Manuka Resources Ltd ABN 80 611 963 225
A N N U A L R E P O R T 2 0 2 1
Manuka Resources Ltd
For the year ended 30 June 2021
i
CORPORATE DIRECTORY
Directors
Dennis Karp – Executive Chairman
Nick Lindsay – Non-Executive Director
Lawyers
K&L Gates
Level 31, 1 O’Connell Street
Sydney NSW 2000
Anthony McPaul – Non-Executive
Director
Key Management
Haydn Lynch – Chief Operating Officer
Company Secretary
Toni Gilholme
Registered Office
Level 4, Grafton Bond Building
201 Kent Street
Sydney NSW 2000
www.manukaresources.com.au
Auditor
Grant Thornton Audit Pty Ltd
Level 17, 383 Kent Street
Sydney NSW 2000
Share Registry
Automic Group Pty Ltd
Level 5, 126 Phillip Street
Sydney , NSW 2000
Stock Exchange Listing
Manuka Resources Limited shares (Code:
MKR) are listed on the Australian
Securities Exchange.
Manuka Resources Ltd
For the year ended 30 June 2021
Contents
Executive Chairman’s Letter
Review of Operations
Mineral Resources and Ore Reserves Statement
Directors’ Report
Auditor’s Independence Declaration
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Independent Auditor’s Report
ASX Additional Information
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Manuka Resources Ltd
For the year ended 30 June 2021
2
Executive Chairman’s Report
A YEAR OF CHALLENGES EMBRACED
It is a little over 12 months since Manuka commenced trading on the ASX (14 July 2020). At the time we were
the first resources company to IPO in 2020 and the first following the initial COVID-19 lockdown. The Board
was very pleased with investors’ response to the float with strong demand received for the Offer, significantly
exceeding the maximum raise sought. The stock performed very well, quickly tripling in a strong environment,
for silver in particular.
The economic impacts arising from the COVID pandemic were uncertain, but Manuka was at the time
Australia’s newest gold and silver producer, and the future for precious metals producers looked very
optimistic. As barometers for a multitude of macro factors commodity prices are volatile and whilst the silver
price largely sustained its strong rally which coincided with Manuka’s IPO, the gold price softened over the
year as investors’ concern over the economic implications of COVID abated. Nonetheless, Manuka share price
has consistently traded well above the $0.20 Offer Price over FY20/21 – a pleasing result.
We anticipated encountering some challenges as we recommenced mining at Mt Boppy and returned the
Wonawinta plant to full production. The wet and unpredictable weather however, proved the most
frustrating. As we restarted mining operations it became increasingly clear that the severe drought over 2017
to early 2020 throughout the Cobar Basin (and most of NSW) had well and truly ended. Extraordinarily high
rainfall rendered our haul roads inaccessible, triggered water issues in the mine pit, and placed additional
safety demands on us all. This had a very large impact on production as we lost 60 production days. It is a
reflection of the strong workplace safety culture of the Manuka team that we had no safety issues.
One of our expectations at the Company’s IPO was that the period of gold production from Mt Boppy would
provide sufficient cash flow to pay down debt. This will still occur. The weather has certainly played a part in
delaying this outcome. I am pleased to confirm, however, that it remains our expectation that Manuka will be
debt free by the time it completes its current production campaign at Mt Boppy.
Following a substantial resource upgrade in February 2021, and mining and haulage efficiencies, the Company
expects to produce in excess of 34,000oz of gold from Mt Boppy, compared with 22,000-24,000oz originally
forecast. At that point in time, we expect to still retain a resource over 30,000 oz.
The Company is in very good shape. When we complete mining and processing the Mt Boppy ore, we will still
have a substantial silver stockpile awaiting processing, a ~50 million oz silver resource and a built and tested,
100% Manuka-owned ~850ktpa mill.
The Board is firmly of the view that our mill at Wonawinta is highly strategic infrastructure. The world-class
Cobar Basin, an area renowned for base metal prospectivity, is host to a multitude of resource companies,
including explorers with aspirations to become producers. However, the lead time for permitting a new mill in
NSW is several years and, if anything, timelines are getting longer. Centrally located on the western edge of
the basin the Wonawinta mill can easily accommodate capacity expansion and the installation of a base metal
circuit for our own, or third party, ore. In our estimation, the current replacement cost of the Company’s
infrastructure at Wonawinta is well in excess of A$150m.
Manuka Resources Ltd
For the year ended 30 June 2021
3
It is however important to note that Manuka is not only a gold and silver producer. It is also a substantial
tenement holder in the Cobar Basin in its own right. We hold circa 1,150km2 of mining leases and exploration
licenses, the vast majority of which is virgin ground, offering substantial potential for value creation via
exploration in FY21/22 and beyond.
Manuka embarked on 4 broad exploration programs from August 2020 until April 2021:
a) The in-fill and grade control drill program at Mt Boppy combining into a resource upgrade (released
on 1 February 2021)
b) A four staged deeper drill program targeting resource extensions below the existing Mt Boppy mine
design (released on 24 August 2020, 25 September 2020, 4 December 2020 and 1 March 2021)
c) The in-fill drill program over the existing Wonawinta silver resource aimed at increasing resource
confidence and providing a general resource upgrade (released 1 April 2021).
d) The successful testing of the Wonawinta Deeps concept for confirmation of broad sulphide
mineralisation prospective for base metals (released 8 February 2021).
All 4 programs delivered very strong outcomes:
In-fill programs supported resource upgrades at both Mt Boppy and Wonawinta;
Resource extension program at Mt Boppy highlighted ongoing mineralisation needing further
exploration below the pit-shell; and
Wonawinta proof of concept program encountered lead zinc silver sulphide mineralisation over 3km
strike – a small portion of its potential length.
Our planned follow-up exploration programs which were to be conducted at both projects have been delayed
due to travel restrictions arising from the pandemic. Most notably, the two geophysics programs will now only
occur when lockdown conditions ease in NSW, now likely in the near term. In the interim, drilling will continue
at both sites (at Wonawinta from August, and a second rig at Mt Boppy from October).
I am extremely excited about the planned geological exploration work to be conducted over the coming 6
months. I expect the following names of targets on our Wonawinta tenements, specifically Wirlong, Smiths
Tank, McKinnons (and McKinnons North), Guzzi and Goldwing to become far better known by investors this
time next year. It is very much the same for our Mt Boppy tenements and in addition to Boppy South, West
and East, I have high expectations for successful programs at one or more of the Birthday Prospects,
Hardwicks, Native Dog and Native Cat targets.
On the production front, Manuka produced ~17,600 ounces of gold in FY21. This was below our target, with
the aforementioned weather being the major hindrance. Our financial results reflect this fact. Looking ahead,
with the dramatic increase in forecast recoverable ounces at Mt Boppy, the Board expects gold production to
continue well into FY22. With expectations of drier weather heading into summer and a material increase in
ore grades and recoveries, we expect a positive impact on monthly production and profits. As our recent
announcements to the ASX have highlighted, the first few months of FY21/22 have already yielded dramatic
and maintainable improvements in operational and financial metrics.
With the improvement in cash flows and profit seen in FY22 thus far, the Company is in sound financial shape.
The Company’s lender, TransAsia Private Capital, recently extended the maturity of our debt facility to
September 30, 2022 on improved terms. The balance of this facility is USD$10.0m, payable in a single tranche
at maturity, without penalty for early repayments. It is our current expectation that the bulk of this facility will
be repaid by June 2022 via voluntary repayments leaving the Company largely debt free.
Manuka Resources Ltd
For the year ended 30 June 2021
4
I expect a very positive tone to my Report this time next year, at which point the Company should have
completed gold production at Mt Boppy; be mid-way through the processing of the existing Wonawinta silver
stockpiles – making Manuka, the only primary silver producer on the ASX; and be in a strong financial position.
I would also expect to be able to comment on our exploration activity across gold, silver and base metal
targets.
In closing, I would like to thank the entire team at Manuka Resources. The past year has certainly not been
without its challenges. However, when I consider the improvements in operating efficiencies, the outstanding
safety record, the ‘above and beyond’ efforts of all staff to maintain production despite the adverse impacts
of unusual weather, I am immensely proud of our team. I would like to specifically acknowledge the role
played by our Operations Manager, David Power, and his team.
Thank you also to our two Non-Executive Directors Tony McPaul and Nick Lindsay, as well as to Haydn Lynch,
our Chief Operating Officer. Finally, thank you to our shareholders for your support during the period which
has laid the foundations for very promising years ahead.
Dennis Karp
Chairman
Manuka Resources Limited
Manuka Resources Ltd
For the year ended 30 June 2021
5
Review of Operations
COMPANY PROFILE AND OPERATIONAL OVERVIEW
Manuka Resources Ltd (“Manuka” or “the Company”) successfully commenced full mining operations at its Mt
Boppy gold mine during the year and has been processing this ore through the Company’s leach plant at
Wonawinta. The Company has been able to employ a significant percentage of its workforce including
contractors from the Central Western region of NSW as part of its concerted effort to benefit the local
community as much as possible.
Activities (excluding mining) at Mt Boppy have focused on identifying additional resources in the pit and
beneath the planned pit floor contemporaneously with a complete exploration review of targets and initial
drill activity on the surrounding exploration licence. A third-party review of historical geophysical surveys
(over 20 years) was undertaken to confirm future field activities.
The major focus (excluding processing) at the Wonawinta site has been an infill drill campaign to upgrade the
silver oxide resource and to initially test for mineralisation in the primary sulphides. Activities centred on the
Wonawinta mining lease during the year with significant planning of exploration activities on many of the
Company’s exploration licences for 2022. These are planned to extend the silver oxide resource adjacent to
the mining lease as well as targeting gold and other minerals on more distal exploration licences.
The company has been undertaking various studies on restarting silver oxide operations at Wonawinta which
are scheduled to commence once the current phase of Mt Boppy processing has ceased, which is expected at
the end of 2021. Comprehensive metallurgical test work on both the existing ROM stockpiles and from the
current silver resource is ongoing and being progressed through independent laboratories together with the
assistance of external engineering firms and the Company’s own metallurgical team. Mine planning activities
are also well progressed and continuing, with operational cost models being constructed to guide mine
schedule planning. These will continue for the remainder of the year. Current intentions are to commence
processing of existing silver ROM stockpiles early in 2022.
ADMISSION AND COMMENCEMENT OF OFFICIAL QUOTATION ON THE ASX
On Friday 10 July 2020, the Company was admitted to the Official List of the Australian Securities Exchange
(‘ASX’). Official Quotation of the Company’s shares commenced on 14 July 2020. The Company raised
$7,000,000 pursuant to the offer under its prospectus dated 22 May 2020 by the issue of 35,000,000 shares
at an issue price of $0.20 per share.
BACKGROUND
Manuka Resources Limited (Manuka or the Company) is a public company which was incorporated in Victoria,
Australia on 20 April 2016. The Company’s assets comprise:
(a)
(b)
the Mt Boppy Gold Project; and
the Wonawinta Silver Project.
The Company commenced production from Mt Boppy in the June quarter 2020 after a successful
commissioning of its processing plant at Wonawinta.
Manuka Resources Ltd
For the year ended 30 June 2021
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(Figure 1 – Location of the Mt Boppy Gold Project and the Wonawinta Silver Project)
The Company’s current sequence of activities is described below.
Mt Boppy and Canbelego Region
The Company continues mining and processing ore from the Mt Boppy Gold Project1. The Company expects
that current open cut mining will cease during Q4 2021 with processing through the Wonawinta plant to
continue till early 2022. Once current mining activities have concluded, further exploration of deeper targets
in the pit and adjacent mining leases will resume which are aimed at adding to potential underground
resources at Mt Boppy. The Company has conducted exploration field activities on EL5842 which surrounds
the Mt Boppy mine during the past year and has planned drill targets for the next 12 months on various
prospects.
Wonawinta and Western Cobar Basin
Mine planning and studies to restart silver processing at Wonawinta continues with an initial focus on existing
stockpiles on the ROM. The Company is also currently progressing mine planning and additional metallurgical
test work based on the updated silver resource to enable a maiden reserve statement to be brought out in
the near future.
Exploration along the trend of known mineralisation continues and targets are continuing to be drilled to the
south and north of the mining lease. Additional drilling of the primary sulphides (Wonawinta Deeps2) will also
continue during the year
Field activities are planned on the Company’s exploration licences predominately to the north of the
Wonawinta mine, targeting both deeper Cobar style precious metals (gold, copper) prospects as well as further
shallower carbonate hosted mineralisation.
1 Processing of Mt Boppy gold ore commenced in April 2020
2 Initial ASX release on 9 February 2021
Manuka Resources Ltd
For the year ended 30 June 2021
7
THE MT BOPPY GOLD PROJECT
Tenements
The Mt Boppy Gold Project (which comprises 3 granted mining leases, 4 gold leases, and one exploration
licence (which together cover an area in excess of approximately 210 km2)) is located approximately 46 km
east of Cobar, on the eastern side of the highly prospective and metalliferous Cobar Basin. The Company owns
(via its wholly owned subsidiary, Mt Boppy Resources P/L) 100% of the interests in the tenements detailed in
the following table:
Tenement
Grant Date
Renewal Date
Expiry Date
Area (Ha)
GL3255
20-May-1926
08-Jul-2014
20-May-2033
GL5836
15-Jun-1965
08-Jul-2014
15-Jun-2033
GL5848
15-Feb-1968
08-Jul-2014
15-Jun-2033
GL5898
21-Jun-1972
08-Jul-2014
12-Dec-2033
8.30
6.05
8.62
7.50
ML311
08-Dec-1976
08-Jul-2014
12-Dec-2033
10.12
ML1681
12-Dec-2012
12-Dec-2012
12-Dec-2033
188.10
MPL240
17-Jan-1986
08-Jul-2014
12-Dec-2033
17.80
EL5842
19-Apr-2001
03-Jul-2017
in renewal
210 km2
(Table 1 – Tenements Mt Boppy)
Regional Geology
Mount Boppy is hosted within Devonian-age sedimentary and volcanic rocks of the Canbelego-Mineral Hill Rift
Zone. Mineralisation occurs largely in brecciated and silicified fine-grained sediments of the Baledmund
Formation, within and adjacent to a faulted contact with older Girilambone Group sedimentary rocks. Lodes
strike approximately north-south and dip steeply west, although the widest zone of mineralisation is related
to slightly shallower dips. Gold mineralisation is fine-grained and commonly associated with coarse grained
iron rich sphalerite. Section 7.2 of the Independent Technical Report discusses the local geology of the project
area3.
3 See Prospectus dated 22 May 2020, released to the ASX platform on 10 July 2020
Manuka Resources Ltd
For the year ended 30 June 2021
8
(Figure 2 - Tenements - Mt Boppy Gold Project)
Manuka Resources Ltd
For the year ended 30 June 2021
9
THE WONAWINTA SILVER PROJECT
The Company holds title to the pastoral lease for the grazing property called “Manuka”, upon part of which
the Wonawinta Silver Project is located. The Manuka pastoral lease is connected to the low voltage rural power
network and contains useful infrastructure namely a homestead and airstrip.
(Figure 3 - Tenements of Wonawinta Silver Project)
Manuka Resources Ltd
For the year ended 30 June 2021
10
Tenements
The Company directly owns 100% of the interests in the Tenements detailed in the following table:
Tenement
Grant Date
Renewal Date
Expiry Date
Area (km2)
ML1659
23-Nov-11
23-Nov-2011
23-Nov-32
EL6482
EL7345
EL6155
EL6302
EL7515
EL6623
EL8498
18-Nov-05
07-Mar-2017
11-Nov-21
25-May-09
30-Mar-2017
25-May-22
17-Nov-03
16-May-2017
17-Nov-21
23-Sep-04
08-Feb-2017
23-Sep-21
7-Apr-10
26-Jul-2017
7-Apr-22
31-Aug-06
20-Jun-2019
31-Aug-23
10-Jan-17
Pending
In renewal
139.93
(Table 2 – Tenements Wonawinta)
9.24
268.21
169.18
10.54
280.02
14.53
26.24
Regional Geology
The Cobar Basin is located in central-west New South Wales, approximately 700 km north-west of Sydney. It
is a complex metallogenic system containing numerous mineral deposits. “Cobar-style” mineral deposits
comprise a unique class of large and commonly high-grade base and precious metal deposits hosted by marine
sediments. They typically have great vertical extent but only a small surface footprint.
Manuka Resources Ltd
For the year ended 30 June 2021
11
(Figure 4 – Existing mine infrastructure and resource outline in ML 1659)
Manuka Resources Ltd
For the year ended 30 June 2021
12
STRATEGY AND DEVELOPMENT PLANS
The Company’s strategy is based on production from its resource base at Mt Boppy and ultimately Wonawinta
whilst also focussing on expanding these existing resources and simultaneously pursuing greenfields and
brownfields exploration on its tenement package in the Cobar basin.
Mining and processing from Mt Boppy will continue until the current phase of open cut operations
has ceased, expected end 2021. At that point the Company will continue to drill targets beneath the
pit which drilling this year has shown contain further gold mineralisation. Additional targets adjacent
the pit will also be drill tested in an effort to better define the total extent of the ore body at Mt
Boppy. Once those activities have completed the Company will be able to evaluate alternative mining
methods at the Mt Boppy mine.
Regional exploration on the sole exploration tenement (EL5842) surrounding Mt Boppy will progress
with drill rig mobilisation during 2H 2021 to the south of current operations to better define
previously identified gold prospects
After open pit operations at Boppy have ceased the Company will commission the Wonawinta plant
for silver oxide ore feed and will begin processing the existing ROM stockpiles. Contemporaneously
with the processing of stockpiles the Company will finalise mine planning and economic modelling
on the silver oxide resource at Wonawinta which is expected to comprise additional mining from
current pits and the opening up of new pits on the mining lease.
The Company will conduct further drill programs of the primary sulphide mineralisation4 (Wonawinta
Deeps) on the Wonawinta mining lease to improve its knowledge of the carbonate hosted sulphides
which have shown encouraging silver-lead-zinc grades thus far.
(Figure 5 - Wonawinta Deeps core from hole DBM003 showing carbonates hosting sulphides and high
grade5 Zn-Pb-Ag mineralisation as announced on ASX 8 February 2021)
4 Refer ASX release dated 1st June 2021
5 43.13% Zn, 12.76% Pb, 4270 g/t AG at 101.2 downhole depth et al
Manuka Resources Ltd
For the year ended 30 June 2021
13
(Figure 6 - Refurbished leach tanks at Wonawinta plant)
(Figure 7 - View from lime silo showing new mill motor and gearbox)
Manuka Resources Ltd
For the year ended 30 June 2021
14
(Figure 8 - Wonawinta plant showing gravity circuit, regrind mill and ROM stockpiles in background)
Exploration Strategy and Overview
Since listing in mid-2020 the Company has completed a thorough review of known targets on its tenement
package of over 1,100 km2 which are located within the highly prospective Cobar Superbasin. The exploration
strategy comprises a combination of brownfields evaluation (on granted mining titles and nearby exploration
licences) and greenfield exploration on its prospective targets, either not fully explored or underexplored.
Numerous other companies are conducting mining and exploration activities within the Cobar Superbasin as
shown below. The figure below also demonstrates the proximity of the Wonawinta processing plant to other
known resources in the southern Cobar Basin.
(Figure 9 - Location of Manuka Resources sites (Wonawinta and Mt Boppy Gold Mine) and other companies’
operations/exploration in the Cobar Superbasin)
Manuka Resources Ltd
For the year ended 30 June 2021
15
Exploration Planning and Drilling Programs
As previously stated, a large amount of historical information has been reviewed over the past 12 months.
Some of this review has included recompiling raw geophysical data using more recent and advanced
interrogation methods. This review is well advanced but currently incomplete, however of note is the fact
that results to date have highlighted new target areas outside of previously defined areas. Greenfield
activities on less advanced or incompletely assessed prospects will also be carried out in line with an overall
strategy of progressively testing and identifying potential mineralisation, increasing confidence in existing
resources and processing to mine planning for future mining.
Figure 10 - RC drill rig on northern section of ML1659 (Wonawinta)
The Company’s exploration planning and drilling programs are divided into three (3) key components, namely
(i) near-mine evaluation activities at Mt Boppy (ML/GLs and surrounding EL5842), (ii) near-mine evaluation at
Wonawinta (Wonawinta ML and adjacent Wonawinta ELs) and (iii) early/follow-up-phase exploration on the
Company’s exploration tenements/mining leases as follows:
i. Near mine Mt Boppy (ML/GLs and adjacent EL5842)
The Mt Boppy Gold Project encompasses a high-grade gold deposit similar to other Cobar-style polymetallic
(Zn-Pb-Ag-Cu-Au) deposits. Cobar-style deposits are understood to have pipe-like orientations with small
surface footprints and steep plunges extending to considerable depth (up to 1 km deep). Multiple deposits
can develop over large strike extents (+10 km). The objective of the Company’s near mine activities at the
Mt Boppy Gold Project is to evaluate the ML/GLs and surrounding EL5842 for gold mineralisation
extensions by:
(A) Undertaking 3D synthesis and targeting in the 3 × 3 km Mt Boppy-Canbelego Gold Camp area.
There are significant gold occurrences in historical shallow drill holes and numerous mine shafts
are located within the Gold Camp. The past decade has seen many advances in understanding the
genesis of Cobar-style polymetallic ore systems which have not yet been systematically applied
in the Mt Boppy-Canbelego Project area; and
(B) Further investigating numerous untested or inadequately tested areas by drilling, various
prospects located in the structural corridor known as the “Central Structural Zone” in the
northern part of EL5842, along with other prospects and areas located further south on EL5842
that require further assessment.
Manuka Resources Ltd
For the year ended 30 June 2021
16
(Figure 11 - Mt Boppy-Canbelego Project Area and Prospects.)
ii. Near Mine Wonawinta Silver Project
The Company’s primary objectives in relation to the Wonawinta ML include:
a)
b)
Additional drilling on southern boundary of Wonawinta mining lease to test for extension of
current oxide resource
New drilling on the western boundary of the mining lease to further define the “Smiths Tank” target
The Company intends to undertake priority exploration along the trend from the Wonawinta ML and into
EL7345, comprising the “Wonawinta” line of lode.
Of the northern tenements EL6302 holds the historic McKinnons6 gold mine which ceased operations in
1996. A number of targets on this EL have been identified as potential Cobar style gold oxides and
polymetallics to be progressed this field season.
6 Produced 148,723t at 2.98 g/t head grade – ML350 Annual Report dated 7 July 1996
Manuka Resources Ltd
For the year ended 30 June 2021
17
(Figure 12 - Wonawinta Silver Project Area and Prospects)
Manuka Resources Ltd
For the year ended 30 June 2021
18
Mineral Resources and Ore Reserves Statement
Mining operations commenced at Mt Boppy during the first half of 2020 and as at 30th June 2021, the JORC
2012 categorised Resources and Reserves have been updated. The updated Mt Boppy resource was released
in February 20217. JORC categorised Mineral Resources for Wonawinta were updated in the March quarter
and released to the ASX on 1 April 2021.
Mt Boppy Resource Statement
The total remaining Resource as at 30 June 2021 is 339,170 tonnes at a grade of 4.58 g/t Au for 49,900 ounces.
The mineral resource estimate for Mt Boppy is reported within a pit shell that reaches a depth of 115m below
surface at the southern end of the deposit. Resources are reported with respect to the current pit design.
Material within the pit design is reported at a 1.6 g/t cut off and material below the pit design is reported to a
3.0 g/t cut off.
Resource Category
Tonnes
Grade
g/t Au
Measured
Indicated
Inferred
Total
159,470
175,700
4,000
339,170
Contained gold
Troy ounces
23,800
25,100
1,000
49,900
4.64
4.44
5.70
4.58
(Table 3 - Mt Boppy Gold Resource at 30 June 2021)
The Mt Boppy Resource reported in the previous year as at 30 June 2020 is reproduced below.
Resource Category
Tonnes
Grade
g/t Au
Measured
Indicated
Inferred
Total
40,500
195,500
24,000
371,700
Contained gold
Troy ounces
4,473
18,790
2,570
38,763
3.43
2.99
3.33
3.23
(Table 4 – Comparative Mt Boppy Gold Resource at 30th June 2020)
The changes arise from a combination of mining depletion over the past year and additional resource drilling
completed over the same period8. Resource grades have improved considerably over the June 2020 Resource
Statement, assisted by grade control drilling over the past 12 months and targeting mineralised material
beneath the pit. This increase was reported in the January 2021 Resource update release to the ASX on 1
February 2021.
7 Refer ASX release dated 1 February 2021
8 Refer ASX release dated 1 February 2021
Manuka Resources Ltd
For the year ended 30 June 2021
19
Mt Boppy Ore Reserves Statement
The remaining Probable Ore Reserves at Mt Boppy at 30 June 2021 is detailed below. The remaining ore
reserve estimate was calculated from the Reserve Block Model tonnes and grade available between the 30
June 2021 actual surveyed pit and the final designed pit from AMDAD. The February 2020 Reserve block model
and final designed pit were developed by AMDAD9 and disclosed in the Company’s Prospectus released to the
ASX on 10 July 2020.
This Reserve represents Ore within the final designed pit only.
Mining commenced at Mt Boppy in May 2020 and is expected to continue until the end of 2021 when the
current phase of open cut operations will cease. At 30 June 2021, the pit was operating at the 185RL bench
with the final pit floor terminating at the 165RL by year end.
Resource Category
Tonnes
Au (g/t)
Au (oz)
Stope fill
Probable Reserve*
146,080
*modifying factors applied to resource, 10 % dilution, 5 % loss, Au cut-off grade 1.6 g/t
15,713
3.35
26%
(Table 5 - Mt Boppy Probable Ore Reserves at 30 June 2021)
The 30 June 2020 Mt Boppy Ore Reserve is reproduced below and contains ore within the design pit only.
Ore type
Oxide
Transitional
Fresh
Stope tailings fill
Total Probable Ore Reserves
Tonnes
10,000
130,000
20,000
100,000
270,000
Au (g/t)
3.1
2.9
3.3
3.3
3.0
Au (oz)
1,000
12,000
2,000
11,000
26,000
(Table 6 – Mt Boppy Probable Ore Reserves at 30th June 2020)
Wonawinta Mineral Resources Statement
An updated JORC (2012) Mineral Resource Statement was released to the ASX10 after the Company completed
an infill drilling program on the resource in Q1 2021 on 1 April 202111 and is reproduced below. The total
resources is 38.3 million tonnes at 41.3 g/t Ag and 0.54% Pb providing 50.94 million ounces of silver and 207.2
thousand tonnes of lead.
9 Australian Mine Design and Development Pty Ltd
10 Refer to Mineral resource update ASX release dated 1 April 2021
11 Full details including Table 1 in the ASX release dated 1 April 2021
Manuka Resources Ltd
For the year ended 30 June 2021
Resource
Category
Measured
Indicated
Inferred
Total
Stockpiles
(Indicated)
Material
(Mt)
1.1
12.3
24.9
38.3
0.515
Ag (g/t)
Ag Moz
Pb (%)
47.3
45.5
39.0
41.3
70
1.65
18.04
31.25
50.94
1.16
0.69
0.83
0.39
0.54
(Table 7: Resource Estimate reported > 20g/t Ag)
Comparison with previous resource estimate
20
Pb kt
7.5
102.8
96.9
207.2
The Wonawinta Resource reported in the previous year as at 30 June 2020 is reproduced below:
Resource
Category
Measured
Indicated
Inferred
Total
Stockpiles
(Indicated)
Material
(Mt)
0.9
8.5
29.4
38.8
0.515
Ag (g/t)
Ag Moz
Pb (%)
Pb kt
45.0
48.5
39.0
42.0
70
1.3
13.2
37.9
52.4
1.16
0.7
0.79
0.55
0.61
-
6.2
67.5
162.9
236.6
-
(Table 8: Resource Estimate reported >20 g/t Ag)
The updated or current resource (refer Table 7) reduces the total tonnes and marginally increases the grade
of both the silver and lead. The updated or current Resource sees an increase of 43% reclassified into the
measured and indicated categories.
Governance arrangements and internal controls
Manuka has put in place governance arrangements and internal controls with respect to its estimates of
Mineral Resources and Ore Reserves and the estimation process, including:
oversight and approval of each annual statement by external consultants or responsible senior
officers;
establishment of internal procedures and controls to meet JORC Code 2012 compliance in all external
reporting;
independent review of new and materially changed estimates;
annual reconciliation with internal planning to validate reserve estimates for operating mines.
Competent Persons retained by the Company are members of the Australasian Institute of Mining and
Metallurgy (AusIMM) and/or the Australian Institute of Geoscientists (AIG) and qualify as Competent Persons
as defined in the JORC Code 2012.
Manuka Resources Ltd
For the year ended 30 June 2021
21
Competent Persons Statements
The information in this report that relates to Mineral Resources is based on, and fairly represents, information
and supporting documentation prepared by Mr Ian Taylor, who is a Certified Professional by The Australasian
Institute of Mining and Metallurgy and is employed by Mining Associates Pty Ltd. Mr Taylor has sufficient
experience which is relevant to the style of mineralisation and type of deposit under consideration and to the
activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the
‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Taylor
consents to the inclusion in the report of the matters based on his information in the form and context in
which it appears.
The information in this report that relates to remaining Ore Reserves is based on, and fairly represents,
information and supporting documentation prepared by Mr Drew Manley (B. Eng Mining), Quarry Manager
for Mt Boppy and approved by Mr Rodney Griffith (B.E (Civil), B. Surv, PG Dip Mining Eng, MAusIMM) who is a
member of The Australasian Institute of Mining and Metallurgy and is employed by Manuka Resources Ltd.
Mr Griffith has over 28 years mine management and engineering experience as COO and GM in a number of
mid-tier mining companies. He has significant open cut and underground mining experience with positions
held at KBL Mining, Hillgrove, Girilambone Copper Company, Tritton, Sebuku, Mount Muro and Cobalt Blue
across a number of commodity groups and mining styles. Since November 2019, Mr Griffith has been operating
in a Projects/Mining consultant capacity for Manuka Resources Ltd. Mr Griffith has sufficient experience which
is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he
is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore Reserves’.
This report includes information that relates to Mt Boppy Mineral Resources and Ore Reserves which were
prepared and first disclosed under JORC Code 2012. The information was extracted from the Company’s ASX
announcement dated 1 February 2021. The Company confirms that, other than mining depletion and
additional resource drilling over the past 12 months, it is not aware of any new information or data that
materially affects the information included in the February 2021 market announcement and, in the case of
reporting of Ore Reserves and Mineral Resources, that all material assumptions and technical parameters
underpinning the estimates in the relevant market announcement continue to apply and have not materially
changed. The Company confirms that the form and context in which any Competent Person’s findings are
presented have not been materially modified from the original market announcement.
This report includes information that relates to Wonawinta Mineral Resources which were prepared and first
disclosed under JORC Code 2012. The information was extracted from the Company’s ASX announcement
dated 1 April 2021. The Company confirms that it is not aware of any new information or data that materially
affects the information included in the April 2021 market announcement and, in the case of reporting of Ore
Reserves and Mineral Resources, that all material assumptions and technical parameters underpinning the
estimates in the relevant market announcement continue to apply and have not materially changed. The
Company confirms that the form and context in which any Competent Person’s findings are presented have
not been materially modified from the original market announcement.
Manuka Resources Ltd
For the year ended 30 June 2021
22
Directors’ Report
The Directors of Manuka Resources Ltd (‘Manuka Resources’) present their report together with the financial
statements of the Entity or the Group, being Manuka Resources (‘the Company’) and its subsidiary Mt Boppy
Resources Pty Ltd (‘Mt Boppy’) for the year ended 30 June 2021.
Manuka Resources Limited is a company limited by shares and incorporated in Australia on the 20th of April
2016.
Director details
The following persons were Directors of Manuka Resources during or since the end of the financial period
and up to the date of this report:
Mr Dennis Karp
Mr Anthony McPaul
Mr Nicholas Lindsay
Mr Dennis Karp
Executive Chairman
Director since 20th April 2016
Mr Karp commenced his career in the Australian financial markets in 1983. He was the Head of Trading at
HSBC Australia prior to joining Tennant Limited in 1997, a substantial Australian domiciled physical commodity
trading company with operations in Asia and Europe. He was a principal shareholder of Tennant Metals until
2010 and managing director from 2000 until December 2014. Mr Karp founded ResCap Investments Pty Ltd in
December 2014.
Over the past 10 years, Mr Karp has been involved in various resource projects and investment opportunities
in base metals and bulk commodities which have had marketing rights attached.
Mr Karp holds a Bachelor of Commerce from the University of Cape Town. Mr Karp has not held any former
directorships in other listed companies in the last 3 years, and neither does he hold any others currently.
Mr Anthony McPaul
Non-executive Director
Director since 25th November 2016
Mr Anthony McPaul is a senior mining executive with over 40 years’ experience in mining operations and
mineral processing. Mr McPaul has worked in and led both open cut and underground operations and was
most recently the general manager for Newcrest’s Cadia Valley Operations, in Orange NSW.
Mr McPaul commenced his career as an automotive engineer and progressed to maintenance and then onto
operations management at various companies, including CRA, Denehurst, MIM and more recently Newcrest.
He has successfully managed a wide range of operating projects from base through to precious metals in both
surface and underground mines and has been directly responsible for all aspects of production and scheduling.
Manuka Resources Ltd
For the year ended 30 June 2021
23
Mr McPaul formally retired from Newcrest in July 2016 and has since devoted his time to non-executive and
contract roles. Mr McPaul has represented Newcrest and the resources industry on many boards, such as NSW
Minerals Council, NSW Minerals Council Executive Committee, and was the NSW Minerals Council
representative on the Mine Safety Advisory Council. Mr McPaul has chaired many of these committees.
Mr McPaul is the current Chairman of the NSW Minerals Council Board and Executive Committee and a
member of the recently formed Mineral Industry Advisory Council.
Mr McPaul has formal qualifications in automotive engineering from Goulburn TAFE. Mr McPaul does not hold
any current and has not held any former directorships in other listed companies in the last three years.
Dr Nicholas Lindsay
Non-executive Director
Director since 20th June 2019
Dr Nicholas Lindsay is an experienced mining executive who brings an attractive mix of commercial, technical
and academic qualifications, all of which are relevant to the Company. He has worked directly for a range of
major and mid-tier mining companies over his career, and led juniors in copper, gold and silver though listings
and mergers. Dr Lindsay is a geologist by profession, specialising in process mineralogy, and has postgraduate
degrees from the University of Otago (NZ), the University of Melbourne and the University of the
Witwatersrand (South Africa). He is a member of the AusIMM and Australian Institute of Geoscientists. Mr
Lindsay has held the following Directorships in other listed companies in the 3 years immediately before the
end of the financial year:
Lake Resources NL - Executive Director (current)
Valor Resources Ltd - Chief Executive Officer and Executive Director – Technical (ceased October 2020)
Daura Capital Corp. - Non-Executive Director (ceased September 2020)
Interests in the shares and options of the Company and related bodies corporate
As at the date of this report, the interests of the directors in the shares and options of Manuka Resources
Limited were:
Ordinary
Shares
91,814,557
-
-
Options over
Ordinary
Shares
1,500,000
1,500,000
1,500,000
Mr Dennis Karp
Mr Anthony McPaul
Dr Nick Lindsay
Company Secretary details
Ms Toni Gilholme
Company Secretary since 20th April 2016
Ms Toni Gilholme is an experienced Financial Controller and a Qualified Chartered Accountant with over 15
years of experience in Financial Accounting and Company Secretarial matters and over 10 years of experience
in Public Practice.
Manuka Resources Ltd
For the year ended 30 June 2021
24
Ms. Gilholme holds a Bachelor of Business from the University of Technology, Sydney and is a qualified
Chartered Accountant.
Mr Dennis Wilkins
Company Secretary since 15th September 2016, resigned 11 February 2021.
Mr Wilkins is the founder and principal of DWCorporate Pty Ltd a leading privately held corporate advisory
firm servicing the natural resources industry. Mr Wilkins resigned as Company Secretary on 11 February 2021.
The Board expresses its thanks to Mr Wilkins for his valuable contribution to the Company.
Principal activities
During the period, the principal activities undertaken by the Group were:
Establishing steady state mining operations at Mt Boppy together with ore haulage and processing through
the Wonawinta plant.
Release of an updated Mineral Resource Estimate for the Wonawinta Silver Project with a 43% increase in
Measured and Indicated Resources12.
Release of an updated Mineral Resource Estimate for the Mt Boppy Gold project within the designed pit
which includes a 23% increase in contained ounces and a 20% increase in grade13.
Completion of the Wonawinta Deeps Proof-of-Concept drilling program14 which confirmed the presence
of carbonate-hosted sulphides in the Winduck Shelf strata down-dip from the existing Wonawinta open
pits encountering lead-zinc-silver mineralisation over 3km and supported the existence of lead-zinc-silver
sulphide mineralisation with Mississippi Valley Type (MVT) affinities.
Commencement of internal feasibility work for the restart the Wonawinta Silver Project including
extensive metallurgical test work prior to the release of its mine plan and Maiden Reserve.
Review of operations
Information on the operations and financial position of the group and its business strategies and prospects is
set out in the review of operations on pages 5 to 17 of this annual report.
Significant changes in state of affairs
During the year there have been no significant changes in the state of affairs of the Group other than:
Commencement of Official Quotation on the ASX
Official Quotation of the Company’s shares commenced on 14 July 2020. The Company raised
$7,000,000, before costs, pursuant to the offer under its prospectus dated 22 May 2020 by the issue of
35,000,000 shares at an issue price of $0.20 per share.
Commencement of and significant progress in exploration
As advised to the ASX in its Quarterly Activities Report which was released to the market on 30 July 2021,
the Company updated its exploration and drilling program which had commenced in early 2020.
Completed components of the exploration program comprises the following:
o The brownfields Wonawinta work program which included in-fill drilling of the inferred resource, as
well as identification of areas of mineralisation close to the ML, was completed in January 2021, and
an updated resource model was released in April 2021. The drilling program has been expanded to
12 Refer ASX announcement dated 1 April 2021
13 Refer ASX announcement dated 1 February 2021
14 Refer ASX announcement dated 1 June 2021
Manuka Resources Ltd
For the year ended 30 June 2021
25
include a drilling program focused on the southern area of the mining lease and adjacent exploration
leases15 with these activities continuing.
o The primary sulphides were drilled (Wonawinta Deeps) in the second half of the year to test for
mineralisation which confirmed the presence of carbonate-hosted sulphides in the Winduck Shelf
strata down-dip from the existing Wonawinta open pits encountering lead-zinc-silver mineralisation
over 3km and have supported the existence of lead-zinc-silver sulphide mineralisation with Mississippi
Valley Type (MVT) affinities16.
o The Company completed a number of resource extension holes in the Mt Boppy pit with spectacular
results giving the Company significant encouragement to continue to work to expand its resource in
the active mining area.
o A review of all known geophysical data and reports on the mining leases and EL5842 has been
progressed and drilling a number of greenfield targets are planned for the coming months.
Mt Boppy Gold Project Resource Upgrade17
The Company released the Mt Boppy Gold Project Resource Upgrade showing a 23% increase in contained
ounces and a 20% increase in grade. The Mineral Resource estimate for Mt Boppy is reported within the
designed pit that reaches a maximum depth of 115 m below surface at the southern end of the deposit.
Resources are reported with respect to the current pit design. Material within the pit design is reported
at a 1.6 g/t cut off and material below the pit design is reported to a 3.0 g/t cut off.
Classification
Measured
Indicated
Inferred
Total
Tonnes
207,230
144,200
11,000
362,430
Grade (g/t)
4.89
4.15
6.7
4.62
Gold (oz)
32,570
19,300
2,000
53,870
Table 1: Mt Boppy Resource Update
*The preceding statements of Mineral Resources conforms to the Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves (JORC Code) 2012 Edition. Due to rounding to
appropriate significant figures, minor discrepancies may occur. All tonnages reported are dry metric.
Repayment of interest Convertible note holders
In July 2020, the Company paid all the outstanding interest of $1.78 million to Convertible Note holders.
Share Placement to Sophisticated and Institutional investors
In December 2020, the Company completed a placement of 17,500,000 new fully paid ordinary shares to
sophisticated and institutional investors at $0.40 per share raising $7,000,000 before costs. The capital
was raised to fund accelerated exploration and drilling at the Mt Boppy and Wonawinta projects, as well
as for the purchase of capital equipment and for general working capital.
In addition to the placement, the Company converted $1,000,000 in unsecured loans to equity at $0.40
per share.
15 Refer ASX announcement Quarterly Activities Report released 30th July 2021
16 Refer ASX announcement dated 1st June 2021
17 Refer ASX announcement dated 1 February 2021
Manuka Resources Ltd
For the year ended 30 June 2021
26
Extension and partial repayment of Secured Debt Facility
During the period the Company has repaid approximately $US4m against the facility to bring the balance
to approximately $US10m as at the date of signing. In addition, the Company has successfully negotiated
to extend the term of the facility to 30 September 202218. The agreement was signed by the parties on the
20 July 2021. Key features of the revised facility include:
o No upfront payments;
o A single bullet payment due on 30 September 2022;
o A 150 basis point reduction in the interest rate payable down to 12.5%;
o No early repayment penalties;
o No hedging requirement; and
o The issue of 10m options expiring in July 2023 with a strike price based on a VWAP formula.
Coronavirus (COVID-19) pandemic
During the financial period, the pandemic and its impact has continued to evolve with further outbreaks
resulting in lockdown restrictions in New South Wales and Victoria, additional border closures between
states, new stimulus measures and many other items. The COVID-19 pandemic did not have any significant
impact on the Group's operations during the year.
Dividends
No dividends were paid or declared during the financial year and no recommendation is made as to
dividends.
Events arising since the end of the reporting period
Coronavirus (COVID-19) pandemic
Throughout the reporting period the Company has continued to consider the potential implications of the
Coronavirus. The Company has continued to adapt its policies to monitor and mitigate the impacts of
COVID-19 such as safety and health measures in line with government guidelines and securing the supply
of essential materials and equipment. During August 2021, a worker who had left site returned a positive
result for COVID-19 as he prepared to return to site. The test was conducted in line with our standard
operating procedures (the requirement of a current negative test result prior to returning to work). This
led to a number of on-site workers being tested and placed in isolation. The health and welfare of our
employees is fundamental to our Company, and Manuka management worked closely with NSW Health
and its regional agencies. All close contacts returned negative results on initial and subsequent retests. No
parties including the primary contact reported any adverse symptoms. These actions caused a temporary
period of limited activity at the plant and importantly tested the Company’s Covid management plan.
Containing a possible transmission of the virus to protect our employees has been a priority since the risk
of COVID–19 arose in March 2020 and continues to be the case and protocols are in place for such a
circumstance. The Company does maintain a dual roster workforce and is able to recall additional workers
to site if necessary. Even with the above there been no significant impact to the Group’s operations,
18 Refer ASX announcements dated 14 May 2021 and 29 June 2021
Manuka Resources Ltd
For the year ended 30 June 2021
27
however, there is still significant uncertainty around the breadth and duration of business disruptions in
Australia in general (which may or may not impact operations of the Group) related to COVID-19.
Documentation of Secured Debt Facility Extension and issuance of options
During the period, the Company successfully negotiated to extend the term of the facility to 30 September
202219. The agreement was signed by the parties on the 20th July 2021. The first tranche of Options
pursuant to the term of the negotiated extension, being 5,000,000 options at a strike price of $0.30 with
an expiry of 28 July 2023, were issued on 28 July 2021.
Meadowhead royalty agreement
Pursuant to a royalty agreement attaching to the Mt Boppy Gold Project, the Company was potentially
required to provide Meadowhead Investments Pty Ltd (Meadowhead) with percentage of all gold
produced from any of the existing mining leases associated with the Mt Boppy Gold Project. Subsequent
to the end of the reporting period, the Company reached an agreement in relation to settlement of the
royalty agreement, the cost of which was already fully provisioned as at 30 June 2021.
Apart from the matters noted above, there are no other matters or circumstances that have arisen since the
end of the period that has significantly affected or may significantly affect either:
the Group’s operations in future financial years;
the results of those operations in future financial years; or
the Group’s state of affairs in future financial years.
Likely developments
During the next six months, it is expected that the Company will complete the processing of the ore from the
Mt Boppy Gold Project. The plant will then be transitioned from Mt Boppy gold production to Wonawinta
silver oxide production. The timing of this transition has been stretched from last year’s estimate due to
increased gold production from Mt Boppy.
Initial silver production feed will be from various stockpiles on site, the majority of which are on the ROM
adjacent to the mill (these comprise over 500,000t), as well as others nearby on the ML. The ROM stockpiles
grade at 70g silver/t and is included in the Company’s JORC Resource statement. It is important to note that
there is no mining cost associated with these stockpiles, only a processing cost which includes site
administration and crushing and is currently estimated at A$35/t.
Pit optimisation works are already well underway, which forms the basis for the finalisation of the mine designs
and planning. The Company continues to expect to announce its Maiden Ore Reserve for the Wonawinta Silver
Project shortly thereafter.
The Company continues to expand its greenfield exploration activities on distal exploration licences which
target gold and copper prospects as well as brownfields silver-lead-zinc primary and secondary mineralisation
on and adjacent to the Wonawinta mining lease.
19 Refer ASX announcements dated 14 May 2021 and 29 June 2021
Manuka Resources Ltd
For the year ended 30 June 2021
28
Further information on the likely developments of the group and its business strategies and prospects is set
out in the review of operations on pages 5 to 17 of this annual report.
Directors’ meetings
The number of meetings of Directors (including meetings of Committees of Directors) held during the period
and the number of meetings attended by each Director is as follows:
Board Member
Dennis Karp
Anthony McPaul
Nicholas Lindsay
Board Meetings
A
11
11
11
B
11
11
11
Where:
column A: is the number of meetings the Director was entitled to attend
column B: is the number of meetings the Director attended
Corporate Governance Statement
For the financial year ended 30 June 2021 (Reporting Period) the Company has adopted the fourth edition of
the Corporate Governance Principles and Recommendations released by the ASX Corporate Governance
Council. The Company’s 2021 Annual Corporate Governance Statement has been approved by the Board and
is publicly available on the Company’s website at www.manukaresources.com.au/site/about/corporate-
governance. It will also be released to the ASX at the same time as this 2021 Annual Report.
Unissued shares under option
Unissued ordinary shares of Manuka Resources under option at the date of this report are:
Date Options Granted
Expiry Date Exercise Price
of Shares
$
Number
under option
Apr 2020
Mar 2020
June 2020
17th Apr 2023
17th Apr 2023
14th Jul 2023
$0.25
$0.25
$0.25
3,250,000
8,000,000
10,000,000
21,250,000
No shares were issued during or since the end of the year as a result of exercise of the options.
Environmental legislation
The operations of Manuka Resources Limited are subject to a number of particular and significant
environmental regulations under a law of the Commonwealth or of a State or Territory in Australia.
All conditions governing the administration of various environmental and tenement licences have been
complied with. So far as the Directors are aware there has been no known breach of the Group’s licence
conditions and all activities comply with relevant environmental regulations. The Directors are not aware of
any environmental regulation which is not being complied with.
Manuka Resources Ltd
For the year ended 30 June 2021
29
Remuneration report (audited)
The information provided in this remuneration report has been audited as required by section 308(3C) of the
Corporations Act 2001. The remuneration report sets out remuneration information for the Company’s
Executive Director, Non-Executive Directors and other Key Management Personnel (“KMP”). The report
contains the following sections:
a) Key Management Personnel disclosed in this report;
b) Remuneration policy;
c) Performance-based remuneration;
d) Company performance, shareholder wealth and directors’ and executives’ remuneration;
e) Use of remuneration consultants;
f) Details of remuneration;
g) Service agreements;
h) Share-based compensation;
i) Equity instruments held by Key Management Personnel; and
j) Other transactions with Key Management Personnel.
a) Key Management Personnel disclosed in this report
Non-Executive and Executive directors (refer pages 22 to 23 for details on each director)
Dennis Karp
Anthony McPaul
Nick Lindsay
Justin Boylson (resigned 17 March 2020)
Other Key Management Personnel
Haydn Lynch, Chief Operations Officer (from 1st July 2019)
David Power, Operations Manager (from 30th September 2019)
There have been no changes to directors or KMP since the end of the reporting period.
b) Remuneration policy
The remuneration policy of Manuka Resources Limited has been designed to align key management personnel
objectives with shareholder and business objectives by providing a fixed remuneration component and
offering specific long-term incentives based on key performance areas affecting the Group’s financial results.
The board of Manuka Resources Limited believes the remuneration policy to be appropriate and effective in
its ability to attract and retain the best key management personnel to run and manage the Group.
The board’s policy for determining the nature and amount of remuneration for key management personnel of
the Group is as follows:
The remuneration policy, setting the terms and conditions for the executive directors and other senior
executives (if any), was developed by the board. All executives receive a base salary (which is based on
factors such as length of service and experience) and superannuation. The board reviews executive
packages annually by reference to the Group’s performance, executive performance and comparable
information from industry sectors and other listed companies in similar industries.
Manuka Resources Ltd
For the year ended 30 June 2021
30
The board may exercise discretion in relation to approving incentives, bonuses and options. The policy is
designed to attract and retain the highest calibre of executives and reward them for performance that
results in long term growth in shareholder wealth.
Executives are also entitled to participate in the employee share and option arrangements.
The executive directors and executives (if any) receive a superannuation guarantee contribution required
by the government, which was 9.5% for the 2021 financial year, and do not receive any other retirement
benefits. Some individuals may choose to sacrifice part of their salary to increase payments towards
superannuation.
All remuneration paid to directors and executives is valued at the cost to the Group and expensed. The
cost of share-based payments is measured by reference to the fair value at the date at which they are
granted using an option pricing model.
The board policy is to remunerate non-executive directors at market rates for comparable companies for
time, commitment, and responsibilities. The board determines payments to the non-executive directors
and reviews their remuneration annually, based on market practice, duties and accountability.
Independent external advice is sought when required. The maximum aggregate amount of fees that can
be paid to non-executive directors is subject to approval by shareholders at the Annual General Meeting
(currently $180,000). Fees for non-executive directors are not linked to the performance of the Group.
However, to align directors’ interests with shareholder interests, the directors are encouraged to hold
shares in the Company.
c) Performance-based remuneration
The Group currently has no performance-based remuneration component built into key management
personnel remuneration packages. Remuneration and share based payments are issued to align the Directors’
interest with that of shareholders.
d) Company performance, shareholder wealth and directors’ and executives’ remuneration
The remuneration policy has been tailored to increase the direct positive relationship between shareholders’
investment objectives and key management personnel performance. Currently, this is facilitated through the
issue of options to the majority of key management personnel to encourage the alignment of personal and
shareholder interests. The Group believes this policy will be effective in increasing shareholder wealth.
The table below shows the gross revenue, losses and earnings per share for the last five financial periods for
the listed entity.
2021
$
2020
$
2019
$
2018
$
2017
$
Revenue and other income 44,544,455
(2,895,244)
Net loss
(1.12)
Loss per share (cents) *
$0.32
Share price
9,468,320
(4,552,843)
(3.28)
n/a
-
(5,428,238)
(4.08)
n/a
1
(4,344,351)
(3.28)
n/a
909,999
(3,745,221)
(4.95)
n/a
No dividends have been paid during the financial years ended 30 June 2017 to 30 June 2021.
* In accordance with AASB 133 paragraph 26, the weighted average number of shares outstanding during the
period and for all period presented shall be adjusted for events (such as a share consolidation) that have
changed the number of shares outstanding without a corresponding change in resources. As a result, the share
consolidation which occurred on 11th May 2020 has been applied to the full financial year ended 30 June 2020
and all the previous reporting periods.
Manuka Resources Ltd
For the year ended 30 June 2021
31
e) Use of remuneration consultants
The Group did not employ the services of any remuneration consultants during the financial year ended 30
June 2021 (2020: None).
f) Details of remuneration
Details of the remuneration of the key management personnel of the Group are set out in the following table.
Salary/
Directors Fee
$
$240,000
$110,000
$45,000
$41,000
$78,800
$39,000
Directors
Dennis Karp
2021
2020
Anthony McPaul
2021
2020
Nick Lindsay
2021
2020
$
-
-
-
-
-
-
Fixed Remuneration
Movement in
Annual and
Long Service
Leave
provision
Non-
Monetary
Benefits
Variable
Remuneration
Superannuation
Options
$
$
$
Total
$
$15,015
-
-
-
-
-
$21,003
$7,001
-
$276,018
$81,677
$198,678
-
-
-
-
-
$45,000
$81,677
$122,677
-
$78,800
$81,677
$120,677
Fixed Remuneration
Variable
Remuneration
Salary/
Directors Fee
Non-
Monetary
Benefits
Movement in
Annual and
Long Service
Leave
provision
Justin Boylson
2021
2020
Other KMP (Group)
Haydn Lynch
2021
2020
David Power
2021
2020
Total KMP remuneration
expensed
2021
2020
$
-
$24,000
$219,178
$206,495
$217,806
$166,848
$800,784
$587,343
$
-
-
-
-
-
-
-
-
$
-
-
$12,160
$12,683
$18,931
-
$46,106
$12,683
Superannuation
Options
Total
$
-
-
$
-
$
-
$81,677
$105,677
$20,822
$20,822
$20,692
$15,850
$62,517
$43,673
-
$252,160
$81,677
$321,677
-
-
-
$257,429
$182,698
$909,407
$408,385
$1,052,084
g) Service agreements
The details of service agreements of the key management personnel of the Group are as follows:
Dennis Karp, Executive Chairman:
(a) Mr Karp was appointed Executive Chairman on 1 March 2020 at an annual salary of $240,000 (exclusive
of superannuation) plus any Compulsory Superannuation; and
Manuka Resources Ltd
For the year ended 30 June 2021
32
(b)
The agreement is ongoing until terminated in accordance with the agreement. Mr Karp may terminate
the agreement by giving 12 weeks’ notice in writing to the Company and the Company may terminate
the agreement (without cause) by giving Mr Karp 12 weeks’ written notice or by making payment in lieu
of notice.
Haydn Lynch, Chief Operations Officer:
(a) Mr Lynch will receive an annual salary of $240,000 (inclusive of superannuation); and
(b)
The agreement is ongoing until terminated in accordance with the agreement. Mr Lynch may terminate
the agreement by giving 12 weeks’ notice in writing to the Company and the Company may terminate
the agreement (without cause) by giving Mr Lynch 12 weeks’ written notice or by making payment in
lieu of notice.
(b)
David Power, Operations Manager:
(a) Mr Power was appointed in September 2019 at an annual salary of $219,000 (inclusive of
superannuation). This was increased on 1 December 2020 to an annual salary of $230,000; and
The agreement is ongoing until terminated in accordance with the agreement. Mr Power may terminate
the agreement by giving 4 weeks’ notice in writing to the Company and the Company may terminate
the agreement (without cause) by giving Mr Power 4 weeks’ written notice or by making payment in
lieu of notice.
Anthony McPaul and Nicholas Lindsay, Non-executive Directors:
The non-executive directors (NEDs) have entered into service agreements with the company in the form of a
letter of appointment. The letter summarises the board policies and terms, including remuneration, relevant
to the office of director. Annual remuneration is $45,000 per annum, with additional fees payable where the
Board determines special duties, or services outside the scope of the of the ordinary duties of a NED, have
been performed. Remuneration is subject to annual review by the Board and reasonable notice of an intention
to resign or to not seek re-election should be given to the Company.
h) Share-based compensation
Options
Options are issued to key management personnel as part of their remuneration. The options are not issued
based on performance criteria but are issued to the majority of key management personnel of Manuka
Resources Limited to increase goal congruence between key management personnel and shareholders. No
options were granted during the period.
No ordinary shares in the Company have been provided as a result of the exercise of remuneration options to
each director of Manuka Resources Limited and other key management personnel of the Group during the
year.
Manuka Resources Ltd
For the year ended 30 June 2021
33
i) Equity instruments held by Key Management Personnel
Share holdings
The numbers of shares in the Company held during the financial year by each director of Manuka Resources
Limited and other key management personnel of the Group, including their related parties, and any nominally
held, are set out below. There were no shares granted during the reporting period as compensation.
Directors
Dennis Karp
Anthony McPaul
Nicholas Lindsay
Justin Boylson
Other KMP
Haydn Lynch
David Power
Received
during the
year on the
exercise of
Options
Other
changes
during the
year
-
-
-
-
-
-
-
-
-
-
-
-
Balance at
start of the
year
91,814,557
-
-
-
-
-
Balance at
end of the
year
91,814,557
-
-
-
-
-
Option holdings
The numbers of options over ordinary shares in the Company held during the financial year by each director
of Manuka Resources Limited and other key management personnel of the Group, including their personally
related parties, and any nominally held, are set out below.
Balance at
start of the
year
Granted as
compen-
sation
Exercised
Other
changes
Balance at
end of the
year
Vested and
exercisable
Unvested
Directors
Dennis Karp
1,500,000
Anthony McPaul
1,500,000
Nicholas Lindsay
1,500,000
Justin Boylson
1,500,000
Other KMP
Haydn Lynch
David Power
1,500,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,500,000
1,500,000
1,500,000
1,500,000
1,500,000
1,500,000
1,500,000
1,500,000
1,500,000
1,500,000
-
-
-
-
-
-
-
-
All vested options are exercisable. They have an exercise price of 25 cents and expire on 17 April 2023.
j) Other transactions with Key Management Personnel
Rescap Investments Pty Ltd - A director, Mr Dennis Karp, is a director of, and holds a controlling interest
in, ResCap Investments Pty Ltd (“ResCap”). The Group has borrowing arrangements with ResCap, along
with transactions for the sublease of office premises and a service agreement for the provision of
administrative services. The ResCap office sublease ended in July 2019 and the service agreement ended
in February 2020.
Cobar Unit Trust - A director, Mr Dennis Karp, is a Unit Holder in Cobar Unit Trust. Manuka entered into a
prepayment in relation to the sale of gold ore to Cobar Pty Ltd ATF Cobar Unit Trust amounting to
$950,000. There is a call and put option in Manuka’s favour in relation to the agreement. The put option
was exercised in June 2020 and payment was made on 26 June 2020 to settle the agreement.
Manuka Resources Ltd
For the year ended 30 June 2021
34
Aggregate amounts of each of the above types of other transactions with key management personnel of
Manuka Resources Limited:
Details of related party transactions with ResCap through
the loan facility:
•
interest charged on loan
83,640
107,225
30 June
2021
$
30 June
2020
$
Details of related party transactions with ResCap as trade
and other creditors
•
•
amounts charged pursuant to sublease to ResCap
and month to month lease payments
amounts charged pursuant to service agreement to
ResCap
Details of related party transactions with Cobar Unit Trust
through the loan facility:
•
gold
interest paid in relation to prepayment of sale of
Details of balances with related parties:
Balance of loan with Manuka Resources Ltd
- payable to ResCap Investments Pty Ltd
Balance of loan with Mt Boppy Resources Pty Ltd
- payable to ResCap Investments Pty Ltd
End of audited Remuneration Report
-
-
-
21,267
240,000
95,000
1,624,493
2,005,327
84,143
196,143
Indemnities given to, and insurance premiums paid for, auditors and officers
During the period, Manuka Resources has paid a premium to insure officers of the Company. The officers of
the Company that are covered by the insurance policy includes all directors.
The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may
be brought against the officers in their capacity as officers of the Company, and any other payments arising
from liabilities incurred by the officers in connection with such proceedings, other than where such liabilities
arise out of conduct involving a wilful breach of duty by the officers or the improper use by the officers of their
position or of information to gain advantage for themselves or someone else to cause detriment to the
Company.
The Company has not otherwise, during or since the end of the financial period, except to the extent permitted
by law, indemnified or agreed to indemnify any current or former officer of the Company against a liability
incurred as such by an officer.
The Company has agreed to indemnify its auditors, Grant Thornton, to the extent permitted by law, against
any claim by a third party arising from the Company’s breach of its agreement. The indemnity requires the
Company to meet the full amount of any such liabilities including a reasonable amount of legal costs.
Manuka Resources Ltd
For the year ended 30 June 2021
35
Proceedings on behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring
proceedings on behalf of the Company, or to intervene in any proceedings to which the Company is a party,
for the purpose of taking responsibility on behalf of the Company for all or part of those proceedings.
No proceedings have been brought, or intervened in, on behalf of the company with leave of the court under
section 237 of the Corporations Act 2001.
Audit and non-audit services
Details of the amounts paid or payable to the auditor (Grant Thornton Audit Pty Ltd) for audit and non-audit
services during the year are disclosed in Note 9.
The Company may decide to employ the auditor on assignments additional to their statutory audit duties
where the auditor’s expertise and experience with the Company and/or the Group are important.
The board of directors is satisfied that the provision of the non-audit services is compatible with the general
standard of independence for auditors imposed by the Corporations Act 2001. There were no non-audit
services during the financial year ended 30 June 2021.
Auditor’s Independence Declaration
A copy of the Auditor’s Independence Declaration as required under s.307C of the Corporations Act 2001 is
included on the following page of this financial report and forms part of this Directors’ Report.
Signed in accordance with a resolution of the Directors
Dennis Karp
Executive Chairman
Dated the 23rd day of September 2021
36
Level 17, 383 Kent Street
Sydney NSW 2000
Correspondence to:
Locked Bag Q800
QVB Post Office
Sydney NSW 1230
T +61 2 8297 2400
F +61 2 9299 4445
E info.nsw@au.gt.com
W www.grantthornton.com.au
Auditor’s Independence Declaration
To the Directors of Manuka Resources Limited
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of Manuka
Resources Limited for the year ended 30 June 2021, I declare that, to the best of my knowledge and belief, there have been:
a
b
no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
Grant Thornton Audit Pty Ltd
Chartered Accountants
N P Smietana
Partner – Audit & Assurance
Sydney, 23 September 2021
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
www.grantthornton.com.au
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients
and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International
Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are
delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one
another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to
Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to
Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation.
Manuka Resources Ltd
For the year ended 30 June 2021
37
Consolidated Statement of Profit or Loss and
Other Comprehensive Income
For the year ended 30 June 2021
Sales revenue
Cost of sales
Operating profit
Other income
Other expenses
Notes
5(a)
6(a)
5(b)
6(c)
Movement in fair value of derivative liability
Share based payment credit / (expense)
25.1
7
8
Loss before finance expenses
Finance expenses
Loss before income tax
Income tax expense
Loss for the year attributable to members of
Manuka Resources Limited
Other comprehensive loss - items that will be
reclassified subsequently to profit or loss
Cashflow hedging current year loss
Total comprehensive loss for the year
attributable to members of Manuka Resources
Limited
Loss per share for loss attributable to the
ordinary equity holders of the Company
30 June
2021
$
30 June
2020
$
43,752,567
9,261,798
(43,312,892)
(7,264,503)
439,675
1,997,295
791,888
206,522
(2,387,032)
(2,554,138)
-
-
(1,155,469)
(1,739,775)
(2,895,244)
-
(239,130)
(435,611)
(1,025,062)
(3,527,781)
(4,552,843)
-
(2,895,244)
(4,552,843)
(6,297)
(6,297)
-
-
(2,901,541)
(4,552,843)
Basic and diluted loss per share (cents per share)
24
(1.12)
(3.28)
This statement should be read in conjunction with the notes to the financial statements.
Manuka Resources Ltd
For the year ended 30 June 2021
38
Consolidated Statement of Financial Position
As of 30 June 2021
Assets
Current
Cash and cash equivalents
Trade and other receivables
Contract assets
Inventories
Prepayments
Other financial assets
Total current assets
Non-current
Mine properties and development assets
Exploration and evaluation assets
Property, plant and equipment
Right of use asset
Other financial assets
Total non-current assets
Total assets
Liabilities
Current
Trade and other payables
Provisions
Derivative liabilities
Borrowings
Lease liabilities
Current liabilities
Non-current
Provisions
Lease liabilities
Borrowings
Total non-current liabilities
Total liabilities
Net assets / (deficit)
Equity
Share capital
Other contributed equity
Share based payment reserve
Hedging reserve
Accumulated losses
Total equity
Notes
30 June
2021
$
30 June
2020
$
11
12
13
1,018,035
1,509,040
693,571
7,653,740
4,533
-
4,692,287
2,007,761
569,627
351,127
18.3
84,000
-
7,062,053
11,521,668
14
15
16
17
6,439,546
9,343,296
4,780,492
322,305
10,090,632
8,589,019
68,083
194,557
18.3
6,804,571
6,456,370
28,183,324
24,905,547
35,245,377
36,427,215
9,979,330
7,670,573
460,189
188,617
6,297
-
-
25,704,579
75,419
128,937
10,521,235
33,692,706
5,917,462
5,108,158
19
20
18.4
18.2
17
20
17
694
18.2
16,621,347
73,078
-
22,539,503
5,181,236
33,060,738
38,873,942
2,184,639
(2,446,727)
21
22
25
25
21,512,355
5,112,041
-
8,867,407
1,486,077
1,486,077
(6,297)
-
(20,807,496)
(17,912,252)
2,184,639
(2,446,727)
This statement should be read in conjunction with the notes to the financial statements.
Manuka Resources Ltd
For the year ended 30 June 2021
39
Consolidated Statement of Changes in Equity
For the year ended 30 June 2021
Share
Capital
$
Other
Contributed
Equity
$
296,170
-
-
-
1
-
-
-
Balance at 1 July 2019
Loss for the period
Other comprehensive
income
Total comprehensive loss
for the period
Contribution of equity
5,112,040
9,934,830
Share issue costs
Share based payments
-
-
(1,363,593)
-
1,486,077
Balance at 1 July 2020
5,112,041
8,867,407
1,486,077
Loss for the period
Other comprehensive loss
Total comprehensive loss
for the period
Contribution of equity
-
-
-
-
-
-
18,231,000
(10,231,000)
Share issue costs
(1,830,686)
1,363,593
Share-
based
payment
reserve
Hedging
reserve
Accumulated
losses
Total equity
$
$
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(13,359,409)
(13,063,238)
(4,552,843)
(4,552,843)
-
-
(4,552,843)
(4,552,843)
-
-
-
15,046,870
(1,363,593)
1,486,077
(17,912,252)
(2,446,727)
(2,895,244)
(2,895,244)
(6,297)
-
(6,297)
(6,297)
(2,895,244)
(2,901,541)
-
-
-
-
8,000,000
(467,093)
Balance at 30 June 2021
21,512,355
-
1,486,077
(6,297)
(20,807,496)
2,184,639
This statement should be read in conjunction with the notes to the financial statements.
Manuka Resources Ltd
For the year ended 30 June 2021
40
Consolidated Statement of Cash Flows
For the year ended 30 June 2021
Notes
2021
$
2020
$
Operating activities
Receipts from customers
Payments to suppliers and employees
Other income
Finance costs paid
Net cash from operating activities
23
Investing activities
Acquisition of property, plant and equipment
Payments for development and exploration assets
Payment for other assets
43,708,204
(40,079,469)
791,888
(4,212,830)
207,793
(2,292,825)
(5,577,475)
(158,803)
8,822,251
(6,223,442)
206,522
(1,037,063)
1,768,268
(6,816,544)
(7,927,193)
(91,280)
Net cash (used in) investing activities
(8,029,103)
(14,835,017)
Financing activities
Proceeds from borrowings
Repayments of borrowings
Repayment of lease liabilities
Proceeds from issues of ordinary shares
Net cash from financing activities
Net change in cash and cash equivalents
Cash and cash equivalents, at beginning of the
period
Cash and cash equivalents, at end of period
11
550,000
(6,184,480)
(148,122)
13,112,907
7,330,305
(491,005)
1,509,040
1,018,035
24,009,356
(9,860,466)
(73,163)
500,000
14,575,727
1,508,978
62
1,509,040
This statement should be read in conjunction with the notes to the financial statements.
Manuka Resources Ltd
For the year ended 30 June 2021
41
Notes to the Financial Statements
Nature of operations and general information and statement of compliance
1
The principal activities of Manuka Resources Ltd comprise mine development, mining and processing of silver
and gold and exploration activities.
During the financial year the Company’s principal activities related to the commencement of processing and
mining of gold ores from the Mt Boppy Gold Project through the Wonawinta plant, the release of an updated
Mineral Resource Estimate for both the Wonawinta Silver Project and the Mt Boppy Gold project, significant
progress on various drilling programs and commencement of internal feasibility work for the restart the
Wonawinta Silver Project.
The financial report includes the consolidated financial statements and notes of Manuka Resources Limited
and its controlled entity Mt Boppy Resources Pty Ltd (Consolidated Group or Group).
These general purpose financial statements have been prepared in accordance with Australian Accounting
Standards and Interpretations issued by the Australian Accounting Standards Board and the Corporations Act
2001. These include Australian equivalents to International Financial Reporting Standards (AIFRS). Compliance
with AIFRS ensures the that the financial report, comprising the financial statements and the notes, complies
with International Financial Reporting Standards (IFRS). Manuka Resources Limited is a for-profit entity for the
purpose of preparing the financial statements.
Manuka Resources Ltd is a Public Company incorporated and domiciled in Australia. The address of its
registered office and its principal place of business is Level 4, Grafton Bond Building, 201 Kent Street, Sydney,
New South Wales.
The consolidated financial statements for the year ended 30 June 2021 were approved and authorised for
issue by the Board of Directors on 23 September 2021. The directors have the power to amend and reissue
the financial statements.
2
Changes in accounting policies
2.1 New and amended standards adopted
The accounting policies adopted by the Group are consistent with those of the previous financial year.
2.2 Accounting standards and interpretations not yet effective
New accounting standards and interpretations that have been published that are not mandatory for the 30
June 2021 reporting period, have not been early adopted by the Group. The Group’s assessment of the impact
of these new standards and interpretations is that they are not expected to have a material impact on the
entity in the current or future reporting periods and on foreseeable future transactions.
Summary of accounting policies
3
3.1 Overall considerations
The significant accounting policies that have been used in the preparation of these financial statements are
summarised below.
Manuka Resources Ltd
For the year ended 30 June 2021
42
The financial statements have been prepared using the measurement bases specified by Australian Accounting
Standards for each type of asset, liability, income and expense. The measurement bases are more fully
described in the accounting policies below.
The financial statements have been prepared on a historical cost basis, except for the assets held for sale which
are measured at fair value less cost of disposal. The financial statements are presented in Australian dollars
which is the Company’s functional and presentation currency.
3.2 Going Concern
The financial report has been prepared on a going concern basis, which contemplates continuity of normal
business activities and realisation of assets and settlement of liabilities in the ordinary course of business. The
financial statements do not include any adjustments that might be necessary to realise its assets and discharge
its liabilities in the normal course of business, and at the amounts stated in the financial report, should the
Group not be able to continue as a going concern.
During the financial year ended 30 June 2021, the Group achieved the following significant milestones:
Official Quotation of the Company’s shares commenced on 14 July 2020. The Company raised
$7,000,000 (before costs of $512,450) pursuant to the offer under its prospectus dated 22 May 2020 by
the issue of 35,000,000 shares at an issue price of $0.20 per share.
On 17 December 2020, the Company completed a placement of $7,000,000 (before costs of $444,737)
through the issue of 17,500,000 ordinary shares at $0.40 per share, to sophisticated, professional and
institutional investors. Funds raised from the Placement supported accelerated exploration and
resources drilling activities at the Mt Boppy Gold Project and the Wonawinta Silver and Base Metals
Project and also provided general working capital to the Group. In addition to the Placement the
Company converted $1,000,000 in unsecured loans to equity through the issue of 2,500,000 ordinary
shares at $0.40 per share.
The Company has repaid approximately US$4 million of its debt facility (TFC/TA Facility) with TransAsia
Private Capital Limited (TPC) and has successfully extended repayment of the facility to 30 September
2022.
The Company released a significantly improved Mt Boppy Gold Project Resource Upgrade in February
2021 which contains a 23% increase in contained ounces and a 20% increase in grade, when compared
with the last reported JORC Resource (September 2016)20 and an updated Mineral Resource Estimate
for the Wonawinta Silver Project with a 43% increase in Measured and Indicated Resources21.
Completion of the Wonawinta Deeps Proof-of-Concept drilling program22 which confirmed the presence
of carbonate-hosted sulphides in the Winduck Shelf strata down-dip from the existing Wonawinta open
pits encountering lead-zinc-silver mineralisation over 3km and supported the existence of lead-zinc-
silver sulphide mineralisation with Mississippi Valley Type (MVT) affinities.
Commencement of internal feasibility work for the restart the Wonawinta Silver Project including
extensive metallurgical test work prior to the release of its mine plan and Maiden Reserve.
20 Refer ASX announcement dated 1 February 2021.
21 Refer ASX announcement dated 1 April 2021
22 Refer ASX announcement dated 1 June 2021
Manuka Resources Ltd
For the year ended 30 June 2021
43
Whilst a significant improvement in the net liability position of the Group is noted driven by commercial
production, and the raising of $14,000,000 in capital during the year, the Group incurred a loss for the year
ended 30 June 2021 of $2,895,244 (2020: loss $4,552,843). The Company has converted its balance sheet to a
net asset position of $2,184,639 (2020: net deficit $2,446,727) and has improved its net current liability
position to $3,459,182 as at the reporting date (2020: 22,171,038).
Management have prepared cash flow projections for the period to 30 September 2022 that support the ability
of the Group to continue as a going concern.
In order to repay the senior debt facility in the timeframe, the projections rely on the proven ability of the
Group maintaining profitable gold production, based on the forecast gold price, the cut-off grade, and the
planned recoveries from known resources and reserves within the current pit design and the successful
transition of the plant to silver production at Wonawinta. The Company’s forecast silver price and the forecast
USD/AUD exchange rate are also key.
The Group has also a number of alternative plans if needed including:
•
•
•
Undertaking capital raising activities on the market;
Finding alternative financing arrangements; or
Reducing the extent of it exploration programs.
In the event the Group is unable to achieve some of the matters detailed above, this would create a material
uncertainty with respect to the ability of the Group to continue as a going concern and accordingly to realise
its assets and extinguish its liabilities in the ordinary course of operations. However, the Directors are satisfied
with respect to the favourable outcome of the above matters and as such have therefore prepared the
financial statements on a going concern basis.
3.3 Basis of consolidation
The Group’s financial statements consolidate those of the Parent Company and all of its subsidiaries at the
end of the reporting period. The parent controls a subsidiary if it is exposed, or has rights, to variable returns
from its involvement with the subsidiary and has the ability to affect those returns through its power over the
subsidiary. All subsidiaries have a reporting date of 30 June.
All transactions and balances between Group companies are eliminated on consolidation, including unrealised
gains and losses on transactions between Group companies. Where unrealised losses on intra-group asset
sales are reversed on consolidation, the underlying asset is also tested for impairment from a group
perspective. Amounts reported in the financial statements of subsidiaries have been adjusted where necessary
to ensure consistency with the accounting policies adopted by the Group.
Profit or loss and other comprehensive income of subsidiaries acquired or disposed of during the year are
recognised from the effective date of acquisition, or up to the effective date of disposal, as applicable.
3.4 Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision maker. The chief operating decision maker, who is responsible for allocating resources and
assessing performance of the operating segments, has been identified as the full Board of Directors.
Manuka Resources Ltd
For the year ended 30 June 2021
44
3.5 Foreign currency translation
Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of
the primary economic environment in which the entity operates (‘the functional currency’). The consolidated
financial statements are presented in Australian dollars, which is Manuka Resources Limited's functional and
presentation currency.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing
at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such
transactions and from the translation at year end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in profit or loss. They are deferred in equity if they are
attributable to part of the net investment in a foreign operation.
Foreign exchange gains and losses that relate to borrowings are presented in the statement of profit or loss,
within finance costs. All other foreign exchange gains and losses are presented in the statement of profit or
loss on a net basis within other gains/(losses).
Income taxes
3.6
Tax expense recognised in profit or loss comprises the sum of deferred tax and current tax not recognised in
other comprehensive income or directly in equity.
Current income tax assets and/or liabilities comprise those obligations to, or claims from, the Australian
Taxation Office (ATO) and other fiscal authorities relating to the current or prior reporting periods that are
unpaid at the reporting date. Current tax is payable on taxable profit, which differs from profit or loss in the
financial statements. Calculation of current tax is based on tax rates and tax laws that have been enacted or
substantively enacted by the end of the reporting period.
Deferred income taxes are calculated using the liability method on temporary differences between the
carrying amounts of assets and liabilities and their tax bases. However, deferred tax is not provided on the
initial recognition of goodwill or on the initial recognition of an asset or liability unless the related transaction
is a business combination or affects tax or accounting profit. Deferred tax on temporary differences associated
with investments in subsidiaries and joint ventures is not provided if reversal of these temporary differences
can be controlled by the Company and it is probable that reversal will not occur in the foreseeable future.
Deferred tax assets and liabilities are calculated, without discounting, at tax rates that are expected to apply
to their respective period of realisation, provided they are enacted or substantively enacted by the end of the
reporting period.
Deferred tax assets are recognised to the extent that it is probable that they will be able to be utilised against
future taxable income. Deferred tax liabilities are always provided for in full.
Deferred tax assets and liabilities are offset only when the Company has a right and intention to set off
current tax assets and liabilities from the same taxation authority.
Changes in deferred tax assets or liabilities are recognised as a component of tax income or expense in profit
or loss, except where they relate to items that are recognised in other comprehensive income (such as the
revaluation of land) or directly in equity, in which case the related deferred tax is also recognised in other
comprehensive income or equity, respectively.
Manuka Resources Ltd
For the year ended 30 June 2021
45
3.7 Leases
Pursuant to AASB 16, the Group recognises on its balance sheet the minimum lease payments under its lease
arrangements as ‘right-of-use assets’ with a corresponding financial lease liability. The financial liability is
adjusted for lease prepayments, lease incentives received, initial direct costs incurred and an estimate of any
future restoration, removal or dismantling costs. Straight-line operating lease expense recognised previously
recognised under AASB 117 is replaced with a depreciation charge for the leased asset (included in operating
costs), and an interest expense on the recognised lease liability (included in finance costs).
Short-term leases and leases of low value assets
The group has elected not to recognise right-of-use assets and lease liabilities for short-term leases of
machinery that have a lease term of 12 months of less. The Group recognises the lease payments associated
with these leases as an expense on a straight-line basis over the lease term.
3.8 Revenue recognition
The Group recognises revenue as follows:
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the Company is expected to be
entitled in exchange for transferring goods or services to a customer. For each contract with a customer, the
Company: identifies the contract with a customer; identifies the performance obligations in the contract;
determines the transaction price which takes into account estimates of variable consideration and the time
value of money; allocates the transaction price to the separate performance obligations on the basis of the
relative stand-alone selling price of each distinct good or service to be delivered; and recognises revenue when
or as each performance obligation is satisfied in a manner that depicts the transfer to the customer of the
goods or services promised.
Variable consideration within the transaction price, if any, reflects concessions provided to the customer such
as discounts, rebates and refunds, any potential bonuses receivable from the customer and any other
contingent events. Such estimates are determined using either the 'expected value' or 'most likely amount'
method. The measurement of variable consideration is subject to a constraining principle whereby revenue
will only be recognised to the extent that it is highly probable that a significant reversal in the amount of
cumulative revenue recognised will not occur. The measurement constraint continues until the uncertainty
associated with the variable consideration is subsequently resolved. Amounts received that are subject to the
constraining principle are initially recognised as deferred revenue in the form of a separate refund liability.
Sale of goods
Revenue from the sale of goods is recognised at the point in time when the customer obtains control of the
goods, which is generally at the time of delivery. The Company has one Key Customer which is an LBMA
Accredited Refinery. Sales revenue is recognised at the time of the Lock-in Contract. This is when goods are
delivered and title and risk passes to the customer. The Lock-in contract is based on provisional assays at the
spot price. Final assays are completed at the Outturn and the resulting difference in product is deposited to
the Company’s Unallocated Metals account, where the goods are recognised as Inventory at cost price.
3.9 Government grants
Grants from the government are recognised at their fair value where there is a reasonable assurance that the
grant will be received, and the Group will comply with all attached conditions. Government grants are
recorded in other income.
Manuka Resources Ltd
For the year ended 30 June 2021
46
3.10 Operating expenses
Operating expenses are recognised in profit or loss upon utilisation of the service.
3.11 Exploration and evaluation expenditure
Exploration and evaluation expenditure incurred is accumulated in respect of each identifiable area of interest.
These costs are only carried forward to the extent that they are expected to be recouped through the
successful development of the area or where activities in the area have not yet reached a stage that permits
reasonable assessment of the existence of economically recoverable reserves.
Accumulated costs in relation to an abandoned area are written off in full against profit or loss in the year in
which the decision to abandon the area is made.
When production commences, the accumulated costs for the relevant area of interest are transferred to mine
properties and amortised over the life of the area according to the rate of depletion of the economically
recoverable reserves.
Costs of site restoration are provided over the life of the facility from when exploration commences and are
included in the costs of that stage. Site restoration costs include the dismantling and removal of mining plant,
equipment and building structures, waste removal, and rehabilitation of the site in accordance with clauses of
the mining permits. Such costs have been determined using estimates of future costs, current legal
requirements and technology on a discounted basis.
Any changes in the estimates for the costs are accounted on a prospective basis. In determining the costs of
site restoration, there is uncertainty regarding the nature and extent of the restoration due to community
expectations and future legislation. Accordingly, the costs have been determined on the basis that the
restoration will be completed within one year of abandoning the site. A regular review for impairment is
undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in
relation to that area of interest. Exploration expenditure which fails to meet at least one of the conditions
outlined above is written off.
3.12 Property, plant and equipment
Property, plant, equipment, is stated at cost less accumulated depreciation and any impairment in value.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits associated with the item will flow to the Company and
the cost of the item can be measured reliably.
All other repairs and maintenance are charged to the income statement during the financial year in which they
are incurred.
Depreciation commences on assets when it is deemed they are capable of operating in the manner intended.
Useful lives are examined on an annual basis and adjustments, where applicable, are made on a revised useful
life basis.
Manuka Resources Ltd
For the year ended 30 June 2021
47
Asset
Freehold land – at cost
Computer Equipment:-
- Laptops and mobile devices
- Other Computer equipment
Plant and Equipment
Ball Mill Motor
Other Pumps and Motors
Generators
Other
Processing Plant
Depreciation rate
not depreciated
2 years effective life (50%) - straight-lined
4 years effective life (25%) - straight-lined
25 years effective life (4%) - straight-lined
20 years effective life (5%) - straight-lined
10 years effective life (10%) - straight-lined
2-5 years effective life (20% to 50%) - straight-lined
units of production
The carrying values of plant and equipment are reviewed for impairment when events or changes in
circumstances indicate the carrying value may not be recoverable.
3.13 Financial instruments
Recognition and derecognition
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual
provisions of the financial instrument and are measured initially at fair value adjusted by transactions costs,
except for those carried at fair value through profit or loss, which are measured initially at fair value.
Subsequent measurement of financial assets and financial liabilities are described below.
Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire,
or when the financial asset and substantially all the risks and rewards are transferred. A financial liability is
derecognised when it is extinguished, discharged, cancelled or expires.
Except for those trade receivables that do not contain a significant financing component and are measured at
the transaction price in accordance with AASB 15, all financial assets are initially measured at fair value
adjusted for transaction costs (where applicable).
Subsequent measurement of financial assets
For the purpose of subsequent measurement, financial assets, other than those designated and effective as
hedging instruments, are classified into the following categories upon initial recognition:
financial assets at amortised cost
financial assets at fair value through profit or loss (FVPL)
debt instruments at fair value through other comprehensive income (FVOCI)
equity instruments at fair value through other comprehensive income (FVOCI)
Classifications are determined by both:
The entity’s business model for managing the financial asset
The contractual cash flow characteristics of the financial assets
All income and expenses relating to financial assets that are recognised in profit or loss are presented within
finance costs, finance income or other financial items, except for impairment of trade receivables which is
presented within other expenses.
Manuka Resources Ltd
For the year ended 30 June 2021
48
Financial assets at amortised cost
Financial assets are measured at amortised cost if the assets meet the following conditions (and are not
designated as FVPL):
they are held within a business model whose objective is to hold the financial assets and collect its
contractual cash flows; and
the contractual terms of the financial assets give rise to cash flows that are solely payments of principal
and interest on the principal amount outstanding.
After initial recognition, these are measured at amortised cost using the effective interest method. Discounting
is omitted where the effect of discounting is immaterial. The Group’s cash and cash equivalents, trade and
most other receivables fall into this category of financial instruments.
Financial assets at fair value through profit or loss (FVPL)
Financial assets that are held within a business model other than ‘hold to collect’ or ‘hold to collect and sell’
are categorised at fair value through profit and loss. Further, irrespective of business model, financial assets
whose contractual cash flows are not solely payments of principal and interest are accounted for at FVPL. All
derivative financial instruments fall into this category, except for those designated and effective as hedging
instruments, for which the hedge accounting requirements apply.
Impairment of financial assets
The AASB 9 impairment model uses forward looking information to recognize expected credit losses - the
‘expected credit losses (ECL) model’. The application of this impairment model depends on whether there has
been a significant increase in credit risk.
The Group considers a broader range of information when assessing credit risk and measuring expected credit
losses, including past events, current conditions, reasonable and supportable forecasts that affect the
expected collectability of the future cash flows of the instrument.
In applying this forward-looking approach, a distinction is made between:
financial instruments that have not deteriorated significantly in credit quality since initial recognition or
that have low credit risk (‘Stage 1’); and
financial instruments that have deteriorated significantly in credit quality since initial recognition and
whose credit risk is not low (‘Stage 2’).
‘Stage 3’ would cover financial assets that have objective evidence of impairment at the reporting date. ‘12-
month expected credit losses’ are recognised for the first category while ‘lifetime expected credit losses’ are
recognised for the second category. Measurement of the expected credit losses is determined by a probability-
weighted estimate of credit losses over the expected life of the financial instrument.
Trade and other receivables and contract assets
The Group makes use of a simplified approach in accounting for trade and other receivables as well as contract
assets and records the loss allowance at the amount equal to the expected lifetime credit losses. In using this
practical expedient, the Group uses its historical experience, external indicators and forward-looking
information to calculate the expected credit losses using a provision matrix.
The Group assess impairment of trade receivables on a collective basis as they possess credit risk
characteristics based on the days past due.
Manuka Resources Ltd
For the year ended 30 June 2021
49
Classification and measurement of financial liabilities
The Group’s financial liabilities include trade and other payables.
Financial liabilities are initially measured at fair value, and, where applicable, adjusted for transaction costs
unless the Group designated a financial liability at fair value through profit or loss. Subsequently, financial
liabilities are measured at amortised cost using the effective interest method except for derivatives and
financial liabilities designated at FVPL, which are carried subsequently at fair value with gains or losses
recognised in profit or loss (other than derivative financial instruments that are designated and effective as
hedging instruments).
3.14 Inventories
Inventories are measured at the lower of their costs and net realisable value. An impairment provision is
recognised when there is objective evidence that the Company will not be able to realise the carrying amount
through use or sale.
Raw materials and stores, work in progress and finished goods are stated at the lower of cost and net realisable
value. Cost comprises direct materials, direct labour and an appropriate proportion of variable and fixed
overhead expenditure, the latter being allocated on the basis of normal operating capacity. Costs are assigned
to individual items of inventory on the basis of weighted average costs. Costs of purchased inventory are
determined after deducting rebates and discounts. Net realisable value is the estimated selling price in the
ordinary course of business less the estimated costs of completion and the estimated costs necessary to make
the sale inventories are valued at the lower of cost and net realisable value.
3.15 Care and Maintenance
When a mine moves into the care and maintenance stage, the costs of maintaining the mine are expensed in
the period as incurred unless there are future economic benefits for other operating mines.
3.16 Mine development
Mine development expenditure relates to costs incurred to access a mineral resource. It represents those
exploration and evaluation costs incurred after the technical feasibility and commercial viability of extracting
the mineral resource has been demonstrated and an identified mineral reserve is being prepared for
production (but is not yet in production).
Significant factors considered in determining the technical feasibility and commercial viability of the project
are the completion of a feasibility study, the existence of sufficient proven and probable reserves to proceed
with development and approval by the Board of directors to proceed with development of the project. Mine
development costs include direct and indirect costs associated with mine infrastructure, pre-production
development costs, development excavation, project execution costs and other subsurface expenditure
pertaining to that area of interest. Costs related to tangible surface plant and equipment and any associated
land and buildings are accounted for as property, plant and equipment.
Development costs are carried forward in respect of areas of interest in the development phase until
commercial production commences. When commercial production commences, carried forward development
costs are transferred to Mine Properties and amortised on a units of production basis over the life of
economically recoverable reserves of the area of interest. The Group assesses future capital costs required to
bring existing reserves into production and includes an estimate of these costs in the base when calculating
amortisation expense. Development assets are assessed for impairment if an impairment trigger is identified.
For the purposes of impairment testing, development assets are allocated to CGUs to which the development
activity relates.
Manuka Resources Ltd
For the year ended 30 June 2021
50
Production Stripping
Removal of waste material normally continues after commercial production commences and throughout the
life of a mine. This activity is referred to as production stripping. The costs of production stripping are
capitalised. The amount of stripping costs deferred is based on the ratio of waste tonnes mined and ore tonnes
mined. Amortisation of the production stripping asset takes place on a unit of production based on the
identified component of the ore body which is mined. An identifiable component is a specific volume of the
ore body that is made more accessible by the stripping activity. Significant judgement is required to identify
and define these components, and also to determine the expected volumes (e.g. tonnes) of waste to be
stripped and ore to be mined in each of these components.
3.17 Cash and cash equivalents
For the purposes of the statement of cash flows, cash and cash equivalents includes cash on hand and at bank,
deposits held at call with financial institutions, other short term, highly liquid investments with maturities of
three months or less, that are readily convertible to known amounts of cash and which are subject to an
insignificant risk of changes in value and bank overdrafts.
3.18 Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently
measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the
redemption amount is recognised in profit or loss over the period of the borrowings using the effective interest
method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the
extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred
until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility
will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the period
of the facility to which it relates.
Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged,
cancelled or expired. The difference between the carrying amount of a financial liability that has been
extinguished or transferred to another party and the consideration paid, including any non-cash assets
transferred or liabilities assumed, is recognised in profit or loss as other income or finance costs.
Where the terms of a financial liability are renegotiated and the entity issues equity instruments to a creditor
to extinguish all or part of the liability (debt for equity swap), a gain or loss is recognised in profit or loss, which
is measured as the difference between the carrying amount of the financial liability and the fair value of the
equity instruments issued.
Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement
of the liability for at least 12 months after the reporting period.
3.19 Borrowing costs
General and specific borrowing costs that are directly attributable to the acquisition, construction or
production of a qualifying asset are capitalised during the period of time that is required to complete and
prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take a substantial
period of time to get ready for their intended use or sale.
Other borrowing costs are expensed in the period in which they are incurred.
Manuka Resources Ltd
For the year ended 30 June 2021
51
3.20 Derivatives
Derivatives are initially recognised at fair value on the date a derivative contract is entered into, and they are
subsequently remeasured to their fair value at the end of each reporting period. Changes in the fair value of
derivatives are recognised immediately in profit or loss and are included in other gains/(losses) except where
hedge accounting applies.
Derivative financial instruments and hedge accounting
Derivative financial instruments are accounted for at FVTPL except for derivatives designated as hedging
instruments in cash flow hedge relationships, which require a specific accounting treatment. To qualify for
hedge accounting, the hedging relationship must meet all of the following requirements:
there is an economic relationship between the hedged item and the hedging instrument
the effect of credit risk does not dominate the value changes that result from that economic
relationship, and
the hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged
item that the entity actually hedges and the quantity of the hedging instrument that the entity actually
uses to hedge that quantity of hedged item.
For the reporting periods under review, the Group has designated certain gold swap and spot contracts as
hedging instruments in cash flow hedge relationships. These arrangements have been entered into to mitigate
short-term commodity price impacts arising from certain highly probable sales transactions and to give
certainty to exchange rate and commodity price impacts on the realised sales prices of the Commodities
produced by the Group.
All derivative financial instruments used for hedge accounting are recognised initially at fair value and reported
subsequently at fair value in the consolidated statement of financial position.
To the extent that the hedge is effective, changes in the fair value of derivatives designated as hedging
instruments in cash flow hedges are recognised in other comprehensive income and included within the cash
flow hedge reserve in equity. Any ineffectiveness in the hedge relationship is recognised immediately in profit
or loss.
At the time the hedged item affects profit or loss, any gain or loss previously recognised in other
comprehensive income is reclassified from equity to profit or loss and presented as a reclassification
adjustment within other comprehensive income. However, if a non-financial asset or liability is recognised as
a result of the hedged transaction, the gains and losses previously recognised in other comprehensive income
are included in the initial measurement of the hedged item.
If a forecast transaction is no longer expected to occur, any related gain or loss recognised in other
comprehensive income is transferred immediately to profit or loss. If the hedging relationship ceases to meet
the effectiveness conditions, hedge accounting is discontinued and the related gain or loss is held in the equity
reserve until the forecast transaction occurs.
3.21 Employee benefits
Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits, and annual leave expected to be settled
within 12 months of the reporting date are recognised in other payables in respect of employees’ services up
to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled.
Manuka Resources Ltd
For the year ended 30 June 2021
52
Other long-term employee benefit obligations
The Group also has liabilities for long service leave that are not expected to be settled wholly within 12 months
after the end of the period in which the employees render the related service. These obligations are therefore
measured as the present value of expected future payments to be made in respect of services provided by
employees up to the end of the reporting period using the projected unit credit method. Consideration is given
to expected future wage and salary levels, experience of employee departures and periods of service.
Expected future payments are discounted using market yields at the end of the reporting period of high-quality
corporate bonds with terms that match, as closely as possible, the estimated future cash outflows.
Remeasurements as a result of experience adjustments and changes in actuarial assumptions are recognised
in profit or loss.
The obligations are presented as current liabilities in the balance sheet if the Group does not have an
unconditional right to defer settlement for at least twelve months after the reporting period, regardless of
when the actual settlement is expected to occur.
Share based payments
Options over ordinary shares have been granted to employees, Directors and finance providers from time to
time, on a discretionary basis. The cost of these share-based payments is measured by reference to the fair
value at the date at which they are granted using an option pricing model. The options may be subject to
service or other vesting conditions and their fair value is recognised as an expense together with a
corresponding increase in other reserve equity over the vesting period.
3.22 Equity, reserves and dividend payments
Share capital represents the fair value of shares that have been issued. Any transaction costs associated with
the issuing of shares are deducted from share capital, net of any related income tax benefits.
Other components of equity include the following:
Share based payment reserve – comprising assessed fair value of options issued to employees,
executives and other parties
Reserve for cash flow hedges – comprising gains and losses relating to these types of financial
instruments
Retained earnings include all current and prior period retained profits.
Dividend distributions payable to equity shareholders are included in other liabilities if the dividends have
been being appropriately authorised and are no longer at the discretion of the entity prior to the reporting
date.
All transactions with owners of the parent are recorded separately within equity.
3.23 Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to owners of the Company, excluding
any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares
outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the 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 financing costs associated with dilutive potential
Manuka Resources Ltd
For the year ended 30 June 2021
53
ordinary shares and the weighted average number of shares assumed to have been issued for no consideration
in relation to dilutive potential ordinary shares.
3.24 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 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 statement
of financial position are shown inclusive of GST.
Cash flows are presented in the statement of cash flows on a gross basis, except for the GST components of
investing and financing activities, which are disclosed as operating cash flows.
3.25 Rehabilitation
Provisions made for rehabilitation are recognised where there is a present obligation as a result of exploration,
development or production activities having been undertaken, and it is probable that an outflow of economic
benefits will be required to settle the obligation. The estimated future obligations include the costs of
removing facilities, abandoning mining activities and restoring the affected areas. The provision for future
rehabilitation costs is the best estimate of the present value of the expenditure required to settle the
obligation at the reporting date, based on current legal requirements and technology. Future rehabilitation
costs are reviewed annually, and any changes are reflected in the present value of the rehabilitation provision
at the end of the reporting period. The amount of the provision for future rehabilitation costs relating to
exploration and development activities is capitalised as a cost of those activities. If the effect is material,
provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current
market assessments of the time value of money, and where appropriate the risks specific to the liability.
3.26 Significant management judgement in applying accounting policies and estimation
uncertainty
When preparing the financial statements, management undertakes a number of judgements, estimates and
assumptions about the recognition and measurement of assets, liabilities, income and expenses.
Rehabilitation provision
The Company is required by the relevant regulatory authorities to ensure that appropriate rehabilitation is
carried out on tenements that are mined. The amount of the rehabilitation cost is an estimate based upon the
estimated life of each mined tenement, as well as the future timing and cost of such rehabilitation. The
provision is constantly revised as information about the life of mine, depth of mining and cost estimates are
updated.
Share based payment reserve
Management uses valuation techniques to determine the fair value of the reserve created when options are
issued to employees and executives. This involves developing estimates and assumptions determined by
reference to historical data of comparable entities over a period of time. Management bases its assumptions
on observable data as far as possible, but this is not always available. In that case management uses the best
information available.
Taxation
Balances disclosed in the financial statements and the notes thereto related to taxation are based on the best
estimates of the directors. These estimates consider both the financial performance and position of the Group
as they pertain to current income taxation legislation, and the directors understanding thereof. No adjustment
Manuka Resources Ltd
For the year ended 30 June 2021
54
has been made for pending or future taxation legislation. The current income tax position represents the
directors’ best estimate, pending an assessment by the Australian Taxation Office.
Exploration and evaluation costs
Exploration and evaluation costs have been capitalised and are only carried forward to the extent that they
are expected to be recouped through the successful development of the area or where activities in the area
have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable
reserves. Key judgements are applied in considering the costs to be capitalised which includes determining
expenditures directly related to these activities and allocating overheads between those that are expensed
and capitalised.
Coronavirus (COVID-19) pandemic
Judgement has been exercised in considering the impacts that the Coronavirus (COVID-19) pandemic has had,
or may have, on the Group based on known information. This consideration extends to the nature of the
products and services offered, customers, supply chain, staffing and geographic regions in which the Group
operates. Other than as addressed in specific notes, there does not currently appear to be either any significant
impact upon the financial statements or any significant uncertainties with respect to events or conditions
which may impact the Group unfavourably as at the reporting date or subsequently as a result of the
Coronavirus (COVID-19) pandemic.
Life of mine method of amortisation and depreciation
The Group applies the life of mine method of amortisation and depreciation to its mine specific plant and to
mine properties and development based on ore tonnes mined. These calculations require the use of estimates
and assumptions. Significant judgement is required in assessing the available reserves and the production
capacity of the plants to be depreciated under this method. Factors that are considered in determining
reserves and production capacity are the complexity of metallurgy, markets and future developments. When
these factors change or become known in the future, such differences will impact pre-tax profit and carrying
values of assets.
Net realisable value of inventories
The calculation of net realisable value for raw materials, work in progress and finished goods involves
significant judgement and estimates in relation to timing and cost of processing, commodity prices, recoveries.
A change in any of these assumptions will alter the estimated net realisable value and may therefore impact
the carrying value of inventories.
Determination of mineral resources and ore reserves
The Group reports its Mineral Resources and Ore Reserves in accordance with the Joint Ore Reserves
Committee (JORC) Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore
Reserves (JORC Code). The information on Mineral Resources and Ore Reserves is prepared by Competent
Persons as defined by the JORC Code.
There are numerous uncertainties inherent in estimating the quantities of economically recoverable Mineral
Resources and Ore Reserves. Assumptions that are valid at the time of estimation may change significantly
when new information becomes available.
Changes in the forecast prices of commodities, exchange rates, production costs or recovery rates may change
the economic status of reserves and may, ultimately, result in the reserves being restated. Such changes may
impact asset carrying values, depreciation and amortisation rates, deferred development costs and provisions
for rehabilitation.
Manuka Resources Ltd
For the year ended 30 June 2021
55
Commencement of production
The Group achieved operating status on 17 April 2020, reaching production for accounting purposes.
Accordingly, for the period 17 April 2020 to 30 June 2020, revenues derived from mining activities and
associated costs were no longer capitalised and were recognised in profit or loss, and depreciation and
amortisation of mine properties commenced on 17 April 2020.
4
Segment reporting
Identification of reportable segments
The Group has identified operating segments based on the internal reports that are reviewed and used by the
board of directors (chief operating decision makers) in assessing performance and determining the allocation
of resources. Currently all the Group’s gold and silver tenements and resources are in New South Wales. Two
operating segments have been identified:
Exploration: Exploration of existing gold leases and exploration leases at Wonawinta and Mt Boppy
projects
Operations: being the appraisal, development and processing of gold and silver deposits
The following table presents revenue and loss information regarding operating segments for the years ended
30 June 2021 and 30 June 2020.
Year ended 30 June 2021
Segment revenue (external customers)
Segment cost of sales
Segment operating contribution
Other income
Expenses
Finance income / (expenses)
Loss before income tax
Year ended 30 June 2020
Segment revenue (external customers)
Segment cost of sales
Segment operating contribution
Other income
Expenses
Finance income / (expenses)
Loss before income tax
Exploration
Operations
Total
$
-
-
-
-
(23,677)
(499)
(24,176)
43,752,567
43,752,567
(43,312,892)
(43,312,892)
439,675
791,888
(2,363,355)
(1,739,276)
(2,871,068)
439,675
791,888
(2,387,032)
(1,739,775)
(2,895,244)
Exploration
Operations
Total
$
-
-
-
-
(64,520)
-
(64,520)
9,261,798
9,261,798
(7,264,503)
(7,264,503)
1,997,295
206,522
(3,164,360)
(3,527,780)
(4,488,323)
1,997,295
206,522
(3,228,880)
(3,527,780)
(4,552,843)
Manuka Resources Ltd
For the year ended 30 June 2021
56
The following table presents segment assets and liabilities of operating segments at 30 June 2021 and 30 June
2020.
Segment Assets
Exploration
Operations
Total
$
As at 30 June 2021
4,780,492
30,464,885
35,245,377
As at 30 June 2020
322,305
36,104,910
36,427,215
Segment Liabilities
As at 30 June 2021
As at 30 June 2020
Exploration
Operations
Total
$
317,125
32,743,613
33,060,738
68,865
38,805,077
38,873,942
Revenue and assets by geographical region
The Company's revenue is derived from sources and assets located wholly within Australia.
Major customers
The Company currently delivers all its product to one off-taker.
Financial information
Reportable items required to be disclosed in this note are consistent with the information disclosed in the
Statement of Profit or Loss and Other Comprehensive Income and Statement of Financial Position and are not
duplicated here.
5
Revenue and other income
(a) Operating sales revenue
Sale of mineralised ore – gold
Sale of mineralised ore – silver
Total revenue from contracts with customers
(b) Other income
Government grant - Jobkeeper
Income from cash settled hedges
Other income
Total other income
Notes
18.4
30 June
2021
$
42,993,529
759,038
43,752,567
463,500
248,454
79,934
791,888
30 June
2020
$
9,243,350
18,448
9,261,798
168,000
-
38,522
206,522
Manuka Resources Ltd
For the year ended 30 June 2021
57
6
Expenses
(a) Cost of sales
Operating expenses
Royalties
Inventory movements
Total operating expenses
(b) Operating expenses
Mining expenses
Hauling and crushing expenses
Processing and refining expenses
Site administration expenses
Amortisation of mine properties
Total operating expenses
(c) Other expenses
Professional expenses
Employment expenses
Depreciation
IPO expenses
Other expenses
Total other expenses
(d) Employment Expenses
Wages and Salaries
Superannuation
Employment taxes
6(b)
0
6(d)
30 June
2021
$
43,610,478
1,996,666
30 June
2020
$
8,555,954
439,201
(2,294,252)
(1,730,652)
43,312,892
7,264,503
30 June
2021
$
9,038,681
10,042,536
15,422,039
4,889,892
4,217,330
30 June
2020
$
647,863
1,684,782
3,110,883
2,130,244
982,182
43,610,478
8,555,954
30 June
2021
$
963,558
904,632
56,142
-
462,700
2,387,032
30 June
2021
$
768,112
66,293
70,227
30 June
2020
$
1,169,448
519,420
64,145
429,282
371,843
2,554,138
30 June
2020
$
423,585
81,602
14,233
Manuka Resources Ltd
For the year ended 30 June 2021
58
7
Finance costs
Finance costs are made up of the following items:
Interest expenses and other finance charges – net of capitalisation of
borrowing costs
Net discounting impact of rehabilitation provisions and financial assets
Net foreign exchange (gain) / loss
Accrued interest charged to notes
Total finance costs
8
Income tax expense
(a) Income tax benefit recognised in the income statement
Current tax
Deferred tax
Income tax as reported in the statement of comprehensive income
(b) Reconciliation of income tax expense to prima facie tax payable
The prima facie income tax expense on pre-tax accounting loss from
operations reconciles to the income tax expense in the financial
statements as follows:
Loss from ordinary activities before income tax expense
Tax at the Australian rate of 26% (2020 : 27.5%)
Increase / (decrease) in income tax due to:
Temporary differences
Permanent differences
Unused tax losses not recognised
Income tax expense
(c) Deferred tax assets not recognised
Deferred tax assets
- carry forward tax losses at 26% (2020: 27.5%) not recognised
- other deferred tax assets
Deferred tax liabilities
Net deferred tax assets not recognised
The Company has no available franking credits.
30 June
2021
$
30 June
2020
$
3,483,608
(41,592)
(1,721,879)
19,638
2,439,578
242,794
181,135
664,274
1,739,775
3,527,781
30 June
2021
30 June
2020
$
-
-
-
$
-
-
-
(2,895,244)
(752,763)
(4,552,843)
(1,252,032)
(1,802,769)
(1,355,229)
(117,240)
2,672,772
-
(134,776)
2,742,037
-
8,348,716
2,875,421
6,003,401
2,985,591
(6,254,124)
(2,978,743)
4,970,013
6,010,249
Potential deferred tax assets attributable to tax losses and other temporary differences have not been brought
to account as at 30 June 2021. Because the directors do not believe it is appropriate to regard realisation of
the deferred tax assets as probable at this point in time. These benefits will be obtained if:
The Company derives future assessable income of a nature and an amount sufficient to enable the
benefit from the deductions for the expenditure to be realised; and
No changes in tax legislation adversely affect the Company in realising the benefit from the deductions
for the expenditure.
Manuka Resources Ltd
For the year ended 30 June 2021
59
Auditor remuneration
9
During the year the following fees were paid or payable for services provided by the auditor of the parent
entity, its related practices and non-related audit firms:
Audit of financial statements
Grant Thornton Audit Pty Ltd – audit and review of financial reports
Remuneration from audit of financial statements
Other services
Grant Thornton Australia Ltd – Investigating Accountants Report
Total other services remuneration
Total auditor’s remuneration
30 June
2021
$
143,500
143,500
-
-
143,500
30 June
2020
$
189,997
189,997
69,025
69,025
259,022
10 Dividends
No dividends for the year ended 30 June 2021 have been declared or paid to shareholders by the Company.
11 Cash and cash equivalents
Cash and cash equivalents comprise the following:
Cash at bank and in hand
Cash and cash equivalents as shown in the statement of
financial position and the statement of cash flows
Cash at bank and in hand is non-interest bearing.
12 Trade and other receivables
Current
Trade receivables
Other receivables
IPO funds raised not yet received
Total trade and other receivables
13
Inventories
Consumables, supplies and spares
Gold concentrate in circuit at cost
Ore stockpiles
Inventories at cost
30 June
2021
$
30 June
2020
$
1,018,035
1,509,040
1,018,035
1,509,040
30 June
2021
$
355,290
338,281
-
693,571
30 June
2021
$
667,383
2,882,813
1,142,091
4,692,287
30 June
2020
$
200,403
453,337
7,000,000
7,653,740
30 June
2020
$
277,109
1,085,212
645,440
2,007,761
Manuka Resources Ltd
For the year ended 30 June 2021
60
14 Development assets and mine properties
Development assets at cost
Accumulated amortisation
Net carrying amount
Mine properties at cost
Accumulated amortisation
Net carrying amount
Total development assets and mine properties at cost
Accumulated amortisation
Total net carrying amount
30 June
2021
$
30 June
2020
$
995,350
450,919
-
-
995,350
450,919
10,643,708
(5,199,512)
5,444,196
11,639,058
(5,199,512)
6,439,546
9,874,559
(982,182)
8,892,377
10,325,478
(982,182)
9,343,296
The following tables show the movements in development assets and mine properties:
Development assets
Opening carrying value
Additions at cost
Transfer to mine properties
Closing carrying value net of accumulated amortisation
Mine Properties
Opening carrying value
Transfer from development assets
Additions at cost
Adjustment to rehabilitation cost estimates
Amortisation charge for the year
Closing carrying value net of accumulated amortisation
Total development assets and mine properties at cost
Opening carrying value
Additions at cost
Adjustment to rehabilitation cost estimates
Amortisation charge for the year
Total closing carrying value net of accumulated amortisation
30 June
2021
$
30 June
2020
$
450,919
544,431
3,307,887
5,516,730
-
(8,373,698)
995,350
450,919
8,892,377
-
208,777
560,372
(4,217,330)
5,444,196
9,343,296
753,208
560,372
(4,217,330)
6,439,546
-
8,373,698
1,500,861
-
(982,182)
8,892,377
3,307,887
7,017,591
-
(982,182)
9,343,296
Manuka Resources Ltd
For the year ended 30 June 2021
15 Exploration and evaluation assets
Exploration and evaluation costs carried forward in respect of areas of interest:
30 June
2021
Note
Exploration assets
Opening net book amount
Exploration and evaluation costs during the year
0(a)
Net book value
$
322,305
4,458,187
4,780,492
61
30 June
2020
$
-
322,305
322,305
(a) During the year, the Company undertook planning and evaluation activities to assess the potential to
mine silver, lead and zinc sulphide in line with the activities outlined in its prospectus dated 22 May 2020.
The Company’s exploration planning and drilling programs are divided into three key components, as
follows:
(i)
(ii)
(iii)
near-mine evaluation activities at Mt Boppy (ML/GLs and adjacent EL5842),
near-mine evaluation at Wonawinta (Wonawinta ML and adjacent Wonawinta ELs); and
early/follow-up-phase exploration on the Company’s exploration tenements/mining leases.
16 Property, plant and equipment
The following tables show the movements in property, plant and equipment:
Fixtures &
Fittings
Plant &
Equipment
IT Equipment
Land
$
$
$
754,994
1,664
1,215,714
-
(1,664)
-
754,994
-
1,215,714
$
-
-
-
Balance 30 June 2019
Cost
Depreciation
Net book value
Year ended 30 June 2020
Motor
Vehicles
$
Total
$
293,610
2,265,982
(63,608)
(65,272)
230,002
2,200,710
Opening net book value
754,994
-
1,215,714
-
230,002
2,200,710
Additions
Depreciation
-
-
42,361
6,384,420
(13,065)
(96,396)
Closing net book value
754,994
29,296
7,503,738
12,757
(1,107)
11,650
93,794
6,533,332
(34,455)
(145,023)
289,341
8,589,019
Balance 30 June 2020
Cost
Depreciation
Net book value
754,994
44,025
7,600,134
-
(14,729)
(96,396)
754,994
29,296
7,503,738
12,757
(1,107)
11,650
387,404
8,799,314
(98,063)
(210,295)
289,341
8,589,019
Manuka Resources Ltd
For the year ended 30 June 2021
62
Land
IT Equipment
Plant &
Equipment
Fixtures &
Fittings
$
$
$
$
Motor
Vehicles
$
Total
$
Year ended 30 June 2021
Opening net book value
754,994
Additions
Depreciation
-
-
29,296
35,895
7,503,738
2,122,815
(39,518)
(753,926)
Closing net book value
754,994
25,673
8,872,627
11,650
13,829
(4,578)
20,901
289,341
8,589,019
176,428
2,348,967
(49,332)
(847,354)
416,437
10,090,632
Balance 30 June 2021
Cost
Depreciation
Net book value
754,994
79,342
9,722,949
-
(53,669)
(850,322)
754,994
25,673
8,872,627
26,586
(5,685)
20,901
563,832
11,147,703
(147,395)
(1,057,071)
416,437
10,090,632
Included within Plant and Equipment is an amount of $324,000 (2020 : $782,105) representing costs incurred
on equipment which was not brought to use as at 30 June 2021 and as such represents capital works in
progress.
17 Right-of-use assets and liabilities
Leases
The Group has two lease contracts, including one for its office premises which commenced on 1 January 2020
and a lease for a printer which commenced September 2020. The office lease has a lease term of two years
with no option to extend and with a rent increase of 4% after one year of commencement. The printer lease
has a term of two years.
Short term lease expenses
The following table shows the short-term lease expenses during the period.
Rent expenses – office rental
Cost of Sales/Operating expenses – hire of plant
Total short-term lease expenses
30 June
2021
$
12,500
1,020,773
1,033,273
30 June
2020
$
56,712
310,129
366,841
Set out below are the carrying amounts of right-of-use assets recognised and the movements during the
period.
Balance at start of period
Additions
Depreciation
Closing net book value
30 June
2021
$
194,557
4,933
(131,407)
68,083
30 June
2020
$
-
258,702
(64,145)
194,557
Manuka Resources Ltd
For the year ended 30 June 2021
Set out below are the carrying amounts of lease liabilities.
Balance at start of period
Additions
Accretion of interest (included in finance expenses)
Payments
Closing balance lease liabilities
Current
Non-current
30 June
2021
$
202,015
4,933
20,762
(151,597)
76,113
75,419
694
Financial assets and liabilities
18
18.1 Categories of financial assets and financial liabilities
The carrying amounts of financial assets in each category are as follows:
Financial assets at amortised cost
Cash and cash equivalents
Trade and other receivables
Other financial assets
Total financial assets at amortised cost
Total financial assets
Notes
11
12
18.3
30 June
2021
$
1,018,035
355,290
6,888,571
8,261,896
8,261,896
The carrying amounts of financial liabilities in each category are as follows:
Financial liabilities at amortised cost
Trade and other payables
Current borrowings – Other
Current borrowings – Convertible notes
Borrowings – Related party loans owed by Manuka
Borrowings – Short-term loan
Borrowings – Senior secured lender – TPC facility (net of
borrowing costs)
Borrowings – Related Party Loans owed by Mt Boppy
Lease liabilities
Total financial liabilities at amortised cost
Financial liabilities at fair value through profit and loss
Derivative liabilities
Total financial liabilities at fair value through profit and loss
Total financial liabilities
Notes
30 June
2021
$
19
9,979,330
-
-
2,155,472
358,293
18.2(b)
18.2(a)
18.2(c)
18.2(d)
18.2(e)
17
0
14,023,439
20,561,906
84,143
76,113
196,143
202,015
26,676,790
33,577,167
6,297
6,297
-
-
26,683,087
33,577,167
63
30 June
2020
$
-
258,702
16,477
(73,164)
202,015
128,937
73,078
30 June
2020
$
1,509,040
7,200,403
6,456,370
15,165,813
15,165,813
30 June
2020
$
7,670,573
251,664
1,760,513
2,507,878
426,475
Manuka Resources Ltd
For the year ended 30 June 2021
64
18.2 Borrowings
Borrowings include the following financial liabilities:
Notes
30 June
2021
$
Current
Related party loans owed by Manuka
Convertible notes
Short-term Loan
Senior secured lender – TPC facility (net of borrowing costs)
Related party Loans owed by Mt Boppy
Other borrowings
Total current borrowings
Non-current
Related party loans owed by Manuka
Related party Loans owed by Mt Boppy
Short-term Loan
Senior secured lender – TPC facility (net of borrowing costs)
Total non-current borrowings
Total borrowings
(a)
(b)
(c)
(d)
(e)
(a)
(e)
(c)
(d)
-
-
-
-
-
-
-
2,155,472
84,143
358,293
14,023,439
16,621,347
16,621,347
30 June
2021
$
2,507,878
1,760,513
426,475
20,561,906
196,143
251,664
25,704,579
-
-
-
-
-
25,704,579
All borrowings are denominated in Australian Dollars except for the TPC Facility which is denominated in US
Dollars.
(a) The related party loans include the following:
ResCap Investments Pty Ltd
Gleneagle Securities (Aust) Pty Ltd
30 June
2021
$
1,624,493
530,979
30 June
2020
$
2,005,327
502,551
The loan provided by ResCap Investments Pty Ltd includes working capital drawn down during the period
and amounts owing for services provided. The loan on the working capital portion has an interest rate of
16%. On 3 July 2019, the facility was subordinated to the TPC Facility changing the repayment date of the
loan to after the repayment of new TPC facility.
The loan provided by Gleneagle Securities (Aust) Pty Ltd includes working capital drawn down during the
period and amounts owing for services provided. The loan on the working capital portion has an interest
rate of 12%. On 3 July 2019, the facility was subordinated to the TPC Facility changing the repayment date
of the loan to after the repayment of new TPC facility.
(b) On the 1st September 2016 the Company issued 3,231,000 convertible notes with a $1.00 face value. The
terms of the Convertible Notes are outlined in a Convertible Note Deed Poll and they were to convert to
shares on occurrence of the any of an IPO event, an RTA event or a Trade Sale event. The Company was
admitted to the ASX on 30 June 2020, and the convertible note was reassessed as Other Contributed
Equity. At 30 June 2020, total interest of $1,760,513 (2019: $1,096,238) has been accrued on the note.
Interest owing on the convertible note was paid in full on 14 July 2020 and the principal of $3,231,000
was converted into equity on IPO.
Manuka Resources Ltd
For the year ended 30 June 2021
65
(c) Short-term Loan – The Short-term loan was drawn down in November 2017 and was expected to be
repaid following a partial sale of an asset which fell over during final documentation. On 3 July 2019 this
facility was subordinated to the TPC Facility, changing the repayment date of the loan to after the
repayment of the TPC facility.
(d) The Company signed a US$13 Million debt facility agreement (TPC Facility) with TransAsia Private Capital
Limited (TPC) during July 2019, with the first drawdown occurring in July 2019. During April 2020 the TPC
Facility limit was increased to US$14 Million (and the additional US$1 Million was drawn). The interest
rate attributable to this facility is 14% per annum payable quarterly. The Company has repaid
approximately US$4 million of its debt facility (TPC Facility) with TransAsia Private Capital Limited (TPC)
and has successfully extended repayment of the facility to 30 September 2022.
(e) The related party loans include the following loans advanced to Mt Boppy Resources Pty Ltd:
ResCap Investments Pty Ltd
30 June
2021
$
84,143
30 June
2020
$
196,143
The loan provided by ResCap Investments Pty Ltd includes amounts advanced and working capital drawn
down during the period. No interest has been charged.
18.3 Other financial assets
Other financial assets comprises the following:
Current assets at amortised cost
Mt Boppy Resources - Deposit for environmental bond
Non-current assets at amortised cost
Manuka Resources - Deposit for environmental bond
Term Deposit – at amortised cost
Rental Bond – at amortised cost
Non-current asset at amortised cost
Notes
(b)
(a)
Mt Boppy Resources – Deposit for environmental bond
(b)
30 June
2021
$
84,000
30 June
2020
$
-
5,157,158
4,825,210
183,366
91,065
171,563
86,615
1,372,982
6,888,571
1,372,982
6,456,370
The carrying amount of other financial assets is considered a reasonable approximation of fair value unless
stated below:
(a) The Environmental Bond and Rental Bond Deposits in the name of Manuka Resources Ltd have been
amortised with reference to a discount rate of 1.84% (2020 : 2.6%). They have been discounted over a 5
year period which is a reasonable approximation as to when the rehabilitation work will have to be
conducted.
(b) The Environmental Bond Deposits in the name of Mt Boppy Resources Pty Ltd have been recorded at
historical cost which has been assessed as a reasonable approximation of its fair value given the
rehabilitation work will have to be undertaken within 12 months.
Manuka Resources Ltd
For the year ended 30 June 2021
66
18.4 Derivative financial instruments and hedge accounting
Derivatives are only used for economic hedging purposes and not as speculative investments. As at 30 June
2021 the Company had a hedge liability/asset position reflecting a negative/positive mark-to-market value of
gold contracts. As at year end gold hedges comprised spot and swap gold contracts for 1,000 ounces of gold
(2020: Nil) at an average price of $2,359 per ounce (2020: Nil) for maturity over the period July 2021 to
September 2021.
Derivative Financial instruments are measured at fair value and are summarised below:
Other financial liabilities comprises the following:
Gold spot and swap exchange contracts – cash flow hedge
Total derivative financial liabilities
30 June
2021
$
6,297
6,297
30 June
2020
$
-
-
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
subsequently remeasured to their fair value at the end of each reporting period. The accounting for
subsequent changes in fair value depends on whether the derivative is designated as a hedging instrument,
and if so, the nature of the item being hedged.
At inception of the hedge relationship, the Company documents the economic relationship between hedging
instruments and hedged items including whether changes in the cash flows of the hedging instruments are
expected to offset changes in the cash flows of hedged items. The Company documents its risk management
objective and strategy for undertaking its hedge transactions.
The full fair value of a hedging derivative is classified as a non-current asset or liability when the remaining
maturity of the hedged item is more than 12 months; it is classified as a current asset or liability when the
remaining maturity of the hedged item is less than 12 months. Trading derivatives are classified as a current
asset or liability.
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow
hedges is recognised in other comprehensive income through the cash flow hedge reserve. The gain or loss
relating to the ineffective portion is recognised immediately in the Statement of Profit or Loss and Other
Comprehensive Income within other income or other expense.
Amounts accumulated in the cash flow hedge reserve are reclassified to the Statement of Profit or Loss and
Other Comprehensive Income in the periods when the hedged item affects profit or loss for instance when
the forecast sale that is hedged takes place.
When a hedging instrument expires or is sold or terminated, or when a hedge no longer meets the criteria for
hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and is
recognised when the forecast transaction is ultimately recognised in profit or loss. When a forecast transaction
is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately
reclassified to profit or loss. However, when the forecast transaction that is hedged results in the recognition
of a non-financial asset (for example, fixed assets) the gains and losses previously deferred in equity are
transferred from equity and included in the initial measurement of the cost of the asset. The deferred amounts
are ultimately recognised in profit or loss as depreciation in the case of fixed assets.
Manuka Resources Ltd
For the year ended 30 June 2021
67
The Group has designated certain gold swap and spot contracts as hedging instruments in cash flow hedge
relationships. These arrangements have been entered into to mitigate short-term commodity price impacts
arising from certain highly probable sales transactions and to give certainty to exchange rate and commodity
price impacts on the realised sales prices of the Commodities produced by the Group.
The Group’s Policy is to hedge up to 60% of highly probable forecast metal produced.
The following movements in the cash flow hedge reserve relate to one risk category being hedges relating to
cash flows arising from gold sales.
Cash flow hedging reserve
Opening balance at start of period
Change in fair value of hedging instrument recognised in
other comprehensive income (OCI)
Closing balance at end of period
30 June
2021
$
-
6,297
6,297
30 June
2020
$
-
-
-
No amounts have been reclassified to profit or loss. No ineffectiveness arose during the year ended 30 June
2021 (2020: n/a).
The effect of hedge accounting on the Group’s consolidated financial position and performance is as follows,
including the outline timing and profile of the hedging instruments:
Carrying amount of gold forward contracts
Notional amount of gold forward contracts
Hedge Ratio
Maturity date
Average forward gold price per oz (in AUD)
30 June
2021
$
(6,297)
2,359,080
1:1
July to
September 2021
2,359
30 June
2020
$
-
-
n/a
n/a
-
18.5 Other financial instruments
The carrying amount of the following financial assets and liabilities is considered a reasonable approximation
of fair value due to the short-term nature of the financial instruments:
Trade and other receivables
Cash and cash equivalents
Trade and other payables
Other financial assets
19 Trade and other payables
Current
Trade creditors
Other creditors and accruals
Total trade and other payables
30 June
2021
$
30 June
2020
$
7,183,356
2,795,974
9,979,330
5,733,337
1,937,236
7,670,573
Manuka Resources Ltd
For the year ended 30 June 2021
68
Trade and other payables amounts are short-term. The carrying values of trade payables and other payables
are considered to be a reasonable approximation of fair value.
20 Provisions
Current
Provision for annual leave
Total current provisions
Non-current
Provision for long service leave
Rehabilitation provisions
Total non-current provisions
Total provisions
Notes
20.1
30 June
2021
$
460,189
460,189
30 June
2020
$
188,617
188,617
17,125
5,900,337
5,917,462
6,377,651
-
5,108,158
5,108,158
5,296,775
20.1 Rehabilitation provisions
Rehabilitation provisions split between the parent and subsidiary are as follows:
Rehabilitation provisions
Manuka Resources Ltd
Mt Boppy Resources Ltd
Total rehabilitation provisions
30 June
2021
$
4,778,733
1,121,604
5,900,337
Set out below are the movements of the rehabilitation provision during the period.
Carrying amount at start of year
Re-assessment of provision
Payments
Net impact of discounting
Carrying amount at end of year
30 June
2021
$
5,108,158
560,372
(73,736)
305,543
5,900,337
30 June
2020
$
3,912,817
1,195,341
5,108,158
30 June
2020
$
5,339,653
(587,297)
-
355,802
5,108,158
Provisions made for rehabilitation are recognised where there is a present obligation as a result of exploration,
development or production activities having been undertaken, and it is probable that an outflow of economic
benefits will be required to settle the obligation. The estimated future obligations include the costs of
removing facilities, abandoning mining activities and restoring the affected areas. The provision for future
rehabilitation costs is the best estimate of the present value of the expenditure required to settle the
obligation at the reporting date, based on current legal requirements and technology. Future rehabilitation
costs are reviewed annually, and any changes are reflected in the present value of the rehabilitation provision
at the end of the reporting period. The amount of the provision for future rehabilitation costs relating to
exploration and development activities is capitalised as a cost of those activities. If the effect is material,
provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current
market assessments of the time value of money, and where appropriate the risks specific to the liability. The
fair value of the rehabilitation provision for Manuka Resources has been calculated with reference to a
Manuka Resources Ltd
For the year ended 30 June 2021
69
discount rate of 4.8% (2020 : 5.6%) over 5 years. The discounting impact for Mt Boppy has been considered to
be non-material as a result of the Company expecting to complete its rehabilitation work within twelve to
eighteen months.
The Company is required by the relevant regulatory authorities to ensure that appropriate rehabilitation is
carried out on tenements that are mined. The amount of rehabilitation cost is an estimate based upon the
estimated life of each mined tenement, as well as the future timing and cost of such rehabilitation. The
provision is constantly revised as information about the life of mine, depth of mining and cost estimates are
updated.
21 Equity
21.1 Share capital
The share capital of Manuka Resources consists only of fully paid ordinary shares; the shares do not have a
par value. All shares are equally eligible to receive dividends and the repayment of capital and represent one
vote at the shareholders’ meeting of Manuka Resources.
Shares issued and fully paid:
At beginning of period
share issue 23 September 2019
share issue 24 February 2020
share issue 27 February 2020
share consolidation 11 May 2020
share issue 11 May 2020
share issue 12 May 2020
share issue 13 May 2020
share issue 8 July 2020 (a)
share issue 8 July 2020 (b)
share issue 17 December 2020 (c)
share issue 17 December 2020 (d)
issue costs - options issued to broker
IPO and Placement expenses
30 June
2021
30 June
2020
# Shares
# Shares
30 June
2021
$
193,087,960
305,838,647
5,112,041
-
-
-
-
-
-
-
3,023,353
2,400,000
6,153,846
(144,907,234)
2,500,000
679,348
17,400,000
-
-
-
-
-
-
-
21,265,752
35,000,000
17,500,000
2,500,000
-
-
-
-
-
-
-
-
3,231,000
7,000,000
7,000,000
1,000,000
(873,499)
(957,187)
30 June
2020
$
1
296,170
200,000
500,000
-
500,000
135,870
3,480,000
-
-
-
-
-
-
Total share capital at end of period
269,353,712
193,087,960
21,512,355
5,112,041
a) On 8 July 2020, the Company issued 21,265,752 shares at $0.15 per share for the conversion of
$3,231,000 in Convertible Notes to equity.
b) On 8 July 2020 the Company issued 35,000,000 shares at an issue price of $0.20 per share pursuant to
the offer under its prospectus dated 22 May 2020.
c) On 17 December 2020, the Company completed a Placement of $7,000,000 before costs through the
issue of 17,500,000 ordinary shares at $0.40 per share, to sophisticated, professional and institutional
investors.
d) On 17 December 2020, the Company converted $1,000,000 in unsecured loans to equity through the
issue of 2,500,000 ordinary shares at $0.40 per share.
Manuka Resources Ltd
For the year ended 30 June 2021
70
21.2 Movements in options on issue or granted
Beginning of the financial year
Forfeited on 6 May 2020, exercisable at $0.35
Issued, exercisable at $0.25 on or before 17 April 2023
Granted, exercisable at $0.25 on or before 14 July 2023
End of the financial year
Number of Options
2021
21,250,000
-
-
-
21,250,000
2020
3,000,000
(3,000,000)
11,250,000
10,000,000
21,250,000
21.3 Capital management policies and procedures
Management’s objectives when managing the capital of the company are to maintain a good debt to equity
ratio, provide the shareholders with adequate returns and to ensure that the company can fund its operations
and continue as a going concern.
The Company’s capital includes ordinary share capital, short-term borrowings and financial liabilities,
supported by financial assets.
The Company has a Loan to Value Ratio requirement of 80% under its TPC Facility. Borrowings are regularly
monitored and reported monthly to the Senior Secured Lender.
Management effectively manages the Company’s capital by assessing the Company’s financial risks and
adjusting its capital structure in response to changes in these risks and in the market. In making decisions to
adjust its capital structure the company considers not only its short-term position but also its long-term
operational and strategic objectives. In order to maintain or adjust the capital structure, the Company may
return capital to shareholders, pay dividends to shareholders or issue new shares.
22 Other contributed equity
Other contributed equity comprises the following:
Shares allotted but not yet issued in respect of
•
•
•
services rendered
IPO funds raised, not yet received
convertible notes
IPO expenses in equity
Share based payments in equity
Total other contributed equity
30 June
2021
$
-
-
-
-
-
-
30 June
2020
$
-
7,000,000
3,231,000
(490,094)
(873,499)
8,867,407
Manuka Resources Ltd
For the year ended 30 June 2021
71
23 Reconciliation of cash flows from operating activities
(a) Details of the reconciliation of cash flows from operating activities are listed in the following table:
Cash flows from operating activities
Loss for the period
Adjustments for non-cash items:
depreciation and amortisation
discounting of provisions and financial assets
share based payments
accretion of interest
amortisation of finance transaction costs
finance costs paid (included in operating cashflows)
finance costs accrued, but not paid
unrealised foreign exchange gains
•
•
•
•
•
•
•
•
•
30 June
2021
$
30 June
2020
$
(2,895,244)
(4,552,843)
5,506,027
(41,591)
-
17,288
556,361
(4,775,256)
2,899,865
(1,129,722)
1,191,350
242,794
435,611
16,477
120,606
-
1,871,711
-
movement in fair value of derivative liability
-
239,131
Change in operating assets and liabilities:
•
•
•
•
•
change in trade and other receivables
change in prepayments
change in inventories
change in trade, other payables and related party advances
change in provisions
Net cash provided by operating activities
(44,363)
(218,500)
(439,547)
(351,127)
(2,684,526)
(2,007,761)
2,728,757
288,697
207,793
4,830,856
171,010
1,768,268
(b) The Company has undertaken a number of non-cash investing and financing activities. Details of the non-
cash financing activities which have resulted in the issue of shares are outlined above at Note 21.1. In
addition, the Company has issued options in respect of non-cash financing and investing activities as
outlined in the table below.
# options
10,000,000
3,250,000
30 June
2021
$
30 June
2020
$
-
-
(873,499)
(176,967)
3 June 2020 - Options granted to lead broker for
IPO services
•
Other contributed equity
16 April 2020 – Options issued to finance
provider in respect of financing and extension of
financing
•
expenses
Borrowings – capitalised finance
Manuka Resources Ltd
For the year ended 30 June 2021
72
24
Loss per share
30 June
2021
$
30 June
2020
$
Loss attributable to the owners of the Company used in calculating basic and
diluted loss per share
(2,895,244)
(4,552,843)
Weighted average number of ordinary shares used as the denominator in
calculating basic and diluted loss per share *
Basic and diluted loss per share
No of shares
No of shares
258,805,422
138,695,011
Cents per share Cents per share
(1.12)
(3.28)
As the Group made a loss for the year ended 30 June 2021, none of the potentially dilutive securities were
included in the calculation of diluted earnings per share. These securities could potentially dilute basic earnings
per share in the future.
* In accordance with AASB 133 paragraph 26, the weighted average number of shares outstanding during the
period and for all periods presented shall be adjusted for events (such as a share consolidation) that have
changed the number of shares outstanding without a corresponding change in resources. As a result, the share
consolidation which occurred on 11th May 2020 has been applied to the full financial year ended 30 June 2020.
25 Reserves
25.1 Share based payments
Options over ordinary shares have been granted to employees and Directors and finance providers from time
to time, on a discretionary basis. The cost of these share-based payments is measured by reference to the fair
value at the date at which they are granted using an option pricing model. The options may be subject to
service or other vesting conditions and their fair value is recognised as an expense together with a
corresponding increase in other reserve equity over the vesting period.
No options were granted during the year. The weighted average fair value of the options granted during the
prior year was 25 cents. The fair values were determined using a variation of the binomial option pricing model
that takes into account factors such as the vesting period, applying the following inputs:
Weighted average exercise price (cents)
Weighted average life of the option (years)
Weighted average underlying share price (cents)
Expected share price volatility
Risk free interest rate
30 June
2021
30 June
2020
-
-
-
-
-
25
3
17
77%
0.25%
Manuka Resources Ltd
For the year ended 30 June 2021
73
Set out below is a summary of the share-based payment options granted:
30 June 2021
30 June 2020
Beginning of the year
Granted
Forfeited
Exercised
Expired
# Options
21,250,000
-
-
-
-
Outstanding at year end
Exercisable at year end
21,250,000
21,250,000
Weighted
average exercise
price cents
25
-
-
-
-
25
25
# Options
3,000,000
21,250,000
(3,000,000)
-
-
21,250,000
21,250,000
Weighted
average exercise
price cents
35
25
35
-
-
25
25
The weighted average remaining contractual life of share options outstanding at the end of the financial year
was 1.9 years (2020: 2.9 years), and the exercise prices are at 25 cents.
During the period there were no share-based payment expenses recorded (2020: $435,611) in the profit or
loss and there was to no movement in the share option reserve. At 30 June 2021 the total value of the share
based payment reserve is $1,486,077 (2020 : $1,486,077).
25.2 Hedging Reserve
The hedging reserve comprises the effective portion of the cumulative net change in the fair value of hedging
instruments (net of tax) used in cash flow hedges pending subsequent recognition in profit or loss The hedging
reserve is used to record gains or losses on derivatives that are designated and qualify as cash flow hedges
and that are recognised in other comprehensive income. Amounts are reclassified to profit or loss when
the associated hedged transaction affects profit or loss. At 30 June 2021, the total value of the hedging reserve
is ($6,297).
26
Financial risk management
General objectives, policies and processes
In common with all other businesses, the Company is exposed to risks that arise from its use of financial
instruments. This note describes the Company’s objectives, policies and processes for managing those risks
and the methods used to measure them. Further quantitative information in respect of these risks is presented
throughout these financial statements.
There have been no substantive changes in the Company’s exposure to financial instrument risks, its
objectives, policies and processes for managing those risks or the methods used to measure them from
previous periods unless otherwise stated in this note.
Activities undertaken by the Company may expose the Company to market risk (including gold price risk,
currency risk and interest rate risk), credit risk and liquidity risk. The Board has overall responsibility for the
determination of the Company’s risk management objectives and policies and, whilst retaining ultimate
responsibility for them, it has delegated the authority to its finance team, for designing and operating
processes that ensure the effective implementation of the objectives and policies of the Company. The
Company's risk management policies and objectives are therefore designed to minimise the potential impacts
of these risks on the results of the Company where such impacts may be material. The Board receives regular
updates from Management through which it reviews the effectiveness of the processes put in place and the
appropriateness of the objectives and policies it sets.
Manuka Resources Ltd
For the year ended 30 June 2021
74
The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly
affecting the company’s competitiveness and flexibility.
At 30 June 2021, the Company held the following financial instruments:
Financial assets
Cash and cash equivalent
Trade and other receivables
Other financial assets
Total financial assets
Financial liabilities
Trade and other payables
Related party loans
Convertible notes
30 June
2021
$
1,018,035
355,290
6,888,571
8,261,896
30 June
2021
$
9,979,330
2,239,615
-
30 June
2020
$
1,509,040
7,200,403
6,456,370
15,165,813
30 June
2020
$
7,670,573
2,704,021
1,760,513
Other interest-bearing loans (net of borrowing costs)
14,381,732
20,988,381
Lease liabilities
Other borrowings
Derivative liabilities
Total financial liabilities
76,113
-
6,297
202,015
251,664
-
26,683,087
33,577,167
The fair value of these current financial instruments is assumed to approximate their carrying value.
Market Risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, commodity prices, interest
rates and equity prices will affect the consolidated entity income or the value of its holdings of financial
instruments.
The Group is currently exposed to the risk of fluctuations in prevailing market commodity prices on the gold
and silver currently produced from its gold mine. The Group does not have any physical gold delivery contracts
in place as at 30 June 2021 (30 June 2020: Nil).
Derivative financial instruments and hedge accounting
Derivatives are only used for economic hedging purposes and not as speculative investments.
Changes in the market gold price will affect the derivative valuation at each reporting date. The objective of
market risk management is to manage and control market risk exposures within acceptable parameters, while
optimising the return. The consolidated entity enters into derivative financial instruments to hedge such
transactions.
The Company’s risk management policy is to hedge between 0% to 60% of forecast gold sales in local currency
over a rolling 24-month period. As at 30 June 2021 the Company had a hedge liability position of $6,297
reflecting a negative mark-to-market value of gold contracts. As at year end gold hedges comprise spot and
swap gold contracts for 1,000 ounces of gold (2020: Nil) at an average price of $2,359 per ounce (2020: Nil),
with a maturity over the period July 2021 to September 2021.
Manuka Resources Ltd
For the year ended 30 June 2021
75
At 30 June 2021 the Company held gold forward contracts to hedge the exposure of future gold sales. The
following table sets out the current hedge position and fair value as at 30 June 2021:
No. of
contracts
3
-
Gold sold
1,000 oz
-
0-6 months
$’000
Maturity
7-12 months
$’000
More than 1
year $’000
$6
-
-
-
-
-
As at 30 June 2021
As at 30 June 2020
Gold price sensitivity
The carrying amount of derivative financial instruments are valued using appropriate valuations models with
inputs such as forward gold prices. The potential effect of using reasonably possible alternative assumptions
in these models, based on changes in the forward gold price by 10 per cent while holding all other variables
constant, is shown in the following table:
30 June 2021
Derivative Financial Instruments
30 June 2020
Derivative Financial Instruments
Carrying amount
$’000
Other Comprehensive Income
10% increase
$’000
10% decrease
$’000
6
-
(236)
-
236
-
The accounting policy for derivative financial instruments and hedge accounting is outlined at Note 18.4 above.
Certain derivative instruments do not qualify for hedge accounting. Changes in the fair value of any derivative
instruments that do not qualify for hedge accounting are recognised immediately in the income statement.
During the period, the Company entered into fair value hedges for 4,000 oz of gold which did not classify for
hedge accounting. An amount of $248,454 was recognised in the Profit and Loss in relation to these hedges
which were settled prior to the end of the period.
Credit risk
Credit risk is the risk that the other party to a financial instrument will fail to discharge their obligation resulting
in the Company incurring a financial loss. This usually occurs when debtors fail to settle their obligations owing
to the Company. The policy of the Company is that sales are only made to customers that are credit worthy.
Credit limits for each customer are reviewed and approved by Management.
Receivable balances are monitored on an ongoing basis. The Company has one Key Customer which is an LBMA
Accredited Refinery. To mitigate Credit Risk associated with its Key Receivable, the Company has in place a
contract which ensures payment is received at the time of transfer of title and physical delivery of goods.
To mitigate the credit risk associated with cash and cash equivalents, contracts are taken out only with
reputable financial institutions in Australia.
The maximum exposure to credit risk at balance date in relation to each class of financial asset is the carrying
amount of those assets, which is net of impairment losses. Refer to the summary of financial instruments table
above for the total carrying amount of financial assets.
Liquidity risk
Liquidity risk is the risk that the Company may encounter difficulties raising funds to meet commitments
associated with financial instruments, e.g. borrowing repayments. Prudent liquidity risk management implies
Manuka Resources Ltd
For the year ended 30 June 2021
76
maintaining sufficient cash and ensuring the availability of funding through an adequate amount of committed
credit facilities.
The Company manages liquidity risk by continuously monitoring forecasted and actual cash flows, seeking the
financial support from its shareholders, finding debt providers and matching the maturity profiles of financial
assets and liabilities.
Maturity Analysis
The table below summarises the maturity profile of the Company’s financial liabilities based on contractual
commitments.
2021
Non-derivatives
Trade and other payables
Related party loans
Other interest-bearing loans
Lease liabilities
2020
Non-derivatives
Trade and other payables
Related party loans
Convertible notes
Other interest-bearing loans
Lease liabilities
Other borrowings
Carrying
Amount
Contractual
Cash flows
< 6 months
6- 12
months
1-3 years
$
$
$
9,979,330
9,979,330
9,979,330
2,239,615
14,381,732
76,113
2,483,092
16,644,553
79,370
181,534
905,128
77,497
$
-
$
-
97,391
905,128
1,405
2,204,167
14,834,297
468
26,676,790
29,186,345
11,143,489
1,003,924
17,038,932
7,670,573
7,670,573
7,670,573
-
2,704,021
1,760,513
20,988,381
202,015
251,664
2,842,992
1,780,152
22,659,562
225,347
259,974
196,143
1,780,152
4,979,156
73,164
86,658
2,646,849
-
17,680,406
76,092
173,316
33,577,167
35,438,600
14,785,846
20,576,663
-
-
-
-
76,091
-
76,091
Foreign exchange risk
Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities
denominated in a currency that is not the entity’s functional currency. The Group has not formalised a foreign
currency risk management policy however, it monitors its foreign currency expenditure considering exchange
rate movements.
The Group is exposed to foreign exchange risk through the USD denominated debt facility obtained from TPC,
refer Note 18.2(d). The Group’s exposure to foreign currency risk at the end of the reporting period, expressed
in Australian dollar, was as follows:
Borrowings
30 June
2021
$
30 June
2020
$
14,023,439
21,118,267
The aggregate net foreign exchange gains/losses recognised in profit or loss were:
Net foreign exchange gain / (loss) recognised in profit or
loss included in finance expenses
30 June
2021
$
30 June
2020
$
1,721,879
(181,135)
Manuka Resources Ltd
For the year ended 30 June 2021
77
Sensitivity analysis
The following table demonstrates the sensitivity to a reasonably possible change in the USD:AUD exchange
rate, with all other variables held constant, of the Company’s profit/loss after tax (through the impact on USD
denominated financial liabilities).
USD:AUD exchange rate – increase 10%
USD:AUD exchange rate – decrease 10%
30 June
2021
$
30 June
2020
$
1,219,377
1,919,842
(1,490,349)
(2,346,474)
Interest rate risk
Interest rate risk is the Company’s exposure to market risk for changes in interest rates relates primarily to
cash and interest-bearing liabilities. The Company's exposure to interest rate risk and the effective weighted
average interest rate by maturity periods is set out in the tables below:
Fixed rates
Floating rates
Total
Non-interest
bearing
Weighted
average
interest rate
2021
Financial assets
Cash and cash equivalent
Trade and other receivables
Other financial assets
Financial liabilities
Trade and other payables
Related party loans
Other interest-bearing loans
Lease liability
-
-
-
-
15%
18%
14%
$
-
-
-
-
-
-
-
-
-
$
-
-
-
-
-
1,283,881
13,771,435
76,113
15,131,429
$
$
1,018,035
355,290
6,888,571
8,261,896
9,979,330
955,734
610,297
-
11,545,361
1,018,035
355,290
6,888,571
8,261,896
9,979,330
2,239,615
14,381,732
76,113
26,676,790
Weighted
average
interest rate
Floating rates
Fixed rates
Non-interest
bearing
Total
2020
Financial assets
Cash and cash equivalent
Trade and other receivables
Other financial assets
Financial liabilities
Other
Trade and other payables
Related party loans
Convertible notes
Other interest-bearing loans
Lease liability
-
-
-
4.5%
-
15%
12%
14%
14%
$
-
-
-
-
251,664
-
-
-
-
-
251,664
$
-
-
-
-
-
1,217,486
1,760,513
20,825,717
202,015
$
$
1,509,040
7,200,403
6,456,370
1,509,040
7,200,403
6,456,370
15,165,813
15,165,813
-
7,670,573
1,486,535
-
162,664
-
251,664
7,670,573
2,704,021
1,760,513
20,988,381
202,015
24,005,731
9,319,772
33,577,167
Manuka Resources Ltd
For the year ended 30 June 2021
78
Sensitivity analysis
The following table demonstrates the sensitivity to a reasonably possible change in interest rates, with all
other variables held constant, of the Company’s profit/loss after tax (through the impact on floating rate
financial assets and financial liabilities).
Carrying
amount
2021
Carrying
amount
2020
$
+1%
-1%
$
+1%
-1%
Cash and cash deposits
1,018,035
Tax charge at 26% (2020: 27.5%)
After tax increase / (decrease)
Other
Tax charge at 26% (2020: 27.5%)
After tax increase / (decrease)
Net after tax increase / (decrease)
10,180
(2,647)
(10,180)
1,509,040
2,647
7,533
(7,533)
15,090
(4,150)
(15,090)
4,150
10,940
(10,940)
-
-
-
-
-
-
-
251,664
(2,517)
692
(1,825)
2,517
(692)
1,825
7,533
(7,533)
9,115
(9,115)
27 Commitments for expenditure
27.1 Tenement Commitments
In order to maintain current rights of tenure to exploration tenements, the Company is required to perform
minimum exploration work to meet the minimum expenditure requirements specified by the State
Government. Due to the nature of the Company’s operations in exploring and evaluating areas of interest,
exploration expenditure commitments beyond twelve months cannot be reliably determined. It is anticipated
that expenditure commitments in subsequent years will be similar to that for the forthcoming twelve months.
These obligations are not provided for in the financial report and are payable as follows:
Not later than one year
Between 1 year and 5 years
30 June
2021
$
561,507
671,096
1,232,603
30 June
2020
$
910,000
1,255,000
2,165,000
If the Company decides to relinquish certain leases and/or does not meet these obligations, assets recognised
in the Statement of Financial Position may require review to determine the appropriateness of carrying values.
28 Contingent assets and liabilities
28.1 Bank Guarantee to Cobar Shire Council and road rehabilitation
The Company has a term deposit with NAB to cover a bank guarantee of $200,000 issued by the NAB to Cobar
Shire Council. The bank guarantee is required by Cobar Shire Council to cover the estimated cost of restoring
the road to their pre-mining condition.
Due to the contingent nature of the asset and liability and the significant uncertainty of timing and because
the cost of necessary road repairs cannot be estimated with any degree of certainty, the value of the bank
guarantee has not been brought to account in the financial statements of the Company.
28.2 Meadowhead royalty agreement
Pursuant to a royalty agreement attaching to the Mt Boppy Gold Project, the Company is also potentially
required to provide Meadowhead Investments Pty Ltd (Meadowhead) with 3% of all gold produced from any
of the existing mining leases associated with the Mt Boppy Gold Project. Subsequent to the end of the
reporting period the Company reached an agreement in relation to settlement of the royalty agreement, the
cost of which has been fully provisioned as at 30 June 2021.
Manuka Resources Ltd
For the year ended 30 June 2021
79
Interests in Subsidiaries
29
Set out below are details of the subsidiaries held directly by the Group:
Name of the subsidiary
Place of incorporation and
place of business
Principal
activity
Mt Boppy Resources Pty Ltd
Australia
Gold Mine
30 June
2021
100%
30 June
2020
100%
Proportion of ownership interests
held by the Group
30 Parent Entity Information
Information relating to Manuka Resources Ltd (the Parent Entity):
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets / (deficit)
Statement of profit or loss and other comprehensive income
Loss for the year
Other comprehensive income / (loss)
Total comprehensive loss
30 June
2021
$
30 June
2020
$
7,079,698
11,521,149
26,047,606
19,020,187
33,127,304
30,541,336
12,122,674
29,002,168
18,819,991
3,985,895
30,942,665
32,988,063
2,184,639
(2,446,727)
(3,095,442)
(6,105,758)
(6,297)
-
(3,101,739)
(6,105,758)
The Parent Entity has not entered into a deed of cross guarantee nor are there any contingent liabilities at the
year end. Refer to Note 28 for details of the Group’s contingent liabilities.
Manuka Resources Ltd
For the year ended 30 June 2021
80
31 Related party transactions
31.1 Transactions with related parties and outstanding balances
The Company’s related parties include key management personnel, and others as described below. Unless
otherwise stated, none of the transactions incorporate special terms and conditions and no guarantees were
given or received. Outstanding balances are usually settled in cash.
Notes
30 June
2021
$
30 June
2020
$
DETAILS OF TRANSACTIONS WITH RELATED PARTIES:
Details of related party transactions with ResCap
Investments Pty Ltd, an entity controlled by a member of
KMP:
interest charged on intercompany loan
83,640
107,225
•
•
•
•
•
amounts charged pursuant to sublease to ResCap
Investments Pty Ltd and month to month lease
payments
amounts charged pursuant to service agreement to
ResCap Investments Pty Ltd
conversion of debt in Mt Boppy Resources to
equity in Manuka Resources
-
-
-
conversion of debt to equity in Manuka Resources
21.1 (d)
1,000,000
21,267
240,000
2,088,000
-
30 June
2020
$
95,000
16,287
30 June
2021
$
-
-
28,428
19,638
25,452
664,274
-
-
1,392,000
200,000
Details of related party transactions with Cobar Gold Unit
Trust 2020, an entity related to KMP:
•
interest paid in relation to prepayment of sale of
gold
31.1 (a)
Details of related party transactions with MCP Unit Trust,
an entity related to KMP:
•
interest expenses and finance fees charged on
loan
Details of related party transactions with Gleneagle
Securities (Aust) Pty Ltd, being an entity which is a related
party due its control over the Convertible Notes pursuant to
the Convertible Note Deed Poll. Gleneagle Securities (Aust)
Pty Ltd ceased being a related party on conversion of the
Convertible Notes in July 2020.
•
•
interest charged on intercompany loan
interest on notes payable to convertible note
holders
Details of related party transactions with Gleneagle
Securities Nominees Pty Ltd, an entity which was a
substantial shareholder of the Company. Gleneagle
Securities Nominees Pty Ltd ceased as a shareholder and
related party on 6 May 2020.
•
•
conversion of debt in Mt Boppy Resources to
equity in Manuka Resources
conversion of trade creditor amount to equity in
Manuka Resources
Manuka Resources Ltd
For the year ended 30 June 2021
81
DETAILS OF BALANCES WITH RELATED PARTIES:
Balance of loan with Manuka Resources Ltd
- payable to ResCap Investments Pty Ltd
- payable to Gleneagle Securities (Aust) Pty Ltd
Balance of convertible notes
Balance of Directors fees and wages payable to KMP
Balance of loan with Mt Boppy Resources Pty Ltd
- payable to ResCap Investments Pty Ltd
Notes
18.2(a)
18.2(a)
18.2(b)
30 June
2021
$
30 June
2020
$
1,624,493
530,979
-
-
2,005,327
502,551
1,760,513
181,122
18.2(e)
84,143
196,143
a) Agreement for Prepayment of Gold Sales with Cobar Gold Unit Trust 2020 - Mr Dennis Karp, the Executive
Chairman, is a director of Cobar United Pty Ltd the trustee for the Cobar Gold Unit Trust 2020. Manuka
entered into a prepayment in relation to the sale of gold to Cobar United Pty Ltd ATF Cobar Gold Unit
Trust 2020 amounting to $950,000. There is a call and put option in Manuka’s favour in relation to the
agreement. The put option was exercised and payment was made to Cobar Unit Trust on 26 June 2020 to
settle the agreement.
31.2 Transactions with key management personnel
Key management personnel remuneration includes the following expenses:
Short-term employee benefits
Post-employment benefits
Long-term benefits
Share-based payments
Total remuneration
30 June
2021
$
846,890
62,517
-
-
909,407
30 June
2020
$
600,026
43,673
-
408,385
1,052,084
Detailed remuneration disclosures are provided in the remuneration report on pages 29 to 34.
32 Events subsequent to the end of the reporting period
Coronavirus (COVID-19) pandemic
Throughout the reporting period the Company has continued to consider the potential implications of the
Coronavirus. The Company has continued to adapt its policies to monitor and mitigate the impacts of
COVID-19 such as safety and health measures in line with government guidelines and securing the supply
of essential materials and equipment. During August 2021, a worker who had left site returned a positive
result for COVID-19 as he prepared to return to site. The test was conducted in line with our standard
operating procedures (the requirement of a current negative test result prior to returning to work). This
led to a number of on-site workers being tested and placed in isolation. The health and welfare of our
employees is fundamental to our Company, and Manuka management worked closely with NSW Health
and its regional agencies. All close contacts returned negative results on initial and subsequent retests. No
parties including the primary contact reported any adverse symptoms. These actions caused a temporary
period of limited activity at the plant and importantly tested the Company’s Covid management plan.
Containing a possible transmission of the virus to protect our employees has been a priority since the risk
of COVID–19 arose in March 2020 and continues to be the case and protocols are in place for such a
Manuka Resources Ltd
For the year ended 30 June 2021
82
circumstance. The Company does maintain a dual roster workforce and is able to recall additional workers
to site if necessary. Even with the above there been no significant impact to the Group’s operations,
however, there is still significant uncertainty around the breadth and duration of business disruptions in
Australia in general (which may or may not impact operations of the Group) related to COVID-19.
Documentation of Secured Debt Facility Extension and issuance of options
During the period, the Company successfully negotiated to extend the term of the facility to 30 September
202223. The agreement was signed by the parties on the 20th July 2021. The first tranche of Options
pursuant to the term of the negotiated extension, being 5,000,000 options at a strike price of $0.30 with
an expiry of 28 July 2023, were issued on 28 July 2021.
Meadowhead royalty agreement
Pursuant to a royalty agreement attaching to the Mt Boppy Gold Project, the Company was potentially
required to provide Meadowhead Investments Pty Ltd (Meadowhead) with percentage of all gold
produced from any of the existing mining leases associated with the Mt Boppy Gold Project. Subsequent
to the end of the reporting period, the Company reached an agreement in relation to settlement of the
royalty agreement, the cost of which was already fully provisioned as at 30 June 2021.
Apart from the matters noted above, there are no other matters or circumstances that have arisen since the
end of the period that has significantly affected or may significantly affect either:
the entity’s operations in future financial years;
the results of those operations in future financial years; or
the entity’s state of affairs in future financial years.
33 Company Details
The registered office and principal place of business of the Company is:
Manuka Resources Ltd
Level 4 Grafton Bond Building
201 Kent Street, Sydney, New South Wales
23 Refer ASX announcements dated 14 May 2021 and 29 June 2021
Manuka Resources Ltd
For the year ended 30 June 2021
83
Directors’ Declaration
In the opinion of the Directors of Manuka Resources Ltd:
a The financial statements and notes of Manuka Resources Ltd are in accordance with the Corporations
Act 2001, including:
i.
ii.
Giving a true and fair view of the consolidated entity’s financial position as at 30 June 2021 and of
its performance for the financial year ended on that date; and
Complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory
professional reporting requirements;
b There are reasonable grounds to believe that Manuka Resources Ltd will be able to pay its debts as
and when they become due and payable; and
c a statement that the attached financial statements are in compliance with International Financial
Reporting Standards has been included in the notes to the financial statements.
The directors have been given the declarations by the chief executive officer and chief financial officer required
by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of the directors.
Dennis Karp
Executive Chairman
Dated the 23rd day of September 2021
84
Level 17, 383 Kent Street
Sydney NSW 2000
Correspondence to:
Locked Bag Q800
QVB Post Office
Sydney NSW 1230
T +61 2 8297 2400
F +61 2 9299 4445
E info.nsw@au.gt.com
W www.grantthornton.com.au
Independent Auditor’s Report
To the Members of Manuka Resources Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Manuka Resources Limited (the Company) and its subsidiary (the Group), which
comprises the consolidated statement of financial position as at 30 June 2021, the consolidated statement of profit or loss
and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows
for the year then ended, and notes to the consolidated financial statements, 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:
a giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its performance for the year
ended on that date; and
b 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 auditor independence requirements of the Corporations Act 2001 and
the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled
our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
www.grantthornton.com.au
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients
and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International
Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are
delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one
another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to
Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiary and related entities. GTIL is not an Australian related entity to
Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation.
85
Material uncertainty related to going concern
We draw attention to Note 3.2 in the financial statements, which indicates that the Group incurred a net loss of $2,895,244
during the year ended 30 June 2021, has net cash inflows from operating activities of $207,793 and as of that date, the
Group’s current liabilities exceeded its current assets by $3,459,182. As stated in Note 3.2, these events or conditions, along
with other matters as set forth in Note 3.2, indicate that a material uncertainty exists that may cast doubt on the Group’s ability
to continue as a going concern. Our opinion is not modified in respect of this matter.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
In addition to the matter described in the Material uncertainty related to going concern section, we have determined the
matters described below to be the key audit matters to be communicated in our report.
Key audit matter
How our audit addressed the key audit matter
Valuation of ore inventory (Note 13)
As at 30 June 2021, the Group has recognised an inventory
balance (including ore inventory) of $4.692 million.
The Group’s inventory, as disclosed in Note 13 to the financial
report, is a key audit matter as the inventory costing model
requires significant estimates to calculate the cost of the ore
inventory and net realisable value (‘NRV’).
Our audit procedures included, but were not limited to:
Virtually attending the stocktake for consumables and
ensuring consistency with the quantities held at year-end;
Obtaining management’s technical reports, including
surveying reports and reconciling the ore grades and
tonnages included in the inventory costing model as at 30
June 2021;
Assessing management’s gold-in-circuit calculation by
comparing the input data in the inventory model to
assaying results and corroborating the accuracy and the
completeness of the data to actual sales quantities
realised subsequent to the end of the reporting date;
Assessing the competency and objectivity of the experts
used by management in the preparation of the technical
reports;
Assessing the costing model applied by the Group in
determining the cost for ore inventory and its consistency
with operating expenses;
Performing a review of sales realised subsequent to the
end of the reporting date to ensure inventories are valued
at the lower of cost and net realisable value in accordance
with AASB 102 - Inventories; and
Assessing the adequacy of the related disclosures in the
financial report.
Accounting for mine properties (Note 14)
As at 30 June 2021, the Group has recorded mine properties
and development assets totalling $6.440 million.
Our audit procedures included, but were not limited to:
The Group’s carrying value of mine properties, as disclosed in
Note 14, is a key audit matter as the carrying value of these
assets is impacted by various key estimates and judgements,
in particular the following:
Evaluating the Group’s amortisation policy in accordance
with Australian Accounting Standards and relevant
accounting interpretations and reviewing its consistency
with the mine plan;
Ore reserve and resource estimates;
Commercial production; and
Amortisation rates.
Testing a sample of additions and assessing whether the
Group has recorded mining expenses in line with the
requirements of AASB 116 Property, plant and equipment;
Furthermore, as the carrying value of mine properties
represents a significant asset to the Group, we considered it
necessary to assess whether any facts or circumstances exist
to suggest that the carrying amount of the mine properties
may exceed its recoverable amount.
Exploration and evaluation assets (Note 15)
The Group recognises capitalised exploration and evaluation
expenditure in accordance with AASB 6 Exploration for and
Evaluation of Mineral Resources.
As at 30 June 2021, exploration and evaluation assets amount
to $4.780 million. During the year, the Group capitalised
$4.458 million of costs to exploration and evaluation assets in
relation to different areas of interest.
This area is a key audit matter due to the inherent subjectivity
that is involved in making judgements in relation to the
evaluation for any impairment indicators, in accordance with
AASB 6 - Exploration for and Evaluation of Mineral
Resources.
There are a number of assumptions made when assessing the
recoverability of capitalised costs and many times it is
dependent upon the future success of projects and initiatives.
86
Agreeing the inputs including the ore reserve and resource
estimates and ounces of gold produced during the year
that were used in the calculation of the amortisation rates
to supporting documentation;
Testing the mathematical accuracy and application of the
amortisation rates applied to the carrying value of all mine
properties in commercial production by recalculating
amortisation for the year;
Assessing the competency and objectivity of the experts
used by management in the preparation of the ore reserve
and resource reports;
Evaluating whether there were any indicators of
impairment under the Australian Accounting Standards;
and
Assessing the adequacy of the related disclosures in the
financial report.
Our procedures included, amongst others:
Obtaining from management a reconciliation of capitalised
exploration and evaluation expenditure and agreeing to the
general ledger;
Vouching a sample of expenditure to ensure they meet the
recognition criteria under AASB 6;
Reviewing management’s areas of interest considerations
against AASB 6;
Confirming whether the rights to tenure for the areas of
interest remained current at balance date;
Obtaining an understanding of the status of ongoing
exploration programmes for the respective areas of
interest;
Obtaining evidence of the future intention for the areas of
interest, including reviewing future budgeted expenditure;
Understanding whether any data exists to suggest that the
carrying value of these exploration and evaluation assets
are unlikely to be recovered through development or sale;
and
Assessing the appropriateness of the related disclosures
within the financial statements.
Information other than the financial report and auditor’s report thereon
The Directors are responsible for the other information. The other information comprises the information included in the
Group’s annual report for the year ended 30 June 2021, but does not include the financial report and our auditor’s report
thereon.
Our opinion on the financial report does not cover the other information and we do not express any form of assurance
conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or
otherwise appears to be materially misstated.
87
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 Group’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the
Directors either intend to liquidate the Group or to cease operations, or have 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 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 29 to 34 of the Directors’ report for the year ended 30 June
2021.
In our opinion, the Remuneration Report of Manuka Resources Limited, for the year ended 30 June 2021 complies with
section 300A of the Corporations Act 2001.
Responsibilities
The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance
with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report,
based on our audit conducted in accordance with Australian Auditing Standards.
Grant Thornton Audit Pty Ltd
Chartered Accountants
N P Smietana
Partner – Audit & Assurance
Sydney, 23 September 2021
Manuka Resources Ltd
For the year ended 30 June 2021
88
ASX Additional Information
Additional information required by Australian Securities Exchange Ltd and not shown elsewhere
in this report is as follows. The information is current as at 23rd September 2021.
(a) Distribution of equity securities
Analysis of numbers of equity security holders by size of holding:
1
1,001
5,001
10,001
100,001
-
-
-
-
1,000
5,000
10,000
100,000
and over
The number of equity security holders holding less than a marketable
parcel of securities are:
Ordinary shares
Number of holders
Number of shares
151
736
489
681
174
2,231
331
106,711
2,029,974
4,190,452
22,011,742
241,014,833
269,353,712
345,383
(b) Twenty largest shareholders
Twenty largest quoted equity security holders
The names of the twenty largest holders of quoted ordinary shares are:
Listed ordinary shares
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
RESCAP INVESTMENTS PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
SPINITE PTY LTD
CLAYMORE CAPITAL PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
WONG JOON KWANG
LANGSTON KEY LIMITED
CLAYMORE CAPITAL PTY LTD
TOI DOWNS LIMITED
CITICORP NOMINEES PTY LIMITED
BNP PARIBAS NOMINEES PTY LTD
UBS NOMINEES PTY LTD
JONATHAN MARQUARD & AMANDA HUTTON
MR BENJAMIN EARL STUBBS
A N HOLMAN INVESTMENTS PTY LIMITED
LEVEL 1 PTY LTD
SPINITE PTY LTD
INVIA CUSTODIAN PTY LIMITED
ARUNDEL WILTON PTY LIMITED
PILLAIYAR PTY LTD
Number of shares
10,440,000
6,928,215
4,293,000
3,745,804
3,500,000
2,000,000
1,925,000
1,889,000
1,694,826
1,623,857
1,576,150
1,250,000
1,217,630
1,100,000
1,027,387
1,022,000
898,454
750,000
750,000
691,446
48,983,774
Percentage of
ordinary shares
10.29%
6.83%
4.23%
3.69%
3.45%
1.97%
1.90%
1.86%
1.67%
1.60%
1.55%
1.23%
1.20%
1.08%
1.01%
1.01%
0.89%
0.74%
0.74%
0.68%
48.26%
Manuka Resources Ltd
For the year ended 30 June 2021
89
(c) Substantial shareholders
The names of substantial shareholders who have notified the Company in accordance with
section 671B of the Corporations Act 2001 are:
Number of Shares
% Issued Capital
Level 1 Pty Ltd (ACN 105 622 928) , Kizogo Pty Ltd
(ACN003 334 370) , Claymore
Capital Pty Ltd (ACN 082 722 290) , Mile Oak
Investments Limited, Sharron Ruth Rosenberg
ResCap Investments Pty Ltd
Dennis Karp (including holding of ResCap Investments Pty Ltd)
29,696,368
11.03%
90,273,280
91,814,557
34.09%
33.51%
(d) Voting rights
All ordinary shares (whether fully paid or not) carry one vote per share without restriction.
(e) Schedule of interests in mining tenements as at 23 September 2021
Location : Wonawinta Silver Project is situated approximately 90 kilometres to the south of
Cobar, NSW, and comprises one (1) granted mining lease and seven (7) granted exploration
licences as below, plus processing plant and associated infrastructure .
Tenement
ML1659
EL6482
EL7345
EL6155
EL6302
EL7515
EL6623
EL8498
Percentage held / earning
100%
100%
100%
100%
100%
100%
100%
100%
Change during quarter
-
-
-
-
-
-
-
-
Location : Mt Boppy Gold Project is situated approximately 45 kilometres east of Cobar, NSW,
adjacent to the Barrier Highway. The Project comprises four (4) gold leases , two(2) mining
leases, one (1) mining purpose lease and one (1) exploration licence which encompasses the
MLs and extends the project area to the south.
Tenement
GL3255
GL5836
GL5848
GL5898
ML311
ML1681
MPL240
EL5842
Percentage held / earning
100%
100%
100%
100%
100%
100%
100%
100%
Change during quarter
-
-
-
-
-
-
-
-
Manuka Resources Ltd
For the year ended 30 June 2021
90
(f) Unquoted Securities
At 23rd September 2021, the Company had the following unlisted securities on issue:
Class
$0.25 options, expiring 17/04/2023
$0.25 options, expiring 14/07/2023
$0.30 options, expiring 28/07/2023
Holders of 20% or more of the class
Number of
Securities
11,250,000
10,000,000
5,000,000
Number of
Holders
8
1
1
Holder Name
n/a
Bell Potter Securities Ltd
Conan Minerals Group Pty Ltd
Number of
Securities
10,000,000
5,000,000
(f) Restricted Securities
At 23rd September 2021, the Company had the following restricted securities on issue:
Class
ESCROWED SHARES 24 MONTHS FROM QUOTATION
Number of Securities
Date escrow period ends
14/07/2022
167,862,649
(h) Approach to Corporate Governance
Manuka Resources Ltd ACN 611 963 225 (Company) has established a corporate governance framework
commencing from when the Company was admitted to the official list of ASX. In establishing its corporate
governance framework, the Company has referred to the recommendations set out in the ASX Corporate
Governance Council's Corporate Governance Principles and Recommendations 4th edition (Principles &
Recommendations). The Company has followed each recommendation where the Board has considered the
recommendation to be an appropriate benchmark for its corporate governance practices.
following governance-related documents can be
The
www.manukaresources.com.au, under the section marked "About Us > Corporate Governance":
found on
the Company's website at
Charters
Board
Audit & Risk Committee
Nomination Committee
Remuneration Committee
Policies and Procedures
Corporate Code of Conduct
Disclosure - Performance Evaluation
Disclosure - Continuous Disclosure
Disclosure - Risk Management
Trading Policy
Diversity Policy
Shareholder Communication Strategy
Hedging Policy
Whistleblower Policy
For the financial year ended 30 June 2021 (Reporting Period) the Company has adopted the fourth edition of
the Corporate Governance Principles and Recommendations released by the ASX Corporate Governance
Council. The Company’s 2021 Annual Corporate Governance Statement has been approved by the Board and
is publicly available on the Company’s website at www.manukaresources.com.au/site/about/corporate-
governance. It will also be released to the ASX at the same time as this 2021 Annual Report.
Manuka Resources Ltd
For the year ended 30 June 2021
91
(i) Use of Proceeds
The Company was admitted to the official list of the ASX on 11 July 2020. In accordance with Listing Rule
4.10.19, the Company has, during the financial year ended 30 June 2021, used cash and assets in a form readily
convertible to cash, in a way consistent with its business objectives.
Manuka Resources Limited
Level 4, Grafton Bond Building,
201 Kent St, Sydney, NSW Australia, 2000