Joseph Mutizwa
Deputy Chairman &
Non-Executive Director
Mr Scott Macmillan
Managing Director
Mr Gabriel Chiappini
Non-Executive Director
Mr Robin Sutherland Non-Executive Director
COMPANY
SECRETARY
REGISTERED
OFFICE
SHARE
REGISTER
STOCK
EXCHANGE
LISTING
AUDITOR
SOLICITORS
Mr Gabriel Chiappini
Level 1, 10 Outram Street
West Perth WA 6005
Tel: +618 6102 5055
Fax: +618 6323 3378
Link Market Services Limited
Ground Floor
Level 4, Central Park
152 St Georges Terrace
Perth WA 6000
Australian Securities Exchange
(ASX: IVZ)
BDO
Level 9, Mia Yellagonga Tower 2
5 Spring Street
Perth WA 6000
Steinepreis Paganin
Level 4, The Read Buildings
16 Milligan Street
Perth WA 6001
WEBSITE
www.invictusenergy.com
Shareholder Address Shareholder
Address
The Cabora
Bassa asset
“Invictus Energy’s basin opening
exploration programme in its 3,600km2
licence area in the Cabora Bassa
Basin initiated with the successful
Mukuyu-1 well and, since year end, the
encouraging early results from Mukuyu-2
have the capacity to materially improve
energy self sufficiency and enhance the
energy transition in Zimbabwe and the
greater Southern Africa region”
Scott Macillan,
Managing Director
Our Company has enjoyed a year of significant activity
– underpinned by the highly successful maiden drilling
campaign of Mukuyu-1 at our Cabora Bassa Basin project,
which confirmed a working hydrocarbon system from the first
exploration well ever drilled in the basin.
In addition, we expanded our acreage position significantly
in the basin with the addition of Exclusive Prospecting Orders
1848 and 1849, commenced the CB23 infill seismic program to
mature additional promising leads to drill ready prospects, and
prepared to drill the Mukuyu-2 appraisal well in 3Q CY2023.
Analysis of results from Mukuyu-1 clearly demonstrate a
working petroleum system in this frontier basin and Invictus’
acreage position in the Cabora Bassa basin with multiple
follow up mature drilling targets provides the Company with
Significant upside potential.
Operational recap
Drilling of Mukuyu-1 headlined the 2023 financial year, kicking
off in September and drilling concluding initially in mid-
November when 3,618mTD was reached. Importantly, this
campaign and the additional Mukuyu-1 ST1 (sidetrack) well
drilled in November-December 2022 confirmed the presence
of a working hydrocarbon system in the Cabora Bassa Basin.
Late in the financial year Invictus commenced the CB23
Seismic Survey, which was awarded to Polaris Natural Resource
Development. The program covered 425-line kilometres in
the eastern portion of EPO 1848 and 1849 to mature multiple
leads (Mopane, Musuma, Machabel and Mahogany) along the
proven play to the east of, and on trend with, Mukuyu.
The survey also covered additional leads along the highly
prospective Basin Margin play (Mimosa and Mukwa). The aim
of the seismic campaign was to mature a number of these
identified leads to drillable prospects as well as firming up
significant exploration upside for the Company in the future.
4
INVICTUS ENERGY LIMITED2023 ANNUAL REPORT
This activity followed the expansion of our exploration licence
to cover the entire conventional oil and gas play fairway in the
Basin reaching a total of 360,000 hectares.
In September 2022 following an agreement with the Sovereign
Wealth Fund of Zimbabwe the assignment of exploration
rights to Exclusive Prospecting Order (EPO) 1848 and 1849
were gazetted.
The southern portion of EPO 1849 licence area contains the
newly identified prospective Basin Margin play, which has seen
prolific success in the East Africa Rift System.
An Independent Prospective Resource Report from ERCE
was carried out which estimates the gross mean recoverable
conventional potential of the Basin Margin Area at a combined
1.17 billion barrels of conventional oil on a gross mean
unrisked basis from five drill-ready prospects.
This substantial resource potential in the Basin Margin play
places it at comparable scale to the prolific East African Rift
System that resulted in significant discoveries in the “String of
Pearls” plays in Kenya and Uganda.
As a high impact explorer, the Company has built a material
and high quality portfolio of prospects and leads through its
ability to identify new opportunities and mature them using
cost effective work programs and applying rigorous technical
evaluation to high grade drilling candidates.
Our exclusive position in the Cabora Bassa Basin and scale
of our portfolio provides us with exciting follow on potential
following success at our Mukuyu-2 which will be completed in
Q4 CY2023.
Energy security
Energy security has become a key topic within the current
geopolitical backdrop. Southern Africa is in the midst of an
energy crisis impacting economic growth in the region and
unfortunately is forecast to worsen in the coming years.
5
New sources of supply are urgently required to provide
affordable and reliable baseload power to support the energy
transition to lower carbon fuel sources and to facilitate the
growth of developing economies in the region.
Coupled with a backdrop of increasing natural gas demand
in the region and limited sources of supply, Invictus is well
placed to capitalise from success at our Mukuyu-2 well, which
if successful will open up a number of large-scale monetisation
opportunities with natural gas set to remain a vital part of the
region’s energy mix for decades to come.
Should a material discovery at Invictus’ Cabora Bassa Project
come to fruition, it has the potential to make a significant
contribution to Zimbabwe’s domestic energy supply mix, and
to neighbouring countries through export via the Southern
Africa Power Pool.
INVICTUS ENERGY LIMITED2023 ANNUAL REPORT Shareholder
Address
ESG initiatives
Our commitment to generating positive community and
environmental outcomes through our activities in Zimbabwe
has always been at the forefront of our values as a company.
Among projects already completed were the upgrade of the
road from Muzarabani to Hoya, which has improved access to
clinics and schools for the surrounding community, followed
by the commencement of rehabilitation of the Muzarabani to
Mahuwe road, a vital access link between the districts.
Our shared prosperity approach with our shareholders, host
governments and local communities strives to ensure all
stakeholders benefit from finding, developing and producing
natural resources.
During the year Invictus enjoyed recognition for its CSR
program by CSR Network Zimbabwe, which announced the
Company as the winner of the Responsible Investment &
Social Impact Award 2022 for Mashonaland Central Province.
Throughout the year Invictus continued to support hundreds
of jobs directly through our operational activity, including the
CB23 Seismic Survey which generated more than 100 direct
jobs for local community members as well as procurement of
goods and services from local suppliers.
The initial Environmental Impact Assessment (EIA) conducted
in 2019 by independent environmental consultants, the
Scientific & Industrial Research & Development Centre, is one
of the largest assessments conducted in Zimbabwe.
The EIA included field surveys and baseline measurements
of hydrology, ecology, environmental, archaeological,
hydrogeological, soil surveys and socioeconomic and
community consultations of key project stakeholders, local
leaders, relevant Government ministries and Government
extension offices.
Initial community information sessions were well attended
with up to 1,000 participants at some meetings. Invictus
has remained engaged with the local community through
subsequent renewal phases of the EIA and during our
exploration program through dedicated Community Liaison
Officers (CLOs) and team members on the ground.
In response to feedback provided through consultation,
our Corporate Social Responsibility (CSR) program
was strengthened subsequent to year’s end, with road
rehabilitation and activities to address human-wildlife conflict
added to the project list.
The CSR program had previously focused on the provision
of water to communities and clinics around the Muzarabani
and Mbire Districts. Water, besides being the most sort after
community request, is a key enabler to other CSR initiatives
the Company wishes to initiate and is key to life in remote
communities.
Programs completed include drilling of water boreholes,
installation of solar panels and pumps and above ground
storage tanks to provide year-round and continuous access
to water for clinics and communities in the Mbire and
Muzarabani districts.
On the climate initiative front, Invictus remains committed
to seeing through the Ngamo-Gwayi-Sikumi (NGS) REDD+
project.
Our Company won the international tender for the NGS
REDD+ in 2022, being awarded a 30-year contract in
partnership with the Forestry Commission of Zimbabwe to
protect indigenous forest by implementing programs to
mitigate deforestation activities.
The resulting benefits of these programs are quantified in
the form of emission reductions, which then generate carbon
credits. The NGS REDD+ project will enable Invictus to fully
offset all Scope 1 and 2 emissions generated across the
entire lifecycle of the Cabora Bassa project, in the event of a
discovery.
6
INVICTUS ENERGY LIMITED2023 ANNUAL REPORT Outlook
At the time of writing the Mukuyu-2 campaign was tracking
to be completed on schedule and within budget, with Total
Depth called at 3,718m. Mukuyu-2 proved up over a 1000m
gross interval of hydrocarbon charge through the Upper and
previously untested Lower Angwa formations across multiple
reservoir zones.
A comprehensive wireline logging programme including
formation pressure and fluid sampling, sidewall cores
and checkshot surveys was due to be run with the aim of
confirming the presence of moveable hydrocarbons in
multiple zones in the Upper and Lower Angwa formations to
declare a discovery.
We thank the Board and Invictus staff for their support and
dedication this year and in the year ahead as we focus on
progressing the Cabora Bassa project beyond Mukuyu-2,
maturing the vast opportunities within the exploration
portfolio, as well as the NGS REDD+ carbon offset business
and possible inorganic growth opportunities.
And not least, we thank our shareholders, stakeholders and
project partners for your ongoing support. Without it, our
ambition to achieve stable and affordable energy growth for
Zimbabwe and Southern Africa would not be possible.
John Bentley
NON-EXECUTIVE CHAIRMAN
Scott Macmillan
MANAGING DIRECTOR
Proudly, this means the Cabora Bassa project has the potential
to be one of the world’s first cradle to grave carbon neutral oil
and gas developments, with emissions to be fully offset from
exploration to decommissioning on a Scope 1 and 2 basis.
Invictus continues to deliver exceptional ESG outcomes
including a safety record with no lost time injuries from the
Mukuyu-1 wellpad construction through drilling operations
to rig down, throughout the CB23 Seismic Survey and into
Mukuyu-2 operations at time of writing.
Corporate activity
During the financial year support from existing and new
shareholders has been immense, with the Company
successfully raising AU$60.4 million to fund a wide range
of operational activity and bank contingency funds for the
Mukuyu-2 drilling campaign.
This consisted of a $25 million private placement completed
in late August 2022 after a Company decision to sole-fund
the Mukuyu-1 drilling campaign, following the significant
upgrade in the prospectivity of the project as the result of
new CB21 seismic data and securing the expanded acreage
position.
This has allowed Invictus to maintain material ownership
of the expanded acreage encompassing the new Basin
Margin play, plus additional prospects and leads, providing
shareholders with the largest exposure to drilling success.
In the second half of financial year 2023 Invictus raised an
additional $35.4 million through a combination of private
placements and a Share Purchase Plan, which assisted
Company planning and preparations for the Mukuyu-2 drilling
campaign, securing long-lead items, well services contractors
and additional exploration carried out through the CB23
seismic program.
We are extremely grateful to our shareholders who have
continued to support the Company as we strive to realise the
huge potential of our assets.
The Company remains open to strategic partnering
opportunities in the future that could add value for
shareholders as it continues to progress development of the
Cabora Bassa project.
While focused on operational activities at Cabora Bassa, the
Company has continued to actively screen the market for new
business opportunities and value accretive assets that offer
a chance to broaden its risk profile and reduce the effect to
external influences by introducing cash flow from production
or low risk, near term development opportunities.
7
INVICTUS ENERGY LIMITED2023 ANNUAL REPORT Directors’
Report
Your Directors present their report together with
the financial statements on Invictus Energy Limited
(the ‘Company’) and the entities it controlled (the
“consolidated entity”) for the year ended 30 June 2023.
Review of Operations
During the year the Company undertook the following activities:
•
•
•
•
•
•
•
•
•
•
Received an updated Independent Report from ERCE estimating substantial resource potential at its Cabora Bassa Project. ERCE
estimated the gross mean recoverable conventional potential of the Mukuyu prospect at a combined 20 Tcf and 845 million barrels of
conventional gas condensate, or approximately 4.3 billion barrels of oil equivalent (boe) on a gross mean unrisked basis. (Cautionary
Statement: The estimated quantities of petroleum that may be potentially recovered by the application of a future development
project relate to undiscovered accumulations. These estimates have both an associated risk of discovery and a risk of development.
Further exploration, appraisal and evaluation are required to determine the existence of a significant quantity of potentially movable
hydrocarbons. Prospective Resources assessments in this release were estimated using probabilistic methods in accordance with
SPE-PRMS standards.
Completed interpretation of the CB21 2D Seismic Survey, which identified a substantial new shallow target in the Post Dande (Horizon
200) section of the Mukuyu prospect.
Further quantitative analysis (QA) studies were undertaken which provided support for the presence of potential hydrocarbons in the
Mukuyu structure. The results from a seismic inversion/QA study indicated the section immediately below the Horizon 200 target likely
comprised multiple stacked hydrocarbon bearing zones, ranging in thickness from 40m to 80m.
Exalo Rig 202 commenced mobilisation from Songo Songo Island in Tanzania to Cabora Bassa with the rig and associated equipment
arriving at the Mukuyu-1 wellsite in August 2022.
Executed a binding well services contract with Baker Hughes for its drilling campaign.
Completed the gazettal of the Exclusive Prospecting Orders surrounding the current SG 4571 licence. The Company engaged with the
Government of Zimbabwe and the Sovereign Wealth Fund of Zimbabwe (SWFZ) to provide transfer of title to Geo Associates of the
expanded area.
Completed the maiden oil and gas exploration drilling campaign at Cabora Bassa project in Zimbabwe with the drilling of the
Mukuyu-1 well which reached a depth of 3,618 metres.
Interpreted 13 potential hydrocarbon bearing zones in the Pebbly Arkose and Upper Angwa formations following completion of
operations of the Mukuyu-1 ST1 well.
Executed a contract extension with Exalo Drilling S.A to keep the Exalo Rig 202 in the Cabora Bassa Basin for up to 12 months.
Received an updated Independent Technical Report from ERCE estimating substantial additional resource potential in the Basin
Margin Area of Exclusive Prospecting Order 1849. ERCE estimated the gross mean recoverable conventional potential of the Basin
Margin Area at a combined 1.17 billion barrels of conventional oil on a gross mean unrisked basis. (Cautionary Statement: The
estimated quantities of petroleum that may be potentially recovered by the application of a future development project relate
to undiscovered accumulations. These estimates have both an associated risk of discovery and a risk of development. Further
exploration, appraisal and evaluation are required to determine the existence of a significant quantity of potentially movable
hydrocarbons. Prospective Resources assessments in this release were estimated using probabilistic methods in accordance with
SPE-PRMS standards.
• Advanced the Ngamo-Gwaai-Sikumi REDD+ (NGS REDD+) project with the draft Project Development Document (PDD) completed
and the commencement of the listing process for project certification through Verra’s internationally recognised Verified Carbon
Standard (VCS). A pilot program focused on forest fire prevention and management was initiated in the Ngamo forest area in
collaboration with the Zambesia Conservation Alliance.
•
•
•
Commenced preparations for the Mukuyu-2 appraisal well and Phase 2 exploration campaign at the Cabora Bassa including the
tendering process for minor additional long leads and well services for the Mukuyu-2 well.
Commenced preparations for a new 2D seismic campaign which focused on multiple leads along the proven play on trend and to the
east of Mukuyu, as well as additional leads along the highly prospective Basin Margin play.
Completed the appraisal campaign following the successful drilling of the Mukukuy-1 well, which confirmed a working hydrocarbon
system in the Cabora Bassa basin. The Mukuyu-1 ST1 well identified 13 potential hydrocarbon bearing zones, as announced in the
ASX release on 23 January 2023, with a combined 225 metres of gross potential hydrocarbon bearing zones identified in the primary
target Upper Angwa.
• Appointed John Bentley as Non-Executive Chairman. John has more than 40 years’ experience in international natural resource
development, with a specific focus on Africa’s upstream oil and gas industry for the past three decades.
8
INVICTUS ENERGY LIMITED2023 ANNUAL REPORT
Review of Operations (CONTINUED)
• Appointed Robin Sutherland as a Non-Executive Director. Robin has worked in the African E&P sector for more than 35 years and
played a key role in the development of Energy Africa, joining as a specialist geophysicist in 1997 and had a hand in several important
hydrocarbon resource discoveries.
• Completed a placement to sophisticated and institutional investors to raise $10.0m (before costs) by way of private Placement. The
Placement was strongly supported by new and existing institutional and sophisticated shareholders, and was strategically cornered by
existing investor Mangwana Capital, local Zimbabwean partners and the Board of Directors.
• Awarded the well services contracts for the Mukuyu-2 appraisal well, as announced in the ASX release on 26 June 2023. SLB (previously
known as Schlumberger) was awarded the open-hole wireline logging contract, Geolog International was awarded the mudlogging
contract, while Baker Hughes in combination with NOV were awarded the directional drilling and logging while drilling contracts.
• Completed the maintenance program for Exalo’s Rig 202.
• Commenced the Phase 2 exploration program at the Cabora Bassa Project, with the commencement of the CB23 2D seismic survey.
The seismic acquisition contract was awarded to Polaris Natural Resource Development Ltd., which also carried out the successful CB21
2D seismic survey.
• Completed compositional analysis for five priority mudgas samples acquired during the drilling of the Mukuyu-1 / ST-1 well in selected
Upper Angwa reservoir units with the results confirming the presence of light oil, gas-condensate and helium validating the Company’s
basin and geological models of the Cabora Bassa.
• Successfully raised a combined $35.4 million before costs via a private placement to sophisticated and institutional investors, which was
cornered by existing shareholder Mangwana Capital, local Zimbabwean partners and the Board of Directors along with an oversubscribed
Share Purchase Plan.
1. Directors and Company Secretary
The Directors and the company secretary of the Company at any time during or since the end of the financial year are as follows.
Directors
Dr Stuart Lake – Non-Executive Chairman (Resigned 28 November 2022)
Dr Lake has over 37 years of global experience in the Petroleum industry and significant expertise, having operated assets in 20 countries
worldwide, including in over ten African countries. He brings a combination of in-depth technical knowledge and a world class track record
as an oil and gas finder, having led many teams in maintaining a 90% exploration success rate (from over 300 wells in 11 countries including
deep-water and new plays) throughout his career. Dr Lake has held a wide variety of roles in international Oil and Gas companies including:
•
•
•
•
Current NED Vedra Hydrogen capturing carbon-negative hydrogen at scale from residual oil while storing 3rd party CO2. The process
delays decommissioning liabilities, changes the fields to hydrogen and extends the asset life.
Current NED Capterio providing flare gas solutions for energy companies to capture flared gas, create value and reduce pollution.
Our public toll www.flareintel.com shows that is flaring what and where.
Current CEO for Durrant Petroleum working onshore conventional Exploration assets outside Africa and helping clients operate
responsibility leveraging ESG credentials.
Former CEO of AGM Petroleum, the operator of the offshore South Deep-water Tano Block in Ghana, he brought in Petrica Energy
as the new main shareholder and acquired over 2000km² 3D seismic, leading to a recently reported new oil discovery from the
Exploration drill campaign. Then as Senior Advisor to Aker Energy and TRG Energy, that acquired Hess Ghana assets, in which Dr Lake
and his team at Hess Corporation had made 7 consecutive deep-water discoveries. Dr Lake stepped down in April 2020.
• He was also the former CEO of African Petroleum Corporation Ltd, where he successfully concluded a number of farm outs and
commercial deals for their West African portfolio in a challenging market and successfully listed the company on the Oslo Bors in
Norway, transferring the company from the NSX.
•
•
Vice President of Exploration in the Hess Corporation, leading highly successful Exploration campaigns, including Ghana, Libya and 30
onshore discoveries in Russia over 4 years. Prior to that Dr Lake was a Director at Apache Corporation.
Vice President Russia in Shell International and former Deputy VP Deep-water Shell. Dr Lake was in Shell for 19 years in five countries
fulfilling a number of roles.
Mr Lake has no current directorships.
Former directorships held in the last 3 years: AGM Petroleum, and Castle Petroleum.
9
INVICTUS ENERGY LIMITED2023 ANNUAL REPORT
Directors’
Report
1. Directors and Company Secretary (CONTINUED)
Mr John Bentley – Non- Executive Chairman (Appointed 1 February 2023)
Mr Bentley has more than 40 years’ experience in international natural resource development, with a specific focus on Africa’s upstream oil
and gas industry since 1993, when he was appointed CEO exploration and production at South African oil company Engen Ltd. In 1996 he
was instrumental in the formation of Energy Africa Ltd. and its listing on the Johannesburg and Luxembourg stock exchanges. Over the next
five years as CEO, Mr Bentley led Energy Africa’s growth, with a fourfold increase in production, operations in 12 African countries, and several
important hydrocarbon resource discoveries. This laid the foundation for Tullow Oil to launch a successful US$500 million takeover of the
Company in 2004. Mr Bentley has held executive and board roles in numerous E&P companies with the majority Africa focused including
Vanco Energy Company, FirstAfrica Oil plc, Rift Oil plc, Caracal Energy Inc, Faroe Petroleum plc, Wentworth Resources Ltd and most recently
Africa Energy Corp, which made the significant Brulpadda and Luiperd play opening discoveries offshore South Africa. Mr Bentley holds a
degree in Metallurgy from Brunel University.
Mr Bentley has no current directorships.
Former directorships held in the last 3 years: Phoenix Global Resources PLC, Wentworth Resources PLC and Africa Energy Ltd.
Mr Joe Mutizwa – Non-executive Director and Deputy Chairman (Appointed 19 May 2021)
Mr Mutizwa is the current chairman of Mangwana Capital, a major shareholder of the Company and is a director of the Company’s 100%
owned local subsidiary Invictus Energy Resources Zimbabwe Pty Ltd. Joe served for ten years as Chief Executive of Delta Corporation, one
of Zimbabwe`s largest listed companies before taking early retirement in 2012. He currently sits on the Presidential Advisory Council (PAC), a
body appointed by Zimbabwe’s President, His Excellency CDE E.D Mnangagwa, and is comprised of experts and leaders drawn from diverse
sectors to advise and assist the President in formulating key economic policies and strategies in the country. Joe served on the board of the
Reserve Bank of Zimbabwe (2015-2019) and currently chairs the boards of the of Star Africa Corporation Zimbabwe (ZSE:SACL), a local sugar
refiner; as well as the board of the Infrastructure Development Bank of Zimbabwe (IDBZ) .Joe has a BSc degree (with first class honours) from
The London School of Economics; an MBA from the University of Zimbabwe and an MSc from HEC – Paris and Oxford University.
Mr Mutizwa has not held any other directorships in the past 3 years.
Mr Scott Macmillan – Managing Director (Appointed 21 June 2018)
Mr Macmillan is a Reservoir Engineer and founder of Invictus Energy Resources Pty Ltd. He has a Bachelor of Chemical Engineering and an
MSc in Petroleum Engineering from Curtin University. He is a member of the Society of Petroleum Engineers (SPE) and has over 13 years
experience in exploration, field development planning, reserves and resources assessment, reservoir simulation, commercial valuations
and business development. He also has extensive business experience in Zimbabwe.
Mr Macmillan has not held any other directorships in the past 3 years.
Mr Gabriel Chiappini – Non-executive Director (Appointed 6 August 2015)
Mr Chiappini is a Chartered Accountant with over 20 years of experience as a finance and governance professional and is an experienced
ASX director and has been active in the capital markets for 17 years. He has assisted in raising AUD$450m and has provided investment
and divestment guidance to a number of companies and has been involved with a number ASX IPO’s and transactions in the last 12 years.
He is a current member of the Australian Institute of Company Directors and Institute of Chartered Accountants (Australia).
Mr Chiappini is currently a Director of Black Dragon Gold Corp (ASX:BDG)
Former directorships held in the last 3 years: Blackrock Mining Ltd (ASX:BKT) and Gefen International AI (ASX:GFN)
Mr Robin Sutherland – Non-executive Director (Appointed 1 February 2023)
Mr Sutherland has extensive experience in the African E&P sector, having worked on the continent for more than 35 years. He has held
a variety of technical and leadership roles, joining the highly respected Energy Africa team as a specialist geophysicist in 1997, playing
a role in a number of important hydrocarbon resource discoveries across several African countries. Following the acquisition of Energy
Africa by Tullow in 2004, he led Tullow’s exploration team through the discovery and appraisal of the Jubilee and TEN fields in Ghana, and
the Lokichar Basin in Kenya before becoming Tullow’s General Manager Exploration Africa in 2015. In 2020, Mr Sutherland launched a
successful consultancy business, assisting companies with exploration, appraisal and development of Africa’s extensive natural resources.
Mr Sutherland holds a first class honours degree in Geophysics from Edinburgh University.
Mr Sutherland has not held any other directorships in the past 3 years.
Company Secretary
Mr Gabriel Chiappini – refer to director details for information on Mr Chiappini.
10
INVICTUS ENERGY LIMITED2023 ANNUAL REPORT
1.1
Directors’ Meetings
The number of Directors’ meetings and number of meetings attended by each of the Directors of the Company during the financial year were:
DIRECTOR
Stuart Lake 1
John Bentley2
Joe Mutizwa
Scott Macmillan
Gabriel Chiappini
Robin Sutherland2
1
2
Resigned 28 November 2022
Appointed 1 February 2023
BOARD OF DIRECTORS MEETINGS
ELIGIBLE TO ATTEND
ATTENDED
5
5
11
11
11
5
5
5
11
11
11
5
During the reporting period, the Directors also met or communicated as a collective group on numerous occasions to discuss and
consider governance and operational strategies and resolutions.
1.2
Corporate Governance
In recognising the need for the highest standards of corporate behaviour and accountability, the Directors of Invictus Energy Limited
support and have adhered to the principles of sound corporate governance. The board recognises the recommendations of the Australian
Securities Exchange Corporate Governance Council and considers that the Company is in compliance with those guidelines which are of
importance to the commercial operation of a junior listed resource company. The Company’s Corporate Governance Statement has been
approved by the Board and can be located on the Company’s website at www.invictusenergy.com.
11
INVICTUS ENERGY LIMITED2023 ANNUAL REPORT Directors’
Report
2. REMUNERATION REPORT (Audited)
This Remuneration Report outlines the remuneration arrangements which were in place during the year and remain in place as at the
date of this report, for the Directors and key management personnel of the Company. The 2022 remuneration report received positive
shareholder support at the Annual General Meeting with a vote, by way of a poll, of 86.69% in favour.
(a)
Key management personnel
Directors of the Company who had authority and responsibility during the financial year for planning, directing and controlling the
activities of the Group, directly or indirectly, as well as other senior executives are the key management personnel disclosed in this report.
NAME
Stuart Lake 1
John Bentley 2
Joe Mutizwa
Scott Macmillan
Gabriel Chiappini
Robin Sutherland2
1
2
Resigned 28 November 2022
Appointed 1 February 2023
POSITION
Non-Executive Chairman
Non-Executive Chairman
Non-Executive Director and Deputy Chairman
Managing Director
Non-Executive Director & Company Secretary
Non-Executive Chairman
(b)
Non-executive Director remuneration policy
Fees and payments to non-executive Directors reflect the demands which are made on, and the responsibilities of, the directors.
Non-executive Directors’ fees and payments are reviewed annually by the board.
The base remuneration of Non-Executive Directors is set at A$60,000 per annum.
Non-executive Directors’ fees are determined within an aggregate Directors’ fee pool limit, which is periodically recommended for
approval by shareholders. The maximum currently stands at A$300,000 per annum and was approved by shareholders at the general
meeting on 12 October 2011
(c)
Executive remuneration policy and framework
In determining executive remuneration, the board aims to ensure that remuneration practices are:
•
•
•
•
competitive and reasonable, enabling the Company to attract and retain key talent;
aligned to the Company’s strategic and business objectives and the creation of shareholder value;
transparent; and
acceptable to shareholders.
The executive remuneration framework has two components:
•
•
base pay and benefits, including superannuation; and
long-term incentives through the issue of options and performance shares.
Base pay and benefits
Base pay is structured as a total employment cost package which may be delivered as a combination of cash and prescribed non-financial
benefits at the board’s discretion.
Executives are offered a competitive base pay that comprises the fixed component of pay and rewards. Base pay for executives is reviewed
annually to ensure the executive’s pay is competitive with the market.
There are no guaranteed base pay increases included in executives’ contracts. There are no short- term cash bonuses included in the
figures contained in the Remuneration Report.
Superannuation
Retirement benefits are limited to superannuation contributions as required under the Australian superannuation guarantee legislation.
Long-term incentives
Long-term incentives are provided to Directors and executives as incentives to deliver long-term shareholder returns. Some of the issued
options and performance shares are granted only if certain performance conditions are met and the Directors and executives are still
employed by the Company at the end of the vesting period.
Share trading policy
The Company has a share trading policy in place. The Board of Directors ratified and approved the share trading policy previously adopted
without change, on 15 September 2019.
12
INVICTUS ENERGY LIMITED2023 ANNUAL REPORT (d)
Link of remuneration to Company performance and shareholders’ wealth
The remuneration policy has been tailored to increase goal congruence between shareholders and Directors and executives. Currently,
this is facilitated through the issue of options and performance shares to Directors and executives to encourage the alignment of personal
and shareholder interests. There are currently various financial and other targets set for the performance related remuneration, and
therefore, remuneration is linked to Company performance or shareholder wealth.
In considering the Group’s performance and benefits for shareholder wealth, the Board have regard to the following indices in respect of
the current financial year and the previous four (4) financial years:
ITEM
EPS loss – continuing operations (cents)
2023
($0.53)
2022
($0.58)
2021
($0.25)
2020
($0.41)
2019
($0.28)
Net loss – continuing operations (’000)
($4,951,928)
($3,786,181)
($1,255,646)
($1,773,456)
($1,022,049)
Share price
$0.115
$0.175
$0.170
$0.026
$0.046
Use of remuneration consultants
During the financial year the Company did not use the services of remuneration consultants for designing the remuneration policies
for Directors or key management personnel. Post 30 June 2023, the Company engaged a remuneration consultant to assist with
remuneration structure and benchmarking for the Company’s executive and Board.
(e)
Service agreements
The Company has service contracts in place with the following board members during the year. Details of the service agreements
are listed below.
Dr Stuart Lake – Non-Executive Chairman (resigned 28 November 2022)
- Commencement date: 1 August 2019
- Director fee: GBP 50,000 per annum
-
The agreement is not subject to any termination notice period
Mr John Bentley – Non-Executive Chairman (appointed 1 February 2023)
- Commencement date: 1 February 2023
- Director fee: GBP 50,000 per annum
-
The agreement is not subject to any termination notice period
Dr Joe Mutizwa – Non-Executive Director and Deputy Chairman
- Commencement date: 19 May 2021
- Director fee: $Nil
-
The agreement is not subject to any termination notice period
Mr Scott Macmillan – Managing Director
- Commencement date: 15 June 2018
-
Base salary: $350,000 per annum plus statutory superannuation guarantee contribution
- No fixed term
-
-
The agreement is subject to a three months’ notice period by either party
The Company may, from time to time, offer the Managing Director the right to participate in an employee incentive plan and may be
granted performance shares or other incentives on terms and performance criteria to be determined by the Board in its absolute discretion
Mr Gabriel Chiappini – Non-executive Director & Company Secretary
- Commencement date: 6 August 2015
- Director fee: $60,000 per annum
- Company secretary fee: $60,000 per annum
-
The agreement is not subject to any termination notice period
Mr Robin Sutherland – Non-Executive Director (appointed 1 February 2023)
- Commencement date: 1 February 2023
- Director fee: $60,000 per annum
-
The agreement is not subject to any termination notice period
No other key management personnel have service contracts in place with the consolidated entity.
13
INVICTUS ENERGY LIMITED2023 ANNUAL REPORT Directors’
Report
2. REMUNERATION REPORT (Audited) (CONTINUED)
(f )
Details of remuneration
The following tables set out remuneration paid to key management personnel of the Company during the current year:
2023
SHORT TERM
POST
EMPLOYMENT
EQUITY SETTLED
PROPORTION OF
REMUNERATION
S
E
E
F
D
N
A
Y
R
A
L
A
S
H
S
A
C
$
3
R
E
H
T
O
$
29,489
19,954
39,084
4,605
-
350,000
-
-
42,500
54,552
30,000
18,312
-
R
E
P
U
S
I
N
O
T
A
U
N
N
A
$
-
-
-
34,125
-
-
491,073
97,423
34,125
S
E
R
A
H
S
$
-
-
-
-
-
-
-
S
E
R
A
H
S
E
C
N
A
M
R
O
F
R
E
P
$
201,810
S
N
O
T
P
O
I
$
-
80,920
79,727
201,810
288,300
201,810
-
-
-
L
A
T
O
T
D
E
X
F
I
D
E
K
N
I
L
E
C
N
A
M
R
O
F
R
E
P
$
%
%
251,252
204,336
201,810
20% 80%
21% 79%
0% 100%
672,425
57% 43%
298,862
32% 68%
80,920
79,727
208,960
23% 77%
1,055,570
159,454
1,837,645
34% 66%
Stuart Lake 1
John Bentley 2
Joe Mutizwa
Scott Macmillan
Gabriel Chiappini
Robin Sutherland2
Total
Note 1: Resigned 28 November 2022
Note 2: Appointed 1 February 2023
Note 3: Represents reimbursements and out of scope work
No short-term cash bonuses included as paid or accrued for during the year ended 30 June 2023.
The following tables set out remuneration paid to key management personnel of the Company during the previous year:
2022
SHORT TERM
POST
EMPLOYMENT
EQUITY SETTLED
PROPORTION OF
REMUNERATION
S
E
E
F
D
N
A
Y
R
A
L
A
S
H
S
A
C
$
2
R
E
H
T
O
$
91,172
93,584
-
325,000
17,381
60,000
-
-
-
15,000
-
R
E
P
U
S
I
N
O
T
A
U
N
N
A
$
-
-
30,875
1,651
-
493,553
108,584
32,526
S
E
R
A
H
S
$
-
-
-
-
-
-
S
E
R
A
H
S
E
C
N
A
M
R
O
F
R
E
P
$
-
-
-
-
-
-
S
N
O
T
P
O
I
$
L
A
T
O
T
$
D
E
X
F
I
%
D
E
K
N
I
L
E
C
N
A
M
R
O
F
R
E
P
%
303,872
303,872
303,871
303,871
303,871
488,628
303,872
659,746
322,903
378,871
1,519,357
2,154,020
100%
100%
100%
100%
100%
100%
-
-
-
-
-
-
Stuart Lake
Joe Mutizwa
Scott Macmillan
Barnaby Egerton-Warburton1
Gabriel Chiappini
Total
Note 1: Resigned 25 October 2021
Note 2: Represents reimbursements and out of scope work
No short-term cash bonuses included as paid or accrued for during the year ended 30 June 2022.
14
INVICTUS ENERGY LIMITED2023 ANNUAL REPORT
(g)
Amounts owing to KMP
Stuart Lake 1
John Bentley2
Joe Mutizwa
Scott Macmillan
Gabriel Chiappini
Robin Sutherland2
Barnaby Egerton-Warburton3
Total
1
2
3
Resigned 28 November 2022
Appointed 1 February 2023
Resigned 25 October 2021
There are no loans to Key Management Personnel (2022: nil).
(h)
Share-based compensation
Options
June 2023
30 JUNE 2023
$
30 JUNE 2022
$
-
-
-
-
-
-
54,145
-
-
-
-
54,145
During the June 2023 financial year, no options were issued to Key Management Personnel as part of their remuneration.
On 1 February 2023, 6,000,000 unlisted options, valued at $390,611, were granted to certain Directors of the Company prior to their
appointment as an incentive to join the Invictus Board. The options have an exercise price of $0.2355 and an expiry date of 23 July 2024.
The options were awarded to Mr Bentley and Mr Sutherland (3,000,000 options each). The options will vest after 12 months of service.
The options were valued using the Black-Scholes European Pricing Model, with the following inputs used:
- Grant date: 1 February 2023
-
-
-
-
-
Expiry date: 23 July 2024
Risk free rate: 0.96%
Stock volatility: 111.23%
Share price at grant date: $0.16
Exercise price: $0.2355
June 2022
On 26 July 2021, 15,000,000 unlisted options were issued to the Directors, with an exercise price of $0.2355 and an expiry date of 23
July 2024. The options were awarded as part of the remuneration for the services provided by the Directors to the Company and were
approved by shareholders at a general meeting on 8 July 2021. The options were valued using the Black-Scholes European Pricing Model,
with the following inputs used:
- Grant date: 8 July 2021
-
-
-
-
-
Expiry date: 23 July 2024
Risk free rate: 0.16%
Stock volatility: 103.61%
Share price at grant date: $0.1750
Exercise price: $0.2355
15
INVICTUS ENERGY LIMITED2023 ANNUAL REPORT
Directors’
Report
2. REMUNERATION REPORT (Audited) (CONTINUED)
Performance rights
June 2023
The following performance rights were issued to Key Management Personnel of the Company during the current year;
CLASS
NUMBER
A
15,500,000
ISSUE DATE
9-Aug-22
EXPIRY DATE
31-Dec-24
VESTING CONDITION
a) The drilling of an exploration or appraisal well in the Cabora Bassa
Project that results in the maiden booking of Contingent Resources or
Reserves (as those terms are defined in the Guidelines for Application
of the Petroleum Resources Management System (2011 Edition) on or
before 31 December 2024; and
b) The Company achieving a 20-day volume weighted average price of
at least $0.50 on or before 31 December 2024.
B
15,500,000
9-Aug-22
31-Dec-26
a) An independent estimate of Contingent Resources or Reserves
(as those defined in the Guidelines for Application of the Petroleum
Resources Management System (2011 Edition) of greater than or
equal to two hundred million barrels or oil equivalent (200 mmboe)
on a 100% gross project basis; and
b) The Company achieving a 20-day volume weighted average price of
at least $0.75 on or before 31 December 2026.
A
7,000,000
27-Jun-23
31-Dec-24
c) The drilling of an exploration or appraisal well in the Cabora Bassa
Project that results in the maiden booking of Contingent Resources or
Reserves (as those terms are defined in the Guidelines for Application
of the Petroleum Resources Management System (2011 Edition) on or
before 31 December 2024; and
c) The Company achieving a 20-day volume weighted average price of
at least $0.50 on or before 31 December 2024.
B
7,000,000
27-Jun-23
31-Dec-26
d) An independent estimate of Contingent Resources or Reserves
(as those defined in the Guidelines for Application of the Petroleum
Resources Management System (2011 Edition) of greater than or
equal to two hundred million barrels or oil equivalent (200 mmboe)
on a 100% gross project basis; and
e) The Company achieving a 20-day volume weighted average price of
at least $0.75 on or before 31 December 2026.
The Hybrid up-and-in trinomial option pricing model with a Parisian barrier adjustment was used to value the performance rights. Set out
below are the assumptions used in assessing the indicative fair value of the Performance Rights:
CLASS A
15,500,000
22-Jul-22
$0.205
Nil
22-Jul-22
31-Dec-24
90%
2.84%
0%
31-Dec-24
PERFORMANCE RIGHTS
CLASS B
15,500,000
22-Jul-22
$0.205
Nil
22-Jul-22
31-Dec-26
90%
3.245%
0%
31-Dec-26
20 Day VWAP of $0.50 or higher
20 Day VWAP of $0.75 or higher
20%
$419,120
20%
$474,610
ASSUMPTIONS
Number of performance rights
Valuation Date
Spot Price ($)
Exercise Price ($)
Issue Date
Expiry Date
Expected future volatility (%)
Risk free rate (%)
Dividend yield (%)
Vesting Date
Performance Hurdle
Probability of success (%)
Valuation
16
INVICTUS ENERGY LIMITED2023 ANNUAL REPORT
ASSUMPTIONS
Number of performance rights
Valuation Date
Spot Price ($)
Exercise Price ($)
Issue Date
Expiry Date
Expected future volatility (%)
Risk free rate (%)
Dividend yield (%)
Provision for Employee Exit (%)
Vesting Date
Performance Hurdle
Probability of success (%)
Valuation
CLASS A
7,000,000
7-Jun-23
$0.12
Nil
7-Jun-23
31-Dec-24
100%
3.85%
0%
31-Dec-24
-
PERFORMANCE RIGHTS
CLASS B
7,000,000
7-Jun-23
$0.12
Nil
7-Jun-23
31-Dec-26
100%
3.69%
0%
31-Dec-26
-
20 Day VWAP of $0.50 or higher
20 Day VWAP of $0.75 or higher
20%
$60,200
20%
$101,640
2. REMUNERATION REPORT (Audited) (CONTINUED)
June 2022
During the June 2022 financial year, no performance rights were issued to Key Management Personnel as part of their remuneration.
Ordinary shares
June 2023
During the June 2023 financial year, no ordinary shares were issued to Key Management Personnel as part of their remuneration.
June 2022
During the June 2022 financial year, no ordinary shares were issued to Key Management Personnel as part of their remuneration.
(i)
Equity instruments held by key management personnel
(i) Option holdings
The following table show options held by key management personnel during the financial year.
2023
F
O
T
R
A
T
S
R
A
E
Y
E
H
T
T
A
E
C
N
A
L
A
B
D
E
T
N
A
R
G
D
E
S
P
A
L
I
/
D
E
S
C
R
E
X
E
R
E
H
T
O
E
C
N
A
L
A
B
D
N
E
E
H
T
T
A
R
A
E
Y
E
H
T
F
O
D
E
T
S
E
V
I
G
N
R
U
D
R
A
E
Y
E
H
T
D
N
A
D
E
T
S
E
V
I
E
L
B
A
S
C
R
E
X
E
Stuart Lake1
12,000,000
-
(3,600,000)
(5,400,000)3
3,000,000
-
3,000,000
D
E
T
S
E
V
N
U
-
John Bentley2
Joe Mutizwa
-
-
Scott Macmillan
Gabriel Chiappini
3,000,000
3,000,000
3,000,0004
-
-
-
Robin Sutherland2
-
3,000,0004
-
-
-
-
-
208,333
3,208,333
714,285
714,285
208,333
714,285
208,333
3,000,000
714,285
-
3,000,000
-
3,000,000
104,166
3,104,166
104,166
3,104,166
-
-
-
-
3,000,000
-
-
3,000,000
TOTAL
18,000,000
6,000,000
(3,600,000)
(4,373,216)
16,026,784
1,026,784
10,026,784
6,000,000
1 Resigned 28 November 2022
2 Appointed 1 February 2023
3 3,000,000 options exercisable at $0.06 were transferred via an off-market trade at $0.09 per option and 2,400,000 options exercisable at $0.12 via
an off-market trade at $0.03 per option
4 On 1 February 2023, 6,000,000 unlisted options were granted to Mr Bentley and Mr Sutherland (3,000,000 options each) prior to their appointment
as an incentive to join the Invictus Board. These options are yet to be issued.
17
INVICTUS ENERGY LIMITED2023 ANNUAL REPORT
Directors’
Report
2. REMUNERATION REPORT (Audited) (CONTINUED)
(ii) Performance share holdings
The following table show options held by key management personnel during the financial year.
2023
F
O
T
R
A
T
S
R
A
E
Y
E
H
T
T
A
E
C
N
A
L
A
B
D
E
T
N
A
R
G
D
E
S
P
A
L
I
/
D
E
S
C
R
E
X
E
Stuart Lake1
John Bentley2
Joe Mutizwa
Scott Macmillan
Gabriel Chiappini
Robin Sutherland2
TOTAL
-
-
-
-
-
-
-
7,000,000
7,000,000
-
10,000,000
7,000,000
7,000,000
38,000,000
-
-
-
-
-
-
-
R
E
H
T
O
-
-
-
-
-
-
-
E
C
N
A
L
A
B
D
N
E
E
H
T
T
A
R
A
E
Y
E
H
T
F
O
D
E
T
S
E
V
I
G
N
R
U
D
R
A
E
Y
E
H
T
D
N
A
D
E
T
S
E
V
I
E
L
B
A
S
C
R
E
X
E
D
E
T
S
E
V
N
U
7,000,000
7,000,000
-
10,000,000
7,000,000
7,000,000
38,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
7,000,000
7,000,000
-
10,000,000
7,000,000
7,000,000
38,000,000
1 Resigned 28 November 2022
2 Appointed 1 February 2023
(iii) Share holdings
The following table shows ordinary shares held by key management personnel during the current year.
2023
N
O
D
E
V
I
E
C
E
R
I
F
O
E
S
C
R
E
X
E
R
A
E
Y
E
H
T
F
O
T
R
A
T
S
T
A
E
C
N
A
L
A
B
I
G
N
R
U
D
S
N
O
T
P
O
I
R
A
E
Y
E
H
T
R
A
E
Y
E
H
T
F
O
G
N
T
S
E
V
I
N
O
D
E
V
I
E
C
E
R
E
C
N
A
M
R
O
F
R
E
P
I
G
N
R
U
D
S
E
R
A
H
S
F
O
U
E
I
L
N
I
D
E
U
S
S
I
S
T
N
E
M
Y
A
P
H
S
A
C
R
A
E
Y
E
H
T
G
N
R
U
D
I
Directors
Stuart Lake1
John Bentley2
Joe Mutizwa
Scott Macmillan
Gabriel Chiappini
Robin Sutherland2
TOTAL
1 Resigned 28 November 2022
2 Appointed 1 February 2023
2,259,732
3,600,000
-
-
73,271,547
8,862,662
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
S
E
G
N
A
H
C
R
E
H
T
O
-
416,667
1,428,570
E
H
T
T
A
E
C
N
A
L
A
B
R
A
E
Y
E
H
T
F
O
D
N
E
5,859,732
416,667
1,428,570
-
73,271,547
208,333
9,070,995
416,667
416,667
84,393,941
3,600,000
-
-
2,470,237
90,464,178
(j)
Other transactions with key management personnel
During the year the Company paid $54,432 to Laurus Corporate Services Pty Ltd, an entity related to Mr Gabriel Chiappini, for the provision
of company secretarial services, on normal commercial terms and conditions and at market rates (2022: $42,500).
On 1 May 2022 the Company entered into an agreement with Black Dragon Gold Ltd, and entity related to Mr Gabriel Chiappini,
whereby Black Dragon Gold Ltd rents one office and one car bay at a cost of $1,225 plus GST from the Company per calendar month. The
arrangement is for no fixed term and can be cancelled by either party by providing one month notice.
All transactions were made on normal commercial terms and conditions and at market rates. There were no other transactions with related
parties during the current year.
End of Audited Remuneration Report.
18
INVICTUS ENERGY LIMITED2023 ANNUAL REPORT
3. Principal Activities
The principal activities of the consolidated entity carried out during the financial year consisted of the exploration and appraisal of the
Cabora Bassa Project.
4. Business Risks
The Group’s activities have inherent risks and the Board is unable to provide certainty of the expected results of activities, or that any or all
of the likely activities will be achieved. The material business risks faced by the Group that could influence the Group’s future prospects,
and the Group manages these risks, are detailed below:
Exploration
Potential investors should understand that oil and gas exploration and development are high-risk undertakings. There can be no
assurance that exploration of Invictus’s projects, or any other permits that may be acquired in the future, will result in the discovery
of an economic oil and gas resource or reserve. Even if an apparently viable resource is identified, there is no guarantee that it can be
economically exploited.
The future exploration activities of the Company may be affected by a range of factors including geological conditions, limitations on
activities due to seasonal weather patterns, unanticipated operational and technical difficulties, industrial and environmental accidents,
native title process, changing government regulations and many other factors beyond the control of the Company.
The success of the Company will also depend upon the Company having access to sufficient development capital, being able to maintain
title to its permits and obtaining all required approvals for its activities.
In the event that exploration programs prove to be unsuccessful this could lead to a diminution in the value of its permits, a reduction
in the case reserves of the Company and possible relinquishment of the permits. The exploration costs of the Company are based on
certain assumptions with respect to the method and timing of exploration. By their nature, these estimates and assumptions are subject
to significant uncertainties and, accordingly, the actual costs may materially differ from these estimates and assumptions. Accordingly,
no assurance can be given that the cost estimates and the underlying assumptions will be realised in practice, which may materially and
adversely affect the Company’s viability.
Potential acquisitions
As part of its business strategy, the Company may make acquisitions of, or significant investments in, companies or assets that are
complementary to its business, projects, blocks or prospects in Zimbabwe, or elsewhere in Africa or other parts of the world. Any
such future transactions are accompanied by the risks commonly encountered in making acquisitions of companies or assets, such as
integrating cultures and systems of operation, relocation of operations, short term strain on working capital requirements, achieving
mineral exploration success and retaining key staff.
Permit applications and license renewal
The Company expects that the applications for permit renewals or for any new permits will be granted following approval by the relevant
Government of Zimbabwe regulatory authorities. However, the Company cannot guarantee that the current SG4571 permit that expires in
June 2024 or that any future permit applications will be granted.
Liquidity risks
There is no guarantee that there will be an ongoing liquid market for Securities. Accordingly, there is a risk that, should the market for
Securities become illiquid, Shareholders will be unable to realise their investment in the Company.
Litigation
The Company may in the ordinary course of business become involved in litigation and disputes, for example with agents, contractors
or third parties in respect of land access to its Tenements. Any such litigation or dispute could involve significant economic costs and
damage to relationships with agents, contractors and other stakeholders. Such outcomes may have an adverse impact on the Company’s
business, reputation and financial performance. As at the date of this Prospectus, the Company is not currently involved in any litigation or
aware of any pending litigation.
Reliance on key personnel
The responsibility of overseeing the day-to-day operations and the strategic management of the Company depends substantially on its
senior management and its key personnel. There can be no assurance given that there will be no detrimental impact on the Company if
one or more of these employees ceases their employment with the Company.
19
INVICTUS ENERGY LIMITED2023 ANNUAL REPORT
Directors’
Report
4. Business Risks (CONTINUED)
Contractual disputes
The Company’s business model is dependent in part on contractual agreements with third parties that have an interaction with the
Company’s target market. The Company is aware that there are associated risks when dealing with third parties including but not limited
to insolvency, fraud and management failure. Should a third party contract fail, there is the potential for negative financial and brand
damage for the Company.
Environmental
The Company will be subject to environmental laws and regulations with operations it may pursue in the oil and gas industry. The
Company intends to conduct its activities in an environmentally responsible manner and in accordance with all applicable laws. However,
the Company may be the subject of accidents or unforeseen circumstances that could subject the Company to extensive liability.
Further, the Company may require approval from the relevant authorities before it can undertake activities that are likely to impact the
environment. Failure to obtain such approvals may prevent the Company from undertaking its desired activities. The Company is unable
to predict the effect of additional environmental laws and regulations that may be adopted in the future, including whether any such laws
and regulations would materially increase the Company’s cost of doing business or affect its operations in any area.
Insurance
The Company seeks to maintain appropriate policies of insurance consistent with those customarily carried by organisations in their
industry sector. Any increase in the cost of the insurance policies of the Company or the industry in which they operate could adversely
affect the Company’s business, financial condition and operational results. The Company’s insurance coverage may also be inadequate to
cover losses it sustains. Uninsured loss or a loss in excess of the Company’s insured limits could adversely affect the Company’s business,
financial condition and operational results.
Sovereign risk
The Company’s projects are located in the Zimbabwe. Possible sovereign risks include, without limitation, changes in relevant legislation
or government policy, changes to royalty arrangements, changes to taxation rates and concessions and changes in the ability to enforce
legal rights. Further, no assurance can be given regarding the future stability in any country in which the Company has, or may have, an
interest. Any of these factors may, in the future, adversely affect the financial performance of the Company.
Hydrocarbon Reserve Estimates
Hydrocarbon reserve estimates are expressions of judgment based on knowledge, experience, interpretation and industry practice.
Estimates that were valid when made may change significantly when new information becomes available. In addition, reserve estimates
are necessarily imprecise and depend to some extent on interpretations, which may prove inaccurate. Should the Company encounter
oil and/or gas deposits or formations different from those predicted by past drilling, sampling and similar examinations, then reserve
estimates may have to be adjusted and production plans may have to be altered in a way which could adversely affect the Company’s
operations. Where possible, the Company will seek to have any such estimates verified or produced by an independent party with
sufficient expertise in their chosen field.
Oil and natural gas exploration, production and related operations are subject to extensive rules and regulations promulgated by federal,
state and local agencies. Failure to comply with such rules and regulations can result in substantial penalties. The regulatory burden on
the oil and gas industry increases the cost of doing business and affects profitability. Because such rules and regulations are frequently
amended or reinterpreted, the Company is unable to predict the future cost or impact of complying with such laws. Permits are required
in some of the areas in which the Company will operate following completion of the Proposed Transaction for drilling operations, drilling
bonds and the filing of reports concerning operations and other requirements are imposed relating to the exploration and production of
oil and gas. The Company will be required to comply with various federal and state regulations regarding plugging and abandonment of
oil and natural gas wells, which will impose a substantial rehabilitation obligation on the Company, which may have a material adverse
effect on the Company’s financial performance.
Drilling
Oil and gas drilling activities are subject to numerous risks, many of which are beyond the Company’s control. The Company’s drilling
operations may be curtailed, delayed or cancelled due to a number of factors including weather conditions, mechanical difficulties,
shortage or delays in the availability or delivery of rigs and/or other equipment and compliance with governmental requirements. Hazards
incident to the exploration and development of oil and gas properties such as unusual or unexpected formations, pressures or other
factors are inherent in drilling and operating wells and may be encountered by the Company. Completion of a well does not assure a
profit on the investment or recovery of drilling, completion and operating costs.
Farm in Partners and contractors
Oil and gas ventures are typically operated under a farm in and/or joint venture arrangements, such as the proposed farm-in partner
option agreement announced on 9 December 2021 by the Company with Cluff Energy Africa Ltd. These arrangements include provisions
that often require certain decisions relating to the projects to be passed with unanimous or majority approval of all participants. Where a
venture partner does not act in the best commercial interest of the project, it could have a material adverse effect on the interests of the
Company.
20
INVICTUS ENERGY LIMITED2023 ANNUAL REPORT
The Company is unable to predict the risk of:
a) financial failure, non-compliance with obligations or default by a participant in any venture to which the Company is,
or may become, a party; or
b) insolvency or other managerial failure by any of the contractors used by the Company in any of its activities; or
c) insolvency or other managerial failure by any of the other service providers used by the Company for any activity,
d) all of which could have a material adverse effect on the operations and financial performance of the Company.
As announced by the Company in its June 2022 Quarterly activities report dated 25 July 2022, during the quarter ending 30 June 2022,
the Company received three farm-in offers for the Cabora Bassa Project. The Company is undertaking ongoing due diligence and internal
approvals by additional parties which may result in further bids received. However, as at the date of this Prospectus, the Company
confirms no binding farm-in or farm-out agreements have been entered into.
Further, as announced by the Company on 17 August 2022, through its 80% owned subsidiary Geo Associates (Pvt) Ltd, it has entered
into an assignment agreement with Sovereign Wealth fund of Zimbabwe (SWFZ) in respect to exploration rights to Exclusive Prospecting
Orders 1848 and 1849, which are contiguous to the Company’s current SG 4571 licence. The assignment from SWFZ expands the
Company’s area in the Cabora Bassa Basin. The assignment confers all exploration rights and obligations for the two Prospecting Orders
and a conversion to a Special Grant upon application following ga commercial discovery. The Company makes no guarantee of a
discovery or that any discovery will be commercially feasible.
Coronavirus (COVID19)
The outbreak of the coronavirus disease (COVID-19) is impacting global economic markets. The nature and extent of the effect of the
outbreak on the performance of the Company remains unknown. The Company’s Share price may be adversely affected in the short to
medium term by the economic uncertainty caused by COVID-19. Further, any governmental or industry measures taken in response to
COVID-19 may adversely impact the Company’s operations and are likely to be beyond the control of the Company.
Economic & Political
General economic conditions, movements in interest and inflation rates and currency exchange rates may have an adverse effect on the
Company’s exploration, development and production activities, as well as on its ability to fund those activities.
Adverse changes in the general economic and political climate in Zimbabwe and on a global basis that could impact on economic
growth, oil and gas prices, interest rates, the rate of inflation, taxation and tariff laws and domestic security, which may affect the viability
of any oil and gas activity that may be conducted by the Company upon the Cabora Bassa Project.
Market conditions
Share market conditions may affect the value of the Company’s quoted securities regardless of the Company’s operating performance.
Share market conditions are affected by many factors such as:
a) general economic outlook;
b) introduction of tax reform or other new legislation;
c) interest rates and inflation rates;
d) changes in investor sentiment toward particular market sectors;
e) the demand for, and supply of, capital; and
f ) terrorism or other hostilities. The market price of securities can fall as well as rise and may be subject to varied and unpredictable
influences on the market for equities in general and resource exploration stocks in particular. Neither the Company nor the Directors
warrant the future performance of the Company or any return on an investment in the Company.
Competition risk
The industry in which the Company will be involved is subject to domestic and global competition. Although the Company will undertake
all reasonable due diligence in its business decisions and operations, the Company will have no influence or control over the activities or
actions of its competitors, which activities or actions may, positively or negatively, affect the operating and financial performance of the
Company’s projects and business.
21
INVICTUS ENERGY LIMITED2023 ANNUAL REPORT
Directors’
Report
4. Business Risks (CONTINUED)
Oil and gas price fluctuations
The demand for, and price of, oil and natural gas is highly dependent on a variety of factors, including international supply and demand,
the level of consumer product demand, weather conditions, the price and availability of alternative fuels, actions taken by governments
and international cartels, and global economic and political developments.
International oil and gas prices have fluctuated widely in recent years and may continue to fluctuate significantly in the future.
Fluctuations in oil and gas prices and, in particular, a material decline in the price of oil or gas may have a material adverse effect on the
Company’s business, financial condition and results of operations.
Additional requirements for capital
The Company’s capital requirements depend on numerous factors. Depending on the Company’s ability to generate income from
its operations, the Company may require further financing in addition to amounts raised under the Placement. Any additional equity
financing will dilute shareholdings, and debt financing, if available, may involve restrictions on financing and operating activities. If the
Company is unable to obtain additional financing as needed, it may be required to reduce the scope of its operations and scale back
its exploration programmes as the case may be. There is however no guarantee that the Company will be able to secure any additional
funding or be able to secure funding on terms favourable to the Company.
Additional funding may be sourced from one or a combination of equity, debt, industry farm-in, or other financing methods as
determined on a case by case basis when those funds are needed. If the Company is unable to obtain additional financing as needed, it
may be required to reduce the scope of its strategy, plans or operations.
5. Results and Dividends
The consolidated entity’s loss after tax from continuing operations attributable to members of the consolidated entity for the financial year
ending 30 June 2023 was $4,951,928 (2022: $3,786,181 loss).
No dividends have been paid or declared by the Company during the year ended 30 June 2023 (2022: nil).
6.
Loss Per Share
The basic loss per share for the consolidated entity for the year was $0.53 per share (2022: $0.58 loss per share).
7.
Significant Changes in the State of Affairs
During the year the Company entered a 30-year contract (the “Contract”) with the Forestry Commission of Zimbabwe (FCZ) for the
development of the Ngamo-Gwayi-Sikumi (NGS) REDD+ project, which is renewable for a further 30 years, as part of the Company’s
sustainable plan to manage emissions. The NGS REDD+ project will enable the Company to fully offset all Scope 1 & 2 emissions
generated across the entire lifecycle of the Cabora Bassa Project.
Other than the above, there have not been any significant changes in the State of Affairs of the Company. Invictus Energy remains focused
on advancing its 80% owned Cabora Bassa Project in Zimbabwe.
8. Events Subsequent to Reporting Date
On 13 July 2023 the Company announced that following completion of the refined seismic interpretation, incorporating results from the
Mukuyu-1/ST-1 well, the Mukuyu-2 subsurface targets and appraisal well location had been selected.
On 17 July 2023 the Company announced that work had commenced on the CB23 2D seismic acquisition program being carried out by
Polaris Natural Resource Development Ltd.
On 24 July 2023 the Company announced that it had issued 2,389,706 ordinary shares for services in lieu of fees.
On 7 August 2023 the Company announced that it had completed the acquisition of its CB23 2D seismic survey in EPO 1848 & EPO 1849
in the Cabora Bassa basin.
On 10 August 2023 the Company announced that it had issued 19,521 ordinary shares upon the exercise of options.
On 11 August 2023 the Company announced that the The Mukuyu-2 wellpad construction has been completed following the finalisation
of civil works including pad levelling and compaction, water supply and reservoirs.
22
INVICTUS ENERGY LIMITED2023 ANNUAL REPORT
8. Events Subsequent to Reporting Date (CONTINUED)
On 24 August 2023 the Company announced that it had issued 9,490,987 ordinary shares and 2,916,667 unlisted options.
On 31 August 2023 the Company announced results from the analysis of 22 mudgas samples acquired from the Mukuyu-1 / ST-1 had
been completed, with the results reaffirming the presence of light oil, gas-condensate and helium.
On 1 September 2023 the Company announced the mobilisation and rig up of the Exalo Rig 202 at Mukuyu-2 was completed.
On 8 September 2023 the Company announced the inadvertent breach of its maximum placement capacity in relation to its placement,
announced on 6 June 2023.
Other than the above, no matters or circumstances have arisen since the end of the financial year which have significantly affected or may
significantly affect the operations, results or state of affairs of the Group in future financial years.
9.
Likely Developments and Expected Results of Operations
The Company intends to develop its Cabora Bassa Basin Gas Condensate project in Zimbabwe which could be funded by debt, equity, a
senior farm-in partner or a combination of each.
In addition, the Company intends to advance the Ngamo-Gwaai-Sikumi REDD+ (NGS REDD+) with a view to generating potential carbon
offset credits that may be tradeable in the future on carbon offset credits trading exchange.
10. Environmental Regulations
The company is not subject to the reporting requirements of either the Energy Efficiency Opportunities Act 2006 or the National
Greenhouse and Energy Reporting Act 2007. When operations commence in Zimbabwe, the Company will be subject to meeting the
environmental laws and regulations.
11. Equity Instruments on Issue
Ordinary shares
As at the date of this report, there were 1,180,506,552 listed ordinary shares on issue.
Unlisted options
As at the date of this report, the following unlisted options over ordinary shares on issue is as follows:
EXERCISE
$0.46
$0.14
$0.40
$0.17
$0.2355
NUMBER
13,586,956
26,311,482
108,695,645
22,286,030
12,000,000
EXPIRY
1-Feb-2026
31-Jan-2025
30-Sept-2027
30-Mar-2024
23-Jul-2024
23
INVICTUS ENERGY LIMITED2023 ANNUAL REPORT
Directors’
Report
11. Equity Instruments on Issue (CONTINUED)
Performance rights
As at the date of this report, there the following unlisted performance rights over ordinary shares on issue is as follows:
CLASS
NUMBER
A
15,500,000
ISSUE DATE
9-Aug-22
EXPIRY DATE
31-Dec-24
B
15,500,000
9-Aug-22
31-Dec-26
A
7,000,000
27-Jun-23
31-Dec-24
B
7,000,000
27-Jun-23
31-Dec-26
VESTING CONDITION
a) The drilling of an exploration or appraisal well in the Cabora Bassa
Project that results in the maiden booking of Contingent Resources or
Reserves (as those terms are defined in the Guidelines for Application
of the Petroleum Resources Management System (2011 Edition) on or
before 31 December 2024; and
b) The Company achieving a 20-day volume weighted average price of
at least $0.50 on or before 31 December 2024.
a) An independent estimate of Contingent Resources or Reserves (as
those defined in the Guidelines for Application of the Petroleum
Resources Management System (2011 Edition) of greater than or
equal to two hundred million barrels or oil equivalent (200 mmboe)
on a 100% gross project basis; and
b) The Company achieving a 20-day volume weighted average price of
at least $0.75 on or before 31 December 2026.
a) An independent estimate of Contingent Resources or Reserves (as
those defined in the Guidelines for Application of the Petroleum
Resources Management System (2011 Edition) of greater than or
equal to two hundred million barrels or oil equivalent (200 mmboe)
on a 100% gross project basis; and
b) The Company achieving a 20-day volume weighted average price
of at least $0.75 on or before 31 December 2026.
a) An independent estimate of Contingent Resources or Reserves (as
those defined in the Guidelines for Application of the Petroleum
Resources Management System (2011 Edition) of greater than or
equal to two hundred million barrels or oil equivalent (200 mmboe)
on a 100% gross project basis; and
b) The Company achieving a 20-day volume weighted average price
of at least $0.75 on or before 31 December 2026.
12.
Indemnification and Insurance of Officers and Auditors
Indemnification
An indemnity agreement has been entered into with each of the Directors and company secretary of the Company named earlier in this
report. Under the agreement, the Company has agreed to indemnify those officers against any claim or for any expenses or costs which
may arise as a result of work performed in their respective capacities to the extent permitted by law. There is no monetary limit to the
extent of this indemnity.
Insurance
During the financial year the Company has taken out an insurance policy in respect of Directors’ and officers’ liability and legal expenses for
directors and officers.
13. Corporate Structure
Invictus Energy Limited is a Company limited by shares that is incorporated and domiciled in Australia. The Company is listed on the
Australian Securities Exchange under the code “IVZ”.
24
INVICTUS ENERGY LIMITED2023 ANNUAL REPORT
14. Audit and Non-Audit Services
The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor’s expertise
and the experience with the Company and/or the Group are important.
Details of the amounts paid or payable to the auditor, BDO Audit (WA) Pty Ltd (“BDO”), are set out below.
During the current year, the following fees were paid or payable for audit services provided by the auditor of the parent entity, its related
practices:
Services provided by the Auditor – BDO Audit (WA) Pty Ltd
Audit and review of financial statements
Total services provided by the Auditor
30-JUN-23
A$
30-JUN-22
A$
51,250
51,250
47,904
47,904
25
INVICTUS ENERGY LIMITED2023 ANNUAL REPORT Directors’
Report
15. Auditor’s Independence Declaration
The lead auditor’s Independence Declaration is set out on page 27 and forms part of the Directors’ report for the financial year ended
30 June 2023.
This report is signed in accordance with a resolution of the board of Directors and is signed on behalf of the Directors by:
Scott Macmillan
MANAGING DIRECTOR
15 September 2023
26
INVICTUS ENERGY LIMITED2023 ANNUAL REPORT Auditors Independence
Declaration
Invictus Energy Limited
Annual Report 30 June 2023
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
Auditors Independence Declaration
Level 9, Mia Yellagonga Tower 2
5 Spring Street
Perth, WA 6000
PO Box 700 West Perth WA 6872
Australia
DECLARATION OF INDEPENDENCE BY JARRAD PRUE TO THE DIRECTORS OF INVICTUS ENERGY
LIMITED
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
Level 9, Mia Yellagonga Tower 2
5 Spring Street
Perth WA 6000
PO Box 700 West Perth WA 6872
Australia
DECLARATION OF INDEPENDENCE BY JARRAD PRUE TO THE DIRECTORS OF INVICTUS ENERGY
LIMITED
As lead auditor of Invictus Energy Limited for the year ended 30 June 2022, I declare that, to the best
of my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
As lead auditor of Invictus Energy Limited for the year ended 30 June 2023, I declare that, to the best
of my knowledge and belief, there have been:
2. No contraventions of any applicable code of professional conduct in relation to the audit.
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
This declaration is in respect of Invictus Energy Limited and the entities it controlled during the period.
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Invictus Energy Limited and the entities it controlled during the period.
Jarrad Prue
Director
BDO Audit (WA) Pty Ltd
Jarrad Prue
Perth
Director
30 September 2022
BDO Audit (WA) Pty Ltd
Perth
15 September 2023
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia
Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO
International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability
limited by a scheme approved under Professional Standards Legislation.
27
66 | P a g e
INVICTUS ENERGY LIMITED2023 ANNUAL REPORT
FOR THE YEAR ENDED 30 JUNE 2022
Consolidated Statement of Profit or Loss
and Other Comprehensive Income
Continuing operations
Interest revenue
Other revenue
Corporate costs
Professional fees
Directors’ and executives’ fees
Finance costs
Other
Depreciation
Foreign currency gain
Loss from continuing operations before income tax
Income tax expense
Loss from continuing operations after income tax
Profit/(loss) for the period attributable to:
Members of the parent entity
Non-controlling interest
Profit/(loss) for the year
Other comprehensive income/(loss):
Items that may be reclassified subsequently to profit or loss:
Foreign currency translation – members of parent entity
Foreign currency translation – non-controlling interest
Total other comprehensive gain/(loss) for the year
Total comprehensive gain/(loss) for the year attributable to:
Members of the parent entity
Non-controlling interest
NOTES
2023
A$
2022
A$
101,894
-
1,413
199,934
(412,642)
(675,114)
(364,373)
(614,950)
(2,101,851)
(2,221,448)
(64,641)
(54,163)
(1,629,725)
(1,000,075)
(250,383)
80, 534
(264,004)
531, 485
(4,951,928)
(3,786,181)
-
-
(4,951,928)
(3,786,181)
6
6
8
(4,659,468)
(3,643,865)
15
(292,460)
(142,316)
(4,951,928)
(3,786,181)
15
(42,365)
(10,515)
(52,880)
561,076
140,221
701,297
(4,701,833)
(3,082,789)
(302,975)
(2,095)
(5,004,808)
(3,084,884)
Basic and diluted loss per share (cents)
9
(0.53)
(0.58)
The consolidated statement of profit or loss and other comprehensive income is to be read in conjunction with the accompanying notes.
28
FOR THE YEAR ENDED 30 JUNE 2023INVICTUS ENERGY LIMITED2023 ANNUAL REPORT AS AT 30 JUNE 2023
Consolidated Statement
of Financial Position
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Other current assets
Total current assets
Non-current assets
Exploration and evaluation expenditure
Leasehold acquisition costs for Carbon Credits
Property, plant and equipment
Right of use asset
Other financial assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Provisions
Lease liability
Total current liabilities
Non-current liabilities
Lease liability
Total non-current liabilities
Total liabilities
Net assets
Equity
Share capital
Reserves
Accumulated loss
Total equity attributable to owners of Invictus Energy Limited
Non-controlling interest
Total equity
NOTES
2023
A$
2022
A$
10
22,931,927
13,718,461
344,486
82,747
245,195
75,850
23,359,160
14,039,506
11
74,256,799
28,228,960
732,588
174,828
309,273
120,771
75,594,259
98,953,419
--
284,344
457,724
120,771
29,091,799
43,131,305
12
2,445,746
4,051,782
92,774
145,906
73,524
127,034
2,684,426
4,252,340
219,157
219,157
365,062
365,062
2,903,583
4,617,402
96,049,836
38,513,903
13
13
15
117,371,778
58,926,088
7,175,304
3,144,107
(29,230,065)
(24,592,086)
95,317,017
37,478,109
732,819
1,035,794
96,049,836
38,513,903
The consolidated statement of financial position is to be read in conjunction with the accompanying notes.
29
INVICTUS ENERGY LIMITED2023 ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2022
Consolidated Statement
of Changes in Equity
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T
FOR THE YEAR ENDED 30 JUNE 2023INVICTUS ENERGY LIMITED2023 ANNUAL REPORT
FOR THE YEAR ENDED 30 JUNE 2023
Consolidated Statement
of Cash Flows
Cash flows from operating activities
Interest received
Payments to suppliers and employees
Net cash used in operating activities
Cash flows from investing activities
Exploration and evaluation payments
Leasehold acquisition costs for Cardon Credits
Payments for property, plant & equipment
Return of restricted cash
Increase in restricted cash
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Share issuance costs
Exercise of options
Net cash from financing activities
Total cash movement for the year
Cash at the beginning of the year
Effect of exchange rate changes on cash and cash equivalents
NOTES
2023
A$
2022
A$
16
11
13
13
13
101,894
1,413
(2,672,326)
(1,617,173)
(2,570,432)
(1,615,760)
(48,666,035)
(13,790,676)
(732,588)
-
-
(57,545)
-
(396,786)
96,143
(120,771)
(49,456,168)
(14,212,090)
60,451,628
19,349,497
(3,371,095)
(2,567,702)
3,842,183
3,589,926
60,922,716
20,371,721
8,896,116
13,718,461
317,350
4,543,870
9,135,271
39,320
Total cash at the end of the year
10
22,931,927
13,718,461
The consolidated statement of cash flows is to be read in conjunction with the accompanying notes.
31
INVICTUS ENERGY LIMITED2023 ANNUAL REPORT Notes to the
Consolidated Financial Statements
1.
Summary of Accounting Policies
A.
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. Invictus Energy Limited is a for-profit entity
for the purpose of preparing the financial statements.
(i) Compliance with IFRS
The consolidated financial statements of the Invictus Energy Limited Group also comply with International Financial Reporting
Standards (IFRS) as issued by the International Accounting Standard Board (IASB).
Where necessary, comparatives have been reclassified and repositioned for consistency with the current year disclosures.
The Group has not elected to early adopt any new Standards or Interpretations.
All new and amended accounting standards mandatory as at 1 July 2022 have not had an impact on the financials. Refer to note 2 for
further details.
(ii) Going concern
The going concern concept relates to the assessment of the Company’s ability to continue its operations (and pay its debts when
they fall due) for the next 12 months from the date when the directors sign the financial report without the need to raise money from
issuing shares or other sources of funding. The financial report has been prepared on a going concern basis.
For the full year ended 30 June 2023 the Group incurred a loss after tax of $4,951,928 (2022: $3,786,181) and had total net cash
outflows from operating and investing activities of $52,026,600 (2022: $15,827,850).
The Directors have prepared an estimated cash flow forecast for the period to 31 October 2024 to determine if the Company may
require additional funding during this period. The Group intends to continue with its operating activities at the Cabora Bassa Project
and will incur related cash expenditure. This results in a material uncertainty that may cast a significant doubt about the Company’s
ability to continue as a going concern, and therefore the Group may be unable to realise its assets and discharge its liabilities in the
normal course of business.
The Directors have made an assessment on whether it is reasonable to assume that the Company will be able to continue its normal
operations based on the following factors and judgements:
•
•
The Directors are of the opinion that the Group’s exploration and
development assets will attract further capital investment when required; and
The Directors expect the Group to be successful in securing additional funding
through debt or equity issues, when and if required.
Should the Company not be able to continue as a going concern, it may be required to realise its assets and discharge its liabilities
other than in the ordinary course of business, and at amounts that differ from those stated in the financial statements. The interim
financial report does not include any adjustments relating to the recoverability and classification of recorded asset amounts or
liabilities that might be necessary should the entity not continue as a going concern.
(iii) Basis of consolidation
The Group financial statements consolidate those of the Parent Company and all of its subsidiaries. The Parent controls a subsidiary if it
is exposed, or has rights, to variable returns from its involvement with the subsidiary and has the ability to affect those returns through
its power over the subsidiary. All subsidiaries have a reporting date of 30 June.
All transactions and balances between Group companies are eliminated on consolidation, including unrealised gains and losses
on transactions between Group companies. Where unrealised losses on intra-group asset sales are reversed on consolidation, the
underlying asset is also tested for impairment from a group perspective. Amounts reported in the financial statements of subsidiaries
have been adjusted where necessary to ensure consistency with the accounting policies adopted by the Group.
Profit or loss and other comprehensive income of subsidiaries acquired or disposed of during the year are recognised from the
effective date of acquisition, or up to the effective date of disposal, as applicable.
B.
Foreign currency translation
(i) Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic
environment in which the entity operates (“functional currency”). The functional currency of Invictus Energy Limited is Australian
dollars (“A$”).
The consolidated financial statements are presented in Australian dollars, which is the Company’s presentation currency.
32
FOR THE YEAR ENDED 30 JUNE 2023INVICTUS ENERGY LIMITED2023 ANNUAL REPORT (ii) Transactions and balances
Transactions in foreign currencies are translated to the functional currency at the foreign exchange rate ruling at the date of the
transaction. Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated to Australian dollars
at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in the statement of
comprehensive income.
Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the
exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at
fair value are translated to A$ at foreign exchange rates ruling at the dates the fair value was determined.
(iii) Financial statements of foreign operations
The revenues and expenses of foreign operations, excluding foreign operations in hyperinflationary economies, are translated to
Australian dollars at rates approximating to the foreign exchange rates ruling at the dates of the transactions.
Foreign exchange differences arising on translation are recognised directly in the foreign currency translation reserve (“FCTR”),
as a separate component of equity. When a foreign operation is disposed of, in part or in full, the relevant amount in the FCTR is
transferred to profit or loss, as part of the gain or loss on sale where applicable.
C.
Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the entity and the revenue
can be reliably measured.
Net financial income
Net financial income comprises interest payable on borrowings calculated using the effective interest method, interest receivable on
funds invested, dividend income and foreign exchange gains and losses.
Interest income is recognised in the profit and loss as it accrues, using the effective interest method.
Management fees are recognised in the profit and loss as the right to a fee accrues, in accordance with contractual rights.
D.
Impairment of assets
The carrying amounts of the Company’s assets are reviewed at each reporting date to determine whether there is any indication of
impairment. If any such indication exists, the assets recoverable amount is estimated. An impairment loss is recognised whenever
the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. Impairment losses are recognised in the
statement of comprehensive income.
The recoverable amount is the greater of the asset’s net selling price and its value in use. In assessing value in use, estimated future cash
flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of
money and the risks specific to the asset. For an asset that does not generate largely independent cash inflows, the recoverable amount is
determined for the cash-generating unit to which the asset belongs.
An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount and it is reversed
only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of
depreciation or amortisation, if no impairment loss has been recognised. The reversal is recognised in the income statement.
E.
Financial instruments
(i) Non-derivative financial instruments
Non-derivative financial instruments are recognised initially at fair value plus, for instruments not at fair value through profit or loss,
any directly attributable transaction costs, except as described below. Subsequent to initial recognition, non-derivative financial
instruments are measured as described below.
A financial instrument is recognised if the Group becomes a party to the contractual provisions of the instrument. Financial assets are
derecognised if the Group’s contractual rights to the cash flows from the financial assets expire or if the Group transfers the financial
asset to another party without retaining control or substantially all risks and rewards of the asset. Purchases and sales of financial
assets are accounted for at trade date, i.e. the date that the Group commits itself to purchase or sell the asset. Financial liabilities are
derecognised if the Group’s obligations specified in the contract expire or are discharged or cancelled.
(ii) Subsequent measurement
Loans and receivables and held-to-maturity investments are carried at amortised cost using the effective interest method.
Details on how the fair value of financial instruments is determined are disclosed in note 3.
(iii) Impairment
The Group assesses at each reporting date whether there is objective evidence that a financial asset or
Group of financial assets is impaired.
33
INVICTUS ENERGY LIMITED2023 ANNUAL REPORT Notes to the
Consolidated Financial Statements
F.
Goods and Services Tax / Value Added Tax
Revenue, expenses and assets are recognised net of the amount of goods and services tax (“GST”) or Value Added Tax (“VAT”), except
where the amount of GST/VAT incurred is not recoverable from the taxation authority. In these circumstances, the GST/VAT is recognised
as part of the cost of acquisition of the asset or as part of the expense.
Receivables and payables are stated with the amount of GST/VAT included. The net amount of GST/VAT recoverable from, or payable to,
the relevant tax authority is included as a current asset or liability in the statement of financial position.
Cash flows are included in the statement of cash flows on a gross basis. The GST/VAT components of cash flows arising from investing and
financing activities which are recoverable from, or payable to, the relevant tax authority are classified as operating cash flows.
G.
Dividends
Dividends are recognised as a liability in the period in which they are declared.
H.
Employee benefits
(i) Short-term employee benefits
Wages, salaries, bonuses and other salary related expenses are recognised as expenses in the year in which the associated services
are rendered by employees of the Company. Short-term accumulating compensated absences such as paid annual leave are
recognised when services rendered by employees, that increase their entitlement to future compensated absences, occur. Short-term
accumulating compensated absences such as sick leave are recognised when absences occur.
(ii) Defined contribution plans
Employee benefits include statutory social insurance payments to the State Social Insurance Scheme. Contributions to this
defined contribution plan are recognised as an expense as incurred.
(iii) Share-based payments
The Company provides benefits to employees (including Directors) of the Company in the form of share-based payment transactions,
whereby employees render services in exchange for shares or options over shares (“equity-settled transactions”).
The fair value of options is recognised as an expense with a corresponding increase in equity (share-based payments reserve). The
fair value is measured at grant date and recognised over the period during which the holder become unconditionally entitled to
the options. Fair value is determined using an appropriate valuation method. In determining fair value, no account is taken of any
performance conditions other than those related to the share price of Invictus Energy Limited (“market conditions”). The cumulative
expense recognised between grant date and vesting date is adjusted to reflect the Directors best estimate of the number of options
that will ultimately vest because of internal conditions of the options, such as the employees having to remain with the Company
until the vesting date, or such that employees are required to meet internal performance targets.
(iv) Leases
Leases are recognised as a right-of-use and a corresponding liability at the date at which the leased asset is available for use by the
Company. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to the Consolidated
Statement of Financial Performance over the lease period as to produce a constant periodic rate of interest on the remaining balance
of the liability for each period. The right-of-use asset is amortised over the shorter of the asset’s useful life and the lease term on a
straight-line basis.
Assets and liabilities from a lease are initially measured on a present value basis. The lease liability includes the present value of the
fixed payments (with a 3.25% set increase each year), and variable payments for outgoings (reconciled and adjusted for actual cost
each year). The lease payments are discounted using the Group’s incremental borrowing rate of 10.0%.
The right-of-use asset is measured at cost comprising of the initial measurement of the lease liability.
(v) Carbon Credits
Initial set up costs associated with the Carbon Credit trading business are capitalised to the balance sheet as Leasehold acquisition
costs for Carbon Credits.
At the date of this report, the Company has not commenced Carbon Credit trading and as such is yet to develop and adopt a Carbon
Credit trading accounting policy.
34
FOR THE YEAR ENDED 30 JUNE 2023INVICTUS ENERGY LIMITED2023 ANNUAL REPORT 2. New and Amended Standards not yet adopted by the Group
The Directors have also reviewed all Standards and Interpretations on issue not yet adopted for the year ended 30 June 2023. As a result
of this review, the directors have determined that there is no material impact of the Standards and Interpretation on issue not yet adopted
on the Group and, therefore, no change is necessary to the Group’s accounting policies.
3. Financial Risk Management
The Group’s activities expose it to a variety of financial risks: market risk (including currency risk, interest rate risk and price risk), credit risk
and liquidity risk. The Group’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimise
potential adverse effects on the financial performance of the Group. The Group uses different methods to measure different types of risk
to which it is exposed.
Risk management is carried out by the management under policies approved by the board of Directors. Group management identifies,
evaluates and hedges financial risks by holding cash in interest earning deposits.
The Group holds the following financial instruments:
2023
A$
2022
A$
22,931,927
13,718,461
344,486
245,195
23,276,413
13,963,656
(1,379,801)
(2,259,037)
(145,906)
(219,157)
(127,034)
(365,062)
(1,744,864)
(2,751,133)
21,531,549
11,212.523
Financial assets
Cash and cash equivalents
Trade and other receivables
Total financial assets
Financial liabilities
Trade and other payables
Lease liability – current
Lease liability – non current
Total financial liabilities
Net financial instruments
35
INVICTUS ENERGY LIMITED2023 ANNUAL REPORT Notes to the
Consolidated Financial Statements
3. Financial Risk Management (CONTINUED)
(a)
Market risk
Foreign currency risk
Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is
not the entity’s functional currency and net investments in foreign operations. The consolidated entity has the Australian dollar (A$) as its
functional currency, which is also the currency for
the Group’s transactions. Some exposure to foreign exchange risk exists in respect to its Cabora Bassa project which has transactions
denominated in US Dollars and Zim Dollars. The risk is measured using sensitivity analysis and cash flow forecasting.
The Group’s exposure to foreign currency risk at the reporting date, expressed in Australian Dollars, was:
Cash and cash equivalents
Trade and other payables
Total exposure to foreign currency risk
2023
A$
2022
A$
5,476,602
9,060,363
(1,388,377)
(3,654,587)
4,088,225
5,405,776
Group sensitivity to movements in foreign exchange rates is shown in the summarised sensitivity analysis table below:
30-JUN-23
Financial assets
Cash and cash equivalents
Trade and other payables
Net exposure to foreign currency risk
30-JUN-22
Financial assets
Cash and cash equivalents
Trade and other payables
Net exposure to foreign currency risk
CARRYING
AMOUNT
A$
5,476,602
(1,388,377)
4,088,225
CARRYING
AMOUNT
A$
9,060,363
(3,654,587)
5,405,776
FOREIGN EXCHANGE RISK
-10%
PROFIT
A$
EQUITY
A$
10%
PROFIT
A$
(547,660)
138,838
(408,822)
547,660
(138,838)
408,822
547,660
(138,838)
408,822
FOREIGN EXCHANGE RISK
-10%
PROFIT
A$
EQUITY
A$
10%
PROFIT
A$
(906,036)
365,459
(540,577)
906,036
(365,459)
540,577
906,036
(365,459)
540,577
EQUITY
A$
(547,660)
138,838
(408,822)
EQUITY
A$
(906,036)
365,459
(540,577)
Foreign exchange volatility was chosen to reflect expected short-term fluctuations in the US Dollar.
(b)
Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding through an
adequate amount of committed credit facilities, the ability to meet obligations when due and to close out market positions. Due to the
dynamic nature of the underlying businesses, the management aims at maintaining flexibility in funding by keeping committed credit lines
available with a variety of counterparties. Surplus funds are only invested in instruments that are tradeable in highly liquid markets.
The tables below analyse the Group’s financial liabilities into relevant maturity groupings. The amounts disclosed in the table are the contractual
undiscounted cash flows. Balances due within 12 months equal their carrying amounts as the impact of discounting is not significant.
30-JUN-23
Trade and other payables
Total exposure to liquidity risk
30-JUN-22
Trade and other payables
Total exposure to liquidity risk
36
LESS THEN
6 MONTHS
TOTAL
CONTRACTUAL
CASH FLOWS
2,445,746
2,445,746
2,445,746
2,445,746
CARRYING
AMOUNT OF
LIABILITIES
2,445,746
2,445,746
LESS THEN
6 MONTHS
TOTAL
CONTRACTUAL
CASH FLOWS
CARRYING
AMOUNT OF
LIABILITIES
4,051,782
4,051,782
4,051,782
4,051,782
4,051,782
4,051,782
FOR THE YEAR ENDED 30 JUNE 2023INVICTUS ENERGY LIMITED2023 ANNUAL REPORT 3. Financial Risk Management (CONTINUED)
(b)
Liquidity risk (CONTINUED)
Interest rate risk
The Group’s exposure to interest rate risk and the effective weighted average interest rate for classes of financial assets and liabilities is set
out below:
Floating interest rate:
Cash available at call
Fixed interest rate:
Deposits at call
WEIGHTED
AVERAGE
INTEREST RATE
30-JUN-23
WEIGHTED
AVERAGE
INTEREST RATE
30-JUN-22
0.00%
17,691,053
0.00%
10,892,007
0.01%
5,240,874
0.05%
2,826,453
Total exposure to interest rate risk
22,931,927
13,718,461
The Group’s sensitivity to movement in interest rates is not significant to the group.
(c)
Credit risk
The carrying amount of cash and cash equivalents and trade and other receivables (excluding prepayments) represent the Group’s
maximum exposure to credit risk in relation to financial assets.
Cash and short-term liquid investments are placed with reputable banks, so no significant credit risk is expected. None of the financial
assets are either past due or impaired.
(d)
Fair value measurements
The carrying values less impairment provision of trade receivables and payables are assumed to approximate their fair values due to their
short-term nature. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows
at the current market interest rate that is available to the Group for similar financial instruments.
4. Critical Accounting Estimates and Judgements
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations
of future events that may have a financial impact on the entity and that are believed to be reasonable under the circumstances. The
Group makes estimates and assumptions concerning the future. The resulting accounting estimates and judgements may differ from the
related actual results and may have a significant effect on the carrying amount of assets and liabilities within the next financial year and
on the amounts recognised in the financial statements. The estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
(a)
Impairment of deferred exploration and evaluation expenditure
Exploration and evaluation costs are carried forward where right of tenure of the area of interest is current. These costs are carried forward
in respect of an area that has not at balance date reached a stage that permits reasonable assessment of the existence of economically
recoverable reserves. The Board and Management have assessed the carrying value of the Exploration and Evaluation Expenditure to be
impaired. Refer to the accounting policy stated in note 11 for movements in the exploration and evaluation expenditure balance.
(b)
Share based payment transactions
The group measures the cost of equity-settled transactions with Directors, employees and consultants by reference to the fair value of the
equity instruments at the date at which they are granted. The fair value is determined using appropriate valuation techniques.
(c)
Tax in foreign jurisdictions
The consolidated entity operates in overseas jurisdictions and accordingly is required to comply with the taxation requirements of those
relevant countries. This results in the consolidated entity making estimates in relation to taxes including but not limited to income tax,
goods and services tax, withholding tax and employee income tax. The consolidated entity estimates its tax liabilities based on the
consolidated entity’s understanding of the tax law. Where the final outcome of these matters is different from the amounts that were
initially recorded, such differences will impact profit or loss in the period in which they are settled.
37
INVICTUS ENERGY LIMITED2023 ANNUAL REPORT
Notes to the
Consolidated Financial Statements
5. Segment Information
AASB 8 Operating Segments requires a ‘management approach’, under which segment information is presented on the same basis as that
used for internal reporting purposes. Operating segments are reported in a manner that is consistent with the internal reporting provided
to the chief operating decision maker.
(a)
Description of segments
The Company’s Board of Directors, who are collectively the “Chief Operating Decision Maker”, receives financial information for one
reportable segment being “Exploration”.
(b)
Segment information
FOR THE YEAR ENDED 30 JUNE 2023
Total segment revenue
Profit (loss) before income tax
Segment Assets
Cash and cash equivalents
Trade and other receivables
Other current assets
EXPLORATION
A$
UNALLOCATED
A$
CONSOLIDATED
A$
-
101,894
101,894
(1,462,301)
(3,489,627)
(4,951,928)
21,976
22,909,951
22,931,927
-
-
344,486
82,747
344,486
82,747
Exploration and evaluation expenditure
74,256,799
-
74,256,799
Other financial assets
Property, plant and equipment
Right of use - asset
Leasehold acquisition costs for Carbon Credits
Total Segment Assets
Segment Liabilities
Trade and other payables
Provisions
Right of use – current liability
Right of use – non-current liability
Total Segment Liabilities
FOR THE YEAR ENDED 30 JUNE 2022
Total segment revenue
Profit (loss) before income tax
Segment Assets
Cash and cash equivalents
Trade and other receivables
Other current assets
Exploration and evaluation expenditure
Other financial assets
Property, plant and equipment
Right of use - asset
Total Segment Assets
Segment Liabilities
Trade and other payables
Provisions
Right of use – current liability
Right of use – non-current liability
Total Segment Liabilities
38
-
28,130
-
-
74,306,905
120,771
146,698
309,273
120,771
174,828
309,273
732,588
24,646,514
732,588
98,953,419
1,005,916
1,439,830
2,445,746
-
-
-
92,774
145,906
219,157
92,774
145,906
219,157
1,005,916
1,897,667
2,903,583
EXPLORATION
A$
UNALLOCATED
A$
CONSOLIDATED
A$
310
201,037
201,347
(712,305)
(3,073,876)
(3,786,181)
151,860
13,566,601
13,718,461
-
-
245,195
75,850
245,195
75,850
28,228,960
-
28,228,960
-
27,072
-
120,771
257,272
457,724
120,771
284,344
457,724
28,407,892
14,723,413
43,131,305
3,654,587
-
-
-
3,654,587
397,195
73,524
127,034
365,062
962,815
4,051,782
73,524
127,034
365,062
4,617,402
FOR THE YEAR ENDED 30 JUNE 2023INVICTUS ENERGY LIMITED2023 ANNUAL REPORT 6. Expenses
Professional fees
Audit fees
Company Secretarial
Accounting fees
Legal fees
Corporate advisory
Staff recruitment costs1
Investor relations
Corporate tax advice
Share-based payments expense – Consultants - shares issued in lieu of services
Total professional fees
Other
Corporate costs for the foreign subsidiaries
Other
Total other expenses
2023
A$
2022
A$
51,250
35,682
141,699
56,014
6,714
205,693
157,968
20,094
-
675,114
47,904
27,500
105,725
104,183
-
-
123,638
6,000
200,000
614,950
1,420,348
209,377
1,629,725
780,272
219,763
1,000,075
1 Included within staff recruitment costs for the current year is $159,455 which relates to 6,000,000 unlisted options, which were granted to
Directors of the Company. The options were awarded to Mr Bentley and Mr Sutherland (3,000,000 options each) as consideration for their
appointment to the Board of Directors. The options will vest after 12 months of service. The options have an exercise price of $0.2355 and
an expiry date of 23 July 2024. Refer to Note 19 for further details.
7. Auditor Remuneration
Services provided by the Auditor – BDO Audit (WA) Pty Ltd
Audit and review of financial statements
Tax compliance services
Total services provided by the Auditor
2023
A$
2022
A$
51,250
-
47,904
-
51,250
47,904
39
INVICTUS ENERGY LIMITED2023 ANNUAL REPORT
Notes to the
Consolidated Financial Statements
8. Taxation
The income tax expense for the period presented comprises current and deferred tax. Income tax is recognised in the statement of profit
or loss and other comprehensive income except to the extent that it relates to items recognised directly in equity, in which case it is
recognised in equity.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting
period in the countries where the Company’s subsidiaries and associates operate and generate taxable income. Management periodically
evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It
establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred tax is provided using the liability method, providing for temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for taxation purposes.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset
can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised, or to
the extent that the Group has deferred tax liabilities with the same taxation authority.
The Group is subject to income taxes in Australia and jurisdictions where it has foreign operations. Significant judgement is required
in determining the provision for income taxes across the Group. There are certain transactions and calculations undertaken during the
ordinary course of business for which the ultimate tax determination is uncertain. The group estimates its tax liabilities based on the Group’s
understanding of the tax law. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such
differences will impact the current and deferred income tax assets and liabilities in the period in which such determination is made.
INCOME TAX EXPENSE
The components of tax expense comprise:
Current income tax charge (benefit)
Adjustments in respect of previous current income tax
Total income tax expense from continuing operation
2023
A$
2022
A$
-
-
-
-
-
-
A reconciliation of income tax expense (benefit) applicable to accounting profit before
income tax at the statutory income tax rate to income tax expense at the Company’s
effective income tax rate for the years ended 30 June 2022 and 30 June 2021 is as follows:
Accounting profit (loss) before income tax
(4,951,928)
(3,786,181)
Prima facie tax payable on profit from ordinary activities before income tax at 30% (2022: 30%)
adjusted for:
(1,485,578)
(1,135,854)
Non-deductible expenses
NANE related expenditure
Temporary differences and losses not recognised
Share based payments expense
Income tax expense/(benefit)
The applicable weighted average effective tax rates are as follows:
Unrecognised deferred tax assets/(liabilities)
Deferred tax assets/(liabilities) have not been recognised in respect of the following items:
Prepayments
Right of use asset
Trade and other payables
Right of use liability
Australian tax losses
Capital loss
Capital raising costs
Offset against deferred tax liabilities recognised
Deferred tax assets not brought to account
40
403,944
15,980
628,084
437,571
-
0%
243,147
8,070
368,830
515,807
-
0%
(485)
(92,782)
37,220
109,519
(665)
(137,317)
30,307
147,629
4,199,004
3,254,395
57,956
1,194,419
5,504,851
-
57,956
341,410
3,693,715
-
5,504,851
3,693,715
FOR THE YEAR ENDED 30 JUNE 2023INVICTUS ENERGY LIMITED2023 ANNUAL REPORT
8. Taxation (CONTINUED)
The tax losses do not expire under current legislation. Deferred tax assets have not been recognised in respect of these items because it is
not probable that future taxable profit will be available against which the Company can utilise the benefits. The tax benefits of the above
deferred tax assets will only be obtained if:
a. The consolidated entity derives future assessable income of a nature and of an amount sufficient to enable the benefits to be utilised;
b. The consolidated entity continues to comply with the conditions for deductibility imposed by law; and
c. No changes in income tax legislation adversely affect the consolidated entity from utilising the benefits.
9. Gain/(Loss) per Share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company, 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
the bonus elements in ordinary shares issued during the year.
The calculation of basic gain per share at the reporting date was based on the loss attributable to ordinary shareholders of $4,004,813
(2022: loss of $3,643,865) and a weighted average number of ordinary shares outstanding during the current financial year of 886,755,485
(2022: 629,692,632) shares calculated as follows:
Loss for the year
2023
A$
2022
A$
(4,659,468)
(3,643,865)
Weighted average number of ordinary shares (basic and diluted)
886,755,485
629,692,632
Basic and diluted loss per share (cents)
(0.53)
(0.58)
Diluted gain/(loss) 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.
Potential ordinary shares are not considered dilutive, thus diluted gain/(loss) per share is the same as basic gain/(loss) per share.
10. Cash and Cash Equivalents
Cash and cash equivalents comprise cash balances, short-term bills and call deposits. Bank overdrafts that are repayable on demand and
form an integral part of the consolidated entity’s cash management are included as a component of cash and cash equivalents for the
purpose of the statement of cash flows.
2023
A$
2022
A$
22,931,927
11,354,587
-
2,363,874
22,931,927
13,718,461
Cash and cash equivalents consist of:
Cash on hand
Term deposits
Total cash and cash equivalents
41
INVICTUS ENERGY LIMITED2023 ANNUAL REPORT
Notes to the
Consolidated Financial Statements
11. Exploration and Evaluation Expenditure
Exploration and evaluation costs are allocated separately to specific areas of interest. Each area of interest is limited to a size related
to a known and probable Mineral Resource capable of supporting a mining operation. Such costs comprise net direct costs and an
appropriate portion of related overhead expenditure directly related to activities in the area of interest.
Exploration and evaluation costs incurred in the normal course of operations are capitalised.
Exploration and evaluation costs are capitalised where they are the result of an acquisition from a third party. These capitalised costs
are only carried forward to the extent that they are expected to be recouped through the successful development of the area or where
activities in the area have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable
reserves.
When a decision to proceed to development is made the exploration and evaluation costs capitalised to that area are transferred to
mine development within property, plant and equipment. All costs subsequently incurred to develop a mine prior to the start of mining
operations within the area of interest are capitalised. These costs include expenditure to develop new ore bodies within the area of
interest, to define further mineralisation in existing areas of interest, to expand the capacity of a mine and to maintain production.
The future recoverability of capitalised exploration and evaluation expenditure is dependent on a number of factors, including whether
the Company decides to exploit the related lease itself, or, if not, whether it successfully recovers the related exploration and evaluation
asset through sale.
Factors that could impact future recoverability include the level of reserves and resources, future technological changes, cost of drilling
and production, production rates, future legal changes (including changes to environmental restoration obligations) and changes to
commodity prices.
As at 30 June 2023, the carrying value of the capitalised exploration and evaluation properties of the consolidated entity was $74,189,799
(2022: $28,228,960); the carrying amounts of individual projects are as per the reconciliation of movement in exploration and evaluation
property below.
Reconciliation of movement in exploration and evaluation expenditure
CABORA BASSA PROJECT
Project carrying value at 1 July
Cost incurred during the year
Effect of translation to presentation currency
Project carrying value at 30 June
2023
A$
28,228,960
47,656,386
(1,628,547)
2022
A$
8,821,190
18,855,709
552,061
74,256,799
28,228,960
The total recoverability of the carrying amounts of exploration and evaluation assets is dependent on the successful development and
commercial exploitation or sale of the respective areas of interest.
12. Trade and Other Payables
Trade and other payables are non-interest bearing liabilities stated at cost and settled within 30 days.
Trade creditors
Accrued expenses
Total trade and other payables
2023
A$
1,379,801
1,065,945
2,445,746
2022
A$
2,259,037
1,792,745
4,051,782
1 As at 30 June 2023 the Directors of the Company are owed $nil in deferred salaries and fees (2022: $54,145)
Trade and other payables are non-interest bearing liabilities stated at cost and settled within 30 days. Information about the Group’s
exposure to foreign currency risk is provided in note 3.
42
FOR THE YEAR ENDED 30 JUNE 2023INVICTUS ENERGY LIMITED2023 ANNUAL REPORT 13. Share Capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the
proceeds. Incremental costs directly attributable to the issue of new shares or options for the acquisition of a business are not included in
the cost of the acquisition as part of the purchase consideration.
If the entity reacquires its own equity instruments, for example as a result of a share buy-back, those instruments are deducted from equity
and the associated shares are cancelled. No gain or loss is recognised in the profit or loss and the consideration paid including any directly
attributable incremental costs (net of income taxes) is recognised directly in equity.
The Group’s capital is comprised of ordinary shares and options over ordinary shares of the Company.
Shares on issue
Issuance cost
Total share capital
Reconciliation of movement in issued capital
Balance as at 1 July 2021
Issue of shares – placement
Issue of shares – consultants
Issue of shares – exercise of options
Share issuance costs
Balance as at 30 June 2022
Issue of shares – placement
Issue of shares – management
Issue of shares – exercise of options
Share issuance costs
Share issuance costs – options issued to Brokers
Balance as at 30 June 2023
2023
A$
2022
A$
129,581,181
64,884,371
(12,209,403)
(5,958,283)
117,371,778
58,926,088
NUMBER OF
SHARES
585,077,387
136,747,370
2,000,000
22,908,191
A$
38,354,367
19,349,497
200,000
3,589,926
-
(2,567,702)
746,732,948
401,851,237
1,300,000
28,232,661
-
-
58,926,088
60,451,628
403,000
3,842,183
(3,371,095)
(2,880,026)
1,178,116,846
117,371,778
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in the proportion to the
number and amount paid on the shares held.
At 30 June 2023, the Company had 381,164,688 options over ordinary shares on issue (2022: 96,333,444).
43
INVICTUS ENERGY LIMITED2023 ANNUAL REPORT
Notes to the
Consolidated Financial Statements
13. Share Capital (CONTINUED)
Reconciliation of movement in unlisted options over ordinary shares
Total options as at 30 June 2021
Director options
Broker options
Placement options1
Cancellation of Director options
Placement options1
Broker options
Placement options1
Broker options
Exercise of options
Exercise of options
Total options as at 30 June 2022
Director options
Broker options
Broker options
Placement options 2
Placement options 2
Placement options 2
Placement options 2
Exercise of options
Exercise of options
Exercise of options
Exercise of options
Exercise of options
Total options as at 30 June 2023
NUMBER
ISSUE DATE
EXPIRY DATE
EXERCISE PRICE
(CENTS)
46,272,727
15,000,000
9,090,909
17,499,994
(3,000,000)
19,999,734
4,375,000
2,500,000
7,503,271
(10,150,269)
(12,757,922)
96,333,444
6,000,000
13,586,956
10,416,667
30,013,070
42,956,515
65,217,391
144,938,378
(3,000,000)
(3,000,000)
(3,000,000)
(8,046,231)
(11,251,502)
381,164,688
26-Jul-21
23-Jul-2024
8-Jul-21
13-Jan-22
26-Jul-21
24-Jan-22
25-Jan-22
1-Mar-22
23-May-22
various
various
1-Feb-23
24-Nov-22
7-Jun-23
27-Jul-22
12-Sep-22
31-Dec-22
27-Jun-23
31-Jul-19
31-Jul-19
31-Jul-19
various
various
30-Mar-24
31-Jan-25
23-Jul-24
31-Jan-25
31-Jan-25
31-Jan-25
11-Jul-23
31-Jan-25
30-Mar-24
23-Jul-24
1-Feb-26
7-Jun-26
26-Jul-26
30-Sep-27
30-Sep-27
7-Jun-26
31-Jul-22
31-Jul-22
31-Jul-22
31-Jan-25
30-Mar-24
23.55
17
14
23.55
14
14
14
35
14
17
23.55
46
20
35
40
40
20
6
9
12
14
17
1 During the prior year, there were a total of 39,999,728 options (‘free attaching placement options’) issued to participants in capital raises during the year, on a 1:2 basis
(1 option for every 2 shares). The options have an exercise price of $0.14 and an expiry date of 31 January 2025. No amounts is recognised in respect of these free attaching
placement options.
2 During the current year, there were a total of 283,647,093 options (‘free attaching placement options’) issued to participants in capital raises during the year, on a 1:2 basis
(1 option for every 2 shares). The options have an exercise price of $0.20, $0.35 or $0.40 and an expiry date of 7 June 2026, 26 July 2026 and 30 September 2027 respectively.
No amounts is recognised in respect of these free attaching placement options.
Options over ordinary shares carry no voting or dividend rights.
Performance shares over ordinary shares
On 20 December 2021, 44,179,281 Class C performance shares expired. The vesting condition for the performance shares was dependant
on the drilling of an exploration well upon the Cabora Bassa Project that results in the maiden booking of Contingent Resources or
Reserves (as those terms are defined in the Guidelines for Application of the Petroleum Resources Management System (2011 Edition).
During the current year there were 22,500,000 Class A performance shares issued to Directors of the Company. The Performance Rights
will convert to ordinary shares upon the following milestones being achieved:
• the drilling of an exploration or appraisal well in the Cabora Bassa Project that results in the maiden booking of Contingent Resources or
Reserves (as those terms are defined in the Guidelines for Application of the Petroleum Resources Management System (2011 Edition) on
or before 31 December 2024.
• the Company achieving a 20 day volume weighted average price of at least $0.50 on or before 31 December 2024.
44
FOR THE YEAR ENDED 30 JUNE 2023INVICTUS ENERGY LIMITED2023 ANNUAL REPORT There were also 22,500,000 Class B Performance Rights issued to Directors during the current year. The Performance Rights will convert to
ordinary shares upon the following milestones being achieved:
• an independent estimate of Contingent Resources or Reserves (as those terms are defined in the Guidelines for Application of the
Petroleum Resources Management System (2011 Edition) of greater than or equal to two hundred million barrels of oil equivalent (200
mmboe) on a 100% gross project basis; and
• the Company achieving a 20 day volume weighted average price of at least $0.75 on or before 31 December 2026.
As at 30 June 2023, the Company has 45,000,000 performance rights over ordinary shares on issue (2022: nil).
Reconciliation of movement in performance shares over ordinary shares
Total as at 1 July 2021
Expiry of performance rights
Total as at 30 June 2022
Performance rights granted
Performance rights granted
Performance rights granted
Performance rights granted
Total as at 30 June 2023
Capital risk management
NUMBER
ISSUE DATE
EXPIRY DATE
44,179,281
44,179,281
22-Jun-18
22-Jun-18
20-Dec-21
20-Dec-21
15,500,000
15,500,000
7,000,000
7,000,000
45,000,000
22-Jul-22
22-Jul-22
7-Jun-23
7-Jun-23
-
31-Dec-24
31-Dec-26
31-Dec-24
31-Dec-26
-
The Group’s objectives when managing capital are to safeguard their ability to continue as a going concern, so that it can continue to
provide returns for shareholders and benefits for other stakeholders, and to maintain an optimal capital structure to reduce the cost of
capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return
capital to shareholders, issue new shares or sell assets to reduce debt.
45
INVICTUS ENERGY LIMITED2023 ANNUAL REPORT
Notes to the
Consolidated Financial Statements
14. Reserves
Share-based payments reserve
The share-based payments reserve represents the value of options issued under the compensation arrangement that the consolidated
entity is required to include in the consolidated financial statements. No gain or loss is recognised in the profit or loss on the purchase,
sale, issue or cancellation of the consolidated entity’s own equity instruments.
Translation reserve
The translation reserve comprises all foreign exchange differences arising from the translation of the financial statements of foreign
operations where their functional currency is different to the presentation currency of the reporting entity.
Share-based payments reserve
Foreign currency translation reserve
Total reserves
Reconciliation of movement in reserves
Share-based payments reserve
Balance as at 1 July
Options issued – Director remuneration (note 19)
Options issued – recruitment costs (note 19)
Options issued – Broker fees (note 19)
Options exercised/expired/lapsed
Balance as at 30 June
Foreign currency translation reserve
Balance as at 1 July
Effect of translation of foreign currency operation to Group presentation currency
Balance as at 30 June
2023
A$
6,838,230
337,074
7,175,304
2,764,668
1,055,570
159,455
2,880,026
(21,489)
6,838,230
2022
A$
2,764,668
379,439
3,144,107
674,095
-
1,519,357
1,549,182
(977,966)
2,764,668
379,439
(42,365)
337,074
(181,637)
561,076
379,439
Total reserves balance as at 30 June
6,680,104
3,144,107
15.
Interests in Other Entities
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Invictus Energy Limited (“the Company”
or “the parent entity”) as at 30 June 2023 and the results of all subsidiaries for the year then ended. Invictus Energy Limited and its
subsidiaries together are referred to in this financial report as the Group or 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 method of accounting is used to account for business combinations by the Group. 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 recognized directly in equity attributable to the parent.
Non-controlling interest in the results and equity of subsidiaries are shown separately in the statement of profit or loss and other
comprehensive income, statement of financial position and statement of changes in equity of the consolidated entity. Losses incurred by
the consolidated entity are attributed to the non-controlling interest in full, even if that results in a deficit balance.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the statement of comprehensive income,
statement of financial position and statement of changes in equity.
46
FOR THE YEAR ENDED 30 JUNE 2023INVICTUS ENERGY LIMITED2023 ANNUAL REPORT
15.
Interests in Other Entities (CONTINUED)
(a)
Subsidiaries
The consolidated entity’s principal subsidiaries at 30 June 2023 and 30 June 2022 are set out below. Unless otherwise stated, they have
share capital consisting solely of ordinary shares that are held directly by the consolidated entity, and the proportion of ownership
interests held equals the voting rights held by the consolidated entity. The country of incorporation or registration is also their principal
place of business. Principal activity of all subsidiaries is gas exploration and development.
PLACE OF
BUSINESS/
COUNTRY OF
INCORPORATION
OWNERSHIP INTEREST HELD BY
THE CONSOLIDATED ENTITY
NON-CONTROLLING INTERESTS
2023
2022
2023
2022
HIS Texas LLC
USA
Invictus Energy Resources Pty Limited
Australia
Invictus Energy Mauritius Limited
Invictus Energy Resources Zimbabwe
(Pvt) Ltd
Geo Associates (Pvt) Ltd
Miombo Forest Carbon Investments
Pty Ltd
Miombo Forest Carbon Investments
Mauritius Ltd
Miombo Forest Carbon Investments
Zimbabwe (Pvt) Ltd
Ngamo-Gwayi-Sikumi Carbon
Investments (Pvt) Ltd
Mauritius
Zimbabwe
Zimbabwe
Australia
Mauritius
Zimbabwe
Zimbabwe
100%
100%
100%
100%
80%
100%
100%
100%
100%
100%
100%
100%
100%
80%
-
-
-
-
100%
100%
100%
100%
20%
100%
100%
100%
100%
-
-
-
-
20%
100%
100%
100%
100%
47
INVICTUS ENERGY LIMITED2023 ANNUAL REPORT
Notes to the
Consolidated Financial Statements
15.
Interests in Other Entities (CONTINUED)
b) Non-controlling interests
The following table sets out the summarised financial information for each subsidiary that has non-controlling interests.
Amounts disclosed are before intercompany eliminations.
Summarised statement of financial position
Current assets
Current liabilities
Current net liabilities/assets
Non-current assets 1
Non-current liabilities
Non-current net assets / liabilities
Net liabilities
Accumulated NCI
1 Represents capitalised exploration costs. Refer to note 11 for further details.
Statement of Profit or Loss and Other Comprehensive Income
Revenue
Loss for the year
Other comprehensive loss
Total comprehensive loss
Loss allocated to NCI
FCTR allocated to NCI
Summarised cash flows
Cash flows from/ (used in) operating activities
Cash flows from/ (used in) investing activities
Cash flows from/ (used in) financing activities
Net increase/(decrease) in cash and cash equivalents
(c)
Transactions with non-controlling interests
There were no transactions with the non-controlling interests during the current year (2022: nil).
GEO ASSOCIATES (PVT) LTD
2023
A$
2022
A$
21,938
151,824
-
21,938
8,075,074
-
151,824
7,005,774
(10,250,119)
(7,795,831)
(2,175,045)
(2,153,107)
(790,057)
(638,233)
732,819
1,035,794
-
1,462,301
-
1,462,301
(292,460)
(10,515)
310
711,578
-
711,578
(142,316)
140,221
-
-
-
-
-
-
-
-
48
FOR THE YEAR ENDED 30 JUNE 2023INVICTUS ENERGY LIMITED2023 ANNUAL REPORT
16. Reconciliation of Loss After Income Tax to Net Cash Outflow Used
NOTES
2023
A$
2022
A$
Loss after tax
Add/(less) non-cash items:
Share- based payments expense – Director and Executive
Management
Recruitment costs – Director options
Depreciation
Share-based payments expense – Consultants - shares issued in lieu of services
19
19
19
Changes in working capital:
Decrease/(increase) in trade and other receivables
Decrease/(increase) in other assets
Increase/(decrease) in trade and other payables
Increase in provisions
Net cash outflow from operating activities
Non- cash investing and financing activities:
Share-based payments expense – Brokers options
17. Parent Entity
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Contributed equity
Share-based payment reserve
Foreign currency translation reserve
Accumulated losses
Total equity
Loss for the year
Total comprehensive loss for the year
Commitments
Refer to note 21: Capital and Other Commitments.
Contingencies
(4,951,928)
(3,786,181)
1,458,570
1,519,357
159,455
250,383
-
(99,291)
(6,897)
600,026
19,250
-
264,004
200,000
(196,971)
(23,836)
375,214
32,651
(2,570,432)
(1,615,760)
2,880,026
2,880,026
1,549,182
1,549,182
2023
A$
2022
A$
19,391,859
13,635,619
517,070
765,169
19,908,929
14,400,788
876,509
219,157
1,095,666
580,875
365,062
945,937
18,813,263
13,454,851
117,371,778
58,926,088
6,838,230
2,764,668
-
-
(105,396,745)
(48,235,905)
18,813,263
13,454,851
57,160,840
57,160,840
17,907,318
17,907,318
There were no contingent assets or liabilities of the parent as at 30 June 2023 related to exploration and evaluation expenditure
(30 June 2022: $ nil).
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
There are no deeds of cross guarantee in place by the parent entity.
49
INVICTUS ENERGY LIMITED2023 ANNUAL REPORT
Notes to the
Consolidated Financial Statements
18. Related Party Transactions
(a)
Parent entities
The ultimate parent entity within the Group is Invictus Energy Limited incorporated in Australia.
(b)
Subsidiaries
Interests in subsidiaries are set out in note 15(a).
(c)
Other related party transactions
During the year the Company paid $96,932 to Laurus Corporate Services Pty Ltd, an entity related to Mr Gabriel Chiappini, for the provision of
non- executive director and company secretarial services, on normal commercial terms and conditions and at market rates (2022: $70,000).
On 15 February 2019 the Company entered into an arrangement with Laurus Corporate Services Pty Ltd, an entity related to which Mr
Gabriel Chiappini, whereby Laurus Corporate Services Pty Ltd rents one office and one car bay at a cost of $1,950 plus GST from the
Company per calendar month. The arrangement is for no fixed term and can be cancelled by either party by providing one months notice.
On 1 October 2021, the amount was reduced to $1,225 plus GST.
On 1 May 2022 the Company entered into an agreement with Black Dragon Gold Ltd, and entity related to Mr Gabriel Chiappini,
whereby Black Dragon Gold Ltd rents one office and one car bay at a cost of $1,225 plus GST from the Company per calendar month. The
arrangement is for no fixed term and can be cancelled by either party by providing one months notice.
All transactions were made on normal commercial terms and conditions and at market rates
There were no other transactions with related parties during the current year.
(d)
Key management personnel
The following persons were Directors and key management personnel of Invictus Energy Limited during the financial year:
Non-Executive Chairman
Non-Executive Deputy Chairman
Managing Director
Non-executive Directors
Mr J Bentley (appointed 1 February 2023)
Dr S Lake (resigned 28 November 2022)
Mr J Mutizwa
Mr S Macmillan
Mr R Sutherland (appointed 1 February 2023)
Non-executive Director and Company Secretary
Mr G Chiappini
There were no other persons, other than the Directors as detailed above, that were identified as key management personnel of the
Company during the current year.
(e)
Key management personnel compensation
The key management personnel compensation was as follows:
Short-term employee benefits
Post-employment benefits
Share-based payment
Total key management personnel compensation
2023
A$
588,496
34,125
1,055,570
1,678,191
2022
A$
602,137
32,526
1,519,357
2,154,020
50
FOR THE YEAR ENDED 30 JUNE 2023INVICTUS ENERGY LIMITED2023 ANNUAL REPORT
19. Share Based Payments
(a)
Over ordinary shares
Decisions to grant options are made by the Board and are based on aligning the long-term interests of key management personnel,
employees, consultants and strategic external parties with those of the Company’s shareholders.
The exercise price of options is based on the weighted average price at which the Company’s shares are traded on the Australian
Securities Exchange (ASX) on or about the date of grant.
Each option is convertible into one ordinary share.
The fair value of an option is measured using an appropriate valuation method. Measurement inputs include share price on measurement
date, exercise price of the instrument, expected volatility (based on weighted average historic volatility adjusted for changes expected due
to publicly available information), weighted average expected life of the instruments (based on historical experience and general option
holder behaviour), expected dividends, and the risk-free interest rate (based on government bonds). Service and non-market performance
conditions attached to the transactions are not taken into account in determining fair value.
Share options granted
2023
On 24 November 2022, 13,586,956 unlisted options, valued at $2,196,044, were granted to the Company’s Lead Manager. The options have
an exercise price of $0.46 and an expiry date of 1 February 2026. The options were awarded as part consideration of services provided
by the Lead Manger to the Company and were approved by shareholders at a general meeting on 24 November 2022. The options were
valued using the Black-Scholes European Pricing Model, with the following inputs used:
- Grant date: 24 November 2022
-
-
-
-
-
Expiry date: 1 February 2026
Risk free rate: 3.21%
Stock volatility: 121.38%
Share price at grant date: $0.25
Exercise price: $0.46
$2,196,044 has been recognised as share issuance costs, within share capital in the Consolidated Statement of Financial Position.
On 1 February 2023, 6,000,000 unlisted options, valued at $390,611, were granted to Directors of the Company. The options have an
exercise price of $0.2355 and an expiry date of 23 July 2024. The options were awarded to Mr Bentley and Mr Sutherland (3,000,000
options each) as consideration for their appointment to the Board of Directors. The options will vest after 12 months of service. The
options were valued using the Black-Scholes European Pricing Model, with the following inputs used:
- Grant date: 1 February 2023
-
-
-
-
-
Expiry date: 23 July 2024
Risk free rate: 0.96%
Stock volatility: 111.23%
Share price at grant date: $0.16
Exercise price: $0.2355
$159,455 has been recognised as professional fees, within the Consolidated Statement of Financial Position.
On 7 June 2023, 10,416,667 unlisted options, valued at $683,892, were granted to the Company’s Lead Manager. The options have an
exercise price of $0.20 and an expiry date of 7 June 2026. The options were awarded as part consideration of services provided by the Lead
Manger to the Company and were approved by shareholders at a general meeting on 7 June 2023. The options were valued using the
Black-Scholes European Pricing Model, with the following inputs used:
- Grant date: 7 June 2023
-
-
-
-
-
Expiry date: 7 June 2026
Risk free rate: 3.65%
Stock volatility: 102.41%
Share price at grant date: $0.12
Exercise price: $0.20
$683,892 has been recognised as share issuance costs, within share capital in the Consolidated Statement of Financial Position.
51
INVICTUS ENERGY LIMITED2023 ANNUAL REPORT
Notes to the
Consolidated Financial Statements
19. Share Based Payments (CONTINUED)
2022
On 26 July 2021, 15,000,000 unlisted options, valued at $1,519,357, were issued to the Directors. The options have an exercise price of
$0.2355 and an expiry date of 23 July 2024. The options were awarded as part of the remuneration for the services provided by the
Directors to the Company and were approved by shareholders at a general meeting on 8 July 2021. The options were valued using the
Black-Scholes European Pricing Model, with the following inputs used:
- Grant date: 8 July 2021
- Expiry date: 23 July 2024
- Risk free rate: 0.16%
- Stock volatility: 103.61%
- Share price at grant date: $0.1750
- Exercise price: $0.2355
$1,519,357 has been recognised as Director Fees, within the Consolidated Statement of Profit or Loss and Other Comprehensive Income
for the 2022 financial year.
The following options were issued to the Company’s broker in relation to capital raisings completed during the year ended 31 June 2022;
• 9,090,909 share options, with an exercise price of $0.17 and an expiry date of 30 March 2024
• 4,375,000 share options, with an exercise price of $0.14 and an expiry date of 31 January 2025
• 7,503,271 share options, with an exercise price of $0.35 and an expiry date of 11 July 2023.
The options were valued using the Black-Scholes European Pricing Model, with the following inputs used:
No. of options
Grant date
Expiry date
Risk free rate
Stock volatility
Share price on grant date
Exercise price
Total fair value
9,090,909
8 July 2021
4,375,000
10 December 2021
30 March 2024
31 January 2025
0.16%
103.61%
$0.175
$0.17
$976,767
0.98%
93.89%
$0.125
$0.14
$316,146
7,503,271
22 July 2022
11 July 2023
3.13%
83.45%
$0.205
$0.35
$256,269
$1,549,182 has been recognised within Capital raising costs within the Consolidated Statement of Financial Position for the 2022 year.
(a)
Employee options over ordinary shares
Reconciliation of movement in share options
As at 1 July
Granted during the year
Exercised during the year
Lapsed during the year
As at 30 June
Vested and exercisable at 30 June
2023
2022
AVERAGE
EXERCISE PRICE
PER OPTION
NUMBER OF
OPTIONS
AVERAGE
EXERCISE PRICE
PER OPTION
NUMBER OF
OPTIONS
$0.17
$0.30
$0.14
-
$0.28
$0.28
96,333,444
313,128,9772
(28,297,733)
$0.15
$0.17
$0.16
-
$0.2355
381,164,688
375,164,688
$0.17
$0.17
46,272,727
75,968,9081
(22,908,191)
(3,000,000)
96,333,444
96,333,444
1 During the prior year, there were a total of 39,999,728 unlisted options (‘free attaching placement options’) issued to participants in capital raises during the year, on a 1:2 basis
(1 option for every 2 shares). The options have an exercise price of $0.14 and an expiry date of 31 January 2025. No amounts is recognised in respect of these free attaching
placement options.
2 During the current year, there were a total of 283,647,093 unlisted options (‘free attaching placement options’) issued to participants in capital raises during the year, on a
1:2 basis (1 option for every 2 shares). The options have an exercise price of $0.20, $0.35 or $0.40 and an expiry date of 7 June 2026, 26 July 2026 and 30 September 2027
respectively. No amount is recognised in respect of these free attaching placement options.
52
FOR THE YEAR ENDED 30 JUNE 2023INVICTUS ENERGY LIMITED2023 ANNUAL REPORT
(a) Employee options over ordinary shares (CONTINUED)
Share options outstanding at the end of the year
GRANT DATE
EXPIRY DATE
EXERCISE PRICE
NUMBER OF OPTIONS
(CENTS)
6
9
12
31.7.2022
31.7.2022
31.7.2022
23.07.2024
23.55
30.3.2024
31.1.2025
11.7.2023
30.9.2027
7.6.2026
1.2.2026
17
14
35
40
20
46
23.7.2024
23.55
31.7.2019
31.7.2019
31.7.2019
8.7.2021
various
various
22.7.2022
various
various
24.11.2022
1.2.2023
2023
-
-
-
12,000,000
22,286,030
26,311,482
37,516,341
108,695,645
155,355,045
13,586,956
6,000,000
2022
3,000,000
3,000,000
3,000,000
12,000,000
33,605,714
34,224,459
7,503,271
-
-
-
381,751,499
96,333,444
Weighted average remaining contractual life of options outstanding at 30 June 2023 is 2.71 years (30 June 2022: 1.88 years).
(b)
Performance shares over ordinary shares
Decisions to grant performance rights are made by the Board and are based on aligning the long-term interests of key management
personnel, employees, consultants and strategic external parties with those of the Company’s shareholders.
Each performance right converts into one ordinary share for a nil exercise price upon the completion of certain vesting conditions.
The fair value of a performance right is measured using the share price at the date the vesting condition is met.
Performance shares granted
2023
On 9 August 2022, 15,500,000 Class A Performance Rights were issued to Directors. The Performance Rights will convert to ordinary shares
upon the following milestones being achieved:
• the drilling of an exploration or appraisal well in the Cabora Bassa Project that results in the maiden booking of Contingent Resources or
Reserves (as those terms are defined in the Guidelines for Application of the Petroleum Resources Management System (2011 Edition) on
or before 31 December 2024.
• the Company achieving a 20 day volume weighted average price of at least $0.50 on or before 31 December 2024.
Also, on 9 August 2022, 15,500,000 Class B Performance Rights were issued to Directors. The Performance Rights will convert to ordinary
shares upon the following milestones being achieved:
• an independent estimate of Contingent Resources or Reserves (as those terms are defined in the Guidelines for Application of the
Petroleum Resources Management System (2011 Edition) of greater than or equal to two hundred million barrels of oil equivalent (200
mmboe) on a 100% gross project basis; and
• the Company achieving a 20 day volume weighted average price of at least $0.75 on or before 31 December 2026.
53
INVICTUS ENERGY LIMITED2023 ANNUAL REPORT Notes to the
Consolidated Financial Statements
19. Share Based Payments (CONTINUED)
The Hybrid up-and-in trinomial option pricing model with a Parisian barrier adjustment was used to value the performance rights.
Set out below are the assumptions used in assessing the indicative fair value of the Performance Rights:
ASSUMPTIONS
Valuation Date
Spot Price ($)
Exercise Price ($)
Issue Date
Expiry Date
Expected future volatility (%)
Risk free rate (%)
Dividend yield (%)
Vesting Date
Performance Hurdle
Probability of success (%)
Valuation
CLASS A
22-Jul-22
$0.205
Nil
22-Jul-22
31-Dec-24
90%
2.84%
0%
31-Dec-24
PERFORMANCE RIGHTS
CLASS B
22-Jul-22
$0.205
Nil
22-Jul-22
31-Dec-26
90%
3.245%
0%
31-Dec-26
20 Day VWAP of $0.50 or higher
20 Day VWAP of $0.75 or higher
20%
$419,120
20%
$474,610
$893,730 has been recognised as Share based payments expense, within the Consolidated Statement of Profit or Loss and Other
Comprehensive Income for the year ended 30 June 2023.
On 7 June 2023, 7,000,000 Class A Performance Rights were issued to Directors. The Performance Rights will convert to ordinary shares
upon the following milestones being achieved:
• the drilling of an exploration or appraisal well in the Cabora Bassa Project that results in the maiden booking of Contingent Resources or
Reserves (as those terms are defined in the Guidelines for Application of the Petroleum Resources Management System (2011 Edition) on
or before 31 December 2024.
• the Company achieving a 20 day volume weighted average price of at least $0.50 on or before 31 December 2024.
Also, on 7 June 2023, 7,000,000 Class B Performance Rights were issued to Directors. The Performance Rights will convert to ordinary
shares upon the following milestones being achieved:
• an independent estimate of Contingent Resources or Reserves (as those terms are defined in the Guidelines for Application of the
Petroleum Resources Management System (2011 Edition) of greater than or equal to two hundred million barrels of oil equivalent (200
mmboe) on a 100% gross project basis; and
• the Company achieving a 20 day volume weighted average price of at least $0.75 on or before 31 December 2026.
54
FOR THE YEAR ENDED 30 JUNE 2023INVICTUS ENERGY LIMITED2023 ANNUAL REPORT
The Hybrid up-and-in trinomial option pricing model with a Parisian barrier adjustment was used to value the performance rights.
Set out below are the assumptions used in assessing the indicative fair value of the Performance Rights:
PERFORMANCE RIGHTS
ASSUMPTIONS
Valuation Date
Spot Price ($)
Exercise Price ($)
Issue Date
Expiry Date
Expected future volatility (%)
Risk free rate (%)
Dividend yield (%)
Vesting Date
Provision for Employee Exit (%)
Performance Hurdle
Probability of success (%)
Valuation
CLASS A
7-Jun-23
$0.12
Nil
7-Jun-23
31-Dec-24
100%
3.85%
0%
31-Dec-24
-
CLASS B
7-Jun-23
$0.12
Nil
7-Jun-23
31-Dec-26
100%
3.69%
0%
31-Dec-26
-
20 Day VWAP of $0.50 or higher
20 Day VWAP of $0.75 or higher
20%
$60,200
20%
$101,640
$161,840 has been recognised as Share based payments expense, within the Consolidated Statement of Profit or Loss and Other
Comprehensive Income for the year ended 30 June 2023.
2022
No performance rights were granted to employees or consultants for services rendered during the 2022 financial year.
Reconciliation of movement in performance rights
As at 1 July
Granted during the year
Exercised during the year
Expired during the year
As at 30 June
2023
NUMBER
2022
NUMBER
-
44,179,281
45,000,000
-
-
-
-
(44,179,281)
45,000,000
-
Decisions to grant performance rights are made by the Board and are based on aligning the long-term interests of key management
personnel, employees, consultants and strategic external parties with those of the Company’s shareholders.
Each performance right converts into one ordinary share for a nil exercise price upon certain milestones being met.
The fair value of a performance right is measured using the share price at the date the vesting condition is met.
(c)
Shares issued
2023
On 24 August 2022, 1,300,000 ordinary shares were granted to employees for recognition of the service to the Company. $403,000 has
been recognised as Share based payments, within the Consolidated Statement of Profit or Loss and Other Comprehensive Income for year
ended 30 June 2023.
2022
No shares were granted to employees for services rendered during the June 2022 financial year.
2,000,000 shares were issued to investor relation consultants of the Company for services performed. The fair value of the shares
recognised is by direct reference to the fair value of services received. This was determined by the corresponding invoice which totalled
$200,000 (excl GST). This amount has been included recognised within Capital raising costs within the Consolidated Statement of
Financial Position for the current year.
55
INVICTUS ENERGY LIMITED2023 ANNUAL REPORT
Notes to the
Consolidated Financial Statements
19. Share Based Payments (CONTINUED)
(d)
Expenses arising from share-based payment transactions
Professional fees - Director options
Share-based payments expense - Director performance rights
Share based payments expense – Director and employee shares issued
Share based payments expense – Consultants - shares issued
Total share-based payments expense recognised in income statement
Capital issuance costs:
Broker options
Total share based payments
20. Events Occurring after Reporting Date
2023
A$
2022
A$
159,455
1,519,357
1,055,570
403,000
-
1,618,025
-
-
200,000
1,719,357
2,880,026
4,498,051
1,549,182
3,268,539
On 13 July 2023 the Company announced that following completion of the refined seismic interpretation, incorporating results from the
Mukuyu-1/ST-1 well, the Mukuyu-2 subsurface targets and appraisal well location had been selected.
On 17 July 2023 the Company announced that work had commenced on the CB23 2D seismic acquisition program being carried out by
Polaris Natural Resource Development Ltd.
On 24 July 2023 the Company announced that it had issued 2,389,706 ordinary shares for services in lieu of fees.
On 7 August 2023 the Company announced that it had completed the acquisition of its CB23 2D seismic survey in EPO 1848 & EPO 1849
in the Cabora Bassa basin.
On 10 August 2023 the Company announced that it had issued 19,521 ordinary shares upon the exercise of options.
On 11 August 2023 the Company announced that the The Mukuyu-2 wellpad construction has been completed following the finalisation
of civil works including pad levelling and compaction, water supply and reservoirs.
On 24 August 2023 the Company announced that it had issued 9,490,987 ordinary shares and 2,916,667 unlisted options.
On 31 August 2023 the Company announced results from the analysis of 22 mudgas samples acquired from the Mukuyu-1 / ST-1 had
been completed, with the results reaffirming the presence of light oil, gas-condensate and helium.
On 1 September 2023 the Company announced the mobilisation and rig up of the Exalo Rig 202 at Mukuyu-2 was completed.
On 8 September 2023 the Company announced the inadvertent breach of its maximum placement capacity in relation to its placement,
announced on 6 June 2023.
Other than the above, no matters or circumstances have arisen since the end of the financial year which have significantly affected or may
significantly affect the operations, results or state of affairs of the Group in future financial years.
21. Capital and Other Commitments
Renewal application
Geo Associates (Pvt) Ltd is the holder of Special Grant 4571 (SG4571) and is required to pay a renewal fee of US$31,800 during the 30 June
2023 financial year.
Exploration and evaluation commitments
Exploration and evaluation expenditure contractually committed to as at 30 June 2023 is as follows:
Not later than 1 year
Later than 1 year but not later than 2 years
Later than 2 years but not later than 5 years
56
30-JUN-23
A$
30-JUN-22
A$
9,027,476
7,179,122
-
-
-
-
9,027,476
7,179,122
FOR THE YEAR ENDED 30 JUNE 2023INVICTUS ENERGY LIMITED2023 ANNUAL REPORT
22. Contigencies
There were no contingent liabilities as at 30 June 2023 (30 June 2022: nil).
57
INVICTUS ENERGY LIMITED2023 ANNUAL REPORT Director’s
Declaration
In the Directors’ opinion:
a)
the accompanying financial statements set out on pages 28 to 57 and the Remuneration Report in the Directors’ Report are in
accordance with the Corporations Act 2001, including:
i. giving a true and fair view of the Group’s financial position as at 30 June 2023 and of its performance, as represented by the results
of its operations, changes in equity and cash flows, for the year ended on that date; and
ii. complying with Australian Accounting Standards, Corporations Regulations 2001 and other mandatory professional reporting
requirements;
b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.
c)
the financial statements and notes thereto are in accordance with International Financial Reporting Standards issued by the
International Accounting Standards Board.
This declaration is made after receiving the declarations required to be made to the Directors in accordance with section 295A of the
Corporations Act 2001 for the year ended 30 June 2023.
This declaration is made in accordance with a resolution of the Board of Directors.
Scott Macmillan
MANAGING DIRECTOR
15 September 2023
58
FOR THE YEAR ENDED 30 JUNE 2023INVICTUS ENERGY LIMITED2023 ANNUAL REPORT
Invictus Energy Limited
Annual Report 30 June 2023
Independent Audit Report
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
Level 9
Mia Yellagonga Tower 2
5 Spring Street
Perth, WA 6000
PO Box 700 West Perth WA 6872
Australia
INDEPENDENT AUDITOR'S REPORT
To the members of Invictus Energy Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Invictus Energy Limited (the Company) and its subsidiaries (the
Group), which comprises the consolidated statement of financial position as at 30 June 2023, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement
of changes in equity and the consolidated statement of cash flows for the year then ended, and notes
to the financial report, 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:
(i)
Giving a true and fair view of the Group’s financial position as at 30 June 2023 and of its
financial performance for the year ended on that date; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described 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 Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (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 confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Material uncertainty related to going concern
We draw attention to Note 1A in the financial report which describes the events and/or conditions
which give rise to the existence of a material uncertainty that may cast significant doubt about the
group’s ability to continue as a going concern and therefore the group may be unable to realise its
assets and discharge its liabilities in the normal course of business. Our opinion is not modified in
respect of this matter.
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd
ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International
Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme
approved under Professional Standards Legislation.
62 | P a g e
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INVICTUS ENERGY LIMITED2023 ANNUAL REPORT
Independent
Invictus Energy Limited
Audit Report
Annual Report 30 June 2023
Independent Audit Report
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters. In addition to the matter described in the Material uncertainty
related to going concern section, we have determined the matters described below to be the key audit
matters to be communicated in our report.
Carrying Value of Exploration and Evaluation Assets
Key audit matter
How the matter was addressed in our audit
At 30 June 2023 the carrying value of exploration and
evaluation asset was disclosed in Note 11 of the
Our procedures included, but were not limited to the
following:
financial report.
As the carrying value of the exploration and
evaluation asset represents a significant asset of the
Group, we considered it necessary to assess whether
any facts or circumstances exist to suggest that the
carrying amount of this asset may exceed its
recoverable amount.
Judgement is applied in determining the treatment of
exploration expenditure in accordance with Australian
Accounting Standard AASB 6 Exploration for and
Evaluation of Mineral Resources. In particular:
• Whether the conditions for capitalisation are
satisfied;
• Which elements of exploration and evaluation
expenditures qualify for recognition; and
• Whether facts and circumstances indicate that the
exploration and expenditure asset should be
tested for impairment.
•
•
•
•
•
•
Obtaining a schedule of tenements held by the
Group and assessing whether the rights to tenure
remained current at balance date;
Considering the status of the ongoing exploration
programmes by holding discussions with
management, and reviewing the Group’s
exploration budgets, ASX announcements and
director’s minutes;
Considering whether exploration assets had
reached a stage where a reasonable assessment of
economically recoverable reserves existed;
Verifying, on a sample basis, exploration and
evaluation expenditure capitalised during the year
for compliance with the recognition and
measurement criteria of AASB 6;
Considering whether there are any other facts or
circumstances existing to suggest impairment
testing was required; and
Assessing the adequacy of the related disclosures
in Note 11 of the financial report.
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60
FOR THE YEAR ENDED 30 JUNE 2023INVICTUS ENERGY LIMITED2023 ANNUAL REPORT
Invictus Energy Limited
Annual Report 30 June 2023
Independent Audit Report
Other information
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 30 June 2023, but does not include the
financial report and the 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 ability of the group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has 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:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf
This description forms part of our auditor’s report.
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61
INVICTUS ENERGY LIMITED2023 ANNUAL REPORT
Independent
Invictus Energy Limited
Audit Report
Annual Report 30 June 2023
Independent Audit Report
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 9 to 18 of the directors’ report for the
year ended 30 June 2023.
12 to 18
In our opinion, the Remuneration Report of Invictus Energy Limited, for the year ended 30 June 2023,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
BDO Audit (WA) Pty Ltd
Jarrad Prue
Director
Perth, 15 September 2023
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62
FOR THE YEAR ENDED 30 JUNE 2023INVICTUS ENERGY LIMITED2023 ANNUAL REPORT
This page has been
left blank
intentionally
63
INVICTUS ENERGY LIMITED2023 ANNUAL REPORT Other Additional
ASX Information
Top 20 Ordinary Shareholders as at 7 September 2023
RANK
ENTITY
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
BAYETHE INVESTMENTS PTY LTD
CITICORP NOMINEES PTY LIMITED
BNP PARIBAS NOMS PTY LTD
BNP PARIBAS NOMINEES PTY LTD
BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
MANGWANA OPPORTUNITIES (PRIVATE) LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
JAERICA PTY LTD
SUPERHERO SECURITIES LIMITED
MR GABRIEL CHIAPPINI & MRS ROSA CHIAPPINI
MR ROBERT HASTINGS SMYTHE
MR BRIAN GREGORY KING
LLAMA CAPITAL PTY LTD
JAERICA PTY LTD
HAWKSBURN CAPITAL PTE LTD
MR NIGEL STRONG
MR NIGEL STRONG
MR LINCOLN ARTHUR HERTWECK
Substantial Shareholders at 7 September 2023
BAYETHE INVESTMENTS PTY LTD 71,375,133
6.21%
Range of shares at 7 September 2023
# OF SHARES
71,375,133
51,554,137
29,160,933
27,140,335
21,669,287
13,586,259
13,221,524
10,727,124
9,054,360
7,759,215
5,413,635
5,023,841
5,000,000
5,000,000
4,956,027
4,791,667
4,738,316
4,732,766
4,360,316
4,348,000
%
6.21%
4.48%
2.54%
2.36%
1.88%
1.18%
1.15%
0.93%
0.79%
0.67%
0.47%
0.44%
0.43%
0.43%
0.43%
0.42%
0.41%
0.41%
0.38%
0.38%
303,612,875
26.39%
RANGE
SECURITIES
100,001 and Over
988,358,787
10,001 to 100,000
146,452,955
5,001 to 10,000
10,498,182
1,001 to 5,000
4,683,502
1 to 1,000
17,715
Total
1,150,011,141
%
85.94%
12.74%
0.91%
0.41%
0.00%
100%
NO. OF HOLDERS
1,566
3,754
1,339
1,408
103
8,170
64
FOR THE YEAR ENDED 30 JUNE 2023INVICTUS ENERGY LIMITED2023 ANNUAL REPORT
# SHARES
5,500,000
5,383,329
3,115,560
2,916,667
2,395,833
2,153,000
2,110,000
2,000,000
1,850,622
1,800,000
1,791,666
1,700,000
1,666,667
1,650,803
1,600,888
1,475,000
1,437,500
1,370,100
1,299,999
1,216,000
%IC
3.45%
3.38%
1.96%
1.83%
1.50%
1.35%
1.32%
1.26%
1.16%
1.13%
1.12%
1.07%
1.05%
1.04%
1.00%
0.93%
0.90%
0.86%
0.82%
0.76%
44,433,634
27.89%
Top 20 Listed Option holders as at 7 September 2023
RANK
ENTITY
MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED
CITICORP NOMINEES PTY LIMITED
MATTHEW BURFORD SUPER FUND PTY LTD
MANGWANA OPPORTUNITIES (PRIVATE) LIMITED
JAERICA PTY LTD
MRS MARIE-MICHELE KYRIAKOPOULOS & MR JOHN KYRIAKOPOULOS
HAWKSBURN CAPITAL PTE LTD
MR SHAE DYLAN OWEN
MR NIGEL STRONG
STARSTREAK PTY LTD
PAUL CHIMBODZA
MR BRIAN GREGORY KING
MORGAN STANLEY AUSTRALIA SECURITIES (NOMINEE) PTY
BNP PARIBAS NOMINEES PTY LTD
MR TENG LIP KOAY & MRS GNET KOOI KOAY
MR SHANE JUSTIN BUTSCH
MR JAMES ALAN EMONSON
FOXTAIL PTY LTD
MR MICHAEL STUART HYNE
MR TREVOR JAMES KEWISH
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
65
INVICTUS ENERGY LIMITED2023 ANNUAL REPORT
Substantial Option holders at 7 September 2023
None
Range of listed Options at 7 September 2023
RANGE
SECURITIES
100,001 and Over
10,001 to 100,000
5,001 to 10,000
1,001 to 5,000
1 to 1,000
133,043,16
24,755,455
1,480,007
33,927
830
Total
159,313,379
Unmarketable Parcels
40,590
%
83.51%
15.54%
0.93%
0.02%
0.00%
100.00%
0.03%
NO. OF HOLDERS
360
561
177
11
12
1,121
24
Tenement Schedule
TENEMENT REFERENCE AND LOCATION
NATURE OF INTEREST
INTEREST
AT BEGINNING
OF PERIOD
INTEREST
AT END OF
PERIOD
Gallatin Gas Project
Cherokee County, Texas USA
SG 4571 –
Cabora Bassa Gas Condensate Project, Zimbabwe
EPO 1848 –
Cabora Bassa Gas Condensate Project, Zimbabwe
EPO 1849 –
Cabora Bassa Gas Condensate Project, Zimbabwe
Working Interest
via 80% equity ownership interest in
Geo Associates (Pvt) Ltd
via 80% equity ownership interest in
Geo Associates (Pvt) Ltd
via 80% equity ownership interest in
Geo Associates (Pvt) Ltd
7.5%
80%
80%
80%
7.5%
80%
80%
80%
66
FOR THE YEAR ENDED 30 JUNE 2023INVICTUS ENERGY LIMITED2023 ANNUAL REPORT
Notes
67
INVICTUS ENERGY LIMITED2023 ANNUAL REPORT www.invictusenergy.com