IRONRIDGE RESOURCES LIMITED
AND CONTROLLED ENTITIES
ACN: 121 572 192
ANNUAL REPORT 2019
CONTENTS
CORPORATE INFORMATION ...................................................................................................... 3
CHAIRMAN’S REPORT ................................................................................................................ 4
DIRECTORS’ REPORT .................................................................................................................. 5
ANNUAL REPORT CORPORATE GOVERNANCE SUMMARY ...................................................... 38
AUDITOR’S INDEPENDENCE DECLARATION ............................................................................. 43
INTEREST IN TENEMENTS......................................................................................................... 44
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME .. 46
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ........................................................... 47
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ........................................................... 48
CONSOLIDATED STATEMENT OF CASH FLOWS ....................................................................... 49
NOTES TO THE FINANCIAL STATEMENTS ................................................................................. 50
DIRECTORS’ DECLARATION ...................................................................................................... 80
INDEPENDENT AUDITOR’S REPORT ........................................................................................ 81
CORPORATE INFORMATION
DIRECTORS
Neil Herbert
Vincent Mascolo
Nicholas Mather
Geoffrey (Stuart) Crow
Kieran Daly
Alistair McAdam
Tetsunosuke Miyawaki
COMPANY SECRETARY
Karl Schlobohm
REGISTERED OFFICE
Level 27, 111 Eagle St
Brisbane QLD 4000
Phone: + 61 7 3303 0610
Fax: +61 7 3303 0681
Email: info@ironridgeresources.com.au
Web Site: www.ironridgeresources.com.au
AUDITOR
BDO Audit Pty Ltd
Level 10, 12 Creek Street
Brisbane QLD 4000
Australia
NOMINATED ADVISER
SP Angel Corporate Finance LLP
Prince Frederick House
35-39 Maddox Street
London W1S 2PP
United Kingdom
BROKER
SP Angel Corporate Finance LLP
Prince Frederick House
35-39 Maddox Street
London W1S 2PP
United Kingdom
BANKERS
Macquarie Bank Ltd (Brisbane Branch)
345 Queen Street, Brisbane QLD 4000
Australia
UK SOLICITORS
Locke Lord LLP
201 Bishopsgate,
London EC2M 3AB,
United Kingdom
AUSTRALIAN SOLICITORS
Hopgood Ganim
Level 8, Waterfront Place
1 Eagle Street,
Brisbane QLD 4000, Australia
REGISTRARS
Computershare Investor Services plc
The Pavilions, Bridgwater Road
Bristol BS99 7NH
United Kingdom
IronRidge Resources Limited financial report for the year ended 30 June 2019
3
CHAIRMAN’S REPORT
Dear Shareholder,
Over the last year the management team have made significant advances with our projects in Africa, demonstrating the
potential for our strategically located high-grade Ghanaian lithium project to deliver a premium lithium concentrate while
also seizing the opportunity to acquire a major new high-grade gold discovery in Cote d’Ivoire. In summary:
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At Ewoyaa in Ghana, lithium exploration results established the existence of high-grade spodumene mineralization
within the pegmatite formations encountered over a wide area. The Ewoyaa Project is ideally located within 1km of a
bitumen highway, adjacent to grid power, and within 100km of the operating deep-sea port at Takoradi. Drilling is
ongoing across the broader project area. Independent metallurgical testing undertaken have provided highly
encouraging results to date, and has demonstrated that Ewoyaa can deliver a premium lithium concentrate product
with low level contaminants using simple gravity beneficiation on a coarse crush.
In Cote d’Ivoire, the Company secured the 400km2 Zaranou Gold Project, itself a potential company-making asset. As
a result of preliminary exploration work, IronRidge geologists have identified a 9.8km strike length high-priority target
zone defined with coincident high-grade gold results, extensive hard-rock artisanal mining sites and favourable
geology. The Company is currently undertaking a high-resolution drone survey and follow-up field mapping, and is
preparing for the commencement of an air core drill program in October 2019.
In Chad, IronRidge continued its trenching program, identifying a number of large-scale high priority gold anomalies
within the Dorothe Gold Project area.
In August 2019 the Company entered into a Memorandum of Understanding for drilling for equity with drilling
contractor GeoDrill Limited for up to USD4m in drilling to deliver up to 40,000m of drilling across IronRidge’s portfolio
of projects. As a result of an approval granted by shareholders at an EGM held in March 2019, the Company now has
the capacity to issue up to 15% of its share capital for non-cash consideration purposes for value adding contracts
such as this. This initiative will allow IronRidge to continue to advance the exploration of its projects in Ghana and
Côte d’Ivoire, whilst maintaining cash resources and benefiting from GeoDrill’s extensive experience operating
throughout West Africa.
This is an exciting time for IronRidge and I would like to take this opportunity to thank the Company’s Board, its executive
team, the invaluable management personnel we have advancing our interests in Africa, and the small team at the
Company’s head office for their continued hard work and dedication. I would also like to thank you, our loyal
shareholders, for providing the funding and support to facilitate the ongoing delivery of the Company’s objectives.
The Company’s Board and management remain committed to the corporate strategy of creating and sustaining
shareholder value through the discovery and advancement of our significant mineral deposits of globally demanded
commodities through to production or onward sale. We look forward to keeping investors up to date as we advance both
our ongoing drilling programmes and our corporate initiatives.
Yours sincerely
Neil Herbert
Non-Executive Chairman
IronRidge Resources Limited financial report for the year ended 30 June 2019
4
DIRECTORS’ REPORT
Your Directors submit their report for the year ended 30 June 2019.
Directors
The names and details of the Company’s Directors in office during the financial year and until the date of this report are as
follows. Directors were in office for this entire period unless otherwise stated.
Neil Herbert
Vincent Mascolo
Nicholas Mather
Geoffrey (Stuart) Crow
Bastiaan Van Aswegen (retired 9 April 2019)
Kieran Daly (appointed 9 April 2019)
Alistair McAdam
Kenichiro Tsubaki (retired 9 July 2019)
Christelle Van der Merwe (alternate for Bastiaan Van Aswegen to 9 April 2019, alternate for Kieran Daly from 9 April 2019)
Frans Olivier (alternate for Alistair McAdam)
Tetsunosuke Miyawaki (alternate for Kenichiro Tsubaki to 9 July 2019, appointed as Non-Executive Director 9 July 2019)
Tsuyoshi Ueda (appointed alternate for Tetsunosuke Miyawaki 9 July 2019)
Neil Herbert – Non-Executive Chairman
FCCA
Mr. Herbert is a Fellow of the Association of Chartered Certified Accountants and has over 25 years of experience in
finance. Mr. Herbert has been involved in growing mining and oil and gas companies, both as an executive and an
investment manager, for over 16 years and, until May 2013, was co-chairman and managing director of AIM quoted Polo
Resources Limited, a natural resources investment company. Prior to this, he was a director of resource investment
company Galahad Gold plc from which he became finance director of its most successful investment, start-up uranium
company UraMin Inc. from 2005 to 2007, during which period he worked to float the company on AIM and the Toronto
Stock Exchange in 2006, raise c.US$400 million in equity financing and negotiate the sale of the group for US$2.5 billion.
Mr. Herbert has also held board positions at a number of resource companies where he has been involved in managing
numerous acquisitions, disposals, stock market listings and fundraisings. Mr. Herbert holds a joint honours degree in
economics and economic history from the University of Leicester. Mr. Herbert is a member of the Audit Committee, the
Nomination & Remuneration Committee and the Social & Ethics Committee and a chair of the Executive Committee.
During the past three years Mr. Herbert has also served as a director of the following listed companies:
Altyn plc (resigned July 2019), which is listed on the London Stock Exchange (AIM)
Concepta plc (resigned April 2017), which is listed on the London Stock Exchange (AIM)
Kemin Resources plc (resigned February 2017), formerly listed on the London Stock Exchange (AIM)
Mobecom Limited (resigned October 2017), which is listed on the Australian Securities Exchange (ASX)
Premier African Minerals (appointed August 2019), which is listed on the London Stock Exchange (AIM)
Vincent Mascolo –Managing Director and Chief Executive Officer
BEng Mining, MAusIMM, MEI Aust
Mr. Mascolo is a qualified mining engineer with extensive experience in a variety of fields including gold and coal mining,
quarrying, civil-works, bridge-works, water and sewage treatment and estimating.
Mr. Mascolo has completed his assignment in the Civil and Construction Industry, including construction and project
management, engineering, quality control and environment and safety management. He is also a member of both the
Australian Institute of Mining and Metallurgy and the Institute of Engineers of Australia. Mr. Mascolo is a member of the
Executive Committee. During the past three years Mr. Mascolo has also served as a director of the following listed
companies:
DGR Global Limited, which is listed on the ASX
Lithium Consolidated Mineral Exploration Limited, which is listed on the ASX
IronRidge Resources Limited financial report for the year ended 30 June 2019
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Directors’ Report (continued)
Nicholas Mather –Non-Executive Director
BSc (Hons, Geology), MAusIMM
Mr. Mather’s special area of experience and expertise is the generation of and entry into undervalued or unrecognised
resource exploration opportunities. He has been involved in the junior resource sector at all levels for more than 25 years.
In that time, he has been instrumental in the delivery of major resource projects that have delivered significant gains to
shareholders. As an investor, securing projects and financiers, leading exploration campaigns and managing emerging
resource companies, Mr. Mather brings a wealth of valuable experience. Mr. Mather is a member of the Nomination &
Remuneration Committee and the Social & Ethics Committee. During the past three years Mr. Mather has also served as a
director of the following listed companies:
DGR Global Limited, which is listed on the ASX
Aus Tin Mining Limited, which is listed on the ASX
Dark Horse Resources Limited, which is listed on the ASX
Armour Energy Limited, which is listed on the ASX
SolGold plc, which is listed on the London Stock Exchange (LSE) and Toronto Stock Exchange (TSX)
Lakes Oil NL, which is listed on the ASX
Stuart Crow –Non-Executive Director
Mr. Crow has more than 27 years’ experience in all aspects of corporate finance and investor relations in Australia and
international markets and has owned and operated his own businesses in these areas for the last nineteen years. He
brings extensive working knowledge of global capital markets and investor relations to the Board. Throughout his career,
Stuart has served on a number of boards of public and unlisted companies and has assisted in raising funds for companies
of varying size in Australia and International capital markets whilst working for his own firm and before that some of the
world’s largest broking firms. Mr. Crow is the Chair of the Audit Committee and also serves on the Social & Ethics
Committee. During the past three years Mr. Crow has also served as a director of the following listed companies:
TNG Limited, which is listed on the ASX
Todd River Resources Limited, which is listed on the ASX
Lake Resources NL, which is listed on the ASX
Kieran Daly – Non-Executive Director
Bsc (Mining Engineering), MBA
Mr Daly is the Executive for Growth & Strategic Development at Assore and worked in investment banking/equity
research for more than 10 years at UBS Group AG, Macquarie Group Limited and Investec Limited prior to joining Assore
in 2018. Mr Daly spent the first 15 years of his mining career at Anglo American plc's Coal Division ("Anglo Coal") in a
number of international roles including operations, sales & marketing, strategy and business development. His key roles
included leading and developing Anglo Coal's marketing efforts in Asia, and to steel industry customers globally, as well as
being Global Head of Strategy for Anglo Coal immediately prior to leaving Anglo in 2007. During the past three years Mr.
Daly has not served as a director of any other listed company.
Alistair McAdam - Non-Executive Director
BSc Hons (Metallurgy), MBA, MIMMM, CEng
Mr. McAdam is a Member of the Institute of Materials, Minerals and Mining and is a chartered engineer. Mr. McAdam
has over 20 years’ experience in platinum and gold production and project evaluation. Mr. McAdam held the position of
sales manager at Johannesburg Consolidated Investment Company Ltd Group until his division was sold to Sudelektra
South Africa Holdings (Pty) Ltd and subsequently to Xstrata and Glencore. Mr. McAdam joined Ore & Metal Company
Limited in 2000 and was appointed as the group manager of new business in August 2013. Mr. McAdam is a member of
the Audit Committee and the Chair of the Nomination & Remuneration Committee. During the past three years Mr.
McAdam has not served as a director of any other listed company.
Tetsunosuke Miyawaki – Non-Executive Director
BEcon
Mr. Miyawaki is an economist with 20+ years’ experience in the mineral resource sector. Joining Sumitomo Corporation
in 1998 he has held several key roles including investment business development and commodity trading for various
divisions with the Sumitomo group. During the past three years Mr. Miyawaki has not served as a director of any other
listed company.
IronRidge Resources Limited financial report for the year ended 30 June 2019
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Directors’ Report (continued)
Christelle Van der Merwe – Alternate Director
BSc (Hons, Geology), BSc (Environmental Management), MAP79 B.Arch
Ms Van der Merwe is a mining geologist responsible for the mining-related geology and resources of the Assore Subsidiary
Companies (comprising the pyrophyllite and chromite mines) and is also concerned with the company's iron and
manganese mines. She has been the Assore group geologist since 2013 and involved with strategic and resource
investment decisions of the company. Ms Van der Merwe is a member of SACNASP and the GSSA. During the past three
years Ms Van der Merwe has not served as a director of any other listed company.
Frans Olivier – Alternate Director
BEng (Mining), MCom (Business Management), GDE (Mining), SAIMM
Mr. Olivier has extensive mining operations and management experience gained through General Mining Corporation,
Sasol Coal, Iscor Mining and Assmang (African Mining and Trust). Mr. Olivier has been responsible for the detailed
economic evaluation of major open pit and underground mine projects in South Africa, Ghana, Kazakhstan, Democratic
Republic of Congo and Russia. During the past three years Mr. Olivier has not served as a director of any other listed
company.
Tsuyoshi Ueda – Alternate Director (appointed 9 July 2019)
Mr Ueda is currently the Deputy General Manager of Sumitomo's Iron & Steel Making Raw Materials Department. Prior
to this appointment Mr Ueda was the General Manager for Sumitomo's Africa Division for Mineral Resources and Steel
Products. During the past three years Mr. Ueda has not served as a director of any other listed company.
As at the date of this report, the interest of the Directors in the shares and options of IronRidge Resources Limited were:
Number of ordinary shares
Number of options over
ordinary shares
Number of
performance rights
500,000
13,500,000
2,290,314
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Neil Herbert
Vincent Mascolo
Nicholas Mather
Stuart Crow
Kieran Daly
Alistair McAdam
Tetsunosuke Miyawaki
Christelle Van der Merwe
Frans Olivier
Tsuyoshi Ueda
Company secretary
Karl Schlobohm – Company Secretary
B.Comm, B.Econ, M.Tax, CA, FGIA
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15,000,000
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8,100,000
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Karl Schlobohm is a Chartered Accountant with over 25 years’ experience across a wide range of industries and businesses.
He has extensive experience with financial accounting, corporate governance, company secretarial duties and board
reporting.
He currently acts as the Company Secretary for ASX-listed DGR Global Limited, Dark Horse Resources Limited, Aus Tin
Mining Limited, Armour Energy Limited and dual LSE and TSX listed SolGold Plc.
IronRidge Resources Limited financial report for the year ended 30 June 2019
7
Directors’ Report (continued)
Corporate structure
IronRidge Resources Limited is a company limited by shares that is incorporated and domiciled in Australia. It was
converted to a public company on 22 August 2011.
Principal activities
IronRidge was originally established to explore for uranium in southern Queensland and over a number of years the
Company accumulated a sizeable package of Exploration Permits for Minerals (EPM) and an Exploration Permit for Coal
(EPC), focused mainly in the Surat Basin, in Queensland, Australia.
In late 2011 the Company sought to expand its strategy of “Early Mover Advantage” into regions of Africa prospective for
iron ore. Following a global search for a new prospective province, equatorial West Africa was identified as a compelling
opportunity lying on the extensive Proterozoic aged iron belt which originally stretched across the ancient continent of
Pangaea from the Pilbara in Western Australia across India and Africa to the famous and prolific Carajas iron region in
Brazil. Licences over vacant project areas were applied for and subsequently granted over the Tchibanga and Belinga Sud
areas in Gabon. IronRidge was attracted to the size of the project and targets, close proximity to the coastal port site of
Mayumba, infrastructure upgrading initiatives by the progressive Gabonese Government and evident presence of high
grade iron mineralisation up to 62% on the main prospect at Mont Pele.
The Company was admitted to trading on AIM on Thursday, 12 February 2015. The Company successfully completed a
placing (“Placing”) of and the subscription for 96,538,380 new Ordinary Shares to raise approximately £9.7 million ($19.2
million). The total number of shares on issue at Admission was 236,612,203 giving the Company a market capitalisation of
approximately £23.7 million ($46.9 million) on Admission at the Placing and Investor Subscription Price of 10p per share.
The funds were raised to undertake exploration mapping, sampling and an approximately 15,000 metre planned drilling
programme on the Company’s exploration projects in Gabon: the Tchibanga and Tchibanga North licence areas, two
adjacent permitted areas located in the Tchibanga region in the south-west of Gabon, and the Belinga Sud Prospect,
located in the north-east of Gabon; as well as providing working capital for the Company.
The company has since expanded its focus to become a multi-commodity mineral exploration and development company
with assets in Africa and Australia. Refer to the Operations Report for details of all of the Company’s projects.
Dividends
No dividends were declared or paid during the financial year.
IronRidge Resources Limited financial report for the year ended 30 June 2019
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Directors’ Report (continued)
Operations Report
IronRidge is a multi-commodity mineral exploration and development company with assets in Africa and Australia. In
Africa, the Company is currently exploring for lithium in Ghana - West Africa, gold and lithium in Côte d’Ivoire - West Africa
and gold in Chad - Central Africa (refer Figure 1).
In Ghana the Company holds 684km2 of granted and under application tenure through direct applications and Earn-In
Agreements where it has intersected high grade lithium pegmatites in drilling within proximity to operational
infrastructure corridors.
In Côte d’Ivoire the Company holds 3,584km2 of granted and under application gold tenure through Earn-In Agreements
and a further 1,172km2 of under application lithium tenure through direct applications and Earn-In Agreements within the
highly prospective Birimian terrain.
In Chad the Company holds 900km2 of highly prospective granted tenure where trenching has defined broad, high-grade
zones of gold mineralization and structural repetitions.
In Australia, the Company holds 704km2 of granted tenure in south-eastern Queensland, where it is exploring for bauxite,
titania, and gold within its 100% owned Monogorilby and May Queen Project areas where a Maiden bauxite (JORC)
Resource of 54.9Mt @ 37.5% total Al and 8.5% total Si has been defined.
The Company holds 3,396km2 of iron ore tenure renewals and applications in Gabon, West Africa.
IronRidge’s corporate strategy is to create and sustain shareholder value through the discovery and evaluation of
significant mineral deposits of globally demanded commodities and continues to advance its project portfolio across the
jurisdictions it works in as well as the ongoing review of new opportunities.
The management team was strengthened with the appointment of key positions including Iwan Williams as Exploration
Manager Ghana, Moctar Keita as Exploration Manager Côte d’Ivoire, Steven Cancio-Newton as Principal Geologist and Len
Kolff as Chief Operations Officer.
Figure 1: Global project country locations and targeted commodities.
GHANA - Lithium:
In Ghana the Company has discovered a high-grade, coarse spodumene dominant lithium pegmatite deposit within 110km
of an operating deep-sea port, within 1km of a bitumen high-way and adjacent to grid power within a 684km2 prospective
lithium portfolio (refer Figure 2).
IronRidge Resources Limited financial report for the year ended 30 June 2019
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Directors’ Report (continued)
Operations Report (continued)
During the annual period, the Company completed its first phase 8,210m, second phase 4,684m reverse circulation (‘RC’)
drilling and 1,000m diamond core (‘DD’) drilling programme at the Ewoyaa and Abonko projects, part of its Cape Coast
Lithium portfolio in Ghana, West Africa.
Figure 2: Cape Coast Lithium Project portfolio location; within 100km of the Takoradi port, adjacent bitumen highway
and grid power.
The Company announced the discovery of ‘blind’ lithium pegmatite mineralisation, below transported cover, in the
northern extension of the Ewoyaa project; significant in that high-grade mineralisation was discovered in a valley without
any surface expression, thus increasing the exploration potential of the portfolio.
Multiple broad, high-grade drill intersections were returned at a 0.5% Li2O cut-off and maximum 10m (Phase 1) or 4m
(Phase 2) of internal dilution including 128m @ 1.21% Li2O from 3m in hole GRC0004, 111m @ 1.35% Li2O from 37m in hole
GRC0027, 80m @ 1.52% Li2O from surface in hole GRC0081, 56m @ 1.71% Li2O from 48m in GRC0034, 72m @ 1.27% Li2O
from 24m in GRC0048, 45m @ 1.57% Li2O from 70m in GRC0042 and 45m @ 1.51% Li2O from 41m in GRC0039. All
reported drill intersections are included in Figure 3.
The Company announced the discovery of the Hweda target in the Apam West license, approximately 45km east of the
main Ewoyaa project within a separate pegmatite cluster. The Hweda target was defined as part of the regional soil
geochemistry sampling programme and a new lithium pegmatite target. Pitting is ongoing.
The Company completed 1,350-line kilometers of ultra-high-resolution helicopter borne geophysics including magnetics
and radiometrics data over the Saltpond license. The survey was designed to extend the existing survey and will assist in
the ongoing targeting of new pegmatites within the portfolio in conjunction with the regional soil geochemical data set.
The Company completed an 11km2 high-resolution drone survey over the immediate Ewoyaa Project area and secured
Geo-eye satellite imagery over the entire Mankessim-Saltpond portfolio, to generate accurate topographic base maps for
resource estimation and project studies as well as ongoing exploration programmes.
The Company engaged Ghanaian consultancy NEMAS for wet and dry season environmental and social baseline studies
over the project area to help fast-track future mine permitting.
IronRidge Resources Limited financial report for the year ended 30 June 2019
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Directors’ Report (continued)
Operations Report (continued)
Metallurgical Test-Work:
The Company completed a 1,000m, nine (9) hole metallurgical diamond drill core (‘DD’) programme over the Ewoyaa
target footprint and shipped a total of 427kg of pegmatite material to NAGROM Laboratories in Perth, Western Australia
for preliminary metallurgical test-work. The Company appointed Mr Noel O’Brien as its metallurgical consultant to provide
oversite and guidance on the metallurgical test-work programme. Mr O’Brien has several years test-work and processing
experience across multiple spodumene pegmatite deposits in Australia, Africa and Europe.
Two types of pegmatite were observed in the diamond drilling to date; coarse type 'P1' pegmatite and finer grained type
'P2' pegmatite. Diamond drilling to date suggests roughly equal proportions of both types with further work underway to
better understand their distribution.
Initial metallurgical test-work was carried out to assess mineralisation amenability to gravity beneficiation using Heavy
Liquid Separation ('HLS') and flotation beneficiation, and their associated concentrate grades. Work included initial HLS
screening to determine preferred crush size on one composite of each P1 and P2, variability HLS test-work at the defined
6.3mm crush on fifteen (15) P1 and P2 composites and flotation test-work on one P2 fine grained pegmatite composite.
Two (2) composites of P1 and P2 mineralisation were crushed at 16mm, 10mm, 6.3mm and 4 mm and wet screened at
0.5mm. The wet screening analysis indicated normal fines production for pegmatites. The plus 0.5mm fractions were
subjected to densimetric profiling at 2.9, 2.8, 2.7, 2.6 and 2.5 densities using heavy liquids.
The results show a marked improvement in recovery and grade with finer crushing to 6.3mm and marginal improvement
after that, which compares to a number of other lithium projects either in operation or under development. Therefore
6.3mm was chosen as the preferred crush size for the next stage HLS variability work on the remaining fifteen (15) PQ-HQ
drill core composites for densimetric profiling at 2.6 and 2.8 densities, and X-Ray diffraction (‘XRD’) mineralogical analysis
of concentrates produced.
From the HLS variability test-work and XRD analysis, the P1 composites produced high-grade, >6% Li02 spodumene
dominant concentrates with low contaminants generally below the nominal 1% Fe2O3 and 3% combined Na2O and K2O
thresholds, and recoveries ranging from 69% to 85%. The P2 material displayed a lesser response to gravity processing with
lower recoveries ranging from 38% to 59% and spodumene dominant concentrate grades between 5.12% to 7.23% Li2O,
still with overall low contaminant levels. All HLS gravity and XRD test-work results are summarised in Figure 4.
A sample of fine grained P2 mineralisation, which was considered the most challenging for flotation, was ground to 106
microns for proof of concept flotation testing. The pulp was deslimed at 20µm and then passed over a 3000-gauss magnet
to remove magnetic material and lower the iron content. The resulting pulp was subjected to standard spodumene
flotation conditions and achieved recoveries between 56.5% to 95.5% with concentrate grades between 6% to 4.16% Li2O
respectively, with some optimisation needed to get the grade/recovery balance right.
Subsequent to the reporting period, a 54kg P1 bulk sample composite at 1.68% Li2O head-grade was generated from the
initial test-work samples for pilot scale DMS100 gravity test-work. The entire bulk sample was crushed to 6.3mm and
screened at -0.5mm to generate 44kg of feed material for Dense Media Separation ('DMS') test work utilising a 100mm
diameter DMS cyclone set to split at 2.6, 2.85 and 2.9 Specific Gravity ('SG') ranges.
A total of 9.96kg of high-grade spodumene concentrate at 6.29% Li2O with low level contaminants (1.07% Fe2O3, combined
1.48 % Na2O plus K2O) was produced. This test was not optimised, nor did it incorporate magnetic separation to lower the
iron content, yet still resulted in a lithium recovery in excess of 75% and produced a high-grade ‘clean’ concentrate.
The results are significant as it is a significant step closer in demonstrating the amenability of the Ewoyaa type P1
mineralisation to beneficiate to a high-grade and clean concentrate via a simple gravity process flowsheet using industry
standard crushing, screening and cyclone technology.
The concentrate produced was sent to ANSTO (Australia’s Nuclear Science and Technology Organisation) for preliminary
tests to determine the amenability to the production of lithium hydroxide. This work is well advanced and will be reported
in the near future.
IronRidge Resources Limited financial report for the year ended 30 June 2019
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Directors’ Report (continued)
Operations Report (continued)
Figure 3: All reported first and second phase RC drilling lithium pegmatite intersections at the Ewoyaa and Abonko projects.
IronRidge Resources Limited financial report for the year ended 30 June 2019
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Directors’ Report (continued)
Operations Report (continued)
Figure 4: HLS variability test-work results and XRD mineral abundance analysis for selected concentrate composites.
CHAD - Gold:
In Chad the Company is exploring a 900km2 highly prospective gold portfolio where it has defined a significant gold target
at Dorothe in 15km of trenching at approximately 200m spacing over a 3km x 1km surface area. Additional gold targets
with trenching results or coincident artisanal workings have been defined at Echbara, Am Ouchar, Kalaka and Guerere
(refer Figure 5).
During the annual period, the Company reported trenching results at 200m spacing for the second phase 9,360m infill
programme at Dorothe. Multiple broad, high-grade trenching intersections were returned at a 0.4g/t gold cut-off and
maximum 4m dilution including highlights 84m @ 1.66g/t*, 4m @ 18.77g/t, 32m @ 2.02g/t, 24m @ 2.53g/t, 12m @
2.32g/t and 4m @ 5.27g/t gold. All reported drill intersections are included in Figure 6.
Six coherent, large-scale high-priority gold anomalies were interpreted in trenching results received to date with
observations from geological logging, structural mapping and airborne magnetics defining two broad target types; steeply
east dipping ‘Main Vein’ target and shallow west dipping ‘Sheeted Vein’ targets (refer Figure 6).
The Main Vein target includes stacked 0.5m to 2m thick steeply east dipping discontinuous massive quartz veins within a
zone over a 1.2km strike and up to 200m wide and remains open to the north and south. The Sheeted Vein targets occur as
multiple shallow 10 to 35-degree west dipping cm scale sheeted quartz veins over 500m to 1000m long and 100m to 200m
wide footprints with true target thicknesses estimated between 20m to 100m.
All target zones are aligned along an east-north-east trending fold axis within the nose of a large-scale fold structure and
adjacent to a significant ‘jog’ or flexure within the major north-south Dorothe Shear Zone. This represents a favourable
structural setting for gold mineralisation to occur and repeats further north at the Guerere and Kalaka artisanal workings.
*Sampled down-dip along shallow dipping alteration zone; not true width
IronRidge Resources Limited financial report for the year ended 30 June 2019
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Directors’ Report (continued)
Operations Report (continued)
Kalaka
Guerere
Dorothe
Figure 5: Chad tenure over regional geology (left) with detailed geology and major gold targets highlighted with
artisanal mining sites (right).
IronRidge Resources Limited financial report for the year ended 30 June 2019
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Directors’ Report (continued)
Operations Report (continued)
Figure 6: All reported second phase gold trenching intersections at the Dorothe project.
IronRidge Resources Limited financial report for the year ended 30 June 2019
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Directors’ Report (continued)
Operations Report (continued)
CÔTE D’IVOIRE – Gold & Lithium
The Company has secured via Earn-In Agreements, access rights to thirteen (13) licences and applications covering an area
of 3,584km2 for gold and 1,172km2 for lithium within Côte d’Ivoire, West Africa. The tenement portfolio covers major
shear zones and associated second and third order structures along proven, gold bearing structures. All projects are well
serviced, with an extensive bitumen road network and well-established cellular network (refer Figure 7).
Figure 7: Côte d’Ivoire Gold and Lithium Project portfolio locations.
Kineta and Marahui Portfolio:
At Kineta a total of 3,392 soil samples were collected on a 400m x 50m and infill 200m x 50m grid over an 11 x 4.5km area
as part of the first phase soil programme over the Kineta license in the north-east of the Country.
Results defined a broad 7km long by 1.5km wide anomalous gold corridor at >30ppb up to 3.7g/t gold with coincident
artisanal workings. The highest priority soil anomaly occurs over a 2km long by 250m wide area with coincident artisanal
underground workings over a 700m strike with previously reported rock-chip sampling results including 15g/t, 32.4g/t and
46.4g/t gold. A trenching programme was completed with multiple narrow gold intersections returned, including 2m @
4.04g/t gold and 6m @ 0.24g/t gold. at a 0.12g/t gold cut-off with maximum 2m of internal dilution.
At Marahui a total of 5,129 soil samples, including Quality assurance/Quality Control (“QA/QC”) samples were sampled and
assayed. Regional soil sampling on a 400m x 50m grid was completed with 3 main gold anomalous gold trends over a 1.5km
to 3km strike length at average 30ppb to 120ppb gold levels. Infill soil sampling at 200m and 100m line spacing was
completed over the defined targets with significant soil anomalies between 30ppb to 2,500ppb gold defined over broad
NNE trending 2km strike and 100m to 200m widths.
IronRidge Resources Limited financial report for the year ended 30 June 2019
16
Directors’ Report (continued)
Operations Report (continued)
Bodite and Bianouan Portfolio:
At Bianouan broad trenching intervals of 47m @ 0.16g/t (including 14m @ 0.23g/t Au), 7m @ 0.18g/t and 4m @ 0.21g/t at
the Ketesso target and 11m @ 0.7g/t, 9m @ 0.16g/t, 1m @ 1.1g/t, 3m @ 0.14g/t and 1m @ 0.42g/t at a 0.15g/t Au cut-off
with maximum 2m of internal dilution were returned at the Yaw target. No significant results were returned from the 19
pits completed.
Despite trenching depths up to 4m, weathering was still intense with laterite and saprolite evident in the trench floor, and
the potential for gold depletion in the sampled horizon. Accordingly, a total of 1,415m of Air Core (AC) drilling for 28 holes
to an average of 50m depth was completed to test the coincident soils, auger and trenching gold geochemical anomalies at
depth. At Bodite a total of 2,488m for 37 AC holes was drilled to an average depth of 30m to test the highest priority soil
geochemical anomaly defined. A total of 2,123 samples including QAQC samples were submitted to the lab for assay.
Vavoua Portfolio:
Xcalibur Airborne Geophysics (Pty) Ltd of South Africa successfully completed airborne magnetics at 100m line spacing and
35m to 40m ground clearance over the Vavoua portfolio. Magnetics data confirms strike extension over 40km of a major
Shear Zone which hosts the 1.73Moz JORC compliant Abujar project to the south of the Company’s Vavoua portfolio.
Southern Geoscience Consultants of Perth, Western Australia completed detailed litho-structural interpretation, which in-
conjunction with field mapping and sampling results, has defined fourteen (14) targets of which four (4) are priority one
targets (refer Figure 8).
Figure 8: Vavoua portfolio geological setting relative to the 1.73Moz Abujar deposit; insert: Southern Geoscience litho-
structural interpretation for two granted northern licenses (red and blue outline).
IronRidge Resources Limited financial report for the year ended 30 June 2019
17
Directors’ Report (continued)
Operations Report (continued)
The Company completed acquisition of 100% of the share capital of each of Marlin Minerals SARL, Booster Minerals SARL
and CAPRI Metals SARL (collectively the "Vavoua Projects"), which gives IronRidge full ownership of this portfolio. The
Company announced on 18 April 2017, 28 March 2017 and 12 April 2017 that it had entered into Earn in arrangement with
Bluefin, Major Star and Enchi Proci respectively, under which IronRidge had rights to acquire 100% of the projects with
each entity maintaining a residual NSR of 2.5% of which 40% to 50% can be acquired for between US$2.5m to US$3m at
any time.
The consideration and transfer of full ownership of the Vavoua Projects collectively is in return for the issue of 2,111,668
depositary interests of no par value each (the “IronRidge Shares”)
in IronRidge at a price of 22 pence per
share. Completion of this acquisition has now occurred for Marlin and Booster for a total of 1,539,012 IronRidge Shares.
The remaining 572,656 IronRidge shares will be issued post formal granting of the CAPRI Metals tenure. The issue of
2,111,668 IronRidge shares will equate to a 0.7% interest in the enlarged share capital of IronRidge.
Ownership of the three (3) licenses and application provides IronRidge with access to exclusive rights to an extensive
tenure package adjacent to the 1.73Moz and growing Abujar project
Zaranou License:
The Company successfully secured access rights to the highly prospective and granted Zaranou Gold license located
approximately 200km north-east of the capital Abidjan, adjacent to the border with Ghana and covering 397km2 of highly
prospective Birimian geology in Côte d'Ivoire, West Africa (refer Figure 8).
The Company entered into a binding agreement with GeoServices Cote d'Ivoire SA ("GS") and Atlas Resources SARL ("AR")
jointly, whereby IronRidge has the option to acquire up to 100% of the project through staged earn in arrangements and
expenditure to Feasibility Study subject to each company retaining an aggregate net smelter royalty, ("NSR") of 2.5% of
which 50% may be acquired for US$4 million. IRR has the right to make milestone payments in shares and/or cash.
The Zaranou license occurs within Birimian metasediments with intruded granitoids, major through-going Shear Zone and
in proximity to major multi-million ounce gold mines across the border in Ghana.
Over 40km strike of highly prospective Shear Zone with coincident alluvial gold workings along its entirety, a 'Pressure
Shadow' target around the margins of a rotated granitoid body in the southern extent of the license and a 16km long high-
priority hard rock artisanal mining corridor in the northern half of the license have been identified with multiple gold
occurrences (refer Figure 9).
IronRidge Resources Limited financial report for the year ended 30 June 2019
18
Directors’ Report (continued)
Operations Report (continued)
Figure 9: Zaranou gold license geological setting with 40km strike Shear Zone defined in geology and alluvial mining
sites, and high-priority 16km strike zone of coincident hard rock and alluvial artisanal workings.
Unverified SEDAR reports by Winslow Gold Corporation (TSX: WGS) recovered online indicate historical mining activity
during the 1930's within the license area, with quartz vein zones between 2m to 60m thick, over 300m in length and with
gold mineralisation averaging 1.5g/t to 12g/t Au and extending 10m into pyritic schists either side of the veins. Unverified
annual reports by Etruscan Resources (TSX: EET) recovered online and completed during 2008 included a best result of
2.2g/t over 21 meters (including 5.7 g/t over 5 meters) in RAB drilling within the license area.
Periods of civil unrest in the country and a focus on more advanced projects elsewhere within Africa and overseas led to
relinquishment of the license area by previous operators.
Subsequent to the reporting period, field teams completed detailed face mapping and channel sampling over 15 large scale
and 130 small scale artisanal pits for a total 145 primary 'hard-rock' artisanal mining pits within the north-eastern half of
the Zaranou license for a total of 324 reconnaissance channel and rock chip samples.
Multiple high-grade channel sampling results including 6m @ 3.67g/t gold, 3m @ 4.13g/t gold and 4m @ 2.39g/t gold were
returned with gold mineralisation encountered both within the schists and quartz veins. Rock-chip sampling returned
multiple high-grade results including 69.6g/t, 48.8g/t, 25.3g/t and 20.5g/t gold in both schists and quartz vein material.
Results provide confidence in broader mineralised zones within the host rock schists amenable to bulk mining techniques.
Results defined a 9.8km long and average 800m wide high-priority gold target zone with coincident hard-rock and alluvial
artisanal workings, high-grade channel sampling and rock chip results. Mineralisation remains open to the north-east and
south-west within a 40km striking shear zone with coincident artisanal workings (refer Figure 10 and Figure 11).
IronRidge Resources Limited financial report for the year ended 30 June 2019
19
Directors’ Report (continued)
Operations Report (continued)
Figure 10: All reported Channel sampling and rock chip results at Zaranou with location map insert on greyscale
topography image background.
IronRidge Resources Limited financial report for the year ended 30 June 2019
20
Directors’ Report (continued)
Operations Report (continued)
Figure 11: Artisanal workings within the license area and visible gold observed in a washing pan (above) and examples
of quartz veining within schists in artisanal pits within the Zaranou license area
IronRidge Resources Limited financial report for the year ended 30 June 2019
21
Directors’ Report (continued)
Operations Report (continued)
AUSTRALIA – Bauxite, Gold, Titania
IronRidge Resources has an extensive 704km2 ground holding in central‐southern Queensland prospective for bauxite,
titania and gold. The portfolio includes the JORC compliant Monogorilby Bauxite resource of 54.9Mt at 37.5% total alumina
and 8.5% total silica and the May Queen gold prospect.
GABON – Iron Ore
The Company is awaiting license renewals with the pre‐requisite 50% license area reductions over the Tchibanga,
Tchibanga Nord and Belinga Sud licenses.
Tchibanga is a Neoproterozoic ferruginous schist type iron formation located in south‐western Gabon, with over 90km of
prospective iron rich lithologies and the historic Mont Pele iron occurrence, and within 10‐60km of the Atlantic coastline.
Belinga Sud is a Paleoproterozoic itabirite type iron formation located in north‐east Gabon between the Belinga Iron Ore
Deposit (estimated 1Bt of iron ore at a grade >60% Fe) and the Trans Gabonese railway, which currently transports
manganese ore and timber from Franceville to the Port of Owendo in Libreville.
SIGNIFICANT EVENTS AFTER REPORTING DATE
On 8 August 2019, the Company announced that it has entered into a binding Memorandum of Understanding ("MoU")
with GeoDrill Limited (TSX: GEO, "GeoDrill") for a drilling for equity program of up to US$4 million, or 40,000m of drilling.
The drilling programs will take place across all the Company's gold and lithium portfolios throughout Africa. The agreement
is based on competitive quotation process and provides for the issue of ordinary shares in IronRidge for 50% of the drilling
cost up to a value of US$4m .
Signed in accordance with a resolution of the Board of Directors:
Vincent Mascolo
Managing Director and CEO
Brisbane
Date: 30 September 2019
Competent Person Statement:
Information in this report relating to the exploration results is based on data reviewed by Mr Lennard Kolff (MEcon. Geol.,
BSc. Hons ARSM), Chief Geologist of the Company. Mr Kolff is a Member of the Australian Institute of Geoscientists who
has in excess of 20 years’ experience in mineral exploration and is a Qualified Person under the AIM Rules. Mr Kolff
consents to the inclusion of the information in the form and context in which it appears.
The information in this announcement that relates to metallurgical results is based on information compiled by Mr Noel
O’Brien, Director of Trinol Pty. Limited. Mr O’Brien is a Fellow of the Australasian Institute of Mining and Metallurgy
(AusIMM) and has sufficient experience which is relevant to the style of mineralisation and type of deposit under
consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the December
2012 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” (JORC
Code). Mr O’Brien consents to the inclusion in the report of the matters based upon the information in the form and
context in which it appears.
IronRidge Resources Limited financial report for the year ended 30 June 2019
22
Directors’ Report (continued)
FINANCIAL REVIEW
Result for the year
The loss after income tax for the Group for the year ended 30 June 2019 was $7,137,728 (2018: $13,191,397). The
decrease in loss for the year was primarily attributable to:
Decrease of $4,040,216 in impairment of exploration and evaluation assets; and
Decrease of $2,338,393 in share based payments expense
Significant changes in the state of affairs
In the opinion of the Directors, there were no significant changes in the state of affairs of the Group that occurred during
the financial year under review not otherwise disclosed in this report or the financial statements of the Group for the
financial year.
Environmental regulations and performance
The Directors have put in place strategies and procedures to ensure that the Group manages its compliance with
environmental regulations. The Directors are not aware of any breaches of any applicable environmental regulations.
Proceedings on behalf of company
No person has applied to the Court under section 237 of Corporations Act 2001 for leave to bring proceedings on behalf of
the Company, or to intervene in any proceedings to which the Company is a party, for the purpose of taking responsibility
on behalf of the Company for all or any part of those proceedings.
No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under section 237 of
the Corporations Act 2001.
Remuneration report (audited)
This remuneration report for the year ended 30 June 2019 outlines the remuneration arrangements of the Company and
the Group in accordance with the requirements of the Corporations Act 2001 (the “Act”) and its regulations. This
information has been audited as required by section 308(3C) of the Act.
The remuneration report details the remuneration arrangements for key management personnel (“KMP”) who are defined
as those persons having authority and responsibility for planning, directing and controlling the activities of the Company
and the Group, directly or indirectly, including any director (whether executive or otherwise) of the Company, and includes
the executive team.
Individual key management personnel disclosures
The remuneration report is presented under the following sections:
1.
2. Remuneration policy
3. Non-executive director remuneration arrangements
4. Executive remuneration arrangements
5. Company performance and the link to remuneration
6. Executive contractual arrangements
7. Equity instruments disclosures
IronRidge Resources Limited financial report for the year ended 30 June 2019
23
Directors’ Report (continued)
Remuneration report (continued)
1. Individual key management personnel disclosures
Key management personnel
(i) Directors
Neil Herbert
Vincent Mascolo
Nicholas Mather
Stuart Crow
Bastiaan van Aswegen
Kieran Daly
Alistair McAdam
Kenichiro Tsubaki
(ii) Executives
Lennard Kolff
Karl Schlobohm
Priy Jayasuriya
Non-executive Chairman
Managing Director and Chief Executive Officer
Non-executive Director
Non-executive Director
Non-executive Director (retired on 9 April 2019)
Non-executive Director (appointed on 9 April 2019)
Non-executive Director
Non-executive Director (retired 9 July 2019)
Chief Geologist and Chief Operating Officer
Company Secretary
Chief Financial Officer
There were no changes, unless otherwise stated, to Key Management Personnel after reporting date and before the date
the financial report was authorized for issue.
2. Remuneration policy
IronRidge Resources Limited’s remuneration strategy is designed to attract, motivate and retain employees and NEDs by
identifying and rewarding high performers and recognising the contribution of each employee to the continued growth and
success of the Group.
The Board of Directors is responsible for determining and reviewing compensation arrangements for the Directors and the
Executive team. The Board assesses the appropriateness of the nature and amount of remuneration of such officers on a
periodic basis by reference to relevant employment market conditions with the overall objective of ensuring maximum
shareholder benefit from the retention of a high quality Board and Executive team. Such officers are given the opportunity
to receive their base remuneration in a variety of forms including cash and fringe benefits. It is intended that the manner
of payments chosen will be optimal for the recipient without creating undue cost for the Company. Further details on the
remuneration of Directors and Executives are set out in this Remuneration Report.
The Company aims to reward the Executives with a level and mix of remuneration commensurate with their position and
responsibilities within the Company. The Board’s policy is to align Executive objectives with shareholder and business
objective by providing a fixed remuneration component and offering long-term incentives.
In accordance with best practice corporate governance, the structure of NED and executive remuneration is separate and
distinct.
3. Non-executive director remuneration arrangements
The Board seeks to set aggregate remuneration at a level that provides the Company with the ability to attract and retain
directors of the highest calibre, whilst incurring a cost that is acceptable to shareholders. The Company’s specific policy for
determining the nature and amount of remuneration of Board members of the Company is as follows:
The Constitution of the Company provides that the NEDs are entitled to remuneration as determined by the Company in a
general meeting to be apportioned among them in such manner as the Directors agree, and, in default of agreement,
equally. The aggregate remuneration per annum, excluding share-based payments was determined to be $500,000.
Additionally, NEDs are entitled to be reimbursed for properly incurred expenses.
IronRidge Resources Limited financial report for the year ended 30 June 2019
24
Directors’ Report (continued)
Remuneration report (continued)
If a NED performs extra services, which in the opinion of the Directors are outside the scope of the ordinary duties of the
Director, the Company may remunerate that Director by payment of a fixed sum determined by the Directors in addition to
or instead of the remuneration referred to above. However, no payment can be made if the effect would be to exceed the
maximum aggregate amount payable to NEDs. A NED is entitled to be paid travelling and other expenses properly incurred
by them in attending Directors’ or general meetings of the Company or otherwise in connection with the business of the
Company.
All Directors have the opportunity to qualify for participation in the Company’s Employee Share Option Plan (“ESOP”),
subject to the approval of shareholders.
The remuneration of NEDs for the year ended 30 June 2019 is detailed in this Remuneration Report.
4. Executive remuneration arrangements
The Company aims to reward the Executives with a level and mix of remuneration commensurate with their position and
responsibilities within the Company and so as to:
align the interests of the Executives with those of shareholders;
link reward with the strategic goals and performance of the Company; and
ensure total remuneration is competitive by market standards.
The remuneration of Executives may from time to time be fixed by the Board. The remuneration will comprise a fixed
remuneration component and also may include offering specific short and long-term incentives, in the form of:
performance based salary increases and/or bonuses; and/or
the issue of options.
The remuneration of the Executives employed on a full-time basis by the Company for the year ending 30 June 2019 and
2018 is detailed in this Remuneration Report.
5. Company performance and the link to remuneration
During the financial year, the Company has generated losses as its principal activity was mineral exploration. Up until 12
February 2015, the Company’s ordinary shares were not traded on any exchange and there were no dividends paid during
the year. The following table shows the share price at the end of the financial year for the Company since listing:
Share price
Initial Public
Offering
£0.1000
30 June 2015
30 June 2016
30 June 2017
30 June 2018
30 June 2019
£0.0413
£0.0413
£0.3525
£0.2770
£0.1563
As the Company is still in the exploration and development stage, the link between remuneration, Company performance
and shareholder wealth is tenuous. Share prices are subject to the influence of metals prices and market sentiment
toward the sector, and as such increases or decreases may occur quite independent of Executive performance or
remuneration.
6. Executive contractual arrangements
It is the Board’s policy that employment agreements are entered into with all Executives.
The current service agreements with the Managing Director and Chief Executive Officer, and Chief Operating Officer have a
notice period of three (3) months. All other employment agreements have one month (or less) notice periods. Executives
are entitled to their statutory entitlements of accrued annual leave and long service leave together with any
superannuation on termination. No other termination payments are payable.
The terms of appointment for NEDs are set out in the letters of appointment.
IronRidge Resources Limited financial report for the year ended 30 June 2019
25
Directors’ Report (continued)
Remuneration report (continued)
Managing Director and Chief Executive Officer
The Company has a three (3) year Executive Service Agreement with Alberona Pty Ltd an entity associated with Mr. Vincent
Mascolo, which took effect on 1 July 2018 with a 2 year renewal option for the provision of certain consultancy services.
Alberona Pty Ltd will provide Mr. Vincent Mascolo as Executive Director of IronRidge Resources Limited. Under the terms
of the agreement:
Alberona Pty Ltd is entitled to a base fee for the services of Mr. Mascolo of $375,000 per annum.
Both the Company and Alberona Pty Ltd are entitled to terminate the contract upon giving three (3) months
written notice. There is no benefits payable on termination of the contract.
The Company is entitled to terminate the agreement immediately upon the happening of certain events in
respect of Alberona Pty Ltd’s solvency or certain acts of misconduct;
Mr. Mascolo is entitled to a short-term incentive of up to $150,000 per annum over the lifetime of the Executive
Service Agreement with Alberona Pty Ltd on meeting the following key performance indicators
a) 20% - Share price performance;
b) 25% - Project advancement and or value adding acquisition;
c)
15% - Promotional activity;
d) 15% - Capital Management;
e) 15% - Cash Raising: Existing and New shareholders; and
f)
10% - Safety and OHES Compliance
Chief Operating Officer
The Company has an three (3) year Executive Service Agreement with Lennard Kolff, which took effect on 1 July 2018 with
a 2 year renewal option. Under the terms of the agreement:
Lennard Kolff is entitled to a base pay of $360,000 per annum.
Both the Company and Lennard Kolff are entitled to terminate the contract upon giving three (3) months written
notice. There are no benefits payable on termination of the contract.
The Company is entitled to terminate the agreement immediately upon certain acts of misconduct;
Mr. Kolff is entitled to a short-term incentive equal to 35% of the base pay over the lifetime of the Executive
Service Agreement on meeting the following key performance indicators, subject to board discretion
a) 20% - New project acquisition;
b) 25% - Project Advancement
c) 20% - Promotional and Marketing Activity
d) 10% - Cost Control
e) 10% - Data Management
f)
15% - Safety and OHES Compliance
Mr. Kolff is entitled to participate in the Company Employee Share Option Plan Scheme.
Other Executives
Employment contracts entered into with other Executives contain the following key terms:
Event
Performance based salary increases and/or bonuses
Short and long-term incentives, such as options
Resignation/ notice period
Serious misconduct
Duration
Company Policy
Board discretion
Board discretion
1 month
Company may terminate at any time
No fixed duration
Payouts upon resignation or termination, outside industrial regulations (i.e.
‘golden handshakes’)
None
IronRidge Resources Limited financial report for the year ended 30 June 2019
26
Directors’ Report (continued)
Remuneration report (continued)
Remuneration of Directors and Other Key Management Personnel
Directors
Short term benefits
Post-employment
Share based payments
Equity settled
Total
% Performance
Related
Salary & fees
Cash Bonus
Termination Payments
Superannuation
Options
Performance Rights
$
$
$
$
$
$
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
0%
0%
42%
11%
90,000
60,000
60,000
60,000
375,000
350,000
240,000
180,000
42,794
189,444
593,949
-
128,383
568,331
60,000
151,667
188,383
819,998
-
100,000
2,010,079
1,666,662
801,130
1,136,662
Directors
Nicholas Mather
- 2019
- 20181
Vince Mascolo
- 2019
- 2018
Stuart Crow
- 2019
- 2018
Neil Herbert
- 2019
- 2018
Bastiaan Van Aswegen2
- 2019
- 2018
Alistair McAdam
- 2019
- 2018
Kenichiro Tsubaki3
- 2019
- 2018
Kieran Daly4
- 2019
- 2018
Total director remuneration
- 2019
- 2018
Alternate Directors do not receive any form of remuneration for their services.
1 The Company terminated the Consultancy Agreement with Samuel Holdings Pty Ltd on 23 May 2018 and paid out the remaining fees of $100,000 under the Consultancy Agreement in lieu of notice.
2Bastiaan Van Aswegen retired 9 April 2019.
3Kenichiro Tsubaki retired 9 July 2019
4Kieran Daly was appointed 9 April 2019.
1,143,481
2,652,213
2,742,430
3,733,880
42,794
189,444
102,794
249,444
42,794
189,444
102,794
249,444
89,294
249,444
42,794
189,444
593,949
-
240,000
180,000
765,000
801,667
42,794
189,444
132,794
249,444
102,794
249,444
60,000
60,000
60,000
60,000
13,500
-
13,500
-
46,500
60,000
0%
n/a
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
100,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
IronRidge Resources Limited financial report for the year ended 30 June 2019
27
Directors’ Report (continued)
Remuneration report (continued)
Remuneration of Directors and Other Key Management Personnel (continued)
Other Key
Management
Personnel
Karl Schlobohm
- 2019
- 2018
Priy Jayasuriya
- 2019
- 2018
Lennard Kolff
- 2019
- 2018
Total other key
management
remuneration
- 2019
- 2018
Total remuneration
- 2019
- 2018
Short term benefits
Post-employment
Share based payments
Equity settled
Total
% Performance
Related
Salary & fees
Cash Bonus
Termination Payments
Superannuation
Options
Performance Rights
$
$
$
$
$
$
$
50,000
50,000
55,000
50,000
3,000
10,000
3,000
10,000
341,637
273,973
156,000
130,000
446,637
373,973
1,211,637
1,175,640
162,000
150,000
402,000
330,000
-
-
-
-
-
-
-
-
-
100,000
-
-
-
-
-
65,416
-
65,416
-
-
-
-
53,000
125,416
58,000
125,416
22,403
26,027
1,043,792
388,303
439,070
2,002,901
-
818,303
6%
8%
5%
8%
30%
16%
22,403
26,027
22,403
26,027
1,043,792
519,135
2,187,273
3,171,348
439,070
2,113,901
-
1,069,135
1,033,019
4,856,331
-
4,803,015
IronRidge Resources Limited financial report for the year ended 30 June 2019
28
Directors’ Report (continued)
Remuneration report (continued)
Performance income as a proportion of total remuneration
There was a total of $402,000 performance based remuneration paid in cash during the year (2018: $330,000). The
options granted during the year which form part of share based payments are not performance related because there
are no market performance conditions at the vesting date.
There were 12,150,000 performance rights issued to Directors and other key management personnel during the year
ended 30 June 2019 (30 June 2018: nil). This element of remuneration constitutes part of a market competitive total
remuneration package and aims to provide an incentive for Directors and other key management personnel to deliver
Group performance that will lead to returns to shareholders, through an increase in the Company’s share price. The
performance rights vest on achievement of each Maturity price milestone and convert to fully paid ordinary shares. The
Maturity price is based on a 30 trading day VWAP metric for each tranche of the performance rights. The holder of the
performance rights must remain an employee of the Group at vesting date for the performance rights to convert into
ordinary shares.
The proportion of performance based payments paid/payable or forfeited to key management personnel entitled thereto
is as follows:
Name
Vincent Mascolo
Lennard Kolff
Karl Schlobohm*
Priy Jayasuriya*
Performance Payment
Paid/Payable
2019
100%
100%
100%
100%
Performance Payment
Forfeited
2019
-%
-%
-%
-%
* Performance based payments are at the discretion of the Board of Directors and there are no set KPIs.
7. Equity instruments disclosures
Shares Options and Performance Rights issued as part of remuneration for the year ended 30 June 2019
Shares, options and performance rights may be issued to Directors and Executives as part of their remuneration. The
options are not issued based on performance criteria, but are issued to the majority of Directors and Executives of the
Company to align comparative shareholder return and reward for Directors and Executives.
There were no shares issued as part of remuneration of Directors and other key management personnel during the
financial year ended 30 June 2019 (2018: nil shares).
The terms and conditions of the grant of options over ordinary shares affecting remuneration of Directors and other key
management personnel in this financial year or future reporting years are as follow:
Expiry date
Exercise price
Director Options
Key Management
Personnel Options
Grant date
29/11/2018
29/11/2018
29/11/2018
Vesting date and
exercisable date
29/11/2018
29/11/2018
29/11/2018
29/11/2020
29/11/2021
29/11/2021
29/09/2017
29/03/2019
29/09/2019
03/09/2018
03/09/2018
03/09/2018
20/01/2019 *
03/09/2018
03/09/2018
03/09/2018
23/01/2019
03/09/2020
03/09/2021
03/09/2021
21/01/2020
Fair value per
option at grant
date
£0.0262
£0.0247
£0.0133
£0.1311
£0.0499
£0.0474
£0.0291
£0.1285
£0.40
£0.60
£0.90
£0.60
£0.40
£0.60
£0.90
£0.10
* These 600,000 options were previously granted to Mr Kolff on 21 January 2016, expiring on 20 January 2019. The options
were exercised through a company funded, interest free non-recourse loan. This has been accounted for in compliance
with the accounting standards as a modification to the original options granted, whereby the expiry date of the option was
effectively extended by 12 months until 21 January 2020.
Options granted carry no dividend or voting rights. There was no amount paid or payable by the recipients.
IronRidge Resources Limited financial report for the year ended 30 June 2019
29
Directors’ Report (continued)
Remuneration report (continued)
7. Equity instruments disclosures (continued)
There were 27,000,000 options (2018: 1,500,000) issued to Directors and other Key management personnel and a
modification during the year to 600,000 options (2018: nil) previously issued to other key management personnel during
a prior year. The number of options over ordinary shares granted, modified and vested by Directors and other key
management personnel as part of compensation during the year ended 30 June 2019 are set out below:
Number of options
modified during the year
2019
Number of options
granted during the year
2019
Number of options vested
during the year 2019
Directors
Neil Herbert
Vincent Mascolo
Nicholas Mather
Stuart Crow
Kenchiro Tsubaki
Alistair McAdam
Bastiaan van Aswegen
Other Key Management
Personnel
Lennard Kolff
Karl Schlobohm
Priy Jayasuriya
Total
-
-
-
-
-
-
-
600,000
-
-
600,000
-
15,000,000
-
-
-
-
-
12,000,000
-
-
27,000,000
-
15,000,000
-
-
-
-
-
12,000,000
-
-
27,000,000
The terms and conditions of the grant of performance rights over ordinary shares affecting remuneration of Directors and
other key management personnel in this financial year or future reporting years are as follow:
Director Performance Rights
Key Management Personnel
Performance Rights
Grant date
Expiry date
Maturity price
29/11/2018
29/11/2018
29/11/2018
29/11/2018
29/11/2018
29/11/2018
29/11/2018
29/11/2018
29/11/2018
29/11/2018
29/11/2018
03/09/2018
03/09/2018
03/09/2018
03/09/2018
03/09/2018
03/09/2018
03/09/2018
03/09/2018
03/09/2018
03/09/2018
03/09/2018
29/11/2021
29/11/2021
29/11/2021
29/11/2021
29/11/2021
29/11/2021
29/11/2021
29/11/2021
29/11/2021
29/11/2021
29/11/2021
03/09/2021
03/09/2021
03/09/2021
03/09/2021
03/09/2021
03/09/2021
03/09/2021
03/09/2021
03/09/2021
03/09/2021
03/09/2021
£0.30
£0.40
£0.50
£0.60
£0.70
£0.80
£0.90
£1.00
£1.25
£1.50
£2.00
£0.30
£0.40
£0.50
£0.60
£0.70
£0.80
£0.90
£1.00
£1.25
£1.50
£2.00
Fair value per
option at grant
date
£0.212
£0.200
£0.189
£0.180
£0.170
£0.161
£0.154
£0.147
£0.132
£0.118
£0.099
£0.213
£0.200
£0.190
£0.180
£0.170
£0.160
£0.150
£0.150
£0.130
£0.120
£0.100
IronRidge Resources Limited financial report for the year ended 30 June 2019
30
Directors’ Report (continued)
Remuneration report (continued)
7. Equity instruments disclosures (continued)
There were 12,150,000 performance rights issued to Directors and other key management personnel during the year
ended 30 June 2019 (30 June 2018: nil). The number of performance rights over ordinary shares granted to Directors and
other key management personnel as part of compensation during the year ended 30 June 2019 are set out below:
Number of
performance rights
during the year
2019
-
8,100,000
-
-
-
-
-
4,050,000
-
-
12,150,000
Directors
Neil Herbert
Vincent Mascolo
Nicholas Mather
Stuart Crow
Kenchiro Tsubaki
Alistair McAdam
Bastiaan van Aswegen
Other Key Management Personnel
Lennard Kolff
Karl Schlobohm
Priy Jayasuriya
Total
Name
Directors
Neil Herbert
Vincent Mascolo
Nicholas Mather
Stuart Crow
Kenchiro Tsubaki
Alistair McAdam
Bastiaan van Aswegen
Other Key
Management
Personnel
Lennard Kolff1
Karl Schlobohm
Priy Jayasuriya
Total
Value of
options
granted /
modified
during
2019
Value of
performance
rights
granted
during 2019
Intrinsic
value of
options
exercised
during
20191
Amount
paid per
share on
exercise of
option
Value of
options
lapsed
$
$
$
£
$
-
544,364
-
-
-
-
-
-
1,996,445
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
260,358
1,562,150
781,075
260,358
260,358
260,358
260,358
876,515
-
-
1,420,879
1,031,559
-
-
3,028,004
135,016
-
-
135,016
£0.10
-
-
330,832
98,462
98,462
4,172,771
Remuneration
consisting of
IronRidge
Resources Ltd
options /
performance
rights for
2019
%
-
69%
-
-
-
-
-
74%
-
-
Vested
options
%
-
100%
-
-
-
-
-
100%
-
-
1 On 25 January 2019, 600,000 options previously granted to Mr. Kolff were exercised via a 12-month interest free non-
recourse company funded loan. For accounting purposes this exercise has been treated as a modification to the options
originally issued.
IronRidge Resources Limited financial report for the year ended 30 June 2019
31
Directors’ Report (continued)
Remuneration report (continued)
7. Equity instruments disclosures (continued)
Shares issued on exercise of remuneration options
There were 600,000 options exercised during the year that were previously granted as remuneration (2018: 7,500,000).
Additional disclosures relating to key management personnel
Shareholdings
Balance
1 July 2018
Granted as
Compensation
Options
Exercised1
Net Change
Other
Balance
30 June 2019
Directors
Nicholas Mather
Vincent Mascolo
Stuart Crow
Neil Herbert
Bastiaan Van Aswegen
Kieran Daly
Alistair McAdam
Kenichiro Tsubaki
Other Key Management
Personnel
Lennard Kolff
Karl Schlobohm1
Priy Jayasuriya
Total
3,197,992
11,900,00
-
-
-
-
-
-
1,482,794
355,000
-
16,935,786
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(907,678)
1,600,000
-
500,000
-
-
-
-
2,290,314
13,500,000
-
500,000
-
-
-
-
600,000
-
-
600,000
(145,094)
72,129
-
1,119,357
1,937,700
427,129
-
18,655,143
“Net Change Other” above includes the balance of shares held on appointment / resignation, and shares acquired and
disposed for cash.
1The 600,000 options exercised during the year were previously granted to Mr Kolff on 21 January 2016, expiring on 20
January 2019. The options were exercised through a company funded, interest free non-recourse loan. This has been
accounted for in compliance with the accounting standards as a modification to the original options granted, whereby
the expiry date of the option was effectively extended by 12 months until 21 January 2020.
There were no shares held nominally at 30 June 2019 (2018: nil).
IronRidge Resources Limited financial report for the year ended 30 June 2019
32
Directors’ Report (continued)
Remuneration report (continued)
Option holdings
Current Year
Directors
Nicholas Mather
Vincent Mascolo
Stuart Crow
Neil Herbert
Bastiaan Van Aswegen
Kieran Daly
Alistair McAdam
Kenichiro Tsubaki
Other Key
Management
Personnel
Lennard Kolff
Karl Schlobohm
Priy Jayasuriya
Total
Balance
1 July 2018
Granted
Exercised
Modified
(exercise via
company
funded loan
plan)
Lapsed
Balance
30 June 2019
Vested at the
end of the year
Vested and
exercisable at the
end of the year
Vested and
unexercisable
at the end of
the year
2,250,000
4,500,000
750,000
750,000
750,000
-
750,000
750,000
-
15,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(2,250,000)
(4,500,000)
(750,000)
(750,000)
(750,000)
-
(750,000)
(750,000)
-
15,000,000
-
-
-
-
-
-
-
15,000,000
-
-
-
-
-
-
5,600,000
1,041,667
1,041,667
18,183,334
12,000,000
-
-
27,000,000
(600,000)
-
-
(600,000)
600,000
-
-
600,000
(3,500,000)
(1,041,667)
(1,041,667)
(16,083,334)
14,100,000
-
-
29,100,000
14,100,000
-
-
29,100,000
-
15,000,000
-
-
-
-
-
-
14,100,000
-
-
29,100,000
-
-
-
-
-
-
-
-
-
-
-
-
There were no options held nominally at 30 June 2019 (2018: nil).
IronRidge Resources Limited financial report for the year ended 30 June 2018
33
Directors’ Report (continued)
Remuneration report (continued)
Performance Right holdings
Balance
1 July 2018
Granted as
Compensation
Net Change
Other
Balance
30 June 2019
Directors
Nicholas Mather
Vincent Mascolo
Stuart Crow
Neil Herbert
Bastiaan Van Aswegen
Kieran Daly
Alistair McAdam
Kenichiro Tsubaki
Other Key Management
Personnel
Lennard Kolff
Karl Schlobohm
Priy Jayasuriya
Total
-
-
-
-
-
-
-
-
-
-
-
-
-
8,100,000
-
-
-
-
-
-
4,050,000
-
-
12,150,000
-
-
-
-
-
-
-
-
-
-
-
-
-
8,100,000
-
-
-
-
-
-
4,050,000
-
-
12,150,000
There were no options held nominally at 30 June 2019 (2018: nil).
Loans to Key Management Personnel
There were no loans to Directors or other key management personnel during the year.
Other Transactions with Key Management Personnel
There were no other transactions or balances with key management personnel during the period.
(End of Remuneration Report)
IronRidge Resources Limited financial report for the year ended 30 June 2019
34
Directors’ Report (continued)
Directors’ Meetings
The number of meetings of Directors held during the year and the number of meetings attended by each Director was as
follows:
BOARD
AUDIT AND RISK
REMUNERATION
Number of
meetings
held while in
office
6
6
6
6
4
2
6
6
6
6
Meetings
attended
4
6
6
6
3
2
6
3
2
4
Number of
meetings
held while
in office
N/A
N/A
1
1
N/A
N/A
1
N/A
N/A
N/A
Meetings
attended
N/A
N/A
1
1
N/A
N/A
1
N/A
N/A
N/A
Number of
meetings
held while
in office
1
N/A
N/A
1
N/A
N/A
1
N/A
N/A
N/A
Meetings
attended
0
N/A
N/A
1
N/A
N/A
1
N/A
N/A
N/A
Nicholas Mather
Vincent Mascolo
Stuart Crow
Neil Herbert
Bastiaan Van
Aswegen
Kieran Daly
Alistair McAdam
Kenichiro Tsubaki
Christelle Van der
Merwe
Tetsunosuke
Miyawaki
Indemnification and insurance of Directors, Officers and Auditor
Each of the Directors and Secretary of the Company has entered into a Deed with the Company whereby the Company has
provided certain contractual rights of access to books and records of the Company to those Directors. The Company has
insured all of the Directors. The contract of insurance prohibits the disclosure of the nature of the liabilities covered and
amount of the premium paid. The Corporations Act does not require disclosure of the information in these circumstances.
The Company has not indemnified or insured its auditor.
Options
There were 600,000 shares issued as a result of the exercise of options during the year ended 30 June 2019 (2018:
7,500,000) and none since that date.
At the date of this report, the unissued ordinary shares of IronRidge Resources Limited under option are as follows:
Grant date
5 September 2017
29 September 2017
3 September 2018
3 September 2018
3 September 2018
29 November 2018
29 November 2018
29 November 2018
20 January 20191
Date of Expiry
4 September 2020
29 September 2019
29 September 2020
29 September 2021
29 September 2021
29 November 2020
29 November 2021
29 November 2021
21 January 2020
Exercise Price
Number under Option
£0.60
£0.60
£0.40
£0.60
£0.90
£0.40
£0.60
£0.90
£0.10
4,500,000
2,000,000
5,750,000
4,000,000
5,000,000
4,000,000
5,000,000
6,000,000
600,000
1600,000 options exercised during the year were previously granted to Mr Kolff on 21 January 2016, expiring on 20
January 2019. The options were exercised through a company funded, interest free non-recourse loan. This has been
accounted for in compliance with the accounting standards as a modification to the original options granted, whereby
the expiry date of the option was effectively extended by 12 months until 21 January 2020.
IronRidge Resources Limited financial report for the year ended 30 June 2019
35
Directors’ Report (continued)
Performance Rights
At the date of this report, the unissued ordinary shares of IronRidge Resources Limited under performance rights are as
follows:
Grant date
Expiry date
Maturity Price
Number under
Performance Rights
3 September 2018
3 September 2018
3 September 2018
3 September 2018
3 September 2018
3 September 2018
3 September 2018
3 September 2018
3 September 2018
3 September 2018
3 September 2018
29 November 2018
29 November 2018
29 November 2018
29 November 2018
29 November 2018
29 November 2018
29 November 2018
29 November 2018
29 November 2018
29 November 2018
29 November 2018
3 September 2021
3 September 2021
3 September 2021
3 September 2021
3 September 2021
3 September 2021
3 September 2021
3 September 2021
3 September 2021
3 September 2021
3 September 2021
29 November 2021
29 November 2021
29 November 2021
29 November 2021
29 November 2021
29 November 2021
29 November 2021
29 November 2021
29 November 2021
29 November 2021
29 November 2021
£0.30
£0.40
£0.50
£0.60
£0.70
£0.80
£0.90
£1.00
£1.25
£1.50
£2.00
£0.30
£0.40
£0.50
£0.60
£0.70
£0.80
£0.90
£1.00
£1.25
£1.50
£2.00
225,000
225,000
225,000
225,000
225,000
225,000
225,000
225,000
500,000
750,000
1,000,000
450,000
450,000
450,000
450,000
450,000
450,000
450,000
450,000
1,000,000
1,500,000
2,000,000
Significant Events after the Reporting Date
In August 2019 the Company entered into a Memorandum of Understanding for drilling for equity with drilling contractor
GeoDrill for up to USD4m in drilling to deliver up to 40,000m of drilling across IronRidge’s portfolio of projects.
The Directors are not aware of any other significant changes in the state of affairs of the Group or events after the
reporting date that would have a material impact on the consolidated financial statements.
Non-audit Services
There were no non-audit services provided by the entity’s auditor BDO Audit Pty Ltd and its overseas affiliates during the
current year.
IronRidge Resources Limited financial report for the year ended 30 June 2019
36
Auditor’s Independence Declaration
The Auditor’s Independence Declaration forms part of the Directors’ Report and can be found on page 44.
Signed in accordance with a resolution of Directors:
Vincent Mascolo
Managing Director
Brisbane
Date: 30 September 2019
IronRidge Resources Limited financial report for the year ended 30 June 2019
37
ANNUAL REPORT CORPORATE GOVERNANCE SUMMARY
Full details are available in the Corporate Governance Section of the Company’s website.
Chairman’s Statement - 2019
The IronRidge Chairman is responsible for the leadership of the Board of Directors, for the efficient organisation and
conduct of that Board's functioning, and for the briefing of all Directors in relation to issues arising at Board meetings. The
Chairman is also ultimately responsible for shareholder communication, arranging Board performance evaluation, and
setting the tone for Board’s approach to corporate governance matters. The Chairman works closely with the Managing
Director of the Company, and utilizes the Company Secretary as a resource for the administration and conduct of these
matters.
The adoption of this comprehensive Corporate Governance framework in September of 2018 came at a time when the
Company recognised the need for a more robust approach to governance.
Whilst slowly maturing, IronRidge essentially remains a junior mining industry mineral exploration company. From a
practical viewpoint, this means that the Company is yet to reach the stage where it is earning revenue, employing a large
workforce, expending large sums of money on capital works or undertaking development and / or mining works on land
owned by third-parties. Accordingly, 2018 the adoption of the QCA’s Corporate Governance framework reflects the
current status of the Company’s lifecycle. In this regard, whilst the Company has largely adopted the QCA’s principles, it
considers that some of the principles and associated reporting requirements may not yet be appropriate for the Company
to adopt.
As Chairman, it is my intention to continue to review the Company’s approach to corporate governance as it evolves from
junior explorer to project development company. Doubtless this evolution will require more rigour to be applied to the
Company’s internal and external policies and procedures as project and capital expenditures, levels of community and
governmental engagement, personnel numbers and asset values all increase over the next 12 to 24 months. In this regard
I have scheduled a regular review of our corporate governance framework, and I will seek appropriate legal and regulatory
advice regarding it from time to time. This Corporate Governance Statement will then be amended, re-adopted and re-
published as required.
The QCA’s Ten Principles as Adopted by the Company
Principle 1 - Promote Long-term Value for Shareholders
IronRidge Resources is an AIM-listed mineral exploration company with frontier assets in both Australia and West Africa.
The Company’s corporate strategy is to create and sustain shareholder value through the discovery of world-class and
globally demanded mineral commodities. Specifically, the Company is aiming to:
build a diversified portfolio of gold, lithium, bauxite, titanium and iron ore in frontier pro-mining regions of Africa and
Australia;
illustrate the metallurgy of the Company’s owned assets with the aim of demonstrating the ability to upgrade to
saleable product; and
obtain the mineral rights, licenses and mining-related permits for the discovery of mineral resources, and
demonstrate a viable approach towards their economic extraction, transportation and sale on the global market
utilizing the combined the combined skills and experience of the Company’s Board and management team.
IronRidge Resources Limited financial report for the year ended 30 June 2019
38
Mindful of the need to ensure the Company’s operations are conducted to comply with all internal systems of control,
accountability and safeguards, and in order to ensure all personnel act with honesty, integrity and fairness when dealing
with communities, land holders, business partners, suppliers, potential customers, industry participants, governments,
regulators, shareholders and fellow employees, the Board established a Social and Ethics Committee in June of 2018. This
Committee reports directly to the full Board of Directors.
Principle 2 - Addressing Shareholder Needs and Expectations
The Company currently has a relatively modest number of shareholders, and approximately 85% of the Company’s shares
are currently held by the Top 20 holders. These shareholders are known to the Board and the Company’s CEO. However,
the Company has also undertaken a number of beneficial shareholder searches in order to understand the make-up of its
register for communication and engagement purposes. The Company engages with its shareholder base (and other
interested parties) via social media, its e-mail news service and its website.
Principle 3 - Accounting for Stakeholder and Social Responsibilities
The Company is committed to being a responsible global citizen and sensitive to the needs and expectations of
governments, communities and other stakeholders in the countries and local communities in which it operates. At this
stage the Company is largely a greenfields exploration company, so the footprint of its physical activities is presently
modest and almost immediately rectified (eg. trenching is re-filled, drill holes re-covered, etc). Furthermore, the
Company’s major projects are typically located in areas of little to no vegetation, no fauna, and a sparse human population.
However, mindful of its continual evolution towards becoming a project development company, in June 2018 the Board
established a Social and Ethics Committee which reports to the full Board. The aim of the Committee is to ensure the
observance of good Corporate Governance and human rights practices by the Company. The Company also has a
Corporate and Social Responsibility Policy (as detailed on the CSR page of its website). The Company takes pride in
providing equal opportunities for employment across the various jurisdictions in which it operates.
Principle 4 - Embedded and Effective Risk Management
The majority of the risks and uncertainties facing the Company were identified and addressed in the Company’s February
2015 Aim Admission Document, a copy of which is available on the Company’s website (AIM Rule 26 Information).
Specifically, those risks were outlined on pages 47 to 65 of that document.
The Board and the Company’s management adopt a conservative approach to the management of the risks facing the
Company, having regard to the present size and scale of its operations. As outlined in the Chairman’s Statement, the
Company is yet to reach the stage where it is earning revenue, employing a large workforce, expending large sums of
money on capital works or undertaking development and / or mining works on land owned by third-parties. However, the
Company utilizes the following framework in the measurement and management of its risks:
Board and Executive Appointments;
Structured Board Reporting;
Comprehensive Insurance Program;
Location Control and Conduct;
Site Visits;
Documented Risk Management Practices and Policies.
Principle 5 - Maintenance of Board Function and Balance
As part of a mid-2018 review of the function and roles of the Board, the Directors instigated the following initiatives:
1. a change to the position of Chairman from an Executive role and an appointee of a substantial shareholder, to an
independent Non-Executive in May 2018;
2.
3.
the establishment in June 2018 of two (2) new committees reporting to the Board, being an Executive Committee and
a Social and Ethics Committee; and
the merger in June 2018 of the Nominations and Remuneration Committees.
IronRidge Resources Limited financial report for the year ended 30 June 2019
39
The Directors consider the outcomes of these changes (as outlined above) to represent an improvement to the
functionality and governance procedures associated with the Company’s Board. The Board currently consists of one
Managing Director and six Non-Executive Directors. Of the Non-Executive Directors, Mr Neil Herbert and Mr Stuart Crow
are both considered to be independent. The reasons are outlined in full within the full Corporate Governance Statement
on the Company’s website.
The terms of appointment for each of the Company’s Directors is set out under a Letter of Appointment, which contains,
amongst other things, the requirement for Directors to attend:
all Director’s Board and Strategy Meetings;
all shareholder’s Meetings;
any special Board or other meeting that may be convened (including committee meetings of which the Director is a
member); together with
time required to liaise with fellow Directors.
Principle 6 - Appropriate Mix of Skills and Experience at Board Level
Board Skills Matrix
Maintaining a balance of experience and skills is an important factor in the Company’s Board composition. The Board is
currently comprised of seasoned industry professionals (as detailed on Pages 5-7 of this Annual Report) with combined
qualifications, skills and experience as outlined below.
Summary Board Skills Matrix
The Company considers the current Board of Directors to provide the following matrix of skills:
Financial management and financial accounting experience;
Publicly-listed, junior mining industry corporate experience;
Mineral exploration and resource definition and development expertise;
Capital raising expertise and experience;
Corporate strategy development expertise;
Contract management experience;
Exploration and mining joint venture and farm-in experience;
Human resource management experience;
OH&S management experience;
Corporate M&A experience;
Ore mining and production expertise; and
Commodity marketing and global trading expertise.
Investor communication and presentation expertise;
The Board of IronRidge is mindful of the need to review its skills and capabilities as the Company continues to expand and
grow its operations, and will consider adding further relevant skills to the Board in due course via training and / or the
appointment of additional Directors.
Maintenance of Directors’ Skillset
The Company encourages and recommends each of its Directors to attend relevant external seminars, conferences and
educational programs for expanding their knowledge base and professional skills. Where practical, Directors are also
encouraged to attend international resource conferences where the Company has a presence or is presenting. In this way
Directors are available to meet with any shareholders, potential investors, business partners, governmental officials, other
industry participants and follow any relevant regulatory, technological and / or commercial developments.
Company Secretary
The Company Secretary is available as a resource to all Directors, but particularly the Chairman, and is responsible for all
matters to do with the proper functioning of the Board. Each Director is entitled to access the advice and services of the
Company Secretary as required.
IronRidge Resources Limited financial report for the year ended 30 June 2019
40
The Company Secretary is a Chartered Accountant with over 25 years experience across a wide range of industries,
including over 15 years’ experience in public company administration, compliance and corporate secretarial matters. The
Company Secretary is a Fellow of the Governance Institute of Australia.
Principle 7 - Evaluation of Board Performance
Performance Evaluation
During 2018, the Board reviewed its performance from the point of view of its composition, mix of skills, committee
composition and roles. As a result of this review, the following matters were determined:
1.
2.
3.
a change to the position of Chairman from an Executive role and an appointee of a substantial shareholder, to an
independent Non-Executive in May 2018;
the establishment in June 2018 of two (2) new committees reporting in to the Board, being an Executive Committee
and a Social and Ethics Committee; and
the merger in June 2018 of the Nominations and Remunerations Committees.
The Board will continue to regularly review and monitor its composition and performance having regard to the evolving
complexity of the Company’s activities and operations, and make changes as appropriate. The Company is in the process of
establishing the criteria against which its performance and effectiveness will be measured and how frequently evaluations
of the Board and the Board Committees will take place. These matters will be reported on in the future.
Principle 8 - Corporate Culture Based on Ethical Values and Behaviours
The Company was listed on the AIM market operated by the London Stock Exchange in February of 2015. At that time, the
Company had a Share Dealing Code and an Anti-Bribery Corruption Policy. Since that time the Company has updated its
Share Dealing Code to be compliant with the European Union’s Market Abuse Regulations introduced in 2016 and adopted
a Corporate Social Responsibility Policy (as outlined above under Principle 3). These documents are set out in full in the
Corporate Governance Section of the Company’s website.
In parallel with the adoption of the QCA Corporate Governance Principles, the Company has instituted a Code of Conduct
applicable to all employees and Board members, as outlined in the Corporate Governance Section of the Company’s
website.
In June 2018, the Board established a Social and Ethics Committee to ensure the adoption and maintenance of good
corporate governance practices by the Company, ensure the Company’s observance of international human rights, monitor
and guide the Company’s environment, health and safety record, and its promotion of equal opportunity and anti-
corruption practices. The role and objectives of the Committee are outlined in further detail in the Corporate Governance
section of the Company’s website.
Principle 9 - Maintenance of Governance Structures and Processes
The Chairman of the Company is ultimately responsible for the approach taken to the adoption, review and maintenance
of corporate governance standards by the Board, management and personnel. The Chairman is assisted by the Managing
Director and the CFO in the maintenance and management of corporate governance and risk management standards from
an operational perspective throughout the Company, and is also assisted from a policy and documentation perspective by
the Company Secretary.
The Company also has a comprehensive Corporate Governance framework and documentation, with full details available
on the Company’s website.
IronRidge Resources Limited financial report for the year ended 30 June 2019
41
Principle 10 - Communications with Shareholders and Other Stakeholders
Committee Reports
Audit Committee
During the 2018 / 19 year the Audit Committee undertook the following activities:
met with the Company’s external audit firm BDO Audit Pty Ltd to discuss the audit of the Company’s 30 June 2018
Financial Statements and the issues arising therefrom;
reviewed the Balance Sheet carrying value of the Company’s exploration and evaluation assets;
reviewed the Company’s accounting policies and treatment of project acquisition costs and share-based payments;
reviewed related party transactions and disclosures;
reviewed the Review of Operations, Remuneration Report and Significant Events After Reporting Date as disclosed in
the Company’s Annual Report;
reviewed all other disclosures within the Company’s Annual Report and Half-yearly Financial Report.
Remuneration Committee
During the last 12 months the Remuneration Committee undertook the following activities:
reviewed and made recommendations to the full Board on executive remuneration and incentive-related matters;
negotiated the contract renewal for the Company’s CEO and COO (including his promotion from Chief Geologist);
reviewed the recommended terms for the appointment of several key geological personnel and in-country
managerial positions.
In June 2018 the Remuneration Committee was merged with the Nominations Committee, the revised Charter for which is
outlined in the Corporate Governance Section of the Company’s website.
IronRidge Resources Limited financial report for the year ended 30 June 2019
42
Tel: +61 7 3237 5999
Fax: +61 7 3221 9227
www.bdo.com.au
Level 10, 12 Creek St
Brisbane QLD 4000
GPO Box 457 Brisbane QLD 4001
Australia
DECLARATION OF INDEPENDENCE BY R M SWABY TO THE DIRECTORS OF IRONRIDGE RESOURCES
LIMITED
As lead auditor of IronRidge Resources Limited for the year ended 30 June 2019, 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
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of IronRidge Resources Limited and the entities it controlled during
the period.
R M Swaby
Director
BDO Audit Pty Ltd
Brisbane, 30 September 2019
IronRidge Resources Limited financial report for the year ended 30 June 2019
43
INTEREST IN TENEMENTS
As at the date of this report, the Group has an interest in the following tenements.
Tenement
Number
Granted Tenements
Australia
EPM 19419
EPM 16260
EPM 16261
EPM 25975
EPM 26123
Gabon
Authorisation de
prospection
G5-525
Authorisation de
prospection
G6-526
Authorisation de
prospection
G5-533
Tenement Name
Principal Holder
Expiry Date
Term
Grant Date /
Application
Date
Throlstupps North
IronRidge Resources Ltd
Cadarga Two
Cadarga One
Eastern Exploration Pty Ltd
Eastern Exploration Pty Ltd
Monogorilby*
Eastern Exploration Pty Ltd
George Creek
Eastern Exploration Pty Ltd
25.08.14
24.05.19
28.05.08
23.02.16
04.08.16
25.08.22
11.06.21
27.05.21
22.02.19
03.08.21
8 years
2 years
2 years
3 years
3 years
Tchibanga*
Belinga Sud*
IronRidge Gabon S.A.
28.06.13
27.06.16
3 years
IronRidge Gabon S.A.
28.06.13
27.06.16
3 years
Tchibanga Nord*
IronRidge Gabon S.A.
Tchibanga Sud
IronRidge Gabon S.A.
05.12.13
01.10.15
04.12.16
3 years
Application
Ghana
PL3/67
PL3/92
Apam East*
Apam West*
RL 3/55
Mankessim
PL3/102
Saltpond
Senya Braku
Mankessim South
Winneba North
Winneba South
Mankwadzi
Cape Coast
Ivory Coast
Decret 2014-103,
#417
Decret 2014-149,
#416
Bianouan
Bodite
Obotan JV MODA Minerals
Limited
Obotan JV MODA Minerals
Limited
Barari JV Charger Minerals Pty
Ltd
Joy Transporters Ltd (JV
Ironridge Resources Ltd)
Green Metals Resources Ltd
(100% IRR)
Green Metals Resources Ltd
(100% IRR)
Merlink Resources Ltd (JV
MODA Minerals Ltd**)
Merlink Resources Ltd (JV
MODA Minerals Ltd**)
Obotan Minerals Company Ltd
(JV MODA Minerals Ltd**)
Joy Transporters Ltd (JV
Ironridge Resources Ltd)
05.10.15
04.10.16
1 year
06.01.17
05.01.19
2 years
23.03.18
22.03.21
3 years
30.12.16
29.12.18
2 years
10.05.16
Application
12.09.17
Application
19.08.16
Application
19.08.16
Application
19.03.18
Application
28.09.16
Application
Major Star JV Matilda Minerals
SARL
Major Star JV Scope Resources
SARL
11.03.17
10.03.20
3 years
26.03.17
25.03.20
3 years
IronRidge Resources Limited financial report for the year ended 30 June 2019
44
INTEREST IN TENEMENTS (continued)
Tenement Number
Tenement Name
Principal Holder
Expiry Date
Term
Grant Date /
Application
Date
Granted Tenements
Ivory Coast (continued)
Decret 2014-397,
AP109
Decret 2018-396,
AP0807
Decret 2017-791,
PR806
Decret 2018-101,
PR809
Decret 2016-135,
PR589
Decret 2019-186
PR0830
Chad
Adzope
Vavoua North
Marahui
Vavoua South
Kineta North
Zaranou
Rubino
Agboville
Gboghue
Kineta
Bouna East
Enchi Proci SA (JV UHITSA
Minerals SARL**)
Boxworx Minerals SARL** (JV
EGR SARL)
Marlin Minerals SARL** (JV
Bluefin SARL)
Gail Exploration CI SARL (JV
PITA Minerals SARL**)
GeoServices/Atlas Resources
(JV Harrier Minerals SAL**)
Khaleesi Resources SARL
(100% IRR)
Khaleesi Resources SARL
(100% IRR)
CAPRI Metals SARL** (JV
Enchi Proci SA)
DIVO Minerals SARL** (JV EGR
SARL)
Hard Yard Metals SARL** (JV
KME SARL)
16.07.17
15.07.18
1 year
11.04.18
10.04.22
4 years
16.11.17
15.11.21
4 years
12.03.18
11.03.22
4 years
09.03.16
08.03.20
4 years
06.03.19
05.03.23
4 years
20.10.16
Application
20.10.16
Application
23.07.17
Application
28.04.17
Application
28.04.17
Application
Arrete 082-PR-
PM-MPM-SG-
DGGM-14
Arrete 083-PR-
PM-MPM-SG-
DGGM-14
Arrete 084-PR-
PM-MPM-SG-
DGGM-14
Arrete 034-PR-
PM-MMDICPSP-
SG-DGG-DRGCM-
19
Arrete 033-PR-
PM-MMDICPSP-
SG-DGG-DRGCM-
18
Echbara
Tekton Minerals Pte Ltd
06.10.14
05.10.19
5 years
Doroty
Tekton Minerals Pte Ltd
06.10.14
05.10.19
5 years
Am Ouchar
Tekton Minerals Pte Ltd
06.10.14
05.10.19
5 years
Nabagay
Tekton Minerals Pte Ltd
23.03.18
22.03.22
5 years
Tekton Minerals Pte Ltd
* Renewal applications have been submitted to the various mining departments of the relevant Governments and the
Group has no reason to believe the renewals will not be granted.
23.03.18
22.03.22
Kalaka
5 years
IronRidge Resources Limited financial report for the year ended 30 June 2019
45
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
For the year ended 30 June 2019
Interest and other income
Administration and consulting expenses
Depreciation
Employee benefits expenses
Impairment of exploration and evaluation assets
Exploration written off
Loss on sale of tenements
Legal expenses
Interest expense
Unrealised foreign exchange gains (losses)
Share based payments
(Loss) before income tax
Income tax expense
(Loss) for the year
Other comprehensive income
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign
operations
Total comprehensive income for the year attributable
to the owners of IronRidge Resources Limited
Loss per share
Basic loss per share
Diluted loss per share
Notes
2
2019
$
2018
$
45,945
52,648
(3,022,726)
(6,442)
(450,511)
-
(141,032)
(253,482)
(255,633)
(1,628)
560,372
(3,562,426)
(7,087,563)
(50,165)
(7,137,728)
(2,837,572)
(17,297)
(508,406)
(4,040,216)
-
-
(76,945)
(239)
174,378
(5,900,819)
(13,154,468)
(36,929)
(13,191,397)
(66,529)
176,483
(7,204,257)
(13,014,914)
Cents / share
Cents / share
(2.4)
(2.4)
(4.8)
(4.8)
16
3
4
8
8
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes.
IronRidge Resources Limited financial report for the year ended 30 June 2019
46
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2019
Current assets
Cash and cash equivalents
Trade and other receivables
Other current assets
Total current assets
Non-current assets
Other financial assets
Property, plant and equipment
Exploration and evaluation assets
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Total current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity attributable to owners of IronRidge
Resources Limited
Notes
2019
$
2018
$
9
10
11
12
13
14
15
17
6,714,221
177,590
31,777
6,923,588
189,166
688,048
24,669,137
25,546,351
8,946,604
129,388
132,497
9,208,489
61,166
557,594
16,326,530
16,945,290
32,469,939
26,153,779
1,395,416
1,395,416
1,395,416
1,452,776
1,452,776
1,452,776
31,074,523
24,701,003
57,052,711
9,949,801
(35,927,989)
46,793,172
6,698,092
(28,790,261)
31,074,523
24,701,003
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
IronRidge Resources Limited financial report for the year ended 30 June 2019
47
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2019
Issued
Capital
Accumulated
Losses
$
$
Share
based
payments
reserve
$
Foreign
currency
translation
reserve
$
Total
Equity
$
Balance at 30 June 2017
Loss for the year
Other comprehensive income
Total comprehensive income for
the year
Shares issued during the year
Share issue costs
Share based payments
Balance at 30 June 2018
Loss for the year
Other comprehensive income
Total comprehensive income for
the year
Shares issued during the year
Share issue costs
Share based payments
Balance at 30 June 2019
26,189,808
-
-
-
20,689,531
(86,167)
-
46,793,172
-
-
-
10,376,591
(117,052)
-
57,052,711
(15,598,864)
(13,191,397)
-
(13,191,397)
-
-
-
(28,790,261)
(7,137,728)
-
(7,137,728)
-
-
-
(35,927,989)
838,444
-
-
-
(217,654)
-
5,900,819
6,521,609
-
-
-
(244,188)
-
3,562,426
9,839,847
-
-
176,483
176,483
-
-
-
176,483
-
(66,529)
(66,529)
-
-
-
109,954
11,429,388
(13,191,397)
176,483
(13,014,914)
20,471,877
(86,167)
5,900,819
24,701,003
(7,087,563)
(66,529)
(7,154,092)
10,132,403
(167,217)
3,562,426
31,074,523
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
IronRidge Resources Limited financial report for the year ended 30 June 2019
48
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 30 June 2019
Notes
2019
$
2018
$
Cash flows from operating activities
Payments to suppliers and employees (including GST)
Interest received
Interest paid
Net cash flows from operating activities
Cash flows from investing activities
Payments for security deposits
Cash on acquisition of Tekton Minerals Pte Ltd
Purchase of property, plant and equipment
Payments for exploration and evaluation assets
Net cash flows from investing activities
Cash flows from financing activities
Proceeds from the issue of shares
Transactions costs on the issue of shares
Net cash flows from financing activities
Net increase / (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Net foreign exchange impact
Cash and cash equivalents at the end of the year
19
9
(3,781,543)
32,059
(1,628)
(3,751,112)
(3,000)
-
(511,952)
(7,655,803)
(8,170,755)
9,512,330
(167,217)
9,345,113
(2,576,754)
8,946,604
344,372
6,714,222
(2,923,307)
52,648
(239)
(2,870,898)
(2,500)
419,247
(467,350)
(5,943,565)
(5,994,168)
15,371,878
(123,096)
15,248,782
6,383,716
2,388,510
174,378
8,946,604
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
IronRidge Resources Limited financial report for the year ended 30 June 2019
49
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2019
Note 1. Summary of Significant Accounting Policies
Corporate Information
The consolidated financial report of IronRidge Resources Limited for the year ended 30 June 2019 was authorised for issue
in accordance with a resolution of the Directors on 30 September 2019.
IronRidge Resources Limited is a public company limited by shares incorporated and domiciled in Australia. IronRidge
Resources Limited is the ultimate parent. The Group’s registered office is located at Level 27, 111 Eagle Street, Brisbane,
QLD 4000.
The nature of the operations and principal activities of the Group are described in the Directors’ report.
Basis of Preparation
This financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting
Standards, including Australian Accounting Interpretations, other authoritative pronouncements of the Australian
Accounting Standards Board and the Corporations Act 2001. The Group is considered a for-profit entity for the purpose of
Australian Accounting Standards.
The financial report covers the Group comprising of IronRidge Resources Limited and its subsidiaries and is presented in
Australian dollars.
Compliance with IFRS
Australian Accounting Standards include Australian Equivalents to International Financial Reporting Standards (AIFRS).
Compliance with AIFRS ensures that the financial statements and notes of IronRidge Resources Limited comply with
International Financial Reporting Standards (IFRS).
Going concern
The financial statements have been prepared on a going concern basis which contemplates the continuity of normal
business activities and the realisation of assets and discharge of liabilities in the ordinary course of business. The Group
has not generated revenues from operations. As such, the Group’s ability to continue to adopt the going concern
assumption will depend upon a number of matters including subsequent successful raisings in the future of necessary
funding and the successful exploration and subsequent exploitation of the Group’s tenements.
These conditions give rise to material uncertainty which may cast significant doubt over the Group’s ability to continue as a
going concern. The Directors believe that the going concern basis of preparation is appropriate as the Directors believe
there is sufficient cash available for the Group to continue operating until it can raise sufficient further capital to funds its
ongoing activities. The Group has a proven ability to raise the necessary funding or settle debts via the issuance of shares,
as evidenced by the raising of $9,512,330 during the 2019 financial year.
Should the Group be unable to continue as a going concern, it may be required to realise its assets and extinguish its
liabilities other than in the ordinary course of business, and at amounts that differ from those stated in the financial report.
IronRidge Resources Limited financial report for the year ended 30 June 2019
50
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 30 June 2019
Note 1. Summary of Significant Accounting Policies (continued)
Basis of Preparation (continued)
Reporting basis and conventions
The financial report has been prepared on an accruals basis and is based on historical costs.
The following is a summary of the material accounting policies adopted by the Group in the preparation of the financial
report.
Accounting Policies
(a)
New Accounting Standards and Interpretations
The accounting policies adopted are consistent with those of the previous financial year except as follows:
The Group has adopted the following relevant new and amended Australian Accounting Standards and AASB
Interpretations as of 1 July 2018:
Reference
AASB 9
AASB 15
AASB 2014-5
AASB 2016-3
AASB 2016-5
AASB 2016-6
AASB 2017-1
AASB 2017-3
Title
Financial instruments
Revenue from Contracts with Customers
Amendments to Australian Accounting Standards arising from AASB
15
Amendments to Australian Accounting Standards - Clarifications to
AASB 15
Amendments to Australian Accounting Standards - Classification
and Measurement of Share-based Payment Transactions
Amendments to Australian Accounting Standards - Applying AASB
9 Financial Instruments with AASB 4 Insurance Contracts
Amendments to Australian Accounting Standards - Transfers of
Investment Property. Annual improvements 2014-2016 Cycle and
Other Amendments
Amendments to Australian Accounting Standards –
Clarifications to AASB 4
Application date of
standard
1 January 2018
1 January 2018
1 January 2018
Application date
for the Group
1 July 2018
1 July 2018
1 July 2018
1 January 2018
1 July 2018
1 January 2018
1 July 2018
1 January 2018
1 July 2018
1 January 2018
1 July 2018
1 January 2018
1 July 2018
On initial adoption of AASB 9, there is no change to measurement of financial assets as they continue to be carried at
amortised cost. The Group’s intention was to hold and collect those contractual cash flows and the characteristics of the
contractual cash flows are that of solely the principal and interest. No provision for expected loss was required on 1 July
2018. There is no impact on adopting AASB 15 as the Group did not generate revenue in the prior periods. The adoption
of other standards and interpretations stated above did not have any material impact on the current or any prior period
and is not likely to materially affect future periods.
Australian Accounting Standards and Interpretations that have been recently issued or amended but are not yet effective
have not been adopted by the Group for the annual reporting period ended 30 June 2019. On evaluating these standards
and interpretations, management do not expect a material impact upon the financial statements on their adoption.
The Group anticipates that all of the relevant pronouncements will be adopted in the Group’s accounting policies for the
first period beginning after the effective date of the pronouncement. Information of new standards, amendments and
interpretations that are expected to be relevant to the Group’s financial statements is provided below.
Reference
AASB 16
AASB 2017-6
AASB 2017-7
AASB 2018-1
AASB 2018-2
Title
Leases
Amendments to Australian Accounting Standards –
Prepayment Features with Negative Compensation
Amendments to Australian Accounting Standards – Long-term
Interests in Associates and Joint Ventures
Amendments to Australian Accounting Standards – Annual
Improvements 2015-2017 Cycle
Amendments to Australian Accounting Standards – Plan
Amendment, Curtailment or Settlement
Application date of
standard
1 January 2019
1 January 2019
Application date
for the Group
1 July 2019
1 July 2019
1 January 2019
1 July 2019
1 January 2019
1 July 2019
1 January 2019
1 July 2019
IronRidge Resources Limited financial report for the year ended 30 June 2019
51
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 30 June 2019
Note 1. Summary of Significant Accounting Policies (continued)
Accounting Policies
(b)
Basis of Consolidation
The consolidated financial statements comprise the financial statements of IronRidge Resources Limited and its
subsidiaries as at and for the period ended 30 June each year (the “Group”).
Subsidiaries
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.
The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using
consistent accounting policies. In preparing the consolidated financial statements, all intercompany balances, transactions,
unrealized gains and losses resulting from intra-group transactions and dividends have been eliminated in full.
Subsidiaries are fully consolidated from the date on which control is obtained by the Group and cease to be consolidated
from the date on which control is transferred out of the Group.
Investments in subsidiaries held by IronRidge Resources Limited are accounted for at cost in the separate financial
statements of the parent entity less any impairment charges. Dividends received from subsidiaries are recorded as a
component of other revenues by the parent entity, and do not impact the recorded cost of the investment. Upon receipt of
dividend payments from subsidiaries, the parent will assess whether any indicators of impairment of the carrying value of
the investment in the subsidiary exist. Where such indicators exist, to the extent that the carrying value of the investment
exceeds its recoverable amount, an impairment loss is recognised.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. The acquisition method of
accounting involves recognising at acquisition date, separately from goodwill, the identifiable assets acquired, the liabilities
assumed and any non-controlling interest in the acquiree. The identifiable assets acquired and the liabilities assumed are
measured at their acquisition date fair values.
The difference between the above items and the fair value of consideration (including the fair value of any pre-existing
investment in the acquiree) is goodwill or discount on acquisition.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of
impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the
Group’s cash generating units that are expected to benefit from the combination, irrespective of whether other assets or
liabilities of the acquiree are assigned to those units.
Where goodwill forms part of a cash generating unit and part of the operation within that unit is disposed of, the goodwill
associated with the operation disposed of is included in the carrying amount of the operation when determining the gain
or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative values of
the operation disposed of and the portion of the cash generating unit retained.
Non-controlling interests are allocated their share of net profit after tax in the statement of profit or loss and other
comprehensive income and presented within equity in the consolidated statement of financial position, separately from
the equity of the owners of the parent.
Losses are attributed to the non-controlling interest even if that results in a deficit balance.
A change in ownership interest of a subsidiary that does not result in a loss of control, is accounted for as an equity
transaction.
IronRidge Resources Limited financial report for the year ended 30 June 2019
52
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 30 June 2019
Note 1. Summary of Significant Accounting Policies (continued)
Accounting Policies (continued)
(c) Business Combinations
Business combinations are accounted for using the acquisition method. The consideration transferred in a business
combination is measured at fair value, which is calculated as the sum of the acquisition date fair values of the assets
transferred by the acquirer, the liabilities incurred by the acquirer to former owners of the acquiree and the equity issued
by the acquirer, and the amount of any non-controlling interest in the acquiree. For each business combination, the
acquirer measures the non-controlling interest in the acquiree either at fair value or at the proportionate share of the
acquiree’s identifiable net assets. Acquisition-related costs are expensed as incurred and included in administrative
expenses.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification
and designation in accordance with contractual terms, economic conditions, the Group’s operating or accounting policies
and other pertinent conditions as at the acquisition date.
If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s previously held equity
interest in the acquiree is remeasured to fair value through profit and loss.
Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date.
Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or liability will be
recognised either in profit or loss or as a change to other comprehensive income. If the contingent consideration is
classified as equity, it is not remeasured.
(d)
Operating Segments
An operating segment is a component of an entity that engages in business activities from which it may earn revenues and
incur expenses, whose operating results are regularly reviewed by the entity’s chief operating decision maker to make
decisions about resources to be allocated to the segment and assess its performance and for which discrete financial
information is available. This may include start-up operations which are yet to earn revenues.
Operating segments that meet the quantitative criteria as prescribed by AASB 8, Operating Segments are reported
separately. However, an operating segment that does not meet the quantitative criteria is still reported separately where
information about the segment would be useful to users of the financial statements.
Information about other operating segments that are below the quantitative criteria are combined and disclosed in a
separate category for “all other segments”.
(e)
Cash and Cash Equivalents
For the statement of cash flows, cash and cash equivalents include cash on hand, deposits held at call with banks, other
short term highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts
are shown within short-term borrowings in current liabilities on the statement of financial position.
(f)
Trade and Other Receivables
Receivables generally have 30-60 day terms, are recognised initially at fair value and subsequently measured at amortised
cost using the effective interest method, less an allowance for impairment.
The Group has not recognised any expense in profit or loss in respect of the expected credit losses for the year ended 30
June 2019 (2018: nil). Based on the historical recovery and forward-looking information of receivables, the Group considers
that no allowance for expected credit losses is appropriate.
IronRidge Resources Limited financial report for the year ended 30 June 2019
53
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 30 June 2019
Note 1. Summary of Significant Accounting Policies (continued)
Accounting Policies (continued)
(g)
Financial Instruments
Recognition and Initial Measurement
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity
instrument of another entity.
Financial assets and financial liabilities are recognised in the Group statement of financial position when the Group
becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are only offset and
the net amount reported in the consolidated statement of financial position and profit or loss when there is a currently
enforceable legal right to offset the recognised amounts and the Group intends to settle on a net basis or realise the asset
and liability simultaneously.
Financial instruments are generally measured at initial recognition fair value and adjusted for transactions costs where the
instrument is not classified as at fair value through profit or loss. Transaction costs related to instruments classified as at
fair value through profit or loss are expensed to profit or loss immediately. Financial instruments are classified and
measured as set out below.
Financial assets
Financial assets at amortised cost
Financial assets are measured at amortised cost if both of the following conditions are met:
The financial asset is held within a business model with the objective to hold financial assets in order to collect
contractual cash flows: and
The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of
principal and interest on the principle amount outstanding.
Financial assets at amortised costs are subsequently measured using the effective interest (EIR) method and are subject to
an impairment assessment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or
impaired.
Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon derecognition
(equity instruments)
Upon initial recognition IronRidge can elect to classify irrevocably its equity investments as equity instruments designated a
fair value through OCI when they meet the definition of equity under IAS 32 Financial Instruments: Presentation and are
not held for trading. The classification is determined on an instrument-by-instrument basis. Gains and losses on these
financial assets are never recycled to profit or loss. Dividends are recognised as other income in the statement of profit or
loss when the right of payment has been established, except when the Group benefits from such proceeds as a recovery of
part of the cost of the financial asset, in which case, such gains are recorded in OCI. Equity instruments designated at fair
value through OCI are not subject to impairment assessment. This is a new policy in the current year.
IronRidge Resources Limited financial report for the year ended 30 June 2019
54
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 30 June 2019
Note 1. Summary of Significant Accounting Policies (continued)
Accounting Policies (continued)
(h)
Property, Plant & Equipment
Property, plant & equipment are stated at historical cost less accumulated depreciation and any accumulated impairment
losses.
The cost of property, plant & equipment constructed within the Group includes the cost of materials, direct labour,
borrowing costs and an appropriate portion of fixed and variable costs. Subsequent costs are included in the asset’s
carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits
associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and
maintenance are charged to the profit or loss during the financial year in which they are incurred.
Depreciation
The depreciable amount of all property, plant & equipment is depreciated over their useful life to the Group commencing
from the time the asset is held ready for use. Leasehold improvements are depreciated over the shorter of either the
unexpired period of the lease or the estimated useful lives of the improvements.
The depreciation rates used for each class of assets are:
Class of Property, plant & equipment
Plant & Equipment
Office Equipment
Motor Vehicles
Depreciation
10% - 30% Straight line
33.3% Straight line
25% Straight line
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These are included in the
statement of profit or loss and comprehensive income.
Derecognition
An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits are
expected from its use or disposal.
(i)
Exploration and Evaluation Assets
Exploration and evaluation expenditure incurred is accumulated in respect of each identifiable area of interest. Such
expenditures comprise net direct costs and an appropriate portion of related overhead expenditure but do not include
overheads or administration expenditure not having a specific nexus with a particular area of interest. These assets 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 which permits reasonable assessment of the existence of
economically recoverable reserves and active or significant operations in relation to the area are continuing.
The exploration and evaluation expenditures incurred in respect of earn-in arrangements have been capitalised in
accordance with AASB 6. In summary:
The farmor will not record any expenditure (whether this would otherwise have been capitalised or expensed
immediately) that is settled by the farmee
The farmor does not recognise a gain or loss on the basis of the partial disposal of any E&E asset that has already
been capitalised. Instead, any proceeds received that are not attributable to future expenditure are simply credited
against the carrying amount of any existing E&E asset
To the extent that the proceeds received from the farmee exceed the carrying amount of any E&E asset that has
already been capitalised by the farmour, this excess is recognized as a gain in profit or loss.
A regular review has been undertaken on each area of interest to determine the appropriateness of continuing to carry
forward assets in relation to that area of interest.
IronRidge Resources Limited financial report for the year ended 30 June 2019
55
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 30 June 2019
Note 1. Summary of Significant Accounting Policies (continued)
Accounting Policies (continued)
(i)
Exploration and Evaluation Assets (continued)
A provision is raised against exploration and evaluation expenditure where the Directors are of the opinion that the carried
forward net cost may not be recoverable or the right of tenure in the area lapses. The increase in the provision is charged
against the results for the year. Accumulated costs in relation to an abandoned area are written off in full against profit in
the year in which the decision to abandon the area is made.
When production commences, the accumulated costs for the relevant area of interest are amortised over the life of the
area according to the rate of depletion of the economically recoverable reserves.
Costs of site restoration are provided over the life of the area from when exploration commences and are included in the
costs of that stage. Site restoration costs include the dismantling and removal of mining plant, equipment and building
structure, waste removal, and rehabilitation of the site in accordance with clauses of mining permits. Such costs have been
determined using estimates of future costs, current legal requirements and technology on an undiscounted basis.
Any changes in the estimates for the costs are accounted on a prospective basis. In determining the costs of site
restoration, there is uncertainty regarding the nature and extent of the restoration due to community expectations and
future legislation. Accordingly, the costs have been determined on the basis that restoration will be completed within one
year of abandoning the site.
(j)
Impairment of Non-Financial Assets
At each reporting date, the Group reviews the carrying values of its tangible assets to determine whether there is any
indication that those assets have been impaired. If such an indication exists, the recoverable amount of the asset, being
the higher of the asset’s fair value less costs to sell and value in use, is compared to the asset’s carrying value. Any excess
of the asset’s carrying value over it recoverable amount is expensed to the profit or loss.
Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable
amount of the cash-generating unit to which the asset belongs.
(k)
Trade and Other Payables
Trade and other payables are carried at amortised cost and due to their short-term nature, they are not discounted. They
represent liabilities for goods and services provided to the Group prior to the end of the financial year that are unpaid and
arise when the Group becomes obliged to make future payments in respect of the purchase of these goods and services.
The amounts are unsecured and are usually paid within 30-60 days of recognition.
(l)
Provisions and Employee Benefits
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is
possible that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable
estimate can be made of the amount of the obligation.
When the Group expects some or all of a provision to be reimbursed, the reimbursement is recognised as a separate asset
but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the statement
of comprehensive income net of any reimbursement.
Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the
present obligation at the reporting date. The discount rate used to determine the present value reflects current market
assessments of the time value of money and the risks specific to the liability. The increase in the provision resulting from
the passage of time is recognised in finance costs.
IronRidge Resources Limited financial report for the year ended 30 June 2019
56
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 30 June 2019
Note 1. Summary of Significant Accounting Policies (continued)
Accounting Policies (continued)
(l)
Provisions and Employee Benefits (continued)
Employee benefits
(i) Wages, salaries and annual leave
Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled within 12
months of the reporting date are recognised in respect of employees’ services up to the reporting date. They are
measured at the amounts expected to be paid when the liabilities are settled. Expenses for non-accumulating sick leave
are recognised when the leave is taken and measured at the rates paid or payable.
(ii) Long service leave
The liability for long service leave is recognised and measured as the present value of expected future payments to be
made in respect of services provided by employees up to the reporting date. Consideration is given to expected future
wages and salary levels, experience of employee departures, and periods of service. Expected future payments are
discounted using market yields at the reporting date on Australian corporate bonds with terms to maturity and currencies
that match, as closely as possible, the estimated future cash outflows.
(m)
Leases
Leases of property, plant & equipment where substantially all the risks and benefits incidental to the ownership of the
asset, but not the legal ownership, are transferred to the Group are classified as finance leases.
Finance leases are capitalised by recording an asset and a liability at the lower of the amounts equal to the fair value of the
leased property or the present value of the minimum lease payments, including any guaranteed residual values. Lease
payments are allocated between the reduction of the lease liability and the lease interest expense for the year.
Leased assets are depreciated on a straight-line basis over their estimated useful lives where it is likely that the Group will
obtain ownership of the asset or over the term of the lease.
Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are charged as
expenses on a straight-line basis.
Lease incentives under operating leases are recognised as a liability and amortised on a straight-line basis over the life of
the lease term.
(n)
Share Capital
Ordinary shares are classified as equity at the time that they are issued. Costs directly attributable to the issue of new
shares or options are shown as a deduction from the equity proceeds, net of any income tax benefit.
(o)
Share-Based Payments
The Group may provide benefits to Directors, employees or consultants in the form of share-based payment transactions,
whereby services may be undertaken in exchange for shares or options over shares ("equity-settled transactions").
The fair value of options granted to Directors, employees and consultants is recognised as an employee benefit 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 recipients become unconditionally entitled to the options. Fair value is
determined using a Black-Scholes option pricing model. An expense is still recognised for options that do not ultimately
vest because a market condition was not met.
IronRidge Resources Limited financial report for the year ended 30 June 2019
57
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 30 June 2019
Note 1. Summary of Significant Accounting Policies (continued)
Accounting Policies (continued)
(o)
Share-Based Payments (continued)
Where the terms of options are modified, the expense continues to be recognised from grant date to vesting date as if the
terms had never been changed. In addition, at the date of the modification, a further expense is recognised for any
increase in fair value of the transaction as a result of the change.
Where options are cancelled, they are treated as if vesting occurred on cancellation and any unrecognised expenses are
taken immediately to the profit or loss. If new options are substituted for the cancelled options and designated as a
replacement, the combined impact of the cancellation and replacement options are treated as if they were a modification.
(p)
Revenue
Interest
Interest revenue is recognized as interest accrues using the effective interest rate method. This is a method of calculating
the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective
interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the
financial asset to the net carrying amount of the financial asset.
All revenue is stated net of the amount of goods and services tax (GST).
(q)
Income Tax
The income tax expense for the period is the tax payable on the current period’s taxable income rate for each jurisdiction
adjusted by changes in deferred tax assets liabilities attributable to temporary differences between the tax base of assets
and liabilities and their carrying amounts in the financial statements, and to unused tax losses.
The charge for current income tax expense is based on the profit for the year adjusted for any non-assessable or
disallowed items. It is calculated using the tax rates that have been enacted or are substantially enacted by the reporting
date.
Deferred tax is recognised for all temporary differences arising between the tax bases of assets and liabilities and their
carrying amounts in the financial statements. No deferred income tax will be recognised from the initial recognition of an
asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss.
Deferred tax is calculated at the tax rates expected to apply to the period when the asset is realised or liability is settled.
Deferred tax is recognised in the statement of comprehensive income except where it relates to items that may be
recognised directly in equity, in which case the deferred tax is adjusted directly against equity. Deferred income tax assets
are recognised to the extent that it is probable that future tax profits will be available against which deductible temporary
differences can be utilised.
The amount of benefits brought to account or which may be realised in the future is based on the assumption that no
adverse change will occur in income taxation legislation and the anticipation that the group will derive sufficient future
assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law.
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net
settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets
and liabilities are offset where a legally enforceable right of set-off exists, the deferred tax assets and liabilities relate to
income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where it
is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur in
future periods in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled.
IronRidge Resources Limited financial report for the year ended 30 June 2019
58
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 30 June 2019
Note 1. Summary of Significant Accounting Policies (continued)
Accounting Policies (continued)
(r)
GST
Revenues, expenses and assets are recognised net of GST except where GST incurred on a purchase of goods and services
is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the
asset or as part of the expense item.
Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable
to, the taxation authority is included as part of receivables or payables in the statement of financial position.
Cash flows are included in the statement of cash flows on a gross basis and the GST component of cash flows arising from
investing and financing activities, which is recoverable from, or payable to, the taxation authority, are classified as
operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation
authority.
(s)
Earnings per Share
Basic earnings per share is calculated as net profit (loss) attributable to members of the parent, adjusted to exclude any
costs of servicing equity other than ordinary shares, divided by the weighted average number of ordinary shares, adjusted
for any bonus element.
Diluted earnings per share adjust the figures used in the determination of basic earnings per share to take into account:
The after tax effect of interest and other financing costs associated with dilutive potential ordinary shares; and
The weighted average number of additional ordinary shares that would have been outstanding assuming the
conversion of all dilutive potential ordinary shares.
(t)
Foreign Currencies
Items included in the financial statements of each of the Group entities are measured using the currency of the primary
economic environment in which the entity operates (‘the functional currency’). The consolidated financial statements are
presented in Australian dollars, which is the Company’s functional and presentation currency.
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of
the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the
translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised
in profit or loss.
Exchange differences arising from the translation of financial statements of foreign subsidiaries are taken to the foreign
currency translation reserve at the reporting date.
(u)
Comparatives
When required by Australian Accounting Standards, comparative figures have been adjusted to conform to changes in
presentation for the current financial year.
(v)
Fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the fair
value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date; and assumes that the transaction will take place either: in the
principle market; or in the absence of a principal market, in the most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or liability,
assuming they act in their economic best interest. For non-financial assets, the fair value measurement is based on its
highest and best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data are
available to measure fair value, are used, maximising the use of relevant observable inputs and minimising the use of
unobservable inputs.
IronRidge Resources Limited financial report for the year ended 30 June 2019
59
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 30 June 2019
Note 1. Summary of Significant Accounting Policies (continued)
Accounting Policies (continued)
(v)
Fair value measurement (continued)
Assets and liabilities measured at fair value are classified, into three levels, using a fair value hierarchy that reflects the
significance of the inputs used in making the measurements. Classifications are reviewed each reporting date and transfers
between levels are determined based on a reassessment of the lowest level input that is significant to the fair value
measurement.
For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is either
not available or when the valuation is deemed to be significant. External valuers are selected based on market knowledge
and reputation. Where there is a significant change in fair value of an asset or liability from one period to another, an
analysis is undertaken, which includes a verification of the major inputs applied in the latest valuation and a comparison,
where applicable, with external sources of data.
(w)
Critical Accounting Estimates and Judgments
The Directors evaluate estimates and judgments incorporated into the financial report based on historical knowledge and
best available current information. Estimates assume a reasonable expectation of future events and are based on current
trends and economic data, obtained both externally and within the Group.
Key estimates – impairment of non-financial assets
The Group assesses impairment at each reporting date by evaluating conditions specific to the Group that may lead to
impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is determined. Where
applicable, value-in-use calculations performed in assessing recoverable amounts incorporate a number of key estimates.
Key judgments – exploration & evaluation assets
The Group performs regular reviews on each area of interest to determine the appropriateness of continuing to carry
forward costs in relation to that area of interest. These reviews are based on detailed surveys and analysis of drilling
results performed to reporting date.
The Directors have assessed that for the exploration and evaluation assets recognised at 30 June 2019, the facts and
circumstances do not suggest that the carrying amount of an asset may exceed its recoverable amount. For the year ended
30 June 2018, in considering the facts and circumstances at the time, the Directors had assessed that there was a need for
an impairment as noted in Accounting Standard AASB 6 “Exploration for and Evaluation of Mineral Resources”.
Accordingly, an impairment provision of $4,040,216 was recognised on the Gabon tenements as the Group currently has
not allocated an exploration budget for these tenements as they are currently being renewed.
Exploration and evaluation assets at 30 June 2019 were $24,669,137 (2018: $16,326,530).
Key judgments – share based payment transactions
The Group measures the cost of equity settled transactions with employees by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value is determined by using the Black-Scholes model or Monte
Carlo model taking into account the terms and conditions upon which the instruments were granted. The accounting
estimates and assumptions relating to equity settled share based payments would have no impact on the carrying amounts
of assets and liabilities within the next annual reporting period but may impact the profit or loss and equity. The key inputs
used in the Black-Scholes model or Monte Carlo model are disclosed in Note 16.
IronRidge Resources Limited financial report for the year ended 30 June 2019
60
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 30 June 2019
Note 1. Summary of Significant Accounting Policies (continued)
Accounting Policies (continued)
Note 2. Income
- Interest received
- Other income
Total Income
(a) Interest income from:
- At call deposits held with financial institutions
Total Interest Revenue
Note 3. Profit / (Loss)
Included in the profit / (loss) are the following specific
expenses:
Depreciation
- Office equipment
- Plant & equipment
- Motor Vehicle
Defined contributions superannuation expense
Unrealised foreign exchange (gains) losses
Executive Directors fees
Non-Executive Director fees
Project generation costs
Administration services
2019
$
2018
$
32,058
13,887
45,945
32,058
32,058
-
6,442
-
12,130
(560,372)
615,000
390,000
69,587
288,000
52,648
-
52,648
52,648
52,648
565
6,715
10,017
39,959
(174,378)
775,420
306,247
232,279
288,000
IronRidge Resources Limited financial report for the year ended 30 June 2019
61
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 30 June 2019
Note 4. Income Tax
Components of income tax expense (benefit)
Income tax expense (benefit) is made up of:
Current tax
Deferred tax
Components of tax expense recognised directly in equity
Deferred tax
The prima facie tax on profit / (loss) before income tax is
reconciled to the income tax expense as follows:
Prima facie tax on profit / (loss) before income tax at 30%
(2018: 30%)
Add tax effect of:
Permanent differences
Current tax loss not recognised
Share based payments
Recognition of tax losses
Prior year over / (under)
Tax impact on recognising additional exploration and
evaluation costs from acquisition of Tekton Minerals Pte Ltd
Income tax expense
Deferred Tax Asset (at 30%)
Recognised temporary differences
Recognised unused tax losses
Payables and provisions
Total deferred tax assets recognised
Deferred Tax Liability
Assessable temporary differences
Exploration and evaluation assets
Total deferred tax liabilities recognised
2019
$
2018
$
50,165
50,165
(50,165)
(50,165)
-
36,929
36,929
(36,929)
(36,929)
(2,126,269)
(3,946,341)
253,123
1,068,728
801,070
53,513
-
50,165
88,180
2,314,354
137,969
2,540,503
(239,520)
(2,300,983)
(2,540,503)
144,174
23,558
1,770,246
(939,791)
(789)
2,985,872
36,929
82,567
2,213,211
70,196
2,365,974
(52,313)
(2,313,661)
(2,365,974)
Net deferred tax recognised
-
-
Unrecognised deferred tax assets comprised of:
Deferred tax assets: Net unrecognised tax losses
Deferred tax assets: Gross unrecognised tax losses
3,552,095
11,840,318
2,700,132
9,000,441
In order to recoup carried forward losses in future periods, either the Continuity of Ownership Test (COT) or Same
Business Test must be passed. The majority of losses are carried forward at 30 June 2019 under COT.
Deferred tax assets which have not been recognised as an asset, will only be obtained if:
(i)
(ii)
(iii)
the Company derives future assessable income of a nature and of an amount sufficient to enable the losses to be
realised;
the Company continues to comply with the conditions for deductibility imposed by the law; and
no changes in tax legislation adversely affect the Company in realising the losses.
IronRidge Resources Limited financial report for the year ended 30 June 2019
62
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 30 June 2019
Note 5. Key Management Personnel
Key Management Personnel Compensation
The total remuneration of Key Management Personnel for the Group for the year was as follows:
Short term employee benefits
Post-employment benefits
Share based payments
Total
2019
$
1,613,637
22,403
3,220,292
4,856,332
2018
$
1,605,640
26,027
3,171,348
4,803,015
Refer to the Remuneration Report contained in the Directors’ Report for details of the remuneration paid or payable to
each member of the Group’s Key Management Personnel.
Note 6. Dividends and Franking Credits
There were no dividends paid or recommended during the year or since the end of the year. There are no franking
credits available to shareholders of the Company.
2019
$
2018
$
Note 7. Auditors Remuneration
Amounts received or due and receivable by BDO Audit Pty
Ltd
An audit or review of the financial report of the
entity or any other entity in the consolidated
group
Other services in relation to the entity and any
other entity in the consolidated group
Tax compliance
Assurance related
Amounts received or due and receivable by BDO (Overseas)
Other services in relation to the entity and any
other entity in the consolidated group
Assurance related
Note 8. Loss per Share (EPS)
(a) Loss
Loss used to calculate basic and diluted EPS
(b) Weighted average number of shares and options
Weighted average number of ordinary shares outstanding
during the year, used in calculating basic loss per share
Weighted average number of dilutive options outstanding
during the year
Weighted average number of ordinary shares and potential
ordinary shares outstanding during the year, used in calculating
diluted loss per share
31,500
-
-
31,500
-
31,500
40,000
-
-
40,000
-
40,000
(7,137,728)
(13,191,397)
Number of Shares
Number of Shares
298,214,647
274,412,675
-
-
298,214,647
274,412,675
The options are considered non-dilutive as the Company is loss making. Options may become dilutive in the future.
Note 9. Cash and Cash Equivalents
Cash at bank
2019
$
2018
$
6,714,221
6,714,221
8,946,604
8,946,604
IronRidge Resources Limited financial report for the year ended 30 June 2019
63
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 30 June 2019
Note 10. Trade and Other Receivables
GST receivable
Other receivables
2019
$
2018
$
80,247
97,343
177,590
44,334
85,054
129,388
Receivables are non-interest bearing and are generally on 30-60 day terms. No impairment loss has been recorded for
the current and previous financial year.
Due to the short term nature of these receivables, their carrying value is assumed to approximate fair value. The
maximum exposure to credit risk is the carrying value of receivables. Collateral is not held as security.
The receivables are not exposed to foreign exchange risk. No receivables were past due or impaired at 30 June 2019
(2018: nil).
Note 11. Other Financial Assets –Non-current
Security deposits
Investment in shares
2019
$
2018
$
60,166
129,000
189,166
57,166
4,000
61,166
Investment in shares at cost comprise an investment in the ordinary issued capital of Aus Tin Mining Ltd, listed on the
Australian Securities Exchange $4,000 (2018: $4,000) and an investment in the ordinary issued capital of Auburn
Resources Ltd $125,000 (2018: Nil), an unlisted public company incorporated in Australia.
The investment in shares are equity instruments under AASB 9 which are not held for trading. The Group made an
irrevocable election on initial recognition to designate these equity instruments at fair value through other
comprehensive income.
Gains or losses will be recognised in OCI and never reclassified from equity to profit or loss.
IronRidge Resources Limited financial report for the year ended 30 June 2019
64
309,507
(159,879)
149,628
4,189
(4,189)
-
532,463
(124,497)
407,966
557,594
Total
$
557,594
24,456
511,954
-
(399,514)
(6,442)
688,048
27,466
259,164
467,350
-
(179,089)
(17,297)
557,594
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 30 June 2019
Note 12. Property, Plant and Equipment
Plant & Equipment – at cost
Accumulated depreciation
Written down value
Office equipment – at cost
Accumulated depreciation
Written down value
Motor Vehicle – at cost
Accumulated depreciation
Written down value
Total Written down value
Reconciliation of carrying amounts at the beginning and of the year
2019
$
2018
$
580,675
(372,240)
208,435
4,189
(4,189)
-
797,705
(318,092)
479,613
688,048
Year ended 30 June 2019
At 1 July 2018 net of accumulated depreciation
Effect of foreign exchange on opening balances
Additions
Disposals
Depreciation charged to exploration and evaluation
Depreciation charge for the year
At 30 June 2019 net of accumulated depreciation
Year ended 30 June 2018
At 1 July 2017 net of accumulated depreciation
Additions – acquisition of Tekton Pte Ltd
Additions
Disposals
Depreciation charged to exploration and evaluation
Depreciation charge for the year
At 30 June 2018 net of accumulated depreciation
Note 13. Exploration and Evaluation Assets
Exploration and evaluation assets
Movements in carrying amounts
Balance at the beginning of the year
Effect of foreign exchange on opening balance
Additions
Additions – acquisition of Tekton Minerals Pte Ltd
Disposals
Impaired during the year
Written-off during the year
Balance at the end of the year
Motor
Vehicle
$
407,966
15,385
249,857
-
(193,595)
-
479,613
-
181,474
347,128
-
(110,619)
(10,017)
407,966
Plant &
Equipment
$
149,628
9,071
262,097
-
(205,919)
(6,442)
208,435
26,901
77,690
120,222
-
(68,470)
(6,715)
149,628
Office
Equipment
$
-
-
-
-
-
-
-
565
-
-
-
-
(565)
-
2019
$
2018
$
24,669,137
16,326,530
16,326,530
(82,516)
8,944,637
-
(378,482)
-
(141,032)
24,669,137
6,809,459
-
6,251,633
7,305,654
-
(4,040,216)
-
16,326,530
The recoverability of the carrying amount of exploration and evaluation assets is dependent on the successful
development and commercial exploitation or alternatively, sale of the respective areas of interest.
IronRidge Resources Limited financial report for the year ended 30 June 2019
65
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 30 June 2019
Note 14. Trade and Other Payables
Trade payables
Sundry payables and accrued expenses
Employee benefits
2019
$
2018
$
296,229
951,702
147,485
1,395,416
600,003
630,726
222,047
1,452,776
Trade payables are non-interest bearing and are generally on 30-60 day terms.
Due to the short term nature of these payables, their carrying value is assumed to approximate fair value.
Note 15. Issued Capital
(a) Issued and paid up capital
311,107,170 (2018: 281,316,158) ordinary shares fully paid
Share issue costs
2019
$
2018
$
57,995,895
(943,184)
57,052,711
47,619,304
(826,132)
46,793,172
Ordinary shares participate in dividends and the proceeds on winding up the Company in proportion to the number of
shares held. At shareholder meetings each ordinary share is entitled to one vote when a poll is called, otherwise each
shareholder has one vote on a show of hands.
(b) Reconciliation of issued and paid-up capital
At 1 July 2017
On 19 July 2017 23,553,767 £0.35 (equivalent to $0.59) ordinary shares were
issued by way of private placement.
On 5 September 2017, 10,000,000 £0.3125 (equivalent to $0.48) ordinary shares
were issued for the acquisition of Tekton Pte Ltd.
On 25 October 2017, 450,000 £0.32 (equivalent to $0.51) ordinary shares were
issued on the conversion of performance rights granted to Tekton Pte Ltd.
On 21 November 2017, 1,600,000 £0.10 (equivalent to $0.17) ordinary shares
were issued on the exercise of options.
On 5 December 2017, 1,400,000 £0.10 (equivalent to $0.17) ordinary shares
were issued on the exercise of options.
On 19 December 2017, 4,900,000 £0.10 (equivalent to $0.17) ordinary shares
were issued on the exercise of options.
On 22 January 2018, 500,000 £0.075 (equivalent to $0.13) ordinary shares were
issued on the exercise of options.
At 30 June 2018
On 13 August 2018, 630,000 £0.22 (equivalent to $0.39) ordinary shares were
issued on the conversion of performance rights granted to Tekton Pte Ltd.
On 26 November 2018, 27,022,000 £0.22 (equivalent to $0.35) ordinary shares
were issued by way of a private placement
On 25 January 2019, 600,000 £0.10 (equivalent to $0.18) ordinary shares were
issued on the exercise of options1.
On 18 June 2019, 1,539,012 £0.22 (equivalent to $0.40) ordinary shares were
issued for the acquisition of the Vavoua projects.
At 30 June 2019
Number of
Shares
238,912,391
$
26,929,773
23,553,767
13,936,735
10,000,000
5,100,000
450,000
1,600,000
1,400,000
4,900,000
217,654
273,392
244,099
852,651
500,000
281,316,158
65,000
47,619,304
630,000
244,188
27,022,000
9,512,330
600,000
-
1,539,012
311,107,170
620,073
57,995,895
1The options exercised on 25 January 2019 were exercised through a 12-month interest free non-recourse company
funded loan. This has been treated as a modification to the options for accounting purposes (refer note 16).
IronRidge Resources Limited financial report for the year ended 30 June 2019
66
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 30 June 2019
Note 15. Issued Capital (continued)
(c) Options
As at 30 June 2019, there were 40,750,000 (2018: 30,600,000) unissued ordinary shares of IronRidge Resources Limited
under option and 600,000 (2018: nil) options exercised under the company funded loan plan (treated as an in substance
option) held as follows:
600,000 unlisted options to take up one ordinary share in IronRidge Resource Ltd at an exercise price of £0.10.
Prior to expiry on 20 January 2019, modification was made to extend the expiry date to 20 January 2020 through
a loan funded share plan.
4,500,000 unlisted options to take up one ordinary share in IronRidge Resources Ltd at an exercise price of £0.40.
The options vested immediately and expire 5 September 2019.
4,500,000 unlisted options to take up one ordinary share in IronRidge Resources Ltd at an exercise price of £0.60.
The options vested immediately and expire 5 September 2020.
2,000,000 unlisted options to take up one ordinary share in IronRidge Resources Ltd at an exercise price of £0.60.
The options vests on the earlier of the expiry of 75% of the term of the option or a Change of Control
Transaction, as defined under the Company’s ESOP Rules.
5,750,000 unlisted options to take up one ordinary share in IronRidge Resources Ltd at an exercise price of £0.40.
The options vested immediately and expire 3 September 2020.
4,000,000 unlisted options to take up one ordinary share in IronRidge Resources Ltd at an exercise price of £0.60.
The options vested immediately and expire 3 September 2021.
5,000,000 unlisted options to take up one ordinary share in IronRidge Resources Ltd at an exercise price of £0.90.
The options vested immediately and expire 3 September 2021.
4,000,000 unlisted options to take up one ordinary share in IronRidge Resources Ltd at an exercise price of £0.40.
The options vested immediately and expire 29 November 2020.
5,000,000 unlisted options to take up one ordinary share in IronRidge Resources Ltd at an exercise price of £0.60.
The options vested immediately and expire 29 November 2021.
6,000,000 unlisted options to take up one ordinary share in IronRidge Resources Ltd at an exercise price of £0.90.
The options vested immediately and expire 29 November 2021.
(d) Capital Risk Management
When managing capital, management’s objective is to ensure the entity continues as a going concern as well as to maintain
optimal returns to shareholders and benefits for other stakeholders. Management also aims to maintain a capital structure
to ensure the lowest costs of capital available to the Group.
The Group’s capital comprises equity as shown in the statement of financial position. The Group is not exposed to
externally imposed capital requirements.
Note 16. Share Based Payments
The expense recognised for share based payments received during the year is shown in the table below:
Expense arising from equity settled share-based payment
transactions:
Share options
Performance rights
Modification to share based payments
2019
$
2,486,336
1,072,249
3,841
3,562,426
2018
$
5,417,679
483,140
-
5,900,819
Modification to share based payments
On 25 January 2019, 600,000 options were exercised via a 12-month interest free non-recourse company funded loan. For
accounting purposes this exercise has been treated as a modification to the options originally issued. Effectively the
exercise period of the options has been extended by 12-months as the loan is non-recourse meaning that if the shares are
of less value than the exercise price on 25 January 2020 the shares can be handed back to the Company. A black-scholes
valuation was undertaken to extend the exercise period by one year from the original grant date and the resultant
additional expense has been recognised in the current year share based payments.
IronRidge Resources Limited financial report for the year ended 30 June 2019
67
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 30 June 2019
Note 16. Share Based Payments (continued)
Employee share option plan (ESOP)
Share options are granted to employees. The employee share option plan is designed to align participants’ interests with
those of shareholders by increasing the value of the Company’s shares.
When a participant ceases employment after the vesting of their share options, the share options are forfeited after 90
days unless cessation of employment is due to termination for cause, whereupon they are forfeited immediately or death.
The Company prohibits KMP from entering into arrangements to protect the value of unvested ESOP awards.
Each option can be exercised from vesting date to expiry date for one share with the exercise price payable in cash.
Options granted
On 29 November 2018, 6,000,000 IronRidge Resources Ltd share options were granted to a Director under the Employee
Share Option Plan. The options are to take up one ordinary share in IronRidge Resources at £0.90 per share. The options
vested immediately and are due to expire on 29 November 2021.
On 29 November 2018, 5,000,000 IronRidge Resources Ltd share options were granted to a Director under the Employee
Share Option Plan. The options are to take up one ordinary share in IronRidge Resources at £0.60 per share. The options
vested immediately and are due to expire on 29 November 2021.
On 29 November 2018, 4,000,000 IronRidge Resources Ltd share options were granted to a Director under the Employee
Share Option Plan. The options are to take up one ordinary share in IronRidge Resources at £0.40 per share. The options
vested immediately and are due to expire on 29 November 2020.
On 3 September 2018, 5,000,000 IronRidge Resources Ltd share options were granted to an employee under the Employee
Share Option Plan. The options are to take up one ordinary share in IronRidge Resources at £0.90 per share. The options
vested immediately and are due to expire on 3 September 2021.
On 3 September 2018, 4,000,000 IronRidge Resources Ltd share options were granted to an employee under the Employee
Share Option Plan. The options are to take up one ordinary share in IronRidge Resources at £0.60 per share. The options
vested immediately and are due to expire on 3 September 2021.
On 3 September 2018, 5,750,000 IronRidge Resources Ltd share options were granted to employees under the Employee
Share Option Plan. The options are to take up one ordinary share in IronRidge Resources at £0.40 per share. The options
vested immediately and are due to expire on 3 September 2020.
On 20 September 2017, 2,000,000 IronRidge Resources Ltd share options were granted to an employee and contractor
under the Employee Share Option Plan. The options are to take up one ordinary share in IronRidge Resources at £0.60 per
share. The options vest on the earlier of the expiry of 75% of the 2 year term or a change of control transaction, as defined
in the Company's ESOP rules.
On 5 September 2017, 9,000,000 IronRidge Resources Ltd share options were granted to the Tekton management team
under the Employee Share Option Plan. The options are to take up one ordinary share in IronRidge Resources at prices
between £0.40 and £0.60 per share. The options vested immediately and are due to expire on 5 September 2019.
IronRidge Resources Limited financial report for the year ended 30 June 2019
68
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 30 June 2019
Note 16. Share Based Payments (continued)
The following table illustrates the number (no.) and weighted average exercise prices (WAEP) of, and movements in, share
based payment share options granted during the year:
Outstanding at the beginning of the year
Granted during the year
Forfeited during the year
Exercised during the year
Modified
Expired during the year
Outstanding at the end of the year
Exercisable at the end of the year
2019
No.
30,600,000
29,750,000
-
(600,000)
600,000
(19,000,000)
41,350,000
41,350,000
2019
WAEP
£0.48
£0.65
-
£0.10
£0.47
£0.61
£0.61
2018
No.
28,000,000
11,000,000
-
(8,400,000)
-
30,600,000
9,100,000
2018
WAEP
£0.37
£0.52
-
£0.10
-
£0.48
£0.29
The weighted average remaining contractual life of the options was 1.49 years (2018: 0.86 years).
Weighted average exercise price
Weighted average life of the option
Underlying share price
Expected share price volatility
Risk free interest rate
Number of options issued
Fair value (black-scholes) per option
Total value of options issued (GBP)
Total value of options issued (AUD equivalent)
IronRidge Resources Ltd ESOP
2019
£0.65
2.68 years
£0.1980 - £0.2400
59.871% - 65.032%
0.78% - 1.08%
29,750,000
£0.013 - £0.050
£930,393
$1,664,184
2018
£0.52
2.00 years
£0.2950 -£0.3375
100.64% - 100.78%
0.41% - 0.45%
11,000,000
£0.133-£0.144
£1,495,631
$2,454,710
Expected share price volatility was estimated based on historical share price volatility.
IronRidge Resources Limited financial report for the year ended 30 June 2019
69
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 30 June 2019
Note 16. Share Based Payments (continued)
Performance rights
There were 12,150,000 performance rights granted during the year ended 30 June 2019 (2018: 1,080,000). The
performance rights entitle the holder to receive the corresponding number of ordinary shares in IronRidge Resources
based on share price performance hurdles. The performance rights vest on achievement of each Maturity price
milestone and convert to fully paid ordinary shares. The Maturity price is based on a 30 trading day VWAP metric for
each tranche of the performance rights. The holder of the performance rights must remain an employee of IronRidge
Resources or its subsidiaries at vesting date for the performance rights to convert into ordinary shares.
The following table illustrates the number and movements in share based payment performance rights granted during
the year:
Outstanding at the beginning of the year
Granted during the year
Forfeited during the year
Vested and converted during the year
Outstanding at the end of the year
2019
Number
630,000
12,150,000
-
(630,000)
12,150,000
2018
Number
-
1,080,000
-
(450,000)
630,000
Number of performance rights
Maturity price
Issue date
Expiry date
Fair value
Total value of performance
rights issued (GBP)
Total value of performance
rights issued (AUD equivalent)
Number of performance rights
Maturity price
Issue date
Expiry date
Fair value
Total value of performance
rights issued (GBP)
Total value of performance
rights issued (AUD equivalent)
Number of performance rights
Maturity price
Issue date
Expiry date
Fair value
Total value of performance
rights issued (GBP)
Total value of performance
rights issued (AUD equivalent)
IronRidge Resources Ltd
Performance Rights
225,000
£0.30
3 September 2018
3 September 2021
£0.213
225,000
£0.40
3 September 2018
3 September 2021
£0.200
225,000
£0.50
3 September 2018
3 September 2021
£0.190
225,000
£0.60
3 September 2018
3 September 2021
£0.180
£47,835
$86,097
£45,091
$81,158
£42,683
$76,824
£40,396
$72,707
IronRidge Resources Ltd
Performance Rights
225,000
£0.70
3 September 2018
3 September 2021
£0.170
225,000
£0.80
3 September 2018
3 September 2021
£0.160
225,000
£0.90
3 September 2018
3 September 2021
£0.150
225,000
£1.00
3 September 2018
3 September 2021
£0.150
£38,219
$68,787
£36,360
$65,443
£34,622
$62,317
£33,147
$59,662
IronRidge Resources Ltd
Performance Rights
500,000
£1.25
3 September 2018
3 September 2021
£0.130
750,000
£1.50
3 September 2018
3 September 2021
£0.120
1,000,000
£2.00
3 September 2018
3 September 2021
£0.100
450,000
£0.30
29 November 2018
29 November 2021
£0.212
£65,935
£89,245
£99,598
£95,499
$118,672
$160,629
$179,263
$166,770
IronRidge Resources Limited financial report for the year ended 30 June 2019
70
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 30 June 2019
Note 16. Share Based Payments (continued)
Number of performance rights
Maturity price
Issue date
Expiry date
Fair value
Total value of performance
rights issued (GBP)
Total value of performance
rights issued (AUD equivalent)
Number of performance rights
Maturity price
Issue date
Expiry date
Fair value
Total value of performance
rights issued (GBP)
Total value of performance
rights issued (AUD equivalent)
Number of performance rights
Maturity price
Issue date
Expiry date
Fair value
Total value of performance
rights issued (GBP)
Total value of performance
rights issued (AUD equivalent)
IronRidge Resources Ltd
Performance Rights
450,000
£0.40
29 November 2018
29 November 2021
£0.200
450,000
£0.50
29 November 2018
29 November 2021
£0.189
450,000
£0.60
29 November 2018
29 November 2021
£0.180
450,000
£0.70
29 November 2018
29 November 2021
£0.170
£90,079
£85,192
£80,954
£76,495
$157,307
$148,772
$141,370
$133,583
IronRidge Resources Ltd
Performance Rights
450,000
£0.80
29 November 2018
29 November 2021
£0.161
450,000
£0.90
29 November 2018
29 November 2021
£0.154
450,000
£1.00
29 November 2018
29 November 2021
£0.147
1,000,000
£1.25
29 November 2018
29 November 2021
£0.132
£72,502
£69,377
£66,015
$126,610
$121,153
$115,282
£131,935
$230,398
IronRidge Resources Ltd
Performance Rights
1,500,000
£1.50
29 November 2018
29 November 2021
£0.118
2,000,000
£2.00
29 November 2018
29 November 2021
£0.099
£177,524
£197,672
$310,008
$345,192
The following table reconciles the movements in share based payments expense recognised in the consolidated
statement of profit or loss and other comprehensive income.
2017 Employee options
2017 Director options
2018 Tekton employee options
2018 Employee options
2018 Performance rights
2019 Employee options
2019 Director options
2019 Performance rights
2016 Employee option modification
Total share based payments
expense
2018
$
533,794
2,652,210
2,007,000
224,675
483,140
-
-
-
-
2019
$
-
599,117
-
223,035
39,230
1,119,820
544,364
1,033,019
3,841
To be recognised
in future periods
$
-
-
-
-
-
-
-
1,994,984
-
Total expense
$
803,450
3,645,017
2,007,000
447,710
522,370
1,119,820
544,364
3,028,003
3,841
5,900,819
3,562,426
1,994,984
12,121,575
IronRidge Resources Limited financial report for the year ended 30 June 2019
71
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 30 June 2019
Note 17. Accumulated Losses
Accumulated losses at the beginning of the year
Losses after income tax expense
Accumulated losses attributable to members of IronRidge
Resources Limited at the end of the year
Note 18. Information relating to IronRidge Resources Limited
(“the parent entity”)
Current assets
Total assets
Current liabilities
Total liabilities
Net Assets
Issued capital
Share based payment reserve
Accumulated losses
Loss of the parent entity
Total comprehensive loss of the parent entity
2019
$
2018
$
(28,790,261)
(7,137,728)
(15,598,864)
(13,191,397)
(35,927,989)
(28,790,261)
2019
$
6,278,861
33,421,610
1,347,636
1,347,636
32,073,975
57,052,711
9,839,847
(34,818,583)
(6,233,004)
(6,233,004)
2018
$
8,259,370
25,830,561
1,101,359
1,101,359
24,729,202
46,793,172
6,521,609
(28,585,579)
(12,939,718)
(12,939,718)
The parent does not have any guarantees in relation to the debts of its subsidiaries, contingent liabilities or contractual
obligations to purchase fixed assets at 30 June 2019 (2018: nil).
Note 19. Cash Flow Reconciliation
Loss after income tax
Non-cash operating items
-
-
-
-
-
-
-
Impairment of exploration expenditure
Exploration written off
Loss on sale of tenements
Depreciation
Share based payments
Unrealised foreign exchange gains
Income tax expense
Changes in operating assets and liabilities*
(Increase) decrease in trade and other receivables
(Increase) decrease in other current assets
Increase (decrease) in trade and other payables*
Net cash flows from operating activities
* Net of amounts relating to exploration and evaluation assets.
Non cash investing and financing activities
Shares issued to acquire Tekton Minerals Pte Ltd, capitalised to
exploration and evaluation assets
Shares issued on the conversion of performance rights granted
to Tekton Pte Ltd (accounted for in prior years as share-based
payments on issue of performance rights)
Shares issued to acquire Vavoua projects, capitalised to
exploration and evaluation assets
Shares received on disposal of exploration and evaluation
assets
2019
$
2018
$
(7,137,728)
(13,191,397)
-
141,032
253,482
6,442
3,562,426
(560,372)
50,165
(27,260)
-
(39,633)
3,751,113
4,040,216
-
-
17,297
5,900,819
(174,378)
36,929
(19,941)
(119,163)
638,720
(2,870,898)
-
5,100,000
244,188
620,073
(125,000)
217,654
-
-
IronRidge Resources Limited financial report for the year ended 30 June 2019
72
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 30 June 2019
Note 20. Related Party Disclosures
(a) Subsidiaries
The consolidated financial statements include the financial statements of IronRidge Resources Limited and the subsidiaries
listed in the following table:
Name
Country of
incorporation
Equity interest (%)
Eastern Exploration Pty Ltd
Milingui Pty Ltd (formerly Quiver Coal Pty
Ltd)
Belinga Holdings Pty Ltd
Gabon Exploration Pty Ltd
Lithium of Africa Pty Ltd
Stark Metals Pty Ltd
Khaleesi Resources Pty Ltd
UHITSA Minerals Pty Ltd
CAPRI Metals Pty Ltd
Matilda Minerals Pty Ltd
Scope Resources Pty Ltd
Booster Minerals Pty Ltd
PITA Minerals Pty Ltd
DIVO Metals Pty Ltd
Boxworx Minerals Pty Ltd
Hard Yard Metals Pty Ltd
Marlin Minerals Pty Ltd
Malamute Minerals Pty Ltd
Stark Metals SARL
Khaleesi Resources SARL
UHITSA Minerals SARL
CAPRI Metals SARL
Matilda Minerals SARL
Scope Resources SARL
Booster Minerals SARL
PITA Minerals SARL
DIVO Metals SARL
Boxworx Minerals SARL
Hard Yard Metals SARL
Marlin Minerals SARL
Malamute Minerals SARL
MODA Minerals Pty Ltd
MODA Minerals Limited
Green Metals Resources Limited
Charger Minerals Pty Ltd
Charger Minerals Pty Limited
Harrier Minerals Pty Ltd
Rhodesian Resources Pty Ltd
IronRidge Botswana Pty Ltd
IronRidge Gabon SA
Tekton Minerals Pte Ltd*
IronRidge Singapore Pte Ltd
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Cote d’Ivoire
Cote d’Ivoire
Cote d’Ivoire
Cote d’Ivoire
Cote d’Ivoire
Cote d’Ivoire
Cote d’Ivoire
Cote d’Ivoire
Cote d’Ivoire
Cote d’Ivoire
Cote d’Ivoire
Cote d’Ivoire
Cote d’Ivoire
Australia
Ghana
Ghana
Australia
Ghana
Australia
Australia
Botswana
Gabon
Singapore
Singapore
2019
100
100
2018
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
-
IronRidge Resources Limited financial report for the year ended 30 June 2019
73
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 30 June 2019
Note 20. Related Party Disclosures (continued)
(a) Subsidiaries (continued)
* On 5 September 2017, the Company completed its acquisition of 100% of Tekton Minerals Pte Ltd and consolidates the
results of Tekton Minerals Pte Ltd from this date forward.
(b) Ultimate parent
IronRidge Resources Limited is the ultimate parent, which is incorporated in Australia. There is no ultimate controlling
party.
(c) Key management personnel
Details relating to key management personnel, including remuneration paid, are included in the Directors’ report and note
5.
(d) Transactions with related parties
The following table provides the total amount of transactions that were entered into with related parties for the relevant
financial year:
Related party
DGR Global Limited (i)
Hopgood Ganim Lawyers (ii)
Auburn Resources Limited (iii)
Sales to related
parties
Purchases from
related parties
2019
2018
2019
2018
2019
2018
-
-
-
-
-
-
288,000
288,000
43,329
62,175
-
-
Other
transactions
with related
parties
-
-
-
-
125,000
-
(i) The Company has a commercial arrangement with a major shareholder, DGR Global Limited for the provision of various
services, whereby DGR Global Limited provides resources and services including the provision of its administration and
exploration staff, its premises (for the purposes of conducting the Company’s business operations), use of existing office
furniture, equipment and certain stationery, together with general telephone, reception and other office facilities
(‘‘Services’’). In consideration for the provision of the Services, the Group pays DGR Global Limited a monthly management
fee. For the year ended 30 June 2019, $288,000 was paid or payable to DGR Global Limited (2018: $288,000) for the
provision of the Services. The total amount outstanding at year end was $nil (2018: $44,282).
(ii) Mr. Brian Moller (a Director of the former ultimate parent entity DGR Global Limited), is a partner in the Australian firm
Hopgood Ganim lawyers. For the year ended 30 June 2019, $62,175 was paid or payable to Hopgood Ganim (2018:
$185,329) for the provision of legal services to the Group. The services were based on normal commercial terms and
conditions. The total amount outstanding at year end was $4,169 (2018: $25,932).
(iii) Auburn Resources Limited is a subsidiary of DGR Global Limited. During the year the Group transferred its interest in a
tenement, EPM 26253 with a carrying value of $378,482 to Auburn Resources Limited for $125,000.
The outstanding balances at each relevant year end are unsecured, interest free and settlement occurs in cash. All
outstanding amounts payable comprise current liabilities.
IronRidge Resources Limited financial report for the year ended 30 June 2019
74
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 30 June 2019
Note 21. Capital Commitments
Future Exploration Commitments
The Group has certain obligations to expend minimum amounts on exploration in tenement areas. These obligations may
be varied from time to time and are expected to be fulfilled in the normal course of operations of the Group. The
commitments are as follows:
Less than 12 months
Between 12 months and 5 years
2019
$
5,159,445
4,374,036
9,533,481
2018
$
4,168,245
2,699,157
6,867,402
To keep tenements in good standing, work programs should meet certain minimum expenditure requirements. If the
minimum expenditure requirements are not met, the Group has the option to negotiate new terms or relinquish the
tenements. The Group also has the ability to meet expenditure requirements by joint venture or farm-in agreements.
Note 22. Financial Risk Management
(a) General objectives, policies and processes
In common with all other businesses, the Group is exposed to risks that arise from its use of financial instruments. This
note describes the Group’s objectives, policies and processes for managing those risks and the methods used to measure
them. Further quantitative information in respect of these risks is presented throughout these financial statements.
There have been no substantive changes in the Group’s exposure to financial instrument risks, its objectives, policies and
processes for managing those risks or the methods used to measure them from previous years unless otherwise stated in
this note.
The Group’s financial instruments consist mainly of deposits with banks, receivables and payables.
The Board has overall responsibility for the determination of the Group’s risk management objectives and policies and,
whilst retaining ultimate responsibility for them, it has delegated the authority for designing and operating processes that
ensure the effective implementation of the objectives and policies to the Group’s finance function. The Group's risk
management policies and objectives are therefore designed to minimise the potential impacts of these risks on the results
of the Group where such impacts may be material.
The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the
Group’s competitiveness and flexibility. Further details regarding these policies are set out below:
(b) Credit Risk
Credit risk is the risk that the other party to a financial instrument will fail to discharge their obligation resulting in the
Group incurring a financial loss. This usually occurs when debtors fail to settle their obligations owing to the Group. The
Group’s objective is to minimise the risk of loss from credit risk exposure.
The maximum exposure to credit risk, excluding the value of any collateral or other security, at reporting date to
recognised financial assets, is the carrying amount, net of any provisions for impairment of those assets, as disclosed in the
statement of financial position and notes to the financial statements.
Credit risk is reviewed regularly by the Board. It arises from exposure to receivables as well as through deposits with
financial institutions.
The Group does not have any material credit risk exposure to any single debtor or group of debtors under financial
instruments entered into by the Group and at reporting date.
Bank deposits are held with Macquarie Bank Limited (credit rating: BBB), Westpac Banking Corporation Limited (credit
rating: AA-), Ecobank Cote d’Ivoire (credit rating: B) and B.I.C.I. Du Gabon (credit rating: B+).
IronRidge Resources Limited financial report for the year ended 30 June 2019
75
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 30 June 2019
Note 22. Financial Risk Management (continued)
(c) Liquidity Risk
Liquidity risk is the risk that the Group may encounter difficulties raising funds to meet financial obligations as they fall due.
The objective of managing liquidity risk is to ensure, as far as possible, that the Group will always have sufficient liquidity to
meets its liabilities when they fall due, under both normal and stressed conditions.
Liquidity risk is reviewed regularly by the Board.
The Group manages liquidity risk by monitoring forecast cash flows and liquidity ratios such as working capital. The Group
did not have any financing facilities available at reporting date.
(d) Market Risk
Market risk arises from the use of interest bearing, tradable and foreign currency financial instruments. It is the risk that
the fair value or future cash flows of a financial instrument will fluctuate because of changes in interest rates (interest rate
risk), foreign exchange rates (currency risk) or other market factors (other price risk). The Group does not have any
material exposure to market risk other than interest rate risk and foreign currency risk.
Interest rate risk
Interest rate risk arises principally from cash and cash equivalents. The objective of interest rate risk management is to
manage and control interest rate risk exposures within acceptable parameters while optimising the return.
Foreign currency risk
Foreign currency risk is that the risk that the fair value of future cash flows of a financial instrument will fluctuate because
of changes in foreign exchange rates. The Group’s exposure to the risk of changes in foreign exchange rates relates
primarily to the Group’s bank deposits held in British Sterling Pound and the United States Dollar.
The Group manages its foreign currency risk by matching as best as possible its foreign exploration spends with the foreign
currency it holds.
IronRidge Resources Limited financial report for the year ended 30 June 2019
76
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 30 June 2019
Note 22. Financial Risk Management (continued)
Interest rate risk is managed with a mixture of fixed and floating rate financial instruments. For further details on interest
rate risk refer to the tables below:
Floating
interest rate
Fixed
interest rate
Non-interest
bearing
2019
$
2019
$
2019
$
Total
carrying
amount
2019
$
Weighted
average
effective
interest rate
2019
%
6,714,221
-
-
6,714,221
-
-
-
-
-
-
-
-
-
177,590
189,166
366,756
6,714,221
177,590
189,166
7,080,977
1,395,416
1,395,416
1,395,416
1,395,416
0.01%
-
-
-
Floating
interest rate
Fixed
interest rate
Non-interest
bearing
2018
$
2018
$
2018
$
Total
carrying
amount
2018
$
Weighted
average
effective
interest rate
2018
%
4,963,768
-
-
4,963,768
3,982,836
-
-
3,982,836
-
129,388
61,166
190,554
8,946,604
129,388
61,166
9,137,158
-
-
-
-
1,452,776
1,452,776
1,452,776
1,452,776
1.53%
-
-
-
(i) Financial assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Total financial assets
(ii) Financial liabilities
Trade and other payables
Total financial liabilities
(i) Financial assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Total financial assets
(ii) Financial liabilities
Trade and other payables
Total financial liabilities
The table below demonstrates the sensitivity to a reasonably possible change in the United States dollar and the British
pound sterling against the Australian dollar.
2019
2018
2019
2018
Change in US dollar
rate
Effect on profit
before tax
$
+10%
-5%
+10%
-5%
583,716
(291,858)
613,621
(306,811)
Change in British
sterling pound rate
Effect on profit
before tax
$
+5%
-5%
+5%
-5%
9,018
(9,018)
74,925
(74,925)
IronRidge Resources Limited financial report for the year ended 30 June 2019
77
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 30 June 2019
Note 23. Operating Segments
The Group has identified its operating segment based on the internal reports that are reviewed and used by the Board of
Directors (chief operating decision makers) in assessing performance and determining the allocation of resources. The
Group is managed primarily on a geographic basis, that is, the location of the respective areas of interest (tenements) in
Australia and Africa. Operating segments are determined on the basis of financial information reported to the Board for
the Group as a whole. The Group does not yet have any products or services from which it derives an income.
Accordingly, management currently identifies the Group as having only one reportable segment, being exploration for base
and precious metals. The financial results from this segment are equivalent to the financial statements of the Group. There
have been no changes in the operating segments during the year.
Geographical information
Australia
Gabon
Ivory Coast
Ghana
Chad
Geographical – non-current assets
2018
2019
$
$
1,687,046
-
5,089,159
5,670,874
13,099,272
25,546,351
1,658,591
41,181
1,840,468
2,633,338
10,771,712
16,945,290
Note 24. Acquisition of Tekton Pte Ltd
On 5 September 2017, the Company completed its acquisition of 100% of Tekton Minerals Pte Ltd (Tekton) providing the
Company with full ownership of a highly prospective gold exploration portfolio in Chad. The Company issued 10,000,000
shares as consideration to the Tekton Vendors. This acquisition has been accounted for as an asset acquisition as the
group of assets acquired and liabilities assumed do not constitute a business and therefore outside the scope of AASB 3.
The following table shows the assets acquired and liabilities assumed at acquisition date.
Identifiable assets and liabilities
Cash
Trade and other receivables
Other financial assets
Property, plant and equipment
Exploration and evaluation assets
Trade and other payables
Identifiable assets acquired and liabilities assumed
Consideration transferred for the acquisition
Investment in shares at cost
Advances to Tekton Minerals Pte Ltd
Shares issued as consideration
Total consideration
Acquiree’s
carrying
amount
$
419,247
2,535
8,486
259,164
167,148
(4,435)
Assigned value
on date of
acquisition
$
419,247
2,535
8,486
259,164
7,305,654
(4,435)
7,990,651
Consideration
transferred on
acquisition
$
197,991
2,692,660
5,100,000
7,990,651
IronRidge Resources Limited financial report for the year ended 30 June 2019
78
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 30 June 2019
Note 25. Contingent Assets and Liabilities
There are no contingent assets and liabilities at 30 June 2019 (2018: nil).
Note 26. Subsequent Events
In August 2019 the Company entered into a Memorandum of Understanding for drilling for equity with drilling contractor
GeoDrill Limited. The agreement is based on competitive quotation process and provides for the issue of ordinary shares in
IronRidge for 50% of the drilling cost up to a value of US$4m in two US$2m stages.
The Directors are not aware of any other significant changes in the state of affairs of the Group or events after the
reporting date that would have a material impact on the consolidated financial statements.
IronRidge Resources Limited financial report for the year ended 30 June 2019
79
DIRECTORS’ DECLARATION
In accordance with a resolution of the Directors of IronRidge Resources Limited, I state that:
1.
In the opinion of the Directors:
(a) The financial statements and notes of IronRidge Resources Limited for the financial year ended 30 June
2019 are in accordance with the Corporations Act 2001, including:
(i) Giving a true and fair view of its financial position as at 30 June 2019 and performance; and
(ii) Complying with the Accounting Standards (including the Australian Accounting Interpretations) and
the Corporations Regulations 2001.
(b) The financial statements and notes also comply with International Financial Reporting Standards as
disclosed in Note 1;
(c) There are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable; and
(d) The remuneration disclosures contained in the Remuneration Report comply with s300A of the
Corporations Act 2001.
2.
This declaration has been made after receiving the declarations required to be made to the Directors in
accordance with section 295A of the Corporations Act 2001 for the financial year ended 30 June 2019.
On behalf of the board
Vincent Mascolo
Managing Director
Brisbane
Date: 30 September 2019
IronRidge Resources Limited financial report for the year ended 30 June 2019
80
Tel: +61 7 3237 5999
Fax: +61 7 3221 9227
www.bdo.com.au
Level 10, 12 Creek St
Brisbane QLD 4000
GPO Box 457 Brisbane QLD 4001
Australia
INDEPENDENT AUDITOR'S REPORT
To the members of IronRidge Resources Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of IronRidge Resources Limited (the Company), and its
subsidiaries (the Group), which comprises the consolidated statement of financial position as at 30
June 2019, the consolidated statement of profit or loss and other comprehensive income, 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 2019 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 (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 1 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 entity’s
ability to continue as a going concern and therefore the entity 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 Pty Ltd ABN 33 134 022 870 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 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.
81
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.
Recoverability of exploration and evaluation assets
Key audit matter
How the matter was addressed in our audit
Refer to note 13 in the annual report
Our procedures included, but were not limited to the following:
The Group carries exploration and
Obtaining evidence that the Group has valid rights to
evaluation assets as at 30 June 2019 in
explore in the areas represented by the capitalised
accordance with the Group’s accounting
exploration and evaluation expenditure by obtaining
policy for exploration and evaluation
supporting documentation such as license agreements and
assets.
also considering whether the Group maintains the tenements
The recoverability of exploration and
in good standing
evaluation asset is a key audit matter due
Making enquiries of management with respect to the status
to the significance of the total balance and
of ongoing exploration programs in the respective areas of
the level of procedures undertaken to
interest and assessing the Group’s cash flow budget for the
evaluate management’s application of the
level of budgeted spend on exploration projects and held
requirements of AASB 6 Exploration for and
discussions with management of the Group as to their
Evaluation of Mineral Resources (‘AASB 6’)
intentions and strategy
in light of any indicators of impairment that
may be present.
Enquiring of management, reviewing ASX announcements
and reviewing directors' minutes to ensure that the Group
had not decided to discontinue activities in any applicable
areas of interest and to assess whether there are any other
facts or circumstances that existed to indicate impairment
testing was required
Evaluating management’s support and calculations for the
impairment expense by checking:
o The allocation of the expenditure across the relevant
tenements
o The mathematical accuracy of the amount written
down.
BDO Audit Pty Ltd ABN 33 134 022 870 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 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.
Share based payments
Key audit matter
How the matter was addressed in our audit
As disclosed in note 16, the Group has
Our procedures included, but were not limited to the following:
recognised a share based payment expense
in the Statement of Profit and Loss and
Other Comprehensive Income for the year
ended 30 June 2019 due to the issue of a
number of equity instruments.
Share based payments is a key audit matter
as the accounting can be complex and
requires judgement and the use of
Reviewing market announcements and board minutes to
ensure all the new options and performance rights granted
during the year have been accounted for
Reviewing relevant supporting documentation to obtain an
understanding of the contractual nature and terms and
conditions of the share-based payment arrangements
Recalculating estimated fair value of the options and
assumptions regarding their recognition and
performance rights using a relevant option valuation
measurement.
methodology, and assessing the valuations inputs
Evaluating management’s assumptions used in the
calculation being interest rate, volatility and the expected
vesting period
Evaluating management’s assessment of the likelihood of
meeting the service conditions attached to the performance
rights
Assessing the allocation of the share-based payment expense
over management’s expected vesting period.
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 2019, but does not include the
financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
BDO Audit Pty Ltd ABN 33 134 022 870 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 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.
In preparing the financial report, the directors are responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or 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 (http://www.auasb.gov.au/Home.aspx) at:
http://www.auasb.gov.au/auditors_responsibilities/ar2.pdf
This description forms part of our auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 23 to 34 of the directors’ report for the
year ended 30 June 2019.
In our opinion, the Remuneration Report of IronRidge Resources Limited, for the year ended 30 June
2019, 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 Pty Ltd
R M Swaby
Director
Brisbane, 30 September 2019
BDO Audit Pty Ltd ABN 33 134 022 870 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 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.