ABN 30 637 512 415
2023
ANNUAL REPORT
Chairman’s Letter
1
Review of Operations
2
Corporate Governance Statement
8
Directors’ Report
9
Lead Auditor’s Independence Declaration
17
Statement of Profit or Loss and Other Comprehensive Income
18
Statement of Financial Position
19
Statement of Changes in Equity
20
Statement of Cash Flows
21
Notes to the Financial Statements
22
Directors’ Declaration
37
Independent Auditor’s Report
38
Additional Stock Exchange Information
43
CONTENTS
CORPORATE DIRECTORY
DIRECTORS
Andrew Van Heyst (Executive Chairman)
Edward Leschke (Managing Director)
Keith Mayes (Non-Executive Director)
Jason Beckton (Non-Executive Director)
COMPANY SECRETARY
Marcelo Mora
PRINCIPAL PLACE OF BUSINESS AND
REGISTERED OFFICE
ESN Partners ‘Australia Square’
Level 30, 264-278 George Street
Sydney NSW 2000
Australia
Telephone:
(61 2) 9008 1381
Web site:
www.loderesources.com
SHARE REGISTRY
Advanced Share Registry Limited
110 Stirling Highway
Nedlands, Western Australia 6009
Telephone:
(61 8) 9389 8033
Facsimile:
(61 8) 9262 3723
AUDITORS
PKF (NS) Audit and Assurance Limited
Partnership
Level 8
1 O’Connell Street
Sydney NSW 2000
SOLICITORS
Thomson Geer
Level 14
60 Martin Place
Sydney NSW 2000
STOCK EXCHANGE LISTINGS
Australian Securities Exchange (Code – LDR)
LODE RESOURCES 2023 ANNUAL REPORT
LODE RESOURCES 2023 ANNUAL REPORT 1
CHAIRMAN’S LETTER
Dear fellow Shareholders,
We are proud to present you with the 2023 Annual Report which covers the second year since completing an
Initial Public Offering and listing the Company on the Australian Securities Exchange (ASX) with a suite of 100%
owned projects in the New England Fold Belt.
The Company’s ongoing objective is to create wealth for its shareholders by making material mineral discoveries, and
the acquisition of prospective tenure should attractive opportunities arise. Our exploration team has continued to achieve
significant exploration success with a strong focus on the company’s flagship Webbs Consol Silver Project.
This exploration success is as a result of having both the right projects, a talented team and sufficient capital to fund it.
We are pleased to report that your company remains well funded and the exploration team supported by a very active
board are building on early successes.
High grade intercepts over substantial widths have been achieved at several mineralised lodes discovered to date
at Webbs Consol. The Tangoa West Lode has been the standout with 12 impressive high endowment intercepts now
defining mineralisation down to vertical depth of almost 300 metres. The top 6 drill holes ranked by mineral endowment
are as follows:
•
WCS045 reported 116.1m @ 1,003 g/t AgEq from 90.5m
•
WCS052A reported 149.2m @ 627 g/t AgEq from 98.0m
•
WCS050 reported 65.8m @ 904 g/t AgEq from 104.4m
•
WCS047 reported 24.5m @ 1,450 g/t AgEq from 144.7m
•
WCS052B reported 40.2m @ 804 g/t AgEq from 279.0m
•
WCS065 reported 33.2m @ 569 g/t AgEq from 270.0m
Work is continuing at Webbs Consol which we believe is a large mineralised system of very high mineral endowment. We
have recently announced several new targets as defined by surface geophysics. Initial geochemical analyses of the first
of these targets indicates the potential for large tonnage and will be drill tested in the near future.
In addition to Webbs Consol, Lode has an extensive exploration portfolio of future facing metal projects located in the
New England Fold Belt with work continuing in the background as well as the Uralla Gold Project which we believe is
potentially a large Intrusive related gold system.
In particular we would like to extend a very warm vote of thanks to all of our shareholders – our owners – for your
support during the year. Without your continued backing, confidence and patience we would not be able to identify the
projects and execute the programs that we all hope will deliver us significant value.
This last year saw a significant breakthrough at Webbs Consol with the discovery of the Tangoa West lode. The team is
busy at work and we are looking forward to an exciting year ahead.
Andrew Van Heyst
Executive Chair
2 LODE RESOURCES 2023 ANNUAL REPORT
REVIEW OF OPERATIONS
THE DIRECTORS OF LODE RESOURCES LTD (ASX: LDR OR ‘LODE’ OR ‘THE COMPANY’) ARE PLEASED
REPORT THAT THE COMPANY HAS ACHIEVED SIGNIFICANT EXPLORATION MILESTONES DURING THE
YEAR-ENDED 30 JUNE 2023.
Lode’s exploration focus is on the highly prospective but under-explored New England Fold Belt in north eastern New
South Wales. The Company has assembled a portfolio of brownfield precious and base metal assets characterised by:
•
100% ownership;
•
Significant historical geochemistry and/or geophysics;
•
Under drilled and/or open-ended mineralisation; and
•
Demonstrated high-grade mineralisation and/or potential for large mineral occurrences.
This has resulted in a portfolio of assets with diverse mineralisation styles:
1. Webbs Consol Silver & Base Metal – Located 16km west-southwest of Emmaville, this historical silver mining centre
is known for high grade silver-base metal bearing lodes;
2. Uralla Gold – Located 8km west of the Uralla township, this goldfield was one of the earlier goldfields discovered
in NSW and a significant gold producer in the 1850’s. Despite this long history, the mineralisation style has only
recently been recognised as being an Intrusive Related Gold System (IRGS) and this has strong implications for this
project’s discovery potential;
3. Fender Copper (Trough Gully) – Located 30km southeast of Tamworth this project hosts significant copper in
drainage anomalies and several known historical workings of VMS style mineralisation providing some very attractive
exploration targets;
4. Sandon Base Metals – The Bundarra Copper and Abington Base Metal Projects host VMS style mineralisation and
have both undergone preliminary exploration. They are located 45km and 60km respectively west of Guyra;
5. Elsinore – Located 30km west of Guyra this project hosts a large regional magnetic and IP anomaly with anomalous
base/precious metals in geochemical sampling;
6. Thor – Located 35km northwest of Manila this project hosts a large gold anomaly potentially associated with high
level intrusions or major regional fault structures;
7. Tea Tree – Located 24km north of Manila this project comprises an underexplored goldfield.
As of 30 June 2023, the Company had been granted seven exploration licences as follows:
Project
Licence
Grant Date
Expiry Date
Commodity
Units Status
Webbs Consol
EL8933
16 January 2020
16 January 2029
Group 1 (Metallic minerals)
16
Granted
Webbs Consol Exp. EL9454
7 September 2022 7 September 2025
Group 1 (Metallic minerals)
53
Granted
Uralla
EL8980
14 May 2020
14 May 2027
Group 1 (Metallic minerals)
80
Granted
Uralla West
EL9087
12 March 2021
12 March 2024
Group 1 (Metallic minerals)
22
Granted
Fender
EL9003
12 October 2020
12 October 2023
Group 1 (Metallic minerals)
76
Granted
Sandon
EL9319
29 October 2021
29 October 2024
Group 1 (Metallic minerals)
273
Granted
Elsinore
EL9004
12 October 2020
12 October 2023
Group 1 (Metallic minerals)
32
Granted
Tea Tree
EL9084
11 March 2021
11 March 2024
Group 1 (Metallic minerals)
24
Granted
Thor
EL9085
11 March 2021
11 March 2024
Group 1 (Metallic minerals)
78
Granted
Since the successful completion of the A$5.1M IPO, admission to the Official List of ASX Limited (‘ASX’) on Wednesday,
30 June 2021 and the commenced trading on Friday, 2 July 2021, successful drill campaigns have been carried out at
three of seven projects 100% owned by Lode with the Webbs Consol Silver-Base Metals Project producing exceptional
drill results.
LODE RESOURCES 2023 ANNUAL REPORT 3
REVIEW OF OPERATIONS
Lode’s strategy is to:
•
Systematically explore and develop the Company’s Tenements in the New England Fold Belt;
•
Target large-scale silver, gold and base metal systems;
•
Use modern exploration methods nd best practices in cost effective programs; and
•
Advance discoveries through to the development stage.
A total of 5,032 metres of drilling in 37 drill holes was carried out during the year of which all was carried out at the
Webbs Consol Silver-Base Metal Project. All of Lode’s projects are located in the highly prospective but under-exploited
New England Fold Belt in north-eastern NSW.
Figure 1: Lode’s Project Locations (blue polygons)
4 LODE RESOURCES 2023 ANNUAL REPORT
REVIEW OF OPERATIONS
Table 1: – Significant intercept assay results from drilling to date at Webbs Consol (all widths are down hole)
1 Silver is deemed to be the appropriate metal for equivalent calculations as silver is the most common metal to all
mineralisation zones. Webbs Consol silver equivalent grades are based on assumptions: AgEq(g/t)=Ag(g/t)+49*Zn(%)
+32*Pb(%)+106*Cu(%)+76*Au(g/t) calculated from 10 December 2021 spot prices of US$22/oz silver, US$3400/t zinc,
US$2290/t lead, US$9550/t copper, US$1800/oz gold and metallurgical recoveries of 97.3% silver, 98.7%, zinc, 94.7%
lead, 96.3% copper and 90.8% gold which is the 4th stage rougher cumulative recoveries in test work commissioned
by Lode and reported in LDR announcement 14 December 2021 titled “High Metal Recoveries in Preliminary Flotation
Test work on Webbs Consol Mineralisation”. It is Lode’s opinion that all the elements included in the metal equivalents
calculation have a reasonable potential to be recovered and sold.
The Tango West Lode contains the highest mineralisation endowment of the six lodes discovered at the Webbs Consol
Silver-Base Metals Project based on drilling to date, aided by easy drill positions. Very thick high-grade silver-lead-zinc
intercepts have been returned from at least ten drillholes. Mineralisation has now been intercepted down to a vertical
depth of 300 metres and the lode remains open at depth.
Assays have shown that there is a transition from silver-lead rich mineralisation to silver-zinc rich mineralisation at
approximately 135m vertical depth within the Tangoa West Lode. What make the mineralogy unusual at Webbs Consol is
the strong association of silver with zinc in addition to the normal association of silver with lead. Silver minerals identified
in petrological analysis include tetrahedrite and stephanite.
From
To
Interval
AgEq1
Ag
Pb
Zn
Cu
Endowment
(m)
(m)
(m)
(g/t)
(g/t)
(%)
(%)
(%)
(AgEq g/t.m)
WCS045
90.9
207.0
116.1
1,003
254
6.35
8.35
0.24
116,401
Tangoa West
WCS052A
98.0
247.2
149.2
627
183
3.13
5.19
0.19
93,502
Tangoa West
WCS050
104.4
170.2
65.8
904
266
13.56
2.38
0.42
59,505
Tangoa West
WCS047
144.7
169.2
24.5
1,450
389
1.56
16.00
0.24
35,519
Tangoa West
WCS052B
279.0
319.2
40.2
804
83
0.16
11.56
0.04
32,302
Tangoa West
WCS065
270.0
303.2
33.2
569
64
0.14
8.13
0.01
18,895
Tangoa West
WCS064
203.3
231.0
27.7
633
146
0.35
7.69
0.03
17,537
Tangoa West
WCS044
48.3
102.3
54.0
304
84
3.69
1.22
0.21
16,394
Tangoa West
WCS023
17.0
67.0
50.0
314
94
2.93
1.81
0.08
15,708
Castlereagh
WCS006
104.6
132.1
27.5
552
118
0.77
6.52
0.07
15,168
Main Shaft
WCS049
81.8
126.0
44.2
264
68
4.16
0.56
0.20
11,656
Tangoa West
WCS051
79.0
109.7
30.7
376
93
3.88
2.13
0.21
11,531
Tangoa West
WCS019
30.1
56.8
26.7
421
115
6.43
1.07
0.25
11,237
Tangoa West
WCS007
122.9
147.1
24.2
450
63
0.49
5.96
0.04
10,871
Main Shaft
WCS020
30.6
61.6
31.0
241
55
3.37
0.98
0.12
7,471
Tangoa West
WCS031
66.5
113.9
47.4
152
46
0.79
1.22
0.04
7,227
Castlereagh
WCS034
16.0
36.5
20.5
302
77
1.10
2.87
0.10
6,183
Copycat
WCS028
138.4
182.0
43.6
141
12
0.28
1.91
0.02
6,143
Main Shaft
WCS035
23.3
37.0
13.7
299
87
0.71
2.61
0.26
4,092
Copycat
WCS012
48.0
60.1
12.1
324
108
5.49
0.36
0.10
3,916
Mt Galena
Hole
Prospect
LODE RESOURCES 2023 ANNUAL REPORT 5
REVIEW OF OPERATIONS
Also there is a change of lode plunge from vertical above approximately 100m vertical depth to a 65°-70° north plunge
below 100m vertical depth as show in Figure 2. This has implication for drill positioning and orientation when the other
lodes are to be tested at depth.
An additional two drill holes targeting the Tangoa West Lode at depth have been completed with assays outstanding at
the time of writing. The estimated intercept down hole length and minerals grades are as follow:
•
Drill hole WCS064 has intersected 26.2m of sulphide mineralisation containing an estimated 20% sphalerite ((Zn,Fe)
S) and 3% galena (PbS) from 203.3m to 229.5m. Significant silver mineralisation is also anticipated.
•
Drill hole WCS065 has intersected 33.1m of sulphide mineralisation containing an estimated 15% sphalerite ((Zn,Fe)
S) and 2% galena (PbS) from 270.0m to 303.1m. Significant silver mineralisation is also anticipated.
Sulphide distribution within these two intercepts range from disseminated blebs of sphalerite and galena to massive
veins of sphalerite with significant silver grades also expected.
Figure 2. Tangoa West Lode longitudinal section showing holes drilled to date (looking west).
6 LODE RESOURCES 2023 ANNUAL REPORT
REVIEW OF OPERATIONS
Extensive multi-discipline geophysical work has also been carried out by LDR over the main known mineralisation
corridor which is essentially the western contact of Webbs Consol leucogranite. This includes an ongoing Loupe TEM
(Time Domain Electromagnetic) survey which has revealed multiple new targets in addition to high grade silver-base
metal lodes discovered to date through drilling.
The Loupe Survey being undertaken is on a tight 20m line spacing. Loupe is a ground-based time-domain
electromagnetic system designed to give high quality, high spatial resolution data near surface. Multiple conductive
anomalies have been identified, potentially representing metal bearing sulphides and many are in areas with no historical
mining and often with extensive cover. These new targets have been prioritised and are being methodical followed-up
with geochemical work which is well underway.
Figure 3. High Resolution Loupe Survey (TEM CH1-X)
LODE RESOURCES 2023 ANNUAL REPORT 7
REVIEW OF OPERATIONS
Initial geochemistry work carried out on one such conductive anomaly (Loupe #1 TEM Anomaly) has discovered highly
elevated metal values both in soils and outcrop over a 300m x 100m area. Soil sampling has return assay values up to
5.02g/t Ag, 1,780ppm Pb, 400ppm Zn. Rock chip sampling has returned values up to 252g/t Ag, 2.30% Pb, 0.31% Zn.
Note that grab sampling is a selective technique and grades are not necessarily reflective of the underlying mineralised
occurrence. Mineralisation at surface is often depleted or enriched depending on chemical weathering process. One
interesting characteristic of this new discovery target is that the soil and rock chip sample results are highly anomalous
in zinc values. This is unusual considering zinc is almost always highly depleted at surface due to the strong mobility of
zinc during chemical weathering.
These high-grade geochemical results are highly encouraging and the highest-grade zones will be tested by initial
scout drilling as part of a wider drill programme. Given the success of this initial follow-up geochemistry, several other
conductive anomalies have been prioritised for similar testing via soil and rock sampling.
Figure 4. Webbs Consol Far North Prospect (Loupe #1 TEM Anomaly)
8 LODE RESOURCES 2023 ANNUAL REPORT
REVIEW OF OPERATIONS
Competent Person’s Statement
The information in this Report that relates to Exploration Results is based on information compiled by Mr Mitchell Tarrant,
who is a Member of the Australian Institute of Geoscientists. Mr Tarrant, who is the Project Manager for Lode Resources,
has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to
the activities which he is undertaking to qualify as a Competent Person as defined in the 2012 edition of the ‘Australasian
Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Tarrant has a beneficial interest as
optionholder of Lode Resources Ltd and consents to the inclusion in this Report of the matters based on the information
in the form and context in which it appears.
No material changes
Lode Resources Ltd confirms that it is not aware of any new information or data that would materially affect the
information included in the quarterly activities report dated 26 July 2023 and market announcements dated 10 August
2023 and that all material assumptions and technical parameters in the market announcements continue to apply and
have not materially changed.
Governance Arrangements
Lode Resources management and Board of Directors include individuals with many years’ work experience in the
mineral exploration and mining industry who monitor all exploration programs and oversee the preparation of reports on
behalf of the Company by independent consultants. The exploration data is produced by or under the direct supervision
of qualified geoscientists. In the case of drill hole data half core samples are preserved for future studies and quality
assurance and quality control. The Company uses only accredited laboratories for analysis of samples and records the
information in electronic databases that are automatically backed up for storage and retrieval purposes.
Table 2. Prospect Target Development Sequence
CORPORATE GOVERNANCE STATEMENT
The Board is committed to maintaining the highest standards of Corporate Governance. Corporate Governance is about
having a set of core values and behaviours that underpin the Company’s activities and ensure transparency, fair dealing
and protection of the interests of stakeholders. The Company has reviewed its corporate governance practices against the
Corporate Governance Principles and Recommendations (4th edition) published by the ASX Corporate Governance Council.
The 2023 corporate governance statement is dated 22 September 2023 and reflects the corporate governance
practices throughout the 2023 financial year. The board approved the 2023 corporate governance on 22 September
2023. A description of the Company’s current corporate governance practices is set out in the Company’s corporate
governance statement, which can be viewed at https://loderesources.com/corporate-governance.
LODE RESOURCES 2023 ANNUAL REPORT 9
DIRECTORS’ REPORT
The Directors of Lode Resources Ltd (‘Lode’ or the ‘Company’) present their report, together with the financial statements
of the Company for the financial year ended 30 June 2023.
DIRECTORS
The names and details of the Directors in office during or since the end of the previous financial year are as follows.
Directors were in office for the entire year unless otherwise stated.
INFORMATION ON DIRECTORS
Andrew Van Heyst
Chairman
Experience
With more than 30 years’ experience in Industrial Equities and Advisory. Has
worked at Merrill Lynch in New York as Head of Australian Sales and for ABN AMRO
as Head of Australian Sales and Head of Americas Client Account Management
for Global Equity Product. In 2005 Andrew moved back to Australia joining Shaw
and Partners as a Corporate Advisor focussing on Small Cap resources and prior to
Lode listing was Executive Director at Bridge Street Capital Partners.
Interest in Shares and Options
18,392,858 ordinary shares and 71,429 unlisted options
Director since
18 November 2019
Ted Leschke
Managing Director
Experience
With more than 30 years experience in the resources industry including Managing
Director of ASX listed resource companies from start up project development
covering areas such as project identification, acquisition and generation, geological
mapping, exploration drilling, local community and government liaison, financial
management, strategy, fund raisings, ASX listing and statutory reporting. Previously
worked as a resource analyst in stockbroking and funds management as well as a
geologist in the mining industry.
Interest in Shares and Options
17,643,858 ordinary shares and 71,429 unlisted options
Director since
18 November 2019
Directorships held in other listed
entities during the last three years
Equus Mining Limited.
Keith Mayes
NonExecutive Director
Experience
With more than 30 years’ experience in the resource sector in exploration, business
development, operational and financial roles with major mining companies including
North Ltd, Newmont, Rio Tinto and Oxiana in Australia, Europe, Middle East and
Africa. Keith is currently Partner at Global Resource Industry Personel and formerly
GM of Australian Garnet a subsidiary of ASX listed Resource Development Group and
COO at ASX listed KGL Resources that is undertaking exploration and development
of the large Jervois copper/silver/gold project in central Australia and COO at Altura
Mining Ltd where he discovered the world class Pilgangoora lithium deposit.
Interest in Shares and options
371,429 ordinary shares and 785,714 unlisted options
Director since
10 March 2020
Jason Beckton
NonExecutive Director
Qualifications
Holds BSc (Hons) Melbourne and a Masters of Economic Geology from the
University of Tasmania.
Experience
With more than 25 years of geological corporate experience in Australia, North and
South America and China. Was Project Manager for Bolnisi Gold NL’s Palmerejo
silver/gold project in Mexico where he managed a program defining 3.1moz AuEq.
Managed the discovery of Exeter Resource Corp’s 30 moz AuEq Caspiche Porphyry
prospect in the Maricunga Gold Copper Belt of Chile. Previously MD of ASX listed
Chinalco Yunnan Copper Resources exploring the Mt Isa, Lao and Chilean copper
districts.
Interest in Shares and Options
200,000 ordinary shares and 750,000 unlisted options
Director since
29 September 2020
Directorships held in other listed
entities during the last three years
Managing Director of ASX listed Prospech Ltd.
10 LODE RESOURCES 2023 ANNUAL REPORT
DIRECTORS’ REPORT
COMPANY SECRETARY
Marcelo Mora
Company Secretary since 15 September 2020.
Marcelo Mora holds a Bachelor of Business degree and Graduate Diploma of Applied Corporate Governance. Mr Mora
has been an accountant for more than 30 years and has experience in resources and mining companies both in Australia
and internationally, providing financial reporting and company secretarial services to a range of publicly listed companies.
MEETINGS OF DIRECTORS
During the financial year, 1 meeting of directors was held. Attendances by each director during the year were as follows:
DIRECTORS’ MEETINGS
Number eligible to attend
Number attended
Andrew Van Heyst
1
1
Edward Leschke
1
1
Keith Mayes
1
1
Jason Beckton
1
1
DIRECTORS’ INTERESTS
At the date of this report, the beneficial interests of each director of the Company in the issued share capital of the
Company and options, each exercisable to acquire one fully paid ordinary share of the Company are:
Director
Fully Paid
Ordinary Shares
Options over
ordinary shares
Option Terms
(Exercise Price and Term)
Andrew Van Heyst
18,392,858
71,429
$0.24 at any time up to 2 December 2024
Edward Leschke
17,643,858
71,429
$0.24 at any time up to 2 December 2024
Keith Mayes
371,429
500,000
$0.30 at any time up to 2 July 2023
-
(1)250,000
$0.24 at any time up to 2 December 2024
-
35,714
$0.24 at any time up to 2 December 2024
Jason Beckton
200,000
500,000
$0.30 at any time up to 2 July 2023
Jason Beckton
-
(1)250,000
$0.24 at any time up to 2 December 2024
(1) During the year ended 30 June 2023, 500,000 unlisted options were granted as compensation to directors of the
Company (2022: nil unlisted options)
There were no options over unissued ordinary shares granted as compensation to directors or executives of the
Company during or since the end of the financial year.
OPTION HOLDINGS
Unissued Shares under options
Grant Date
Expiry Date
Vesting
Options
Exercise Price
25 August 2022
25 August 2024
Immediately
8,330,500
$0.24
2 December 2022
2 December 2024
Immediately
1,428,572
$0.24
14 February 2023
14 February 2025
Immediately
2,500,000
$0.40
14 February 2023
25 August 2024
Immediately
4,933,333
$0.24
Option holders do not have any rights to participate in any issues of shares or other interests in the Company.
LODE RESOURCES 2023 ANNUAL REPORT 11
DIRECTORS’ REPORT
SHARES ISSUED ON EXERCISE OF OPTIONS
During the financial year ended 30 June 2023, the Company has not issued ordinary shares as a result of the exercise
of options (2022: nil). Since the end of the financial year, the Company has not issued ordinary shares as a result of the
exercise of options.
Principal activities
The principal activities of Lode Resources Ltd during the financial year were the initial drilling camping at its tenements of
Webbs Consol and Uralla and the acquisition of exploration licence Sandon through Exploration Licence Application and
the subsequent granting of the Exploration Licence.
Operating results
The loss of the Company amounted to $1,115,531 (2022: $970,510), after providing for income tax.
Review of operations
A review of the Company’s operations for the year ended 30 June 2023 is set out on pages 1 to 7 of this Annual Report.
Dividends paid or recommended
No dividends were paid or declared during the period.
Changes in state of affairs
In the opinion of the Directors, significant changes in the state of affairs of the Company that occurred during the year
ended 30 June 2023 were as follows:
•
On 17 August 2022, the Company announced a placement to institutional investors and raise $1,632,540 before
costs by the issue of 11,661,000 shares at an issue price of $0.14. In addition, the Company issued a total of
5,830,500 listed options to the subscribers of the placement on the basis of one option for every two shares
subscribed with an exercise price of $0.24 and expiring on 25 August 2024.
•
On 25 August 2022, The Company issued to the lead manager of the placement 2,500,000 listed options under the
same terms and conditions as the subscribers of the placement.
•
On 7 September 2022, Lode Resources Ltd was granted Exploration Licence EL 9454 Webbs Consol Expanded.
•
On 2 December 2022, following shareholders’ approval at the Company’s Annual General Meeting. The Company
issued 357,143 shares to Directors of the Company raising $50,000. In addition, the Company issued 178,572
unlisted attaching options to Directors on basis of one option for every two shares subscribed with an exercise price
of $0.24 and expiring on 2 December 2024.
•
On 2 December 2022, following shareholders’ approval at the Company’s Annual General Meeting. The Company
issued 500,000 unlisted options to the Non-executive Directors with an exercise price of $0.24 and expiring on 2
December 2024 and vesting immediately.
•
On 8 December 2022, The Company issued 500,000 unlisted options to the Exploration Manager and 250,000
unlisted options to the Company Secretary. The options have an exercise price of $0.24 expiring on 2 December
2024 and vesting immediately.
•
On 6 February 2023, the Company announced a placement to institutional investors and raise $4,440,000 before
costs by the issuing of 14,800,000 shares at an issue price of $0.30. In addition, the Company issued 4,933,333
listed options to the subscribers of the placement on the basis of one option for every three shares subscribed with
an exercise price of $0.24 and expiring on 25 August 2024.
•
On 14 February 2023, The Company issued to the lead manager of the placement 2,500,000 unlisted options with
an exercise price of $0.40 and expiring on 14 February 2025.
Events after the reporting date
No other matters or circumstances have arisen since the end of the financial year which significantly affected or could
significantly affect the operations of the Company, the results of those operations or the state of affairs of the Company in
future financial years.
Future developments and results
During the course of the 2024 financial year, the Company will focus principally on advancing its brownfields and
greenfields exploration of its exploration licences in the New England Fold Belt in northeastern NSW.
Further information as to the likely developments in the operations of the Company and the expected results of those
operations in future financial years have not been included in this report as the inclusion of such information is likely to
result in unreasonable prejudice to the Company.
12 LODE RESOURCES 2023 ANNUAL REPORT
DIRECTORS’ REPORT
Environmental issues
The operations and proposed activities of the Group are subject to State and Federal laws and regulations concerning
the environment. As with most exploration projects and mining operations, the Company’s activities are expected to have
an impact on the environment, particularly if advanced exploration or field development proceeds. It is the Company’s
intention to conduct its activities to the highest standard of environmental obligation, including compliance with all
applicable environmental laws.
INDEMNIFICATION AND INSURANCE OF OFFICERS AND AUDITORS
During or since the end of the financial year, the Company has not indemnified or made a relevant agreement to
indemnify an officer or auditor of the Company against a liability incurred as such by an officer or auditor. The Company
has not paid or agreed to pay, a premium in respect of a contract insuring against a liability incurred by an officer or
auditor.
Use of cash
The Company confirms that it has used its available cash and assets at the time of admission to the ASX consistent with
the business objectives.
Total cash expenditure during the financial year ended 30 June 2023 was $3,069,537. Exploration and evaluation cash
expenditure was $1,873,629. Approximately 97% of this expenditure was spent on exploration activities at the Webbs
Consol Silver Project and the remainder primarily split among the other licences.
Activities included mapping, rock and soil sampling, geophysics and pre-drilling preparations, and significant drilling. No
expenditure was incurred during the year on mining production and development activities.
Used of funds
Prospectus Year 2 Budget
$
12 Months Actuals to 30 June 2023
$
Webbs Consol (EL8933)
321,600
1,814,800
Uralla (EL8980 and EL9087)
322,400
19,396
Fender (EL9003)
321,600
7,077
Elsinore (EL9004)
28,400
4,387
Tea Tree (EL9084)
20,000
3,907
Thor (EL9085)
20,000
6,712
Sandon (EL9319)
-
17,349
Miscellaneous
228,800
-
Contingency 15%
189,400
-
Total
1,452,200
1,873,628
REMUNERATION REPORT - AUDITED
Principals of compensation
Key management personnel have authority and responsibility for planning, directing, and controlling the activities of the
Company. Key management personnel comprises the directors of the Company. No other employees have been deemed
to be key management personnel.
The remuneration policy of Directors is to ensure the remuneration package properly reflects the persons’ duties and
responsibilities, and that remuneration is competitive in attracting, retaining, and motivating people of the highest quality.
The Board is responsible for reviewing its own performance. The evaluation process is designed to assess the Group’s
business performance, whether long-term strategic objectives are being achieved, and the achievement of individual
performance objectives.
The Constitution and ASX Listing Rules specify that the aggregate remuneration of Non-Executive Directors shall be
determined from time to time by a general meeting.
LODE RESOURCES 2023 ANNUAL REPORT 13
DIRECTORS’ REPORT
Remuneration generally comprises of salary and superannuation. Long-term incentives are able to be provided through
the Company’s share option program at the discretion of directors, which acts, to align the Director’s and senior
executive’s actions with the interests of the shareholders.
The remuneration disclosed below represents the cost to the Company for services provided under these arrangements.
Andrew Van Heyst and Edward Leschke are paid through the Company’s payroll. All other Director’s services are paid by
way of an arrangement with the director or with related parties.
There were no remuneration consultants used by the Company during the year ended 30 June 2023, or in the prior year.
Consequences of performance on shareholders’ wealth
In considering the Company’s performance and benefits for shareholders’ wealth, the Board has regard to the following
indices in respect of the current financial year and the previous financial year.
2023
$
2022
$
2021
$
Net loss attributable to equity holders of the parent
1,115,531
970,510
574,934
Dividends paid
-
-
-
Change in share price
0.005
(0.02)
-
The overall level of key management personnel’s compensation has been determined based on market conditions, the
advancement of the Company’s projects, and the financial performance of the Company.
Remuneration Structure
In accordance with better practice corporate governance, the structure of Executive Director and Non-Executive Director
remuneration is separate and distinct.
Service contracts
In accordance with better practice corporate governance, the company provided each key management personnel with
a letter detailing the terms of appointment, including their remuneration. Key management personnel may at any time
resign by written notice.
Details of the nature and amount of each major element of the remuneration of each Director of the Company and other
key management personnel of the Company and Group are:
Year
Primary
Salary / Fees
$
Super-
annuation
$
Sharebased
Payment
$
Short Term
Benefit
$
Total
$
Executive Directors
Andrew Van Heyst
2023
181,250
19,031
-
4,885
205,166
2022
125,000
12,500
-
9,652
147,152
Edward Leschke
2023
218,750
22,969
-
25,752
267,471
2022
200,000
20,000
-
15,444
235,444
Non-Executive Directors
Jason Beckton
2023
50,000
-
13,500
-
63,500
2022
50,000
-
-
-
50,000
Keith Mayes
2023
50,000
-
13,500
-
63,500
2022
50,000
-
-
-
50,000
Total all directors
2023
500,000
42,000
27,000
30,637
599,637
2022
425,000
32,500
-
25,096
482,596
Executive Directors
During the financial year ended 30 June 2023, Andrew Van Heyst and Edward Leschke were considered Executive
Directors. Their remuneration for the year ended 30 June 2023 comprised of fixed remuneration, free of performance
conditions, plus 10.5% statutory superannuation paid through the Company’s payroll.
14 LODE RESOURCES 2023 ANNUAL REPORT
DIRECTORS’ REPORT
Options granted as compensation
No bonuses were paid during the financial year. During the year ended 30 June 2023, 500,000 unlisted options were
issued to directors of the Company or Key Management personnel (2022: nil). Refer below for the options granted
during the financial year ended 30 June 2023 to Jason Beckton and Keith Mayes. The Company employed no other key
management personnel.
The options granted to non-executive directors were not subject to any performance or service conditions and vested
immediately on the issue of the options.
Director
Grant Date
Number
of Options
Granted
Fair value
per option
at grant date
Fair Value at
Grant Date
Option Terms
(Exercise Price and Term)
Jason Beckton
21 October 2022
(2)250,000
$0.054
$13,500
$0.24 at any time to 2 December 2024
31 March 2021
(1)500,000
$0.085
$42,500
$0.30 at any time to 2 July 2023
Keith Mayes
21 October 2022
(2)250,000
$0.054
$13,500
$0.24 at any time to 2 December 2024
31 March 2021
(1)500,000
$0.085
$42,500
$0.30 at any time to 2 July 2023
(1) The fair value of the 1,000,000 options at the grant date was determined based on a Black- Scholes formula. The
model inputs of the options issued were the share price of $0.20 at the time of listing on the ASX, a volatility factor of
100%, a risk-free rate of 0.08% based on the 2-year government bond rate, and no dividends paid.
(2) The fair value of the 500,000 options at the grant date was determined based on a Black- Scholes formula. The
model inputs of the options issued were the share price of $0.125, a volatility factor of 106.15%, a risk-free rate of
3.62% based on the 2-year government bond rate, and no dividends paid.
During the year no options lapsed (2022: nil) and no options held by key management personnel were exercised during
the 2023 or 2022 financial years.
Modification of terms of equity-settled share-based payment transactions
No terms of equity-settled share-based payment transactions (including options granted as compensation to a key
management person) have been altered or modified by the issuing entity during the 2023 and 2022 financial years.
Exercise of options granted as compensation
There were no shares issued to Directors on the exercise of options previously granted as compensation during the
2023 and 2022 financial years.
Analysis of options and rights over equity instruments granted as compensation
All options refer to options over ordinary shares of Lode Resources Ltd, which are exercisable on a one-for-one basis.
Director
Options granted
% vested at
year end
Expired during
the year
Balance at
year end
Financial year in
which grant vests
Number
Date
Jason Beckton
500,000
31 March 2021
100%
-
500,000
30 June 2021
250,000
21 October 2022
100%
-
250,000
30 June 2023
Keith Mayes
500,000
31 March 2021
100%
-
500,000
30 June 2021
250,000
21 October 2022
100%
-
250,000
30 June 2023
The number of options that had vested at 30 June 2023 is 500,000 (2022 – nil). 500,000 options were granted as
remuneration during the year (2022: nil). No options were granted as compensation subsequent to year-end.
Analysis of movements in options granted as compensation
No options were granted or exercised during the year.
LODE RESOURCES 2023 ANNUAL REPORT 15
DIRECTORS’ REPORT
Options and rights over equity instruments
The movement during the reporting period in the number of options over ordinary shares in the Company held directly,
indirectly or beneficially, by each key management person, including their personally related entities, is as follows:
Option holdings 2023
Directors
Held at
1 July 2022
Granted/
Purchased
Exercised/
Sold
Expired
Held at
30 June 2023
Vested and
exercisable
at 30 June 2023
Andrew Van Heyst
-
71,429
-
-
71,429
71,429
Edward Leschke
-
71,429
-
-
71,429
71,429
Jason Beckton
500,000
250,000
-
-
750,000
750,000
Keith Mayes
500,000
285,714
-
-
785,714
785,714
Loans to key management personnel and their related parties
There were no loans made to key management personnel or their related parties during the 2023 and 2022 financial
years and no amounts were outstanding at 30 June 2023 (2022 - $nil).
Other transactions with key management personnel
There were no other transactions with key management personnel or their related parties during 2023.
At 30 June 2023, the amount outstanding for salaries, superannuation and directors’ fees were $nil (2022: $nil).
Movements in shares
The movement during the reporting period in the number of ordinary shares in the Company held directly, indirectly or
beneficially by each key management personnel, including their related parties, is as follows:
Fully paid ordinary shareholdings and transactions - 2022
Key management personnel
Held at 30 June 2022
Purchases
Sales
Other
Held at 30 June 2023
Andrew Van Heyst
21,250,001
142,857
-
-
21,392,858
Edward Leschke
20,750,001
142,857
-
-
20,892,858
Jason Beckton
200,000
-
-
-
200,000
Keith Mayes
300,000
71,429
-
-
371,429
Non-Executive Directors
During the financial year ended 30 June 2023, the following Directors were considered Non-Executive Directors:
•
Jason Beckton;
•
Keith Mayes.
The salary component of Non-Executive Directors was made up of:
•
fixed fees paid by way of arrangements with related parties; and
•
entitlement to receive options when invited by the Board and subject to shareholders’ approval.
End of remuneration report.
16 LODE RESOURCES 2023 ANNUAL REPORT
DIRECTORS’ REPORT
NON-AUDIT SERVICES
During the years ended 30 June 2023 and 30 June 2022, PKF, the Company’s auditor, did not perform other services in
addition to the audit and review of the financial statements.
Lead Auditor’s Independence Declaration
The Lead Auditor’s Independence Declaration is set out on page 17 and forms part of the Directors’ Report for the
financial year ended 30 June 2023.
Signed at Sydney this 22nd day of September 2023 in accordance with a resolution of the Board of Directors:
Andrew M. Van Heyst
Edward J. Leschke
Executive Chairman
Managing Director
LODE RESOURCES 2023 ANNUAL REPORT 17
AUDITOR’S INDEPENDENCE DECLARATION
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18 LODE RESOURCES 2023 ANNUAL REPORT
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
For the Year Ended 30 June 2023
Notes
30 June 2023
$
30 June 2022
$
CONTINUING OPERATIONS
Other income
-
-
Expenses
Administration and consultants’ expenses
(223,272)
(181,820)
Employee, directors and consultants costs
(616,436)
(552,190)
Amortisation and depreciation
(31,228)
(36,215)
Legal and professional expenses
(17,874)
(4,732)
Travel expenses
(39,976)
(7,798)
Other expenses
5
(263,013)
(184,826)
Operating loss before financing income and expense
(1,191,799)
(967,581)
Interest income
6
77,345
425
Interest expense
6
(1,077)
(3,354)
Net finance expense
76,268
(2,929)
Loss before income tax
(1,115,531)
(970,510)
Income tax benefit/(expense)
4
-
-
Loss for the period
(1,115,531)
(970,510)
Other comprehensive income for the period
-
-
Total comprehensive loss for the period
(1,115,531)
(970,510)
Earnings per share
Basic and diluted loss per share
16
(0.0116)
(0.0121)
The above Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the
accompanying notes.
LODE RESOURCES 2023 ANNUAL REPORT 19
STATEMENT OF FINANCIAL POSITION
For the Year Ended 30 June 2023
Notes
30 June 2023
$
30 June 2022
$
Current assets
Cash and cash equivalents
7
4,845,931
2,181,010
Trade and other receivables
8
93,126
79,706
Other assets
3,899
3,904
Total current assets
4,942,956
2,264,620
Non-current assets
Other financial assets
9
395,563
166,028
Property, plant and equipment
10
2,602
33,830
Exploration and evaluation assets
11
4,172,070
2,159,105
Total non-current assets
4,570,235
2,358,963
Total assets
9,513,191
4,623,583
Current liabilities
Trade and other payables
12
571,214
376,045
Employee entitlements
12
42,876
33,690
Lease liability
13
2,299
32,810
Total current liabilities
616,389
442,545
Non–current liabilities
Lease liability
13
-
2,299
Total non-current liabilities
-
2,299
Total liabilities
616,389
444,844
Net assets
8,896,802
4,178,739
Equity
Issued capital
14
9,113,475
5,611,514
Reserves
15
2,466,633
135,000
Accumulated losses
(2,683,306)
(1,567,775)
Total equity
8,896,802
4,178,739
The above Statement of Financial Position should be read in conjunction with the accompanying notes.
20 LODE RESOURCES 2023 ANNUAL REPORT
STATEMENT OF CHANGES IN EQUITY
For the Year Ended 30 June 2023
Issued
capital
$
Option premium
reserve
$
Accumulated
losses
$
Total
$
Balance at 1 July 2021
5,611,514
85,000
(597,265)
5,099,249
Loss for the year
-
-
(970,510)
(970,510)
Other comprehensive income
-
-
-
-
Total comprehensive loss for the year
-
-
(970,510)
(970,510)
Transactions with owners recorded directly in equity
Share base payments
-
50,000
-
50,000
Balance at 30 June 2022
5,611,514
135,000
(1,567,775)
4,178,739
Balance at 1 July 2022
5,611,514
135,000
(1,567,775)
4,178,739
Loss for the year
-
-
(1,115,531)
(1,115,531)
Total other comprehensive income
-
-
-
-
Total comprehensive loss for the year
-
-
(1,115,531)
(1,115,531)
Transactions with owners recorded directly in equity
Ordinary shares issued
4,688,657
1,433,883
-
6,122,540
Transaction costs on issue of shares
(1,186,696)
-
-
(1,186,696)
Share base payments
-
897,750
-
897,750
Balance at 30 June 2023
9,113,475
2,466,633
(2,683,306)
8,896,802
The above Statement of Changes in Equity should be read in conjunction with the accompanying notes.
LODE RESOURCES 2023 ANNUAL REPORT 21
STATEMENT OF CASH FLOWS
For the Year Ended 30 June 2023
Notes
30 June 2023
$
30 June 2022
$
Cash flows from operating activities
Cash payments in the course of operations
(1,043,718)
(799,513)
Interest received
77,345
425
Net cash used in operating activities
17
(966,373)
(799,088)
Cash flows from investing activities
Payments for exploration and evaluation expenditure
(1,873,629)
(1,561,642)
Payments for security deposits
(229,535)
(67,228)
Payment for plant and equipment
-
(40,308)
Net cash used in investing activities
(2,103,164)
(1,669,178)
Cash flows from financing activities
Proceeds from share issues
6,122,541
-
Transaction costs on share issue
(354,196)
(59,164)
Lease payments
(33,887)
(30,699)
Net cash provided / (used in) by financing activities
5,734,458
(89,863)
Net increase / (decrease) in cash held
2,664,921
(2,558,129)
Cash at the beginning of the reporting period
2,181,010
4,739,139
Cash and cash equivalents at 30 June
4,845,931
2,189,010
The above Statement of Cash Flows should be read in conjunction with the accompanying notes.
22 LODE RESOURCES 2023 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
1.
REPORTING ENTITY
Lode Resources Ltd (the ‘Company’) is a company domiciled in Australia as an individual entity. The address
of the Company’s registered office is C/o ESN Partners, Australia Square, Level 30, 264-278 George Street,
Sydney, NSW, 2000. The financial statements, of the Company as at and for the year ended 30 June 2023. The
Company is a for-profit entity and is primarily engaged in identifying and evaluating gold, copper, and silver
resource opportunities in New England Fold Belt of New South Wales.
2.
BASIS OF PREPARATION
(a) Statement of compliance
The financial statements are general purpose financial statements which have been prepared in accordance
with Australian Accounting Standards (‘AASBs’) adopted by the Australian Accounting Standards Board
(‘AASB’) and the Corporations Act 2001. The financial statements comply with International Financial Reporting
Standards (‘IFRSs’) and interpretations adopted by the International Accounting Standards Board (‘IASB’).
The financial statements were authorised for issue by the Directors on 22 September 2023.
(b) Basis of measurement
The financial statements have been prepared on the historical cost basis except for certain financial assets
which are measured at fair value.
(c) Functional and presentation currency
These financial statements are presented in Australian dollars, which is the Company’s functional currency.
(d) Use of estimates and judgement
The preparation of the financial statements in conformity with AASBs requires management to make
judgements, estimates and assumptions that affect the application of accounting policies and the reported
amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised and in any future periods affected.
In particular, information about significant areas of estimation uncertainty and critical judgements in applying
accounting policies that have the most significant effect on the amount recognised in the financial statements
are described in the following notes:
•
Note 11 - Exploration and evaluation expenditure.
•
Note 14 – Valuation of share based payments.
LODE RESOURCES 2023 ANNUAL REPORT 23
NOTES TO THE FINANCIAL STATEMENTS
3.
SIGNIFICANT ACCOUNTING POLICIES
(a) Changes in accounting policies
The accounting policies set out below have been applied consistently to all periods presented in these financial
statements, and have been applied consistently by the Company.
(b) Finance income and finance costs
Finance income comprises interest income on funds invested, dividend income. Interest income is recognised as
it accrues in profit or loss, using the effective interest method. Dividend income is recognised in profit or loss on
the date that the Company’s right to receive payment is established, which in the case of quoted securities is the
ex-dividend date.
Finance costs comprise interest expense on borrowings. Borrowing costs that are not directly attributable to the
acquisition, construction or production of a qualifying asset are recognised in profit or loss using the effective
interest method
(c) Exploration and evaluation expenditure
Exploration and evaluation expenditure, including the costs of acquiring licences, are capitalised as intangible
exploration and evaluation assets on an area of interest basis, less any impairment losses. Costs incurred before
the Company has obtained the legal rights to explore an area are recognised in profit or loss.
Exploration and evaluation assets are only recognised if the rights of the area of interest are current and either:
•
the expenditures are expected to be recouped through successful development and exploitation of the area
of interest; or
•
activities in the area of interest have not at the reporting date, reached a stage which permits a reasonable
assessment of the existence or otherwise of economically recoverable reserves and active and significant
operations in, or in relation to, the area of interest are continuing.
Exploration and evaluation assets are assessed for impairment if sufficient data exists to determine technical
feasibility and commercial viability and facts and circumstances suggest that the carrying amount exceeds the
recoverable amount. For the purposes of impairment testing, exploration and evaluation assets are allocated to
cash-generating units to which the exploration activity relates. The cash generating unit shall not be larger than
the area of interest.
Once the technical feasibility and commercial viability of the extraction of mineral resources in an area of interest
are demonstrable, exploration and evaluation assets attributable to that area of interest are first tested for
impairment and then reclassified to developing mine properties.
(d) Financial instruments
Non-derivative financial assets
Recognition and initial measurement
The Company initially recognises trade receivables on the date that they are originated. All other financial assets
are recognised initially on the trade date at which the Company becomes a party to the contractual provisions of
the instrument.
The Company derecognises a financial asset when the contractual rights to the cash flows from the asset expire,
or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which
substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in such
transferred financial assets that is created or retained by the Company is recognised as a separate asset or
liability.
Financial assets and liabilities are offset and the net amount presented in the statement of financial position
when, and only when, the Company has a legal right to offset the amounts and intends either to settle them on a
net basis or to realise the asset and settle the liability simultaneously.
24 LODE RESOURCES 2023 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
3.
SIGNIFICANT ACCOUNTING POLICIES (CONT.)
(d) Financial instruments (Cont.)
Classification and subsequent measurement
On initial recognition, a financial asset is classified as measured at:
•
Amortised cost;
•
Fair value through other comprehensive income – equity investment; or
•
Fair value through profit or loss.
Financial assets are not reclassified subsequent to their initial recognition unless the Company changes its
business model for managing financial assets, in which case all affected financial assets are reclassified on the
first day of the first reporting period following the change in the business model.
A financial asset is measured at amortised cost if it meets both the following conditions and is not designated as
fair value through profit or loss:
•
It is held within a business model whose objective is to hold assets to collect contractual cash flows; and
•
Its contractual terms give rise on specified dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding.
On initial recognition of an equity investment that is not held for trading, the Group may irrevocably elect to
present subsequent changes in the investment’s fair value through OCI. This election is made on an investment-
by-investment basis.
All financial assets not classified as measured at amortised cost or fair value through other comprehensive
income as described above are measured at fair value through profit or loss. This includes all derivative financial
assets. On initial recognition, the Group may irrevocably designate a financial asset that otherwise meets the
requirements to be measured at amortised cost or at fair value through other comprehensive income as at fair
value through profit or loss if doing so eliminates or significantly reduces an accounting mismatch that would
otherwise arise.
Non-derivative financial liabilities
Financial liabilities are measured at amortised cost.
The Company initially recognises debt securities issued and subordinated liabilities on the date that they are
originated. All other financial liabilities are recognised initially on the trade date, which is the date that the
Company becomes a party to the contractual provisions of the instrument.
The Company derecognises a financial liability when its contractual obligations are discharged, cancelled or
expire.
Other financial liabilities comprise loans and borrowings and trade and other payables.
(e) Share Capital
Ordinary Shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are
recognised as a deduction from equity, net of any tax effects.
(f) Trade and other receivables and payables
Trade receivables and payables are carried at amortised cost. For receivables and payables with a remaining life
of less than one year, the notional amount is deemed to reflect the fair value. All other receivables and payables
are discounted to determine the fair value.
(g) Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits with an original maturity of three months or
less.
LODE RESOURCES 2023 ANNUAL REPORT 25
NOTES TO THE FINANCIAL STATEMENTS
3.
SIGNIFICANT ACCOUNTING POLICIES (CONT.)
(h) Impairment
Non-derivative financial assets
The Company recognises loss allowances to an amount equal to lifetime expected credit losses (ECLs), except
for the following, which are measured at 12-month ECLs:
•
Debt securities that are determined to have a low credit risk at the reporting date; and
•
Other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the
expected life of the financial instrument) has not increased significantly since initial recognition.
Loss allowances for trade receivables and contract assets are always measured at an amount equal to lifetime
ECLs.
Measurement of ECLs
ECLs are a probability weighted estimate of credit losses. Credit losses are measured as the present value of all
cash shortfalls. ECL’s are discounted at the effective interest rate of the financial asset.
Non-financial assets
An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit (CGU)
exceeds its recoverable amount. The recoverable amount of an asset or CGU is the greater of their fair value
less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to
their present value using a pre-tax discount rate that reflects current market assessments of the time value of
money and the risks specific to the asset or CGU. For impairment testing, assets are grouped together into the
smallest group of assets that generates cash inflows from continuing use that are largely independent of the
cash inflows of other assets or CGUs. Impairment losses are recognised in profit or loss.
Reversals of impairment
An impairment loss in respect of a financial asset carried at amortised cost is reversed if the subsequent
increase in recoverable amount can be related objectively to an event occurring after the impairment loss was
recognised.
In respect of non-financial assets, an impairment loss is reversed if there has been a conclusive change in the
estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that
the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of
depreciation or amortisation, if no impairment loss had been recognised.
(i) Segment reporting
Determination and presentation of operating segments
The Company determines and presents operating segments based on the information that is provided internally
to the Executive Directors, who are the Company’s chief operating decision maker.
An operating segment is a component of the Company that engages in business activities from which it may
earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of
the Company’s other components. All operating segments’ operating results are regularly reviewed by the
Company’s Executive Directors to make decisions about resources to be allocated to the segment and assess its
performance, and for which discrete financial information is available.
Segment results that are reported to the Executive Directors include items directly attributable to a segment as
well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly corporate assets
(primarily the Company’s headquarters), head office expenses, and income tax assets and liabilities.
Segment capital expenditure is the total cost incurred during the period to acquire property, plant and
equipment, and intangible assets other than goodwill.
26 LODE RESOURCES 2023 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
3.
SIGNIFICANT ACCOUNTING POLICIES (CONT.)
(j) Income tax
Current tax and deferred tax is recognised in profit or loss except to the extent that it relates to a business
combination or items recognised directly in equity or in other comprehensive income.
Current tax
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates
enacted or substantially enacted at the reporting date, and any adjustment to tax payable in respect of previous
years.
Deferred tax
Deferred tax is recognised in respect of temporary differences between the carrying amount of assets and
liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not
recognised for:
•
temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business
combination and that affects neither accounting nor taxable profit or loss;
•
temporary differences related to investments in subsidiaries to the extent that the Company is able to
control the timing of the reversal of the temporary differences and it is probable that they will not reverse in
the foreseeable future; or
•
taxable temporary differences arising on the initial recognition of goodwill.
The measurement of deferred tax reflects the tax consequences that would follow the manner in which the
Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and
liabilities.
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they
reverse, using tax rates enacted or substantively enacted at the reporting date. Deferred tax assets and liabilities
are offset if there is a legally enforceable right to offset current tax liabilities and assets and they relate to taxes
levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle
current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.
A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences to the
extent that it is probable that future taxable profits will be available against which they can be utilised. Deferred
tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that
the related tax benefit will be realised.
(k) Provisions
A provision is recognised if, as a result of a past event, the Company has a present legal or constructive
obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required
to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax
rate that reflects the current market assessments of the time value of money and the risks specific to the liability.
The unwinding of the discount is recognised as a finance cost.
(l) Goods and services tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST
incurred is not recoverable from the Australian Taxation Office. In these circumstances, the GST is recognised as
part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the
balance sheet are shown inclusive of GST.
Cash flows are presented in the Statement of Cash Flows on a gross basis, except for the GST component of
investing and financing activities, which are disclosed as operating cash flows.
LODE RESOURCES 2023 ANNUAL REPORT 27
NOTES TO THE FINANCIAL STATEMENTS
3.
SIGNIFICANT ACCOUNTING POLICIES (CONT.)
(m) Employee benefits
Short-term employee benefits
Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the
amount expected to be paid if the Company has a present legal or constructive obligation to pay this amount as
a result of past service provided by the employee and the obligation can be estimated reliably.
Share-based payment transactions
The grant-date fair value of share-based payment awards granted is recognised as an employee and
consultants’ expense, with a corresponding increase in equity, over the period that the employees become
unconditionally entitled to the awards. The amount recognised as an expense is adjusted to reflect the number
of awards for which the related service and non-market vesting conditions are expected to be met, such that the
amount ultimately recognised as an expense is based on the number of awards that meet the related service
and non-market performance conditions at the vesting date. For share-based payment awards with non-vesting
conditions, the grant date fair value of the share-based payment is measured to reflect such conditions and
there is no true-up for differences between expected and actual outcomes.
(n) Right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at
cost, which comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments
made at or before the commencement date net of any lease incentives received, any initial direct costs incurred,
and an estimate of costs expected to be incurred for dismantling and removing the underlying asset, and
restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the
estimated useful life of the asset, whichever is the shorter. Where the Company expects to obtain ownership
of the leased asset at the end of the lease term, the depreciation is over its estimated useful life. Right-of use
assets are subject to impairment or adjusted for any remeasurement of lease liabilities.
(o) Lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at
the present value of the lease payments to be made over the term of the lease, discounted using the interest
rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental borrowing rate.
Lease payments comprise of fixed payments less any lease incentives receivable, variable lease payments that
depend on an index or a rate, amounts expected to be paid under residual value guarantees, exercise price of a
purchase option when the exercise of the option is reasonably certain to occur, and any anticipated termination
penalties. The variable lease payments that do not depend on an index or a rate are expensed in the period in
which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are
remeasured if there is a change in the following: future lease payments arising from a change in an index or
a rate used; residual guarantee; lease term; certainty of a purchase option and termination penalties. When a
lease liability is remeasured, an adjustment is made to the corresponding right-of use asset, or to profit or loss if
the carrying amount of the right-of-use asset is fully written down.
(p) Changes in accounting policies
All accounting policies used are consistent with those applied in the 30 June 2022 financial report.
(q) Comparative information
Certain comparative amounts, which are not deemed to be material, have been disclosed or reclassified where
necessary to provide consistency with current period disclosures.
28 LODE RESOURCES 2023 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
3.
SIGNIFICANT ACCOUNTING POLICIES (CONT.)
(r) Earnings per share
Basic earnings/ (loss) per share is calculated by dividing the profit or loss attributable to equity holders of the
Company, excluding any costs of servicing equity other than ordinary shares, by the weighted average number
of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued
during the financial year.
Diluted earnings/ (loss) per share is calculated by dividing the profit or loss attributable to equity holders of the
Company by the weighted average number of ordinary shares outstanding during the financial year, adjusted for
the effects of all dilutive potential ordinary shares which comprise relevant share options granted to employees.
Potential ordinary shares are anti-dilutive when their conversion to ordinary shares would increase earnings
per share or decrease loss per share from continuing operations. The calculation of diluted earnings/ (loss) per
share does not assume conversion, exercise, or other issue of potential ordinary shares that would have an anti-
dilutive effect on earnings per share.
(s) New and revised accounting standards and interpretations
The Company has adopted all standards which became effective for the first time in the year ended 30 June
2023.
The AASB has issued new and amended accounting standards and interpretations that have mandatory
application dates in future reporting periods. The Company has decided not to early adopt these and has
assessed their impact as being immaterial.
4.
INCOME TAX EXPENSE
2023
$
2022
$
(a) Reconciliation of income tax accounting profit:
Prima Facie tax payable on profit from ordinary activities before
income tax at 25% (2022: 25%)
(278,883)
(242,627)
Add tax effect off:
- origination and reversal of temporary differences
2,739
554
- non-deductible expenses
21,144
2,853
- deferred tax assets not recognised
255,000
239,220
Income tax expense
-
-
At 30 June 2023, the Company had unrecognised unused tax losses of $6,894,872 (2022: 3,617,977).
5.
LOSS FROM OPERATING ACTIVITIES
The following items are relevant in explaining the financial performance for the year ended 30 June 2023
2023
$
2022
$
Other Expenses
Accounting fees
40,017
41,743
Marketing
73,509
71,204
IT expenses
12,180
10,416
Insurance
37,539
32,947
Other
99,768
28,516
Total
263,013
184,826
LODE RESOURCES 2023 ANNUAL REPORT 29
NOTES TO THE FINANCIAL STATEMENTS
6.
FINANCE INCOME AND FINANCE COSTS
2023
$
2022
$
Recognised in profit and loss
Interest income on cash deposits
77,345
425
Finance costs
(1,077)
(3,354)
Net finance income/(costs) recognised in profit and loss
76,268
2,929
7.
CASH AND CASH EQUIVALENTS
Cash at bank
790,407
30,649
Deposit at call
4,055,524
2,150,361
4,845,931
2,181,010
8.
TRADE AND OTHER RECEIVABLES
Current
GST receivable
93,126
79,706
93,126
79,706
9.
OTHER FINANCIAL ASSETS
Non-current
Security deposits
245,528
166,028
Net smelter royalty EL5674
150,035
-
395,563
166,028
10.
PROPERTY PLANT AND EQUIPMENT
Motor vehicles - at cost
32,718
32,718
Accumulated depreciation
(32,718)
(32,718)
Total motor vehicles
-
-
Office furniture – at costs
7,890
7,890
Accumulated depreciation
(7,890)
(7,890)
Total motor vehicles
-
-
Right of use assets – leased property – at cost
62,455
62,455
Accumulated depreciation
(59,853)
(28,625)
Total right of use assets – leased property
2,602
33,830
Total property plant and equipment
2,602
33,830
Movement in the carrying amounts for each class of property, plant and equipment between the beginning and
the end of the current financial year:
Right of use assets
Balance at 1 July
33,830
-
Additions
-
62,455
Depreciation
(31,228)
(28,625)
Carrying amount at the end of the financial year
2,602
33,830
Total carrying amount at the end of the financial year
2,602
33,830
30 LODE RESOURCES 2023 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
11.
EXPLORATION AND EVALUATION EXPENDITURE
2023
$
2022
$
EL 8933 Webbs Consol
2,942,350
1,000,913
EL 8980 Uralla
824,424
808,815
EL 9003 Fender
281,857
268,430
EL 9004 Elsinore
21,556
17,169
EL 9084 Tea Tree
16,303
12,396
EL 9085 Thor Gold
32,113
25,401
EL 9319 Sandon
36,419
12,720
EL 9087 Uralla West
17,048
13,261
Net book value
4,172,070
2,159,105
Balance at 1 July
2,159,105
332,834
Expenditure incurred
2,012,965
1,826,271
Net book value
4,172,070
2,159,105
The recoverability of the carrying amount of the exploration and evaluation assets is dependent on the
successful development and commercial exploitation, or alternatively, sale of the respective areas of interest.
The recoverable amount of development expenditure is determined as the higher of its fair value less costs to
sell and its value in use.
During the year ended 30 June 2023, Lode was granted Exploration Licence EL 9454 Webbs Consol Expanded.
12.
TRADE AND OTHER PAYABLES
2023
$
2022
$
CURRENT
Trade payables
447,326
293,195
Sundry payables and accrued expenses
52,832
27,448
Related party payables
7,713
8,163
Other payables
63,343
47,239
571,214
376,045
CURRENT
Employee benefits
42,876
33,690
42,876
33,690
13.
LEASE LIABILITY
Current
Lease liability
2,299
32,810
Non-current
Lease liability
-
2,299
2,299
35,109
LODE RESOURCES 2023 ANNUAL REPORT 31
NOTES TO THE FINANCIAL STATEMENTS
14.
ISSUED CAPITAL
(a) Issued and paid-up share capital
30 June 2023
30 June 2022
Number
$
Number
$
Ordinary shares, fully paid at 1 July
79,966,002
5,611,514
79,966,002
5,611,514
Movement in Ordinary Shares:
Issued ordinary shares 17 August 2022 for $0.14(1)
11,661,000
1,419,657
-
-
Issued ordinary shares 2 December 2022 for $0.14
357,143
50,000
-
-
Issued ordinary shares 14 February 2023 for $0.30(2)
14,800,000
3,219,000
-
-
Less cost of issue
-
(1,186,696)
-
-
106,784,145
9,113,475
79,966,002
5,611,514
(1) In August 2022, the Company issued 11,661,000 ordinary shares and 5,830,500 listed options for cash
totaling $1,632,540 under a share placement and 2,500,000 listed options to the lead manager of the
placement. The listed options are each exercisable at $0.24 to acquire one fully paid ordinary share
exercisable at any time up to 25 August 2024.
(2) In February 2023, the Company issued 14,800,000 ordinary shares and 4,933,333 listed options for cash
totaling $4,440,000 under a share placement. The listed options are each exercisable at $0.24 to acquire
one fully paid ordinary share exercisable at any time up to 25 August 2024.
Terms and conditions - Shares
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled
to one vote per share at the shareholder’s meetings. In the event of winding up of the Company, ordinary
shareholders rank after creditors and are fully entitled to any proceeds of liquidation.
(b) Share based payment
The following unlisted options were on issue at 30 June 2023:
On 14 July 2021, the Company granted 500,000 unlisted options to the Exploration Manager. The options
have an exercise price of $0.30, vest immediately, expire on 14 July 2023 and the fair value of the options was
$50,000. The Black-Scholes formula model inputs were the Company’s share price of $0.18 at the grant date,
a volatility factor of 137.76% based on historical share price performance, and a risk-free interest rate of 0.04%
based on the 2-year government bond rate.
On 8 December 2022, the Company granted 500,000 unlisted options to the Exploration Manager and 250,000
unlisted options to the Company Secretary. The options have an exercise price of $0.24, vest immediately,
expire on 2 December 2024 and the fair value of the options was $38,250. The Black-Scholes formula model
inputs were the Company’s share price of $0.13 at the grant date, a volatility factor of 102.17% based on
historical share price performance, and a risk-free interest rate of 2.99% based on the 2-year government bond
rate.
On 2 February 2023, the Company granted 2,500,000 unlisted options to the Lead Manager of the Share
Placement announced on 6 February 2023. The options have an exercise price of $0.40, vest immediately,
expire on 14 February 2025 and the fair value of the options was $570,000. The Black-Scholes formula model
inputs were the Company’s share price of $0.335 at the grant date, a volatility factor of 144.64% based on
historical share price performance, and a risk-free interest rate of 3.13% based on the 3-year government bond
rate.
32 LODE RESOURCES 2023 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
14.
ISSUED CAPITAL(CONT.)
(b) Share based payment (Cont.)
The following unlisted options were on issue as at 30 June 2023.
Opening Balance
1 July 2022
Number
Exercise
price
$
Granted during
the year
Number
Expired during
the year
Number
Exercised during
the year
Number
Closing Balance
30 June 2023
Number
500,000
0.30
-
-
-
500,000
0.24
750,000
-
-
750,000
0.40
2,500,000
-
-
2,500,000
The following unlisted options held by Key management personnel were on issue at 30 June 2023.
On 31 March 2021, the Company granted 1,000,000 unlisted options to Keith Mayes and Jason Beckton Non-
Executive Directors. The options have an exercise price of $0.30, vest immediately, expire on 2 July 2023 and
the fair value of options was $85,000. The Black-Scholes formula model inputs were the Company’s share price
of $0.20 at the grant date, a volatility factor of 100.00%, and a risk-free interest rate of 0.08% based on the
2-year government bond rate.
On 21 October 2022, the Company granted 500,000 unlisted options to Keith Mayes and Jason Beckton
Non-Executive Directors. The options have an exercise price of $0.24, vest immediately, expire on 2 December
2024 and the fair value of the options was $27,000. The Black-Scholes formula model inputs were the
Company’s share price of $0.125 at the grant date, a volatility factor of 106.15% based on historical share price
performance, and a risk-free interest rate of 3.62% based on the 2-year government bond rate.
The terms and conditions of the unlisted options held by key management personnel during the year ended 30
June 2023 are as follows:
Opening Balance
1 July 2022
Number
Exercise
price
$
Granted during
the year
Number
Expired during
the year
Number
Exercised during
the year
Number
Closing Balance
30 June 2023
Number
1,000,000
0.30
-
-
-
1,000,000
0.24
500,000
-
-
500,000
The following unlisted options were on issue as at 30 June 2023:
Opening Balance
1 July 2022
Number
Exercise
Price
$
Granted during
the year
Number
Expired during
the year
Number
Exercised during
the year
Number
Closing Balance
30 June 2023
Number
1,000,000
0.30
-
-
-
1,000,000
500,000
0.30
-
-
-
500,000
-
0.24
750,000
-
-
750,000
-
0.40
2,500,000
-
-
2,500,000
-
0.24
500,000
-
-
500,000
The following unlisted options were on issue as at 30 June 2022:
Opening Balance
1 July 2021
Number
Exercise
Price
$
Granted during
the year
Number
Expired during
the year
Number
Exercised during
the year
Number
Closing Balance
30 June 2022
Number
1,000,000
0.30
-
-
-
1,000,000
-
0.30
500,000
-
-
500,000
LODE RESOURCES 2023 ANNUAL REPORT 33
NOTES TO THE FINANCIAL STATEMENTS
15.
RESERVES
2023
$
2022
$
Equity based compensation reserve
1,032,750
135,000
Option premium reserve
1,433,883
-
2,466,633
135,000
Movement during the period
Equity based compensation reserve
Balance at the beginning of the year
135,000
85,000
Share based payment – vested share options
897,750
50,000
Balance at the end of year
1,032,750
135,000
Option premium reserve
Balance at the beginning of the year
-
-
Issue of options
1,433,883
-
Balance at the end of year
1,433,883
-
16.
LOSS PER SHARE
Basic and diluted loss per share has been calculated using:
Net loss for the year attributable to equity holders of the company
(1,115,531)
(970,510)
Weighted average number of ordinary shares (basic and diluted)
Issued ordinary shares at beginning of year
79,966,002
79,966,002
Effect of shares issued (Note 14)
15,891,035
-
Weighted average ordinary shares at the end of the year
95,857,037
79,966,002
As the Company is loss making, none of the potentially dilutive securities are currently dilutive in the calculation
of total earnings per share.
17.
RECONCILIATION OF CASH FLOWS FROM OPERATING ACTIVITIES
2023
$
2022
$
Cash flows from operating activities
Loss for the year
(1,115,531)
(970,510)
Non-cash items
Depreciation / amortisation
31,228
64,955
Share based payments
65,250
50,000
Employee entitlements
9,186
33,690
Other expenses
29,007
14,682
Changes in assets and liabilities
Decrease/(increase) in receivables
13,934
(38,830)
Decrease/(increase) in other assets
(13,415)
(335)
(Decrease)/Increase in payables
13,968
47,260
Net cash used in operating activities
(966,373)
(799,088)
18.
CONTINGENCIES
In the opinion of the Directors, the Company did not have any contingencies at 30 June 2023 (2022: none).
34 LODE RESOURCES 2023 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
19.
CAPITAL AND LEASING COMMITMENTS
The NSW Division of Resource and Geoscience requires a commitment to a work program rather than an
expenditure commitment. Work programs can be varied annually. The Company has budgeted minimum work
programs for each year as shown below. However, it is anticipated that early exploration success in any project
will result in higher expenditures for that project.
Project Name
Licence
Expiry date
2024
$
2025
$
2026
$
2027
$
2028
$
2029
$
Webbs Consol
EL8933
16 January 2029
100,000 100,000 100,000 100,000 100,000 54,795
Uralla
EL8980
14 May 2027
150,000 150,000 150,000 130,685
-
-
Fender
EL9003 12 October 2023
18,521
-
-
-
-
-
Elsinore
EL9004 12 October 2023
12,822
-
-
-
-
-
Tea Tree
EL9084
11 March 2024
34,932
-
-
-
-
-
Thor
EL9085
11 March 2024
45,411
-
-
-
-
-
Uralla West
EL9087
12 March 2024
17,534
-
-
-
-
-
Sandon
EL9319 29 October 2024
66,666
22,100
-
-
-
-
Webbs Consol Expanded EL9454 7 September 2025
25,000
25,000
4,726
-
-
-
Total
470,886 297,100 254,726 230,685 100,000 54,795
20.
RELATED PARTIES
The Company’s main related parties are:
Key management personnel who comprise the Board of Directors.
Other related parties include close family members of key management personnel and entities that are
controlled or significantly influenced by those key management personnel or their close family members.
Transactions between related parties are on normal commercial terms and conditions no more favourable than
those available to other parties unless otherwise stated.
No directors have entered into a material contract with the Company and there were no material contracts
involving directors’ interests existing at 30 June 2023.
Key management personnel and director transactions
During the year ended 30 June 2023 and 2022, no key management persons, or their related parties, held
positions in other entities that provide material professional services resulting in them having control or joint
control over the financial or operating policies of those entities.
Information regarding individual key management personnel’s compensation and some equity instruments
disclosures as permitted by Corporations Act and Corporations Regulations 2M.3.03 are provided in the
Remuneration Report section of the Director’s Report.
2023
$
2022
$
Key management personnel compensation
Primary fees/salary
500,000
425,000
Superannuation
42,000
32,500
Share based payment
27,000
-
Short term benefits
30,637
25,096
599,637
482,596
LODE RESOURCES 2023 ANNUAL REPORT 35
NOTES TO THE FINANCIAL STATEMENTS
21.
SHARE BASE PAYMENT
At 30 June 2023 Lode Resources Ltd has the following sharebased payment schemes:
During the year the Company has granted 500,000 unlisted options to key management personnel to acquire
options over unissued ordinary shares in the Company (2022 – nil). The options have no voting or dividend
rights. The options vested immediately on Grant Date and there are no vesting conditions attached to the
options issued. Any options not exercised by the expiry date will lapse automatically.
The terms and conditions of the options held by key management personnel during the year ended 30 June
2023 are as follows:
Grant date
Expiry
date
Exercise
price
Start of
the year
Granted
during
the year
Exercised
during
the year
Forfeited
during
the year
Balance at
the end of
the year
Vested and
exercisable
at the end
of the year
31 March 2021
2 July 2023
$0.30
1,000,000
-
-
-
1,000,000 1,000,000
21 October 2022 2 December 2024
$0.24
- 500,000
-
-
500,000
500,000
The weighted average remaining contractual life of options outstanding at year end was 0.48 years (2022:
1.01). The weighted average exercise price of outstanding shares at the end of the reporting period was $0.28.
The equity based compensation reserve is used to record the options issued to directors and executives of the
Company as compensation. Options are valued using the Black-Scholes option pricing model.
22.
FINANCIAL RISK MANAGEMENT
The Company is exposed to a variety of financial risks through its use of financial instruments.
The Company‘s overall risk management plan seeks to minimise potential adverse effects due to the
unpredictability of financial markets.
Financial instruments used
The principal financial instruments used by the Company are summarised as follows:
2023
$
2022
$
Financial assets
Held at amortised cost
Cash and cash equivalents
4,845,931
2,181,010
Security deposits
245,528
166,028
Total financial assets
5,091,459
2,347,038
Financial liabilities
Financial liabilities at amortised cost
553,046
397,605
Total financial liabilities
553,046
397,605
36 LODE RESOURCES 2023 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
22.
FINANCIAL RISK MANAGEMENT (CONT.)
Objectives, policies and processes
The Board of Directors have overall responsibility for the establishment of Lode Resource’s financial risk
management framework. This includes the development of policies covering specific areas such as foreign
exchange risk, interest rate risk, liquidity risk, credit risk and the use of derivatives.
Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the
Company’s activities.
Mitigation strategies for specific risks faced are described below:
Liquidity risk
Liquidity risk arises from the Company’s management of working capital. It is the risk that the Company will
encounter difficulty in meeting its financial obligations as they fall due. The Company’s policy is to ensure that it
will always have sufficient cash to allow it to meet its liabilities as and when they fall due.
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a financial
loss to the Company.
Credit risk arises from cash and cash equivalents and deposits held.
The credit risk for liquid funds and other short-term financial assets is considered negligible since the
counterparties are reputable banks and governmental bodies with high-quality external credit ratings.
Interest rate risk
The Company’s income statement is affected by changes in interest rates due to the impact of such changes on
the interest income from cash and cash equivalents and interest-bearing security deposits.
22.
OPERATING SEGMENTS
The Company’s chief operating decision maker has considered the requirements of AASB 8, Operating
Segments, and has concluded that, for the year ended 30 June 2023, the Company operated in the mineral
exploration within the geographical segments of Australia with no separate reportable segment.
23.
SUPERANNUATION EXPENSE
Employee benefit expense includes defined contribution expense of $42,000 (2022: $33,500).
24.
REMUNERATION OF AUDITORS
During the financial year, the following fees were paid or were payable for services provided by the auditors of
the Company:
2023
$
2022
$
Audit services
41,803
30,285
41,803
30,285
25.
IMPUTATION CREDITS
Imputation credits of $nil were available for distribution at 30 June 2023 (2022: $nil).
26.
SUBSEQUENT EVENTS
No matters or circumstances have arisen since the end of the financial year which significantly affected or could
significantly affect the operations of the Company, the results of those operations or the state of affairs of the
Company in future financial years.
LODE RESOURCES 2023 ANNUAL REPORT 37
DIRECTORS’ DECLARATION
In the opinion of the directors of Lode Resources Ltd (the ‘Company’):
(a) the financial statements and notes set out on pages 18 to 36, and the Remuneration Report as set out on pages 12 to
15 of the Directors’ Report are in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the Company’s financial position as at 30 June 2023 and of its performance for the
year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; and
(b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become
due and payable.
The Directors have been given the declarations required under section 295A of the Corporations Act 2001 for the
financial year ended 30 June 2023.
The Director’s draw attention to Note 2(a) to the consolidated financial statements, which includes a statement of
compliance with International Financial Reporting Standards.
Signed at Sydney this 22nd day of September 2023 in accordance with a resolution of the Board of Directors:
Andrew Van Heyst
Edward Leschke
Executive Chairman
Managing Director
38 LODE RESOURCES 2023 ANNUAL REPORT
INDEPENDENT AUDITOR’S REPORT
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LODE RESOURCES 2023 ANNUAL REPORT 43
ADDITIONAL STOCK EXCHANGE INFORMATION
Additional information required by the ASX Limited Listing Rules and not disclosed elsewhere in this report is set out
below. The information is effective as at 31 August 2023.
SECURITIES EXCHANGE
The Company is listed on the Australian Securities Exchange. The Home Exchange is Sydney.
SUBSTANTIAL SHAREHOLDERS
The number of substantial shareholders and their associates are set out below:
Shareholder
Number of Shares
Andrew Van Heyst
21,392,858
Edward Leschke
20,892,858
Michael Ruane
7,050,000
THE NUMBER OF HOLDERS IN EACH CLASS OF SECURITIES
The total distribution of fully paid shareholders and optionholders as at 31 August 2023 was as follows:
Type of security
Number of holders
Number of securities
Ordinary shares
837
106,784,145
Options
128
17,192,405
CLASS AND VOTING RIGHTS
The voting rights attached to ordinary shares, as set out in the Company’s Constitution, are that every member in person
or by proxy, attorney or representative, shall have one vote on a show of hands and one vote for each share held on a
poll.
A member holding partly paid shares is entitled to a fraction of a vote equivalent to the proportion which the amount paid
up bears to the issue price for the shares.
Options don’t carry voting rights.
DISTRIBUTION OF SHAREHOLDERS AND OPTIONHOLDERS
The total distribution of fully paid shareholders and unlisted option holders was as follows:
Range
Total Shareholders
Total Optionholders
1 - 1,000
31
3
1,001 - 5,000
153
6
5,001 - 10,000
168
11
10,001 - 100,000
364
68
100,001 and over
121
40
Total
837
128
ON MARKET BUY BACK
There is no on market buy-back.
ESCROWED SECURITIES
As at 31 August 2023, there were escrowed securities.
44 LODE RESOURCES 2023 ANNUAL REPORT
LESS THAN MARKETABLE PARCELS
On 31 August 2023, there are 123 holders of less than a marketable of 3,846 ordinary shares.
TWENTY LARGEST SHAREHOLDERS
As at 31 August 2023, the twenty largest quoted shareholders held 62.55% of the fully paid ordinary shares as follows:
Nº Name
Ordinary Shares
Quantity
%
1
A M Van Heyst Superannuation
20,892,858
19.57
2
Augusta Enterprises Pty Ltd
20,750,001
19.43
3
One Management Investment Funds Limited
3,450,570
3.23
4
Ashabia Pty Ltd C/-Praemium S2 (S60189-Mjw)
2,598,743
2.43
5
Kenneth William Gibson & Janice Elizabeth Gibson
2,500,000
2.34
6
Spiceme Capital Pty Ltd
1,500,000
1.40
7
HSBC Custody Nominees (Australia) Limited – A/C 2
1,318,403
1.23
8
Leigh David Kalazich
1,300,086
1.22
9
Williams Northwood Pty Ltd
1,250,000
1.17
10 Matthew James Osborne
1,210,000
1.13
11 MCJP Darling Enterprise Pty Ltd
1,182,779
1.11
12 El Aliya Pty Ltd
1,150,000
1.08
13 BNP Paribas Nominees Pty Ltd
1,050,895
0.98
14 One Management Investment Funds Limited
1,000,000
0.94
15 Dowmardella Pty Ltd
1,000,000
0.94
16 Lonway Pty Limited Lonergan Edwards & Associates
1,000,000
0.94
17 Pasagean Pty Limitedc/-Praemium S2 (S94772-Tcj)
1,000,000
0.94
18 Edna Securities Pty Ltd C/- Praemium-1927-390908
940,000
0.88
19 Karthikeyan Kumaran Vadivelu
900,000
0.84
20 Station Capital Pty Ltd
800,000
0.75
TWENTY LARGEST OPTIONOLDERS
As at 31 August 2023, there are optionholder that held 20% or more of the options on issued.
TENEMENTS SCHEDULE
Project
Location
Licence Number
Holder
Interest
%
Type of Tenement
Uralla
NSW
EL8980
Lode Resources Ltd
100
Exploration
Uralla West
NSW
EL9087
Lode Resources Ltd
100
Exploration
Webbs Consol
NSW
EL8933
Lode Resources Ltd
100
Exploration
Webbs Consol Expanded
NSW
EL9454
Lode Resources Ltd
100
Exploration
Fender
NSW
EL9003
Lode Resources Ltd
100
Exploration
Elsinore
NSW
EL9004
Lode Resources Ltd
100
Exploration
Tea Tree
NSW
EL9084
Lode Resources Ltd
100
Exploration
Thor
NSW
EL9085
Lode Resources Ltd
100
Exploration
Sandon
NSW
EL9319
Lode Resources Ltd
100
Exploration
ADDITIONAL STOCK EXCHANGE INFORMATION
www.loderesources.com
A.B.N. 30 637 512 415
NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the Annual General Meeting of Members of Lode Resources Ltd will be held on
Wednesday, 29 November 2023 at 11 am Australian Eastern Daylight Time (AEDT). at Level 5, 56 Pitt Street Sydney
NSW 2000
AGENDA
ORDINARY BUSINESS
Financial Reports for the Year Ended 30 June 2023
To receive and consider the Company's Annual Financial Reports, the Directors' Report and the Auditor's
Report for the year ended 30 June 2023.
To consider and, if thought fit, pass the following resolutions as ordinary resolutions, unless otherwise specified, with
or without amendment:
Resolution 1
Adoption of the Remuneration Report
'That the Remuneration Report for the year ended 30 June 2023 be and is hereby adopted.'
The vote on this resolution is advisory only and does not bind the Directors.
Resolution 2
Re-election of a Director
'That Andrew Van Heyst having retired in accordance with the Company’s Constitution and the ASX Listing Rules,
and being eligible, offers himself for re-election, be re-elected as a Director of the Company with immediate effect.'
Resolution 3
Ratification of 14,800,000 Shares - Listing Rule 7.4
'That for the purposes of ASX Listing Rule 7.4 and for all other purposes, shareholders hereby ratify and approve
the issue and allotment of 14,800,000 fully paid ordinary shares in the Company issued under ASX Listing Rule 7.1
and 7.1A on 14 February 2023, on the terms and conditions set out in the Explanatory Memorandum accompanying
this Notice of Meeting.'
Resolution 4
Ratification of 4,933,333 Listed Options - Listing Rule 7.4
'That for the purposes of ASX Listing Rule 7.4 and for all other purposes, shareholders hereby ratify and approve
the issue and allotment of 4,933,333 options issued under ASX Listing Rule 7.1 on 14 February 2023, on the terms
and conditions set out in the Explanatory Memorandum accompanying this Notice of Meeting.'
Resolution 5
Ratification of 2,500,000 Unlisted Options - Listing Rule 7.4
‘That, for the purposes of ASX Listing Rule 7.4 and for all other purposes, approval is given for the Company to
issue up to 2,500,000 Unlisted Options on the terms and conditions set out in the Explanatory Memorandum
accompanying this Notice of Meeting.’
Resolution 6
Ratification of 750,000 Unlisted Options - Listing Rule 7.4
'That for the purposes of ASX Listing Rule 7.4 and for all other purposes, shareholders hereby ratify and
approve the issue and allotment of 750,000 unlisted options issued under Listing Rule 7.1 on 2 December
2022, on the terms and conditions set out in the Explanatory Memorandum accompanying this Notice of
Meeting.
Resolution 7
Approval to issue Unlisted Options to Jason Beckton
“That, for the purposes of ASX Listing Rule 10.11 and for all other purposes, approval is given for the Company to
issue 250,000 options to Jason Beckton or his nominee on the terms and conditions set out in the Explanatory
Memorandum accompanying this Notice of Meeting.”
Resolution 8
Approval to issue Unlisted Options to Keith Mayes
“That, for the purposes of ASX Listing Rule 10.11 and for all other purposes, approval is given for the Company to
issue 250,000 Options to Keith Mayes or his nominee on the terms and conditions set out in the Explanatory
Memorandum accompanying this Notice of Meeting.”
Resolution 9
Approval to issue Unlisted Options to Mitchell Tarrant
“That, for the purposes of ASX Listing Rule 7.1 and for all other purposes, approval is given for the Company to
issue 500,000 Options to Mitchell Tarrant or his nominee on the terms and conditions set out in the Explanatory
Memorandum accompanying this Notice of Meeting.”
Resolution 10
Additional capacity to issue securities
'That, for the purposes of ASX Listing Rule 7.1A and for all other purposes, approval is given for the Company to
issue equity securities of up to 10% of the issued capital of the Company at the time of issue on the terms and
conditions set out in the Explanatory Memorandum accompanying this Notice of Meeting.'
This is a special resolution requiring the approval of 75% or more of all votes cast by shareholders present and
eligible to vote.
To transact any other business that may be brought forward in accordance with the Company's Constitution.
By order of the Board
Marcelo Mora
Company Secretary
24 October 2023
A.B.N. 30 637 512 415
1
EXPLANATORY MEMORANDUM
TO THE NOTICE OF ANNUAL GENERAL MEETING
This Explanatory Memorandum has been prepared to assist members to understand the business to be put to members
at the Annual General Meeting of Members of Lode Resources Ltd that will be held on Wednesday, 29 November 2023
at 11 am Australian Eastern Daylight Time (AEDT). at Level 5, 56 Pitt Street Sydney NSW 2000
Financial Report
The Financial Report, Directors' Report and Auditor's Report (i.e. Annual Financial Reports or Annual Report) for the
Company for the year ended 30 June 2023 will be laid before the meeting. There is no requirement for shareholders to
approve these reports, however, the Chairman of the meeting will allow a reasonable opportunity to ask questions
including questions directed to the auditor about the conduct of the audit and the content of the Auditor's Report.
The Company will not provide a hard copy of the Company’s annual financial report to shareholders unless specifically
requested to do so. The Company’s annual financial report to shareholders is available on its website
loderesources.com/investor-centre/annual-reports/. The Company's annual financial reports were also announced on
22 September 2023 and can be access by visting the ASX's announcement platform www.asx.com.au (ASX:LDR).
Resolution 1
Adoption of Remuneration Report
The Remuneration Report, which can be found as part of the Directors’ Report in the Company's 2023 Annual Report,
contains certain prescribed details, sets out the policy adopted by the Board of Directors and discloses the payments
to key management personnel, Directors and senior executives for the year ended 30 June 2023.
In accordance with section 250R of the Corporations Act, a resolution that the Remuneration Report be adopted must
be put to a vote by the shareholders. This resolution is advisory only and does not bind the Directors or the Company.
Shareholders will be given a reasonable opportunity at the meeting to comment on and ask questions about the
Company’s Remuneration Report.
Under the Corporations Act, a company is required to put to its shareholders a resolution proposing the calling of
another meeting of shareholders to consider the appointment of directors of the company (Spill Resolution) if, at
consecutive annual general meetings, at least 25% of the votes cast on a remuneration report resolution is voted against
the adoption of the remuneration report and at the first of those annual general meetings a Spill Resolution was not
put to vote. If required, the Spill Resolution must be put to vote at the second of those annual general meetings.
At the Company’s previous annual general meeting the votes cast against the 2022 remuneration report considered at
that annual general meeting were less than 25%. Accordingly, the Spill Resolution is not relevant for this Annual
General Meeting. However, in the event that 25% or more of votes that are cast are against adoption of the 2023
Remuneration Report at the meeting, shareholders should be aware that if there is a ‘no’ vote of 25% or more for the
same resolution at the 2024 annual general meeting, the consequence is that it may result in the re-election of the
Board.
The Chairman intends to exercise all undirected proxies in favour of Resolution 1. If the Chairman of the Meeting is
appointed as your proxy and you have not specified the way the Chairman is to vote on Resolution 1, by signing and
returning the Proxy Form, you are considered to have provided the Chairman with an express authorisation for the
Chairman to vote the proxy in accordance with the Chairman's intention.
Voting Exclusion Statement
The Company will disregard any votes cast on Resolution 1 by any of the following persons:
Key Management Personnel (KMP) named in the Remuneration Report and Closely Related Parties of Key
Management Personnel. Key Management Personnel has the same meaning as in the accounting standards issued by
the Australian Accounting Standards Board and means those persons having authority and responsibility for planning,
directing and controlling the activities of the Company, directly or indirectly, including any Director (whether
executive or otherwise. Closely Related Party of a Key Management Personnel means a spouse or child of the personnel;
a child of the personnel's spouse; a dependent of the personnel or the personnel's spouse; anyone else who is one of
the personnel's family and may be expected to influence the personnel, or be influenced by the personnel, in the
2
personel's dealing with the entity; a company the personnel controls or a person prescribed by the Corporations
Regulations 2001 (Cth).
However, the Company need not disregard a vote if it is:
•
Cast by a person as a proxy or attorney for a person who is entitled to vote on the resolution, in accordance
with the directions of the proxy form that specifies how the proxy is to vote on Resolution 1; or
•
Cast by the chair of the Meeting as proxy or attorney appointed in accordance with the directions of the proxy
form for a person who is entitled to vote, and such appointment on the proxy form expressly authorises the
chair to exercise the proxy even if the resolution is connected directly with the remuneration report.
The Directors recommend that you vote IN FAVOUR of advisory Resolution 1.
The Chairman of the Meeting intends to vote undirected proxies IN FAVOUR of Resolution 1.
Resolution 2
Re-election of Mr Andrew Van Heyst
Andrew Van Heyst has more than 30 years' experience in Institutional Equities and Advisory. Andrew worked at
Merrill Lynch in New York as Head of Australian Sales and for ABN AMRO as Head of Australian Sales and Head of
Americas Client Account Management for Global Equity Product. In 2005 Andrew moved back to Australia joining
Shaw and Partners as a Corporate Advisor focussing on Small Cap resources and prior to Lode listing was Executive
Director at Bridge Street Capital Partners.
Clause 41.3 of the Company's Constitution and ASX Listing Rule 14.5 states that an entity must hold an election of
directors at each annual general meeting. Andrew volunteers himself for retirement and re-election pursuant to the
Company's Constitution and ASX Listing Rule 14.5.
The Directors recommend that you vote IN FAVOUR of Resolution 2.
The Chairman of the Meeting intends to vote undirected proxies IN FAVOUR of Resolution 2.
Resolution 3
Ratification of Prior Issue Shares - Listing Rule 7.4
On 14 February 2023, the Company issued 14,800,000 shares at an issue price of $0.30 per share utilising the Company's
15% placement capacity under ASX Listing Rule 7.1 and its 10% placement capacity under ASX Listing Rule 7.1A. The
Company confirms that the issue of these shares did not breach ASX Listing Rules 7.1 and 7.1A.
Broadly speaking, and subject to a number of exceptions, ASX Listing Rule 7.1 limits the amount of equity securities
that a listed company can issue without the approval of its shareholders over any 12 month period to 15% of the fully
paid ordinary securities it had on issue at the start of that period. In addition, under ASX Listing Rule 7.1A, an eligible
entity can seek approval from its members, by way of a special resolution passed at its annual general meeting, to
increase this 15% limit by an extra 10% to 25%. Shareholders approved this additional capacity at the Company’s last
Annual General Meeting.
The issue of the 14,800,000 shares did not fit within any of the exceptions to ASX Listing Rule 7.1 or ASX Listing Rule
7.A and, as it has not yet been approved by the Company’s shareholders. Accordingly, the issue of these shares uses up
part of the 15% limit in ASX Listing Rule 7.1, reducing the Company’s capacity to issue further equity securities without
shareholder approval under ASX Listing Rule 7.1 for the 12 month period following the date the Company issued the
shares.
The issue of the shares also uses up the 10% limit in ASX Listing Rule 7.1A, reducing the Company’s capacity to issue
further equity securities without shareholder approval under ASX Listing Rule 7.1A.
ASX Listing Rule 7.4 allows the shareholders of a company to approve an issue of equity securities after it has been
made or agreed to be made. If they do, the issue is taken to have been approved under ASX Listing Rules 7.1 and 7.1A
and so does not reduce the company’s capacity to issue further equity securities without shareholder approval under
those rules.
The Company wishes to retain as much flexibility as possible to issue additional equity securities into the future
without having to obtain shareholder approval for such issues under ASX Listing Rules 7.1 and 7.1A.
To this end, Resolution 3 seeks shareholder approval to ratify the issue of the 14,8000,000 shares under and for the
purposes of ASX Listing Rule 7.4.
If Resolution 3 is passed, the issue of these shares will be excluded in calculating the Company’s 15% limit in ASX
Listing Rule 7.1, effectively increasing the number of equity securities the Company can issue without shareholder
approval.
3
The issue of the shares will also be excluded in calculating the Company’s additional 10% limit in ASX Listing Rule
7.1A, effectively further increasing the number of equity securities the Company can issue without shareholder
approval.
If Resolution 3 is not passed, the issue of these shares will be included in calculating the Company’s aggregate 25%
limit under ASX Listing Rules 7.1 and 7.1A, effectively decreasing the number of equity securities the Company can
issue without shareholder approval under ASX Listing Rules 7.1 and 7.1A.
Details of the issue, as required by ASX Listing Rule 7.5 are as follows:
Name of allottees:
Sophisticated and professional investors identified by the Lead Manager
DealAccess Pty Ltd Known as DealAccess (PAC Partners) by contacting their high
net-worth clients and other brokers (none of whom were related parties of the
Company under ASX Listing Rules 10.1 or 10.11 and none are material investors as
defined in section 7.4 of Guidance Note 21).
Number of securities allotted:
14,800,000 ordinary shares were issued as follows:
5,601,586 shares were issued under ASX Listing Rule 7.1; and
9,198,414 shares were issued under ASX Listing Rule 7.1A
Terms:
Fully paid ordinary shares ranking pari passu with existing fully paid ordinary
shares.
Date:
The shares were issued on 14 February 2023
Issue price:
$0.30 per share
Intended use of funds:
The funds will be applied towards ensuring Lode is well funded to continue to
progress its drilling and exploration campaign at New England Fold Belt in NSW
and for general corporate and working capital purposes.
Voting Exclusion Statement
The Company will disregard any votes cast in favour on Resolution 3 by or on behalf of
•
a person who participated in the issue or;
•
an associate of that person or those persons.
However, this does not apply to a vote cast in favour of a Resolution by:
•
a person as proxy or attorney for a person who is entitled to vote on the resolution, in accordance with
directions given to the proxy or attorney to vote on the resolution in that way; or
•
the chair of the meeting as proxy or attorney for a person who is entitled to vote on the resolution, in
accordance with a direction given to the chair to vote on the resolution as the chair decides; or
•
a holder acting solely in a nominee, trustee, custodial or other fiduciary capacity on behalf of a beneficiary
provided the following conditions are met:
•
the beneficiary provides written confirmation to the holder that the beneficiary is not excluded from
voting, and is not an associate of a person excluded from voting, on the resolution; and
•
the holder votes on the resolution in accordance with directions given by the beneficiary to the holder
to vote in that way.
The Directors recommend that you vote IN FAVOUR of Resolution 3.
The Chairman of the Meeting intends to vote undirected proxies IN FAVOUR of Resolution 3.
4
Resolution 4
Ratification of Prior Issue Options - Listing Rule 7.4
On 14 February 2023, in connection with the 14,800,000 shares the subject of Resolution 3, the Company issued
4,933,333 options as free attaching options on a 1 for 3 basis.
The terms and conditions of the options are set out in Annexure A.
Broadly speaking, and subject to a number of exceptions, ASX Listing Rule 7.1 limits the amount of equity securities
that the Company can issue without the approval of its shareholders over any 12 months to 15% of the fully paid
ordinary shares it had on issue at the start of that period.
The issue of these options does not fall within any of the exceptions set out in ASX Listing Rule 7.2 and as it has not
yet been approved by the Company’s shareholders, it effectively uses up part of the 15% limit in ASX Listing Rule 7.1,
reducing the Company’s capacity to issue further equity securities without shareholder approval under ASX Listing
Rule 7.1 for the 12 months following the date the Company issued the shares.
If Resolution 4 is passed, the issue of these options will be excluded in calculating the Company’s 15% limit under ASX
Listing Rule 7.1, effectively increasing the number of equity securities the Company can issue without shareholder
approval over the 12 months following the date the Company issued the options. If all of the options the subject of
Resolution 4 are exercised the Company will receive approximately $1,184,000 in exercise monies
If Resolution 4 is not passed, the issue of these options will be included in calculating the Company’s 15% limit under
ASX Listing Rule 7.1, effectively decreasing the number of equity securities the Company can issue without shareholder
approval over the 12 months following the issue date.
Resolution 4 seeks shareholder approval of the options issued under and for the purposes of ASX Listing Rule 7.4
Details as required by ASX Listing Rule 7.5 are as follows:
Names of allottee:
Sophisticated and professional investors who participated in the shares issued on 14 February 2023
identified by the Lead Manager DealAccess Pty Ltd (PAC Partners) by contacting the high net-
worth clients and other brokers (none of whom were related parties of the Company under ASX
Listing Rule 10.1 or 10.11 and none are material investors as defined in section 7.4 of Guidance Note
21).
Number of
securities allotted:
4,933,333 quoted options.
Issue price:
Nil cash consideration
Terms:
The full terms and conditions of the options issued under Resolution 4 are set out in Annexure
A.
Each option entitles the holder to subscribe for and be allotted one fully paid ordinary share. The
options vest on the Issue Date and are exercisable at any time before the Expiry Date.
Issue Date:
14 February 2023
Exercise price:
$0.24 per share
Vesting date:
The options vested on the Issue Date.
Expiry date:
25 August 2024.
Intended use of
funds
The options are free options and therefore no funds were raised from the issue. Any funds raised
on exercise will be applied towards ensuring Lode is well funded to continue to progress its
drilling and exploration campaign at New England Fold Belt in NSW and for general corporate
and working capital purposes.
5
Voting Exclusion Statement
The Company will disregard any votes cast in favour of Resolution 4 by or on behalf of
•
A person who participated in the issue or;
•
an associate of person or those persons.
However, this does not apply to a vote cast in favour of a Resolution by:
•
a person as proxy or attorney for a person who is entitled to vote on the resolution, in accordance with
directions given to the proxy or attorney to vote on the resolution in that way; or
•
the chair of the meeting as proxy or attorney for a person who is entitled to vote on the resolution, in
accordance with a direction given to the chair to vote on the resolution as the chair decides; or
•
a holder acting solely in a nominee, trustee, custodial or other fiduciary capacity on behalf of a beneficiary
provided the following conditions are met:
•
the beneficiary provides written confirmation to the holder that the beneficiary is not excluded from
voting, and is not an associate of a person excluded from voting, on the resolution; and
•
the holder votes on the resolution in accordance with directions given by the beneficiary to the holder
to vote in that way.
The Directors recommend that you vote IN FAVOUR of Resolution 4.
The Chair of the Meeting intends to vote undirected proxies IN FAVOUR of Resolution 4.
6
Resolution 5
Ratification of Prior issue of Options
On 14 February 2023, the Company issued 2,500,000 unlisted Options to the Lead Manager DealAccess Pty Ltd (PAC
Partners) as commission for the shares issued in connection with the 14,800,000 shares the subject of Resolution 3,
(there were no Listing Rule 10.11 parties). Each Option has an exercise price of $0.40 and an expiry date 14 February
2025.
The terms and conditions of the Options are set out in Appendix B.
Broadly speaking, and subject to a number of exceptions, Listing Rule 7.1 limits the amount of Equity Securities that
the Company can issue without the approval of its shareholders over any 12 months period to 15% of the fully paid
ordinary Shares it had on issue at the start of that period.
The issue of the Options does not fall within any of the exceptions set out in Listing Rule 7.2 as it has not yet been
approved by the Company’s Shareholders, it effectively uses up part of the 15% limit in Listing Rule 7.1, reducing the
Company’s capacity to issue further Equity Securities without Shareholder approval under Listing Rule 7.1 for the 12
month period following the date the Company issued the Shares.
If Resolution 5 is passed, the issue of these options will be excluded in calculating the Company’s 15% limit in Listing
Rule 7.1, effectively increasing the number of Equity Securities the Company can issue without Shareholder approval
over the 12 months following the date the Company issued the options. If all of the Options the subject of Resolution
5 are exercised the Company will receive approximately $1,000,000 in exercise monies
If Resolution 5 is not passed, the issue of these options will be included in calculating the Company’s 15% limit in
Listing Rule 7.1, effectively decreasing the number of Equity Securities the Company can issue without Shareholder
approval over the 12 months following the issued date.
Resolution 5 seeks Shareholder approval of the issue under and for the purposes of Listing 7.4
Details as required by ASX Listing Rule 7.5:
Names of allottees:
DealAccess Pty Ltd (PAC Partners)
(Who is not a releted party to the Company under Listing Rule 10.1 or 10.11 and is not a material
investor as defined in section 7.4 of Guidance Note 21).
Number of securities
to be allotted:
2,500,000 Unlisted Options.
Issue price:
Nil cash consideration
Terms:
The full terms and conditions of the Options issued under Resolution 5 are set out in
Appendix B.
Each Option entitles the holder to subscribe for and be allotted one fully paid ordinary share.
The options vest on Grant Date and are exercisable at any time before the Expiry Date.
Exercise price:
$0.40 per share
Vesting date:
The options vested on Grant Date.
Expiry date:
14 February 2025.
Intended use of funds
The options are free options and therefore no funds were raised from the issue. Any funds
raised on exercise will be applied towards ensuring Lode is well funded to continue to progress
its drilling and exploration campaign at New England Fold Belt in NSW and for general
corporate and working capital purposes.
7
Voting Exclusion Statement
The Company will disregard any votes cast in favour on Resolution 5 by or on behalf of
•
A person who participated in the issue or;
•
an associate of that person or those persons.
However, this does not apply to a vote cast in favour of a Resolution by:
•
a person as proxy or attorney for a person who is entitled to vote on the resolution, in accordance with directions
given to the proxy or attorney to vote on the resolution in that way; or
•
the chair of the meeting as proxy or attorney for a person who is entitled to vote on the resolution, in accordance
with a direction given to the chair to vote on the resolution as the chair decides; or
•
a holder acting solely in a nominee, trustee, custodial or other fiduciary capacity on behalf of a beneficiary provided
the following conditions are met:
•
the beneficiary provides written confirmation to the holder that the beneficiary is not excluded from voting,
and is not an associate of a person excluded from voting, on the resolution; and
•
the holder votes on the resolution in accordance with directions given by the beneficiary to the holder to vote
in that way.
The Directors recommend that you vote IN FAVOUR of Resolution 5.
The Chair of the Meeting intends to vote undirected proxies IN FAVOUR of Resolution 5
8
Resolution 6 Ratification of Prior Issue unlisted options - Listing Rule 7.4
On 2 December 2022, the Company issued 500,000 unlisted options to Mitchell Tarrant Exploration Manager
and 250,000 to Marcelo Mora Company Secretary. The Board considers that it is reasonable to provide
remuneration incentives to the Exploration Manager and the Company Secretary to align management interests
with those of shareholders. The Board believes that the issue of the options to Management provides a
reasonable, and cost-effective method of remunerating management by providing an equity-based incentive for
their ongoing commitment and contribution to the Company in their management role.
The terms and conditions of the Options are set out in Annexure C.
Broadly speaking, and subject to a number of exceptions, Listing Rule 7.1 limits the amount of Equity Securities
that the Company can issue without the approval of its shareholders over any 12 months to 15% of the fully paid
ordinary Shares it had on issue at the start of that period.
The issue of the Options does not fall within any of the exceptions set out in Listing Rule 7.2 as it has not yet
been approved by the Company’s Shareholders, it effectively uses up part of the 15% limit in Listing Rule 7.1,
reducing the Company’s capacity to issue further Equity Securities without Shareholder approval under Listing
Rule 7.1 for the 12 months following the date the Company issued the Shares.
If Resolution 6 is passed, the issue of these options will be excluded in calculating the Company’s 15% limit in
Listing Rule 7.1, effectively increasing the number of Equity Securities the Company can issue without
Shareholder approval over the 12 months following the date the Company issued the options. If all of the Options
the subject of Resolution 6 are exercised the Company will receive approximately $180,000 in exercise monies
If Resolution 6 is not passed, the issue of these options will be included in calculating the Company’s 15% limit
in Listing Rule 7.1, effectively decreasing the number of Equity Securities the Company can issue without
Shareholder approval over the 12 months following the issued date.
Resolution 6 seeks Shareholder approval of the options issued under and for the purposes of Listing 7.4
Details as required by ASX Listing Rule 7.5:
Names of allottee:
Mitchell Tarrant and Marcelo Mora (who are not related parties under Listing Rule 10.1 or
10.11).
Number of
securities allotted:
750,000 Unlisted Options.
Issue price:
Nil cash consideration
Terms:
The full terms and conditions of the Options issued under Resolution 6 are set out in
Annexure C.
Each Option entitles the holder to subscribe for and be allotted one fully paid ordinary
share. The options vest on Grant Date and are exercisable at any time before the Expiry
Date.
Exercise price:
$0.24 per share
Vesting date:
The options vested on issued Date.
Expiry date:
2 December 2024.
Intended use of
funds
The Options are free Options and therefore no funds were raised from the issue. Any funds
raised on exercise will be applied towards ensuring Lode is well funded to continue to
progress its drilling campaign at New England Fold Belt of NSW, Australia and for general
corporate and working capital purposes.
9
Voting Exclusion Statement
The Company will disregard any votes cast in favour of Resolution 6 by or on behalf of
•
Mitchell Tarrant, Marcelo Mora or;
•
an associate of Mitchell Tarrant and Marcelo Mora.
However, this does not apply to a vote cast in favour of a Resolution by:
•
a person as proxy or attorney for a person who is entitled to vote on the resolution, in accordance with
directions given to the proxy or attorney to vote on the resolution in that way; or
•
the chair of the meeting as proxy or attorney for a person who is entitled to vote on the resolution, in
accordance with a direction given to the chair to vote on the resolution as the chair decides; or
•
a holder acting solely in a nominee, trustee, custodial or other fiduciary capacity on behalf of a
beneficiary provided the following conditions are met:
•
the beneficiary provides written confirmation to the holder that the beneficiary is not excluded
from voting, and is not an associate of a person excluded from voting, on the resolution; and
•
the holder votes on the resolution in accordance with directions given by the beneficiary to the
holder to vote in that way.
The Directors recommend that you vote IN FAVOUR of Resolution 6.
The Chair of the Meeting intends to vote undirected proxies IN FAVOUR of Resolution 6.
10
Resolutions 7 and 8
Issue of unlisted options to Mr Jason Beckton and Mr Keith Mayes
For the purposes of Chapter 2E of the Corporations Act, Messrs Beckton and Mayes, being Directors of the Company
are related parties of the Company. Resolutions 7 and 8 relates to a proposed issued of options to Messrs Beckton and
Mayes (or entities related to them or in which they have an indirect interest), which is a financial benefit that requires
shareholder approval for the purposes of section 208 of the Corporations Act.
The Company has agreed, subject to obtaining shareholder approval to issue 250,000 options each to Mr Beckton and
Mr Mayes or their nominees. The Board considers that it is reasonable for the remuneration of Directors to have a cash
component and an equity component to further align directors’ interests with those of shareholders. The Board
believes that the issue of the options to Directors provides a reasonable, appropriate and cost-effective method of
remunerating Directors by providing an equity-based incentive for their ongoing commitment and contribution to the
Company in their roles as Directors and when required as members of a Committee.
ASX Listing Rule 10.11 provides that unless one of the exceptions in ASX Listing Rule 10.12 applies, the Company must
not issue or agree to issue equity securities to:
•
a related party (ASX Listing Rule 10.11.1);
•
a person who is, or was at any time in the 6 months before the issue or agreement, a substantial (30%+) holder
in the Company (ASX Listing Rule 10.11.2);
•
a person who is, or was at any time in the 6 months before the issue or agreement, a substantial (10%+) holder
in the Company and who has nominated a Director to the Board pursuant to a relevant agreement which
gives them a right or expectation to do so (ASX Listing Rule 10.11.3);
•
an associate of a person referred to in Listing Rules 10.11.1 to 10.11.3 (ASX Listing Rule 10.11.4); or
•
a person whose relationship with the Company or a person referred to in ASX Listing Rules 10.11.1 to 10.11.4 is
such that, in ASX’s opinion, the issue or agreement should be approved by shareholders (ASX Listing Rule
10.11.5),
unless it obtains the approval of its shareholders.
The proposed issue of options under Resolutions 7 and 8 will be to parties who fall within ASX Listing Rule 10.11.1 and
no exception in ASX Listing Rule 10.12. It therefore, requires the approval of shareholders under ASX Listing Rule 10.11.
If Resolutions 7 and 8 are passed, the Company will be able to proceed with the issue of the options to Directors. If all
of the options to Directors are exercised the Company will receive $120,000 in exercise monies.
If one or more of Resolutions 7 and 8 are not passed, the Company will not be able to proceed with the issue of the
options to that Director or their nominee and the Company will not compensate Mr Beckton and Mr Mayes in another
manner or form.
Details of the issue, as required by ASX Listing Rule 10.13 are as follows:
Names of the allottees:
Resolution 7 the options are to be issued to Jason Beckton or his nominee;
Resolution 8 the options are to be issued to Keith Mayes or his nominee.
The category under ASX Listing
Rule 10.11:
Jason Beckton (Resolution 7) and Keith Mayes (Resolution 8) are Directors of the
Company and therefore fall under ASX Listing Rule 10.11.1
Remuneration package
Mr Beckton and Mr Mayes both receive director's fees of $50,000 each per annum
and no other form of remuneration. The options the subject of this resolution
will provide an incentive to further align the Director's interests with those of
shareholders.
The number and class of
securities to be issued:
The options will be issued as follows:
Jason Beckton or his nominee 250,000 options; and
Keith Mayes or his nominee 250,000 options.
Terms:
The full terms and conditions of the Options to be issued under Resolutions 7
and 8 are set out in Annexure “C”.
Each option entitles the holder to subscribe for and be allotted one fully paid
ordinary share. The options vest on Issue Date and are exercisable at any time
before the Expiry Date.
Issue Date:
The options will be issued no later than 1 month after the date of this Annual
General Meeting and it is intended that issue will occur on the same date.
11
Issue price:
Nil for the options, as the options are being issued as equity remuneration to
directors.
Exercise price:
$0.24 per share.
Vesting dates:
Immediately following shareholder approval to issue the options.
Expiry date:
24 months from the Issue Date.
Use of the funds:
No funds will be raised from the issue of the options. The options are issued to
remunerate directors and any funds raised on exercise will be applied towards
insuring Lode is well funded to continue the drilling and exploration programs
at New England Fold Belt in NSW or any other projects it may be undertaking at
the time and for general corporate and working capital purposes.
If approval is given for the issue of the options under ASX Listing Rule 10.11, approval is not required under Listing
Rule 7.1 in accordance with ASX Listing Rule 7.2 Exception 14
Voting Exclusion Statement
The Company will disregard any votes cast in favour on Resolution 7 by or on behalf of
•
Jason Beckton or an associate of Jason Beckton or any other person who is to receive the securities and any
other person who will obtain a material benefit as a result of the issue of the securities (except a benefit
solely by reason of being a holder of ordinary securities in the Company).
However, this does not apply to a vote cast in favour of Resolution 7 by:
•
a person as proxy or attorney for a person who is entitled to vote on the resolution, in accordance with
directions given to the proxy or attorney to vote on the resolution in that way; or
•
the chair of the meeting as proxy or attorney for a person who is entitled to vote on the resolution, in
accordance with a direction given to the chair to vote on the resolution as the chair decides; or
•
a holder acting solely in a nominee, trustee, custodial or other fiduciary capacity on behalf of a beneficiary
provided the following conditions are met:
•
the beneficiary provides written confirmation to the holder that the beneficiary is not excluded from
voting, and is not an associate of a person excluded from voting, on the resolution; and
•
the holder votes on the resolution in accordance with directions given by the beneficiary to the holder
to vote in that way.
The Directors recommend that you vote IN FAVOUR of Resolution 7.
The Chair of the Meeting intends to vote undirected proxies IN FAVOUR of Resolution 7.
Voting Exclusion Statement
The Company will disregard any votes cast in favour on Resolution 8 by or on behalf of
•
Keith Mayes or an associate of Keith Mayes or any other person who is to receive the securities and any
other person who will obtain a material benefit as a result of the issue of the securities (except a benefit
solely by reason of being a holder of ordinary securities in the Company).
However, this does not apply to a vote cast in favour of Resolution 8 by:
•
a person as proxy or attorney for a person who is entitled to vote on the resolution, in accordance with
directions given to the proxy or attorney to vote on the resolution in that way; or
•
the chair of the meeting as proxy or attorney for a person who is entitled to vote on the resolution, in
accordance with a direction given to the chair to vote on the resolution as the chair decides; or
•
a holder acting solely in a nominee, trustee, custodial or other fiduciary capacity on behalf of a beneficiary
provided the following conditions are met:
•
the beneficiary provides written confirmation to the holder that the beneficiary is not excluded from
voting, and is not an associate of a person excluded from voting, on the resolution; and
•
the holder votes on the resolution in accordance with directions given by the beneficiary to the holder
to vote in that way.
The Directors recommend that you vote IN FAVOUR of Resolution 8.
The Chair of the Meeting intends to vote undirected proxies IN FAVOUR of Resolution 8
12
Resolution 9
Approval to Issue 500,000 unlisted options
The Company has agreed, to issue 500,000 unlisted options to Mitchell Tarrant. The Board considers that it is
reasonable to provide remuneration incentive to the exploration manager to align management interests with
those of shareholders. The Board believes that the issue of the options to Management provides a reasonable,
and cost-effective method of remunerating management by providing an equity-based incentive for their
ongoing commitment and contribution to the Company in their management role.
The terms and conditions of the Options are set out in Annexure C.
Broadly speaking, and subject to a number of exceptions, Listing Rule 7.1 limits the amount of Equity Securities
that the Company can issue without the approval of its shareholders over any 12 months to 15% of the fully paid
ordinary Shares it had on issue at the start of that period.
The issue of the Options does not fall within any of the exceptions set out in Listing Rule 7.2 as it has not yet
been approved by the Company’s Shareholders, it effectively uses up part of the 15% limit in Listing Rule 7.1,
reducing the Company’s capacity to issue further Equity Securities without Shareholder approval under Listing
Rule 7.1 for the 12 months following the date the Company issued the Shares.
If Resolution 9 is passed, the issue of these options will be excluded in calculating the Company’s 15% limit in
Listing Rule 7.1, effectively increasing the number of Equity Securities the Company can issue without
Shareholder approval over the 12 months following the date the Company issued the options. If all of the Options
the subject of Resolution 9 are exercised the Company will receive approximately $120,000 in exercise monies
If Resolution 9 is not passed, the issue of these options will be included in calculating the Company’s 15% limit
in Listing Rule 7.1, effectively decreasing the number of Equity Securities the Company can issue without
Shareholder approval over the 12 months following the issued date.
Details as required by ASX Listing Rule 7.1:
Names of allottee:
Mitchell Tarrant (not a related party under Listing Rule 10.1 or 10.11).
Number of
securities allotted:
500,000 Unlisted Options.
Issue price:
Nil cash consideration
Terms:
The full terms and conditions of the Options issued under Resolution 9 are set out in
Annexure C.
Each Option entitles the holder to subscribe for and be allotted one fully paid ordinary share.
The options vest on Grant Date and are exercisable at any time before the Expiry Date.
Issue Date:
The options will be issued no later than 1 month after the date of this Annual General Meeting.
Exercise price:
$0.24 per share
Vesting date:
The options vested on issued Date.
Expiry date:
24 months from the Issue Date.
Intended use of
funds
The Options are free Options and therefore no funds were raised from the issue. Any funds
raised on exercise will be applied towards ensuring Lode is well funded to continue to
progress its drilling campaign at New England Fold Belt of NSW, Australia and for general
corporate and working capital purposes.
13
Voting Exclusion Statement
The Company will disregard any votes cast in favour of Resolution 9 by or on behalf of
•
Mitchell Tarrant or;
•
an associate of Mitchell Tarrant.
However, this does not apply to a vote cast in favour of a Resolution by:
•
a person as proxy or attorney for a person who is entitled to vote on the resolution, in accordance with
directions given to the proxy or attorney to vote on the resolution in that way; or
•
the chair of the meeting as proxy or attorney for a person who is entitled to vote on the resolution, in
accordance with a direction given to the chair to vote on the resolution as the chair decides; or
•
a holder acting solely in a nominee, trustee, custodial or other fiduciary capacity on behalf of a
beneficiary provided the following conditions are met:
•
the beneficiary provides written confirmation to the holder that the beneficiary is not excluded
from voting, and is not an associate of a person excluded from voting, on the resolution; and
•
the holder votes on the resolution in accordance with directions given by the beneficiary to the
holder to vote in that way.
The Directors recommend that you vote IN FAVOUR of Resolution 9.
The Chair of the Meeting intends to vote undirected proxies IN FAVOUR of Resolution 9.
14
Resolution 10
Approval of additional capacity to issue securities
ASX Listing Rule 7.1A enables the Company to issue equity securities up to 10% of its issued share capital through
placements over a 12 month period after the AGM ('10% Placement Facility'). The 10% Placement Facility is in
addition to the Company's 15% placement capacity under ASX Listing Rule 7.1. Listed entities that are not included in
the S&P/ASX 300 index and with a market cap of $300 million or less are eligible to seek shareholder approval under
Listing Rule 7.1A. The Company’s approximate market cap at the time of this Notice of Meeting is $10.5 million.
If Resolution 10 is not passed, the Company would not be able to issue securities and it will not be able to raise funds
under this 10% placement facility.
If Resolution 10 is passed, The Company will be able to raise funds to the maximum of 10% of the placement facility in
accordance with Listing Rule 7.1A.
Resolution 10, which is a Special Resolution requiring 75% of votes cast to be in favour of the resolution, seeks
shareholder approval for the Company to have the ability to issue equity securities under the 10% Placement Facility
on the following terms:
(a) Placement Period
Shareholder approval of the 10% Placement Facility is valid from the date of the AGM and expires on the earlier of:
(i) the date that is 12 months after the date of the AGM;
(ii) the time and date of the Company's next AGM; or
(iii) the time and date of the approval by shareholders of a transaction under ASX Listing Rules 11.1.2 (a
significant change to the nature or scale of activities) or 11.2 (disposal of main undertaking).
(b) Equity Securities
Any equity securities issued under the 10% Placement Facility must be in the same class as an existing quoted class of
equity securities of the Company which, in the Company's case, are fully paid ordinary shares.
(c) Formula for calculating 10% Placement Facility.
The maximum number of shares that can be issued under the 10% Placement Facility is calculated as follows:
(A x D) – E
Where:
A is the number of fully paid ordinary shares on issue 12 months before the date of issue or agreement:
(i)
plus the number of fully paid ordinary shares issued in the 12 months under an exception in ASX
Listing Rule 7.2 other than exception 9, 16 or 17;
(ii)
plus the number of fully paid ordinary shares issued in the 12 months on the conversion of convertible
securities within ASX Listing Rule 7.2 exception 9 where:
a.
the convertible securities were issued or agreed to be issued before the commencement of the 12
month perod; or
b.
the issue of, or agreement to issue, the convertible securities was approved or taken under the
ASX Listing Rules to have been approved under ASX Liting Rule 7.1 or ASX Listing Rule 7.4;
(iii)
plus the number of fully paid ordinary shares issued in the relevant period under an agreement to
issue securities within ASX Listing Rule 7.2 exception 16 where:
a.
the agreement was entered into before the commencement of the 12 month period; or
b.
the agreement or issue was approved or taken under the ASX Listing Rules to have been
approved under ASX Listing Rule 7.1 or ASX Listing Rule 7.4;
(ii)
plus the number of partly paid ordinary shares that became fully paid in the 12 months;
(iii)
plus the number of fully paid shares issued in the 12 months with approval of holders of shares under
ASX Listing Rule 7.1 and 7.4;
(iv)
less the number of fully paid shares cancelled in the 12 months.
D is 10%.
E is the number of fully paid ordinary shares issued or agreed to be issued under ASX Listing Rule 7.1A.2 in
the 12 months before the date of the issue or agreement to issue that are not issued with the approval of
shareholders under ASX Listing Rules 7.1 or 7.4.
15
(d) Minimum Issue Price
The minimum issue price of equity securities issued for the purpose of ASX Listing Rule 7.1.A.3 must be not less than
75% of the volume weighted average price of equity securities in the same class calculated over the 15 trading days on
which trades were recorded immediately before:
(i)
the date on which the price at which the equity securities are to be issued is agreed by the Company and
the recipient of the equity securities; or
(ii) if the equity securities are not issued within 10 trading days of the date in paragraph (i) above, the date
on which the equity securities are issued.
(e) Purposes for which the funds raised by an issue of equity securities may be used
The Company may issue equity securities under the 10% Placement Capacity for cash consideration only, and the
Company intends to use any funds raised under such an issue for continued exploration and evaluation of the
Company’s exploration projects and for general working capital.
(f)
Risk of Economic and Voting Dilution
If Resolution 15 is approved by shareholders and the Company issues equity securities under the 10% Placement
Facility, the existing shareholders' voting power in the Company will be diluted as shown in the table below. Further,
there is a risk that:
(i)
the market price for the Company's equity securities may be significantly lower on the date of the issue
of the equity securities than on the date of the AGM; and
(ii) the equity securities may be issued at a price that is at a discount to the market price for the Company's
equity securities on the issue date.
If this Resolution 10 is not approved by shareholders then the Company will not have the flexibility of an available
additional 10% capacity to issue shares under the 10% Placement Facility described in this Explanatory Memorandum.
The Company not having the 10% Placement Facility will have no effect on the Company's existing ASX Listing Rule
7.1, 15% capacity.
Because variable A in the formula for calculating 10% Placement Facility, and consequently the number of shares that
can be issued under the 10% Placement Facility, can change during the Placement Period, the table below shows a
matrix of scenarios of the potential dilution of existing shareholders as at the date of the AGM on the basis of:
(i)
the issue price of equity securities being the current approximate market price of fully paid ordinary
shares, plus 50% and minus 50%; and
(ii) the maximum number of shares that can be issued under the 10% Placement Facility in accordance with
the definition of variable A in the formula for calculating 10% Placement Facility increasing by 50% and
100%.
Variable A in
10% Placement Facility
under ASX Listing Rule
7.1A.
Voting Dilution
and Placement
Facility Capacity
Issue Price and
Funds Raised
50% Decrease in
Current
Approximate
Market Price
$0.053
Current
Approximate
Market Price
$0.105*
50% Increase in
Current
Approximate
Market Price
$0.158
Current Variable A
106,784,145 shares
10%
10,678,145
Shares
$560,617
$1,121,234
$1,681,850
50% increase in current
Variable A
160,176,218 shares
10%
16,017,622
Shares
$840,925
$1,681,850
$2,522,775
100% increase in current
Variable A
213,568,290 shares
10%
21,356,829
shares
$1,121,234
$2,242,467
$3,363,701
*The current approximate market price of $0.105 was the closing price as at 4 October 2023.
16
The above table is based on the following assumptions:
(i)
There are currently 106,784,145 shares on issue and all figures in the table are calculated on an undiluted
basis.
(ii)
The Company issues the maximum possible number of equity securities under the 10% Placement
Capacity.
(iii)
The issue of equity securities under the 10% Placement Capacity consists only of shares. If the issue of
equity securities includes quoted options, it is assumed that those quoted options are exercised into shares
for the purpose of calculating the voting dilution effect on existing shareholders.
(iv)
The calculations above do not show the dilution that any one particular shareholder will be subject to. All
shareholders should consider the dilution caused to their own shareholding depending on their specific
circumstances.
(v)
This table does not set out any dilution pursuant to approvals under ASX Listing Rule 7.1.
(vi)
The 10% voting dilution reflects the aggregate percentage dilution against the issued share capital at the
time of issue. This is why the voting dilution is shown in each example as 10%.
(g) Allocation policy
The Company’s allocation policy is dependent on the prevailing market conditions at the time of any proposed issue
pursuant to the 10% Placement Facility. As there is no issue currently proposed, the identity of the allottees is not
currently known and will be determined on a case-by-case basis at the time of allotment, having regard to factors
including, but not limited to, the following:
(i) the methods of raising funds that are available to the Company, including but not limited to, rights issues
or other issues in which existing security holders can participate;
(ii) the effect of the issue of the equity securities on the control of the Company;
(iii) the financial situation and solvency of the Company; and
(iv) advice from corporate, financial and broking advisers (if applicable).
The allottees under the 10% Placement Facility have not currently been determined but may include existing
substantial shareholders and/or new shareholders who are not related parties or associates of a related party of the
Company.
(h) Prior approval
The Company obtained shareholder approval under ASX Listing Rule 7.1A at its 2022 Annual General Meeting.
The Company issued a total of 24,019,048 equity securities made up of 15,157,143 ordinary fully paid shares and
8,861,905 options in the 12 month preceding the date of this Notice of Annual General Meeting which based on the
number of Equity Securities on issue at the commencement of that period represents 24% of the Company’s Equity
Securities.
Further details of the issues of equity securities by the Company during the 12 months period preceding the date of
the meeting are set out in Annexure “D” of this Explanatory Memorandum.
Information relating to the issue of equity securities in the preceding 12 months under listing rule 7.1A is as follows:
Number of securities issued:
9,198,414;
Class of securities issued:
Ordinary fully paid shares;
Issued of the Securities:
To professional and sophisticated investors; identified by the Lead Manager
DealAccess Pty Ltd (PAC Partners) by contacting the high net-worth clients and
other brokers
Issue price:
9,198,414 shares were issued at $0.30 per share and the closing price on the date
of the issue was $0.275 per share;
The issue was for cash:
The total cash consideration received was $2,759,524 before costs and is been
used to continue to progress its drilling and exploration program at New England
Fold Belt in NSW, and for general corporate and working capital purposes.
The Directors recommend that you vote IN FAVOUR of Resolution 10.
The Chairman of the Meeting intends to vote undirected proxies IN FAVOUR of Resolution 10.
17
Annexure “A”
Term and Conditions of Listed Options
1.
Entitlement and Exercise Price
The Options entitle Option Holders to subscribe for 1 fully paid ordinary shares in the Company for each option
exercised at an exercise price of $0.24 per share.
2.
Vesting and Expiry Date of the options
The Options vest immediately and will expire on 25 August 2024. If the Option Holder has acted fraudulently,
dishonestly or in breach of its obligations to the Company (as determined by the Board, acting reasonably), then
the Options shall lapse upon written notification to the Option Holder.
3.
Exercise Period
The Options not exercised on or before the Expiry Date will automatically lapse.
4.
Notice of Exercise
The Options may be exercised at any time prior to the Expiry Date wholly or in part by delivering a duly completed
form of notice of exercise together with payment of the Exercise Price for each Option being exercised to the
Company.
5.
Exercise Date
A Notice of Exercise is only effective on and from the later of the date of receipt of the Notice of Exercise and the
date of receipt of the payment of the Exercise Price for each Option being exercised in cleared funds.
6.
Shares issued on exercise
All Shares allotted on the exercise of Options will rank equally in all respects with the Company’s then existing
ordinary fully paid ordinary shares.
7.
Quotation of Options
The Company will seek ASX official quotation of these options subject to meeting the minimum listing
requirements.
8.
Participation in new issue
The Option Holders may only participate in new issues of securities to holders of ordinary shares in the Company
if their Options have been exercised and Shares allotted in respect of the Options before the record date for
determining entitlements to the issue.
9.
Change in Exercise Price
There will be no change to the Exercise Price of the Options or the number of Shares over which an Option is
exercisable in the event of the Company making a pro-rata issue of shares or other securities to the holders of
ordinary shares in the Company.
10. Timing of issue of shares on exercise
Within 15 Business Days after the Exercise Date, if the Company’s ordinary shares are quoted by ASX, the
Company must:
a.
on the date that the shares are allotted pursuant to the exercise of Options, apply for quotation of all
shares allotted; and
b.
perform such other acts or take such other actions to ensure the shares that are allotted pursuant to the
exercise of the Options are quoted by the ASX and freely tradeable.
11. Reconstruction of Capital
If prior to the Expiry Date there is a reorganisation of the issued capital of the Company, the rights of a holder of
Options will be changed to the extent necessary to comply with the applicable ASX Listing Rules in force at the
time of the reorganisation.
12. Transferability
Unless quoted, the Options are transferable to sophisticated investors as that term is defined under the
Corporations Act 2001 (Cth).
18
Annexure “B”
Term and Conditions of Unlisted Options
with $0.40 exercise price
1.
Entitlement and Exercise Price
The Options entitle Option Holders to subscribe for 1 fully paid ordinary share in the Company for each option
exercised at an exercise price of $0.40 per share.
2.
Vesting and Expiry Date of the options
The Options vest immediately and will expire 24 months from the issue date.
3.
Exercise Period
The Options not exercised on or before the Expiry Date will automatically lapse. If the Option Holder has acted
fraudulently, dishonestly or in breach of its obligations to the Company (as determined by the Board, acting
reasonably), then the Options shall lapse upon written notification to the Option Holder.
4.
Notice of Exercise
The Options may be exercised at any time prior to the Expiry Date wholly or in part by delivering a duly completed
form of notice of exercise together with payment of the Exercise Price for each Option being exercised to the
Company.
5.
Exercise Date
A Notice of Exercise is only effective on and from the later of the date of receipt of the Notice of Exercise and the
date of receipt of the payment of the Exercise Price for each Option being exercised in cleared funds.
6.
Shares issued on exercise
All Shares allotted on the exercise of Options will rank equally in all respects with the Company’s then existing
ordinary fully paid ordinary shares.
7.
Quotation of Options
The Options will be issued unlisted and the Company will not seek ASX official quotation of these options.
8.
Participation in new issue
The Option Holders may only participate in new issues of securities to holders of ordinary shares in the Company
if their Options have been exercised and Shares allotted in respect of the Options before the record date for
determining entitlements to the issue.
9.
Change in Exercise Price
There will be no change to the Exercise Price of the Options or the number of Shares over which an Option is
exercisable in the event of the Company making a pro-rata issue of shares or other securities to the holders of
ordinary shares in the Company.
10. Timing of issue of shares on exercise
Within 15 Business Days after the Exercise Date, if the Company’s ordinary shares are quoted by ASX, the Company
must:
a.
on the date that the shares are allotted pursuant to the exercise of Options, apply for quotation of all shares
allotted; and
b. perform such other acts or take such other actions to ensure the shares that are allotted pursuant to the
exercise of the Options are quoted by the ASX and freely tradeable.
11. Reconstruction of Capital
If prior to the Expiry Date there is a reorganisation of the issued capital of the Company, the rights of a holder of
Options will be changed to the extent necessary to comply with the applicable ASX Listing Rules in force at the
time of the reorganisation.
12. Transferability
Unless quoted, the Options are transferable to sophisticated investors as that term is defined under the
Corporations Act 2001 (Cth).
19
Annexure “C”
Term and Conditions of Unlisted Options
with $0.24 exercise price
1. Entitlement and Exercise Price
The Options entitle Option Holders to subscribe for 1 fully paid ordinary share in the Company for each option
exercised at an exercise price of $0.24 per share.
2.
Vesting and Expiry Date of the options
The Options vest immediately and will expire 24 months from the issue date.
3.
Exercise Period
The Options not exercised on or before the Expiry Date will automatically lapse. If the Option Holder has acted
fraudulently, dishonestly or in breach of its obligations to the Company (as determined by the Board, acting
reasonably), then the Options shall lapse upon written notification to the Option Holder.
4.
Notice of Exercise
The Options may be exercised at any time prior to the Expiry Date wholly or in part by delivering a duly completed
form of notice of exercise together with payment of the Exercise Price for each Option being exercised to the
Company.
5.
Exercise Date
A Notice of Exercise is only effective on and from the later of the date of receipt of the Notice of Exercise and the
date of receipt of the payment of the Exercise Price for each Option being exercised in cleared funds.
6.
Shares issued on exercise
All Shares allotted on the exercise of Options will rank equally in all respects with the Company’s then existing
ordinary fully paid ordinary shares.
7.
Quotation of Options
The Options will be issued unlisted and the Company will not seek ASX official quotation of these options.
8.
Participation in new issue
The Option Holders may only participate in new issues of securities to holders of ordinary shares in the Company
if their Options have been exercised and Shares allotted in respect of the Options before the record date for
determining entitlements to the issue.
9.
Change in Exercise Price
There will be no change to the Exercise Price of the Options or the number of Shares over which an Option is
exercisable in the event of the Company making a pro-rata issue of shares or other securities to the holders of
ordinary shares in the Company.
10. Timing of issue of shares on exercise
Within 15 Business Days after the Exercise Date, if the Company’s ordinary shares are quoted by ASX, the Company
must:
c.
on the date that the shares are allotted pursuant to the exercise of Options, apply for quotation of all shares
allotted; and
d. perform such other acts or take such other actions to ensure the shares that are allotted pursuant to the
exercise of the Options are quoted by the ASX and freely tradeable.
11. Reconstruction of Capital
If prior to the Expiry Date there is a reorganisation of the issued capital of the Company, the rights of a holder of
Options will be changed to the extent necessary to comply with the applicable ASX Listing Rules in force at the
time of the reorganisation.
12. Transferability
Unless quoted, the Options are transferable to sophisticated investors as that term is defined under the
Corporations Act 2001 (Cth).
20
Annexure “D”
Issue of Equity Securities since 22 November 2022
Date
Number of
Equity
Securities
Class of
Equity
Securities
and summary
of terms
Names of recipients
or basis on which
recipients
determined
Issue price of
Equity
Securities and
discount to
market price
on the trading
day prior to
the issue
Form of
Consideration
2 December 2022
357,143 Ordinary
Shares
Directors of the
Company
$0.14
Represent a
premium of 7.7%
to the market
price
The total cash
consideration received
was $50,000 before
costs and was used to
continue the drilling
and exploration
program at the New
England Fold Belt in
NSW and for general
corporate and working
capital purposes.
2 December 2022
1,428,572 Options
Directors and
Management of the
Company
Nil
consideration
No funds were raised
and no non-cash
consideration paid
14 February 2023
L.R.7.1
5,601,586
L.R. 7.1A
9,198,414
Total
14,800,000
Ordinary
shares
Sophisticated and
professional investors
identified by the Lead
Manager DealAccess Pty
Ltd Known as
DealAccess (PAC
Partners) through their
network
$0.30
Represent a
premium of 9.1%
to the market
price
The total cash
consideration received
was $4,440,000 before
costs and will be used
to continue the drilling
and exploration
program at the New
England Fold Belt in
NSW and for general
corporate and working
capital purposes.
14 February 2023
4,933,333 Options
To the subscribers of the
share issued on 14
February 2023
Nil
consideration
No funds were raised
and no non-cash
consideration paid
14 February 2023
2,500,000 Options
To DealAccess Pty Ltd
(PAC Partners) the Lead
Manager of the share
issued on 14 February
2023
Nil
consideration
No funds were raised
and no non-cash
consideration paid
The Company has spent 0% of the cash raised from the shares issued. Expenditure today has been funded from cash
available pre-capital raising on the drilling campaign at the New England Fold Belt in NSW and for corporate and
working capital purposes.
.
ANNUAL GENERAL MEETING PROXY FORM
I/We being shareholder(s) of Lode Resources Ltd and entitled to attend and vote hereby:
STEP 1
APPOINT A PROXY
The Chairman of
the meeting
OR
PLEASE NOTE: If you leave the section blank, the
Chair of the Meeting will be your proxy.
or failing the individual(s) or body corporate(s) named, or if no individual(s) or body corporate(s) named, the Chairman of the Meeting, as
my/our proxy to act generally at the Meeting on my/our behalf, including to vote in accordance with the following directions (or, if no
directions have been given, and to the extent permitted by law, as the proxy sees fit), at the Annual General Meeting of the Company to
be held at Level 5, 56 Pitt Street Sydney NSW 2000 on Wednesday, 29 November 2023 at 11:00 am (AEDT) and at any adjournment or
postponement of that Meeting.
Chairman’s voting intentions in relation to undirected proxies: The Chairman intends to vote all undirected proxies in favour of all
Resolutions. In exceptional circumstances, the Chairman may change his/her voting intentions on any Resolution. In the event this occurs,
an ASX announcement will be made immediately disclosing the reasons for the change.
Chairman authorised to exercise undirected proxies on remuneration related resolutions: Where I/we have appointed the Chairman of
the Meeting as my/our proxy (or the Chairman becomes my/our proxy by default), I/we expressly authorise the Chairman to exercise
my/our proxy on Resolution 1 (except where I/we have indicated a different voting intention below) even though this resolution is
connected directly or indirectly with the remuneration of a member(s) of key management personnel, which includes the Chairman .
STEP 2
VOTING DIRECTIONS
Resolutions
For
Against
Abstain*
1
Adoption of the Remuneration Report
◼
◼
◼
2
Re-election of a Director
◼
◼
◼
3
Ratification of 14,800,000 Shares – Listing Rule 7.4
◼
◼
◼
4
Ratification of 4,933,333 Listed Options – Listing Rule 7.4
◼
◼
◼
5
Ratification of 2,500,000 Unlisted Options – Listing Rule 7.4
◼
◼
◼
6
Ratification of 750,000 Unlisted Options – Listing Rule 7.4
◼
◼
◼
7
Approval to issue Unlisted Options to Jason Beckton
◼
◼
◼
8
Approval to issue Unlisted Options to Keith Mayes
◼
◼
◼
9
Approval to issue Unlisted Options to Mitchell Tarrant
◼
◼
◼
10 Additional capacity to issue securities
◼
◼
◼
* If you mark the Abstain box for a particular Resolution, you are directing your proxy not to vote on your behalf on a show of hands
or on a poll and your votes will not be counted in computing the required majority on a poll.
STEP 3
SIGNATURE OF SHAREHOLDERS – THIS MUST BE COMPLETED
Shareholder 1 (Individual)
Joint Shareholder 2 (Individual)
Joint Shareholder 3 (Individual)
Sole Director and Sole Company Secretary
Director/Company Secretary (Delete one)
Director
This form should be signed by the shareholder. If a joint holding, all the shareholders should sign. If signed by the shareholder’s attorney,
the power of attorney must have been previously noted by the registry or a certified copy attached to this form. If executed by a company,
the form must be executed in accordance with the company’s constitution and the Corporations Act 2001 (Cth).
Email Address
Please tick here to agree to receive communications sent by the company via email. This may include meeting notifications,
dividend remittance, and selected announcements.
LODGE YOUR PROXY APPOINTMENT ONLINE
ONLINE PROXY APPOINTMENT
www.advancedshare.com.au/investor-login
MOBILE DEVICE PROXY APPOINTMENT
Lodge your proxy by scanning the QR code below, and
enter your registered postcode.
It is a fast, convenient and a secure way to lodge your vote.
IF YOU WOULD LIKE TO ATTEND AND VOTE AT THE MEETING, PLEASE BRING THIS FORM WITH YOU.
THIS WILL ASSIST IN REGISTERING YOUR ATTENDANCE.
CHANGE OF ADDRESS
This form shows your address as it appears on the Company’s share register. If
this information is incorrect, please make the correction on the form.
Shareholders sponsored by a broker should advise their broker of any changes.
APPOINTMENT OF A PROXY
If you wish to appoint the Chair as your proxy, mark the box in Step 1. If you
wish to appoint someone other than the Chairman, please write that person’s
name in the box in Step 1. A proxy need not be a shareholder of the Company.
A proxy may be an individual or a body corporate.
DEFAULT TO THE CHAIR OF THE MEETING
If you leave Step 1 blank, or if your appointed proxy does not attend the
Meeting, then the proxy appointment will automatically default to the Chair of
the Meeting.
VOTING DIRECTIONS – PROXY APPOINTMENT
You may direct your proxy on how to vote by placing a mark in one of the boxes
opposite each resolution of business. All your shares will be voted in
accordance with such a direction unless you indicate only a portion of voting
rights are to be voted on any resolution by inserting the percentage or number
of shares you wish to vote in the appropriate box or boxes. If you do not mark
any of the boxes on a given resolution, your proxy may vote as they choose to
the extent they are permitted by law. If you mark more than one box on a
resolution, your vote on that resolution will be invalid.
PROXY VOTING BY KEY MANAGEMENT PERSONNEL
If you wish to appoint a Director (other than the Chairman) or other member
of the Company’s key management personnel, or their closely related parties,
as your proxy, you must specify how they should vote on Resolution 1, by
marking the appropriate box. If you do not, your proxy will not be able to
exercise your vote for Resolution 1.
PLEASE NOTE: If you appoint the Chairman as your proxy (or if they are
appointed by default) but do not direct them how to vote on a resolution (that
is, you do not complete any of the boxes “For”, “Against” or “Abstain” opposite
that resolution), the Chairman may vote as they see fit on that resolution.
APPOINTMENT OF A SECOND PROXY
You are entitled to appoint up to two persons as proxies to attend the Meeting
and vote on a poll. If you wish to appoint a second proxy, an additional Proxy
Form may be obtained by telephoning Advanced Share Registry Limited or you
may copy this form and return them both together.
To appoint a second proxy you must:
(a) on each Proxy Form state the percentage of your voting rights or number
of shares applicable to that form. If the appointments do not specify the
percentage or number of votes that each proxy may exercise, each proxy
may exercise half your votes. Fractions of votes will be disregarded; and
(b) Return both forms together.
COMPLIANCE WITH LISTING RULE 14.11
In accordance to Listing Rule 14.11, if you hold shares on behalf of another
person(s) or entity/entities or you are a trustee, nominee, custodian or other
fiduciary holder of the shares, you are required to ensure that the person(s) or
entity/entities for which you hold the shares are not excluded from voting on
resolutions where there is a voting exclusion. Listing Rule 14.11 requires you to
receive written confirmation from the person or entity providing the voting
instruction to you and you must vote in accordance with the instruction
provided.
By lodging your proxy votes, you confirm to the company that you are in
compliance with Listing Rule 14.11
CORPORATE REPRESENTATIVES
If a representative of a nominated corporation is to attend the meeting the
appropriate “Certificate of Appointment of Corporate Representative” should
be produced prior to admission in accordance with the Notice of Meeting. A
Corporate Representative Form may be obtained from Advanced Share
Registry.
SIGNING INSTRUCTIONS ON THE PROXY FORM
Individual:
Where the holding is in one name, the security holder must sign.
Joint Holding:
Where the holding is in more than one name, all security holders should sign.
Power of Attorney:
If you have not already lodged the Power of Attorney with Advanced Share
Registry, please attach the original or a certified photocopy of the Power of
Attorney to this form when you return it.
Companies:
Where the company has a Sole Director who is also the Sole Company
Secretary, this form must be signed by that person. If the company (pursuant
to section 204A of the Corporations Act 2001) does not have a Company
Secretary, a Sole Director can sign alone. Otherwise this form must be signed
by a Director jointly with either another Director or a Company Secretary.
Please sign in the appropriate place to indicate the office held.
LODGE YOUR PROXY FORM
This Proxy Form (and any power of attorney under which it is
signed) must be received at an address given below by 11:00 am
(EDST) on 27 November 2023, being not later than 48 hours before
the commencement of the Meeting. Proxy Forms received after
that time will not be valid for the scheduled meeting.
ONLINE PROXY APPOINTMENT
www.advancedshare.com.au/investor-login
BY MAIL
Advanced Share Registry Limited
110 Stirling Hwy, Nedlands WA 6009; or
PO Box 1156, Nedlands WA 6909
BY FAX
+61 8 6370 4203
BY EMAIL
admin@advancedshare.com.au
IN PERSON
Advanced Share Registry Limited
110 Stirling Hwy, Nedlands WA 6009
ALL ENQUIRIES TO
Telephone: +61 8 9389 8033
HOW TO COMPLETE THIS SHAREHOLDER PROXY FORM