MANDRAKE RESOURCES LIMITED
A.B.N. 60 006 569 124
ANNUAL REPORT
FOR THE YEAR ENDED
30 June 2020
MANDRAKE RESOURCES LIMITED
ABN 60 006 569 124
ANNUAL REPORT 30 June 2020
Table of Contents
CORPORATE DIRECTORY ........................................................................................................................................................... 2
DIRECTORS’ REPORT................................................................................................................................................................... 3
REMUNERATION REPORT (AUDITED).................................................................................................................................... 11
AUDITOR’S INDEPENDENCE DECLARATION ....................................................................................................................... 16
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME............................ 17
CONSOLIDATED STATEMENT OF FINANCIAL POSITION .................................................................................................. 18
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY .................................................................................................. 19
CONSOLIDATED STATEMENT OF CASH FLOWS ................................................................................................................ 20
NOTES TO FINANCIAL REPORT FOR THE YEAR ENDED 30 June 2020........................................................................ 21
DIRECTORS’ DECLARATION ..................................................................................................................................................... 35
INDEPENDENT AUDITOR’S REPORT ...................................................................................................................................... 36
ASX ADDITIONAL INFORMATION ..................................................................................................................................... ......39
---- 1 ----
MANDRAKE RESOURCES LIMITED
ABN 60 006 569 124
ANNUAL REPORT 30 June 2020
CORPORATE DIRECTORY
Directors
Patrick Burke – Non-Executive Chairman
James Allchurch – Managing Director
Ben Phillips – Non-Executive Director
Company Secretary
Lloyd Flint
Registered office
Ground Floor,
24 Outram Street
West Perth WA 6005
Ph: +61 8 6189 1155
Website: www.mandrakeresources.com.au
Auditors
BDO Audit (WA) Pty Ltd
Level 1
38 Station Street
Subiaco WA 6008
Share Registry
Automic Registry Services
Level 2
267 St Georges Terrace
Perth WA 6000
Ph: 1300 288 664 (within Australia) +61 2 9698 5414
E: hello@automicgroup.com.au
Website: www.automicgroup.com.au
Bankers
National Australia Bank
1232 Hay Street
West Perth WA 6005
Securities Exchange Listing
Australian Securities Exchange Limited
ASX Code – MAN
---- 2 ----
MANDRAKE RESOURCES LIMITED
ABN 60 006 569 124
ANNUAL REPORT 30 June 2020
DIRECTORS’ REPORT
Your directors present their report of the Company and its controlled entities for the financial year ended 30 June 2020.
Information on Directors
The names of directors in office at any time during or since the end of the year are:
Patrick Burke
Qualifications
Experience
—
—
Non-Executive Chairman (appointed 4 August 2019)
LLB
— Mr Burke holds a Bachelor of Laws from the University of Western Australia. He has
extensive legal and corporate advisory experience and over the last 15 years has acted
as a Director for a large number of ASX, NASDAQ and AIM listed companies. His legal
expertise is in corporate, commercial and securities law in particular capital raisings and
mergers and acquisitions.
Mr Burke’s corporate advisory experience includes identification and assessment of
acquisition targets, strategic advice, deal structuring and pricing, funding, due diligence
and execution.
Interest in Shares and Options
—
940,000 ordinary fully paid shares; 6,000,000 unlisted options @ $0.03 expiring 28
November 2022
Directorships held in listed entities —
In the past 3 years, Patrick Burke has been a director of:
James Allchurch
Qualifications
Experience
Triton Minerals Limited (Deputy Chairman – appointed 22 July 2016)
Meteoric Resources Limited (Executive Chairman – appointed 1 December 2017)
Vanadium Resources Limited (Non-Executive Director - appointed 1 July 2017; resigned
29 November 2019)
Koppar Resources Limited (Non-Executive Director - appointed 5 February 2018;
resigned 31 December 2019)
Transcendence Technologies Limited (Non-Executive Director - appointed 28 September
2018; resigned 20 November 2019)
ATC Alloys Limited (Non-Executive Director – appointed 8 September 2014; resigned 1
June 2018)
Pan Pacific Petroleum NL (Non-Executive Director – appointed 22 November 2016;
resigned 13 November 2017).
— Managing Director (appointed 4 August 2019)
—
BSc (Hons)
— Mr Allchurch is a geologist with over 19 years’ experience in mineral exploration,
geotechnical assessment and mining operations. Mr Allchurch was the Managing
Director of ASX-listed company Monto Minerals which controlled copper mining and tin
exploration operations in Queensland and has held various Board positions over the
previous 10 years including ASX-listed Bligh Resources and various private entities. More
recently Mr Allchurch founded a Chilean cobalt mining exploration company, executing
detailed exploration activities prior to a cash sale to a US-based fund.
Mr Allchurch spent six years working at Ascent Capital and has considerable expertise in
the identification and assessment of resource projects over a broad range of
commodities in geographies including Europe, Australia, Africa and South America.
Interest in Shares and Options
—
2,500,000 Ordinary fully paid shares; 12,000,000 unlisted options @ $0.03 expiring 28
November 2022.
Directorships held in listed entities —
In the past 3 years, James Allchurch has been a director of:
Winchester Energy Limited – (Non-Executive Director – appointed 1 April 2020)
PepinNini Lithium Limited – (Non-Executive Director - appointed 1 July 2019; resigned
11 November 2019).
Ben Phillips
—
Non-Executive Director (appointed 18 April 2018)
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MANDRAKE RESOURCES LIMITED
ABN 60 006 569 124
ANNUAL REPORT 30 June 2020
Experience
— Mr Phillips has over 15 years’ experience providing consultation for a broad spectrum of
companies including Oil and Gas, Resources, MedTech and Defence. He has provided
services to departments ranging from R&D through to product commercialisation and
sales.
Interest in Shares and Options
—
Mr Phillips current role in corporate finance focuses on the structuring of ‘funding and
management’ for small cap companies both private and public. Mr Phillips has been
working at Ironside Capital since the company’s incorporation having previously held a
position at Merchant Corporate Finance.
Beneficially held through Deep36 Pty Ltd – 1,000,000 Ordinary fully paid shares, 500,000
Unlisted options @ $0.03 expiring 14 July 2022 escrowed for 24 months and 500,000
Unlisted options @ $0.03 expiring 14 July 2022
Beneficially held through Bob Alfred Pty Ltd – 2,310,500 Ordinary fully paid shares
(1,710,500 escrowed 24 months from quotation) and 1,710,500 Unlisted options @
$0.03 expiring 14 July 2022 escrowed for 24 months; 6,000,000 unlisted options @ $0.03
expiring 28 November 2022.
Directorships held in listed entities —
Nil
Graham Durtanovich
Qualifications
Experience
—
—
Non-Executive Director (appointed 2 June 2017; ceased 26 September 2019)
B.Ec, MBA, AppFin
— Mr Durtanovich has extensive financial management experience from a large private
enterprise with the construction industry, where he previously held the role of Chief
Financial Officer and was responsible for the financial administration, strategic planning,
risk analysis and Corporate Governance of the company.
Interest in Shares and Options
—
Mr Durtanovich holds a Bachelor of Economics, Graduate Diploma in Applied Finance
and Investments from FINSIA and a Masters of Business Administration.
As at date of resignation: beneficially held through Connected Energy Solutions Pty Ltd
3,250,500 Ordinary fully paid shares escrowed 24 months from quotation and 3,250,500
Unlisted options @ $0.03 expiring 14 July 2022 escrowed 24 months from quotation
Directorships held in listed entities —
In the past 3 years, Graham Durtanovich has been a director of:
Rafaella Resources Limited (resigned 24th August 2019)
Peter Wall
Qualifications
Experience
Interest in Shares
—
Non-Executive Chairman (appointed 2 June 2017; ceased 5 August 2019)
LLB BComm MAppFin FFin
Mr Wall is a corporate lawyer and has been a Partner at Steinepreis Paganin (Perth based
corporate law firm) since July 2005. Mr Wall graduated from the University of Western
Australia in 1998 with a Bachelor of Laws and Bachelor of Commerce (Finance). He has
also completed a Masters of Applied Finance and Investment with FINSIA.
Mr Wall has a wide range of experience in all forms of commercial and corporate law,
with a particular focus on technology companies, resources (hard rock and oil/gas),
equity capital markets and mergers and acquisitions. He also has significant experience
in dealing in cross border transactions.
As at date of resignation: beneficially held through Pheakes Pty Ltd ATF Senate Trust
5,000,000 Ordinary Fully Paid Shares and 2,500,000 unlisted options @ $0.03 expiring
14 July 2022. 2,805,000 Ordinary Fully Paid shares escrowed for 24 months from
quotation and 4,055,000 unlisted options @ $0.03 expiring 14 July 2022 escrowed for
24 months from quotation.
Beneficially held through Peter Christopher Wall & Tanya-Lee Wall 2,500,000 Ordinary fully paid shares and 1,250,000 Unlisted Options @ $0.03
expiring 14 July 2022.
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MANDRAKE RESOURCES LIMITED
ABN 60 006 569 124
ANNUAL REPORT 30 June 2020
Directorships held in listed entities
In the past 3 years, Peter Wall has been a director of:
Minbos Resources Ltd (Non-Executive Chairman - appointed 21 February 2014)
Myfiziq Limited (Non-Executive Chairman - appointed 25 May 2015)
MMJ Phytotech Ltd (Non-Executive Chairman - appointed 14 August 2014)
Transcendence Technologies Limited (Non-Executive Chairman - appointed 6 October
2015)
Sky and Space Global Ltd (Non-Executive Chairman- 27 October 2015, resigned
December 2108)
Pursuit Minerals Ltd (Non-Executive Chairman – appointed 13 January 2016)
Argent Minerals Limited (Non-Executive Chairman-appointed 23 April 2018)
Company Secretary (appointed 2 June 2017; resigned 1 February 2020)
GAICD
Mr Buckley has 37 years’ experience in financial markets having worked in both Australia
and New Zealand. He is the Managing Director of Company Secretary Solutions Pty Ltd, a
company specialising in providing company secretarial, corporate governance and
corporate advisory services.
Company Secretary (appointed 1 February 2020)
BAcc, MBA, CAANZ, FINSIA
Mr Flint is an experienced professional gained over 25 years including CFO and group
Company Secretary roles for a number of listed ASX companies. Mr Flint currently
provides financial and company secretarial services to a number of ASX listed companies
Company Secretary
Stephen Buckley
Qualifications
Experience
—
—
—
Lloyd Flint
Qualifications
Experience
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MANDRAKE RESOURCES LIMITED
ABN 60 006 569 124
ANNUAL REPORT 30 June 2020
DIRECTORS’ REPORT (CONT)
Meeting of Directors
The number of meetings of Directors held during the period and the number of meetings attended by each Director was as
follows:
DIRECTORS’ MEETINGS
Number eligible to attend
Number Attended
Patrick Burke
James Allchurch
Ben Phillips
Peter Wall
Graham Durtanovich
Principal Activities
4
4
4
-
1
4
4
4
-
1
The principal activity of the Company during the financial year ended 30 June 2020 was the exploration and evaluation of mineral
resources.
The Company was placed in administration on the 9 June 2016 and was dormant for the 2017, 2018 and 2019 financial years. On
the 26th April 2019 a binding heads of agreement was signed with the shareholders of Focus Exploration Pty Ltd (Focus) to acquire
100% of the issued capital of Focus. Focus was a privately-owned exploration company that was created to identify and secure
prospective exploration projects. Focus owns 100% of the Berinka Pine Creek Project which is situated on exploration licence
(EL31710) in the Northern Territory. The acquisition of Focus was completed on 12 August 2019. The Company was reinstated to
official quotation and commenced trading on 14th August 2019.
The Company commenced exploration activities during the year with regard to the evaluation of gold, base metal and other
mineral opportunities at the Projects.
Operating Results
The consolidated loss of the group after providing for income tax amounted to $788,931 (2019: Loss of $547,107).
Dividends Paid or Recommended
No interim dividend (2019: Nil) was paid during the year. No final dividend is recommended by the Directors .
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MANDRAKE RESOURCES LIMITED
ABN 60 006 569 124
ANNUAL REPORT 30 June 2020
Review of Operations
The 2020 financial year has been transformational for the Company as it successfully relisted on the Australian Stock Exchang e
(ASX) in August 2019 as resource explorer Mandrake Resources Limited (formerly Bronson Group Limited) following re-compliance
with Chapters 1 and 2 of the ASX Listing Rules.
The Company raised $4,527,838 pursuant to the offer under its replacement prospectus dated 21 May 2019 by the issue of
226,391,900 shares at an issue price of $0.02 per share and 113,195,950 attaching options exercisable at $0.03 per option on or
before 14 July 2022.
Through its wholly owned subsidiary Focus Exploration Pty Ltd (Focus), the Company owns 100% of the Berinka Pine Creek Projec t
which is situated on exploration licence (EL31710) and, in April 2020, entered into a farm-in agreement with Andean Energy
Resources Pty Ltd (AER) to farm in to exploration licence application (ELA) 70/5345 (Jimperding Project), in the Jimperding
Metamorphic Belt located 70km north east of Perth, Western Australia.
Berinka Pine Creek Gold Project
The Berinka gold exploration project is located within the Pine Creek Orogen of the Northern Territory, located 220km south
southwest of Darwin.
Gold mineralisation at the project is associated with >10km strike of poorly tested structurally controlled Berinka Volcanics of the
Proterozoic Pine Creek Orogen. Previous reverse circulation (RC) drilling has intersected gold mineralisation associated with
sulphide rich veins and is open at depth and along strike at the Terrys prospect with a best intersection of 4m @ 6.5 6g/t from
32m (TRP-018). A complete list of all historic drill intercepts is contained in the Mandrake Resources prospectus dated 21 May
2019.
Investigations into previous exploration work conducted at the project revealed the existence of 4 diamond drill holes (ZK1701,
ZK1702, ZK7801 and ZK8801) drilled by China Australia Land Resources which had not been submitted for assay. The NQ2 diamond
core totaled approximately 1,161m with zones prospective for mineralisation of approximately 189m submitted for ass ay and
results used to further develop the exploration model at Berinka.
Four detailed site visits (two helicopter-borne) were undertaken at the Berinka Project in FY2020 targeting a host of prospects
across the entire EL including Terrys Prospect, the Vegetation Anomaly (identified by Carpentaria Exploration Company (CEC) in
the mid-1980s), Bubbles Creek, RGC Creek, Specky Creek, Silver Streak and Sandy Creek. The primary objectives were to establish
access and conduct geological mapping and rock chip sampling to rank prospects and determine drill targets.
In March 2020 Mandrake identified several prospects (including Vegetation Anomaly, Terry’s Gap and Sandy Creek) worthy of dri ll
testing for gold mineralisation and submitted a Mine Management Plan (MMP) (drill permit application) to the Northern Territory
government whish was subsequently approved in late June 2020.
An RC drill programme was undertaken in August 2020 with results pending.
Jimperding Project (earning-in)
The Jimperding Project lies approximately 30km east of Chalice Gold Mines Limited’s (Chalice) Julimar Ni-Cu-PGE discovery
announced on 23 March 2020. The 140km2 ELA comprising the Jimperding Project was applied for on 4 March 2020, prior to the
Julimar discovery hole announcement and prior to Chalice pegging over 2,000km 2 of ELAs contiguous to the Jimperding Project.
The terms of the farm-in agreement to ELA 70/5345 with AER are detailed below:
Cash payment to AER of $40,000 (paid)
-
- Mandrake to expend $100,000 to earn a 51% interest in ELA 70/5345
- Mandrake to expend a further $200,000 to a earn a further 29% (total 80%) in ELA 70/5345
-
AER to be free-carried through to the commencement of a Bankable Feasibility Study at which point a Joint Venture will
be incorporated between Mandrake and AER
- Mandrake to satisfy all expenditure related to grant of EL70/5345
The Jimperding Metamorphic Belt is in the northern part of the southwestern Yilgarn Craton and comprises Archaean gneisses,
arkosic paragneiss and banded-iron formation, interleaved with a variety of garnetiferous orthogneiss and ultramafic units 1.
1 Wilde, S.A. (2001), Jimperding and Chittering Metamorphic Belts, Southwestern Yilgarn Craton, WA – A Field Guide. 4th International
Archaean Symposium. Geol Survey of WA.
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MANDRAKE RESOURCES LIMITED
ABN 60 006 569 124
ANNUAL REPORT 30 June 2020
Figure 2 - Regional Aeromagnetics – Jimperding Project
Regional work conducted by Harrison (1986) suggested that some of the mafic/ultramafic bodies in the terrane may be remnants
of larger layered intrusives and thus targets for platinum group element (PGEs) 1. The recent Julimar discovery in the area appears
to validate this assessment.
A distinct bullseye total magnetic intensity anomaly was identified at the Newleyine Prospect from aeromagnetic data
corresponding with confirmed ultramafic layered intrusive units and banded iron formation (BIF).
A ground magnetic survey conducted in 2016 was re-processed by Mandrake which demonstrated the distinct internal character
of the magnetic anomaly at Newleyine. Rather than a homogenous ovoid-shaped magnetic anomaly, Newleyine appears to
comprise a series of magnetic high lenses and potential structural offsets. These internal features are encouraging as they may be
attributable to layering in the BIF and/or magmatic differentiation in the ultramafic intrusive(s), structural features and l ocalized
weathering.
Concentrations of platinum and palladium in rock chip samples collected from two field mapping events (96 samples in total) have
exceeded expectations with rock chip samples up to 0.36g/t Pd and 0.27g/t Pt confirming the ultramafic intrusive at Newleyine is
highly fertile for PGEs. This is an exciting development for the Company and has elevated Newleyine’s prospectivity for PGEs .
The eastern paddock area to the east and north east of the vegetated laterite hill is underlain by a series of distinct ma gnetic highs
as outlined by a recent ground magnetic survey. Ultramafic float, sub-crop and limited outcrop was observed during recent
sampling with results confirming the presence of Ni-Cu-PGE mineralisation coinciding with magnetic highs.
In August 2020 a detailed Fixed Loop Electromagnetic Survey (FLEM) was completed at Newleyine which successfully identified
three high conductivity anomalies across the Newleyine Prospect that may be representative of bedrock massive sulphide bodies
- drill testing for Julimar-style PGE-Ni-Cu mineralisation is now planned.
1 Harrison, P.H (1986), Professional Papers for 1984. Rep 19. Geol Survey of WA.
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MANDRAKE RESOURCES LIMITED
ABN 60 006 569 124
ANNUAL REPORT 30 June 2020
Financial Position
The net assets/(deficiency) of the Company at 30 June 2020 was $3,853,267 (2019: $(489,586)).
Significant Changes in State of Affairs
The Company was reinstated to official quotation and commenced trading on 14th August 2019, following re-compliance with
Chapters 1 and 2 of the ASX Listing Rules. The Company raised $4,527,838 before costs pursuant to the offer under its
replacement prospectus dated 21 May 2019 by the issue of 226,391,900 shares at an issue price of $0.02 per share and
113,195,950 attaching options exercisable at $0.03 per option on or before 14 July 2022. 12,500,000 shares were issued to the
vendors of Focus to settle the acquisition.
On reinstatement, a further 11,000,000 shares were issued on conversion of the $220,000 of convertible notes along with
11,000,000 attaching options exercisable at $0.03 per option on or before 14 July 2022. 13,200,727 ordinary fully paid shares
along with 13,200,727 attaching options exercisable at $0.03 per option on or before 14 July 2022 were issued to creditors in
lieu of cash.
Peter Wall resigned as Non-Executive Chairman on the 5th August 2019 following the appointments of James Allchurch as
Managing Director and Pat Burke as Non-Executive Chairman on the 4th August 2019. Graham Durtanovich resigned on 26
September 2019.
24,000,000 options were approved in the annual general meeting for issue to directors. The options are exerciseable at $0.03
and expire on 28 November 2022.
Notices to exercise for 125,000 attaching options exercisable at $0.03 per option on or before 14 July 2022 were received during
the year and 125,000 shares were issued accordingly.
Environmental Regulations
To the best of the Directors’ knowledge, all activities have been undertaken in compliance with the requirements of environmental
regulations.
Proceedings on Behalf of Company
No person has applied for leave of Court to bring proceedings on behalf of the Company or 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.
The Company was not a party to any such proceedings during the year.
Subsequent Events
Notices to exercise 21,300,000 options exercisable at $0.03 per option were received and 21,300,000 shares were issued
accordingly raising $639,000 before costs for the Company.
The impact of the Coronavirus (COVID-19) pandemic is ongoing and while it has not significantly impacted the entity up to 30
June 2020, it is not practicable to estimate the potential impact, positive or negative, after the reporting date. The situat ion is
rapidly developing and is dependent on measures imposed by the Australian Government and other countries, such as
maintaining social distancing requirements, quarantine, travel restrictions and any economic stimulus that may be provided.
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MANDRAKE RESOURCES LIMITED
ABN 60 006 569 124
ANNUAL REPORT 30 June 2020
DIRECTORS’ REPORT (CONT)
Share Options
Unissued shares under option
At the date of this report, the un-issued ordinary shares of Mandrake Resources Limited under option are as follows:
Grant Date
Expiry Date
Exercise Price
Number of shares under option
14 July 2017 & 30 November 2017
14 July 2019
28 November 2019
14 July 2021
14 July 2022
28 November 2022
$0.40
$0.03
$0.03
3,000,001
161,250,077
24,000,000
Option holders do not have any right, by virtue of the option, to participate in any share issue of the Company or any relate d body
corporate.
Indemnification and Insurance of Directors and Officers
The Company indemnifies each of its Directors, Officers and Company Secretary. The Company indemnifies each Director or
Officer to the maximum extent permitted by the Corporations Act 2001 from liability to third parties, except where the liability
arises out of conduct involving lack of good faith, and in defending legal and administrative proceedings and applications for such
proceedings.
The Company must use its best endeavours to insure a Director or Officer against any liability, which does not arise out of conduct
constituting a wilful breach of duty or a contravention of the Corporations Act 2001. The Company must also use its best
endeavours to insure a Director or Officer against liability for costs and expenses incurred in defending proceedings whether civil
or criminal.
The Company has not entered into any agreement with its current auditors indemnifying them against any claims by third partie s
arising from their report on the financial report.
On the 12 June 2020, Director and Officers Insurance was taken out with Liberty Mutual Insurance Company.
Non-Audit Services
The Company may decide to employ the auditor on assignments additional to their statutory duties where the auditor’s expertise
and experience with the Company and/or group are important.
The board of directors has considered the position and, in accordance with advice received from the audit committee, is satisfied
that the provision of non-audit services is compatible with the general standard of independence for auditors imposed by the
Corporations Act 2001. The directors are satisfied that the provision of non-audit services by the auditor, as set out below, did not
compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons:
•
All non-audit services have been reviewed by the audit committee to ensure they do not impact the impartiality and
objectivity of the auditor
• None of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of
Ethics for Professional Accountants.
Details of the amounts paid or payable to the auditor (BDO Audit (WA) Pty Ltd) for audit and non-audit services provided during
the year are set out in note 17.
Non-audit services
–
–
–
Tax returns
Relisting services
Other
2020
$
12,465
3,840
2,308
18,613
2019
$
9,864
18,690
-
28,554
Auditor’s Independence Declaration
The auditor’s independence declaration for the year ended 30 June 2020 has been received and can be found on page 15.
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MANDRAKE RESOURCES LIMITED
ABN 60 006 569 124
ANNUAL REPORT 30 June 2020
REMUNERATION REPORT (AUDITED)
The remuneration report is presented under the following sections:
Introduction
1.
2. Remuneration governance
3. Executive remuneration arrangements
4. Non-executive director fee arrangements
5. Details of remuneration
6. Additional disclosures relating to options and shares
7.
8. Consultancy Agreements, and other transactions and balances with KMP and their related parties
Loans to key management personnel (KMP) and their related parties
The names of the directors in office at any time during or since the end of the financial year are:
Pat Burke – Non-Executive Chairman (appointed 4 August 2019)
Graham Durtanovich – Non-Executive Director (appointed 2 June 2017; ceased 26 September 2019)
Ben Phillips – Non-Executive Director (appointed 18 April 2018)
James Allchurch – Managing Director (appointed 4 August 2019)
Peter Wall – Non-Executive Chairman (appointed 2 June 2017, ceased 5 August 2019)
1.
Introduction
The remuneration policy of the Company has been designed to ensure reward for performance is competitive and appropriate to the
result delivered. The framework aligns executive reward with the creation of value for shareholders and conforms to market be st
practice. The Board ensures that Director and executive reward satisfies the following key criteria for good reward government
practices:
•
•
Competitiveness and reasonableness;
Acceptability to the shareholder;
•
•
Performance;
Transparency; and
Capital management.
2. Remuneration governance
Throughout the financial year, the Company did not have a remuneration committee as the directors believed the size of the
consolidated entity and the size of the Board did not warrant its existence.
3. Executive remuneration arrangements
The Board’s policy for determining the nature and amount of remuneration for KMP of the consolidated group is based on the following:
•
•
•
All KMP receive a base salary (which is based on factors such as length of service and experience), superannuation and
options.
Incentives paid in the form of options are intended to align the interests of the directors and Company with those of the
shareholders.
KMP receive a superannuation guarantee contribution required by the government, which is currently 9.5% of the individual’s
average weekly ordinary time earnings (AWOTE), and do not receive any other retirement benefits. Some individuals,
however, have chosen to sacrifice part of their salary to increase payment towards superannuation.
• Upon retirement, KMP are paid employee benefit entitlements accrued to the date of retirement. Any options not exercised
before or on the date of termination will lapse. The Non-Executive Directors are not entitled to retirement benefits.
• All remuneration paid to KMP is valued at the cost to the Company and expensed.
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MANDRAKE RESOURCES LIMITED
ABN 60 006 569 124
ANNUAL REPORT 30 June 2020
REMUNERATION REPORT (AUDITED) (CONT)
4. Non-executive director fee arrangements
The Board policy is to remunerate Non-Executive Directors at a level to comparable Companies for time, commitment, and
responsibilities. Non-executive Directors do not receive performance related compensation. Directors’ fees cover all main Board
activities and membership of any committee. The Board has no established retirement or redundancy schemes in relation to Non -
Executive Directors.
The Non-Executive Directors have or may be provided with options that are meant to incentivise the Non-Executive Directors. The
board determines payments to the Non-Executive Directors and reviews their remuneration annually based on market practice, duties,
and accountability. Independent external advice will be sought when required.
The maximum aggregate amount of fees that can be paid to Non-Executive Directors is $300,000 per annum and any change is subject
to approval by shareholders at a General Meeting. Fees for Non-Executive Directors are not linked to the performance of the Company.
However, to align Directors’ interests with shareholder interests, the Directors are encouraged to hold shares in the Company.
5. Details of Remuneration
The Key Management Personnel of Mandrake Resources Limited includes the Directors of the Company.
30 June 2020
Short Term
Salary, Fees &
Commissions
Post
Employment
Superannuation
Other/
Bonus
Share-based
payments
Total
Performance
based
remuneration6
$
$
$
$
$
%
Patrick Burke1
James Allchurch2
Ben Phillips3
Peter Wall4
Graham Durtanovich5
Total
45,742
197,976
45,000
12,000
18,000
318,718
-
-
-
-
-
-
-
-
-
-
-
-
52,740
98,482
105,480
303,456
52,740
-
-
97,740
12,000
18,000
53.5%
34.8%
54.0%
-
-
210,960
529,678
37.5%
1 Appointed 4 August 2019. June 2020 fees of $5,000 are payable as at 30 June 2020.
2 Appointed 4 August 2019. Includes May and June 2019 fees of $21,900. June 2020 fees of $20,148 payable as at 30 June 2020.
Director fees are paid to Stoped Pty Ltd, a company controlled by Mr Allchurch.
3 Includes April to June 2019 fees of $9,000. June 2020 fees of $3,000 are payable as at 30 June 2020. Bob Alfred Pty Ltd ATF the Bob
Alfred Trust (an entity controlled by Mr Phillips)
4 Resigned 5 August 2019.
5 Resigned 26 September 2019.
6 Options issued to directors that vested on grant. The options are exercisable at $0.03 per shares on or before 28 November 2022.
30 June 2019
Non-Executive Directors
Peter Wall
Graham Durtanovich
Ben Phillips
Total
Short Term
Salary, Fees &
Commissions6
Post
Employment
Superannuation
Other/
Bonus
Share-based
payments
Total
Performance
based
remuneration
$
$
$
$
$
36,000
36,000
36,000
108,000
-
-
-
-
-
-
-
-
-
-
-
-
36,000
36,000
36,000
108,000
%
-
-
-
-
6 As at 30 June 2019 the entirety of fees was accrued and not yet paid.
---- 12 ----
MANDRAKE RESOURCES LIMITED
ABN 60 006 569 124
ANNUAL REPORT 30 June 2020
REMUNERATION REPORT (AUDITED) (CONT)
6. Additional disclosures relating to options and shares
KMP Options and Rights Holdings
The table below discloses the number of share options granted, vested or lapsed during the year.
Share options do not carry any voting or dividend rights and can only be exercised once the vesting conditions have been met, until
their expiry date.
30 June 2020
Patrick Burke
James Allchurch
Ben Phillips
Peter Wall
Graham Durtanovich
Total
Balance at the start
of the year
Issued as part of
debt conversion
Granted as
Compensation and
Exercisable
Options
Expired
Other changes
during the
year1
Balance at
end of Year
-
-
-
-
-
-
-
-
2,710,500
7,805,000
3,250,500
6,000,000
12,000,000
6,000,000
-
-
-
-
-
-
-
-
-
-
(7,805,000)
(3,250,000)
6,000,000
12,000,000
8,710,500
-
-
13,766,000
24,000,000
-
(11,055,000)
26,710,500
1 Held at date of resignation.
KMP Shareholdings
The number of ordinary shares in Mandrake Resources Limited held by each KMP of the Group during the financial year is as follows:
30 June 2020
Patrick Burke
James Allchurch
Ben Phillips
Peter Wall
Graham Durtanovich
Total
Balance at the
start of the year
Shares
Purchased
Granted as
Compensation
Other changed
during the year
Balance at
At resignation
end of Year
-
-
-
-
-
-
940,000
-
600,000
-
-
1,540,000
-
-
-
-
-
-
-
2,500,0001
2,710,5002
-
-
-
10,305,0003
(10,305,000)
3,250,5004
(3,250,500)
940,000
2,500,000
3,310,500
-
-
18,766,000
(13,555,500)
6,750,500
1 Vendor shares issued pursuant to purchase of Focus Exploration Pty Ltd
2
3
4
1,000,000 shares on conversion of convertible notes and 1,710,500 shares in lieu of amounts owing (with attaching options).
2,500,000 shares issued on conversion of convertible notes and 7,805,000 shares issued in lieu of amounts owing (both with
attaching options). Peter Wall resigned on 5 August 2019
3,250,500 shares and attaching options issued lieu of amounts due and payable. Graham Durtanovich resigned on 26 September
2019.
7.
Loans to KMP and their related parties
There were no loans to KMP and the related parties during the financial year (2019: nil).
---- 13 ----
MANDRAKE RESOURCES LIMITED
ABN 60 006 569 124
ANNUAL REPORT 30 June 2020
REMUNERATION REPORT (AUDITED) (CONT)
8. Consultancy agreements, and other transactions and balances with KMP and their related parties
During the reporting period, the Company engaged the services of the following related parties on normal commercial terms and
conditions no more favourable than those available to other parties:
• Steinepreis Paganin, an entity associated with Mr Peter Wall, had liabilities of $222,909 settled during the year via shares,
options and cash and discounts given to the Company. Steinepreis Paganin invoiced the Company $37,350 including GST
during the year (2019: invoiced $172,271 (incl GST)) in relation to legal services provided to the Company. $5,603 (incl GST)
remains owing at 30 June 2020 (2019: $222,909 (including GST)).
• Pheakes Pty Ltd, a company controlled by Mr Peter Wall, had liabilities of $69,300 (incl. GST) settled by cash and the issue of
securities during the year. Director’s fees of $6,600 (incl. GST) were paid to Pheakes Pty Ltd during the year. Nil was owing
at year end (2019; $69,300 (incl. GST)).
• Chaperon Corporate, an entity associated with Graham Durtanovich, had liabilities of $58,399 (incl. GST) settled by cash and
the issue of securities during the year. Director fees of $9,900 (including GST) were paid during the year and $26,702 (incl
GST) were paid to Chaperone Corporate for accounting work. Nil remains owing at year end (2019: $58,399 (incl GST)).
•
Ironside Capital was engaged as Corporate Advisor on 23 April 2019 received $123,907 (incl GST) (2019: $nil) for pre and post
re-quotation corporate advisory fees. Ben Phillips is employed by Ironside Capital. The Ironside Capital mandate terminated
in May 2020.
James Allchurch is one of the Focus Shareholders and received 2,500,000 consideration shares pursuant to the acquisition of F ocus
Exploration Pty Ltd.
Connected Energy Solutions, and entity associated with Graham Durtanovich was issued 3,250,500 shares and 3,250,000 attaching
options in lieu of debts owed to Chaperon Corporate, an entity also associated with Mr Durtanovich.
Ben Phillips participated in a Convertible Loan Agreement with the Company to the value of $20
,000. The Convertible Note Agreement converted on the basis of one share and one attaching option for every $0.02 invested with
the attaching option having a strike price of $0.03 and an expiry date of 14 July 2022. On conversion, 1,000,000 Shares and 1,000,000
options were issued to Deep36 Pty Ltd ATF Deep Super (an entity controlled by Mr Phillips). 1,710,500 shares and 1,710,500 options
were issued to Bob Alfred Pty Ltd ATF the Bob Alfred Trust (an entity controlled by Mr Phillips) in lieu of debts owed to Mr Phillips by
the Company. Ironside Capital Pty Ltd, an entity associated with Ben Phillips, had a corporate mandate for monthly services at $7,700
(incl GST) which terminated in May 2020.
7,805,000 shares and 5,305,000 options were issued to Pheakes Pty Ltd and the Wall Family superannuation fund, both entities
controlled by Mr Wall, on re-compliance by the Company and in lieu of debts owed to Mr Wall. In May 2019 Peter Wall participated
through a Convertible Loan Agreement for $50,000. The Convertible Note Agreement converted on the basis of one share and one
attaching option for every $0.02 invested with the attaching option having a strike price of $0.03 and an expiry date of 14 July 2022.
On conversion, 1,000,000 Shares and 1,000,000 options were issued to Pheakes Pty Ltd.
In addition to the above, refer to Note 10c. for details of options granted to Directors.
9.
Service agreements
The Company has entered into and executive service agreement with James Allchurch which was amended on 12 May 2020. The
material terms of the agreement are as follows:
(a).
(Position): Mr Allchurch is appointed as the Managing Director of the Company.
(b).
(c).
(d).
(e).
(Commencement Date): Mr Allchurch’s term as the Managing Director of the Company will commence on completion of the
acquisition of Focus Exploration Pty Ltd.
(Term): Mr Allchurch’s employment commenced on the Commencement Date and continue until the agreement is validly
terminated in accordance with its terms.
(Notice period): The Company must give 6 months’ notice to terminate the agreement other than for cause. Mr Allchurch must
give 3 months’ notice to terminate the agreement.
(Salary): The Company will pay Mr Allchurch a salary of $220,000 per year for services rendered. Should Mr Allchurch be required
to undertake services with time commitments above and beyond that contemplated by this agreement, with Board approval, the
Mr Allchurch will receive a day rate of $1,200 per day.
The agreement otherwise contains leave entitlements, termination and confidentiality provisions and general provisions consid ered
standard for an agreement of this nature.
Non-executive Directors:
Each of the non-executive Directors have signed letters of appointment. The key terms of appointment are:
---- 14 ----
MANDRAKE RESOURCES LIMITED
ABN 60 006 569 124
ANNUAL REPORT 30 June 2020
REMUNERATION REPORT (AUDITED) (CONT)
Term
Remuneration
Patrick Burke
n/a
Ben Phillips
n/a
$5,000 per month
$3,000 per month
Termination benefits
n/a
n/a
There were no other transactions with KMP and their related parties.
Corporate Governance Statement
Under ASX Listing Rule 4.10.3 the Company’s Corporate Governance Statement can be located at the URL on the Company’s website :
http: https://www.mandrakeresources.com.au/about-us/corporate-governance/
Signed in accordance with a resolution of the directors.
James Allchurch
Managing Director
Dated 25 September 2020
---- 15 ----
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 JARRAD PRUE TO THE DIRECTORS OF MANDRAKE RESOURCES
LIMITED
As lead auditor of Mandrake Resources Limited for the year ended 30 June 2020, 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 Mandrake Resources Limited and the entity it controlled during the
period.
Jarrad Prue
Director
BDO Audit (WA) Pty Ltd
Perth, 25 September 2020
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 a firms. Liability limited by a scheme approved under Professional Standards Legislation.
Mandrake Resources Limited ABN 60 006 569 124
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2020
Consolidated Group
Note
30.06.2020
30.06.2019
Interest Received
Administration expenses
Consultancy Fees
Debt extinguishment
Director Fees and employee costs
Travel expenses
Occupancy expenses
Legal compliance and professional fees
2
10.c
$
40,394
$
14
(173,474)
(85,935)
(153,920)
(122,742)
(1,092)
(20,865)
(60,336)
(239,500)
-
-
(108,000)
(1,498)
-
(198,122)
-
Share based payments
10.c
(210,960)
(Loss) before income tax
Income tax benefit/(expense)
(Loss) for the year
(788,931)
(547,107)
3
-
-
(788,931)
(547,107)
Other comprehensive income for the year
Total comprehensive (loss) for the year
-
-
(788,931)
(547,107)
Earnings per share
Basic (loss) per share
Diluted (loss) per share
5
5
(0.003)
N/A
(0.168)
N/A
The above Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the
accompanying notes
---- 17 ----
Mandrake Resources Limited ABN 60 006 569 124
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2020
CURRENT ASSETS
Cash and cash equivalents
Other receivables
TOTAL CURRENT ASSETS
NON- CURRENT ASSETS
Exploration and Evaluation expenditure
TOTAL NON- CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS/(LIABILITIES)
EQUITY
Ordinary Share Capital
Convertible Loan Note Reserve
Option Reserve
Accumulated (Losses)
TOTAL EQUITY/(DEFFICIENCY)
Consolidated Group
Note
30.06.20
30.06.19
$
$
6
7
8
9
10
10
10
3,305,851
69,318
3,375,169
593,375
593,375
84,115
77,854
161,969
-
-
3,968,544
161,969
115,277
115,277
115,277
651,556
651,556
651,556
3,853,267
(489,586)
17,470,027
13,011,070
-
893,112
220,000
285
(14,509,872)
(13,720,941)
3,853,267
(489,586)
The above Statement of Financial Position should be read in conjunction with the accompanying notes
---- 18 ----
Mandrake Resources Limited ABN 60 006 569 124
and Controlled Entities
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2020
Consolidated Group
Balance at 1.7.2018
Loss for the year
Transactions with owners in their capacity as owners
Issue of Convertible Notes
Balance at 30.6.2019
Balance at 1.7.2019
Loss for the year
Transactions with owners in their capacity as owners
Shares issued during the year
Share Issue Expenses
Option Reserve
Balance at 30.06.2020
Ordinary Share Capital
Convertible Loan Note
Reserve
Option Reserve
Accumulated (Losses)
Total Equity
$
13,011,070
-
-
13,011,070
13,011,070
-
5,265,603
(806,646)
-
17,470,027
$
-
-
220,000
220,000
220,000
-
(220,000)
-
-
-
$
285
-
-
$
(13,173,835)
(547,107)
-
285
(13,720,942)
285
(13,720,942)
-
-
-
892,827
893,112
(788,931)
-
-
-
(14,509,872)
$
(162,479)
(547,107)
220,000
(489,586)
(489,586)
(788,931)
5,045,603
(806,646)
892,827
3,853,267
The above consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes
---- 19 ----
Mandrake Resources Limited ABN 60 006 569 124
and Controlled Entities
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2020
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees
Interest received
Consolidated Group
Note
30.06.2020
30.06.2019
$
$
(728,171)
(186,233)
40,394
14
Net cash (outflow) inflow from operating activities
14
(687,777)
(186,219)
CASH FLOWS FROM INVESTING ACTIVITIES
Acquired through acquisition of Focus Exploration Pty Ltd
Exploration and evaluation expenditure
Net cash (outflow) inflow from investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares
Payment of share issue cost
Issue of Convertible Notes
Net cash inflow from financing activities
Net increase in cash held
Cash at beginning of year
11
9
10
10
Cash and cash equivalents carried forward
6
100
(343,475)
(343,375)
4,531,588
(278,700)
-
4,252,888
3,221,736
84,115
3,305,851
-
-
-
-
220,000
220,000
33,781
50,334
84,115
The above consolidated Statement of Cashflows should be read in conjunction with the accompanying notes
---- 20 ----
MANDRAKE RESOURCES LIMITED
ABN 60 006 569 124
ANNUAL REPORT 30 June 2020
NOTES TO FINANCIAL REPORT FOR THE YEAR ENDED 30 June 2020
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
This financial report includes the consolidated financial statements and notes of Mandrake Resources Limited and controlled
entities (‘Consolidated Group’ or ‘Group’).
The separate financial statements of the parent entity, Mandrake Resources Limited, have not been presented within this financial
report as permitted by the Corporations Act 2001.
The financial report was authorised for issue on 25 September 2020 by the Board of Directors.
Basis of Preparation
These general purpose financial statements have been prepared in accordance with the Corporations Act 2001, Australian
Accounting Standards and Interpretations of the Australian Accounting Standards Board and International Financial Reporting
Standards as issued by the International Accounting Standards Board. The Group is a for-profit entity for financial reporting
purposes under Australian Accounting Standards. Material accounting policies adopted in the preparation of these financial
statements are presented below and have been consistently applied unless stated otherwise.
Except for cash flow information, the financial statements have been prepared on an accruals basis and are based on historica l
costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial
liabilities.
Accounting Policies
a. Going Concern
The financial statements have been prepared on the going concern basis, which assumes the continuity of normal business
activities and the realisation of assets and settlement of liabilities in the ordinary course of business.
On the 12th August 2019 Mandrake Resources Limited was reinstated to official quotation post the raise of $4,527,838 being
completed.
The net loss after income tax for the consolidated entity for the financial year ended 30 June 2020 was $788,931, and as at 30
June 2020, total assets exceeded total liabilities by $3,853,267. Cash and cash equivalents was $3,305,851.
Forecast Cash Flows demonstrates the Group can operate on a Going Concern basis.
b. Principles of Consolidation
The consolidated financial statements incorporate the assets, liabilities and results of entities controlled by Mandrake
Resources Limited at the end of the reporting period. A controlled entity is any entity over which Mandrake Resources Limited
has the ability and right to govern the financial and operating policies so as to obtain benefits from the entity’s activities.
Where controlled entities have entered or left the Group during the year, the financial performance of those entities is
included only for the period of the year that they were controlled. A list of controlled entities is contained in Note 20 to the
financial statements.
In preparing the consolidated financial statements, all inter-group balances and transactions between entities in the
consolidated group have been eliminated in full on consolidation.
Non-controlling interests, being the equity in a subsidiary not attributable, directly or indirectly, to a parent, are reported
separately within the equity section of the consolidated statement of financial position and statement of comprehensive
income. The non-controlling interests in the net assets comprise their interests at the date of the original business
combination and their share of changes in equity since that date.
c.
Income Tax
The income tax expense (revenue) for the year comprises current income tax expense (income) and deferred tax expense
(income).
Current income tax expense charged to profit or loss is the tax payable on taxable income. Current tax liabilities (assets) are
measured at the amounts expected to be paid to (recovered from) the relevant taxation authority. Deferred income tax
expense reflects movements in deferred tax asset and deferred tax liability balances during the year as well as unused tax
losses. Current and deferred income tax expense (income) is charged or credited outside profit or loss when the tax relates to
items that are recognised outside profit or loss. Except for business combinations, no deferred income tax is recognised from
the initial recognition of an asset or liability, where there is no effect on accounting or taxable profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is
realised or the liability is settled and their measurement also reflects the manner in which management expects to recover or
settle the carrying amount of the related asset or liability.
---- 21 ----
MANDRAKE RESOURCES LIMITED
ABN 60 006 569 124
ANNUAL REPORT 30 June 2020
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable
that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised.
Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures, deferred
tax assets and liabilities are not recognised where the timing of the reversal of the temporary difference can be controlled and
it is not probable that the reversal will occur in the foreseeable future.
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net
settlement or simultaneous realisation and settlement of the respective asset and liability will occur.
Deferred tax assets and liabilities are offset where: (a) a legally enforceable right of set-off exists; and (b) the deferred tax
assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different
taxable entities where it is intended that net settlement or simultaneous realisation and settlement of the respective asset
and liability will occur in future periods in which significant amounts of deferred tax assets or liabilities are expected to be
recovered or settled.
Tax Consolidation
Mandrake Resources Limited and its wholly-owned Australian subsidiaries have formed an income tax consolidated group
under tax consolidation legislation. Each entity in the group recognises its own current and deferred tax assets and liabili ties.
Such taxes are measured using the ‘stand-alone taxpayer’ approach to allocation. Current tax liabilities (assets) and deferred
tax assets arising from unused tax losses and tax credits in the subsidiaries are immediately transferred to the head entity.
The group notified the Australian Tax Office that it had formed an income tax consolidated group under the tax consolidation
regime. The tax consolidated group has entered a tax funding arrangement whereby each company in the group contributes
to the income tax payable by the group in proportion to their contribution to the group’s taxable income. Differences between
the amounts of net tax assets and liabilities derecognised and the net amounts recognised pursuant to the funding
arrangement are recognised as either a contribution by, or distribution to the head entity
d.
Impairment of Assets
At each reporting date, the group reviews the carrying values of its tangible and intangible assets to determine whether there
is any indication that those assets have been impaired. If such an indication exists, the recoverable amount of the asset, being
the higher of the asset’s fair value less costs to sell and value in use, is compared to the asset’s carrying value. Any exce ss of
the asset’s carrying value over its recoverable amount is expensed to the statement of comprehensive income.
Impairment testing is performed annually for goodwill and intangible assets with indefinite lives.
Where it is not possible to estimate the recoverable amount of an individual asset, the group estimates the recovera ble
amount of the cash-generating unit to which the asset belongs.
e. Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks, and bank overdrafts. Bank overdrafts are
shown within short-term borrowings in current liabilities on the balance sheet.
f.
Revenue
Interest revenue is recognised as the interest accrues (using the effective interest rate method, which is the rate that exactly
discounts estimated future cash receipts through the expected life of the instrument) to the net carrying amount of the
financial asset.
g.
Trade and Other Receivables
Trade and other receivables include amounts due from customers for goods sold and services performed in the ordinary course
of business. Receivables expected to be collected within 12 months of the end of the reporting period are classified as curre nt
assets. All other receivables are classified as non-current assets.
Trade and other receivables are initially recognised at fair value and subsequently measured at amortised cost using the
effective interest method, less any provision for expected credit losses.
h.
Trade and Other Payables
Liabilities for trade creditors and other payables are initially measured at fair value and subsequently carried at amortised cost
which is the amount of the consideration to be paid in the future for goods and services received, whether or not billed to the
Group. The amounts are unsecured and are usually paid within 30 days. Payables to related parties are carried at the principal
amount.
i. Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not
recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of
the asset or as part of an item of the expense. Receivables and payables in the balance sheet are shown inclusive of GST.
Cash flows are presented in the cash flow statement on a gross basis, except for the GST component of investing and financing
activities, which are disclosed as operating cash flows.
---- 22 ----
MANDRAKE RESOURCES LIMITED
ABN 60 006 569 124
ANNUAL REPORT 30 June 2020
j.
Segment Information
An operating segment is a component of an entity that engages in business activities for which it may earn revenues and
incur expenses (including revenues and expenses relating to transactions with other components of the same entity) ,
whose operating results are regularly reviewed by the entity’s chief operating decision maker to make decisions about
resources to be allocated to the segment and assess its performance and for which discrete financial information is
available. Management will also consider other factors in determining operating segments such as the existence of a line
manager and the level of segment information presented to the board of Directors.
Operating segments have been identified based on the information provided to the chief operating decision makers –
being the executive management team.
Nature of the products and services,
The Group aggregates two or more operating segments when they have similar economic characteristics, and the
segments are similar in each of the following respects:
-
-
-
-
Methods used to distribute the products or provide the services, and if applicable
Type or class of customer for the products and services,
Nature of the regulatory environment
Operating segments that meet the quantitative criteria as prescribed by AASB 8 are reported separately. However, an
operating segment that does not meet the quantitative criteria is still reported separately where information about the
segment would be useful to users of the Financial Statements.
Management has determined the operating segments based on the reports reviewed by the board of directors that are used
to make strategic decisions. The Group does not have any material operating segments with discrete financial informati on.
The Group does not have any customers and all its’ assets and liabilities are primarily related to the corporate office and a re
located within Australia. The Board of Directors review internal management reports on a regular basis that is consistent with
the information provided in the statement of profit or loss and other comprehensive income, statement of financial position
and statement of cash flows. As a result, no reconciliation is required because the information as presented is what is used by
the Board to make strategic decisions.
k. Borrowings
In May 2019 the issue of Convertible Notes to the value of $220,000 occurred. As these Convertible Notes were issued with
the expectation of converting to equity, it has been treated as equity within the accounts, with the full amount being taken to
an equity reserve “Convertible Loan Note Reserve”. The terms of the notes are such that, assuming approval of Shareholders
to convert at a General Meeting, under no circumstance would the group be liable to settle the instruments in cash, and for
this reason are treated as equity rather than as a liability in the financial statements. The Notes were subsequently converted
in the current year pursuant to attaching terms and conditions..
l.
Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the
current financial year.
Where the group has retrospectively applied an accounting policy, made a retrospective restatement of items in the financial
statements or reclassified items in its financial statements, an additional statement of financial position as at the beginni ng of the
earliest comparative period will be disclosed.
m.
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Group, excluding any costs
of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the
reporting period, adjusted for bonus elements in ordinary shares issued during the year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into acc ount the
after income tax effect of interest and other financial costs associated with dilutive potential ordinary shares and the weighted
average number of shares outstanding plus the weighted average number of ordinary shares that would be issued on the
conversion of all potential ordinary shares into ordinary shares.
n. Contributed Equity
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.
---- 23 ----
MANDRAKE RESOURCES LIMITED
ABN 60 006 569 124
ANNUAL REPORT 30 June 2020
o.
Exploration and evaluation expenditure
Exploration and evaluation expenditure in relation to separate areas of interest for which rights of tenure are current is
carried forward as an asset in the statement of financial position where it is expected that the expenditure will be recovered
through the successful development and exploitation of an area of interest, or by its sale; or exploration activities are
continuing in an area and activities have not reached a stage which permits a reasonable estimate of the existence or
otherwise of economically recoverable reserves. Where a project or an area of interest has been abandoned, the
expenditure incurred thereon is written off in the year in which the decision is m ade.
p.
Share-based payments
The Group provides benefits to employees (including Directors) and consultants of the Group in the form of share-based
payment transactions, whereby employees and consultants render services in exchange for shares or options over shares
(“equity-settled transactions”).
The fair value of options is recognised as an expense with a corresponding increase in equity (share-based payments
reserve). The fair value is measured at grant date and recognised over the period during which the holder becomes
unconditionally entitled to the options. Fair value is determined using a Black-Scholes option pricing model. In determining
fair value, no account is taken of any performance conditions other than those related to the share price of Mandrake
Resources (“market conditions”).
q.
Financial Instruments
Classification
The Group classifies its financial assets in the following measurement categories:
-
-
The classification depends on how the Group manages the financial assets and the contractual terms of the cash flows. At
year end, all of the Group’s financial assets have been classified as those to be measured at amortised cost.
those to be measured subsequently at fair value (either through OCI, or through profit or loss), and
those to be measured at amortised cost.
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.
Impairment
The Group assesses expected credit losses associated on a forward looking basis. For trade 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.
r.
Critical Accounting Estimates and Judgments
The directors evaluate estimates and judgments incorporated into the financial report based on historical knowledge and best
available current information. Estimates assume a reasonable expectation of future events and are based on current trends
and economic data, obtained both externally and within the group.
Judgement has been exercised in considering the impacts that the Coronavirus (COVID-19) pandemic has had, or may have,
on the consolidated entity based on known information. This consideration extends to the nature of the supply chain, staffing
and geographic regions in which the consolidated entity operates. 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 consolidated entity unfavourably as at the reporting date or subsequently as a
result of the Coronavirus (COVID-19) pandemic.
Convertible notes
In May 2019 the issue of Convertible Notes to the value of $220,000 occurred. As these Convertible Notes were issued with
the expectation of converting to equity, they were treated as equity within the accounts in2019. During the current year,
they were converted, as noted in Note 10.
Acquisition of Focus Exploration Pty Ltd
As described in Note 11 below, during the year, the parent company acquired Focus Exploration Pty Ltd for 12,500,000
shares. This transaction has been accounted for as an asset acquisition, not a Business Combination. In these circumstances,
the assets and liabilities are assigned a carrying amount based on their relative fair values in an asset purchase transaction,
and no goodwill will arise on the transaction.
In determining whether an acquisition is a business combination or an asset acquisition, manage ment apply significant
judgement to assess whether the net assets acquired constitute a “business” in accordance with AASB 3. Under that
standard, a business is an integrated set of activities and assets that is capable of being conducted or managed for the
---- 24 ----
MANDRAKE RESOURCES LIMITED
ABN 60 006 569 124
ANNUAL REPORT 30 June 2020
purpose of providing a return, and necessarily consists of inputs, processes, which when applied to those inputs, have the
ability to create outputs.
Share-based payments
The measurement of fair value requires the Group to make certain significant es timates and judgements as disclosed in the
relevant note to the financial statements. The accounting estimates and judgements relating to equity-settled share based
payments impact amounts recorded as assets and liabilities, and profit and loss. Please refer to Notes 10 and 11 for further
information.
Exploration and evaluation expenditure
The consolidated group capitalises expenditure relating to exploration and evaluation costs where they are considered to
be likely to be recoverable or where the activities have not reached a stage which permits a reasonable assessment of the
existence of economically recoverable resources. Capitalisation of expenditure requires the consolidated group to make a
judgement on the extent that expenditure on exploration and evaluation assets will likely be recovered in the future through
mineral extraction or some other form of commercialisation of the exploration and evaluation stage assets.
The future recoverability of capitalised exploration and evaluation costs are dependent on a number of factors, including
whether the consolidated group decides to exploit the related lease itself or, if not, whether it successfully recovers the
related exploration and evaluation asset through sale. Factors that could impact the future recoverability include the level
of reserves and resources, future technological changes, which could impact the cost of mining, future legal changes
(including changes to environmental restoration obligations) and changes to commodity prices.
Changes in accounting policies
This note explains the impact of the adoption of AASB 16 Leases on the group’s financial statements and also discloses the
new accounting policies that have been applied from 1 July 2019, where they are different to those applied in prior periods.
AASB 16 Leases
The Group has adopted AASB 16 Leases from 1 July 2019, under the modified retrospective method which resulted in changes
to accounting policies. Adjustments to the amounts have been recognised in the financial statements.
AASB 16 Leases – Accounting policies
Group has reviewed contracts to assess whether the contract is or contains a lease.
Lease liabilities are initially measured at the present value of the lease payments that are not paid at the commencement
date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group's
incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate.
The lease liabilities are measured at amortised cost using the effective interest method. They are re-measured when there is
a change in future lease payments arising from a change in an index or rate, if there is a changes in the Group's estimates of
the amount expected to be payable under residual value guarantees, or if the Group changes any assessment of whether it
will exercise extension options.
The Group has elected not to recognise right-of-use assets and lease liabilities for short-term leases of offices that have a lease
term of 12 months or less and leases of low-value assets, including IT equipment. The Group recognises the lease payments
associated with these leases as an expense on a straight-line basis over the lease term.
There are no other standards that are not yet effective and that would be expected to have a material impact on the entity in
the current of future reporting periods and on foreseeable future transactions.
Accounting Policies issued not yet effective
There are no other standards that are not yet effective and that would be expected to have a material impact on the entity in
the current of future reporting periods and on foreseeable future transactions.
---- 25 ----
MANDRAKE RESOURCES LIMITED
ABN 60 006 569 124
ANNUAL REPORT 30 June 2020
NOTE 2: REVENUE AND OTHER INCOME
Revenue
Interest received or due and receivable from other persons
NOTE 3: OPERATING (LOSS)
(Loss) before income tax expense includes the following expenses
Audit and Accounting
Financial expenses
Legal compliance and professional fees
Travel
NOTE 3: INCOME TAX EXPENSE
a.
The components of income tax expense comprise:
Current tax
Deferred tax
Utilisation of deferred tax assets previously not recognised
Deferred tax assets not recognised (losses)
Deferred tax assets not recognised (temporary)
2020
$
40,394
40,394
2020
$
54,676
-
60,336
1,092
2019
$
14
14
2019
$
76,734
216
198,122
1,498
2020
2019
$
-
-
-
$
-
-
-
(216,956)
(150,454)
-
-
(216,956)
(150,454)
b.
The prima facie tax on (loss) from ordinary activities before income tax is
reconciled to the income tax as follows:
Accounting profit (loss)from continuing operations before income tax
(788,931)
(547,107)
Prima facie tax payable on (profit) from ordinary activities before income tax at
27.5% (2019: 27.5%)
(216,956)
(150,454)
Add:
Tax effect of:
—
Other non-allowable items
Less:
Tax effect of:
—
—
—
Utilisation of deferred tax assets previously not recognised
Deferred tax assets not recognised (losses)
Deferred tax assets not recognised (temporary)
Income tax expense/(benefit)
NOTE 4: DIVIDENDS
No dividends have been paid during the financial year (2019: nil)
---- 26 ----
990
-
29
-
217,496
150,425
-
-
-
-
MANDRAKE RESOURCES LIMITED
ABN 60 006 569 124
ANNUAL REPORT 30 June 2020
NOTE 5: EARNINGS PER SHARE
Net (loss) used in the calculation of basic EPS
Weighted average number of ordinary shares outstanding during the year used in
the calculation of basic earnings per share
Basic (loss) per share
2020
2019
(788,931)
(547,107)
235,442,991
64,971,8771
(0.003)
(0.168)
$
No.
$
For the year ended 30 June 2020, diluted earnings per share was not disclosed because potential ordinary shares, being options
granted, are not dilutive and their conversion to ordinary shares would not demonstrate an inferior view of the earnings
performance of the Company.
1 Note that this is the balance of shares pre-share consolidation.
NOTE 6: CASH AND CASH EQUIVALENTS
Cash at bank and on hand
NOTE 7: OTHER RECEIVABLES
CURRENT
Other receivables
Deposits
The group have considered the other receivables as not impaired or past due.
NOTE 8: EXPLORATION AND EVALUATION EXPENDITURE
Opening balance
Shares issued to acquire Focus Exploration Pty Ltd
Exploration and evaluation expenditure
NOTE 9: TRADE AND OTHER PAYABLES
CURRENT
Trade payables and other payables
2020
$
3,305,851
3,305,851
2020
$
45,886
23,432
69,318
2020
$
-
249,900
343,475
593,375
2019
$
84,115
84,115
2019
$
77,854
-
77,854
2019
$
-
-
-
-
115,277
115,277
651,556
651,556
---- 27 ----
(61,723,283)
289
-
-
-
-
-
-
-
-
-
-
-
MANDRAKE RESOURCES LIMITED
ABN 60 006 569 124
ANNUAL REPORT 30 June 2020
NOTE 10: CONTRIBUTED EQUITY
a.
Share Capital
2020
$
2020
No.
2019
$
2019
No.
Ordinary fully paid shares
17,470,027
266,341,510
13,011,070
3,248,594
13,011,070
3,248,883
13,011,070
64,971,877
$
No.
Movement in ordinary shares on issue
Balance at 1 July
Consolidation on 12 June 2019
Rounding
Re-compliance
Conversion of converting loan notes
220,000
11,000,000
Conversion of debt
264,015
13,200,727
Issue for acquisition of Focus Exploration Pty Ltd
250,000
12,500,000
4,527,838
226,391,900
Conversion of options
Share Issue Costs
Balance at 30 June 2020
3,750
125,000
(806,646)
-
(27,000)
17,470,027
266,466,510
13,011,070
3,248,883
Ordinary shares participate in dividends and the proceeds on winding up of the parent entity in proportion to the number of
shares held. At shareholders meetings, each ordinary share is entitled to one vote when a poll is called, otherwise each
shareholder has one vote on a show of hands. On 12th June 2019 a 1 for 20 consolidation was completed.
b.
Convertible Loan Note Reserve
Opening balance
Issued during the year
Conversion
Closing balance
2020
$
220,000
2019
$
-
-
220,000
(220,000)
-
-
220,000
During the 2019 year, the Company entered into converting loan agreements with various lenders, for a total of $220,000.
The loans were interest free and unsecured.
The loan notes converted into 11,000,000 shares and 11,000,000 options prior to re-quotation on 14 August 2019.
c. Option Reserve
Period opening balance
Consolidation 12/6/19
Converting loan options
Debt extinguishment
Capital raising
Broker options
Director options
30.6.2020
30.6.2019
$
Number
$
Number
285
3,000,001
285
60,000,000
-
11,000,000
153,921
13,200,727
-
113,195,950
527,946
45,278,400
210,960
24,000,000
-
-
-
-
-
-
(56,999,999)
-
-
-
-
-
893,112
209,675,078
285
3,000,001
---- 28 ----
MANDRAKE RESOURCES LIMITED
ABN 60 006 569 124
ANNUAL REPORT 30 June 2020
Options
Grant
date
Expiry
date
Balance at
the start
Granted
during the
year
Exercise
Price
$
Exercised
during the
year
Expired
during
the year
Balance at the
end of the
year
Vested and
exercisable at
the end of the
year
Existing1
Existing1
14/07/17
14/07/21
2,250,001
30/11/17
14/07/21
750,000
-
-
0.400
0.400
Converting loans
4/06/19
14/07/22
Debt
extinguishment
12/08/19
14/07/22
Capital raising
12/08/19
14/07/22
Broker
Directors
12/08/19
14/07/22
28/11/19
28/11/22
-
-
-
-
-
11,000,000
0.030
13,200,727
0.030
113,195,950
0.030
(125,000)
45,278,400
0.030
24,000,000
0.030
-
-
3,000,001
206,675,077
(125,000)
-
-
-
-
-
-
-
-
-
-
-
-
2,250,001
2,250,001
750,000
750,000
11,000,000
11,000,000
13,200,727
13,200,727
113,070,950
113,070,950
45,278,400
45,278,400
24,000,000
24,000,000
209,550,078
209,550,078
1 As a result of the consolidation on 12 June 2019, the previous number of options on issue (60,000,000) consolidated to 3,000,001,
and the exercise price increased, from $0.02 to $0.40.
Subsequent to 30 June 2019, an additional 206,675,077 options were issued, with an exercise price of $0.03 per option.
The fair value of the options issued was calculated using Black-Scholes modelling. A fair value of 1.166c and 0.879c respectively for re-
compliance and director’s options were calculated. The following inputs were used in the calculation:
Options issued on
re-compliance
Directors options
Valuation date (equal to grant date under AASB 2)
Exercise price
Expiration date
Share price at valuation date
Risk free rate of interest
Company share price volatility
Fair value
The value recognised on issue of options is as follows:
Name
Re-compliance options
Broker options
Debts to equity options
Total
Directors options
James Allchurch
Patrick Burke
Ben Phillips
Total
3 cents
12 August 2019 28 November 2019
3 cents
14 July 2020 28 November 2022
$0.016
0.62% p.a.
110% p.a.
$0.00879
$0.020
0.7% p.a.
110% p.a.
$0.01166
Quantity
45,278,400
13,200,727
58,479,127
12,000,000
6,000,000
6,000,000
24,000,000
AUD$
527,946
153,920
681,867
105,480
52,740
52,740
210,960
The Broker options were considered to be capital raising costs, the value recorded was deducted against share capital. The debt-to-equity
options were (along with 13,200,727 ordinary shares) issued to creditors to extinguish certain liabilities, and the excess of the fair value of
the shares and options issued to the book value of the liabilities extinguished was expensed to profit and loss. The options issued to
Directors were expensed in accordance with AASB 2.
The options that attached to the shares issued as part of the capital raising, and the options that attached to the conversion of the
convertible note, have been treated as freely attaching to the underlying issue of ordinary shares, and therefore have not been assigned
any additional value.
All the options above vested on grant of the respective options.
---- 29 ----
MANDRAKE RESOURCES LIMITED
ABN 60 006 569 124
ANNUAL REPORT 30 June 2020
d. Capital Management
Management controls the capital of the group in order to maintain a good debt to equity ratio, provide the shareholders with adequate
returns and ensure that the group can fund its operations and continue as a going concern.
There are no externally imposed capital requirements.
Management effectively manages the group’s capital by assessing the group’s financia l risks and adjusting its capital structure in
response to changes in these risks and in the market. These responses include the management of debt levels, distributions t o
shareholders and share issues.
NOTE 11: ACQUISITION OF FOCUS EXPLORATION PTY LTD
Summary of acquisition
During the period, Mandrake Resources Ltd acquired 100% of the issued share capital of Focus Exploration Pty Ltd (Focus) by
way of the issue of 12,500,000 Mandrake shares to the shareholders of Focus at a fair value 0f $0.02 per share. Focus is a
Proprietary limited company which holds the Berinka Project in the Northern Territory.
The assets and liabilities recognised as a result of the acquisition are as follows:
Fair value
Cash
Exploration and evaluation expenditure
Trade and other payables
Fair Value of the Net Assets acquired
$
100
249,900
-
250,000
The Company gained control of Focus on 12 August 2019 with a shareholding of 100% pursuant to the completion of the re-
compliance work articulated in the Prospectus dated 21 May 2019.
Total cash outflows relating to the acquisition of Focus was nil. The purchase of Focus shares was funded entirely by the is sue
of Mandrake shares. Cash received on the acquisition of Focus was $100, resulting in a net cash inflow in investing activities in
the statement of cash flows of $100. The only liabilities originally sitting in that company were Director’s loans, which had been
forgiven in full prior to the acquisition.
NOTE 12: COMMITMENTS AND CONTINGENCIES
There are no material commitments or contingencies within the group at reporting date.
NOTE 13: EVENTS SUBSEQUENT TO BALANCE DATE
Notices to exercise 21,300,000 options exercisable at $0.03 per option were received and 21,300,000 shares were issued
accordingly raising $639,000 before costs for the Company.
The impact of the Coronavirus (COVID-19) pandemic is ongoing and while it has not significantly impacted the entity up to 30
June 2020, it is not practicable to estimate the potential impact, positive or negative, after the reporting date. The situat ion is
rapidly developing and is dependent on measures imposed by the Australian Government and other countries, s uch as
maintaining social distancing requirements, quarantine, travel restrictions and any economic stimulus that may be provided.
Other than the above, there have been no significant events after the reporting date.
NOTE 14: CASH FLOW INFORMATION
Reconciliation of profit/(loss) after income tax expense to net cash used in operating activities
Loss for the year
Non-cash items recorded in Profit and Loss:
Debt extinguishment
Share-based payments
Changes in working capital balances
Trade and other receivables
Trade and other payables
---- 30 ----
2020
$
2019
$
(788,931)
(547,107)
153,920
210,960
8,537
(272,264)
(687,777)
-
-
(57,309)
418,197
(186,219)
MANDRAKE RESOURCES LIMITED
ABN 60 006 569 124
ANNUAL REPORT 30 June 2020
NOTE 15: RELATED PARTY TRANSACTIONS
a.
Related parties
The Group’s main related parties are as follows:
(i)
Entities exercising control over the Group:
The ultimate parent entity that exercises control over the Group is, Mandrake Resources Limited which is
incorporated in Australia.
(ii)
Key management personnel:
Any person(s) having authority and responsibility for planning, directing and controlling the activities of the entity,
directly or indirectly, including any director (whether executive or otherwise) of that entity, are considered key
management personnel.
For details of disclosures relating to key management personnel, refer below and Note 16.
(iii)
Entities subject to significant influence by the Group:
An entity that has the power to participate in the financial and operating policy decisions of an entity, but does
not have control over those policies, is an entity that holds significant influence. Significant influence may be
gained by share ownership, statute or agreement.
b.
Transactions with related parties
Transactions between related parties are on normal commercial terms and conditions no more favourable than those
available to other parties unless otherwise stated.
The following transactions occurred with related parties:
• Steinepreis Paganin, an entity associated with Mr Peter Wall, had liabilities of $222,909 settled during the year
via shares, options and cash and discounts given to the Company. Steinepreis Paganin invoiced the Company
$37,350 including GST during the year (2019: invoiced $172,271 (incl GST)) in relation to legal services provided
to the Company. $5,603 (incl GST) remains owing at 30 June 2020 (2019: $222,909 (including GST)).
• Pheakes Pty Ltd, a company controlled by Mr Peter Wall, had liabilities of $69.300 (incl. GST settled by cash and
the issue of securities during the year. Director’s fees of $6,600 (incl. GST) were paid to Pheakes Pty Ltd during
the year. Nil was owing at year end (2019; $69,300 (incl. GST)).
• Chaperon Corporate, an entity associated with Graham Durtanovich, had liabilities of $58,399 (incl. GST) s settled
by cash and the issue of securities during the year. Director fees of $9,900 (including GST) were paid during the
year and $26,702 iincluding GST were paid to Chaperone Corporate for accounting work. Nil remains owing at
year end (2019: $58,399 including GST).
•
Ironside Capital was engaged as Corporate Advisor on 23 April 2019 received $123,907 (incl GST) (2019: $nil) for
pre and post re-quotation corporate advisory fees. Ben Phillips is employed by Ironside Capital. The Ironside
Capital mandate terminated in May 2020.
James Allchurch is one of the Focus Shareholders and received 2,500,000 consideration shares pursuant to the acquisition
of Focus Exploration Pty Ltd.
Connected Energy Solutions, and entity associated with Graham Durtanovich was issued 3,250,500 shares and 3,250,000
attaching options in lieu of debts owed to Chaperon Corporate, an entity also associated with Mr Durtanovich.
Ben Phillips participated in a Convertible Loan Agreement with the Company to the value of $20,000. The Convertible Note
Agreement converted on the basis of one share and one attaching option for every $0.02 invested with the attaching option
having a strike price of $0.03 and an expiry date of 14 July 2022. On conversion, 1,000,000 Shares and 1,000,000 options
were issued to Deep36 Pty Ltd ATF Deep Super, (an entity controlled by Mr Phillips). 1,710,500 shares and 1,710,500
options were issued to Bob Alfred Pty Ltd ATF the Bob Alfred Trust (an entity controlled by Mr Phillips) in lieu of debts owed
to Mr Phillips by the Company. Ironside Capital Pty Ltd, an entity associated with Ben Phillips, has a corporate mandate for
monthly services at $7,700 (incl GST).
7,805,000 shares and 5,305,000 options were issued to Pheakes Pty Ltd and the Wall Family superannuation fund, both
entities controlled by Mr Wall, on re-compliance by the Company and in lieu of debts owed to Mr Wall. In May 2019 Peter
Wall participated through a Convertible Loan Agreement for $50,000. The Convertible Note Agreement converted on the
basis of one share and one attaching option for every $0.02 invested with the attaching option having a strike price of $0.03
and an expiry date of 14 July 2022. On conversion, 1,000,000 Shares and 1,000,000 options were issued to Pheakes Pty Ltd.
There were no other transactions with KMP and their related parties other than what is disclosed above and Note 16.
---- 31 ----
MANDRAKE RESOURCES LIMITED
ABN 60 006 569 124
ANNUAL REPORT 30 June 2020
NOTE 16: KEY MANAGEMENT PERSONNEL COMPENSATION
Refer to the remuneration report contained in the directors’ report for details of the remuneration paid or payable to each
member of the Group’s key management personnel (KMP) for the year ended 30 June 2020.
The totals of remuneration paid to KMP of the Company and the Group during the year are as follows:
Short-term employee benefits
Post-employment benefits
Other long-term benefits
Share-based payments
Total KMP compensation
Short-term employee benefits
2020
$
2019
$
318,718
108,000
-
-
210,960
529,678
-
-
-
108,000
These amounts include fees and benefits paid to the non-executive Chair, non-executive directors and executive directors as
well as all salary, paid leave benefits, fringe benefits and cash bonuses awarded to executive directors and other KMP.
These amounts are the current-year’s estimated costs of providing for the Group’s defined benefits scheme post- retirement,
superannuation contributions made during the year and post-employment life insurance benefits.
Share-based payments
24,000,000 options were approved at the 2019 Annual General Meeting. Further information on the options are detailed in
note 10c. above.
Further information in relation to KMP remuneration can be found in the directors’ report.
NOTE 17: AUDITOR’S REMUNERATION
Remuneration of the auditor for:
2020
$
2019
$
–
auditing or reviewing the financial statements – BDO Audit (WA) Pty Ltd
61,654
37,591
Remuneration of the auditor for non-assurance services:
–
–
–
Tax returns
Relisting services
Other
12,465
3,840
2,308
80,266
9,864
18,690
-
66,145
NOTE 18: FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
Interest Rate Risk
At reporting date, the Group’s exposure to market risk for changes in interest rates relates primarily to the Group’s cash. The Group
constantly analyses its exposure to interest rates, with consideration given to potential renewal of existing positions, the mix of fixed
and variable interest rates and the period to which deposits may be fixed.
At reporting date, the Group had the following financial assets exposed to variable interest rates that are not designated in cash flow
hedges:
Financial Assets
Cash and cash equivalents – interest bearing
3,305,851
84,115
2020
$
2019
$
---- 32 ----
MANDRAKE RESOURCES LIMITED
ABN 60 006 569 124
ANNUAL REPORT 30 June 2020
Sensitivity
At 30 June 2020, if interest rates had increased by 0.25% from the year end variable rates with all other variables held constant, post
tax profit and equity for the group would have been $8,265 higher (2019: changes of 0.5% $421 higher). The 0.25% (2019: 0.5%)
sensitivity is based on reasonably possible changes over a financial year, using an observed range of historical RBA movement s over the
last year.
Liquidity Risk
The Group has no significant exposure to liquidity risk as there is effectively no debt. The Group manages liquidity risk by monitoring
immediate and forecast cash requirements and ensuring adequate cash reserves are maintained.
Credit Risk
Credit risk refers to the risk that a counter party will default on its contractual obligations resulting in a financial loss to the Group. The
Group has adopted the policy of dealing with creditworthy counterparties and obtaining sufficient collateral or other securit y where
appropriate, as a means of mitigating the risk of financial loss from defaults. The Group measures credit risk on a fair value basis.
Significant cash deposits are with institutions with a minimum credit rating of AA (or equivalent) as determined by a reputable credit
rating agency e.g. Standard & Poor.
The Group does not have any other significant credit risk exposure to a single counterparty or any group of counterparties ha ving
similar characteristics.
NOTE 19: PARENT ENTITY DISCLOSURES
The following information has been extracted from the books and records of the parent and has been prepared in accordance with
Accounting Standards.
Financial position of the parent entity at year end
Current assets
Non-current assets
Total assets
Current Liabilities
Total liabilities
Total equity of the parent entity comprising of:
Share capital
Reserves
Accumulated losses
Total equity
Statement of Profit or Loss and Other Comprehensive Income
Total Profit/(loss)
Total comprehensive loss
COMMITMENTS AND CONTINGENCIES
2020
$
3,440,553
593,475
4,034,028
180,761
180,761
2019
$
161,969
-
161,969
651,556
651,556
17,470,027
13,011,070
893,112
220,285
(14,509,872)
(13,720,941)
3,853,267
(489,586)
(788,931)
(788,931)
(547,107)
(547,107)
Mandrake Resources Limited does not have any commitments and contingent assets and liabilities at 30 June 2020.
NOTE 20: CONTROLLED ENTITIES
Focus Exploration Pty Ltd was acquired during the financial year and is 100% owned (refer note 11).
---- 33 ----
MANDRAKE RESOURCES LIMITED
ABN 60 006 569 124
ANNUAL REPORT 30 June 2020
NOTE 21: FAIR VALUES OF FINANCIAL INSTRUMENTS
Recurring fair value measurements
The Group does not have any financial instruments that are subject to recurring or non-recurring fair value measurements
Fair values of financial instruments not measured at fair value
Due to their short-term nature, the carrying amounts of current receivables and current trade and other payables is assumed to
equal their fair value.
---- 34 ----
MANDRAKE RESOURCES LIMITED
ABN 60 006 569 124
ANNUAL REPORT 30 June 2020
DIRECTORS’ DECLARATION
The Directors declare that:
(a)
(b)
(c)
in the Directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as
and when they become due and payable;
in the Directors’ opinion, the attached financial statements and notes thereto are in compliance with International
Financial Reporting Standards, as stated in note 1 to the financial statements;
in the Directors’ opinion, the attached financial statements and notes thereto are in accordance with the Corporations
Act 2001, including compliance with accounting standards and giving a true and fair view of the financial position and
performance of the Company; and
(d)
the Directors have been given the declarations required by s.295A of the Corporations Act.
Signed in accordance with a resolution of the Directors made pursuant to s.295 (5) of the Corporations Act 2001.
James Allchurch
Managing Director
Dated 25 September 2020
---- 35 ----
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 Mandrake Resources Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Mandrake Resources Limited (the Company) and its subsidiary
(the Group), which comprises the consolidated statement of financial position as at 30 June 2020, 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 2020 and of its
financial performance for the year ended on that date; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
Report section of our report. We are independent of the Group in accordance with the Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code)
that are relevant to our audit of the financial report in Australia. We have also fulfilled our other
ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
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 a firms. Liability limited by a scheme approved under Professional Standards Legislation.
Carrying value of Exploration and Evaluation asset
Key audit matter
How the matter was addressed in our audit
The carrying value of the capitalised exploration and
Our procedures included, but were not limited to:
evaluation asset as at 30 June 2020 is disclosed in Note
8 of the financial report.
(cid:127)
Obtaining a schedule of the areas of interest
held by the Group and assessing whether the
As the carrying value of the Exploration and Evaluation
rights to tenure of those areas of interest
Asset represents a significant asset of the Group, we
remained current at balance date;
considered it necessary to assess whether any facts or
circumstances exist to suggest that the carrying
amount of this asset may exceed its recoverable
amount.
(cid:127)
Considering the status of the ongoing
exploration programmes in the respective
areas of interest by holding discussions with
management, and reviewing the Group’s
In accordance with AASB 6 Exploration for and
exploration budgets, ASX announcements and
Evaluation of Mineral Resources (AASB 6), the
director’s minutes;
recoverability of exploration and evaluation
expenditure requires significant judgment by
management in determining whether there are any
facts or circumstances that exist to suggest that the
carrying amount of this asset may exceed its
recoverable amount.
As a result, this is considered a key audit matter.
(cid:127)
Considering whether any such areas of
interest had reached a stage where a
reasonable assessment of economically
recoverable reserves existed;
(cid:127)
(cid:127)
Considering whether there are any other
facts or circumstances existing to suggest
impairment testing was required; and
Assessing the adequacy of the related
disclosures in Note 8 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 2020, but does not include the
financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) 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 on pages 11 to 15 of the directors’ report for the
year ended 30 June 2020.
In our opinion, the Remuneration Report of Mandrake Resources Limited, for the year ended 30 June
2020, complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
BDO Audit Pty Ltd
Jarrad Prue
Director
Perth, 25 September 2020
MANDRAKE RESOURCES LIMITED
ABN 60 006 569 124
ANNUAL REPORT 30 JUNE 2017
ASX ADDITIONAL INFORMATION
The shareholder information set out below was applicable as at 13 September 2020.
As at 13 September 2020 there were 1,376 holders of Ordinary Fully Paid Shares
VOTING RIGHTS
The voting rights of the ordinary shares are as follows:
(a)
(b)
(c)
at meetings of members each member entitled to vote may vote in person or by proxy or attorney;
on a show of hands each person present who is a member has one vote; and
on a poll each person present in person or by proxy or by attorney has one vote for each ordinary share held
There are no voting rights attached to any of the options that the Company currently has on issue. Upon exercise of these opt ions, the
shares issued will have the same voting rights as existing ordinary shares.
TWENTY LARGEST SHAREHOLDERS
The names of the twenty largest shareholders as at 13 September 2020 are as follows:
Ordinary Fully Paid Shares
Holder Name
SANDHURST TRUSTEES LTD
BELLARINE GOLD PTY LTD
MR ALASTAIR CARDNO
GREENSEA INVESTMENTS PTY LTD
PHEAKES PTY LTD
MELBOR PTY LTD
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
DR SALIM CASSIM
BLUEKNIGHT CORPORATION PTY LTD
BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD
ONGAVA PTY LTD
CONNECTED ENERGY SOLUTIONS PTY LTD
BEDEL & SOWA CORP PTY LTD
MARTINI 29 PTY LTD
SCINTILLA STRATEGIC INVESTMENTS LIMITED
JAMES PETER ALLCHURCH
MR RYAN JOHN RAY VITALI & MRS HOLLY DIANA VITALI
PURESTEEL HOLDINGS PTY LTD
MR PETER CHRISTOPHER WALL & MRS TANYA-LEE WALL
PHEAKES PTY LTD
Totals
Holding
31,465,095
17,197,853
8,073,984
7,000,000
5,305,000
5,000,000
4,900,000
4,500,000
4,340,227
4,000,000
3,700,000
3,250,500
3,000,000
3,000,000
3,000,000
2,500,000
2,500,000
2,500,000
2,500,000
2,500,000
% IC
10.93%
5.98%
2.81%
2.43%
1.84%
1.74%
1.70%
1.56%
1.51%
1.39%
1.29%
1.13%
1.04%
1.04%
1.04%
0.87%
0.87%
0.87%
0.87%
0.87%
120,232,659
41.78%
SUBSTANTIAL HOLDERS
The following substantial holder notices have been received by the Company:
Holder Name
SANDHURST TRUSTEES LTD
Holding
24,465,095
% IC
9.19%
---- 39 ----
MANDRAKE RESOURCES LIMITED
ABN 60 006 569 124
ANNUAL REPORT 30 June 2020
ASX ADDITIONAL INFORMATION (CONT)
DISTRIBUTION OF EQUITY SECURITIES
Ordinary Fully Paid Shares
Unmarketable Parcels – 676 Holders comprising a total of 135,184 ordinary fully paid shares. This is based on a price of $0.075, being the
closing trading price on 13 September 2020.
Holding Ranges
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 - 9,999,999,999
Totals
RESTRICTED SECURITIES
Holders
Total Units
% Issued Share Capital
649
25
21
345
335
1,375
56,191
67,325
175,973
17,347,144
270,119,877
287,766,510
0.02%
0.02%
0.06%
6.03%
93.87%
100.00%
As at 13 September 2020 the following securities are subject to escrow:
15,700,727 Ordinary fully paid shares escrow expiring 14 August 2021
60,229,127 Options expiring 14 July 2022 @ $0.03 escrow expiring 14 August 2021
UNQUOTED SECURITIES
As at 13 September 2020, the following unquoted securities are on issue:
3,000,001 Options Expiring 14 July 2021 @ $0.40 – 21 Holders
Holders with more than 20% - Nil
60,229,127 Options expiring 14 July 2022 @ $0.03 escrow expiring 14 August 2021 – 28 Holders
Holders with more than 20% - Nil
125,000 Options expiring 14 July 2022 @ $0.03 – 1 Holder
Holders with more than 20%
Holder Name
Rebecca Simone Robson
Holding
125,000
% IC
100.00%
---- 40 ----
MANDRAKE RESOURCES LIMITED
ABN 60 006 569 124
ANNUAL REPORT 30 June 2020
500,000 Options expiring 14 July 2022 @ $0.03 – 1 Holder
Holders with more than 20%
Holder Name
Rec (WA) Pty Ltd
500,000 Options expiring 14 July 2022 @ $0.03 – 1 Holder
Holders with more than 20%
Holder Name
JM Phillips Pty Ltd
125,000 Options expiring 14 July 2022 @ $0.03 – 1 Holder
Holders with more than 20%
Holder Name
Stephen Colin Stanley Robson
1,000,000 Options expiring 14 July 2022 @ $0.03 – 2 Holders
Holders with more than 20%
Holder Name
Larfrae Pty Ltd
Markota Pty Ltd
250,000 Options expiring 14 July 2022 @ $0.03 – 1 Holder
Holders with more than 20%
Holder Name
Ratatat Investments Pty Ltd
98,520,950 Options expiring 14 July 2022 @ $0.03 – 357 Holders
Holders with more than 20% - Nil
ON-MARKET BUY BACK
There is currently no on-market buyback program.
USE OF FUNDS
Holding
500,000
% IC
28.57%
Holding
500,000
% IC
100.00%
Holding
125,000
% IC
100.00%
Holding
500,000
500,000
% IC
50.00%
50.00%
Holding
250,000
% IC
100.00%
Mandrake Resources Ltd has used cash and cash equivalents on hand at re-quotation in a manner consistent with stated
business objectives.
---- 41 ----
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