Magmatic Resources Limited
ABN 32 615 598 322
Annual report
for the year ended 30 June 2021
Contents
Corporate Information
Chairman’s letter to shareholders
Review of operations
Directors’ report
Auditor’s independence declaration
Corporate governance statement
Consolidated statement of profit or loss and other comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the consolidated financial statements
Directors’ declaration
Independent auditor’s report to the members
ASX additional information
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Magmatic Resources Limited
ABN 32 615 598 322
Corporate Information
Directors
David J Richardson – Executive Chairman
Peter B Duerden – Managing Director
David W Berrie – Non-Executive Director
Company Secretary
Andrea S Betti
David W Berrie
Registered Office and
Principal Place of
Business
Suite 7, 55 Hampden Road
Nedlands WA 6009
Share Registry
Auditors
Solicitors
ASX Code
Telephone:
Email:
Website:
+61 8 9322 6009
info@magmaticresources.com
www.magmaticresources.com
Computershare Investor Services Pty Ltd
Level 11, 172 St George’s Terrace
Perth WA 6000
Telephone:
Telephone:
1300 850505
+61 8 9415 4000
BDO Audit (WA) Pty Ltd
38 Station Street
Subiaco WA 6008
HopgoodGanim
Level 8, 1 Eagle Street
Brisbane QLD 4000
Magmatic Resources Limited is listed on the Australian Securities
Exchange
Shares: MAG, Quoted Options: MAGOA
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Magmatic Resources Limited
ABN 32 615 598 322
Chairman’s Letter
Dear shareholder,
I am pleased to present the Company’s fifth annual report since listing on the ASX in May 2017. The Lachlan
Fold Belt, NSW is one of the world’s gold and copper “hotspots” with a long history of high-grade gold
production and recently attracting many of the world’s leading gold and copper companies.
Magmatic recognised the regions potential, acquiring 4 exploration projects from Gold Fields Limited (“Gold
Fields”) (the world 7th largest gold miner), and have always described Magmatic as a junior explorer with a
“major’s” portfolio, with three of the projects in the East Lachlan.
The East Lachlan is a globally significant gold-copper province with an endowment of more than 80 million
ounces of gold and 13 million tonnes of copper (Phillips 2017). It is most famous for Newcrest Mining
Limited’s world class gold-copper porphyry cluster at the Cadia Valley mines.
To further unlock shareholder value, the Company made the strategic decision to demerge its Moorefield
orogenic gold project and focus our activities on the three 100%-owned advanced gold/copper projects in the
East Lachlan, the Myall, Wellington North and Parkes Projects.
As such the Group transferred its Moorefield Orogenic gold project, which consisted of two exploration
licenses (EL7675 and EL8669) to its wholly owned subsidiary, Australian Gold and Copper Ltd (AGC) in
December 2020 and AGC was then listed as a separate listed entity on the ASX in January 2021.
The Company’s shareholders received an in-specie distribution of 24,362,406 new AGC shares which
represented 24.36% of AGC’s recapitalised capital structure, with Magmatic retaining 5,637,594 AGC shares
which represents 5.64% of AGC’s issued capital at 30 June 2021. This gave shareholders exposure to both
MAG and AGC shares and further upside of 2 new gold projects acquired by AGC.
The Company recognised a $6,000,000 profit on the AGC demerger and the retained 5.64% shareholding
was revalued down by $338,256 in the second half of the year to its’ closing market value per share of $0-14
from its’ $0-20 listing price.
The Company’s three projects represent strategic positions with advanced target portfolios adjacent to major
mining operations and recent discoveries in the East Lachlan.
Significant work was carried out by our exploration team located in Orange, NSW during the year. Multiple
aircore (AC), reverse circulation (RC) and diamond core drilling (DD) were completed at our Wellington North
and Myall projects. The Company’s significant exploration activity was also recognised with the entire East
Lachlan tenure portfolio receiving full six-year renewal.
Magmatic’s Wellington North Project has a dominant tenure position and target portfolio essentially
surrounding the Boda gold-copper discovery by Alkane Resources Ltd (“Alkane”) (ref: ASX:ALK 9 September
2019).
The Myall Projects ongoing exploration activity indicates strong similarities with the Northparkes Mining
District, located 60km south owned by the China Molybdenum Company Limited “(CMOC”) and Sumitomo
Group (“Sumitomo”) joint venture.
The Company also holds a strategic position in the Parkes Fault Zone (Parkes Project), immediately south
from Alkane’s Tomingley Gold Operations and recent Roswell and San Antonio discoveries.
The Group also surrendered its’ non-core West Australian Yamarna and Mt Venn Project exploration
licences (E38/2961 E38/3351, E38/2918, E38/3312 and E38/3327).
In February 2021 Non-Executive Director Mr David Flanagan resigned from the Company’s Board. I would
like to thank David for his service to the Company.
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Magmatic Resources Limited
ABN 32 615 598 322
During the year the Company raised $5,000,000 through the issue of 44,166,670 new shares and raised a
further $415,900 from option holders who exercised 2,377,120 options. In the first quarter of the 2022
financial year, the Group raised a further $2,514,561 from option holders who exercised 34,827,710 options.
The Company is very well funded, and we look forward to advancing our gold/copper targets in the 2022
Financial Year.
I want to take this opportunity to thank our dedicated employees and contractors across the business for
their contributions to the successful execution of both exploration and corporate activities in the reporting
period and acknowledge our loyal shareholders for their continued support of the Company.
Sincerely
David Richardson
Executive Chairman
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Magmatic Resources Limited
ABN 32 615 598 322
Review of Operations
Magmatic Resources Ltd (“Magmatic” or the “Company”) (ASX:MAG) is a New South Wales‐focused gold and
copper explorer that listed in May 2017, following the acquisition of an advanced gold‐copper target portfolio
in the East Lachlan, New South Wales from Gold Fields Limited in 2014.
During the year, the company remained active across its East Lachlan portfolio, with acquisitions and the
demerger of its Moorefield Project into Australian Gold and Copper Limited (ASX:AGC) providing investment
exposure to Central Lachlan discovery opportunities, whilst focussing the group on its East Lachlan strategy.
The renewed focus on the Company’s East Lachlan strategy was further enhanced through tenure
consolidation activities across its Western Australian projects and the full six‐year renewal of the entire East
Lachlan tenure portfolio.
Figure 1: Location of Magmatic’s East Lachlan Projects (Resources from Phillips 2017, CMOC 2018, Evolution 2019,
Newcrest 2019 Alkane 2020)
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Magmatic Resources Limited
ABN 32 615 598 322
East Lachlan Exploration
The Company has three 100%‐owned projects comprising six licences in the East Lachlan, New South Wales
– Myall, Wellington North and Parkes.
The East Lachlan is a globally significant gold‐copper province with an endowment of more than 80 million
ounces of gold and 13 million tonnes of copper (Phillips 2017). It is most famous for Newcrest Mining’s world
class gold‐copper porphyry cluster at the Cadia Valley District, where currently the Cadia East Mine
represents Australia’s largest and one of the world’s most profitable gold producers (Newcrest 2021). In
addition, the Northparkes copper‐gold porphyry deposits (China Molybdenum/Sumitomo, CMOC 2021) and
Cowal gold deposit (Evolution Mining, Evolution 2021) represent other significant long‐life mining operations.
The company’s projects represent strategic holdings and target portfolios adjacent to major mining
operations and recent discoveries.
The recent Boda gold‐copper discovery by Alkane Resources Ltd (ASX ALK 9 September 2019) has highlighted
the value of Magmatic’s dominant surrounding tenure position and target portfolio at its Wellington North
Project (Figure 1).
Ongoing exploration activity indicates strong similarities between the company’s Myall Project and the
Northparkes Mining District, located 60km south (China Molybdenum/Sumitomo, CMOC 2021).
The Company also holds a strategic position in the Parkes Fault Zone (Parkes Project), immediately south
from Alkane’s Tomingley Gold Operations and recent Roswell and San Antonio discoveries.
Wellington North Project (Gold-Copper)
Magmatic Resources Ltd 100%
The Wellington North Project covers the northern extension of the Molong Volcanic Belt, located north of
Australia’s largest gold producer at Cadia East (ASX:NCM) and effectively surrounding Alkane’s recent Boda
gold‐copper discovery (ASX:ALK).
The project area is considered highly prospective for epithermal‐porphyry gold‐copper (Boda‐Kaiser) and
epithermal lode, high grade gold mineralisation (Bodangora Gold Field).
The historic Bodangora Gold Field produced 230,000 ounces @ 26g/t Au between 1869‐1917 (ASX MAG 17
May 2017) and offers significant drill ready high grade exploration opportuities.
Magmatic’s exploration activity during the year has tested multiple targets with core drilling defining a broad
zone of gold‐copper anomalism at Lady Ilse and intrusion‐hosted molybdenum‐rich porphyry mineralisation
at Rose Hill. Aircore drilling was conducted across multiple earlier stage targets at Boda South, Rockleigh and
Lady Ilse, comprising 89 holes for 1046m to prioritise areas for follow up work.
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Magmatic Resources Limited
ABN 32 615 598 322
Hole ID
Hole
Type
Prospect
Easting
(MGA)
Northing
(MGA)
20LIRC002
20LIRC003
20LIRC004
20LIRC005
20LIRC006
20LIRC007
RC
RC
RC
RC
RC
RC
Lady Ilse
Lady Ilse
Lady Ilse
683002
683321
683295
6407598
6407701
6407906
Lady Ilse
Lady Ilse
Lady Ilse
683449
683380
683441
6407898
6408100
6407298
RL
(m)
366
360
364
364
364
355
Dip
Azimuth
(MGA)
‐60
‐60
‐60
‐60
‐60
‐55
257
258
257
260
263
255
Total
Depth
(m)
246
282
36
294
282
12
20LIRC008
RC
Lady Ilse
683456
6407299
355
‐68
086
66.5
20LIRC009
20LIRC010
20LIRC011
20LIRC012
20LIDD013
20LIDD014
20BNRC013
20BNRC014
20BNRC015
20LIDD013
20LIDD014
20LIDD015
21RHDD011
RC
RC
RC
RC
DD
DD
RC
RC
RC
DD
DD
DD
DD
Lady Ilse
Lady Ilse
Lady Ilse
Lady Ilse
682840
683350
683257
683332
6407300
6408480
6407456
6407723
355
368
355
360
‐65
‐60
‐60
‐60
Lady Ilse
Lady Ilse
683530
683365
6407230
6408580
355
368
‐65
‐65
086
247
088
077
266
268
Boda
North
Boda
North
Boda
North
Lady Ilse
Lady Ilse
Lady Ilse
Rose Hill
690465
6418546
467
‐60
270
690568
6418550
465
‐60
270
690080
6416904
475
‐60
080
683530
683365
683550
678477
6407230
6408580
6407898
6412264
355
368
355
393
‐65
‐65
‐65
‐65
266
268
270
270
222
360
360
37.5
504.9
492.9
150
120
150
504.9
492.9
552.5
450.8
Table 1: Collar summary for RC/DD holes in reporting period
Comments
Completed
Completed
Hole abandoned, failed to test
target position due to collar
collapse/poor ground conditions
Completed
Completed
Hole abandoned, failed to test
target position due to collar
collapse/poor ground conditions
Hole abandoned, failed to test
target position due to collar
collapse/poor ground conditions
Completed
Completed
Completed
Hole abandoned, failed to test
target position due to collar
collapse/poor ground conditions
Completed
Testing down dip and north of
20LIRC010 mineralisation
Central IP chargeability
anomaly, Completed
Central IP chargeability
anomaly, Completed
Southern IP chargeability
anomaly, Completed
Completed
Completed
Completed
Completed
Hole ID
20LIRC002
20LIRC003
and
20LIRC004
20LIRC005
and
and
and
20LIRC006
and
and
incl.
and
20LIRC007
20LIRC008
20LIRC009
20LIRC010
and
and
incl.
and
and
incl.
and
and
and
20LIRC011
20LIRC012
Interval
from (m)
Interval to
(m)
Intercept
length (m)
Au (g/t)
(>0.05 g/t Au)
Cu (%)
(>0.03% Cu)
89
195
483
23
116
170
249
90
122
166
171
238
16
44
79
103
122
151
184
184
220
279
347
252
99
198
484
77
119
237
272
110
144
182
172
257
18
56
94
144
140
158
197
195
259
292
360
255
10
3
1
54
3
67
23
20
22
16
1
19
2
12
15
41
18
7
13
11
39
13
13
3
0.05
0.12
0.27
0.18
0.22
0.22
0.27
0.14
0.12
0.64
9.71
0.17
0.27
0.14
0.19
0.25
0.43
0.11
0.72
0.84
0.08
0.16
0.05
0.14
0.03
0.03
0.03
0.07
0.06
0.06
0.11
0.17
0.06
0.36
0.42
0.03
0.03
0.11
Comments
NSR
NSR (abd)
NSR (abd)
abd
NSR
eoh
NSR (abd)
8
Magmatic Resources Limited
ABN 32 615 598 322
20LIDD013
20LIDD014
20LIDD015
including
and
including
and
including
and
14
36
73
20
452
452
462
476.5
507
295.2
357
357
373
254
192
205
210
16
38
76
22
468
497
463.4
477.3
519
347
375
359
374
266
221
206
211
2
2
3
2
16
45
1.4
0.8
12
51.8
18
2
1
12
29
1
1
0.14
0.23
0.96
0.18
0.06
0.44
3.46
9.71
0.15
0.14
0.48
2.19
1.1
0.11
0.19
1.08
0.44
0.06
0.13
0.48
0.08
0.05
0.03
0.05
0.03
0.07
0.07
1.02
Peripheral porphyry alteration
Peripheral porphyry alteration
Peripheral porphyry alteration
Peripheral porphyry alteration
Peripheral porphyry alteration
Peripheral porphyry alteration
Peripheral porphyry alteration
Peripheral porphyry alteration
Table 2: Significant intercepts in reporting period, gold and copper intercepts are calculated using a lower cut of 0.05g/t Au and
0.03% Cu and up to 6m internal dilution
Figure 2: Wellington North Project, Aeromagnetic imagery, RTP (Magmatic and Open File Company/Government) showing northern
Molong Belt summary target portfolio, highlighting Boda Au‐Cu Discovery (ASX:ALK)
9
Magmatic Resources Limited
ABN 32 615 598 322
Myall Project (Copper-Gold)
Magmatic Resources Ltd 100%
The Myall Copper‐Gold Project covers the northern extension of the Junee ‐ Narromine Volcanic Belt, located
(China
~60km north and along
Molybdenum/Sumitomo, CMOC 2021).
the Northparkes copper‐gold Mining District
strike
from
Multiple copper‐gold‐molybdenum intercepts, including 70m @ 0.54% Cu, 0.15g/t Au from 141m and 62m
@ 0.27% Cu, 0.13g/t Au from 260m (MYACD001, ASX MAG 4 June 2017), highlight near equivalent grades to
Northparkes Mine resources and indicate potential for a fertile porphyry cluster at Myall.
Magmatic’s exploration activity during the year tested two target areas, with core drilling defining a wide
zone of copper mineralisation at Kingswood, returning 381.9m @ 0.20% Cu, 8.25g/t Mo from 150m to end
of hole (21MYDD412) and a drill hole defining an anomalous zone hosted within a massive monzodiorite
intrusive at the SLR Prospect (133m @ 0.07% Cu, 0.05g/t Au, 21MYDD413).
The recent drilling at Kingswood is considered particularly encouraging with the recent hole defining zones
of sericite‐chlorite alteration overprinting earlier potassic‐alteration associated with mineralisation,
suggestive an upper level porphyry position and good preservation potential for a high grade core at depth.
Further supporting the down dip potential is the well documented relationship within Northparkes‐style
porphyry systems of the main gold zones occurring down dip within the core of the system (House 1994).
The drillhole intercept is also characterised by strong molybdenum anomalism, further supporting the
interpreted upper‐level porphyry position (381.9m @ 0.20% Cu, 8.25g/t Mo to EOH, 21MYDD412).
Figure 3: Myall Project, Kingswood District, showing drilling coverage and regolith Cu anomalism
10
Magmatic Resources Limited
ABN 32 615 598 322
Figure 4: Regional gravity and magnetic imagery, highlighting the similarities between Myall Project and the major
deposits of the Junee‐Narromine Belt, East Lachlan
Figure 5: Comparison between Myall project area and Northparkes Porphyry Mining District, located 60km south, at the same scale,
showing copper regolith anomalism at 500ppm Cu and 1000ppm Cu (MAG ASX 31 January 2019), Northparkes modified from Heithersay
and Walshe, (1995), Phillips (2017)
11
Magmatic Resources Limited
ABN 32 615 598 322
Parkes Project (Gold)
Magmatic Resources Ltd 100%
The Parkes Project comprises two exploration licences located within the Parkes Fault Zone, approximately
25km south from Alkane’s Tomingley Gold Operations and recently defined gold resources at Roswell, 662koz
(ASX ALK 54 November 2020) and San Antonio, 453koz (ASX ALK 20 April 2021). Several existing gold
intersections are equivalent to early stage exploration results at Alkane’s Tomingley Deposits, including:
16m at 1.22 g/t Au from 13m (MM33) McGregors (ASX MAG 17 May 2017)
18m at 0.72 g/t Au from 33m (MM33) McGregors (ASX MAG 17 May 2017)
26m at 0.55 g/t Au from 34m (MM32) McGregors (ASX MAG 17 May 2017)
22m at 0.79g/t Au from 45m (S1) Stockmans (ASX MAG 17 May 2017
12m at 1.42g/t Au from 7m (S2) Stockmans (ASX MAG 17 May 2017)
Figure 6: Parkes Project, aeromagnetic imagery, showing position along strike from Tomingley Gold Mine
(ASX:ALK), recent discoveries within the highly prospective Parkes Fault Zone
12
Magmatic Resources Limited
ABN 32 615 598 322
Moorefield Project (Gold)
Magmatic Resources Ltd 100%
The Moorefield Project comprises two tenements (EL7675 and EL8669) covering 478km2 and is considered
prospective for near surface gold and polymetallic base metal, gold VMS mineralisation.
Magmatic has demerged its Moorefield Project and Australian Gold and Copper Limited (AGC) purchased two
Central Lachlan gold/polymetallic projects from New South Resources Pty Ltd (NSR) (ASX MAG 4 November
2020).
Magmatic retains exposure to the AGC portfolio, which includes gold and base metal targets in the Cobar
Basin, whilst allowing the company to focus on its East Lachlan gold and gold‐copper projects.
AGC was admitted to the official list of ASX on 20 January 2021 (ASX MAG 20 January 2021).
Yamarna/Mt Venn Projects (Copper-Nickel)
Magmatic Resources Ltd 100%
Ongoing tenement management activity resulted in the surrender of E38/2961 ‘Mt Venn’, E38/3351 ‘Mt
Venn North’, E38/2918 ‘Yamarna’, E38/3312 ‘Cowderoy Hill’, E38/3327 ‘Yamarna North’ during the year.
References
CMOC 2021., China Molybdenum Company Limited, http://www.cmocinternational.com/australia/
Evolution., 2018, https://evolutionmining.com.au/reservesresources/
Heithersay P S and Walshe J L, 1995, Endeavour 26 North: A porphyry Copper‐Gold Deposit in the Late Ordovician,
Shoshonitic Goonumbla Volcanic Complex, New South Wales, Economic Geology v90
House, M.J. 1994. Gold distribution at the E26 porphyry copper‐gold deposit, NSW. M.Sc thesis, Uni of Tasmania
Lye 2006, The Discovery History of the Northparkes Deposits, Mines and Wines 2006
Newcrest., 2019, Newcrest Investor and Analyst Presentation, ASX Announcement, 18 November 2019
2020,
30
Newcrest
https://www.newcrest.com/sites/default/files/2020‐10/Technical%20Report%20on%20Cadia%20
%20as%20of%2030%20June%202020_0.pdf
Operations
Technical
Report,
43‐101
Cadia
NI
June
2020,
Operations
Phillips, G N (Ed), 2017. Australian Ore Deposits, The Australasian
Melbourne
Institute of Mining and Metallurgy:
Competent Persons Statement
The information in this document that relates to Exploration Results, Mineral Resources or Ore Reserves is based on
information compiled by Mr Peter Duerden who is a Registered Professional Geoscientist (RPGeo) and member of the
Australian Institute of Geoscientists. Mr Duerden is a full‐time employee of, and has associated shareholdings in,
Magmatic Resources Limited, and has sufficient experience which is relevant to the style of mineralisation and type of
deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in
the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”.
Mr Duerden consents to the inclusion in this presentation of the matters based on his information in the form and
context in which it appears.
Additionally, Mr Duerden confirms that the entity is not aware of any new information or data that materially affects
the information contained in the ASX releases referred to in this report.
13
Magmatic Resources Limited
ABN 32 615 598 322
Directors’ Report
Your directors present their annual financial report on the consolidated entity (referred to hereafter as the “Group”)
consisting of Magmatic Resources Limited (the “Company” or “parent entity”) and its wholly owned subsidiaries
Modeling Resources Pty Ltd (“Modeling”) and Landslide Investments Pty Ltd (“Landslide”). In order to comply with
the provisions of the Corporations Act, the directors report as follows:
Directors
The names of the directors of the Company during or since the end of the year are noted below. Directors were in
office for the entire year unless otherwise stated:
David J Richardson – Executive Chairman
Peter B Duerden – Managing Director
David W Berrie – Non-Executive Director
David N Flanagan – Non-Executive Director (appointed 28 October 2019, resigned 4 February 2021)
Company Secretary
Andrea S Betti (appointed 26 October 2000)
David W Berrie
Anthony M Walsh (appointed 15 October 2019, resigned 26 October 2020)
Principal activities
The principal activity of the Group during the financial year was mineral exploration.
Dividends
No dividend has been paid or declared since the start of the financial year and the directors do not recommend
the payment of a dividend in respect of the financial year.
Review of operations
Information on the operations of the Group is set out in the Review of Operations report on pages 6 to 14 of this
Annual Report. COVID 19 had an impact on the exploration program during the financial year to 30 June 2021
with the contracted drill rig operating on day shifts only and with a lower than usual efficiency. To partially offset
this cost the Group received a $103,995 Australian federal government Cash Boost subsidy.
Financial review
The profit for the Group after providing for income tax for the financial year amounted to $1,188,014 (2020: loss of
$4,318,026).
As at 30 June 2021, the Group had net assets of $7,519,063 (30 June 2020: $5,812,849), including cash and cash
equivalents of $6,122,271 (30 June 2020: $4,234,820).
Significant changes in the state of affairs
The Group raised $5,000,000 through the issue of 44,166,670 new shares, and raised a further $415,900 from
option holders who exercised 4,877,120 options.
The Group transferred its’ two Moorfield Project exploration licences (EL7675 and EL8669) to its’ fully owned
subsidiary, Australian Gold and Copper Ltd [AGC] in December 2020 and AGC was then de-merged and listed as
a separate listed entity in January 2021. At the time AGC was de-merged, the Company’s shareholders received
an in-specie distribution of 24,362,406 new AGC shares which represented 24.36% of AGC’s recapitalised capital
structure. Magmatic retained 5,637,594 AGC shares which represents 5.64% of AGC’s issued capital at 30 June
2021. The Company recognised a $6,243,740 gain on the AGC demerger and the retained 5.64% shareholding
was revalued down by $338,256 at 30 June 2021, based on the AGC closing market price of $0.14 from its $0.20
listing price.
The Group surrendered its’ West Australian Yamarna and Mt Venn Project exploration licences (E38/2961
E38/3351, E38/2918, E38/3312 and E38/3327) in June 2021 resulting in an impairment charge against their
acquisition cost that month of $260,000, resulting in the acquisition cost of these assets being fully impaired.
Matters subsequent to the end of the financial year
During the first quarter of the 2022 financial year, the Group raised a further $2,514,561 from option holders who
exercised 34,827,710 options.
14
Magmatic Resources Limited
ABN 32 615 598 322
COVID19
On 31 January 2020, the World Health Organisation (WHO) announced a global health emergency because of a
new strain of coronavirus originating in Wuhan, China (COVID-19 outbreak) and the risks to the international
community as the virus spreads globally beyond its point of origin. Because of the rapid increase in exposure
globally, on 11 March 2020, the WHO classified the COVID-19 outbreak as a pandemic.
The full impact of the COVID-19 outbreak continues to evolve at the date of this report. The Group is therefore
uncertain as to the full impact that the pandemic will have on its financial condition, liquidity, and future results of
operations during FY2022.
Management is actively monitoring the global situation and its impact on the Group's financial condition, liquidity,
operations, suppliers, industry, and workforce. Given the daily evolution of the COVID-19 outbreak and the global
responses to curb its spread, the Group is not able to estimate the effects of the COVID-19 outbreak on its results
of operations, financial condition, or liquidity for the 2022 financial year.
Likely developments and expected results
Additional comments on expected results of certain operations of the Group are included in the Review of
Operations. The impact of COVID-19 on the Company going forward, including its financial condition cannot be
reasonably estimated at this stage and will be reflected in the Group’s 2022 interim and annual financial
statements.
Environmental legislation
The Group is subject to significant environmental legal regulations in respect to its exploration and evaluation
activities. The group is compliant with the NGER Act 2007. There have been no known breaches of these
regulations and principles.
During the financial year the Company has paid premiums in respect of insuring directors and officers of the
Company against liabilities incurred as directors or officers. The amount paid is confidential under the terms of
the terms of the insurance policy. The Company has no insurance policy in place that indemnifies the Company’s
auditors.
Information on directors
David Richardson B. Comm MBA Executive Chairman (appointed 28 October 2016, elected Chairman 3
February 2020)
Experience and expertise
Mr David Richardson has extensive international corporate experience including 15 years in Japan in Asia Pacific
regional director positions with organisations such as Pacific Dunlop Ltd and Amcor Ltd, expertise includes venture
capital and finance.
Mr Richardson founded Magmatic Resources in 2014, listing the Company on the ASX in 2017 and is Executive
Chairman of the Company. Mr Richardson holds an Masters of Business Administration from the University of
Southern California (USC), Los Angeles.
Mr Richardson is not considered to be independent due to his executive role as Executive Chairman of the
Company and his interest in the securities of the Company.
Other current directorships: Australian Gold and Copper Ltd
Former directorships in the last 3 years: Nil
Special responsibilities: Executive Chairman
Interests in shares and options at the date of this report:
47,442,571 ordinary shares (indirectly held) and 4,000,000 options (indirectly held).
Peter Duerden BSc Hons (EconGeo), M (EconGeo), RPGeo Managing Director (appointed 3 February 2020)
Experience and expertise
Mr Peter Duerden has over 20 years experience in the mining and exploration industry working across a wide
range of commodities and deposit styles with particular expertise in NSW mineral systems. Before joining
Magmatic, Mr Duerden was involved in the start-up of Sky Metals Limited and the development of their successful
NSW gold strategy and has held senior management positions with Newcrest Mining and Alkane Resources.
15
Magmatic Resources Limited
ABN 32 615 598 322
Mr Duerden holds a Masters of Economic Geology and is a Registered Professional Geoscientist (RPGeo) and
member of the AIG.
Mr Duerden is not considered to be independent due to his executive role as Managing Director of the Company.
Other Current Directorships: Nil
Former directorships in the last 3 years: Sky Metals Limited (appointed 14 October 2019 resigned 4 December
2019)
Special Responsibilities: Managing Director
Interests in shares and options at the date of this report:
4,850,313 ordinary shares (indirectly held) and 6,000,000 options (indirectly held)
David Flanagan AM CitWA Non-Executive Director (appointed 28 October 2019, resigned 04 February 2021)
Experience and expertise
Mr David Flanagan is a geologist with more than 25 years’ experience in the multi commodity mining and mineral
exploration industry in Australia, Indonesia and Africa. David has a BSc Mining & Minerals Exploration Geology,
undertaken at Curtin University, School of Mines in Western Australia. He is a Fellow of the Australian Institute of
Company Directors and Member of the Australasian Institute of Mining and Metallurgy. David was Chancellor of
Murdoch University from 2013 to 2019.
During 2014, Mr Flanagan was named the Western Australian of the Year and Western Australian Business
Leader of the Year. He was awarded an Eisenhower Fellowship in 2013 and remains active in the not for profit
sector. In January 2018, Mr Flanagan was awarded the prestigious Member of the General Division of the Order
of Australia Award.
Other directorships: Non-Executive Chairman of ASX listed companies, Battery Minerals Limited
Former directorships in the last 3 years: CZR Resources (appointed 3 April 2020, resigned 10 September 2021)
Special responsibilities: Nil
Interests in shares and options at date of retirement:
Nil ordinary shares held and 6,000,000 options (directly held).
David Berrie LLB Non-Executive Director (appointed 28 October 2016)
Company Secretary (appointed 01 June 2019)
Experience and expertise
Mr. David Berrie has over 30 years’ experience in the mining industry. Mr Berrie worked as a solicitor in the mining
team at Clayton Utz before joining the international mining house Western Mining Corporation in 1987 with much
of that time spent in the exploration division before transitioning over to BHP Billiton. Mr Berrie has extensive public
company experience. Mr Berrie has a Bachelor of Laws and a Bachelor of Juris Prudence from the University of
Western Australia.
Other current directorships: Nil
Former directorships in the last 3 years:
Hylea Metals Limited (appointed 6 February 2018, resigned 2 January 2019)
Summit Resources Limited (appointed 19 Oct 2006, resigned 15 November 2018)
Special responsibilities: Joint Company Secretary
Interests in shares and options at the date of this report:
14,029,044 ordinary shares (indirectly held) and 2,000,000 options (indirectly held).
Meetings of directors
During the financial year there were nine formal directors’ meetings. All other matters that required formal Board
resolutions were dealt with via written circular resolutions. In addition, the directors met on an informal basis at
regular intervals during the financial year to discuss the Group’s affairs.
The Company has no separate Remuneration committee as is not of a sufficient size to warrant these. The
Company’s Audit and Risk committee met once. All matters usually dealt with by the Remuneration committee are
dealt with by the whole Board.
16
Magmatic Resources Limited
ABN 32 615 598 322
The number of meetings of the Company’s board of directors attended by each director were:
D Richardson
P Duerden
D Berrie
D Flanagan
Shares under option
Directors’ meetings held
9
9
9
7
Directors’ meetings attended
9
9
9
7
Outstanding share options at the date of this report are as follows:
Grant date
14 October 2019
22 October 2019
29 November 2019
31 January 2020
31 January 2020
04 December 2019
04 December 2019
18 February 2020
24 September 2020
25 September 2020
28 May 2021
Date of expiry
14 October 2022
30 November 2022
30 November 2022
31 January 2023
31 January 2023
31 January 2023
31 January 2023
12 February 2023
30 September 2023
30 September 2023
28 May 2024
Shares issued on the exercise of options
Exercise price
Number of options
$0.0722
$0.0722
$0.2322
$0.3352
$0.5772
$0.3352
$0.5772
$0.5262
$0.2642
$0.2642
$0.2062
3,000,000
8,000,000
8,000,000
9,040,000
4,460,000
660,000
340,000
2,000,000
500,000
250,000
4,000,000
Options Grant Date
31 August 2018
31 August 2018
31 August 2018
31 August 2018
31 August 2018
22 November 2019
31 August 2018
31 August 2018
31 August 2018
31 August 2018
31 August 2018
31 August 2018
31 August 2018
31 August 2018
31 August 2018
22 November 2019
Date of Expiry
30 August 2021
30 August 2021
30 August 2021
30 August 2021
30 August 2021
30 November 2022
30 August 2021
30 August 2021
30 August 2021
30 August 2021
30 August 2021
30 August 2021
30 August 2021
30 August 2021
30 August 2021
30 November 2022
Date Exercised
18 November 2020
23 December 2020
29 December 2020
8 February 2021
12 March 2021
17 May 2021
11 June 2021
30 July 2021
6 August 2021
13 August 2021
17 August 2021
20 August 2021
27 August 2021
1 September 2021
3 September 2021
3 September 2021
Exercised Price
$0.10
$0.10
$0.10
$0.0722
$0.0722
$0.0722
$0.0722
$0.0722
$0.0722
$0.0722
$0.0722
$0.0722
$0.0722
$0.0722
$0.0722
$0.0722
Number of Options
305,000
326,669
1,662,250
10,000
250,000
2,000,000
323,201
5,000,000
441,500
3,058,410
165,000
2,777,356
5,358,892
5,886,552
140,000
12,000,000
Remuneration Report (Audited)
This report outlines the remuneration arrangements in place for the key management personnel of Magmatic
Resources Limited (the “Company” or “Parent”) for the financial year ended 30 June 2021. The information provided
in this remuneration report has been audited as required by Section 308(3C) of the Corporations Act 2001.
The remuneration report details the remuneration arrangements for key management personnel (“KMP”) who are
defined as those persons having authority and responsibility for planning, directing and controlling the major activities
of the Company and the Group, directly or indirectly, including any director (whether executive or otherwise) of the
parent company, and includes all executives in the Parent and the Group receiving the highest remuneration.
17
Magmatic Resources Limited
ABN 32 615 598 322
Key Management Personnel
(i) Directors
David Richardson - Executive Chairman
Peter Duerden – Managing Director
David Berrie – Non-Executive Director
David Flanagan – Non-Executive Director (appointed 28 October 2019, resigned 04 February 2021)
(ii) Executives
Michael Franklin - Chief Financial Officer
Details of directors’ and executives’ remuneration are set out under the following main headings:
A
B
C
D
Principles used to determine the nature and amount of remuneration
Details of remuneration
Employment contracts/Consultancy agreements
Share-based compensation
Principles used to determine the nature and amount of remuneration
A
The objective of the Company’s executive reward framework is to ensure reward for performance is competitive and
appropriate for the results delivered. The framework aims to align executive reward with the creation of value for
shareholders. The key criteria for good remuneration governance practices adopted by the Board are:
competitiveness and reasonableness
acceptability to shareholders
performance incentives
transparency
capital management
The framework provides a mix of fixed salary, consultancy, agreement based remuneration and share based
incentives.
The broad remuneration policy for determining the nature and amount of emoluments of Board members and senior
executives of the Company is governed by the full board. Although there is no separate remuneration committee, the
Board’s aim is to ensure the remuneration packages properly reflect directors’ and executives’ duties and
responsibilities. The Board assesses the appropriateness of the nature and amount of emoluments of such officers
on a periodic basis by reference to relevant employment market conditions with the overall objective of ensuring
maximum stakeholder benefit from the retention and motivation of a high quality Board and executive team.
The current remuneration policy adopted is that no element of any director or executive package is directly related
to the Company’s financial performance. Indeed there are no elements of any director or executive remuneration that
are dependent upon the satisfaction of any specific condition however the overall remuneration policy framework is
structured to advance and create shareholder wealth.
Non-executive directors
Fees and payments to non-executive directors reflect the demands which are made on, and the responsibilities of,
the directors. Non-executive directors’ fees and payments are reviewed annually by the Board and are intended to
be in line with the market. Non-executive directors receive a board fee and fees for chairing or participating on board
committees. They do not receive performance-based pay or retirement allowances.
For the year ended 30 June 2021, exclusive of superannuation guarantee the annual cash remuneration for the Non-
Executive Directors was $113,272
The non-executive directors fee pool approved by shareholders is $250,000 per annum.
Directors’ fees
On appointment to the Board, all non-executive directors enter into a service agreement with the Company in the form
of a letter of appointment. The letter summarises the Board policies and terms, including remuneration relevant to the
office of director.
The Board policy is to remunerate non-executive directors at commercial market rates for comparable companies for
their time, commitment and responsibilities. Non-executive directors receive a Board fee but do not receive fees for
chairing or participating on Board committees. Board members are allocated superannuation guarantee contributions as
18
Magmatic Resources Limited
ABN 32 615 598 322
required by law, and do not receive any other retirement benefits. From time to time, some individuals may choose to
sacrifice their salary or consulting fees to increase payments towards superannuation.
Fees for non-executive directors are not linked to the performance of the Group.
Retirement allowances for directors
Apart from superannuation payments paid on salaries there are no retirement allowances for directors.
Executive pay
The executive pay and rewards framework has the following components:
base pay and benefits such as superannuation where appropriate
long-term incentives through participation in employee equity issues
Base pay
All executives are either full time employees or consultants who are paid on an agreed basis that has been formalised
in a consultancy agreement.
Benefits
Apart from superannuation paid on executive salaries there are no additional benefits paid to executives.
Short-term incentives
There are no current short-term incentive remuneration arrangements.
Performance based remuneration
To ensure that the Company has appropriate mechanisms in place to continue to attract and retain the services of
suitable directors and employees, the Company has, in the past, issued options and performance rights to some key
personnel.
Share-based compensation
Issue of shares
No shares were issued to directors during the year ended 30 June 2021.
Options
No options were issued to directors during the year ended 30 June 2021.
Performance rights
No performance rights were issued during the year ended 30 June 2021.
Company performance, shareholder wealth and directors’ and executives’ remuneration
No relationship exists between shareholder wealth, director and executive remuneration and Company performance
due to the nature of the Company’s operations being a non-producing resources exploration company.
The table below shows the losses and earnings per share of the Company for the last four financial years:
2021
2020
2019
2018
Net profit / (loss)
$1,188,014
($4,318,026)
($1,993,025)
($2,533,870)
Share Price at year end (cents)
Profit / (Loss) per share (cents)
12.5
0.58
27.0
(3.02)
1.8
(1.76)
6.1
(2.75)
B
Details of remuneration
Amounts of remuneration
Details of the remuneration of the directors and other key management personnel (as defined in AASB 124 Related
Party Disclosures) of the Company and the Group for the year ended 30 June 2021 are set out in the following
tables.
19
Magmatic Resources Limited
ABN 32 615 598 322
The key management personnel of the Group comprise the directors of the Company and persons who have the
authority and responsibility for planning, directing and controlling the activities of the Group. Given the size and
nature of the Group, there are no other employees who are required to have their remuneration disclosed in
accordance with the Corporations Act 2001. No cash remuneration is linked to performance.
Year ended 30 June 2021
Name
Director
D Richardson
P Duerden
D Berrie
D Flanagan (appointed 28 October 2020
resigned 4 February 2021)
Key Management Personnel
M Franklin
Year ended 30 June 2020
Name
Director
D Richardson
P Duerden (appointed 3 February 2020)
D Flanagan (appointed 28 October 2020)
D Berrie
M Norris (resigned 3 February 2020)
Key Management Personnel
M Franklin
Post-
employment
benefits /
Superannuation
$
Share-based
compensation
$
Other
$
Total
$
24,680
48,685
5,700
5,061
167,644
251,030
83,822
-
-
-
-
-
372,324
562,581
149,522
58,333
-
84,126
-
502,496
-
100,000
- 1,242,760
Post-
employment
benefits /
Superannuation
$
Share-based
compensation
$
Other
$
Total
$
54,469
19,412
5,910
5,700
2,217
73,028
109,353
584,281
36,514
194,760
-
-
-
-
-
307,497
237,098
652,397
102,214
220,310
-
87,708
-
997,936
-
100,000
- 1,619,516
Salary /
Fees
$
180,000
262,866
60,000
53,272
100,000
656,138
Salary /
Fees
$
180,000
108,333
62,206
60,000
23,333
100,000
533,872
C
Employment contracts / Consultancy agreements
On appointment to the Board, all Non-Executive Directors enter into a service agreement with the Company in the
form of a letter of appointment.
Remuneration of the Managing Director and other executives are formalised in letters of appointment and
employment agreements. These agreements provide details of the salary and employment conditions relating to
each employee.
Name
Term of agreement
and notice period
Base salary (excl.
superannuation)
Termination
payments
David Richardson
Executive Chairman
Peter Duerden
Managing Director
Michael Franklin
Chief Financial Officer
1 year
3 months
N/A
6 months
N/A
N/A
$180,000
$260,000
$100,000
N/A
N/A
N/A
20
Magmatic Resources Limited
ABN 32 615 598 322
D
Key management personnel equity holdings
2021
Ordinary shares
Directors
D Richardson
P Duerden (appointed 3 February 2020)
D Berrie
D Flanagan (appointed 28 October 2020,
resigned 4 February 2021)
Other Key management personnel
M Franklin
Options
Directors
D Richardson
P Duerden (appointed 3 February 2020)
D Berrie
D Flanagan (appointed 28 October 2020,
resigned 4 February 2021)
Other Key management personnel
M Franklin
Balance at
beginning of year
Net movement
during the year
Balance at the
end of year
42,442,571
4,850,313
14,029,044
-
100,000
-
-
-
-
-
42,442,571
4,850,313
14,029,044
-
100,000
Balance at
beginning of year
Net movement
during the year
Balance at the end
of year
9,000,000
6,000,000
2,675,000
6,000,000
-
-
-
-
-
-
9,000,000
6,000,000
2,675,000
6,000,000
-
No remuneration consultants have been used. Other than disclosed above, there are no other transactions
with key management personnel.
Loans to Key Management Personnel
There were no loans to individuals or members of key management personnel during the financial year.
Transactions with Key Management Personnel
Mr David Berrie (Non-Executive Director)
During the financial year the daughter of Mr Berrie provided casual administrative services to the Company to
the value of $500. These services were provided on normal commercial terms and conditions.
Other than described above, there were no transactions with key management personnel during the financial
year or the previous financial year
E
Voting and comments made at the Company’s 2020 Annual General Meeting
Magmatic Resources Ltd received more than 99.7% of “yes” votes on its remuneration report for the 2020
financial year. The Company did not receive any specific feedback at the AGM or throughout the year on its
remuneration practices.
End of audited remuneration report.
21
Magmatic Resources Limited
ABN 32 615 598 322
Auditor’s independence and non-audit services
Section 307C of the Corporations Act 2001 requires our auditors, BDO Audit (WA) Pty Ltd to provide the
directors of the Company with an Independence Declaration in relation to the audit of the annual report. This
Independence Declaration is set out on page 24 and forms part of this directors’ report for the year ended
30 June 2021.
Non-audit services
The Company may decide to employ the auditors on assignments additional to their statutory audit duties
where the auditor’s expertise and experience with the Company and/or the consolidated entity are important.
The Company has considered the position and is satisfied that the provision of the non-audit services is
compatible with the general standard of independence for auditors imposed by the Corporations Act 2001.
Details of remuneration paid to the auditors are:
Assurance services
BDO Audit (WA) Pty Ltd
Audit and review of financial statements
Total remuneration for audit services
Consolidated
2021
$
2020
$
38,117
38,117
42,902
42,902
Total auditor’s remuneration
38,117
42,902
Proceedings on behalf of Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring
proceedings on behalf of the Company, or to intervene in any proceedings to which the Company is a party,
for the purpose of taking responsibility on behalf of the Company for all or part of those proceedings.
Insurance of Directors and Officers
The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may
be brought against the officers in their capacity as officers of the Company, and any other payments arising
from liabilities incurred by the officers in connection with such proceedings. This does not include such
liabilities that arise from conduct involving a wilful breach of duty by the officers or the improper use by the
officers of their position or of information to gain advantage for themselves or someone else or to cause
detriment to the Company. It is not possible to apportion the premium between amounts relating to the
insurance against legal costs and those relating to other liabilities.
This report is made in accordance with a resolution of the directors.
D Richardson
Executive Chairman
PERTH, Western Australia
Dated: 28 September 2021
22
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
DECLARATION OF INDEPENDENCE BY DEAN JUST TO THE DIRECTORS OF MAGMATIC RESOURCES
LIMITED
As lead auditor of Magmatic Resources Limited for the year ended 30 June 2021, I declare that, to the
best of my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Magmatic Resources Limited and the entities it controlled during the
period.
Dean Just
Director
BDO Audit (WA) Pty Ltd
Perth, 28 September 2021
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.
23
Magmatic Resources Limited
ABN 32 615 598 322
Corporate Governance Statement
The Company and the Board are committed to achieving and demonstrating the highest standards of corporate
governance. 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 2021 Corporate Governance Statement is lodged with the ASX as a separate document to the Annual
Report.
The 2021 Corporate Governance Statement was approved by the Board on 28 September 2021 and is current
as at 30 June 2021. A description of the Group’s current corporate governance practices is set out in the
Group’s Corporate Governance Statement which can be viewed at www.magmaticresources.com.
24
Magmatic Resources Limited
ABN 32 615 598 322
Consolidated Statement of Profit or Loss and Other
Comprehensive Income for the year ended 30 June 2021
Consolidated
Note
2021
$
Continuing Operations
Other income
Corporate administration expenses
Exploration and evaluation expenses
Exploration asset impairments
Share based payment expense
Finance costs
Profit / (Loss) before tax
Income tax
Net profit / (loss) for the year
Other comprehensive income, net of tax
Items that will not be classified subsequently to profit or loss
Changes in the fair value of investments at fair value
through other comprehensive income
Items that may be reclassified subsequently to profit or loss
Total comprehensive profit / (loss) for the year
Total comprehensive profit / (loss) for the period
attributable to the members of Magmatic Resources
Limited:
Profit / (Loss) per share attributable to the members of
Magmatic Resources Limited
Profit / (Loss) per share (dollars)
Profit / (Loss) per share fully diluted (dollars)
2
3
3
8
11
4
9
5
5
2020
$
254,494
254,494
(1,389,438)
(1,466,443)
-
(1,700,486)
(16,153)
(4,572,520)
6,433,474
6,433,474
(1,257,527)
(3,135,379)
(260,000)
(588,039)
(4,515)
5,245,460
1,188,014
(4,318,026)
-
-
1,188,014
(4,318,026)
-
(338,256)
-
-
-
-
849,758
(4,318,026)
849,758
(4,318,026)
$0.006
$0.004
($0.030)
($0.020)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in
conjunction with the accompanying notes.
25
Magmatic Resources Limited
ABN 32 615 598 322
Consolidated Statement of Financial Position
as at 30 June 2021
Current Assets
Cash and cash equivalents
Other receivables
Total Current Assets
Non-Current Assets
Plant and Equipment
Security Bonds
Exploration assets
Right-of-use assets
Financial assets held at fair value through other comprehensive income
Total Non-Current Assets
Total Assets
Current Liabilities
Trade and other payables
Lease Liabilities
Total Current Liabilities
Non-Current Liabilities
Lease Liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Reserves
Accumulated losses
Total Equity
Note
Consolidated
2021
$
2020
$
7
8
9
6,122,271
107,628
4,234,820
73,677
6,229,899
4,308,497
63,636
69,300
1,368,350
68,765
789,263
89,623
91,300
1,628,350
115,235
-
2,359,314
1,924,508
8,589,213
6,233,005
10
999,506
41,378
304,637
39,200
1,040,884
343,837
29,266
29,266
76,319
76,319
1,070,150
420,156
7,519,063
5,812,849
11
12
14,580,282
4,763,141
(11,824,360)
15,071,988
3,753,235
(13,012,374)
7,519,063
5,812,849
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying
notes.
26
Consolidated Statement of Changes in Equity for the year ended 30 June 2021
Magmatic Resources Limited
ABN 32 615 598 322
Consolidated
Share
Based
Payments
Reserve
$
Capital
Restructure
Reserve
$
Fair Value Other
Comprehensive
Income ("FVOCI")
Reserve
Issued
Capital
$
Balance at 1 July 2019
6,733,855
3,156,499
250
Loss after income tax expense for the year
Other comprehensive income for the year, net of tax
Total comprehensive loss for the year
-
-
-
-
-
-
Transactions with owners recorded directly in equity
Vesting of Performance Shares
Share-based payments
Issue of ordinary shares
Capital raising expenses
1,104,000
-
7,685,133
(451,000)
(1,104,000)
1,700,486
-
-
Total transactions with owners recorded directly in equity
8,338,133
596,486
Balance at 30 June 2020
15,071,988
3,752,985
Balance at 1 July 2020
Profit after income tax expense for the year
Other comprehensive income for the year, net of tax
15,071,988
-
-
3,752,985
-
-
Total comprehensive loss for the year
-
-
Transactions with owners recorded directly in equity
Share-based payments
Issue of ordinary shares
Capital raising expenses
In-specie Distribution to Shareholders
-
5,415,898
(1,035,123)
(4,872,481)
588,039
-
760,123
-
Total transactions with owners recorded directly in equity
(491,706)
1,348,162
-
-
-
-
-
-
-
-
250
250
-
-
-
-
-
-
-
-
Accumulated
Losses
$
Total
Equity
$
(8,694,348)
1,196,256
(4,318,026)
-
(4,318,026)
-
(4,318,026)
(4,318,026)
-
-
-
-
-
-
1,700,486
7,685,133
(451,000)
8,934,619
(13,012,374)
5,812,849
-
-
-
-
-
-
-
-
-
-
-
-
(338,256)
(13,012,374)
1,188,014
-
5,812,849
1,188,014
(338,256)
(338,256)
1,188,014
849,758
-
-
-
-
-
-
-
-
588,039
5,415,898
(275,000)
(4,872,481)
(338,256)
1,188,014
856,456
Balance at 30 June 2021
14,580,282
5,101,147
250
(338,256)
(11,824,360)
7,519,063
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
27
Magmatic Resources Limited
ABN 32 615 598 322
Consolidated Statement of Cash Flows
for the year ended 30 June 2021
Consolidated
Note
2021
$
2020
$
Cash flows from operating activities
Receipts from customers, contract discontinuance fees
received and Government Subsidies
Payments to suppliers and employees
Payments for exploration expenditure
Proceeds from / (returned to) earn-in partner
Net Interest received / (paid)
171,382
(868,663)
(2,517,985)
-
9,690
251,160
(1,389,284)
(1,808,487)
(38,427)
(253)
Net cash used in operating activities
17(a)
(3,205,576)
(2,985,291)
Cash flows from investing activities
Payments for property, plant & equipment
Tenement bonds refunded net of bonds paid
Net cash from / (used in) investing activities
Cash flows from financing activities
Proceeds from borrowings
Repayment of borrowings
Repayment of lease liabilities
Proceeds from the issue of shares
Payment of capital raising costs
-
22,000
22,000
-
-
(44,873)
5,415,900
(300,000)
(91,641)
-
(91,641)
550,000
(450,000)
(45,811)
7,475,132
(451,000)
Net cash from financing activities
5,071,027
7,078,321
Net increase/(decrease) in cash and cash equivalents
1,887,451
4,001,389
Cash and cash equivalents at the beginning of the year
4,234,820
233,431
Cash and cash equivalents at the end of the year
7
6,122,271
4,234,820
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
28
Magmatic Resources Limited
ABN 32 615 598 322
Notes to the consolidated financial statements for the year
ended 30 June 2021
Note 1: Statement of significant accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out below. These
policies have been consistently applied to all the years presented, unless otherwise stated.
(a)
Adoption of new and revised accounting standards and interpretations
In the year ended 30 June 2021, the Directors have reviewed all of the new and revised Standards and
Interpretations issued by the AASB that are relevant to the Company and effective for the current reporting
periods beginning on or after 1 July 2020. As a result of this review the Directors have determined that there
is no material impact of the Standards and Interpretations issued by the AASB and, therefore, no change is
necessary to Company accounting policies.
There is no material impact to profit or loss or net assets on the adoption of this new standard in the current
or comparative periods as leases were only short term leases and low value leases.
(b)
New accounting standards and interpretations that are not yet mandatory
The Directors have also reviewed all Standards and Interpretations issued and not yet adopted for the year
ended 30 June 2021. As a result of this review the Directors have determined that there is no material impact
of the Standards and Interpretations in issue not yet adopted on the Company and, therefore, no change is
necessary to Company accounting policies.
(c)
Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting
Standards and Interpretations issued by the Australian Accounting Standards Board and the Corporations
Act 2001. Magmatic Resources Limited is a for-profit entity for the purpose of preparing the financial
statements.
Historical cost convention
The financial statements have been prepared under the historical cost convention.
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the process of applying the Company's accounting
policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and
estimates are significant to the financial statements, are disclosed in note 1(u).
(d)
Statement of compliance
The financial report was authorised by the Board of directors for issue on 28 September 2021.
The financial report complies with Australian Accounting Standards and International Financial Reporting
Standards (IFRS).
(e)
(f)
Government grants
Government grants relating to costs are deferred and recognised in profit or loss over the period necessary
to match them with the costs that they are intended to compensate. This includes Cash Boost income (add
any other incentives received) received due to COVID-19 during the year which has been recognised as
other income in the statement of profit or loss and other comprehensive income this year.
Principles of consolidation
The consolidated financial statements incorporate all of the assets, liabilities and results of the parent entity
(Magmatic Resources Limited) and its controlled subsidiaries; Modeling Resources Pty Ltd and Landslide
Investments Pty Ltd. The parent controls an entity when it is exposed to, or has rights to, variable returns
from its involvement with the entity and has the ability to affect those returns through its power over the
entity.
The assets, liabilities and results of all subsidiaries are fully consolidated into the financial statements of the
Group from the date on which control is obtained by the Group. The consolidation of a subsidiary is
29
Magmatic Resources Limited
ABN 32 615 598 322
Notes to the consolidated financial statements for the year
ended 30 June 2021
discontinued from the date that control ceases. Intercompany transactions, balances and unrealised gains
or losses on transactions between group entities are fully eliminated on consolidation. Accounting policies
of subsidiaries have been changed and adjustments made where necessary to ensure uniformity of the
accounting policies adopted by the Group.
(g)
(h)
(i)
(j)
(k)
Income tax
The income tax expense or benefit for the period is the tax payable on that period's taxable income based
on the applicable income tax rate for each jurisdiction, adjusted by changes in deferred tax assets and
liabilities attributable to temporary differences, unused tax losses and the adjustment recognised for prior
periods, where applicable.
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current
classification.
An asset is current when it is expected to be realised or intended to be sold or consumed in normal operating
cycle; it is held primarily for the purpose of trading; it is expected to be realised within twelve months after
the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used
to settle a liability for at least twelve months after the reporting period. All other assets are classified as non-
current.
A liability is current when: it is expected to be settled in normal operating cycle; it is held primarily for the
purpose of trading; it is due to be settled within twelve months after the reporting period; or there is no
unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other
short-term, highly liquid investments with original maturities of three months or less that are readily
convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
The Group accounts for long term restricted security deposits as ‘other’ non-current assets.
Other receivables
Other receivables are recognised at amortised cost, less any provision for impairment.
Plant and equipment
Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical
cost includes expenditure that is directly attributable to the acquisition of the items.
Depreciation is calculated on a straight-line basis to write off the net cost of each item of property, plant and
equipment (excluding land) over their expected useful lives as follows:
Plant and equipment 3-7 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at
each reporting date.
Leasehold improvements are depreciated over the unexpired period of the lease or the estimated useful life
of the assets, whichever is shorter.
An item of plant and equipment is derecognised upon disposal or when there is no future economic benefit
to the Company. Gains and losses between the carrying amount and the disposal proceeds are taken to
profit or loss.
(l)
Leases
All leases are accounted for by recognising a right-of-use asset and a lease liability except for:
•
•
leases of low value assets; and
leases with a term of 12 months or less.
30
Magmatic Resources Limited
ABN 32 615 598 322
Notes to the consolidated financial statements for the year
ended 30 June 2021
Lease liabilities are measured at the present value of the contractual payments due to the lessor over the
lease term, with the discount rate determined by reference to the rate inherent in the lease unless (as is
typically the case) this is not readily determinable, in which case the group’s incremental borrowing rate on
commencement of the lease is used. Variable lease payments are only included in the measurement of the
lease liability if they depend on an index or rate. In such cases, the initial measurement of the lease liability
assumes the variable element will remain unchanged throughout the lease term. Other variable lease
payments are expensed in the period to which they relate.
On initial recognition, the carrying value of the lease liability also includes:
• amounts expected to be payable under any residual value guarantee;
•
the exercise price of any purchase option granted in favour of the group if it is reasonable certain to
assess that option; and
• any penalties payable for terminating the lease, if the term of the lease has been estimated on the
basis of termination option being exercised.
Right of use assets are initially measured at the amount of the lease liability, reduced for any lease incentives
received, and increased for:
•
•
•
lease payments made at or before commencement of the lease;
initial direct costs incurred; and
the amount of any provision recognised where the group is required to dismantle, remove or restore
the leased asset.
Subsequent to initial measurement lease liabilities increase as a result of interest charged at a constant rate
on the balance outstanding and are reduced for lease payments made. Right-of-use assets are amortised
on a straight-line basis over the remaining term of the lease or over the remaining economic life of the asset
if, rarely, this is judged to be shorter than the lease term.
When the group revises its estimate of the term of any lease (because, for example, it re-assesses the
probability of a lessee extension or termination option being exercised), it adjusts the carrying amount of the
lease liability to reflect the payments to make over the revised term, which are discounted using a revised
discount rate (being the interest rate implicit in the lease for the remainder of the lease term or, if that cannot
be readily determined, the Group’s incremental borrowing rate at the re-assessment date). An equivalent
adjustment is made to the carrying value of the right-of-use asset, with the revised carrying amount being
amortised over the remaining (revised) lease term.
The carrying value of lease liabilities is also revised when the variable element of future lease payments
dependent on a rate or index is revised or there is a revision to the estimate of amounts payable under a
residual value guarantee. In both cases an unchanged discount rate is used. In both cases an equivalent
adjustment is made to the carrying value of the right-of-use asset, with the revised carrying amount being
amortised over the remaining (revised) lease term.
When the group renegotiates the contractual terms of a lease with the lessor, the accounting depends on
the nature of the modification:
•
•
•
if the renegotiation results in one or more additional assets being leased for an amount
commensurate with the standalone price for the additional rights-of-use obtained, the modification
is accounted for as a separate lease in accordance with the above policy
in all other cases where the renegotiated increases the scope of the lease (whether that is an
extension to the lease term, or one or more additional assets being leased), the lease liability is
remeasured using the discount rate applicable on the modification date, with the right-of-use asset
being adjusted by the same amount.
if the renegotiation results in a decrease in the scope of the lease, both the carrying amount of the
lease liability and right-of-use asset are reduced by the same proportion to reflect the partial of full
termination of the lease with any difference recognised in profit or loss. The lease liability is then
further adjusted to ensure its carrying amount reflects the amount of the renegotiated payments
over the renegotiated term, with the modified lease payments discounted at the rate applicable on
the modification date. The right-of-use asset is adjusted by the same amount.
31
Magmatic Resources Limited
ABN 32 615 598 322
Notes to the consolidated financial statements for the year
ended 30 June 2021
Payments associated with short-term leases and leases of low-value assets are recognised on a straight-
line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or
less. Low-value assets are items such as IT-equipment and small items of office furniture.
(m)
Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the
financial period and which are unpaid. Due to their short-term nature they are measured at amortised cost
and are not discounted. The amounts are unsecured and are usually paid within 30 days of recognition.
(n)
Fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure
purposes, the fair value is based on the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the measurement date; and assumes that
the transaction will take place either: in the principle market; or in the absence of a principal market, in the
most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or
liability, assuming they act in their economic best interest. For non-financial assets, the fair value
measurement is based on its highest and best use. Valuation techniques that are appropriate in the
circumstances and for which sufficient data are available to measure fair value, are used, maximising the
use of relevant observable inputs and minimising the use of unobservable inputs.
Investments and other financial assets
Investments and other financial assets are recognised and derecognised on settlement date where the
purchase or sale of an investment is under a contract whose terms require delivery of the investment within
the time-frame established by the market concerned. They are initially measured at fair value, net of
transaction costs, except for those financial assets classified as fair value through profit or loss, which are
initially measured at fair value.
The Group classifies its financial assets in the following measurement categories:
Those to be measured subsequently at fair value (either through other comprehensive income
(OCI), or through profit or loss); or
Those to be measured at amortised cost.
The classification depends on the entity’s business model for managing the financial assets and the
contractual terms of the cash flows.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or OCI. For
investments in equity instruments that are not held for trading, the classification will depend on whether the
Group has made an irrevocable election at the time of initial recognition to account for the equity investment
at FVOCI.
(i) Measurement
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial
asset not at fair value through profit or loss (FVPL), transaction costs that are directly attributable to the
acquisition of the financial asset. Transaction costs of financial assets carried at FVPL are expensed in profit
or loss. Financial assets with embedded derivatives are considered in their entirety when determining
whether their cash flows are solely payment of principal and interest.
The Group subsequently measures all equity investments at fair value. The fair values of quoted investments
are based on current bid prices. If the market for a financial asset is not active (and for unlisted securities),
the Group establishes fair value by using valuation techniques. These include reference to the fair values of
recent arm’s length transactions, involving the same instruments or other instruments that are substantially
the same, discounted cash flow analysis, and pricing models to reflect the issuer’s specific circumstances.
Where the Group’s management has elected to present fair value gains and losses on equity investments
in OCI, there is no subsequent reclassification of fair value gains and losses to profit or loss following the
32
Magmatic Resources Limited
ABN 32 615 598 322
Notes to the consolidated financial statements for the year
ended 30 June 2021
derecognition of the investment. Dividends from such investments continue to be recognised in profit or loss
as other income when the Group’s right to receive payments is established.
Impairment losses (and reversal of impairment losses) on equity investments measured at FVOCI are not
reported separately from other changes in fair value.
(ii) Impairment
The Group assesses at each balance date whether there is objective evidence that a financial asset or group
of financial assets is impaired. For trade and other receivables, the Group applies the simplified approach
permitted by AASB 9, which requires expected lifetime losses to be recognised from initial recognition of the
receivables. The expected credit losses on these financial assets are estimated using a provision matrix
based on the Group’s historical credit loss experience.
(o)
Exploration expenditure
Exploration expenditure is expensed to the statement of profit or loss as incurred and acquisition costs are
capitalised as noncurrent assets. A regular review is undertaken of each area of interest to determine the
appropriateness of continuing to carry forward costs in relation to that area of interest. Where uncertainty
exists as to the future viability of certain areas, the value of the area of interest is written off or provided
against. Due to the speculative nature, when exploration assets have been acquired through equity
instruments, the fair value of the asset cannot be measure reliably, therefore the fair value of the equity
instrument is used to determine the fair value of the asset.
Impairment testing of exploration and evaluation expenditure
Exploration and evaluation expenditure is assessed for impairment if sufficient data exists to determine
technical feasibility and commercial viability or facts and circumstances suggest that the carrying amount
exceeds the recoverable amount.
Exploration and evaluation expenditure is tested for impairment when any of the following facts and
circumstances exist:
The term of exploration licence in the specific area of interest has expired during the reporting period or
will expire in the near future, and is not expected to be renewed;
Substantive expenditure on further exploration for and evaluation of mineral resources in the specific
area are not budgeted nor planned;
Exploration for and evaluation of mineral resources in the specific area have not led to the discovery of
commercially viable quantities of mineral resources and the decision was made to discontinue such
activities in the specified area; or
Sufficient data exist to indicate that, although a development in the specific area is likely to proceed, the
carrying amount of the exploration and evaluation asset is unlikely to be recovered in full from successful
development or by sale.
Where a potential impairment is indicated, an assessment is performed for each area of interest. The Group
performs impairment testing in accordance with accounting policy note 1(n) (ii).
(p)
Share based payments
Equity-settled share-based payment transactions to Directors and seed capitalists for services are
measured in reference to the fair value of equity instruments granted.
Equity-settled share-based payments in return for goods and services are measured at fair value of the
goods and services received, except where the fair value cannot be estimated reliably, in which case they
are measured at the fair value of the equity instruments.
The fair value of options and performance rights with non-vesting conditions and no service conditions
attached issued to Directors, seed capitalists and suppliers, are valued with a Black-Scholes pricing model.
The fair value is measured at the grant date of the equity instrument and is recognised in equity in the share-
based payment reserve. The number of instruments expected to vest is estimated based on the non-market
vesting conditions. The total expense is recognised at the date of grant of the options and rights.
33
Magmatic Resources Limited
ABN 32 615 598 322
Notes to the consolidated financial statements for the year
ended 30 June 2021
(q)
Issued capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a
deduction, net of tax, from the proceeds.
(r)
Goods and Services Tax ('GST') and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST
incurred is not recoverable from the tax authority. In this case it is recognised as part of the cost of the
acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount
of GST recoverable from, or payable to, the tax authority is included in other receivables or other payables
in the statement of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or
financing activities which are recoverable from, or payable to the tax authority, are presented as operating
cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to,
the tax authority.
(s)
Deferred tax
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is
probable that future taxable amounts will be available to utilise those temporary differences and losses.
The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the
extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the
deferred income tax asset to be utilised.
Unrecognised deferred income tax assets are reassessed at each reporting date and are recognised to the
extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.
(t)
In-specie distribution
The share capital of the Company is reduced by the fair value of the investment that was returned to
shareholders.
(u)
Critical accounting estimates and judgements
The preparation of these financial statements requires the use of certain critical accounting estimates.
It also requires management to exercise its judgement in the process of applying the Group’s accounting
policies.
Judgements:
Leases – determining the lease term.
The Group has in place a number of leases of property and equipment with terms that can be renewed or
extended, or, where no formal extension or renewal option exist, there is a practice of renewing or extending
the lease.
In determining the lease term, management is required to determine:
• Whether there is an actual or implied extension or renewal option. An implied extension or renewal option
will exist if both the lessee and lessor would incur a more than insignificant penalty if the lease were not
extended or renewed; and
• Whether the Group is reasonably certain to exercise any actual or implied extension options, taking into
account all facts and circumstances relating to the lease.
Impact of Coronavirus (COVID-19) pandemic
Judgement has been exercised in considering the impacts that the Coronavirus (COVID-19) pandemic has
had, or may have, on the company based on known information. This consideration extends to the nature
34
Magmatic Resources Limited
ABN 32 615 598 322
Notes to the consolidated financial statements for the year
ended 30 June 2021
of the products and services offered, customers, supply chain and staffing. Other than as addressed in
specific notes, there does not currently appear to be either any significant impact upon the financial
statements or any significant uncertainties with respect to events or conditions which may impact the
company unfavourably as at the reporting date or subsequently as a result of the Coronavirus (COVID-19)
pandemic. The areas involving a higher degree of judgement or complexity, or areas where assumptions
and estimates are significant to the financial statements are:
Impairment of Exploration and Evaluation Asset
Determining the recoverability of exploration and evaluation expenditure capitalised in accordance with the
Group’s accounting policy (refer Note 1(p)), requires judgements as to future events and circumstances, in
particular, whether successful development and commercial exploitation, or alternatively sale, of the
respective areas of interest will be achieved. If, after having capitalised the expenditure under accounting
policy 1(p), a judgement is made that recovery of the expenditure is unlikely, an impairment loss is recorded
in the income statement in accordance with accounting policy 1(p). The carrying amounts of exploration and
evaluation assets are set out in Note 8.
Share-based payments
The Group measures the cost of equity-settled transactions by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value is determined by using the Black-Scholes
model taking into account the terms and conditions upon which the instruments were granted. The
accounting estimates and assumptions relating to equity-settled share-based payments would have no
impact on the carrying amounts of assets and liabilities within the next annual reporting period but may
impact profit or loss and equity. Refer to note (q).
Note 2: Other income
Gain on disposal of AGC
AGC shared services agreement income
NSW Government Co-operative Drilling Programme grant
Contract discontinuance fee received
COVID 19 Cash Boost subsidy
Office sub-lease
Interest income
Other
22
Note 3: Expenses
Corporate and administration expenses
Depreciation
Director and Company Secretarial Fees
Consulting Fees
Investor Relations
Legal Fees
Travel
Employee Expenses
Rental Expense
Contract discontinuance settlements
Other
Exploration and evaluation expenses
Exploration expenses incurred
Net exploration and evaluation expense
Consolidated
2021
$
6,243,740
32,168
35,250
-
103,995
1,905
14,205
2,211
6,433,474
25,986
220,487
100,000
40,141
65,272
11,396
292,756
29,983
-
471,506
1,257,527
2020
$
-
-
-
100,000
96,005
22,041
15,881
20,567
254,494
38,438
212,570
153,115
89,704
89,281
90,058
235,648
45,350
60,000
375,274
1,389,438
3,135,379
3,135,379
1,466,443
1,466,443
35
Magmatic Resources Limited
ABN 32 615 598 322
Notes to the consolidated financial statements for the year
ended 30 June 2021
Note 4: Income tax
(a) Income tax benefit
The prima facie income tax expense on pre-tax accounting result from
operations reconciles to the income tax benefit in the financial
statements as follows:
Accounting profit/(loss) from continuing operations before
income tax
At the statutory income tax rate of 26% (2020: 27.5%)
Add
- Non-assessable income
- Share based payments
- Deductible equity costs
- Capital gain on exit from consolidated group
- Capital losses utilised
- Non-deductible expenses
- Tax loss not brought to account
Income tax (benefit)
Accounting profit/(loss from Other Comprehensive Income before income
tax
At the statutory income tax rate of 26% (2020: 27.5%)
Add
- Temporary differences not brought to account
Income tax (benefit) reported in the statement of comprehensive income
(b) Unrecognised deferred tax balances
The following deferred tax assets have not been brought to account
Deferred tax assets comprise:
Accruals
Operating lease
Employee entitlements
Share issues & capital costs
Exploration expenditure
Losses available for offset against future income – revenue
Deferred tax liabilities comprise:
Prepayments
Investments
Capitalised expenditure deductible for tax purposes
Consolidated
2021
$
2020
$
1,188,014
308,884
(4,318,026)
(1,187,457)
(1,357,256)
152,890
(68,158)
51,297
(51,297)
50,717
912,923
-
(338,526)
87,947
(87,947)
-
6,614
489
39,301
186,296
-
3,407,824
3,640,524
10,227
205,208
-
215,435
(26,401)
494,034
(52,991)
-
-
1,422
771,393
-
-
-
-
-
-
4,400
78
27,092
218,786
40,963
2,274,005
2,565,324
9,051
-
1,081
10,132
Net unrecognised deferred tax assets
3,425,089
2,555,192
Deferred tax assets have not been recognised in respect of these items because it is not certain that future taxable profit
will be available against which the Group can utilise the benefit thereof.
Tax Losses
As at 30 June 2021, the Consolidated Entity has $13,107,014 (2020: $8,269,109) of taxable losses and $200,607 of
capital losses (2020: $397,904) that are available for offset against future taxable profits of the consolidated entity, subject
to the loss recoupment requirements in the Income Tax Assessment Act 1997. No deferred tax assets have been
recognised in the Statement of Financial Position in respect of the amount of these losses, as it is not presently probable
future taxable profits will be available against which the Company can utilise the benefit.
36
Magmatic Resources Limited
ABN 32 615 598 322
Notes to the consolidated financial statements for the year
ended 30 June 2021
Demerger of AGC and tax consolidations
Prior to the demerger of AGC on 30 December 2020, AGC ceased to be a wholly owned subsidiary of the Magmatic tax
consolidated group as at 30 December 2020, and therefore exited the tax consolidated group as at that date. The
expenses for AGC for the period to 30 December 2020 will be included in Magmatic’s tax return for the year ended 30
June 2021. The ATO have been notified of the exit.
Magmatic has applied to the ATO for a binding Class Ruling to confirm that the demerger will qualify for demerger relief
for income tax purposes. The tax provision has been calculated on the basis that the ATO confirm that the demerger
qualifies for relief, such that Magmatic will not be subject to tax on the gain on disposal of the shares in AGC as part of
the in-specie capital return to shareholders.
Note 5: Profit / (Loss) per share
Total basic profit / (loss) per share
Total fully diluted profit / (loss) per share
The profit / (loss) and weighted average number of ordinary shares
used in the calculation of basic profit / (loss) per share is as follows:
Net profit / (loss) for the period
The weighted average number of ordinary shares
Options outstanding at year end
Fully diluted total weighted average securities on issue
Note 6: Segment information
Consolidated
2021
$
2020
$
0.0058
0.0042
(0.0302)
(0.0199)
1,188,014
(4,318,026)
205,768,090
142,824,641
75,908,558
74,035,708
281,676,648
216,860,349
AASB 8 requires operating segments to be identified on the basis of internal reports about components of the Consolidated
Entity that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segment and
to assess its performance.
AASB 8 “Operating Segments’” states that similar operating segments can be aggregated to form one reportable segment.
Following incorporation, the Company acquired Modeling Resources Pty Ltd and Landslide Investments Pty Ltd. The
Group has one reportable operating segment being gold exploration projects in Australia.
Note 7: Cash and cash equivalents
Cash at bank and on hand
Consolidated
2021
$
2020
$
6,122,271
6,122,271
4,234,820
4,234,820
(Refer to Note 13(f) which contains risk exposure analysis for cash and cash equivalents)
Note 8: Exploration project acquisition costs
Opening balance
Project acquisition costs
Impairment of acquired exploration projects*
Acquisition costs in respect of areas of
interest in the exploration phase
Consolidated
2021
$
1,628,350
-
(260,000)
1,368,350
2020
$
1,628,350
-
-
1,628,350
37
Magmatic Resources Limited
ABN 32 615 598 322
Notes to the consolidated financial statements for the year
ended 30 June 2021
*$260,000 was impaired during the 2021 financial year in relation to the Mt Venn area of interest after the relevant
exploration licences were surrendered in June 2021.
Exploration expenditure is expensed to the statement of profit or loss as incurred and acquisition costs are capitalised as
non-current assets. A regular review is undertaken of each area of interest to determine the appropriateness of continuing
to carry forward costs in relation to that area of interest. Where uncertainty exists as to the future viability of certain areas,
the value of the area of interest is written off or provided against.
The carrying value of capitalised exploration expenditure is assessed for impairment at each area of interest whenever
facts and circumstances suggest that the carrying amount of the asset may exceed its recoverable amounts.
An impairment exists when the carrying amount of an asset or area of interest exceeds its estimated recoverable amount.
The asset or area of interest is then written down to its recoverable amount. Any impairment losses are recognised in the
profit or loss account.
Note 9: Financial assets held at fair value through other comprehensive income
Investments
Opening balance
Investment in AGC retained at listing (5,367,594 shares)
Revaluation to fair market value
Closing balance
Note 10: Trade and other payables
Current Trade and other payables
Trade creditors *
Other creditors
Goods and services tax payable
* Trade payables are non-interest bearing and are normally paid on 30 day terms.
Note 11: Issued capital
(a) Ordinary shares issued
Consolidated
2021
$
-
1,127,519
(338,256)
789,263
2020
$
-
-
-
-
Consolidated
2021
$
817,690
180,732
1,084
999,506
2020
$
135,559
153,228
15,850
304,637
Consolidated
2021
$
2020
$
219,659,088 (2020: 173,115,298) ordinary shares
14,580,282
15,071,988
Holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote
per share at shareholders’ meetings. In the event of winding up of the parent entity, ordinary shareholders rank after
all creditors and are fully entitled to any proceeds on liquidation.
38
Magmatic Resources Limited
ABN 32 615 598 322
Notes to the consolidated financial statements for the year
ended 30 June 2021
(b) Movements in ordinary share capital:
Date
Balance as at 30 June 2019
14 October 2019
23 October 2019
30 October 2019
25 November 2019
25 November 2019
6 January 2020
20 February 2020
4 March 2020
18 May 2020
20 May 2020
Balance as at 30 June 2020
Details
North Iron Cap Discontinuance Settlement
Tranche 1 Share Placement
Class ‘B’ Performance Shares Issue
Tranche 2 Share Placement
Options exercised at $0.03
Options exercised at $0.10
Share Placement
Options exercise at $0.30
Options exercised at $0.10
Options exercised at $0.30
Capital Raising Expenses
Balance as at 30 June 2020
18 November 2020
22 December 2020
23 December 2020
29 December 2020
8 February 2021
12 March 2021
12 March 2021
17 May 2021
11 June 2021
Options exercised at $0.10
AGC in-specie distribution to shareholders
Options exercised at $0.10
Options exercised at $0.10
Options exercised at $0.0722
Options exercised at $0.0722
Share Placement at $0.12 per share
Options exercised at $0.0722
Options exercised at $0.0722
Capital Raising Expenses
Number of
shares
117,242,568
1,000,000
10,375,000
7,440,000
17,125,000
2,000,000
306,433
16,666,667
12,593
17,000
930,037
173,115,298
173,115,298
305,000
326,669
1,662,250
10,000
250,000
41,666,670
2,000,000
323,201
$
6,733,855
110,000
830,000
1,104,000
1,370,000
60,000
30,644
5,000,000
3,778
1,700
279,011
(451,000)
15,071,988
15,071,988
30,500
(4,872,481)
32,667
166,225
722
18,050
5,000,000
144,400
23,336
(1,035,125)
Balance as at 30 June 2021
(c) Movements in share options
Listed Options to acquire ordinary fully
paid shares at $0.30 on or before 17
May 2020:
Beginning of the financial year
Issued during the year
Converted during the year
Expired during the year
Balance at end of financial year
(3) Listed Options to acquire ordinary
fully paid shares at $0.0722 on or
before 30 August 2021:
Beginning of the financial year
Issued during the year
Converted during the year
Expired during the year
Balance at end of financial year
219,659,088
14,580,282
2021
Weighted
average
exercise price
2020
Weighted
average
exercise price
Number of
Options
Number of
Options
-
-
-
-
-
-
-
-
-
-
17,980,613
-
(942,630)
(17,037,983)
-
26,535,708
-
(2,877,120)
-
23,658,588
0.10
-
0.0944
-
0.0722
26,859,141
-
(323,433)
-
26,535,708
0.30
-
0.30
0.30
-
0.10
-
0.10
-
0.10
39
Magmatic Resources Limited
ABN 32 615 598 322
Notes to the consolidated financial statements for the year
ended 30 June 2021
2021
2020
Number of
Options
Weighted
average
exercise price
Number of
Options
Weighted
average
exercise price
(1) Unlisted Options to acquire ordinary
fully paid shares on or before
11 May 2020:
Beginning of the financial year
Issued during the year
Expired during the year
Balance at end of financial year
Balance at end of financial year
(4) Unlisted Options to acquire
ordinary fully paid shares on or before
14 October 2022:
Beginning of the financial year
Issued during the year
Converted during the year
Expired during the year
Balance at end of financial year
(5) Unlisted Options to acquire
ordinary fully paid shares on or before
30 November 2022:
Beginning of the financial year
Issued during the year
Converted during the year
Expired during the year
Balance at end of financial year
(6) Unlisted Options to acquire
ordinary fully paid shares on or before
31 January 2023:
Beginning of the financial year
Issued during the year
Converted during the year
Expired during the year
Balance at end of financial year
(7) Unlisted Options to acquire
ordinary fully paid shares on or before
12 February 2023:
Beginning of the financial year
Issued during the year
Converted during the year
Expired during the year
Balance at end of financial year
(8) Unlisted Options to acquire
ordinary fully paid shares on or before
30 September 2023:
Beginning of the financial year
Issued during the year
Converted during the year
Expired during the year
Balance at end of financial year
-
-
-
-
-
-
-
-
-
-
2,500,000
-
(2,500,000)
-
-
3,000,000
-
-
-
3,000,000
30,000,000
-
(2,000,000)
-
28,000,000
14,500,000
-
-
-
14,500,000
2,000,000
-
-
-
2,000,000
-
750,000
-
-
750,000
0.10
-
-
-
0.0722
0.1426
-
0.0722
-
0.1179
0.4431
-
-
-
0.1252
0.5540
-
-
-
0.5262
-
0.2920
-
-
0.2642
-
3,000,000
-
-
3,000,000
-
30,000,000
-
-
30,000,000
-
14,500,000
-
-
14,500,000
-
2,000,000
-
-
2,000,000
-
-
-
-
-
0.205
-
0.205
-
-
-
0.10
-
-
0.10
-
0.1426
-
-
0.1426
-
0.4431
-
-
0.4431
-
0.5540
-
-
0.5540
-
-
-
-
-
40
Magmatic Resources Limited
ABN 32 615 598 322
Notes to the consolidated financial statements for the year
ended 30 June 2021
2021
2020
Number of
Options
Weighted
average
exercise price
Number of
Options
Weighted
average
exercise price
(9) Unlisted Options to acquire
ordinary fully paid shares on or before
28 May 2024:
Beginning of the financial year
Issued during the year
Converted during the year
Expired during the year
Balance at end of financial year
-
4,000,000
-
-
4,000,000
-
0.2062
-
-
0.2062
-
-
-
-
-
-
-
-
-
-
(1) Unlisted Options exercisable at a price which is the greater of $0.20 or a 5% discount to the 20 day volume
weighted average price of shares on ASX. On the assumption that the Options will be exercised on expiry, a Monte
Carlo simulation has been prepared in order to assess the higher of the 5% discount to the 20 VWAP or 20 cents
for the Options at expiry for the Tranche I, Tranche 2 and Tranche 3 Options. The following exercise prices result:
Tranche 1: 20 cents (20 cents was the higher of the two) Monte valuation =19.3 cents. These options have expired.
Tranche 2: 20 cents (20 cents was the higher of the two) Monte valuation = 19.7 cents. These options have expired.
Tranche 3: 20.5 cents (5% discount to the 20 Day VWAP was higher of the two) These options have expired.
(2) During the 2019 financial year, the Group issued options with the fair value of $42,898 to Element 25 Limited
(formerly Montezuma) which vested immediately. The options were valued using a Black-Scholes option pricing
model using the following inputs:
Grant Date
Share Price
on Grant Date
Exercise
Price
Expected
Volatility
Option
Life
Dividend
Yield
Interest
Rate
Fair Value per
Option
7 May 2019
These options were all exercised during the previous year.
$0.025
$0.03
95%
5.12 years
0.00%
1.07%
$0.0214
(3) During the 2019 financial year, the Company announced a rights issue where 1 free attaching option would be
issued for every one share subscribed for, resulting in 24,859,141 free attaching options issued. In addition to
this, 2,000,000 options were issued to the broker as part of the transaction. The fair value of the service provided
was not able to be estimated, therefore a Black-Scholes model was used to fair value these options using the
following inputs:
Grant Date
Share Price
on Grant Date
Exercise
Price
Expected
Volatility
Option
Life
Dividend
Yield
Interest
Rate
Fair Value per
Option
30 July 2018
The share-based payment expense of $45,148 has been offset against issued capital as a capital raising cost.
2,877,120 of these options were exercised during the year (2020: 323,433 were exercised).
3.09 years
$0.022
$0.053
0.96%
0.00%
$0.10
95%
(4) During the previous year, the Group issued options with the fair value of $126,398 to Blue Cap Mining Pty Ltd
as settlement of a contract discontinuance which vested immediately. The options were valued using a Black-
Scholes option pricing model using the following inputs:
Grant Date
Share Price
on Grant Date
Exercise
Price
Expected
Volatility
Option
Life
Dividend
Yield
Interest
Rate
Fair Value per
Option
11 October 2019
$0.075
$0.10
100%
3.011 years
0.00%
0.68%
$0.042
(5) During the previous year, the Group issued options with the fair value of $1,187,520 to the Company’s
corporate adviser, two non-executive directors and its company secretary as consideration for their
engagement which vested immediately. 20,000,000 of these options were valued at $140,000 based on a fixed
percentage of funds the corporate advisers raised while 10,000,000 of the options issued to the non-executive
41
Magmatic Resources Limited
ABN 32 615 598 322
Notes to the consolidated financial statements for the year
ended 30 June 2021
directors and the company secretary were valued using a Black-Scholes option pricing model using the
following inputs:
Grant Date
22 November
2019
29 November
2019
Share Price
on Grant Date
Exercise
Price
Expected
Volatility
Option
Life
Dividend
Yield
Interest
Rate
Fair Value
per Option
$0.185
$0.10
100%
3.025 years
0.00%
0.68%
$0.0134
$0.180
$0.10
100%
3.005 years
0.00%
0.68%
$0.097
The share-based payment expense of $140,000 has been offset against issued capital as a capital raising cost.
(6) During the previous year, the Group issued 13,500,000 options with the fair value of $1,709,438 in
accordance with the Company’s employee share ownership plan to certain key management personnel which
vest progressively throughout the period during which they can be exercised but lapse if their employment is
terminated. The options were valued using a Black-Scholes option pricing model using the following inputs:
Grant Date
Share Price
on Grant Date
Exercise
Price
Expected
Volatility
Option
Life
Dividend
Yield
Interest
Rate
Fair Value
per Option
23 January 2020
$0.265
$0.37935
100%
3.025 years
0.00%
0.73%
23 January 2020
$0.265
$0.63225
100%
3.025 years
0.00%
0.73%
$0.135
$0.109
(6) During the previous year, the Group issued 1,000,000 options with the fair value of $126,371 to the
Company’s investor relations consultancy firm as part of their engagement terms which vest immediately but
lapse if their engagement is terminated. The options were valued using a Black-Scholes option pricing model
using the following inputs:
Share Price
on Grant Date
Exercise
Price
Expected
Volatility
Option
Life
Dividend
Yield
Interest
Rate
Fair Value
per Option
$0.180
$0.37935
100%
3.025 years
0.00%
0.73%
$0.135
$0.180
$0.63225
100%
3.025 years
0.00%
0.73%
$0.109
Grant Date
4 December
2019
4 December
2019
(7) During the previous year, the Group issued 2,000,000 to the broker who managed the $5,000,000 share
placement that occurred that year. The fair value of the service provided was not able to be estimated,
therefore a Black-Scholes model was used to fair value these options using the following inputs:
Share Price
on Grant Date
Exercise
Price
Expected
Volatility
Option
Life
Dividend
Yield
Interest
Rate
Fair Value
per Option
$0.450
$0.5262
100%
3.01 years
0.00%
0.73%
$0.213
Grant Date
11 February
2020
42
Magmatic Resources Limited
ABN 32 615 598 322
Notes to the consolidated financial statements for the year
ended 30 June 2021
(8) During the year, the Group issued 750,000 options with the fair value of $90,338 in accordance with the
Company’s employee share ownership plan to certain key management personnel which vest progressively
throughout the period during which they can be exercised but lapse if their employment is terminated. The
options were valued using a Black-Scholes option pricing model using the following inputs:
Grant Date
24 September
2020
25 September
2020
Share Price
on Grant Date
Exercise
Price
Expected
Volatility
Option
Life
Dividend
Yield
Interest
Rate
Fair Value
per Option
$0.215
$0.292
100%
3.02 years
0.00%
0.178%
$0.119
$0.220
$0.292
100%
3.01 years
0.00%
0.182%
$0.123
(9) During the year, the Group issued 4,000,000 to the broker who managed the $5,000,000 share placement
that occurred during the year. The fair value of the service provided was not able to be estimated, therefore a
Black-Scholes model was used to fair value these options using the following inputs:
Share Price
on Grant Date
Exercise
Price
Expected
Volatility
Option
Life
Dividend
Yield
Interest
Rate
Fair Value
per Option
$0.150
$0.2062
100%
3.25 years
0.00%
0.128%
$0.084
Grant Date
26 February
2021
Note 12: Reserves
Capital Restructure reserve
Opening balance
Expense for the year
Closing balance
Share-based payment reserve
Opening balance
Share based acquisition cost
Performance share conversion
Share based expense for year
Share based capital raising costs
Fair Value Other Comprehensive Income ("FVOCI") Reserve movement
Consolidated
2021
$
2020
$
250
-
250
250
-
250
Consolidated
2021
$
3,752,985
-
-
588,039
760,123
(338,256)
2020
$
3,156,499
-
(1,104,000)
1,700,486
-
-
Closing balance
4,762,891
3,752,985
Nature of reserves:
(a) Capital restructure reserve
The capital restructure reserve arises from the acquisition of Modeling Resources Pty Ltd
(b) Share-based payment reserve
This reserve records the value of equity instruments issued to directors, employees and suppliers as recognition for
services provided.
43
Magmatic Resources Limited
ABN 32 615 598 322
Notes to the consolidated financial statements for the year
ended 30 June 2021
Note 13: Financial instruments
(a) Capital risk management
Prudent capital risk management implies maintaining sufficient cash and marketable securities to ensure continuity
of tenure to exploration assets and to be able to conduct the Group’s business in an orderly and professional
manner. The Board monitors its future capital requirements on a regular basis and will when appropriate consider
the need for raising additional equity capital or to farm-out exploration projects as a means of preserving capital.
The Board currently has a policy of not entering into any debt arrangements.
(b) Categories of financial instruments
The Group’s principal financial instruments comprise of cash and short-term deposits. The main purpose of these
financial instruments is to raise finance for the Group’s operations. The Group has various other financial assets
and liabilities such as receivables and trade payables, which arise directly from its operations. It is, and has been
throughout the year, the Group’s policy that no trading in financial instruments shall be undertaken during the year.
(c) Financial risk management objectives
The Group is exposed to market risk (including interest rate risk and equity price risk), credit risk and liquidity risk.
The main risks arising from the Group’s financial instruments are interest rate risk and credit risk. The Board
reviews and agrees policies for managing each of these risks and they are summarised below.
(d) Market risk
Equity price risk sensitivity analysis
There has been no change to the Group’s exposure to market risks or the manner in which it manages and
measures the risk from the previous period.
(i) Interest rate risk management
All cash balances attract a floating rate of interest. Excess funds that are not required in the short term are placed
on deposit for a period of no more than 3 months. The Group’s exposure to interest rate risk and the effective
interest rate by maturity periods is set out below.
Interest rate sensitivity analysis
As the Group has no interest bearing borrowings, its exposure to interest rate movements is limited to the amount
of interest income it can potentially earn on surplus cash deposits.
At 30 June 2021, if interest rates had changed by + 50 basis points and all other variables were held constant, the
Group’s loss would have been $19,285 (2020: $9,465) lower as a result of higher interest income on cash and cash
equivalents. If interest rates dropped on average – 50 basis points then the Group’s loss would have increased the
by $19,285 (2020: $9,465).
(e) Credit risk management
Credit risk relates to the risk that counterparties will default on their contractual obligations resulting in financial
loss to the Group. The Group has adopted a policy of only dealing with credit worthy counterparties and obtaining
sufficient collateral or other security where appropriate, as a means of mitigating the risk of financial loss from any
defaults.
44
Magmatic Resources Limited
ABN 32 615 598 322
Notes to the consolidated financial statements for the year
ended 30 June 2021
(f) Liquidity risk management
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities to ensure
continuity of tenure to exploration assets and to be able to conduct the Group’s business in an orderly and
professional manner. Cash deposits are only held with major financial institutions.
2021
Weighted
Average
Interest
Rate
Less than
1 month
1-3
months
3 months
– 1 year
5 + years
Financial assets
Cash and cash equivalents – non - interest bearing
Cash and cash equivalents – interest bearing
Trade and other receivables
n/a
0.27%
n/a
$
$
122,261
1,000,010
4,945
1,127,216
-
5,000,000
-
5,000,000
$
-
-
-
-
Financial liabilities
Trade and other payables
Lease Liabilities
2020
Financial assets
Cash and cash equivalents – non - interest bearing
Cash and cash equivalents – interest bearing
Trade and other receivables
n/a
0.35%
n/a
$
-
-
5,276
5,276
-
25,393
25,393
n/a
5%
931,462
4,166
935,628
34,332
12,497
46,829
33,712
33,725
67,437
Weighted
Average
Interest
Rate
Less than
1 month
1-3
months
3 months
– 1 year
5 + years
$
$
84,268
-
73,677
157,945
-
4,150,552
-
4,150,552
$
-
-
-
-
$
-
-
-
-
Financial liabilities
Trade and other payables
Lease Liabilities
n/a
5%
206,119
4,100
210,219
41,417
12,300
53,717
57,101
22,800
79,901
-
76,319
76,319
The directors consider that the carrying value of the financial assets and financial liabilities are recognised in the
consolidated financial statements approximate their fair values.
Note 14: Commitments and contingencies
In order to maintain an interest in the exploration tenements in which the Group is involved, the Group is committed to
meet the conditions under which the tenements were granted. The timing and amount of exploration expenditure
commitments and obligation of the Group are subject to the minimum expenditure commitments over the life of the
licenses, required as per the Mining Act 1978, as amended, and may vary significantly from the forecast based upon the
results of the work performed which will determine the prospectivity of the relevant area of interest. Currently, the minimum
expenditure commitment for the granted tenements are approximately $1,574,325 (2020: $1,397,847).
Contingent liabilities
From time to time the Company may be party to claims from suppliers and service providers arising from operations in
the ordinary course of business.
As at the date of this report there are no claims or contingent liabilities that are expected to materially impact, either
individually or in aggregate, the Company’s financial position or results from operations, other than as set out below.
45
Magmatic Resources Limited
ABN 32 615 598 322
Notes to the consolidated financial statements for the year
ended 30 June 2021
Note 15: Key management personnel disclosures
(a) Directors
At the date of this report the directors of the Company are:
D Richardson – Executive Chairman (elected Chairman 3 February 2020)
P Duerden – Managing Director (appointed 3 February 2020)
D Berrie – Non-Executive Director and Joint Company Secretary
D Flanagan – Non-Executive Director (appointed 28 October 2019, resigned 4 February 2021)
There were no changes of the key management personnel after the reporting date and the date the financial report
was authorised for issue.
(b) Key management personnel
At the date of this report the other Key management personnel of the Company are:
M Franklin – Chief Financial Officer
(c) Key management personnel compensation
Short-Term
Post-employment
Share-based payments
Termination benefits
Consolidated
2021
$
656,138
84,126
502,496
-
1,242,760
2020
$
533,872
87,708
997,936
-
1,619,516
Detailed remuneration disclosures of directors and key management personnel are in pages 18 to 20 of this report.
There were no loans to individuals or members of the key management personnel during the financial year or the
previous financial year.
During the financial year the daughter of Mr Berrie provided casual administrative services to the Company to the value
of $500. These services were provided on normal commercial terms and conditions.
Note 16: Subsidiaries
Name of entity
Country of
incorporation
Class of shares
Equity holding
Modeling Resources Pty Ltd
Landslide Investments Pty Ltd
Australia
Australia
Ordinary
Ordinary
2021
%
100
100
2020
%
100
100
46
Magmatic Resources Limited
ABN 32 615 598 322
Notes to the consolidated financial statements for the year
ended 30 June 2021
Note 17: Reconciliation of loss after income tax to net cash outflow from operating activities
a) Reconciliation of loss from ordinary activities after income
tax to net cash outflow from operating activities
Net profit / (loss) for the year after income tax
1,188,014
(4,318,026)
Consolidated
2021
$
2020
$
Profit on disposal of AGC
Share based payment expense
Finance cost (equity)
Share issue costs
Depreciation
ROU Asset Amortisation
Exploration asset impairments
Movements in working capital
(Increase) / Decrease in other receivables
(Increase) in prepayments
Increase / (Decrease) in trade and other payables
Net cash outflows from operating activities
b) Non-cash financing and investing activities
(6,243,740)
588,039
-
-
25,986
46,470
260,000
-
1,700,486
-
-
38,438
46,094
-
216,212
(6,423)
719,867
1,700
(29,762)
(424,221)
(3,205,575)
(2,985,291)
There were no non-cash financing and investing activities in the financial year ended 30 June 2021.
Note 18: Parent Entity Disclosures
Financial position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Financial performance
Profit / (Loss) for the year
Other comprehensive income/(loss)
Total comprehensive income/(loss)
2021
$
6,102,862
1,605,472
7,708,334
2020
$
4,219,753
1,631,034
5,850,787
189,271
189,271
99,899
99,899
7,519,063
5,750,888
2021
$
2020
$
14,265,431
4,717,743
(11,464,111)
15,117,136
3,707,837
(13,074,085)
7,519,063
5,750,888
4,377,204
(338,256)
4,038,948
(4,551,182)
182,975
(4,368,207)
47
Magmatic Resources Limited
ABN 32 615 598 322
Notes to the consolidated financial statements for the year
ended 30 June 2021
Note 19: Events after the reporting date
During the first quarter of the 2022 financial year, the Company raised a further $2,514,561 from option holders who
exercised 34,827,710 options.
On 31 January 2020, the World Health Organisation (WHO) announced a global health emergency because of a new
strain of coronavirus originating in Wuhan, China (COVID-19 outbreak) and the risks to the international community as
the virus spreads globally beyond its point of origin. Because of the rapid increase in exposure globally, on 11 March
2020, the WHO classified the COVID-19 outbreak as a pandemic.
The full impact of the COVID-19 outbreak continues to evolve at the date of this report. The Group is therefore uncertain
as to the full impact that the pandemic will have on its financial condition, liquidity, and future results of operations
during FY2022.
Management is actively monitoring the global situation and its impact on the Group's financial condition, liquidity,
operations, suppliers, industry, and workforce. Given the daily evolution of the COVID-19 outbreak and the global
responses to curb its spread, the Group is not able to estimate the effects of the COVID-19 outbreak on its results of
operations, financial condition, or liquidity for the 2022 financial year.
Note 20: Auditor’s remuneration
The auditors of the Group are BDO Audit (WA) Pty Ltd
Assurance services
BDO Audit (WA) Pty Ltd
Audit and review of financial statements
Total remuneration for audit services
Total auditor’s remuneration
Note 21: Fair Value Measurement
Consolidated
2021
$
2020
$
38,117
38,117
38,117
42,902
42,902
42,902
This note provides an update on the judgements and estimates in determining the fair values of the financial
instruments since the last annual financial report.
Fair Value Hierarchy
To provide an indication about the reliability of the inputs used in determining fair value. The Group classifies its
financial instruments into the three levels prescribed under accounting standards. An explanation of each level
follows underneath the table.
The following table presents the Group’s financial assets and financial liabilities measured and recognised at fair
value.
As at 30 June 2021
Level 1
$
Level 2
$
Level 3
$
Total $
Financial assets as FVOCI – Equity Securities
789,263
-
-
789,263
There were no transfers between levels during the year. The Group’s policy is to recognise transfers into and out of
the fair value hierarchy levels at balance date.
The fair value of the financial assets and liabilities held by the Group must be estimated for recognition, measurement
and /or disclosure purposes. The Group measures fair value by level, per the following fair value measurement
hierarchy:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
48
Magmatic Resources Limited
ABN 32 615 598 322
Notes to the consolidated financial statements for the year
ended 30 June 2021
Level 2: inputs other than quoted prices included within level 1 that are observable for the asset or the liability,
either directly (as prices) or indirectly (derived from prices); and
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
Valuation techniques used to determine fair values
The Group did not have any financial instruments that are recognised in the financial statements where their carrying
value differed from the fair value. The fair value of assets and liabilities are included at an amount at which the
instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation
sale. The carrying value of amounts of cash and short term trade and other receivables, trade payables and other
current liabilities approximate their fair value largely due to the short term maturities of these payments.
Financial assets at fair value through other comprehensive income – equity securities
The fair value of the equity holdings held in ASX companies are based on the quoted market prices from the ASX on
the last trading day prior to the period end.
Note 22: Asset disposal
On 18 September 2020 Magmatic announced
its intention to demerge its Moorefield Project
into its fully owned subsidiary AGC and then
list AGC separately on the ASX via an initial
public offering (IPO) to raise $10,000,000 by
issuing 50,000,000 new AGC shares at $0.20
each. This IPO closed fully subscribed on 18
December 2020 and AGC securities were
officially quoted on the ASX on 20 January
2021.
in AGC
shareholding
in consideration
Prior to the AGC IPO, on 31 December 2020,
issued Magmatic an additional
AGC
for
29,999,999 shares
taking
Magmatic’s Moorefield Project
Magmatic’s
to
30,000,000 shares representing 60% of the
total shares on issue on that date. Magmatic
then, also on 31 December 2020, distributed
to Magmatic shareholders on an in-specie
basis, 24,362,406 of these AGC shares,
retaining 5,637,594 shares which represented
11.275% of the 50 million total AGC shares on
issue.
Assets and liabilities of AGC at date of demerger
Assets
Cash and cash equivalents
Total assets demerged
Liabilities
Intercompany loan from Magmatic
Total liabilities demerged
Net assets / (liabilities) demerged
31 December
2020
-
-
243,740
243,740
(243,740)
Allocation of deemed fair value of AGC at demerger
Capital distribution
4,872,481
Fair value of Magmatic’s retained investment in AGC
1,127,519
Fair value at date of distribution
6,000,000
Gain on demerger
The fair value of AGC on 31 December 2020,
being $10,000,000, was calculated using the
AGC IPO issue price of $0.20 multiplied by the
50 million total AGC shares on issue at that
date. The 11.275% investment in AGC
retained by Magmatic
initially valued at
$1,127,519 using the same methodology.
Fair value of Magmatic’s interest in AGC
Net liabilities disposed of
Net profit on disposal before income tax
Income tax expense1
Gain on disposal after income tax
6,000,000
243,740
6,243,740
-
6,243,740
in-specie distribution
The demerger
is
accounted for as a reduction in equity by way
of a reduction in share capital of $4,872,481
calculated by multiplying the 24,362,406 AGC
share distributed to Magmatic shareholders by
the $0.20 AGC IPO issue price.
Key judgement: control and significant influence
In relation to AGC, the Group has determined it lost control of the
entity on 31 December 2020. Due to the Group retaining an 11.275%
minority interest, it was determined that the Group did not have
control or significant influence over AGC at that date and accordingly
AGC has been accounted for as an investment at fair value through
other comprehensive income as disclosed in note 21.
49
Magmatic Resources Limited
ABN 32 615 598 322
Directors’ declaration
1.
In the opinion of the directors of Magmatic Resources Limited (the “Company”):
a.
b.
c.
the accompanying financial statements and notes are in accordance with the Corporations Act 2001
including:
i. giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its performance
for the financial year then ended; and
ii. complying with Accounting Standards, Corporations Regulations 2001, professional reporting
requirements and other mandatory requirements.
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 financial statements and notes thereto are in accordance with International Financial Reporting
Standards issued by the International Accounting Standards Board.
2. This declaration has been made after receiving the declarations required to be made to the directors in
accordance with Section 295A of the Corporations Act 2001 for the year ended 30 June 2021.
This declaration is signed in accordance with a resolution of the Board of Directors.
D Richardson
Chairman
Perth, Western Australia
28 September 2021
50
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
INDEPENDENT AUDITOR'S REPORT
To the members of Magmatic Resources Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Magmatic Resources Limited (the Company) and its subsidiaries
(the Group), which comprises the consolidated statement of financial position as at 30 June 2021, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement
of changes in equity and the consolidated statement of cash flows for the year then ended, and notes
to the financial report, including a summary of significant accounting policies and the directors’
declaration.
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
Act 2001, including:
(i)
Giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its
financial performance for the year ended on that date; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
Report section of our report. We are independent of the Group in accordance with the Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance
with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters.
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.
51
Accounting for the demerger of Australian Gold Copper Limited (“AGC”)
Key audit matter
How the matter was addressed in our audit
As disclosed in Note 22, Australian Gold Copper Limited
Our procedures included, but were not limited to:
(“AGC”) held the Group’s Moorefield Project and
during the period, AGC was demerged from the Group,
with the Group retaining an 11.275% interest.
Demergers of this nature are not common transactions
for the Group, the accounting is complex and resulted
in a net gain within profit or loss of $6,243,740 and a
reduction in contributed equity of $4,872,481.
(cid:127)
(cid:127)
(cid:127)
(cid:127)
Reviewing the implementation deed of the
demerger;
Assessing the determination of fair value of the
shares distributed;
Testing the mathematical accuracy of the
calculation of the net gain on demerger and the
capital distribution; and
Assessing the adequacy of the related disclosures
in Note 22 to the financial report.
Other information
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 30 June 2021, but does not include the
financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
52
Auditor’s responsibilities for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf
This description forms part of our auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 18 to 22 of the directors’ report for the
year ended 30 June 2021.
In our opinion, the Remuneration Report of Magmatic Resources Limited, for the year ended 30 June
2021, complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
BDO Audit (WA) Pty Ltd
Dean Just
Director
Perth, 28 September 2021
53
18.64%
7.54%
5.51%
%
0.00
0.28
0.76
13.03
85.92
100.00
Magmatic Resources Limited
ABN 32 615 598 322
Additional Shareholder Information
The following additional information is current as at 20 September 2021.
Corporate Governance:
The Company’s Corporate Governance Statement is available on the Company’s website at
www.magmaticresources.com/corporate-governance
Substantial Shareholders:
Holder Name
Bilingual Software Pty Ltd and D & R
Richardson
Gold Fields Australia Pty Ltd
Davthea Pty Ltd
Holding
% IC
47,442,571
19,200,000
14,029,044
Ordinary Shares – Range of Units:
Holdings Ranges
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
>100,000
Holders
43
214
231
790
264
1,542
Totals
There are 228 shareholders with less than a marketable parcel.
Total Units
4,619
719,053
1,939,481
33,169,236
218,654,409
254,486,798
Voting rights
Each fully paid ordinary share carries voting rights of one vote per share.
The top 20 holders of ordinary shares are:
Ranking
Holder
1
2
3
4
BILINGUAL SOFTWARE PTY LTD
GOLD FIELDS AUSTRALIA PTY LTD
DAVTHEA PTY LTD
MR MARC DAVID HARDING
MR DAVID RICHARDSON + MRS RYOKO RICHARDSON
MR NEVRES CRLJENKOVIC
CITICORP NOMINEES PTY LIMITED
BUDWORTH CAPITAL PTY LTD
MR MING YIU KO
SEASCAPE CAPITAL PTY LTD
WESTGATE CAPITAL PTY LTD
DUERDEN INVESTMENTS PTY TD
AG INVESTMENT SERVICES PTY LTD
KAOS INVESTMENTS PTY LIMITED
MR BINH LE
CRLJENKOVIC SUPER FUND PTY LTD
WOMBAT SUPER INVESTMENTS PTY LTD
GOSOJO PTY LTD
MRS MARISA MACKOW
SERCA SUPERFUND PTY LTD
Total
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Total remaining holders
Shares Held
36,668,823
19,200,000
14,029,044
12,085,000
10,367,502
9,940,000
4,239,614
4,000,000
4,000,000
4,000,000
4,000,000
3,984,782
3,451,754
2,450,000
2,000,000
1,780,000
1,760,000
1,665,000
1,580,000
1,509,234
142,710,753
111,776,405
%
14.41
7.54
5.51
4.75
4.07
3.91
1.67
1.57
1.57
1.57
1.57
1.57
1.36
0.96
0.79
0.70
0.69
0.65
0.62
0.59
56.08
43.92
54
Magmatic Resources Limited
ABN 32 615 598 322
Unquoted equity securities
Unquoted equity securities on issue as at 20 September 2021 was as follows:
- 3 Optionholders holding 8,000,000 options, exercisable at $0.0722, expiring 30 November 2022
- 1 Optionholder holding 3,000,000 options, exercisable at $0.0722, expiring 14 October 2022
- 2 Optionholders holding 4,000,000 options, exercisable at $0.2062, expiring 28 May 2024
- 3 Optionholders holding 8,000,000 options, exercisable at $0.2322, expiring 30 November 2022
- 2 Optionholders holding 750,000 options, exercisable at $0.2642, expiring 30 September 2023
- 6 Optionholders holding 9,700,000 options, exercisable at $0.3352, expiring 31 January 2023
- 2 Optionholders holding 2,000,000 options, exercisable at $0.5262, expiring 12 February 2023
- 6 Optionholder holding 4,800,000 options, exercisable at $0.5772, expiring 31 January 2023
Tenement Listing
Project Area
Wellington North – Duke
Myall
Parkes – Alectown
Wellington North – Bodangora
Parkes
Wellington North - Combo
Tenement Details
% Held
EL6178
EL6913
EL7424
EL7440
EL7676
EL8357
100
100
100
100
100
100
55