MANDRAKE RESOURCES LIMITED
A.B.N. 60 006 569 124
ANNUAL REPORT
FOR THE YEAR ENDED
30 June 2023
MANDRAKE RESOURCES LIMITED
ABN 60 006 569 124
ANNUAL REPORT 30 June 2023
Table of Contents
CORPORATE DIRECTORY ........................................................................................................................................... 2
DIRECTORS’ REPORT ................................................................................................................................................. 3
REMUNERATION REPORT (AUDITED) ..................................................................................................................... 12
AUDITOR’S INDEPENDENCE DECLARATION .......................................................................................................... 17
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME ......................... 18
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ....................................................................................... 19
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ....................................................................................... 20
CONSOLIDATED STATEMENT OF CASH FLOWS .................................................................................................... 21
NOTES TO FINANCIAL REPORT FOR THE YEAR ENDED 30 June 2023 ................................................................ 22
DIRECTORS’ DECLARATION ..................................................................................................................................... 35
INDEPENDENT AUDITOR’S REPORT ....................................................................................................................... 36
ASX ADDITIONAL INFORMATION .............................................................................................................................. 40
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MANDRAKE RESOURCES LIMITED
ABN 60 006 569 124
ANNUAL REPORT 30 June 2023
CORPORATE DIRECTORY
Directors
Lloyd Flint – Non-Executive Chairman
Roger Fitzhardinge – Non-Executive Director
James Allchurch – Managing Director
Company Secretary
Lloyd Flint
Registered office
Level 1,
10 Outram Street
West Perth WA 6005
Ph: +61 8 9200 3743
Website: www.mandrakeresources.com.au
Auditors
BDO Audit (WA) Pty Ltd
Level 9, Mia Yellagonga Tower 2,
5 Spring Street
Perth WA 6000
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
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MANDRAKE RESOURCES LIMITED
ABN 60 006 569 124
ANNUAL REPORT 30 June 2023
DIRECTORS’ REPORT
Your directors present their report of the Company and its controlled entities for the financial year ended 30 June 2023.
Information on Directors
The names of directors in office at any time during or since the end of the year are:
Lloyd Flint
Qualifications
Experience
Non-Executive Chairman (Appointed 7 March 2021) and Company Secretary
BAcc, MBA, CAANZ, FGIA
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
Interest in Securities
5,000,000 Director Performance Rights
Directorships held in listed
entities (last 3 years)
Nil
Roger Fitzhardinge
Independent Non-Executive Director (Appointed 24 January 2022)
Qualifications
Experience
(B.Sc (Geology), MAusIMM)
Mr Fitzhardinge is a geologist with more than 20 years’ experience in the exploration
and mining industry. Mr Fitzhardinge is currently the General Manager - Exploration &
Growth of Centaurus Metals Limited. Before joining Centaurus, Mr Fitzhardinge worked
with Mirabela Nickel Ltd in Brazil as Manager of Technical Services. He has previously
worked in gold exploration in the Yilgarn with Normandy (now Newmont) and
Homestake (now Barrick) as well as BHP's iron ore operations in the Pilbara region. Mr
Fitzhardinge lived in Brazil for 11 years and is fluent in Portuguese.
Interest in Securities
2,050,000 ordinary fully paid shares; 5,000,000 Director Performance Rights
Directorships held in listed
entities (last 3 years)
Nil
James Allchurch
Qualifications
Experience
Interest in Shares and Options
Directorships held in listed
entities (last 3 years)
— Managing Director (Appointed 4 August 2019)
—
BSc (Hons); AIG
— Mr Allchurch is a geologist with over 20 years’ experience in oil, gas and mineral
exploration and operations. Mr Allchurch has identified, financed and developed dozens
of energy and mineral projects as well as having held various Board positions over the
previous 10 years including ASX-listed Monto Minerals, 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.
14,500,000 Ordinary fully paid shares; 8,500,000 Class A Performance Rights; 8,500,000
Class B Performance Rights; 20,000,000 Director Performance Rights
In the past 3 years, James Allchurch has been a director of:
Winchester Energy Limited – (Non-Executive Director – resigned 30 June 2023)
—
—
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MANDRAKE RESOURCES LIMITED
ABN 60 006 569 124
ANNUAL REPORT 30 June 2023
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
3
3
3
3
3
3
Lloyd Flint
Roger Fitzhardinge
James Allchurch
Principal Activities
The principal activity of the Company during the financial year ended 30 June 2023 was the exploration and evaluation of mineral
resources.
Operating Results
The consolidated loss of the group after providing for income tax amounted to $310,619 (2022: Loss of $559,764).
Dividends Paid or Recommended
No interim dividend (2022: 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 2023
Review of Operations
Utah Lithium Project (Mandrake 100%)
During the year ending 30 June 2023 the Company organically generated the Utah Lithium Project though the acquisition of both
Utah State and US Federal mineral tenure.
As at 30 June 2023 Mandrake had secured 88,096 acres. To the date of this report a further 5,659 acres has been secured. Over
93,755 acres (approximately 379 km2) of lithium brine prospective ground in the Paradox Basin in southeast Utah has now been
secured. The lithium brine land tenure comprises:
1. 34,670 acres of leases pursuant to an Other Business Agreement (OBA) with the Utah School and Institutional Trust Lands
Administration (SITLA), the organization which manages the Utah State Government’s trust lands and mineral rights.
2. Over 2,950 claims have been acquired on Bureau of Land Management (BLM) land which totals over 59,058 acres. Claim
staking has targeted the most prospective lithium brine areas in the Paradox Basin.
A global review undertaken by Mandrake of several lithium assets and numerous lithium hard-rock, clay and brine prospective
areas throughout the world identified the Paradox Basin in the United States as the most attractive opportunity for the Company
to successfully develop a world-class lithium project.
The Paradox Basin in the ‘lithium four corners’ area hosts hypersaline brines historically documented to contain significant
concentrations of lithium, boron, potassium salts (potash) and other elements. The United States’ biggest potash producer,
Intrepid Potash (NYSE: IPI) operates the Cane Creek potash mine which is located approx 50km to the north west of the Utah
Lithium Project whilst mid-tier ASX-listed lithium developer Anson Resources (ASX: ASN) is located approx 60km north west (Figure
1).
Figure 1: Location of the Utah Lithium Project
In a strong vote of confidence for the Utah Lithium Project, ASX-listed Galan Lithium Limited invested $1.5M for an approximate
5% stake in Mandrake through the subscription of 30M ordinary shares at 5c and also nominated strategic advisors who subscribed
for a further 14M shares in Mandrake at 5c ($700,000).
Operations
In May 2023 Mandrake executed a Well Access Agreement (WAA) with Paradox Upstream LLC (Paradox), the largest vertically
integrated oil and gas/ helium producer/processor in the northern Paradox Basin. The WAA covers Mandrake’s entire Utah Lithium
Project with any subsequent leasing conducted by Mandrake able to be added to the scope of the WAA.
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MANDRAKE RESOURCES LIMITED
ABN 60 006 569 124
ANNUAL REPORT 30 June 2023
The WAA is transformative for the Utah Lithium Project in that it allows Mandrake to potentially re-enter Paradox’s 84 existing
suspended oil and gas wells for the purpose of sampling lithium-rich brines, circumventing the requirement for drilling which will
save Mandrake millions of dollars in exploration drilling costs given that a new well is estimated to cost in excess of US$3M.
The B-912 and BIU-1 wells are the first wells selected by Mandrake for lithium brine sampling under the WAA based on their
highly prospective attributes, including:
1. Proximity to NW-SE trending fault structures
2. Total well depths of >9,000 feet, penetrating the highly prospective clastic units (Paradox) as well as the underlying
Leadville and McCracken Formations (BIU-1 only)
Interpretation of logs indicates good porosity and permeability of target zones
3.
4. Access (roads and pad)
5.
Infrastructure (power and pipelines)
6. Down-hole well conditions (engineering)
Subsequent to the year ending 30 June 2023, Mandrake secured 181km2 of 3D seismic data incorporating much of the Utah
Lithium Project (Figure 2). The 3D data was acquired in 2008 and 2012 and was merged and reprocessed in 2022.
Figure 2. Extent of 3D seismic and cross-section locations
Mandrake, with the aid of the 3D seismic dataset and petrophysical and mud logs from historic wells, completed detailed
stratigraphic correlation and modelling that identified the regional-scale, lateral continuity and significant thickness of formations
to be targeted for lithium brine sampling (Figure 3).
Lithological units, or aquifers, with potential for hosting lithium-rich brines include the Devonian McCracken Sandstone, the
Mississippian Leadville Limestone and a multitude of clastic zones within the overlying Pennsylvanian Paradox Formation.
According to logs, the aggregate thickness of these laterally continuous regional units is typically in excess of 500ft (150m) of total
brine-saturated rock.
The precise genesis of anomalously high lithium concentrations in Paradox Basin brines is understood to be from one or both of:
1) high lithium legacy in-situ evaporite sediments (contemporaneous with the formation of the Paradox Basin) and 2) the
breakdown of hydrothermal and felsic basement rocks with high lithium content. Given its highly soluble nature, lithium is readily
dissolved and transported in sub-surface fluids with highest concentrations of lithium typically proximal to feeder structures.
The deep-rooted faults across the Utah Lithium Project typically extend to the basement and have been subjected to hydrothermal
fluid flow, giving rise to base metal and other mineralisation in the area. It is anticipated that the fault systems also provide
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MANDRAKE RESOURCES LIMITED
ABN 60 006 569 124
ANNUAL REPORT 30 June 2023
preferential migration pathways for brines enriched in basement-sourced lithium to flow towards the surface and recharge
existing aquifers in overlying sediments.
Figure 3: Cross-section A– A’ (see Figure 2 for cross-section location) - 3D seismic, re-entry wells and lateral continuity of
lithological units
Berinka Pine Creek Gold-Copper Project (Mandrake 100%)
During the year ending 30 June 2023 the Company completing a drilling campaign of 11 holes for 1,131m and a soil and rock chip
sampling campaign which collected 56 soil and 21 rock chip samples at the Berinka Pine Creek Gold-Copper Project in the Northern
Territory.
Drilling results defined gold mineralisation over a strike length of greater than 2km between the Vegetation Anomaly and Terry's
Prospects and also identified platinum and palladium anomalism for the first time in the Sandy Creek Complex gabbro host rock.
Most of the Vegetation and Terry’s Prospect area is under cover and there is insufficient drilling to enable a complete
understanding of the extent of higher-grade zones or their controlling structures.
Jimperding Project (Mandrake 100%)
The 142km2 Jimperding Project lies approximately 30km east of Chalice Mining Limited’s (Chalice) Julimar PGE-Ni-Cu deposit and
includes the historical Newleyine prospect and two new prospects identified by the Company (Tolarno North and South). No
activity was carried out at the Jimperding project during the period.
Assessment of New Projects
In September 2022, Mandrake concluded the evaluation and due diligence of the Delfin project which, notwithstanding
Mandrake’s best endeavours, was unable to satisfy the Conditions Precedent of the Terms Sheet by the End Date (refer to the
release dated 26 September 2022). As a result, Mandrake did not proceed with the Delfin transaction.
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MANDRAKE RESOURCES LIMITED
ABN 60 006 569 124
ANNUAL REPORT 30 June 2023
RISKS
The Group actively manages a range of financial and non-financial business risks and uncertainties which can potentially have a
material impact on the Group and its ability to achieve its goals and objectives. While every effort is made to identify and manage
material risks and emerging risks, additional risks not currently known or detailed below may also adversely affect future
performance.
Exploration Risk
Mineral exploration and development are high risk undertakings due to the various levels of inherent uncertainty. There can be
no assurance that exploration of the Group’s tenements, or of any other tenements that may be acquired by the Group in the
future, will result in the discovery of economic mineralisation. Even if economic mineralisation is discovered there is no guarantee
that it can be commercially exploited.
Economic
General economic conditions, introduction of tax reform, new legislation, the general level of activity within the resources
industry, investor sentiment, movements in interest and inflation rates, currency exchange rates and changes in commodity prices
may have an adverse effect on the Group’s exploration, development and possible production activities, as well as on its ability to
fund those activities.
Resource Estimates
There is no guarantee that a JORC Code compliant resource will be discovered on any of the Group’s tenements. Resource
estimates are expressions of judgement based on knowledge, experience and industry practice. Estimates which were valid when
originally calculated may alter significantly when new information or techniques become available. In addition, by their very
nature, resource estimates are imprecise and depend to some extent on interpretations which may prove to be inaccurate. As
further information becomes available through additional fieldwork and analysis the estimates are likely to change.
Access Risks – Cultural Heritage and Native Title
The Group must comply with various country specific cultural heritage and native title regulations which may require various
commitments, such as base studies and compliant survey work, to be undertaken ahead of the commencement of mining
operations.
Environmental Risks
The operations and proposed activities of the Group are subject to each project’s jurisdiction, laws and regulations concerning
the environment. As with most exploration projects and mining operations, the Group’s activities are expected to have an impact
on the environment, particularly if advanced exploration or mine development proceeds. Any future legislation and regulations
governing exploration, development and possible production may impose significant environmental obligations on the Group.
There can be no assurances that new environmental laws, regulations or stricter enforcement policies, once implemented, will
not oblige the Group to incur significant expenses and undertake significant investments in such respect which could have a
material adverse effect on the Group’s business, financial condition and results of operations.
Climate Change
The Group recognises that physical and non-physical impacts of climate change may affect assets, productivity, markets and the
community. Risks related to the physical impacts of climate change include the risks associated with increased severity of extreme
weather events and chronic risks resulting from longer-term changes in climate patterns. Non-physical risks and opportunities
arise from a variety of policy, legal, technological and market responses to the challenges posed by climate change and the
transition to a lower carbon world.
Sovereign, Political and Title Risk
The Group has overseas interests which are subject to the risks associated with operating in a foreign country. These risks may
include economic, social or political instability or change, hyperinflation, currency non-convertibility or instability and changes of
law affecting foreign ownership, exchange control, exploration licensing, export duties, investment into a foreign country and
repatriation of income or return of capital, environmental protection, land access and environmental regulation, mine safety,
labour relations as well as government control over petroleum properties or government regulations that require the employment
of local staff or contractors or require other benefits be provided to local residents.
COMPETENT PERSONS STATEMENT
The technical information in this announcement complies with the 2012 Edition of the Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves (JORC Code) and has been compiled and assessed under the supervision
of Mr James Allchurch, Managing Director of Mandrake Resources. Mr Allchurch is a Member of the Australian Institute of
Geoscientists. He has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration
and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the JORC Code. Mr Allchurch
consents to the inclusion in this announcement of the matters based on his information in the form and context in which it appears
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MANDRAKE RESOURCES LIMITED
ABN 60 006 569 124
ANNUAL REPORT 30 June 2023
Financial Position
The net assets of the Company at 30 June 2023 was $23,499,019 (2022: $19,681,226).
Significant Changes in State of Affairs
During the reporting year the company issued the following securities:
Shares
57,878,517 shares were issued on receipt of notice to exercise options raising $1,736,355 for the Company before costs. Of
these shares, 12,000,000 were issued to directors of the Company on exercise.
44,000,000 shares were placed at $0.05 cents each raising $2,200,000 for the Company before costs. 1,760,000 shares were
issued at $0.05 cents each in lieu of cash forming part of the capital arrangement fees.
500,000 shares were issued on the exercise of Performance Rights that had vested.
Options
5,000,000 options with a term of 4 years and an exercise price of $0.10 cents per share forming part of the capital arrangement
fees were issued.
57,878,517 options were exercised during the year. Of these options, 12,000,000 were exercised by directors of the Company.
Performance rights
30,000,000 performance rights approved by shareholders in general meeting were issued during the year.
A further 9,500,000 performance rights were issued to the Company’s US based Exploration Manager. The first tranche of the
rights vested and 500,000 rights were converted to shares accordingly.
Interests in the shares and options of the company and related bodies corporate
Securities
As at the date of this report the interests of the Directors in the shares and options of Mandrake Resources Limited were as
follows:
Ordinary Shares
Holder
James Allchurch
Roger Fitzhardinge
Lloyd Flint
Total
Options
Holder
James Allchurch
Roger Fitzhardinge
Lloyd Flint
Total
Balance at Beginning
of Year
Exercise of
Options during
the year
Other changes
during the year/
resignation
Balance at the date
of this report
2,500,000
2,050,000
-
12,000,000
-
-
4,550,000
12,000,000
-
-
-
-
14,500,000
2,050,000-
-
16,550,000
Balance at
beginning of year
Issued during
the year
12,000,000
-
-
12,000,000
-
-
-
-
Exercised
during the
year
(12,000,000)
-
-
(12,000,000)
Balance as at date
of this report
Vested and
exercisable
-
-
-
-
-
-
-
-
The amounts paid per ordinary share on the exercise of options at the date of exercise were as follows:
Date of exercise was 23 November 2022 and the amount paid per share was $0.03 per share. No amounts are unpaid on any
shares issued on the exercise of options.
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MANDRAKE RESOURCES LIMITED
ABN 60 006 569 124
ANNUAL REPORT 30 June 2023
Performance Rights
30 June 2023
Balance at the
start of the year
Granted as
Compensation
Vested during the
year
Exercised during
the year
Balance at
end of Year
James Allchurch
17,000,000
20,000,000
Roger Fitzhardinge
Lloyd Flint
Total
-
-
5,000,000
5,000,000
17,000,000
30,000,000
-
-
-
-
Vested
Un-vested
17,000,000
20,000,000
-
-
5,000,000
5,000,000
17,000,000
30,000,000
-
-
-
-
Environmental Regulations
To the best of the Directors’ knowledge, all activities have been undertaken in compliance with the requirements of environmental
regulations.
Likely developments and expected results of operations
Information on likely developments in the operations of the consolidated entity and the expected results of operations have not
been included in this report, other than as disclosed above, because the Directors believe it would be likely to result in
unreasonable prejudice to the consolidated entity.
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
No other matter or circumstance has arisen since 30 June 2023 that has significantly affected, or may significantly affect the
operations of the Group, the results of those operations, or the Group's state of affairs in future financial years..e.
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MANDRAKE RESOURCES LIMITED
ABN 60 006 569 124
ANNUAL REPORT 30 June 2023
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
22 June 2021
29 June 2021
28 February 2023
18 June 2024
18 June 2024
27 February 2027
$0.30
$0.30
$0.10
5,000,000
6,000,000
5,000,000
Option holders do not have any right, by virtue of the option, to participate in any share issue of the Company or any related 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 parties
arising from their report on the financial report.
On the 29 June 2023, 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 16.
Non-audit services
–
Other
2023
$
-
-
2022
$
565
565
Auditor’s Independence Declaration
The auditor’s independence declaration for the year ended 30 June 2023 has been received and can be found on page 16.
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MANDRAKE RESOURCES LIMITED
ABN 60 006 569 124
ANNUAL REPORT 30 June 2023
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
9.
Service agreements
10. Remuneration consultants
11. Voting of shareholders at the Company’s 2022 Annual General Meeting
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:
Lloyd Flint – Non-Executive Chairman (appointed 7 March 2021)
Roger Fitzhardinge – Non-Executive Director (appointed 24 January 2022)
James Allchurch – Managing Director (appointed 4 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 best
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.
•
•
•
•
•
Executive Officers are those directly accountable for the operational management and strategic direction of the Company and the
Group. The following table shows key performance indicators for the Group over the last five years:
2021
(237,283)
(0.0005)
-
-
0.170
(Loss)/Profit for the year ($)
Basic (loss) per share ($)
Dividend payments
Dividend payment ratio (%)
30 June share price
2022
(155,201)
(0.0003)
-
-
0.034
2020
(788,931)
(0.003)
-
-
0.027
2019
(547,107)
(0.168)
-
-
0.02
(300,169
(0.001)
-
-
0.046
2023
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 or fees (which is based on factors such as length of service and experience) and superannuation.
Incentives paid in the form of options and performance rights are intended to align the interests of the directors and Company
with those of the shareholders. Incentive securities were issued during the year.
KMP receive a superannuation guarantee contribution required by the government (), which is currently 10.5% (2022: 10.0%)
of the individual’s average weekly ordinary time earnings (AWOTE), and do not receive any other retirement benefits. Some
individuals, may choose 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 or
performance rights 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 2023
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 2023
Short Term
Salary, Fees &
Commissions
Post
Employment
Superannuation
Other/
Bonus
Share-
based
payments
Total
Performance
based
remuneration
$
$
$
$
$
%
James Allchurch1
Roger Fitzhardinge2
Lloyd Flint3
Total
257,354
60,000
36,000
353,354
-
6,300
-
6,300
-
-
-
-
124,380
31,095
31,095
186,570
381,734
97,395
67,095
546,223
33%
32%
46%
34%
Director fees are paid to Stoped Pty Ltd, a company controlled by Mr Allchurch.
Fees are $5,000 per month plus superannuation.
All fees were paid to Flint Family Trust, an entity controlled by Mr Flint. In addition, $79,150 was paid to Mr Flint for financial and
company secretarial services performed during the year
30 June 2022
Short Term
Salary, Fees &
Commissions
Post
Employment
Superannuation
Other/
Bonus
Share-
based
payments
Total
Performance
based
remuneration
$
$
$
$
$
%
Patrick Burke1
James Allchurch2
Roger Fitzhardinge3
Lloyd Flint4
Total
43,870
251,342
26,154
36,000
357,366
-
-
2,746
-
2,746
-
-
-
-
-
-
-
-
-
-
43,870
251,342
28,900
36,000
360,112
-%
-%
-%
-%
-%
Resigned 24 March 2022.
Director fees are paid to Stoped Pty Ltd, a company controlled by Mr Allchurch.
Appointed 24 January 2022. Fees are $5,000 per month plus superannuation. As at 30 June 2023, $26,154 in fees along with
superannuation was due and payable.
All fees were paid to Flint Family Trust, an entity controlled by Mr Flint. In addition, $74,910 was paid to Mr Flint for financial and
company secretarial services performed during the year
1
2
3
1
2
3
4
---- 13 ----
MANDRAKE RESOURCES LIMITED
ABN 60 006 569 124
ANNUAL REPORT 30 June 2023
REMUNERATION REPORT (AUDITED) (CONT)
6. Additional disclosures relating to options, performance rights and shares
KMP Options and Rights Holdings
The table below discloses the number of share options and performance rights granted, vested or lapsed during the year.
Share options and performance rights do not carry any voting or dividend rights and can only be exercised once the vesting conditions
have been met, until their expiry date.
Options
30 June 2023
James Allchurch
Roger Fitzhardinge
Lloyd Flint
Total
Balance at the start of
the year
12,000,000
-
-
12,000,000
Granted as
Compensation
and Exercisable
Options
Exercised
Options
Expired
Balance at
end of Year
-
-
-
-
(12,000,000)
-
-
(12,000,000)
-
-
-
-
-
-
-
-
The amounts paid per ordinary share on the exercise of options at the date of exercise were as follows:
Date of exercise was 23 November 2022 and the amount paid per share was $0.03 per share.
No amounts are unpaid on any shares issued on the exercise of options.
Performance Rights
30 June 2023
Balance at the start
of the year
Granted as
Compensation
Vested during the
year
Exercised during
the year
Balance at
end of Year
James Allchurch
17,000,000
20,000,000
Roger Fitzhardinge
Lloyd Flint
Total
-
-
5,000,000
5,000,000
17,000,000
30,000,000
-
-
-
-
Vested
Un-vested
17,000,000
20,000,000
-
-
5,000,000
5,000,000
17,000,000
30,000,000
-
-
-
-
A total of 30,000,000 Performance Rights approved at the 2022 Annual General Meeting on 29 November 2022 were issued to the
directors of the Company. The terms of the Performance Rights are as follows:
Class
Performance Rights
Vesting Condition
The 20 Day volume weighted average price of Shares traded on ASX is greater than $0.10 per
Share subject to holder continuing to be an employee, consultant or Director of the Company or
as the Board decides otherwise in its absolute discretion.
The Rights were valued as follows:
Methodology
Inputs:
Underlying security spot price
Exercise price
Valuation date
Commencement of performance period
End of performance period
Performance period (years)
Implied share price barrier
Volatility
Risk-free rate
Dividend yield
Value per right
Performance Rights
Barrier up-and-in trinomial hybrid method
$0.041
Nil
29 November 2022
29 November 2022
29 November 2025
3
$0.10
100%
3.235%
Nil
$0.032
The value of the grant of the rights was calculated to be $960,000 of which $186,570 has been expensed to share based payments in
the statement of profit or loss and other comprehensive income during the year ended 30 June 2023.
---- 14 ----
MANDRAKE RESOURCES LIMITED
ABN 60 006 569 124
ANNUAL REPORT 30 June 2023
The rights were issued pursuant to approval at the 2022 annual general meeting as follows:
Value
$
Lloyd Flint
entitlement
Value
$
Class Rights
Roger
Fitzhardinge
entitlement
James
Allchurch
entitlement
Value
$
Total Value
Performance
Rights
KMP Shareholdings
5,000,000
160,000
5,000,000
160,000
20,000,000
640,000
960,000
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 2023
Balance at the
start of the year
Shares
Purchased
Granted as
Compensation
Other changes
during the year
Balance at
end of Year
James Allchurch1
Roger Fitzhardinge
Lloyd Flint
Total
1 Exercise of options.
2,500,000
2,050,000
-
4,550,000
-
-
-
-
-
-
-
-
12,000,000
14,500,000
-
-
2,050,000
-
12,000,000
16,550,000
Transactions between 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:
$79,150 was paid to Mr Flint for financial and company secretarial services performed during the year (2022: $74,910).
There were no other transactions with KMP and their related parties other than what is disclosed above and Note 15.
7.
Loans to KMP and their related parties
There were no loans to KMP and the related parties during the financial year (2022: nil).
---- 15 ----
MANDRAKE RESOURCES LIMITED
ABN 60 006 569 124
ANNUAL REPORT 30 June 2023
REMUNERATION REPORT (AUDITED) (CONT)
8. Consultancy agreements, and other transactions and balances with KMP and their related parties
During the reporting period, no related parties of directors were engaged by the Company.
9.
Service agreements
The Company entered into an 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 considered
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:
Term
Remuneration
Roger Fitzhardinge
n/a
Lloyd Flint
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.
10. Remuneration consultants
The Board may, from time to time, engage independent remuneration consultants to assist with the review of the Company’s
remuneration policy and structure to ensure it remains aligned to the Company’s needs and meets the Company’s remuneration
principles. The Company did not engage any independent remuneration consultants during the year.
11. Voting of shareholders at the Company’s 2022 Annual General Meeting
The Company received 82.58% of votes “in favour” on its remuneration report for the 2022 financial year. The Company did not receive
any specific feedback at the Annual General Meeting or throughout the year on its remuneration practices.
This is the end of the Remuneration Report.
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 26 September 2023
---- 16 ----
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
Level 9, Mia Yellagonga Tower 2
5 Spring Street
Perth WA 6000
PO Box 700 West Perth WA 6872
Australia
DECLARATION OF INDEPENDENCE BY ASHLEIGH WOODLEY TO THE DIRECTORS OF MANDRAKE
RESOURCES LIMITED
As lead auditor for the review of Mandrake Resources Limited for year ended 30 June 2023, 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 review; and
2. No contraventions of any applicable code of professional conduct in relation to the review.
This declaration is in respect of Mandrake Resources Limited and the entities it controlled during the
period.
Ashleigh Woodley
Director
BDO Audit (WA) Pty Ltd
Perth, 26 September 2023
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia
Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO
International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability
limited by a scheme approved under Professional Standards Legislation.
17
Mandrake Resources Limited ABN 60 006 569 124
and Controlled Entities
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2023
Note
30.06.2023
30.06.2022
Interest Received
Exploration and evaluation expenditure expensed
8
Administration expenses
Consultancy Fees
Director Fees and employee costs
Travel expenses
Occupancy expenses
Legal compliance and professional fees
Share based payments
Loss before income tax
Income tax benefit/(expense)
Loss for the year
$
402,018
(18,588)
(206,842)
(37,600)
(91,154)
(33,065)
(22,050)
(69,114)
(234,224)
$
23,679
(145,029)
(225,440)
(22,609)
(105,870)
(9,442)
(33,525)
(41,528)
-
(310,619)
(559,764)
3
-
-
(310,619)
(559,764)
Other comprehensive income for the year
Total comprehensive loss for the year
-
-
(310,619)
(559,764)
Earnings per share
Basic and diluted (loss) per share
5
(0.001)
(0.001)
The above consolidated statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with
the accompanying notes
---- 18 ----
Mandrake Resources Limited ABN 60 006 569 124
and Controlled Entities
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 June 2023
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
EQUITY
Ordinary Share Capital
Performance Right Reserve
Option Reserve
Accumulated (Losses)
TOTAL EQUITY
Consolidated Group
Note
30.06.2023
30.06.2022
$
$
6
7
8
9
16,809,515
16,262,730
78,463
77,557
16,887,978
16,340,287
6,749,702
6,749,702
3,526,199
3,526,199
23,637,680
19,866,486
138,660
138,660
138,660
185,260
185,260
185,260
23,499,019
19,681,226
10a
10b
10c
37,450,685
33,704,247
2,546,413
1,990,716
2,312,189
1,842,966
(18,488,795)
(18,178,176)
23,499,019
19,681,226
The above Statement of Financial Position should be read in conjunction with the accompanying notes
---- 19 ----
Mandrake Resources Limited ABN 60 006 569 124
and Controlled Entities
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2023
Ordinary Share
Capital
Performance
Rights Reserve
Option
Reserve
Accumulated
(Losses)
Total Equity
Consolidated Group
$
$
$
$
Balance at 1.7.2021
32,346,886
2,312,189
1,842,966
(17,618,412)
18,883,629
Loss for the year
Transactions with owners in their
capacity as owners
-
-
Shares issued during the year
Share Issue Expenses
10a
10a
1,370,897
(13,536)
-
-
-
-
-
-
-
-
(559,764)
(559,764)
(559,764)
(559,764)
-
-
1,370,897
(13,536)
Balance at 30.06.2022
33,704,247
2,312,189
1,842,966
(18,178,176)
19,681,226
Balance at 1.7.2022
33,704,247
2,312,189
1,842,966
(18,178,176)
19,681,226
Loss for the year
Transactions with owners in their
capacity as owners
Issue of performance rights
Issue of options
Shares issued during the year
Share Issue Expenses
10b
10c
10a
10a
-
-
-
-
4,024,355
(277,917)
-
-
234,224
-
-
-
-
-
-
147,750
-
-
(310,619)
(310,619)
(310,619)
(310,619)
-
-
-
-
234,224
147,750
4,024,355
(277,917)
Balance at 30.06.2023
37,450,685
2,546,413
1,990,716
(18,488,795)
23,499,019
The above consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes
---- 20 ----
Mandrake Resources Limited ABN 60 006 569 124
and Controlled Entities
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2023
Consolidated Group
Note
30.06.2023
30.06.2022
$
$
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees
Interest received
Net cash outflow from operating activities
13
(507,331)
402,018
(105,313)
(442,027)
23,679
(418,348)
CASH FLOWS FROM INVESTING ACTIVITIES
Exploration and evaluation expenditure
Net cash outflow from investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares
Payment of share issue cost
Net cash inflow from financing activities
Net increase in cash held
Cash at beginning of year
Cash and cash equivalents at end of year
8
(3,242,091)
(3,242,091)
(738,701)
(738,701)
10
10
6
3,936,356
(42,167)
3,894,189
546,785
16,262,730
16,809,515
1,370,897
(13,536)
1,357,361
200,311
16,062,419
16,262,730
The above consolidated Statement of Cashflows should be read in conjunction with the accompanying notes
---- 21 ----
MANDRAKE RESOURCES LIMITED
ABN 60 006 569 124
ANNUAL REPORT 30 June 2023
NOTES TO FINANCIAL REPORT FOR THE YEAR ENDED 30 June 2023
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 26 September 2023 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 historical
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.
The net loss after income tax for the consolidated entity for the financial year ended 30 June 2023 was $310,619, and as at 30
June 2023, the net assets was $23,499,019. Cash and cash equivalents was $16,809,515.
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 19 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.
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.
---- 22 ----
MANDRAKE RESOURCES LIMITED
ABN 60 006 569 124
ANNUAL REPORT 30 June 2023
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 liabilities.
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 excess 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 recoverable
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 current
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.
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) ,
---- 23 ----
MANDRAKE RESOURCES LIMITED
ABN 60 006 569 124
ANNUAL REPORT 30 June 2023
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.
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:
-
-
-
-
Nature of the products and services,
Type or class of customer for the products and services,
Methods used to distribute the products or provide the services, and if applicable, and
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 information.
The Group does not have any customers and all its’ assets and liabilities are primarily related to the corporate office and are
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. 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 beginning of the
earliest comparative period will be disclosed.
l.
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 account 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.
m. 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.
n. 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 made.
---- 24 ----
MANDRAKE RESOURCES LIMITED
ABN 60 006 569 124
ANNUAL REPORT 30 June 2023
o. 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, performance rights or
options over shares (“equity-settled transactions”).
The fair value of options and performance rights are 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 for options is determined using a Black-Scholes option
pricing model and fair value for performing rights is determined using Barrier up-and-in trinomial hybrid method. 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”).
p.
Financial Instruments
Classification
The Group classifies its financial assets in the following measurement categories:
those to be measured subsequently at fair value (either through OCI, or through profit or loss), and
those to be measured at amortised cost.
-
-
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.
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.
q. 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.
Share-based payments
The measurement of fair value requires the Group to make certain significant estimates 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 Note 10 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.
Asset Acquisition not Constituting a Business
When an asset acquisition does not constitute a business combination, the assets and liabilities are assigned a carrying amount
based on their relative fair values in an asset purchase transaction and no deferred tax will arise in relation to the acquired
assets and assumed liabilities as the initial recognition exemption for deferred tax under AASB 112 applies. No goodwill will
arise on the acquisition and transaction costs of the acquisition will be included in the capitalised cost of the asset.
Changes in accounting policies and Accounting Policies issued not yet effective
Certain new/amended accounting standards and interpretations have been issued but are not mandatory for financial years
ended 30 June 2023. They have not been adopted in preparing the financial statements for the year ended 30 June 2023. They
are not expected to have a material impact on the entity in the period of initial application.
---- 25 ----
MANDRAKE RESOURCES LIMITED
ABN 60 006 569 124
ANNUAL REPORT 30 June 2023
NOTE 2: REVENUE AND OTHER INCOME
Other Income
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
Legal and compliance 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)
2023
$
2022
$
402,018
402,018
2023
$
31,625
71,909
33,065
23,679
23,679
2022
$
30,921
87,453
9,442
2023
2022
$
-
-
-
$
-
-
-
(85,420)
(153,935)
-
-
(85,420)
(153,935)
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
(310,619)
(559,764)
Prima facie tax payable on (profit) from ordinary activities before income tax at
27.5% (2022: 27.5%)
(85,420)
(153,935)
Add:
Tax effect of:
—
Other non-allowable items
(63,473)
(47,053)
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)
-
-
148,894
200,968
-
-
-
-
The deferred tax assets on revenue losses have not been recognised as it is not probable that taxable profits will be available
against which the deductible temporary differences can be utilised. At reporting date, the group has unrecognised losses of
$5,304,077 (2022: $4,153,410) and unrecognised net deferred tax asset of $ 1,458,621 (2022: $1,142,188).
NOTE 4: DIVIDENDS
No dividends have been paid during the financial year (2022: nil)
---- 26 ----
MANDRAKE RESOURCES LIMITED
ABN 60 006 569 124
ANNUAL REPORT 30 June 2023
NOTE 5: LOSS 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 loss per share
Basic loss per share
2023
2022
(310,619)
(559,764)
558,437,649
478,229,611
(0.001)
(0.001)
$
No.
$
For the year ended 30 June 2023, diluted loss 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 losses performance of the
Company.
NOTE 6: CASH AND CASH EQUIVALENTS
Cash at bank and on hand
2023
$
2022
$
16,809,515
16,262,730
16,809,515
16,262,730
Cash at banks earns interest at floating rates based on daily bank deposit rates. Short-term deposits are made for varying periods
of between one day and three months, depending on the immediate cash requirements of the Group, and earn interest at the
respective short-term deposit rates.
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
Exploration and evaluation interests written off
Exploration and evaluation expenditure
2023
$
48,827
29,636
78,463
2022
$
47,921
29,636
77,557
2023
$
3,526,199
(18,588)
3,242,091
6,749,702
2022
$
2,932,528
(145,029)
738,701
3,526,199
The exploration projects of the Company require additional exploration work in order to be able to assess their prospectively as
economic deposits. Notwithstanding certain due diligence costs have been expensed, no triggers for impairment have been identified
for June 2023.
NOTE 9: TRADE AND OTHER PAYABLES
CURRENT
Trade payables and other payables
Trade payables are non-interest bearing and are normally settled on 30-day terms.
---- 27 ----
2023
$
138,660
138,660
2022
$
185,260
185,260
MANDRAKE RESOURCES LIMITED
ABN 60 006 569 124
ANNUAL REPORT 30 June 2023
NOTE 10: CONTRIBUTED EQUITY
a.
Share Capital
2023
$
2023
No.
2022
$
2022
No.
Ordinary fully paid shares
37,450,685
598,759,920
33,704,247
494,621,403
Movement in ordinary shares on issue
Balance at 1 July
Exercise of options
Placement1
Share issue in lieu for fees2
Exercise of rights
Share Issue Costs3
33,704,247
1,736,355
2,200,000
88,000
-
(277,917)
494,621,403
57,878,517
44,000,000
1,760,000
500,000
-
32,346,886
1,370,897
-
-
-
(13,536)
443,924,843
45,696,560
-
-
5,000,000
-
Balance at 30 June 2023
1
37,450,685
In February 2023 the Company undertook a placement to raise funds to progress the Utah lithium project. The shares were
placed with sophisticated investors at $0.05 each,
33,704,247 494,621,403
598,759,920
2 Part of the capital arrangement fee was taken in shares in lieu of cash. The fair value of the shares was deemed to be $0.05
3
per share being the quoted price of the shares on date of issue.
Forming part of the capital arrangement fee was the issue of 5,000,000 options fair valued at $0.02954 each ($147,700 in
total). Refer note 10c below.
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.
b. Performance Rights Reserves
Period opening balance
Issue of Performance Rights
Exercised
Lapsed
Period closing balance
2023
No. $
2022
No. $
17,000,000
39,500,000
(500,000)
-
56,000,000
2,312,189
234,224
-
-
22,000,000
-
(5,000,000)
-
2,312,189
-
-
-
2,546,413
17,000,000
2,312,189
A total of 30,000,000 Performance Rights approved at the 2022 Annual General Meeting on 29 November 2022 were issued to the
directors of the Company. The terms of the Performance Rights are as follows:
Class
Performance Rights
Vesting Condition
The 20 Day volume weighted average price of Shares traded on ASX is greater than $0.10 per
Share subject to holder continuing to be an employee, consultant or Director of the Company or
as the Board decides otherwise in its absolute discretion.
The Rights were valued as follows:
Methodology
Inputs:
Underlying security spot price
Exercise price
Valuation date
Commencement of performance period
End of performance period
Performance period (years)
Implied share price barrier
Volatility
Risk-free rate
Dividend yield
Value per right
Performance Rights
Barrier up-and-in trinomial hybrid method
$0.041
Nil
29 November 2022
29 November 2022
29 November 2025
3
$0.10
100%
3.235%
Nil
$0.032
The value of the grant of the rights was calculated to be $960,000 of which $186,569 has been expensed to share based payments in
the statement of profit or loss and other comprehensive income during the period ended 30 June 2023.
The rights were issued pursuant to approval at the 2022 annual general meeting as follows:
---- 28 ----
MANDRAKE RESOURCES LIMITED
ABN 60 006 569 124
ANNUAL REPORT 30 June 2023
Class Rights
Lloyd Flint
entitlement
Value
$
Roger
Fitzhardinge
entitlement
Value
$
James
Allchurch
entitlement
Value
$
Total Value
Performance
Rights
5,000,000
175,060
5,000,000
175,060
20,000,000
700,240
1,050,360
The Company also issued 9,500,000 Performance Rights to the exploration manager for the Utah Lithium Project (or his nominee) on 8
March 2023 on the terms and conditions set out below. The Performance Rights are split into four tranches and vest as follows:
Class
Tranche A
Performance
Rights
500,000
Vesting Milestone
Successful lodgement and registration of 26,000 acres of BLM claims
Tranche B
1,000,000
Establishment of JORC-compliant Exploration Target
Tranche C
3,000,000
Establishment of JORC-compliant Mineral Resource
Tranche D
5,000,000
Commercial production of over 100t of lithium carbonate equivalent
Expiry Date
Three (3) years from
the date of issue
Three (3) years from
the date of issue
Three (3) years from
the date of issue
Three (3) years from
the date of issue
The performance rights have been fair valued at grant date (8 March 2023) and each class of performance rights are being expensed over
the vesting period
The Performance Rights were ascribed the following value and cost realised in the current period:
Class
Tranche A1
Tranche B
Tranche C
Tranche D
Number of
Performance Rights
500,000
1,000,000
3,000,000
4,000,000
Fair Value at grant
date
$0.052
$0.052
$0.052
$0.052
Fair Value
$
26,000
52,000
156,000
260,000
1 Converted on 22 March 2023 on achievement of relevant hurdles
Expense recognised
during the year
26,000
5,414
16,241
-
Balance 30 June
2023
-
1,000,000
3,000,000
4,000,000
2022
No performance rights were issued during the year ended 30 June 2022.
c. Option Reserve
Period opening balance
Options expired
Broker options (refer note 10)
Option application fee
Options exercised
2023
2022
$
Number
$
Number
1,842,966
-
147,700
50
-
68,878,517
-
5,000,000
-
(57,878,517)
1,842,966
-
-
-
-
117,575,078
(3,000,001)
-
-
(45,696,560)
1,990,716
16,000,000
1,842,966
68,878,517
Options
Grant
date
Expiry
date
Balance at
the start
Broker
12/08/19 14/07/22
39,878,517
Granted
during
the year
-
Exercise
Price
$
0.030
Exercised
during the
year
(39,878,517)
Directors
Lead Manager
28/11/19 28/11/22
22/06/21 18/06/24
Driller
Geologist
29/06/21 18/06/24
29/06/21 18/06/24
Broker fees
28/02/23 27/02/27
18,000,000
5,000,000
5,000,000
1,000,000
-
-
-
-
0.030
(18,000,000)
0.300
0.300
0.300
-
-
-
- 5,000,000
0.100
68,878,517 5,000,000
-
(57,878,517)
Expired
during the
year
Balance at
the end of
the year
Vested and
exercisable at
year end
-
-
-
-
-
-
-
-
-
-
-
5,000,000
5,000,000
5,000,000
5,000,000
1,000,000
1,000,000
5,000,000
5,000,000
16,000,000
16,000,000
The fair value of the options issued was calculated using Black-Scholes modelling. A fair value of 2.954c per option for the broker fee
options was calculated. The options vested immediately on grant date. The following inputs were used in the calculation:
---- 29 ----
MANDRAKE RESOURCES LIMITED
ABN 60 006 569 124
ANNUAL REPORT 30 June 2023
Valuation date
Exercise price
Expiration date
Share price at valuation date
Risk free rate of interest
Company share price volatility
Fair value
Quantity
Value
Fee options
28 February 2023
10 cents
27 February 2027
$0.050
3.63% p.a.
100% p.a.
$0.02954
5,000,000
$147,700
The Broker options were considered to be capital raising costs, the value recorded was deducted against share capital.
2022
No options were issued during the year ended 30 June 2022.
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 financial 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 to
shareholders and share issues.
NOTE 11: COMMITMENTS AND CONTINGENCIES
There are no material commitments or contingencies within the group at reporting date (2022: nil).
Minimum annual exploration expenditure on granted leases is $87,000 (2022: $87,000).
NOTE 12: EVENTS SUBSEQUENT TO BALANCE DATE
No other matter or circumstance has arisen since 30 June 2023 that has significantly affected, or may significantly affect the
operations.
NOTE 13: CASH FLOW INFORMATION
Reconciliation of profit/(loss) after income tax expense to net cash used in operating activities
2023
$
2022
$
(310,619)
(559,764)
234,224
18,588
(906)
(46,600)
(105,313)
-
145,029
178,715
(182,328)
(418,348)
Loss for the year
Non-cash items recorded in Profit and Loss:
Share-based payments
Exploration and evaluation interests written off
Changes in working capital balances
Trade and other receivables
Trade and other payables
Net cash outflow from operating activities
NON-CASH INVESTING ACTIVITIES
There were no non-cash investing activities during the year (2022: nil).
NOTE 14: RELATED PARTY TRANSACTIONS
a.
Related parties
The Group’s main related parties are as follows:
---- 30 ----
MANDRAKE RESOURCES LIMITED
ABN 60 006 569 124
ANNUAL REPORT 30 June 2023
NOTE 14: RELATED PARTY TRANSACTIONS
(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 15.
(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:
$79,150 was paid to Mr Flint for financial and company secretarial services performed during the year.
There were no other transactions with KMP and their related parties other than what is disclosed above and Notes 10 (the
issue of performance rights) and Note 15.
---- 31 ----
MANDRAKE RESOURCES LIMITED
ABN 60 006 569 124
ANNUAL REPORT 30 June 2023
NOTE 15: 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 2023.
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
Share-based payments
Total KMP compensation
Short-term employee benefits
2023
$
353,354
6,300
186,569
546,223
2022
$
357,366
2,746
-
360,112
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
A total of 30,000,000 Performance Rights approved at the 2022 Annual General Meeting on 29 November 2022 were issued to
the directors of the Company as disclosed in Note 10 (2022: nil).
Further information in relation to KMP remuneration can be found in the directors’ report.
NOTE 16: AUDITOR’S REMUNERATION
During the financial year the following fees were paid or payable for services provided by BDO Audit (WA) Pty Ltd, the auditor
of the company:
Remuneration of the auditor for:
–
auditing or reviewing the financial statements – BDO Audit (WA) Pty Ltd
45,494
36,988
2023
$
2022
$
Remuneration of the auditor for non-assurance services:
–
Other
4,000
49,494
565
37,553
NOTE 17: 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:
2023
$
2022
$
Financial Assets
Cash and cash equivalents – interest bearing
16,809,515
16,262,730
Sensitivity
At 30 June 2023, if interest rates had increased by 2.75% (2022: 1.75%) from the year end variable rates with all other variables held
constant, post tax profit and equity for the group would have been $462,261 (2022: $284,598) higher. The 2.75% (2022: 1.75%)
sensitivity is based on reasonably possible changes over a financial year, using an observed range of historical RBA movements over the
last few years.
---- 32 ----
MANDRAKE RESOURCES LIMITED
ABN 60 006 569 124
ANNUAL REPORT 30 June 2023
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 security 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 having
similar characteristics.
NOTE 18: 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
2023
$
2022
$
16,953,362
16,405,671
6,749,901
3,526,399
23,703,263
19,932,070
204,244
204,244
250,844
250,844
37,450,685
33,704,247
4,537,129
4,155,155
(18,488,795)
(18,178,176)
23,499,019
19,681,226
(310,619)
(559,764)
(310,619)
(559,764)
COMMITMENTS AND CONTINGENCIES
Mandrake Resources Limited has minimum annual exploration expenditure commitments of $87,000 (2022: $nil). The entity
does not have any contingent assets and liabilities at 30 June 2023 (30 June 2022: nil).
NOTE 19: CONTROLLED ENTITIES
Name
Country of incorporation
Percentage owned
Focus Exploration Pty Ltd
Seventh Son Pty Ltd
Australia
Australia
---- 33 ----
2023
100%
100%
2022
100%
100%
MANDRAKE RESOURCES LIMITED
ABN 60 006 569 124
ANNUAL REPORT 30 June 2023
NOTE 19: CONTROLLED ENTITIES
Mandrake Lithium USA, Inc
USA (Incorporated 4 January 2023)
100%
-
NOTE 20: 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 2023
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 consolidated financial statements as at 30 June 2023 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 consolidated 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
consolidated 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 26 September 2023
---- 35 ----
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
Level 9
Mia Yellagonga Tower 2
5 Spring Street
Perth, WA 6000
PO Box 700 West Perth WA 6872
Australia
INDEPENDENT AUDITOR'S REPORT
To the members of 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 subsidiaries
(the Group), which comprises the consolidated statement of financial position as at 30 June 2023, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement
of changes in equity and the consolidated statement of cash flows for the year then ended, and notes
to the financial report, including a summary of significant accounting policies and the directors’
declaration.
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
Act 2001, including:
(i)
(ii)
Giving a true and fair view of the Group’s financial position as at 30 June 2023 and of its
financial performance for the year ended on that date; and
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 member firms. Liability
limited by a scheme approved under Professional Standards Legislation.
36
CARRYING VALUE OF EXPLORATION AND EVALUATION ASSETS
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 2023 is disclosed in Note
1(q) and Note 8 of the financial report.
• 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.
•
Considering the status of the ongoing
exploration programmes in the respective
areas of interest by holding discussions with
management, and reviewing the Group’s
Judgement is applied in determining the treatment of
exploration budgets, ASX announcements and
exploration expenditure in accordance with Australian
director’s minutes;
Accounting Standard AASB 6 Exploration for and
Evaluation of Mineral Resources. In particular:
•
Considering whether any such areas of
interest had reached a stage where a
• Whether the conditions for capitalisation are
reasonable assessment of economically
satisfied;
recoverable reserves existed;
• Which elements of exploration and evaluation
•
Verifying, on a sample basis, exploration and
expenditures qualify for recognition; and
evaluation expenditure capitalised during the
• Whether facts and circumstances indicate that the
exploration and evaluation expenditure assets should
be tested for impairment.
As a result, this is considered a key audit matter.
year for compliance with the recognition and
measurement criteria of AASB 6;
•
•
Considering whether there are any other
facts or circumstances existing to suggest
impairment testing was required; and
Assessing the adequacy of the related
disclosures in Note 1(q) and 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 2023, but does not include the
financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website (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 in pages 12 to 16 of the directors’ report for the
year ended 30 June 2023.
In our opinion, the Remuneration Report of Mandrake Resources Limited, for the year ended 30 June
2023, complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
BDO Audit (WA) Pty Ltd
Ashleigh Woodley
Director
Perth, 26 September 2023
MANDRAKE RESOURCES LIMITED
ABN 60 006 569 124
ANNUAL REPORT 30 June 2023
ASX ADDITIONAL INFORMATION
The shareholder information set out below was applicable as at 12 September 2023.
As at 12 September 2023 there were 3,630 holders of 598,759,920 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 options, 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 12 September 2023 are as follows:
Ordinary Fully Paid Shares
Holder Name
BNP PARIBAS NOMS PTY LTD
GALAN LITHIUM LIMITED
MARTINI 29 PTY LTD
SANDHURST TRUSTEES LTD
MR JAMES PETER ALLCHURCH
CITICORP NOMINEES PTY LIMITED
ROWAN HALL PTY LTD
BELLARINE GOLD PTY LTD
PURESTEEL HOLDINGS PTY LTD
BROWN BRICKS PTY LTD
BNP PARIBAS NOMINEES PTY LTD
ESZLENY INVESTMENTS PTY LTD
PJ & SL MOYLAN PTY LTD
ALITIME NOMINEES PTY LTD
GALAN LITHIUM LIMITED
DC & PC HOLDINGS PTY LTD
SWANCAVE PTY LTD
ONGAVA PTY LTD
ABDUL FIDA PTY LTD
BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
MR RYAN BOYD
ST BARNABAS INVESTMENTS PTY LTD
Totals
SUBSTANTIAL HOLDERS
Holding
33,041,925
30,000,000
13,773,951
13,590,766
12,000,000
11,627,922
11,000,000
10,000,000
7,094,820
6,600,000
6,076,553
5,700,000
5,000,000
5,000,000
5,000,000
5,000,000
4,439,809
4,200,000
4,000,000
3,610,093
3,433,928
3,418,785
3,150,000
206,758,552
%
5.52%
5.01%
2.30%
2.27%
2.00%
1.94%
1.84%
1.67%
1.18%
1.10%
1.01%
0.95%
0.84%
0.84%
0.84%
0.84%
0.74%
0.70%
0.67%
0.60%
0.57%
0.57%
0.53%
34.53%
No changes to substantial holdings notices have been received by the Company since the last Annual Report was released.
---- 40 ----
MANDRAKE RESOURCES LIMITED
ABN 60 006 569 124
ANNUAL REPORT 30 June 2023
ASX ADDITIONAL INFORMATION (CONT)
DISTRIBUTION OF EQUITY SECURITIES
Ordinary Fully Paid Shares
Unmarketable Parcels -1,435 Holders comprising a total of 5,545,690 ordinary fully paid shares. This is based on a price of $0.039, being
the closing trading price on 12 September 2023.
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
676
253
371
1,600
730
3,630
Total Units
62,699
916,375
3,015,892
66,835,866
527,929,088
598,759,920
% Issued Share Capital
0.01%
0.15%
0.50%
11.16%
88.17%
100.00%
There were 30,000,000 restricted securities as at 12 September 2023 escrowed to 27/02/2024.
UNQUOTED SECURITIES
As at 12 September 2023, the following unquoted securities are on issue:
11,000,000 Options expiring 18/06/2024 exerciseable at $0.30 - 5 Holders
BELL POTTER NOMINEES LTD
BLUE SPEC DRILLING PTY LTD
3,750,000
5,000,000
34.1%
45.5%
5,000,000 Options expiring 27/02/2027exerciseable at $0.10 – 11 Holders
VERT NOMINEES (WA) PTY LTD
1,000,000
20%
17,000,000 Performance rights - 1 Holder
MR JAMES PETER ALLCHURCH
17,000,000
100%
30,000,000 Performance rights - 3 Holders
MR JAMES PETER ALLCHURCH
20,000,000
67%
9,000,000 Performance rights - 1 Holder
INTERPRETIVE GEOSCIENCES LLC
ON-MARKET BUY BACK
There is currently no on-market buyback program.
9,000,000
100%
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