ABN 77 610 319 769
ANNUAL REPORT - 30 JUNE 2021
Corporate Information
ABN 77 610 319 769
Directors
Mr Stephen Dennis (Non-Executive Chairman)
Mr Phil Hoskins (Managing Director)
Mr Andrew Pardey (Non-Executive Director)
Mr Chris van Wijk (Executive Director)
Company Secretary
Mr Stuart McKenzie
Registered Office
Emerald House
1202 Hay Street
WEST PERTH WA 6005
Tel +61 8 9200 4960
Fax +61 8 9200 4961
Bankers
Commonwealth Bank of Australia
150 St Georges Terrace
PERTH WA 6000
Share Register
Computershare Limited
Level 11, 172 St Georges Terrace
PERTH WA 6000
Tel + 61 8 9323 2000
Fax + 61 8 9323 2033
Auditors
BDO Audit (WA) Pty Ltd
38 Station Street
SUBIACO WA 6000
Website Address
www.marvelgold.com.au
ASX Code
Shares are listed on the Australian Securities Exchange (ASX) under stock code MVL.
1
Contents
Chairman’s
report
Directors'
report
Corporate governance statement
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
consolidated
financial
statements
Directors' declaration
Independent
auditor’s
report
ASX
additional
information
3
4
24
25
26
27
28
29
30
57
58
63
2
Marvel Gold Limited 30 June 2021 Chairman’s report 3 Dear Shareholders With the completion of the 2021 financial year, I reflect on what we have achieved over the past 12 months, and the challenges that we faced. The past 12-18 months has been one of transformation for your company. Not that long ago, we faced serious challenges and uncertainty. Through a great deal of hard work, we have repositioned Marvel as a Mali focused gold explorer, with a significant existing mineral resource and an attractive portfolio of exploration assets. We have also now lodged a prospectus for a transaction involving a spin-out of the Chilalo Graphite Project and an initial public offering of Evolution Energy Minerals, which is expected to deliver significant value to our shareholders. In Mali, our primary focus is on the Tabakorole Gold Project, where we have currently completed the milestoness to earn a 51% interest and following recently completed work programs, is nearing 70%. Located along the Bannifin Shear Zone, Tabakorole is situated in a highly prospective, yet largely under explored region of Mali. At Tabakorole, we have applied a systematic approach to exploration, which has seen a near doubling of the Mineral Resource to 910,000 ounces defined (see page 5) and ongoing exploration success during the 2021 field season that is expected to support a meaningful increase in the Mineral Resource. We were particularly pleased with the results of an initial metallurgical testwork program that confirmed the amenability of Tabakorole ore to simple carbon-in-leach processing and demonstrated high recoveries from all samples, with low cyanide and lime consumption. Our exploration focus at Tabakorole is twofold: 1. To grow the existing mineral resource, such that it can support a standalone mining operation. Resource expansion drilling will continue in 2022. We are excited about the opportunities in both the north-west and central zones, where higher-grade mineralisation has been consistently intersected, including areas outside the existing mineral resource. 2. We recognise that major growth for Marvel will likely be driven by a new discovery in our landholding surrounding the existing Tabakorole Mineral Resource. Through a series of strategic tenement acquisitions, we have assembled an attractive land package of 830 km2. A comprehensive program of gold and multi-element soil geochemistry and ground magnetics. mapping will continue across this land package and has already identified a number of priority targets for follow-up testing in 2022. We recognise that maintaining a social licence to operate is a fundamental requirement for success in Mali. We aim to ensure that our work in Mali benefits the local communities and other key stakeholders and work in partnership with the communities in which we operate to identify areas of need. This saw us install a solar powered water pump and elevated water tank storage unit at two villages located in close proximity to Tabakorole. The world is increasingly committed to reducing carbon emissions and graphite has a critical role to play in the achievement of that commitment. Completion of the spin-out of Chilalo and IPO of Evolution is expected to see Marvel hold over 31% of Evolution’s shares, giving Marvel shareholders exposure to a high-quality graphite project that is well positioned to benefit from the global commitment to reducing carbon emissions. With the knowledge and experience we gained in 2021 we look ahead to the 2022 field season in Mali with great anticipation. Our sizeable land package, together with the success achieved from application of a systematic approach to exploration, gives us confidence that the Tabakorole Gold Project will emerge as one of real significance. I would like to thank my fellow Board members and the management team for their dedication and focus on delivering on what is a most promising gold exploration project. Finally, the Board would also like to thank shareholders for your continued support. This is an exciting time for Marvel and we look forward to providing updates as we ramp-up exploration efforts in Mali and bring the Chilalo spin-out transaction to a conclusion. Yours faithfully Stephen Dennis Non-executive Chairman
Marvel Gold Limited
30 June 2021
Directors’ report
Basis of preparation
The Directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as the
Group or Company) consisting of Marvel Gold Limited and the entities it controlled at the end of, or during, the year ended 30 June
2021. Marvel Gold Limited (Marvel) is a Company limited by shares that is incorporated and domiciled in Australia.
The attached financial statements for the year ended 30 June 2021 contains an independent auditor's report which includes a material
uncertainty related to going concern. For further information, refer to note 28 of the financial statements together with the auditor’s
report.
Directors and Company Secretary
The following persons were Directors of Marvel (Directors) during the 2021 financial year and up to the date of this report:
Mr Stephen Dennis (Non-Executive Chairman)
Mr Phil Hoskins (Managing Director)
Mr Andrew Pardey (Non-Executive Director)
Mr Chris van Wijk (Executive Director)
Directors were in office for the entire period unless otherwise stated.
The Company Secretary is Mr Stuart McKenzie.
Principal activities
During the period, the principal continuing activities of the Group related to the exploration and development of the Company’s gold
exploration tenements in Mali.
Dividends
During the period, no dividends were declared or paid.
Significant changes in the state of affairs
During 2021, the Company entered into a joint venture agreement on the Tabakorole and Lakanfla gold projects with Altus Strategies
Inc. The Company has various earn in exploration requirements (as announced on the ASX on 17 June 2020) to earn up to 80% interest
in the projects.
During 2021, the Company also entered into a joint venture agreement with Oklo Resources Limited on its West Mali projects. The
Company completed this transaction earning 80% in the joint venture by paying cash consideration of $200,000. The Company
anticipates issuing 20,000,000 shares to Oklo once certain tenements are renewed. A further 20,000,000 Company shares may be
issued as consideration, dependent on further milestones.
The Company also entered into an options agreement with Société Minière et Commerciale (SOMICO) over the Sakaar exploration
permit to earn up to 80% dependent on completion of three stage of various exploration targets. The Company reimbursed SOMICO
$21,958 for permit application fees.
The Company’s Chilalo Graphite Project in Tanzania has been reclassified as held for sale as it is now likely this asset will be disposed of
by the Company via spin off and IPO of the Company’s wholly owned subsidiary Evolution. Subsequent to year end a Share Exchange
Agreement was executed under which the Company agreed to sell the Chilalo Project to Evolution in exchange for $10 million of Evolution
shares (representing approximately 31% of Evolution on a post-ASX listing, undiluted basis) and cash of $2 million (or, if PL 11034/2017
is not reinstated on or before 31 December 2021, then $1 million). All conditions of the Share Exchange Agreement have been met which
resulted in the transfer of the Chilalo Project to Evolution and the release of the Prospectus to raise funds for the Evolution IPO. As part
of the transaction the Company also reached an agreement with its financier via a deed of release to freeze the balance of the loan at
$9.5 million, should the IPO occur prior to 30 November 2021.
4
Marvel Gold Limited
30 June 2021
Directors’ report
Events since the end of the financial year
Subsequent to year end, the Company:
•
•
•
•
•
Substantially increased its Mali landholdings via the acquisition of 438km2 of exploration permits in Mali. This takes the
Company landholding in Mali to 830 km2.
A Share Exchange Agreement was executed under which the Company agreed to sell the Chilalo Project to Evolution Energy
Minerals Limited (Evolution). See significant changes in the statement of affairs above for details.
Issued 70 million shares at a price of $0.06 per share to raise gross proceeds before costs of $4.2 million.
Issued options under the employee share scheme including 2,897,692 short term incentive zero priced options, (including
1,116,924 that were issued to KMP), 2,897,692 long term incentive options (including 1,116,924 that were issued to KMP) and
3,500,000 cashless options with an exercise price of $0.06 per share.
The Company received regulatory approval from the Tanzanian Fair Competition Commission which allows the initial public
offering of Evolution and the lodgement of the prospectus on the 28 September 2021 inviting investors to subscribe for
Evolution shares.
Likely developments and expected results
In the opinion of the Directors, there is nothing else to report, except as outlined in the Directors’ Report, which relates to likely
developments in the operations of the Group and the expected results of those operations in financial years subsequent to 30 June
2021.
Environmental regulation
The Group’s exploration and development activities and those of its partners are subject to environmental regulations and guidelines
applicable to the tenements on which such activities are carried out. Failure to meet environmental conditions attaching to the Group’s
exploration and mining tenements could lead to forfeiture of those tenements. The Group is committed to achieving a high standard
of environmental performance. No environmental breaches have occurred or have been notified by any Government agencies during
the period ended 30 June 2021 and up to the date of this report.
Review of operations
Results of operations
A summary of results for 2021 is as follows:
Net loss after income tax
attributable to:
Fair value gain on loan notes
Corporate and administration costs
Employee benefits
Exploration and evaluation expenditure
Finance costs
Share based payments
2021
$
2020
$
(8,997,070)
(7,486,841)
1,307,349
(1,285,607)
(1,075,132)
(6,276,412)
(2,068,654)
(593,258)
-
(1,238,722)
(1,176,126)
(3,461,198)
(1,949,048)
149,584
5
Marvel Gold Limited
30 June 2021
Directors’ report
Mali Gold Projects
In June 2020, the Company completed a series of transactions that repositioned it as a Mali focused gold explorer. Those transactions
included the acquisition of interests in two gold projects – Tabakorole Gold Project (Tabakorole) and the Lakanfla Gold Project (Lakanfla)
– in Mali through joint venture arrangements with UK listed entity, Altus Strategies plc and a restructure of the debt and security
arrangements associated with the Chilalo Graphite Project that left Marvel unencumbered.
Over the past 12 months, the Company has made significant progress in Mali, including:
•
•
•
Publication of a maiden mineral resource estimate of 910,000 oz Au at Tabakorole;
Consistent exploration success that is expected to see a meaningful increase in the existing mineral resource at Tabakorole; and
Strategic acquisitions of additional tenements around the Tabakorole deposit that now sees the Company’s landholding at
Tabakorole total 830km2.
In parallel with the advances made in Mali, the Company has progressed a transaction to spin-out its Chilalo Graphite Project and
undertake an initial public offering (IPO) of Marvel’s wholly owned subsidiary, Evolution Energy Minerals Limited (Evolution).
Exploration in Mali – Tabakorole Gold Project
Upon acquiring its interest in Tabakorole, the Company’s immediate focus was to review the substantial available data set and to
undertake drilling of the south-east portion of the deposit in order to support the publication of a mineral resource in accordance with
the 2012 JORC Code. This initial drilling program was successful, intersecting 38m at 2.1 g/t gold from 145m and 31m at 1.2 g/t gold
from 191m and formed part of an upgraded mineral resource estimate reported on 30 September 2021 as shown in Table 1.
Table 1: Tabakorole Mineral Resource Estimate (JORC 2012)
Indicated
Inferred
Total
Oxide
Fresh
Total
Mt
1.0
6.3
7.3
Au (g/t)
koz (Au)
1.3
1.2
1.2
40
250
290
Mt
1.5
15.1
16.6
Au (g/t)
koz (Au)
1.3
1.2
1.2
60
560
620
Mt
2.4
21.5
23.9
Au (g/t)
koz (Au)
1.3
1.2
1.2
100
810
910
A further 9,540m of resource expansion drilling, comprised of 5,400m of reverse circulation resource (RC) drilling and 4,140m of diamond
drilling were carried out at Tabakorole, which targeted three main areas:
•
Drilling within the existing strike in areas where only sparse drilling had previously occurred
o Drilling within the existing strike consistently intersected mineralisation, with results including 21m at 2.6 g/t gold
from 70m, 12m at 2.1 g/t gold from 18m, 13m at 2.0 g/t gold from 174m, 18m at 1.9 g/t gold from 53m, 22m at
1.8 g/t gold from 77m, 40m at 1.0 g/t gold from 86m and 33m at 1.1 g/t gold from 84m. The results demonstrated
continued shallow, higher-grade mineralisation, sitting outside the previously modelled resource and are expected
to contribute to an upgraded resource estimate.
•
Drilling of the north-west extension, where mineralisation was initially highlighted by aircore drilling (16m at 6.2 g/t gold from 14m)
completed in 2020
o
Results from 20 holes successfully extended the strike to the north-west, with best intersections including 15m at
2.0 g/t gold from 25m, 16m at 2.0 g/t gold from 75m, 6m at 5.8 g/t gold from 61m and 28m at 1.5 g/t gold from
121m.
•
Drilling to extend mineralisation to the south-east of the Mineral Resource
o Drilling to test the south-east extended the existing 2.9km strike length a further 150m to the south-east, with better
intersections including 29m at 1.8 g/t gold from 178m and 10m at 2.0 g/t gold from 49m.
Figure 1 shows the notable results of the RC and diamond drilling carried out at Tabakorole.
6
Directors’ report
Figure 1: Plan view showing results from Tabakorole resource expansion drill program
Marvel Gold Limited
30 June 2021
In addition to drilling activities, across its broader landholding at Tabakorole, the Company has also completed a comprehensive multi-
element soil geochemistry program (4,267 soil samples) and 5,300 line kilometres of high resolution ground magnetics which has
provided the Company with excellent datasets for targeting new discoveries.
Numerous targets were found to exhibit a similar geochemical signature to the Tabakorole deposit, being anomalous in gold, arsenic,
tungsten and tellurium.
Figure 2 shows the geochemical grid for gold as well as Tabakorole’s signature pathfinder elements, arsenic, tungsten and tellurium.
7
Directors’ report
Figure 2: Soil geochemistry grid for gold showing coincident anomalism with arsenic and tellurium
Marvel Gold Limited
30 June 2021
The Company recognises that continued growth at Tabakorole must come from additional gold discoveries. With the project located in a
prospective structural setting proximal to the Bannifin Shear Zone, soil geochemistry results delineating numerous targets with strong
coincident multi-element anomalism, including several Tabakorole “lookalike” signatures and high-resolution ground magnetics providing
the structural data to support robust targeting, Marvel is strongly placed to deliver further discoveries.
Positive metallurgical testwork results at Tabakorole
During the year, the Company completed an initial metallurgical testwork program that confirmed the amenability of Tabakorole ore to
simple carbon-in-leach processing.
A total of four composite samples were collected from diamond drillholes completed by the Company in mid-2020. The composites were
made from the coarse split of diamond drilling samples based on the drillhole locations within the Tabkorole deposit and the head grade
assay of the original samples. The composites targeted the current Mineral Resource grade of 1.2 g/t gold and ranged from 1.1-1.9 g/t
gold. All samples were taken in fresh rock as this material represents approximately 90% of the Tabakorole Mineral Resource. Initial
bottle roll testing is the industry standard first step to determine gold recoveries from cyanide leaching.
Results from the bottle roll testing showed high recoveries from all samples, with low cyanide and lime consumption. Average leach
recoveries were 92.7%, 94.8% and 96.6% for the four samples at the three grind sizes. The high recoveries show that the gold is likely
to be recoverable via a simple carbon-in-leach process flow sheet, with no indications of refractory gold.
Growing the Company’s landholding in Mali
The Company entered into agreements with Oklo Resources Limited (Oklo) to acquire an 80% interest in Oklo’s three South Mali gold
projects – Tabakorole, Yanfolila and Kolondieba (the South Mali Gold Projects) – covering 600km2 of highly prospective Birimian
Greenstone terrain in South Mali.
A key feature of the transaction with Oklo was the acquisition of the Sirakourou and Solabougougda tenements, which adjoin the
Tabakorole tenement, and provide an additional 200km2 of granted tenements.
8
Marvel Gold Limited
30 June 2021
Directors’ report
In addition to the acquisition of the Sirakourou tenement, the Company has completed a series of tenement acquisitions that have
increased the total landholding at Tabakorole to 830 km2. This is primarily a continuous landholding and includes a number of licences
contiguous to Tabakorole. The immediate priority with all of the Company’s newly acquired licences, is to collect multi-element soil
geochemistry datasets and to potentially follow up with ground magnetics, a survey technique that is working very well in this region to
define the structures and support targeting activities.
Exploration in Mali – Lakanfla
Results received from the Stage One 3,800m RC drilling program and passive seismic surveys at the Lakanfla Gold Project successfully
proved the existence of a karst, defined the size and shape of the karst and returned widespread low-grade gold mineralisation.
While the Company’s primary focus is currently on Tabakorole subsequent to the Stage One drilling, activities at Lakanfla have included:
•
•
•
Refinement of the karst model and reviewing the results of multi-element soil geochemistry to ascertain whether the anomalous
results from the Stage One drilling record a primary bedrock or transported gold signature
Assessing existing near-surface gold mineralisation that has already been defined by historical drilling within the central granite
intrusion and determining whether follow up drilling is an option
Reviewing the results of soil sampling results from outside of the karst target and the granite intrusion where gold assays returned
peak values of 39.1 g/t gold and 4.2 g/t gold in soil.
Chilalo Graphite Project
Marvel’s proposed spin-out of its Chilalo Graphite Project and IPO of Evolution is at an advanced stage, pending final in-country
regulatory approvals. A share exchange agreement has been executed under which the Company agrees to sell the Chilalo Project to
Evolution in exchange for $10 million of Evolution shares (expected to represent approximately 31% of Evolution on a post-ASX listing,
undiluted basis) and cash of $2 million (or, if PL 11034/2017 is not reinstated on or before 31 December 2021, then $1 million), subject
to satisfaction of the pre-conditions.
9
Marvel Gold Limited
30 June 2021
Directors’ report
Information on Directors
Mr Stephen Dennis – Non-Executive Chairman – appointed 4 March 2016
Experience and expertise
Stephen Dennis has been actively involved in the mining industry for over 30 years. He has
held senior management positions at a number of Australian resources companies and
was previously the Chief Executive Officer and Managing Director of CBH Resources
Limited, the Australian subsidiary of Toho Zinc Co., Ltd of Japan.
Other current directorships
Former directorships in the last 3 years
Special responsibilities
Interests in shares and options
Heron Resources Limited (Non-Executive Chairman)
Rox Resources Limited (Non-Executive Chairman)
Burgundy Diamond Mines Ltd. (Non-Executive Chairman)
Kalium Lakes Limited (Non-Executive Chairman)
LeadFx Inc. (Non-Executive Chairman)
Chairman
Ordinary shares
Unlisted Options
4,047,598
2,300,000
Mr Andrew Pardey – Non-Executive Director – appointed 17 June 2020
Experience and expertise
Mr. Pardey has over 30 years in the mining industry with experience in exploration, project
development, construction and operations. Between February 2015 and December 2019,
he was Chief Executive Officer of Centamin Plc which holds the Tier 1 Sukari Gold Mine.
Andrew also served as General Manager Operations at Sukari before his previous
appointment as Chief Operating Officer in May 2012. He was a major driving force in
bringing Sukari into production, having joined during the mine’s construction phase, and
was instrumental in the successful transition of the operation through construction and
into production.
Other current directorships
Former directorships in the last 3 years
Special responsibilities
Interests in shares and options
Andrew holds a BSc in Geology and has also previously held senior positions in Africa,
Australia and other parts of the world including with Guinor Gold Corporation and Ashanti
Goldfields, now AngloGold Ashanti.
Predictive Discovery Limited (Non-Executive Director)
Tanga Resources Limited (Non-Executive Chairman)
Centamin PLC
N/A
Ordinary shares
Unlisted options
2,000,000
4,500,000
Mr Philip Hoskins – Managing Director – appointed 2 February 2016
Experience and expertise
Other current directorships
Former directorships in the last 3 years
Special responsibilities
Interests in shares and options
Mr Hoskins commenced his career at a large international accounting firm and has since
gained corporate experience with both Australian and international listed companies. He
is a senior executive with over 15 years of broad finance and commercial experience across
resources exploration, project development and production as well as large-scale property
developments requiring debt and equity financing. He was the Chief Financial Officer of
IMX Resources Limited from 2011 to 2014 and then Managing Director from 2014 to
2016. Mr Hoskins became the Managing Director of Graphex Mining Limited in June 2016
which became Marvel Gold Limited in June 2020.
Nil
N/A
Nil
Ordinary shares
Unlisted options
7,461,328
10,250,000
10
Directors’ report
Marvel Gold Limited
30 June 2021
Mr Chris van Wijk – Executive Director - appointed 17 June 2020
Experience and expertise
Mr Van Wijk is an experienced geologist, who specialises in project evaluation and project
generation. Chris brings to his role in Marvel a wealth of relevant experience including
base metal and gold exploration in Africa, Europe, the Americas and Australia as well as
joint venture management and project evaluation for major mining companies including
BHP, IAMGOLD, First Quantum Minerals and Fortescue Metals Group. Chris has managed
various successful exploration projects including the Scoping Study at Mont Nimba in
Guinea for BHP Billiton and the resource drilling at First Quantum’s Sentinel Project in
Zambia.
Tanga Resources Limited (Non-Executive Director)
Indiana Resources Limited (Managing Director)
Nil
Ordinary shares
Unlisted options
412,500
8,500,000
Other current directorships
Former directorships in the last 3 years
Special responsibilities
Interests in shares and options
Information on Company Secretary
Stuart McKenzie LLB, Bec. (Hons.), AGIA, ACIS – Company secretary
Experience and expertise
Mr McKenzie has over 30 years of experience in senior commercial roles. He was
previously Company Secretary with Anvil Mining Limited for six years, prior to which he
held senior positions with Ok Tedi Mining Limited, Ernst and Young and HSBC. Mr
McKenzie is the current company secretary of Matador Mining Limited, Lotus Resources
Limited, Superior Lake Resources Limited and Tanga Resources Limited.
Meetings of Directors
The number of meetings of the Company’s Directors held during the year ended 30 June 2021 and the number of meetings attended
by each Director is shown below:
S Dennis
A Pardey
P Hoskins
C van Wijk
Meetings of Directors
Held
10
10
10
10
Attended
10
10
10
10
As at the date of this report, there is no audit and risk committee or remuneration committee. The Board has determined that given
the size and composition of the Board and the scale of the Company’s activities, the functions of those committees ought to be
performed by the Board. For further information, please see the Company’s Corporate Governance Statement.
11
Marvel Gold Limited
30 June 2021
Directors’ report
Remuneration report (audited)
(a) Key management personnel covered in this report
This Remuneration Report sets out information relating to the remuneration of the key management personnel (KMP) of the Group
during the 2021 financial year. KMP are defined as those persons having authority and responsibility for planning, directing and
controlling the activities of the Company and Group, directly or indirectly. The KMP for the 2021 financial year are as set out below.
Non-Executive and Executive Directors
Name
S Dennis
A Pardey
P Hoskins
C van Wijk
Other KMP
Name
S McKenzie
C Knee
Position
Non-Executive Chairman
Non-Executive Director
Managing Director
Executive Director
Position
Commercial Manager and Company Secretary
Chief Financial Officer
(b) Statutory key performance measures
The Company aims to align executive remuneration to the strategic and business objectives and the creation of shareholder wealth.
The table below shows measures of the Group’s financial performance over the last five years as required by the Corporations Act
2001. These are not necessarily consistent with the measures used in determining the variable amounts of remuneration to be awarded
to KMPs, as outlined in (c) below. As a consequence, there may not always be a direct correlation between the statutory key
performance measures and the variable remuneration awarded.
Company performance
metric
Company share price
(ASX:MVL)
Company loss after tax
Company exploration
expense
2021
$0.052
2020
$0.039
2019
$0.156
2018
$0.149
2017
$0.240
8,997,070
7,486,841
8,049,751
4,106,569
4,635,240
6,276,412
3,461,198
4,231,952
951,705
1,389,808
(c) Remuneration policy and link to performance
The Group’s approach to remuneration is designed to attract and retain key executive talent, recognise the individual contributions of
the Group’s people, and motivate them to achieve strong performance aligned to the business strategy, whilst discouraging excessive
risk taking.
In summary, the Group’s approach to remuneration is to:
•
•
•
•
•
•
Provide remuneration that is competitive and consistent with market standards;
Align remuneration with the Company’s overall strategy and shareholder interests;
Reward superior performance within an objective and measurable incentive framework;
Ensure that executives understand the link between individual reward and Group and individual performance;
Be at a level acceptable to shareholders; and
Apply sufficiently flexible remuneration practices that enable the Company to respond to changing circumstances.
Remuneration policy for the year ended 30 June 2021
All Executive KMP remuneration was comprised of the following:
•
Fixed (base remuneration):
o
Contractual salary; and
12
Marvel Gold Limited
30 June 2021
Directors’ report
o
Legislated superannuation guarantee (9.5% of gross salary for 2021).
•
At risk component:
o
Share Based Payments (SBP) – described further in the table below.
Element
Base (fixed)
remuneration
SBP
Purpose
Provide a market
competitive salary,
including
superannuation.
Alignment with growth
in long-term shareholder
value over a three year
period.
Performance metrics
Nil
Nil – exercise prices of $0.035, $0.06
and $0.10.
Potential value
Within industry averages for the
position’s required skill and
experience. Third party advice is
sought periodically to ensure these
are at or close to market median.
Managing Director and other KMP
up to 65% of base remuneration
based on a Black Scholes valuation.
The Company considers performance-based remuneration to be a critical component of the overall remuneration framework, by
providing a remuneration structure that rewards employees for achieving goals that are aligned to the Group’s strategy and objectives.
For the 2021 financial year SBPs were issued under the Company’s Option Plan (Option Plan), however for the 2022 financial year the
Company will roll out an STI/LTI program with a comprehensive set of KPI’s.
Share Based Payments
The KMP remuneration structure seeks to drive performance and align with shareholder interests through LTI equity-based
remuneration. This involves the issue of options to KMP as SBPs. Subject to performance against agreed exercise prices, SBPs expire
three years from the grant date. Each vested SBP option represents a right to be issued one Marvel share. KMPs have three exercise
price hurdles as outlined below that are to be achieved within three years when the options expire.
The exercise prices for SBPs granted relating to KPIs during the 30 June 2021 performance period were:
•
•
•
$0.035
$0.06; and
$0.10.
The share price hurdles were set by reference to the capital raising completed immediately prior to the issue of the SBP options. The
capital raise was completed at a $0.02 share price, therefore the exercise prices above represented a 75%, 200% and a 400% premium
respectively to the capital raising price.
No KMP exercised any of the above mentioned options during the period.
Change in remuneration policy
Following the change in strategic direction and acknowledging that the Company’s performance is best assessed by share price
performance (as compared to specific known measurable milestones as could be determined previously) the Company implemented a
once off grant of options to KMP during the 2021 financial year. This grant replaces the previously distinctive STI and LTIs and
incentivises KMP’s by aligning their interests with the interests with those of shareholders. Subsequent to year end, the Company
issued 2022 SBP to KMP in the form of short term incentives (STIs) and long term incentives (LTIs). The STI had a number of key
performance hurdles including exploration success. The LTI key hurdles were based on share price growth and share price performance
against a peer group of companies.
13
Directors’ report
(d) Contractual arrangements with executive KMPs
Component
Fixed remuneration
Managing Director
$260,000 plus superannuation.
Executive Director –
Exploration
$120,000 plus
superannuation.
Contract duration
Ongoing contract
Services agreement
Marvel Gold Limited
30 June 2021
Other KMP - Senior executives
$200,000 to $215,000 plus
superannuation. All other KMPs
are subcontracted to external
companies to reduce Company
costs. See shared services
recovery column in the KMP
remuneration table below.
Ongoing contract
Notice by individual
Notice by Company
Change of control bonus
payment
3 months
6 months
3 months
3 months
3 months
3 months
12 months fixed remuneration.
In the event of a change of
control, any unvested options
will immediately vest on the
date that the change of control
event occurs, so as to permit
the option holder to exercise
such options.
6 months fixed
remuneration. In the
event of a change of
control, any unvested
options will immediately
vest on the date that the
change of control event
occurs, so as to permit
the option holder to
exercise such options.
6 months fixed remuneration.
In the event of a change of
control, any unvested options
will immediately vest on the
date that the change of control
event occurs, so as to permit
the option holder to exercise
such options.
Termination of employment
(with or without cause)
Unvested SBP options to be automatically forfeited unless the Board determines in its
discretion to vest some or all of the options.
(e) Non-Executive Director arrangements
Non-Executive Directors receive an annual fee, paid quarterly. No compensation other than the annual fee (including superannuation)
was paid to Directors in 2021. As the Company is not of sufficient size to have separate audit and remuneration committees, no
additional fees are paid in connection with the provision of these services.
Non-Executive Director fees are reviewed annually by the Board taking into account comparable roles and market data. Directors’ fees
will next be reviewed in July 2022, with no changes made in the 2021 financial year. Annual Directors’ Fees were approved by
shareholders on 25 February 2016 with a maximum pool of $250,000 per year available for Non-Executive Directors. Fees for the
financial year are as follows:
• Non-Executive Chairman – $60,000 plus superannuation
• Non-Executive Directors – $40,000 plus superannuation
All Non-Executive Directors enter into a service agreement with the Company in the form of a letter of appointment which summarises
the key terms and conditions of the Non-Executive Director’s appointment.
(f) Remuneration expenses for key management personnel
The following table shows details of the remuneration expense recognised for the Group’s KMP for the current financial period
measured in accordance with the requirements of the accounting standards:
14
Marvel Gold Limited
30 June 2021
Directors’ report
2021 financial year
Name
Non-executive
directors
S Dennis
A Pardey
Executive
directors
P Hoskins
C van Wijk
Other KMP
S McKenzie
C Knee
Total executive
and other KMP
Total NED
remuneration
Total KMP
remuneration
expensed
Fixed remuneration
Variable
Cash salary
Annual
leave
Post-
employment
benefits
STI / LTI share
based
payment2
Termination
Performance
based
remuneration
%
Shared
services
recovery
Total
60,000
40,000
260,000
120,000
210,425
210,000
-
-
5,700
-
37,798
73,952
83,267
-
24,346
-
21,694
-
25,000
19,000
168,446
143,795
51,766
51,766
800,425
107,613
65,694
415,774
100,000
-
5,700
111,750
-
-
-
-
(186,059)1
(175,330)1
(361,389)
-
-
-
-
-
-
-
-
-
103,498
113,952
533,407
263,795
125,478
105,436
1,028,116
217,449
-
-
-
-
-
-
-
-
-
900,425
107,613
71,394
527,524
-
(361,389)
1,245,566
1 The Group is a party to a Shared Services Agreement with Matador Mining Limited, Lotus Resources Limited, Tanga Resources Limited,
Cradle Resources Limited and Superior Lake Resources Limited under which the Company shared certain costs. During the year,
Executives Mr McKenzie and Mr Knee spent a portion of their time working for the above-mentioned companies, with this time
recharged by the Group on an at cost basis. This is included above as the Shared Services Recovery.
2 Equity settled share based payment.
15
Directors’ report
2020 financial year
Fixed remuneration
Variable
Name
Cash salary
Annual
leave
Post-
employment
benefits
STI / LTI
share based
payment
Termination
Shared
services
recovery
Non-executive directors
S Dennis
A Pardey3
G Davey1
D Saint Don2
Executive directors
P Hoskins6
C van Wijk3
Other KMP
S McKenzie
C Knee
Total executive and
other KMP
Total NED remuneration
Total KMP
remuneration expensed
60,000
1,444
10,000
38,590
310,000
-
210,425
200,000
720,425
110,034
-
-
-
-
20,551
-
10,138
4,777
35,466
-
5,700
-
950
-
21,003
-
25,000
19,000
65,003
6,650
-
-
-
-
(53,908)4
-
(43,496)4
(38,269)4
(135,673)
-
830,459
35,466
71,653
(135,673)
-
-
-
-
-
-
-
-
-
-
-
Marvel Gold Limited
30 June 2021
Total
65,700
1,444
10,950
38,590
297,646
-
41,178
33,729
-
-
-
-
-
-
(160,889)5
(151,779)5
(312,668)
-
372,553
116,684
(312,668)
489,237
1 Mr Davey resigned 25 September 2019
2 Mr Saint Don resigned 17 June 2020.
3 Mr Andrew Pardey and Mr Chris van Wijk were appointed 17 June 2020.
4 At the end of each reporting period the Company applies a probability to options with non-market based vesting criteria to reflect the likely number
of options that will vest at the end of the vesting period taking into consideration all the vesting criteria. As outlined in the Directors Report, the Company
has changed strategic direction which will likely result in all previous options lapsing unvested. This is a result of previous vesting criteria being based
on progression and financing of the Chilalo Graphite Project. This results in a reversal of amounts previously expensed.
5 The Group is a party to a shared services agreement with Matador Mining Limited (Matador) and Superior Lake Resources Limited (Superior) under
which the Company, Matador and Superior shared certain costs. During the year, Mr McKenzie and Mr Knee spent a portion of their time working for
Matador and Superior, with this time recharged by the Group on an at cost basis. This is included in the table above as the shared services recovery.
6 Effective 1 May 2020 Mr Hoskins cash salary has been reduced to $260,000.
(g) Other KMP transactions
Mr. Knee is Director of Superior Lake Resources Limited an ASX listed Company that has a Shared Services Agreement with the Company.
Under this arrangement the Company provides company secretarial, accounting and administration services. Payments made under
these arrangements for the year are set out below.
Related party transactions
Receipts from Superior Lake Resources Limited (ex-GST)
Amounts outstanding at 30 June
(h) Additional statutory information
Relative proportions of fixed and variable remuneration expense
2021
$
2020
$
102,955
278,200
5,574
-
The following table shows the relative proportions of remuneration that are linked to performance and those that are fixed, based on
the amounts disclosed as statutory remuneration expense above:
16
Marvel Gold Limited
30 June 2021
Directors’ report
Name
Managing Director
P Hoskins
Other KMP
C van Wijk
S McKenzie
C Knee
2021
2020
Fixed
remuneration
At risk
remuneration -
STI / LTI
Fixed
remuneration
At risk
remuneration -
STI / LTI
63%
43%
82%
81%
27%
57%
18%
19%
100%
-
100%
100%
-
-
-
-
Performance based remuneration granted and forfeited
The remuneration of KMPs was approved by the Board in August 2021. As at 30 June 2021 KMP had 3,775,928 options with
performance criteria relating to the development of the Chilalo Graphite Project. On 30 June 2021 the Board resolved that the
performance criteria for these options was no longer capable of being satisfied and also inconsistent with the Company’s longer term
gold strategy. The options were therefore lapsed.
Options
The terms and conditions of each grant of options affecting remuneration in the current or a future reporting period are as follows:
Grant date
Vesting
date
Expiry
date
Exercise
price
20-Jul-20
20-Jul-20
20-Jul-20
27-Aug-21
27-Aug-21
29-Jul-20
29-Jul-20
29-Jul-20
1-Jul-22
1-Jul-22
29-Jul-24
29-Jul-24
29-Jul-24
27-Aug-24
27-Aug-26
$0.035
$0.060
$0.100
$0.000
$0.000
Value per
option at
grant date
$0.0178
$0.0160
$0.0142
$0.0560
$0.0560
Performance
achieved
% Vested
N/A
N/A
N/A
-
-
100%
100%
100%
-
-
17
Directors’ report
Marvel Gold Limited
30 June 2021
The number of options over ordinary shares in the Company provided as remuneration to KMP is shown below. The options carry no dividend or voting rights. When exercisable, each option is convertible
into one ordinary share of the Company.
Reconciliation of
options
2021
Name and Grant
dates
S Dennis
20-Jul-20
20-Jul-20
20-Jul-20
A Pardey
20-Jul-20
20-Jul-20
20-Jul-20
P Hoskins
21-Nov-17
26-Nov-18
26-Nov-18
14-Nov-19
14-Nov-19
14-Nov-19
20-Jul-20
20-Jul-20
20-Jul-20
C van Wijk
20-Jul-20
20-Jul-20
20-Jul-20
S McKenzie
27-Sept-17
13-Dec-18
13-Dec-18
13-Dec-18
24-Jul-19
24-Jul-19
20-Jul-20
Balance at the start of the period
Vested
Unvested
Granted as
compensation
Exercise price
-
-
-
-
-
-
-
105,455
-
130,093
-
-
-
-
-
-
-
-
-
35,454
-
42,545
-
-
-
-
-
-
-
-
-
596,261
-
580,000
-
549,647
755,764
-
-
-
-
-
-
400,934
-
390,000
-
83,091
507,779
-
1,150,000
575,000
575,000
2,250,000
1,125,000
1,125,000
-
-
-
-
-
-
5,125,000
2,562,500
2,562,500
4,375,000
2,187,500
2,187,500
-
-
-
-
-
-
1,575,000
$0.035
$0.060
$0.100
$0.035
$0.060
$0.100
$0.035
$0.060
$0.100
$0.035
Vested
Forfeited / expired
Balance at end of period
Exercised
-
-
-
-
-
-
-
(105,455)
-
(130,093)
-
-
-
-
-
-
-
-
-
(35,454)
-
(42,545)
-
-
-
Number
%
Vested
Unvested
-
-
-
-
-
-
(596,261)
-
(580,000)
-
(549,647)
(755,764)
-
-
-
-
-
-
(400,934)
(390,000)
-
(83,091)
(507,779)
-
-
-
-
-
-
-
100
-
100
-
100
100
-
-
-
-
-
-
100
100
100
-
100
100
-
1,150,000
575,000
575,000
2,250,000
1,125,000
1,125,000
-
-
-
-
-
-
5,125,000
2,562,500
2,562,500
4,375,000
2,187,500
2,187,500
-
-
-
-
-
1,575,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
%
100
100
100
100
100
100
-
-
-
-
-
-
100
100
100
100
100
100
-
-
-
-
-
100
Number
1,150,000
575,000
575,000
2,250,000
1,125,000
1,125,000
-
-
-
-
-
-
5,125,000
2,562,500
2,562,500
4,375,000
2,187,500
2,187,500
-
-
-
-
-
1,575,000
18
Directors’ report
Reconciliation of
options
2021
Name and Grant
dates
Balance at the start of the period
Vested
Unvested
Granted as
compensation
Exercise price
20-Jul-20
20-Jul-20
-
-
C Knee
27-Sept-17
13-Dec-18
13-Dec-18
13-Dec-18
24-Jul-19
24-Jul-19
20-Jul-20
20-Jul-20
20-Jul-20
-
32,727
-
38,130
-
-
-
-
-
-
-
349,532
-
360,000
-
472,353
77,294
-
-
-
558,462
558,462
-
-
-
-
-
-
1,575,000
558,462
558,462
$0.060
$0.100
$0.035
$0.060
$0.100
Number
558,462
558,462
-
-
-
-
-
1,575,000
558,462
558,462
Vested
Forfeited / expired
Balance at end of period
%
100
100
-
-
-
-
-
100
100
100
Exercised
-
-
-
(32,727)
-
(38,130)
-
-
-
-
-
Number
-
-
(349,532)
(360,000)
-
(472,353)
(77,294)
-
-
-
%
-
-
100
100
-
100
100
-
-
-
Vested
558,462
558,462
-
-
-
-
-
1,575,000
558,462
558,462
Unvested
-
-
-
-
-
-
-
-
-
-
Marvel Gold Limited
30 June 2021
19
Directors’ report
Marvel Gold Limited
30 June 2021
Shareholdings
Name
S Dennis
P Hoskins
A Pardey
C van Wijk
S McKenzie
C Knee
Balance at start of
period
Received during
the period on the
exercise of options
Other changes
during the period1
Balance at end of
the period
773,799
877,728
-
-
335,971
226,822
-
235,548
-
-
77,999
70,857
3,273,799
6,348,052
2,000,000
412,500
903,048
155,965
4,047,598
7,461,328
2,000,000
412,500
1,317,018
453,644
1 Other changes during the period was the participation of KMP in capital raisings or on-market purchases. These were not received as
remuneration.
None of the shares in the above table are held nominally by the Directors or by any of the other KMP.
Loans to KMP
There were no loans made to Directors or KMP.
Reliance on external remuneration consultants
In performing its role, the Board may seek advice from independent remuneration consultants where appropriate, to make
recommendations as to the nature and amount of remuneration payable to KMPs. Remuneration consultants are engaged by, and
report directly to the Board. In 2021, the Board did not engage an independent remuneration consultant to review the Company’s
remuneration structure. Having considered publicly available information on the remuneration practices of peer group companies and,
the Board believes that current remuneration arrangements are appropriate.
Shares under option
Unissued ordinary shares
Shares under option held by Directors and KMP that formed part of remuneration at the date of this report are as follows:
Date options granted
Expiry date
Exercise price
Number under option
20-Jul-20
20-Jul-20
20-Jul-20
27-Aug-21
27-Aug-21
20-Jul-23
20-Jul-23
20-Jul-23
31-Jul-24
31-Jul-26
$0.035
$0.06
$0.10
Nil
Nil
16,050,000
8,025,000
8,025,000
1,116,924
1,116,924
No option holder has any right under the options to participate in any other share issue of the Company or any other entity.
Voting of shareholders at last year’s Annual General Meeting
The Group received 99.1% votes for its remuneration report for the 2020 financial year. The Company did not receive any specific
feedback at the AGM or throughout the year on its remuneration practices.
END OF REMUNERATION REPORT (audited)
20
Marvel Gold Limited
30 June 2021
Directors’ report
Insurance of officers and indemnities
Marvel’s constitution allows the Company to indemnify each Director or officer of the Company, to the extent permitted by law, against
liability incurred in or arising out of the conduct of the business of the Company or the discharge of the duties of the Directors or
officers.
The Group has granted indemnities under deeds of indemnity with its current Directors and officers. In conformity with the constitution,
each deed of indemnity indemnifies the relevant Director or officer to the full extent permitted by law. Where applicable, each deed of
indemnity indemnifies the relevant Director, officer or employee to the fullest extent permitted by law for liabilities incurred whilst acting
as a director, officer or employee of the Company, any of its related bodies corporate and any outside entity, where such an office is held
at the request of the Company.
The Group has a policy that it will, as a general rule, support and hold harmless an employee who, while acting in good faith, incurs
personal liability to others as a result of working for the Group.
No indemnity has been granted to an auditor of the Group in their capacity as auditors of the Group.
During the period, the Group paid insurance premiums (inclusive of fees and charges) in respect of directors’ and officers’ liability
insurance of $200,300 (2020: $127,650) (ex goods and services tax (GST)).
The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be brought against officers
in their capacity as officers of entities in the Group, and any other payments arising from liabilities incurred by the officers in connection
with such proceedings. This does not include such liabilities that arise from conduct involving a wilful breach of duty by the officers or
the improper use by the officers of their position or of information to gain advantage for themselves or someone else or to cause
detriment to the Company. It is not possible to apportion the premium between amounts relating to the insurance against legal costs
and those relating to other liabilities.
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.
Non-audit services
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.
Details of the amounts paid or payable to the auditor (BDO Audit (WA) Pty Ltd) for audit and non-audit services provided during the
period are set out in note 25.
The Board has considered the position and is satisfied that the provision of the non-audit services is compatible with the general standard
of independence for auditors imposed by the Corporations Act 2001. The Directors are satisfied that the provision of non-audit services
by the auditor did not compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons:
•
All non-audit services have been reviewed by the Board to ensure they do not impact the impartiality and objectivity of the auditor;
and
• None of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for
Professional Accountants.
21
Marvel Gold Limited
30 June 2021
Directors’ report
Auditor independence
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 26.
Annual Statement of Ore Reserves and Mineral Resources
Chilalo Project: Ore Reserve and Mineral Resource Estimate
Domain
Classification
Zone
Million Tonnes (Mt)
TGC (%)
High-Grade
Total Ore Reserve
Probable Reserve
Probable Reserve
High-Grade
Indicated
Inferred
Total High-Grade
Indicated + Inferred
Low-Grade
Inferred
Main
Main
Main
North East
All
Main
North East
All
All
Main
North East
All
High-Grade +
Low-Grade
Indicated + Inferred
All
5.3
5.3
9.2
1.0
10.3
7.4
2.3
9.8
20.1
37.8
9.5
47.3
67.3
10.9
10.9
10.6
9.5
10.5
9.5
8.8
9.3
9.9
3.4
4.1
3.5
5.4
Contained Graphite
(Kt)
576
576
982
100
1,082
704
205
908
1,991
1,282
394
1,677
3,667
Mineral Resources are inclusive of Ore Reserves. The Mineral Resource was estimated within constraining wireframe solids using a core high-grade
domain defined above a nominal 5% TGC cut-off within a surrounding low-grade zone defined above a nominal 2% TGC cut-off. The resource is
quoted from all classified blocks above a lower cut-off of 2% TGC within these wireframe solids. Differences may occur due to rounding.
Tabakorole Gold Project: Mineral Resource Estimate
Indicated
Inferred
Total
Mt
1.0
6.3
7.3
Au (g/t)
koz (Au)
1.3
1.2
1.2
40
250
290
Mt
1.5
15.1
16.6
Au (g/t)
koz (Au)
1.3
1.2
1.2
60
560
620
Mt
2.4
21.5
23.9
Au (g/t)
koz (Au)
1.3
1.2
1.2
100
810
910
Oxide
Fresh
Total
Reported at a cut-off grade of 0.6 g/t Au, differences may occur due to rounding.
Competent persons’ statements
Mineral Resources – Tabakorole Gold Project
The information in the annual report report that relates to the Mineral Resources is based on information compiled by Mr Brian Wolfe,
Principal Consultant of International Resource Solutions Pty Ltd which provides consulting services to the Company. Mr. Wolfe is a
Member of the Australian Institute of Geoscientists and has sufficient experience which is relevant to the style of mineralisation and
types of deposits under consideration and to the activity which has been undertaken 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 (JORC Code). An entity
associated with Mr Wolfe has a minor shareholding in the company. Mr. Wolfe consents to the inclusion in the presentation of the
matters based on his information in the form and context in which it appears.
The information in this announcement that relates to exploration results at Tabakorole is based on information compiled by the Company
and reviewed by Mr Chris van Wijk, in his capacity as an Executive Director - Exploration of Marvel Gold Limited. Mr. van Wijk is a Member
of the AUSIMM and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration
and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 JORC Code. Mr. van Wijk consents
to the inclusion in the report of the matters based upon the information in the form and context in which it appears
22
Marvel Gold Limited 30 June 2021 Directors’ report 23 Competent Person’s Statement - Chilalo Ore Reserve Estimate The information in this Prospectus that relates to the Chilalo Ore Reserve Estimate is based on information compiled by Mr Anoop Antu Kachappilly and reviewed by Mr Karl van Olden, both employees of CSA Global at the time the Chilalo Ore Reserve Estimate was made. Mr van Olden takes overall responsibility for the information as Competent Person. Mr van Olden is a Fellow of the Australasian Institute of Mining and Metallurgy and has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration, and to the activity he is undertaking, to qualify as a Competent Person as defined in the JORC Code. The Competent Person, Karl van Olden, has reviewed the Chilalo Ore Reserve Estimate and given permission for the publication of this information in the form and context in which it appears. Competent Person’s Statement - Chilalo Mineral Resource Estimate The information in this Prospectus that relates to the Chilalo Mineral Resource Estimate is based on information compiled by Mr Grant Louw, under the direction and supervision of Dr Andrew Scogings. Mr Louw was a full-time employee of CSA Global and Dr Scogings was an Associate of CSA Global at the time the Chilalo Mineral Resource Estimate was made. Dr Scogings takes overall responsibility for Chilalo Mineral Resource Estimate. Dr Scogings is a Member of both the Australian Institute of Geoscientists and Australasian Institute of Mining and Metallurgy and has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration, and to the activity he is undertaking, to qualify as a Competent Person as defined in the JORC Code. Dr Scogings consents to the inclusion of such information in this Prospectus in the form and context in which it appears. Ore Reserves and Mineral Resources Governance Marvel reviews its Mineral Resource and Ore Reserve estimates on an annual basis. The Annual Statement of Mineral Resources and Ore Reserves is prepared in accordance with the JORC Code 2012 and the ASX Listing Rules. Competent Persons named by the Company are members of the Australian Institute of Mining and Metallurgy and/or the Australian Institute of Geoscientists and qualify as Competent Persons as defined under the JORC Code 2012. The Company engages external consultants and Competent Persons to prepare and calculate estimates of its Mineral Resources and Ore Reserves. These estimates and underlying assumptions are reviewed by the Directors and management for reasonableness and accuracy. The results of the Mineral Resource and Ore Reserve estimates are then reported in accordance with the JORC Code 2012 and the ASX Listing Rules. Where material changes occur to a project during the period, including the project’s size, title, exploration results or other technical information, previous resource estimates and market disclosures are reviewed for completeness. The Company reviews its Mineral Resources and Ore Reserves as at 30 June each year and where a material change has occurred in the assumptions or data used in previously reported Mineral Resources and Ore Reserves, a revised estimate will be prepared as part of the annual review process. This report is made in accordance with a resolution of the Directors. Stephen Dennis Chairman of the Board PERTH On the 30th day of September 2021
Corporate governance statement
Marvel and the Board are committed to achieving and demonstrating the highest standards of corporate governance. Marvel has
reviewed its corporate governance practices against the Corporate Governance Principles and Recommendations (3rd edition) published
by the ASX Corporate Governance Council.
The 2021 corporate governance statement is dated as at 30 June 2021 and reflects the corporate governance practices in place
throughout the 2021 financial year. The 2021 corporate governance statement was approved by the Board on 30 September 2021. A
description of the Group's current corporate governance practices is set out in the Group's corporate governance statement which can
be viewed on the Company’s website at www.marvel gold.com.au/corporate-governance/.
Marvel Gold Limited
30 June 2021
24
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
DECLARATION OF INDEPENDENCE BY DEAN JUST TO THE DIRECTORS OF MARVEL GOLD LIMITED
As lead auditor of Marvel Gold Limited for the year ended 30 June 2021, I declare that, to the best of
my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Marvel Gold Limited and the entities it controlled during the period.
Dean Just
Director
BDO Audit (WA) Pty Ltd
Perth, 30 September 2021
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.
Consolidated statement of profit or loss and other comprehensive income
for the period ended 30 June 2021
Marvel Gold Limited
30 June 2021
Continuing operations
Government incentives, rebates and grants
Other income
Fair value gain on loan notes
Exploration and evaluation expenses
Corporate and administration expenses
Business development and marketing
Finance costs
Employee benefits
Share based payments
Other expenses
Loss before income tax
Income tax benefit
Loss for the period
Other comprehensive income
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign operations
Total comprehensive loss for the period
Net loss is attributable to:
Owners of Marvel Gold Limited
Total comprehensive loss is attributable to:
Owners of Marvel Gold Limited
Notes
30 June 2021
$
30 June 2020
$
1(d)
1(a)
12
1(c)
1(b)
14
3
531,318
800,568
1,307,349
(6,276,412)
(1,285,607)
(326,557)
(2,068,654)
(1,075,132)
(593,258)
(10,686)
(8,997,070)
-
(8,997,070)
436,948
450,103
-
(3,461,198)
(1,238,772)
(698,332)
(1,949,048)
(1,176,126)
149,584
-
(7,486,841)
-
(7,486,841)
111,684
17,300
(8,885,386)
(7,469,541)
(8,997,070)
(7,486,841)
(8,885,386)
(7,469,541)
Earnings per share attributable to owners of the Company
Basis EPS
Diluted EPS
26
26
$
(0.02)
(0.02)
$
(0.07)
(0.07)
The above consolidated statement of profit or loss and other comprehensive income is to be read in conjunction with the notes to the
financial statements.
26
Consolidated statement of financial position
as at 30 June 2021
Marvel Gold Limited
30 June 2021
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Sub-total current assets
Assets held for sale
Total current assets
Non-current assets
Property, plant and equipment
Exploration and evaluation
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Shareholder funds received in advance
Provisions
Loans and borrowings
Sub-total current liabilities
Liabilities directly associated with assets held for sale
Total current liabilities
Non-current liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets / (liabilities)
EQUITY
Share capital
Reserves
Retained earnings
Total equity/(deficiency)
Notes
30 June 2021
$
30 June 2020
$
4
5
8
6
7
9
10
11
12
10
13
14
15
1,506,958
650,914
2,157,872
5,000,000
7,157,872
304,633
142,900
447,533
-
447,533
383,728
2,657,685
3,041,412
10,199,284
69,072
5,000,000
5,069,072
5,516,605
(1,664,043)
-
(68,160)
-
(1,732,203)
(8,730,035)
(437,200)
(35,000)
(198,328)
(8,748,377)
(9,418,905)
-
(10,462,238)
(9,418,905)
(102,858)
(102,858)
(73,641)
(73,641)
(10,565,095)
(9,492,546)
(365,811)
(3,975,941)
31,134,472
3,061,723
(34,562,006)
20,272,214
1,316,781
(25,564,936)
(365,811)
(3,975,941)
The above consolidated statement of financial position is to be read in conjunction with the notes to the financial statements.
27
Consolidated statement of changes in equity
for the period ended 30 June 2021
Balance at 30 June 2019
Total comprehensive loss for the period:
Loss for the period
Foreign exchange translation differences
Total comprehensive loss for the period
Transactions with owners in their capacity as owners:
Issue of shares net of transaction costs
Employee share schemes - value of employee services
Marvel Gold Limited
30 June 2021
Notes
Contributed
equity
Foreign currency
translation
reserve
Share based
payment reserve
Retained earnings
/ (Accumulated
losses)
$
$
$
$
16,832,075
(41,024)
1,490,089
(18,078,095)
Total equity
$
203,045
-
-
-
3,440,139
-
-
17,300
17,300
-
-
-
-
-
-
(149,584)
1,340,505
(7,486,841)
(7,486,841)
-
17,300
(7,486,841)
(7,469,541)
-
-
3,440,139
(149,584)
(25,564,936)
(3,975,941)
Balance at 30 June 2020
20,272,214
(23,724)
Total comprehensive loss for the period:
Loss for the period
Foreign exchange translation differences
Total comprehensive loss for the period
Transactions with owners in their capacity as owners:
Issue of shares net of transaction costs
Shares issued to acquire project
Shares issued to financier
Deferred share consideration for asset acquisition
7
Employee share schemes - value of employee services
-
-
-
-
111,684
111,684
10,012,258
700,000
150,000
-
-
-
-
-
-
-
-
-
-
-
-
-
1,040,000
593,258
Balance at 30 June 2021
31,134,472
87,960
2,973,763
(34,562,006)
The above consolidated statement of changes in equity should be read in conjunction with the notes to the financial statements.
28
(8,997,070)
(8,997,070)
-
111,684
(8,997,070)
(8,885,386)
-
-
-
-
-
10,012,258
700,000
150,000
1,040,000
593,258
(365,811)
Consolidated statement of cash flows
for the period ended 30 June 2021
Marvel Gold Limited
30 June 2021
Cash flows from operating activities
Payments to suppliers and employees
Payments for business development and marketing
Payment of exploration expenditure
Other income received
Receipts from government incentives, rebates and grants
Notes
30 June 2021
$
30 June 2020
$
(2,051,727)
(497,413)
(5,366,183)
-
531,318
(1,567,498)
(553,296)
(3,664,566)
1,702
436,948
Net cash (outflow) from operating activities
16
(7,384,005)
(5,346,710)
Cash flows from investing activities
Payments for the acquisition of tenements
Payment for property, plant and equipment
Net cash (outflow) from investing activities
Cash flows from financing activities
Proceeds from the issue of interim loan notes
Proceeds from the issue of ordinary shares
Shareholder funds received in advance
Share issue transaction costs
Net cash flow from financing activities
Net increase / (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Effects of exchange rate changes on cash and cash
equivalents
Cash and cash equivalents at the end of the period
4
(862,379)
(409,229)
(1,271,608)
-
11,067,048
-
(795,096)
10,271,952
1,616,339
-
(15,495)
(15,495)
1,358,576
3,452,409
35,000
(407,070)
4,438,915
(923,290)
304,633
1,264,791
(414,014)
1,506,958
(36,868)
304,633
The above consolidated statement of cash flows is to be read in conjunction with the notes to the financial statements.
29
Notes to the financial statements
1. Income and expenses
(a) Other income
Recharges
Foreign exchange gain
Other income
Marvel Gold Limited
30 June 2021
2021
$
423,184
376,318
1,066
800,568
2020
$
448,401
-
1,702
450,103
The Group was a party to a Shared Services Agreement with Matador Mining Limited, Lotus Resources Limited, Tanga Resources Limited,
Cradle Resources Limited and Superior Lake Resources Limited under which the Company shared certain costs. During the year, Executives
Mr McKenzie and Mr Knee spent a portion of their time working for the above-mentioned companies, with this time recharged by the
Group on an at cost basis.
(b) Employee benefits
Salaries
Salaries – Technical and exploration1
Superannuation
Changes in leave provisions
2021
$
1,265,156
(272,335)
73,890
8,420
1,075,132
2020
$
1,205,741
(145,589)
87,559
28,415
1,176,126
1Employee expenses above include all employee expenses of all departments in the Group. On the face of the Consolidated statement of
profit or loss and other comprehensive income, technical and exploration staff wages of $272,335 (2020: $145,589) are included as
exploration expenses. Employee benefits expense on the face of the statements therefore includes only corporate and administrative staff.
(c) Finance costs
Interest expense
Other finance costs
2021
$
2,009,154
59,500
2,068,654
2020
$
1,882,720
66,328
1,949,048
Other finance costs include a fee payable to Citi Bank Hong Kong for the provision of agency and trustee services. Refer to note 11 and 12
for a reconciliation of the Groups interest bearing liabilities.
(d) Government incentives and rebates
Research and development rebate
State government COVID cash boost grant
2021
$
446,924
84,394
531,318
2020
$
436,948
-
436,948
30
Marvel Gold Limited
30 June 2021
Notes to the financial statements
2. Segment information
Management has determined the operating segments based on the reports reviewed by the chief operating decision makers, being the
Directors. The Group’s reportable segments in accordance with AASB 8 are as follows:
•
•
•
Exploration – exploration carried out in Mali;
Exploration – exploration carried out in Tanzania; and
Corporate – management of corporate affairs.
The segments have applied the same accounting policies as applied to the Group and disclosed in note 28 of these financial statements.
30-Jun-21
Exploration
Tanzania
$
Exploration
Mali
$
Corporate
$
Exploration
Tanzania
$
Total
$
-
-
-
-
-
-
-
-
800,568
800,568
1,307,349
1,307,349
531,318
531,318
2,369,235
2,639,235
-
-
-
30-Jun-20
Corporate
$
Total
$
450,103
450,103
436,948
887,051
436,948
887,051
(21,347)
-
-
(266,354)
(166,173)
-
-
-
(6,010,057)
(132,685)
(73,226)
(2,068,654)
(593,258)
-
(2,304,550)
(94,573)
(2,068,654)
(593,258)
(6,276,411)
(2,603,408)
(25,788)
-
-
(3,461,198)
(2,377,165)
(29,431)
(1,949,048)
149,583
-
(680,845)
(55,219)
(1,949,048)
149,583
(3,461,198)
(3,058,010)
Other income
Fair value adjustment to
loan
Research and
development rebate
Total income
Depreciation and
amortisation
Finance costs
Share based payments
Exploration expenses
Other expenses
Segment loss
(453,874)
(6,142,742)
(2,400,455)
(8,997,070)
(5,864,151)
(1,622,690)
(7,486,841)
Segment assets
5,058,286
2,657,685
2,483,314
10,199,284
5,097,768
418,837
5,516,605
Segment liabilities
(78,500)
(4,774)
(11,721,822)
(11,805,095)
(27,466)
(9,465,080)
(9,492,546)
Additions to PP&E
-
367,119
45,212
412,331
-
10,299
10,299
3. Income tax expense
The Company has total carried forward tax losses of $17,152,826 (2020: $14,485,258) available for offset against future assessable income
of the Company. The net deferred tax asset attributable to the residual tax losses of $4,717,027 (2020: $3,983,446) has not been brought to
account until convincing evidence exists that assessable income will be earned of a nature and amount to enable such benefit to be realised.
4. Cash and cash equivalents
Cash at bank
Refer to note 17 for the Group’s exposure to interest rate and credit risk.
2021
$
2020
$
1,506,958
1,506,958
304,633
304,633
31
Notes to the financial statements
5. Trade and other receivables
Accounts receivable
Other receivables
Prepayments
Marvel Gold Limited
30 June 2021
2021
$
50,840
581,049
19,025
650,914
2020
$
94,803
30,917
17,180
142,900
Of the amount included in other receivables, $526,248 relates to IPO related costs the Company has paid on behalf of Evolution, which as
at 30 June 2021 was a wholly owned subsidiary of the Company. Upon successful spin out and IPO of Evolution, these amounts are
repayable in cash.
6. Property, plant and equipment
Non-current
At 30 June 2021
Cost
Accumulated depreciation
Net book amount
Period ended 30 June 2021
Opening net book amount
Additions
Disposal
Foreign exchange movement
Depreciation charge
Closing net book amount
Non-current
At 30 June 2020
Cost
Accumulated depreciation
Net book amount
Period ended 30 June 2020
Opening net book amount
Additions
Disposal
Foreign exchange movement
Depreciation charge
Closing net book amount
Plant and
equipment
Furniture and
fittings
$
$
Total
$
482,253
(162,583)
319,670
162,931
(98,873)
64,058
645,184
(261,456)
383,728
23,855
367,119
-
(9,065)
(62,240)
319,670
45,217
45,212
(9,098)
15,060
(32,333)
64,058
Plant and
equipment
Furniture and
fittings
$
$
125,157
(101,302)
23,855
48,139
-
-
3,325
(27,609)
23,855
120,855
(75,638)
45,217
64,741
10,299
(22,149)
19,936
(27,610)
45,217
69,072
412,331
(9,098)
5,995
(94,573)
383,728
Total
$
246,012
(176,940)
69,072
112,880
10,299
(22,149)
23,261
(55,219)
69,072
32
Notes to the financial statements
7. Exploration and evaluation expenditure
Marvel Gold Limited
30 June 2021
2021
$
2020
$
(a) Reconciliation of exploration and evaluation expenditure
Exploration and evaluation acquisition costs – Tanzania
5,000,000
5,000,000
Exploration and evaluation acquisition costs – Mali
Exploration and evaluation acquisition costs – Mali Oklo JV (see note 7(a) below)
Transferred to assets held for sale (see note 8)
Carrying amount at the end of the period
1,490,577
1,167,108
(5,000,000)
-
-
2,657,685
5,000,000
During 2021, the Company entered into a joint venture agreement on the Tabakorole and Lakanfla gold projects with Altus Strategies
Inc. The Company has various earn in exploration requirements (as announced on the ASX on 17 June 2020) to earn up to 80% interest
in the projects. A number of payments were required for the initial acquisition and as the Company progresses through the joint venture
stages including:
•
•
•
Stage 1 – On 4 August 2020, the Company paid US$450,000 in shares to acquire its initial joint venture interests.
Stage 2 – On 17 December 2020, the Company made a US$200,000 payment to progress to stage 2 of the Tabakorole JV.
Stage 3 – On 25 February 2021 the Company made a US$150,000 payment to progress to stage 3 of the Tabakorole JV.
The Company also entered into an option agreement with SOMICO over the Sakaar exploration permit to earn up to 80% dependent
on completion of three stage of various exploration targets. The Company reimbursed SOMICO $21,958 for permit application fees.
(a) Acquisition accounting – Oklo JV
During 2021, the Company also entered into a joint venture agreement with Oklo Resources Limited on its South Mali projects. The
Company completed this transaction on 4 January 2021 earning 80% in the joint venture by paying cash consideration of $200,000. The
Company anticipates issuing 20,000,000 shares to Oklo once certain tenements are renewed. The value of the share consideration has
been assessed at the company shares price at the date of completion being $0.052 per share or $1,040,000 in total. This amount has
been recorded in the share based payment reserve pending the final issue of shares.
A further 20,000,000 Company shares will be paid as consideration dependent on further milestones.
Tranche 1 - The Company will issue 10,000,000 Marvel shares to Oklo within 5 business days of Marvel announcing:
•
•
a JORC 2012 Mineral Resource at the Yanfolila or Kolondieba projects of any resource category of not less than 500,000 oz of
gold or gold equivalent at a minimum grade of 1 g/t; or
a JORC 2012 Mineral Resource at the Sirakourou, Solabougouda and Solabougouda South licences (now part of the
Tabakorole project) of any resource category of not less than 350,000 oz of gold or gold equivalent at a minimum grade of 1
g/t.
Tranche 2 - The Company will issue a further 10,000,000 Marvel shares to Oklo within 5 business days of Marvel announcing:
•
•
a JORC 2012 Mineral Resource at the Yanfolila and Kolondieba projects of any resource category of not less than 1,000,000
oz of gold or gold equivalent at a minimum grade of 1 g/t; or
a JORC 2012 Mineral Resource at the Sirakourou, Solabougouda and Solabougouda South (now part of the Tabakorole
project) licences of any resource category of not less than 700,000 oz of gold or gold equivalent estimated at a minimum
grade of 1 g/t.
The Tranche 1 and 2 shares have been assessed to have a zero probability of being issued at acquisition date. Given the acquired
tenements are at a very early stage with no confirmed JORC Resources, the Company has assessed that a zero probability is appropriate.
33
Notes to the financial statements
7. Exploration and evaluation expenditure (continued)
(a) Acquisition accounting – Oklo JV (continued)
The fair value of assets and liabilities recognised as a result of the acquisition are outlined below:
Marvel Gold Limited
30 June 2021
Cash and cash equivalents
Trade and other receivables
Exploration and evaluation asset
Trade and other payables
Net assets acquired
Consideration
Cash
Shares to be issued on completion of tenement renewals
Total
8. Assets held for sale
Chilalo Graphite Project
Fair value
$
57,681
25,469
1,167,108
(10,258)
1,240,000
200,000
1,040,000
1,240,000
2021
$
5,000,000
5,000,000
2020
$
-
-
The Company’s Chilalo Graphite Project in Tanzania has been transferred to held for sale as it is now likely this asset will be disposed
of by the Company via spin off and IPO of the Company’s wholly owned subsidiary Evolution. Subsequent to year end a Share Exchange
Agreement was executed under which the Company agreed to sell the Chilalo Project to Evolution in exchange for $10 million of
Evolution shares (representing approximately 31% of Evolution on a post-ASX listing, undiluted basis) and cash of $2 million (or, if PL
11034/2017 is not reinstated on or before 31 December 2021, then $1 million), subject to satisfaction of the pre-conditions to the Spin-
out of Evolution.
9. Trade and other payables
Creditors
Accruals
Other payables
2021
$
1,127,195
438,887
97,961
1,664,043
2020
$
306,099
30,001
101,100
437,200
34
Notes to the financial statements
Marvel Gold Limited
30 June 2021
10. Provisions
Current
Provision for annual leave
Non-current
Provision for long service leave
11. Loans and borrowings
Current
Interim Loan Notes drawn
Effective interest capitalised
Foreign currency movement
Net debt reconciliation
30 June 2019
Cashflows
Capitalised fees and interest
Foreign exchange differences
30 June 2020
Capitalised fees and interest
Loan balance as at 20 July 2021 prior to modification in terms
Reclassification – liabilities directly associated with assets
classified as held for sale
20 July 2020
2021
$
68,160
68,160
102,858
102,858
2021
$
-
-
-
-
Cash
$
1,264,791
(923,290)
-
(36,868)
304,633
-
-
2020
$
198,328
198,328
73,641
73,641
2020
$
6,551,240
2,001,106
196,031
8,748,377
Net debt
$
(4,535,034)
(2,281,866)
(1,487,919)
(138,925)
(8,443,744)
98,211
8,846,588
Loans and
Borrowings
$
(5,799,825)
(1,358,576)
(1,487,919)
(102,057)
(8,748,377)
(98,211)
(8,846,588)
8,846,588
(304,633)
(8,541,955)
-
-
-
On 29 October 2018, the Company signed agreements for financing the development of its Chilalo Graphite Project with funds managed by
global private investment firm Castlelake, L.P (Castlelake), which provided for a funding package of up to US$80 million subject to satisfaction
of agreed conditions.
Under the funding package, the Company entered into a Loan Note Subscription Agreement (LNSA) to raise US$5 million from the issue of
secured Interim Loan Notes. At the end of the year, the Company has fully drawn the US$5 million Interim Loan Notes.
35
Marvel Gold Limited
30 June 2021
Notes to the financial statements
11. Loans and borrowings (continued)
On 17 June 2020, the Company announced Castlelake had decided not to proceed with the Senior Funding Package. As a result, the Company
agreed with Castlelake to restructure the debt during the year which included:
•
•
•
•
•
Confining the Financier’s security to Chilalo Project related assets and removing the Castlelake’s legal recourse to the Company;
Paying an amendment fee of 7.5% of the debt capitalised into the balance of the loan notes;
Paying a security release fee of US$100,000;
Issuing 7.5 million shares of the Company;
Extending the due date of the debt by two years to October 2022;
• Undertaking steps to either sell the Chilalo Project or refinance the Castlelake debt amount;
•
•
•
Should the Chilalo sales process yield cash proceeds that exceed the LNSA debt, the Company will receive the excess proceeds;
and
If the Chilalo process does not result in repayment of the LNSA by 29 October 2022, Castlelake will take control of the Chilalo
Project with no further recourse to the Company.
During 2021 the Company signed a further Deed of Agreement with Castlelake which caps the loan including capitalised interest
at $9.5 million should the Company successfully IPO the Chilalo Graphite Project prior to 30 November 2021 and they are repaid
fully from the proceeds of the IPO raise.
On 20 July 2020, the Company’s shareholders voted to approve the above amended terms which formalised the amended agreement.
As outlined above the terms of the Interim Loan Notes previously issued by the Company were materially changed during the year including
but not limited to extending the term of the Interim Loan Notes by two years and accruing a 7.5% restructuring fee. Under the requirements
of AASB 9 - Financial Instruments the accounting for modification of a financial liability depends on whether the modification is a substantial
or a non-substantial modification. The modification is substantial where the present value of the restructured cash flows differ from the
carrying value of the debt by more than 10%. The Company has accounted for the modification as substantial. In making this assessment,
the Company applied a discount rate of 30% to the present value of restructured cashflow. The Company is the only ASX listed graphite
company that has secured debt and therefore the discount rate used to assess fair value was the effective interest rate at the date of
amendment being the only reference to the fair value of the cost of debt.
12. Liabilities directly associated with assets classified as held for sale
Current
Interim Loan Notes drawn
Borrowing costs
Fair value gain on modification of terms
Effective interest capitalised
Foreign currency movement
2021
$
(6,661,275)
(150,000)
1,307,349
(4,010,260)
784,151
(8,730,035)
2020
$
-
-
-
-
-
-
On the 27 April 2021 the Company entered in a Deed of Consent with the Company’s financier in relation to the Loan Notes. The Deed of
Consent facilitates fixing the balance of the loan at $9.5 million, should the IPO of Evolution occur prior to 30 November 2021. Refer to note
8 for details of the IPO. Given the modification of the loan terms is contingent on the IPO the fair value of the loan has not been modified.
36
Marvel Gold Limited
30 June 2021
Notes to the financial statements
12. Liabilities directly associated with assets classified as held for sale (continued)
Net debt reconciliation
30 June 2020
Reclassification – liabilities directly associated with assets
classified as held for sale from Loans and Borrowings
Cashflows
Fair value gain on the modification of terms
Capitalised interest
Borrowing costs
Foreign exchange differences
30 June 2021
Loans and
Borrowings
$
-
(8,846,588)
-
1,307,349
(2,009,154)
150,000
668,358
Cash
$
-
304,633
1,192,089
-
-
-
10,236
Net debt
$
-
(8,541,955)
1,192,089
1,307,349
(2,009,154)
150,000
678,594
(8,730,035)
1,506,958
(7,223,077)
The Company’s Chilalo Graphite Project in Tanzania has been transferred to held for sale as it is now likely this asset will be disposed of by
the Company via spin off and IPO of the Company’s wholly owned subsidiary Evolution. This has resulted in the Loan Notes on issue being
reclassified from loans and borrowings to the current Liabilities directly associated with assets classified as held for sale. This is required as
the Loan Note will be spun out with Evolution and the loans are also secured by the Chilalo Graphite Project which is also being spun out in
the transaction.
13. Share capital
(a) Issued and paid up capital
Ordinary fully paid shares
(b) Movement in ordinary shares
Opening balance
Issue of equities
Shares issued as consideration for annual leave
Shares issued as consideration for project acquisition
Shares issued to interim loan note holders
Issue of shares
Less: Transaction costs arising on share issues
Movement for the period
Closing balance
(c) Ordinary Shares
2021
Shares
2021
$
2020
Shares
2020
$
508,644,058
31,134,472
115,011,555
20,272,214
115,011,555
20,272,214
88,145,208
16,832,075
2,851,717
35,000,000
7,500,000
348,280,786
-
57,034
700,000
150,000
10,750,231
(795,007)
-
-
312,500
26,553,847
-
393,632,503
10,862,258
26,866,347
-
-
457,300
3,389,909
(407,070)
3,440,139
508,644,058
31,134,472
115,011,555
20,272,214
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion to the
number of, and amounts paid on, shares held.
On a show of hands, every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote. Upon a poll,
each fully paid share has one vote.
37
Notes to the financial statements
14. Reserves
The following table shows a breakdown of the statement of financial position line item ‘reserves’ and the movements in these reserves
during the period. A description of the nature and purpose of each reserve is provided below.
Marvel Gold Limited
30 June 2021
Share based
payments
Foreign
currency
translation
Total reserves
$
$
$
1,490,089
(41,024)
1,449,065
-
-
(149,584)
1,340,505
-
-
593,258
1,040,000
2,973,763
17,300
17,300
-
(23,724)
111,684
111,684
-
-
87,960
17,300
17,300
(149,584)
1,316,781
111,684
111,684
593,258
1,040,000
3,061,723
At 30 June 2019
Translation of foreign subsidiaries
Other comprehensive income
Transactions with owners in their capacity as owners
Employee share based payments expense
At 30 June 2020
Translation of foreign subsidiaries
Other comprehensive income
Transactions with owners in their capacity as owners
Employee share based payments expense
Deferred share consideration for acquisition1
At 30 June 2021
1 Refer to note 7(a).
(a) Nature and purpose of reserves
(i) Foreign currency translation reserve
The foreign currency translation reserve comprises all foreign currency differences arising from the translation of the financial
statements of foreign operations as well as from the translation of the Company’s net investment in a foreign subsidiary.
(ii) Share based payment reserve
The share-based remuneration reserve is used to recognise the fair value of options issued.
15. Retained earnings
Opening balance
Net loss for the period
Closing balance
2021
$
(25,564,936)
(8,997,070)
(34,562,006)
2020
$
(18,078,095)
(7,486,841)
(25,564,936)
38
Notes to the financial statements
16. Cash flow information
(a) Reconciliation of operating loss after income tax to the net cash
flows from operating activities:
Loss for the period
Adjustments for:
Depreciation
Non-cash employee benefits expense - share based payments
Non-cash fair value adjustment to loan
Non-cash costs of interim loan notes capitalised
Net exchange differences
Changes in operating assets and liabilities:
Changes in trade and other receivables
Changes in provisions
Changes in trade and other payables
Net cash (outflow) from operating activities
(b) Non-cash investing and financing activities
Marvel Gold Limited
30 June 2021
2021
$
2020
$
(8,997,070)
(7,486,841)
94,573
593,258
(1,307,349)
2,068,654
(453,950)
55,219
(149,583)
-
1,920,140
122,889
(508,013)
(100,951)
1,226,843
175,565
28,573
(12,672)
(7,384,005)
(5,346,710)
As part of the financing arrangement outlined in note 12 the Company issued 312,500 shares to the Interim Loan Note holders as part
of the terms of the financing transaction at inception. The Company also issued a further 7,500,000 shares as compensation for the
renegotiation of terms set out in note 11.
17. Financial risk management
The Company and Group’s activities expose it to a variety of financial risks, including market, foreign currency, credit and liquidity risk.
For the Group, market risk includes:
•
•
Interest rate risk; and
Foreign exchange risk.
Financial risk management is carried out by the Group’s Managing Director and Chief Financial Officer, in close co-operation with the
Board. The Group obtains independent external advice as required to assist it in understanding and managing its exposures and risks.
The Group held the following financial instruments at reporting date:
Financial Assets
Cash and cash equivalents
Trade and other receivables
Total Financial Assets
Financial Liabilities
Trade and other payables
Loans and borrowings
Liabilities directly associated with assets classified as held for sale
Total Financial Liabilities
(a) Market risk
(i) Interest rate risk
Note
4
5
9
11
12
2021
$
1,506,958
650,914
2,157,872
2020
$
304,633
142,900
447,533
(1,664,043)
-
(8,730,035)
(437,200)
(8,748,377)
-
(10,394,078)
(9,185,577)
The Group and the Company are exposed to interest rate volatility on deposits and loans. Deposits and loans at variable rates expose the
Group and the Company to cash flow interest rate risk. Deposits and loans at fixed rates expose the Group to fair value interest rate risk.
39
Notes to the financial statements
17. Financial risk management (continued)
Marvel Gold Limited
30 June 2021
Effective Average
Interest Rate (%)
Variable
Interest Rate
$
Fixed Interest
Rate
$
Non-Interest
Bearing
$
Total
$
2021 (consolidated)
Financial Assets
Cash and cash equivalents
Trade and other receivables
Financial Liability
Trade and other payables
Liabilities directly associated with assets
classified as held for sale
2020 (consolidated)
Financial Assets
Cash and cash equivalents
Trade and other receivables
Financial Liability
Trade and other payables
Loans and borrowings
Sensitivity Analysis
0.01%
0.00%
0.00%
24.70%
0.19%
0.00%
0.00%
30.00%
1,170,411
-
1,170,411
-
-
-
-
-
-
-
336,547
650,914
987,461
1,506,958
650,914
2,157,872
(1,664,043)
(1,664,043)
(8,730,035)
(8,730,035)
-
(1,664,043)
(8,730,035)
(10,394,078)
230,376
-
230,376
-
-
-
74,257
142,900
217,157
304,633
142,900
447,533
-
-
-
-
(8,748,377)
(8,748,377)
(437,200)
-
(437,200)
(437,200)
(8,748,377)
(9,185,577)
The following tables summarise the sensitivity of the Group’s financial assets to interest rate risk. Had the relevant variables, as illustrated
in the tables, moved with all other variables held constant, post-tax loss and equity would have been affected as shown below.
Interest Rate Risk
-100 basis points (-1%)
Interest Rate Risk
+100 basis points (+1%)
Carrying
Amount
$
Net Profit /
(Loss)
$
Equity
$
Net Profit /
(Loss)
$
1,170,411
1,170,411
(11,704)
(11,704)
(11,704)
(11,704)
230,376
230,376
(2,304)
(2,304)
(2,304)
(2,304)
11,704
11,704
2,304
2,304
Equity
$
11,704
11,704
2,304
2,304
2021 (consolidated)
Financial Assets
Cash and cash equivalents
2020 (consolidated)
Financial Assets
Cash and cash equivalents
(ii) Foreign exchange risk
The Group is exposed to fluctuations in foreign currencies arising from costs incurred in currencies other than the functional currency
of the Company and Group entities.
The Group operates internationally and is primarily exposed to foreign exchange risk arising from currency exposures to the United
States dollar and Tanzanian shilling.
40
Marvel Gold Limited
30 June 2021
Notes to the financial statements
17. Financial risk management (continued)
The Group has not formalised a foreign currency risk management policy and it holds only limited amounts of cash in foreign currencies
at any point in time. The Group monitors foreign currency expenditure in light of exchange rate movements.
The Group’s exposure to foreign currency risk at the end of the reporting period, expressed in Australian dollars was as follows.
Foreign currency balances
Cash at bank
Trade receivables
Trade payables
Liabilities directly associated with
assets classified as held for sale
US Dollar
119,249
-
(62,963)
2021
Tanzanian
Shilling
5,133
27,198
(13,146)
CFA Franc
180,621
-
-
-
2020
US Dollar
13,749
-
(21,130)
Tanzanian
Shilling
1,356
16,039
(333)
(8,730,035)
-
(8,748,377)
-
Sensitivity analysis
2021 (Consolidated)
USD (10% movement)
TZS (10% movement)
XOF (10% movement)
2020 (Consolidated)
USD (10% movement)
TZS (10% movement)
(b) Liquidity risk
10% Strengthening to the AUD
10% Weakening to the AUD
Equity
$
(13,250)
1,277
-
Net Profit /
(Loss)
$
(881,590)
467
16,420
(1,923)
1,428
(798,831)
123
Equity
$
10,841
(1,561)
-
2,351
(1,745)
Net Profit /
(Loss)
$
1,077,499
(570)
(20,069)
976,349
(151)
The liquidity position of the Group is managed to ensure sufficient liquid funds are available to meet the Group’s financial commitments
in a timely and cost-effective manner.
The Group’s treasury function continually reviews the Group’s liquidity position, including cash flow forecasts, to determine the
forecast liquidity position and maintain appropriate liquidity levels.
Contractual maturities of financial liabilities
2021 (Consolidated)
Trade and other payables
Liabilities directly associated with assets classified
as held for sale
2020 (Consolidated)
Trade and other payables
Loans and borrowings
(c) Credit risk
Less than 1 year
$
Between 1 and 2
years
$
1,664,043
8,730,035
10,394,078
437,200
9,759,920
10,197,120
-
-
-
-
-
-
Total
contractual
cash flows
$
Carrying amount
$
1,664,043
1,664,043
8,730,035
8,730,035
10,394,078
10,394,078
437,200
9,759,920
10,197,120
437,200
8,748,377
9,185,577
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual
obligations and arises principally from the Group’s receivables from customers.
41
Marvel Gold Limited
30 June 2021
Notes to the financial statements
17. Financial risk management (continued)
(i) Cash at bank
The Group manages its credit risk on financial instruments, including cash, by only dealing with banks licensed to operate in Australia
and a credit rating of AA or higher.
(ii) Trade and other receivables
The group operates in the mining exploration sector and does not have trade receivables from customer. It does however have credit
risk arising from other receivables.
(iii) Exposure to credit risk
The carrying amount of the Group’s financial assets represents the maximum credit exposure. The Group’s maximum exposure to credit
risk at the reporting date was:
Financial Assets
Cash and cash equivalents
Trade and other receivables
Total Financial Assets
(d) Fair value measurements
Note
4
5
2021
$
1,506,958
650,914
2,157,872
2020
$
304,633
142,900
447,533
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement, or for disclosure purposes.
AASB 7 Financial Instruments: Disclosures requires disclosure of fair value measurements by level of the following fair value
measurement hierarchy:
(a) Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1);
(b)
Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (prices) or
indirectly (derived from prices) (level 2); and
(c)
Inputs for the asset or liability that are not based on observable market data (unobservable inputs) (level 3).
The carrying amounts and estimated fair values of all the Group’s financial instruments recognised in the financial statements are
materially the same.
18. Capital management
(a) Risk management
The Group’s policy is to maintain a strong capital base so as to ensure investor, creditor and market confidence and to sustain future
development of the business.
The Company has welcomed equity investment from major stakeholders so that goals are aligned and there is a vested interest in the
Group’s success. Current stakeholders that are also shareholders include major suppliers for exploration, project management and
feasibility studies advisors, corporate advisors, Directors, executives and employees.
The Company monitors its total shares on issue, market capitalisation and enterprise value on a regular basis so as to maintain a critical
balance between having its strategy fully funded and minimising existing shareholder dilution.
42
Notes to the financial statements
18. Capital management (continued)
As disclosed in note 11, the Company incurred a debt during 2018 in the form of the Interim Loan Notes to help fund development of
the Chilalo Project. The financier made a decision to not proceed with the senior funding arrangement. The Company had chosen to
take on this debt as opposed to issuing additional shares so as to avoid excessive shareholder dilution at the Company’s current market
capitalisation. The Company was aiming to fund ongoing project development at a gearing ratio of 50%.
Marvel Gold Limited
30 June 2021
Net debt
Share capital
Net debt to equity ratio
(b) Dividends
2021
$
2020
$
(7,873,517)
31,134,472
(8,443,744)
20,272,214
25%
42%
Up until the date of this report, no dividend has been declared or paid by the Company.
19. Interests in other entities
The Group’s principal subsidiaries at 30 June 2021 are set out below. Unless otherwise stated, they have share capital consisting solely
of ordinary shares that are held directly by the Group, and the proportion of ownership interests held equals the voting rights held by
the Group. The country of incorporation or registration is also their principal place of business.
Name
Country of incorporation
Class of shares
Marvel Gold Australia Pty Ltd
Evolution Energy Minerals Limited
Evolution Energy Holdings Pty Ltd
Graphex Mining UK No.1 Limited
Oklo South Mali Limited
Ngwena Tanzania Limited
Kolon Mining SARL
Sola Mining SARL
Yanfo SARL
South East Mali Gold
South Mali Gold
Marvel Gold Exploration SARL
1 Newly incorporated by the Company.
2 Acquired via joint venture or acquisition.
Australia
Australia
Australia
United Kingdom
United Kingdom
Tanzania
Mali
Mali
Mali
Mali
Mali
Mali
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Equity
Holding
2021
%
1001
1001
1001
100
802
100
802
802
802
1001
1001
1001
Equity
Holding
2020
%
-
100
-
100
-
-
-
-
-
-
43
Marvel Gold Limited
30 June 2021
Notes to the financial statements
20. Contingent liabilities
The Group had the following contingent liabilities as at 30 June 2021. As part of the Company’s joint venture with Oklo Resources Limited
(Oklo) the Company has three deferred consideration milestones which are:
The Company will issue 20,000,000 shares on the successful renewal of all joint venture tenements.
The Company will issue 10,000,000 shares within 5 business days of Marvel announcing:
•
•
a JORC 2012 Mineral Resource at the Yanfolila or Kolondieba projects of any resource category of not less than 500,000 oz of gold
or gold equivalent at a minimum grade of 1 g/t; or
a JORC 2012 Mineral Resource at the Sirakourou, Solabougouda and Solabougouda South licences (now part of the Tabakorole
project) of any resource category of not less than 350,000 oz of gold or gold equivalent at a minimum grade of 1 g/t.
The Company will issue a further 10,000,000 Marvel shares to Oklo within 5 business days of Marvel announcing:
•
•
a JORC 2012 Mineral Resource at the Yanfolila and Kolondieba projects of any resource category of not less than 1,000,000 oz of
gold or gold equivalent at a minimum grade of 1 g/t; or
a JORC 2012 Mineral Resource at the Sirakourou, Solabougouda and Solabougouda South (now part of the Tabakorole project)
licences of any resource category of not less than 700,000 oz of gold or gold equivalent estimated at a minimum grade of 1 g/t.
21. Commitments
(a) Exploration commitments
The Company is required to meet certain minimum expenditure commitments on the mineral exploration assets in which it has an
interest. The minimum expenditure commitment is set out in the Prospecting Licences held by the Group. Outstanding exploration
commitments are as follows:
- not later than one year
- beyond one year
(b) Prospecting and mining licence rentals
- not later than one year
- beyond one year
2021
$
1,860,266
-
1,860,266
2021
$
287,495
-
287,495
2020
$
275,269
-
275,269
2020
$
57,221
-
57,221
The Company pays an annual lease amount for the tenements it holds. The leases can be relinquished on or before the anniversary
date, therefore there are no contractual commitments beyond one year. The Company has no current plans to drop any existing
tenements.
44
Marvel Gold Limited
30 June 2021
Notes to the financial statements
22. Events occurring after reporting date
Subsequent to year end, the Company:
•
•
•
•
•
Substantially increased its Mali landholdings via the acquisition of 438km2 of exploration permits in Mali. This takes the Company
landholding in Mali to 830 km2.
A Share Exchange Agreement was executed under which the Company agreed to sell the Chilalo Project to Evolution Energy
Minerals Limited (Evolution). See significant changes in the statement of affairs above for details.
Issued 70 million shares at a price of $0.06 per share to raise gross proceeds before costs of $4.2 million.
Issued options under the employee share scheme including 2,897,692 short term incentive zero priced options, (including
1,116,924 that were issued to KMP), 2,897,692 long term incentive options (including 1,116,924 that were issued to KMP) and
3,500,000 cashless options with an exercise price of $0.06 per share.
The Company received regulatory approval from the Tanzanian Fair Competition Commission which allows the initial public
offering of Evolution and the lodgement of the prospectus on the 28 September 2021 inviting investors to subscribe for Evolution
shares.
23. Related party transactions
(a) Parent entity
Marvel Gold Limited is the ultimate Australian parent entity of the Group. Marvel Gold Limited is a company limited by shares that is
incorporated and domiciled in Australia.
(b) Subsidiaries
Interests in subsidiaries are set out in note 19.
(c) Group transactions
Controlled entities made payments and received funds on behalf of the Company and other controlled entities by way of inter-company
loan accounts with each controlled entity. These loans are unsecured, bear no interest and are repayable on demand, however demand for
repayment is not expected in the next twelve months.
(d) Key management personnel compensation
Short-term employee benefits
Post-employment benefits
Annual and long service leave
Share-based payments
Shared Services Recovery1
2021
$
900,425
71,394
107,613
527,523
(361,390)
1,245,566
2020
$
830,459
71,653
35,466
(135,673)
(312,668)
489,237
1 The Group was a party to a Shared Services Agreement with Matador Mining Limited, Lotus Resources Limited, Tanga Resources Limited,
Cradle Resources Limited and Superior Lake Resources Limited under which the Company shared certain costs. During the year, Executives
Mr McKenzie and Mr Knee spent a portion of their time working for the above-mentioned companies, with this time recharged by the
Group on an at cost basis. This is included above as the Shared Services Recovery.
Detailed remuneration disclosures are provided in the Remuneration Report.
45
Marvel Gold Limited
30 June 2021
Notes to the financial statements
23. Related party transactions (continued)
(e) Other KMP transactions
Mr. Knee is Director of Superior Lake Resources Limited an ASX listed Company that has a Shared Services Agreement with the Company.
Under this arrangement the Company provides company secretarial, accounting and administration services. Payments made under these
arrangements for the year are set out below.
Related party transactions
Receipts from Superior Lake Resources Limited (ex-GST)
Amounts outstanding at 30 June
2021
$
2020
$
102,955
278,200
5,574
-
During 2021 the Company issued the following options to Directors and KMP.
Date options granted
Expiry date
Exercise price
Number under option
20-Jul-20
20-Jul-20
20-Jul-20
20-Jul-23
20-Jul-23
20-Jul-23
$0.035
$0.06
$0.10
16,050,000
8,025,000
8,025,000
32,100,000
24. Share-based payments
(a) Employee option plan
Information on the Company’s Option Plan (Plan) was set out in the Company’s Replacement Prospectus lodged on 14 November 2019.
Given the disclosure of the Plan in the Replacement Prospectus, the issue of shares under the Plan rules does not count towards the
Company’s share issuance capacity under ASX listing Rules 7.1 and 7.1A. The Plan is designed to:
a) assist and reward the retention and motivation of employees;
b)
link employee reward to shareholder value creation; and
c)
align the interests of employees with shareholders by providing an opportunity for employees to receive an equity interest in the
Company in the form of Options.
Under the Plan, participants are granted options which vest when issued. Participation in the Plan is at the Board’s discretion and no
individual has a contractual right to participate in the Plan or to receive any guaranteed benefits.
The Employee may exercise the option at any time after issue. To exercise an option, an employee must deliver a signed notice of exercise
and, subject to a cashless exercise of options, pay the option exercise price prior to the expiry date. An option may specify that at the time
of exercise, the employee may elect not to be required to provide payment of the option exercise price. Alternatively, the Company will
transfer or issue to the employee that number of shares equal in value to the positive difference between the market value of the shares
at the time of exercise and the option exercise price that would otherwise be payable to exercise those options.
The Board has determined that STI awards and LTI awards will be equity settled to ensure alignment with shareholders’ interests and to
preserve cash.
Options are granted under the Plan for no consideration and carry no dividend or voting rights. When exercisable, each option is convertible
into one ordinary share subject to the payment of any applicable exercise price.
46
Marvel Gold Limited
30 June 2021
Notes to the financial statements
24. Share-based payments (continued)
As at 1 July
Granted during the period
Exercised during the period
Forfeited or lapsed during the period
As at 30 June
2021
2020
Weighted
average
exercise price
Nil
$0.058
Nil
Nil
Number of
options
5,622,000
36,100,000
(384,000)
(5,238,000)
Weighted
average
exercise price
Nil
Nil
Nil
Nil
Number of
options
5,357,000
2,576,000
-
(2,311,000)
$0.058
36,100,000
Nil
5,622,000
Options outstanding at the end of the period have the following expiry date and exercise prices:
Grant date
Expiry date
Exercise price
20-Jul- 20
20-Jul- 20
20-Jul- 20
29-Jul-24
29-Jul-24
29-Jul-24
0.035
0.060
0.100
Options 30 June
2021
18,050,000
9,025,000
9,025,000
Vested and
exercisable
18,050,000
9,025,000
9,025,000
Weighted average remaining contractual life of options outstanding at period end is 3.08 years (2020: 2.76 years).
Fair value of options granted
The fair value of services received in return for the share options granted is measured by reference to the fair value of options granted. The
estimate of the fair value of the services is measured based on a Black-Scholes option valuation methodology.
The assumptions used for the options valuation are as follows:
Underlying value of the security
Exercise price
Valuation date
Vesting date
Expiry date
Risk free rate
Volatility
Life of Options in years
Number of Options
Valuation per Option
Amount expensed during the year
Director and
ESS options
$0.024
$0.035
20/07/20
29/07/20
29/07/24
0.4%
120%
4.03
18,050,000
$0.018
$320,500
Director and
ESS options
$0.024
$0.06
20/07/20
29/07/20
29/07/24
0.4%
120%
4.03
9,025,000
$0.016
$144,528
Director and
ESS options
$0.024
$0.10
20/07/20
29/07/20
29/07/24
0.4%
120%
4.03
9,025,000
$0.014
$128,230
(b) Expenses arising from share-based payment transactions
Total expenses arising from share-based payment transactions during the period were as follows:
Options issued under the Plan
2021
$
593,258
593,258
2020
$
(149,583)
(149,583)
At the end of each reporting period the Company applies a probability to options with non-market based vesting criteria to reflect the likely
number of options that will vest at the end of the vesting period taking into consideration all the vesting criteria. As outlined in the Directors
Report, the Company has changed strategic direction which resulted in all options issued as performance incentives during 2019 and 2020
lapsing unvested. This is a result of previous vesting criteria being based on progression and financing of the Chilalo Graphite Project.
47
Marvel Gold Limited
30 June 2021
Notes to the financial statements
24. Share-based payments (continued)
(c) Other share based payments
The Group had the following contingent liabilities as at 30 June 2021. As part of the Company’s joint venture with Oklo Resources Limited
(Oklo) the Company has three deferred consideration milestones which are:
The Company will issue 20,000,000 shares on the successful renewal of all joint venture tenements.
The Company will issue 10,000,000 shares within 5 business days of Marvel announcing:
•
•
a JORC 2012 Mineral Resource at the Yanfolila or Kolondieba projects of any resource category of not less than 500,000 oz of gold
or gold equivalent at a minimum grade of 1 g/t; or
a JORC 2012 Mineral Resource at the Sirakourou, Solabougouda and Solabougouda South licences (now part of the Tabakorole
project) of any resource category of not less than 350,000 oz of gold or gold equivalent at a minimum grade of 1 g/t.
The Company will issue a further 10,000,000 shares within 5 business days of Marvel announcing:
•
•
a JORC 2012 Mineral Resource at the Yanfolila and Kolondieba projects of any resource category of not less than 1,000,000 oz of
gold or gold equivalent at a minimum grade of 1 g/t; or
a JORC 2012 Mineral Resource at the Sirakourou, Solabougouda and Solabougouda South (now part of the Tabakorole project)
licences of any resource category of not less than 700,000 oz of gold or gold equivalent estimated at a minimum grade of 1 g/t.
25. Remuneration of auditors
During the period, the following fees were paid and payable for services provided by the auditor of the parent entity, its related practices
and non-related audit firms:
(a) BDO Audit (WA) Pty Ltd
(i) Audit and assurance services
Audit and review of financial statements
Other assurance services
Total audit and assurance remuneration
(ii) Taxation services
Taxation services
Total taxation remuneration
2021
$
35,500
-
35,500
-
-
2020
$
45,6841
-
45,6841
32,8741
32,8741
1 In the 2020 financial year the Company used PricewaterhouseCoopers (PwC) as the Company auditors and tax advisors.
(b) PricewaterhouseCoopers (Tanzania component auditor)
(i) Audit and assurance services
Audit of financial statements
Total audit and assurance remuneration
(ii) Taxation services
Taxation services
Total taxation remuneration
15,743
15,743
-
-
11,089
11,089
15,850
15,850
The Company engaged PwC to perform tax compliance services provided during the 2020 financial year being the preparation and lodgement
of the Group’s tax returns in both Australian and Tanzania. In addition to compliance engagements, the Company also engaged PwC Australia
and Tanzania for tax structuring advice on an ad hoc basis. It is the Group’s general preference to employ PwC on assignments additional to
their statutory audit duties where PwC’s expertise and experience with the Group are important. These assignments are principally tax
advice, or where PwC is awarded assignments on a competitive basis.
48
Notes to the financial statements
26. Earnings per share
Marvel Gold Limited
30 June 2021
2021
$
2020
$
(a) Basic earnings per share
From continuing operations attributable to ordinary equity holders
(0.02)
(0.07)
The weighted average number of shares used to calculate both the basic and diluted earnings per share is 442,550,279 (2020: 104,446,456).
(b) Fully diluted earnings per share
From continuing operations attributable to ordinary equity holders
(0.02)
(0.07)
(c) Information concerning the classification of securities
Options granted to employees under the Plan and those issued to contractors are considered to be potential ordinary shares. They have
been included in the determination of diluted earnings per share with the assumption all such options will vest, and to the extent to which
they are dilutive. The options have not been included in the determination of basic earnings per share. Details relating to the options are
set out in note 24.
27. Parent entity financial information
The individual financial statements for the parent entity show the following aggregate amounts:
(a) Summary of financial information
Statement of financial position
Current assets
Total assets
Current liabilities
Total liabilities
Shareholders’ equity
Issued capital
Reserves
Retained earnings
Total shareholders’ equity
Loss for the period
Total comprehensive loss
(b) Guarantees
2021
$
2020
$
1,552,858
3,423,392
(10,963,455)
(11,066,312)
416,882
5,461,214
(9,465,079)
(9,465,079)
31,134,472
1,933,763
(40,711,155)
20,272,214
1,340,505
(25,616,584)
(7,642,920)
(4,003,865)
(10,213,644)
(6,273,559)
(10,213,644)
(6,273,559)
Marvel, as the parent company, has provided a guarantee for ongoing financial support to its wholly owned Tanzanian subsidiary Ngwena
Tanzania Limited.
(c) Commitments
Of the commitments in note 21, all of the leases disclosed in note 21 related to the parent, Marvel. These related to the fixed term non-
cancellable low value leases of the Company’s photocopier/printer lease.
(d) Contingencies
The parent entity did not have any contingent liabilities as at 30 June 2021 or 30 June 2020. For information about guarantees given by the
parent entity, please see above.
49
Notes to the financial statements
2
8. Summary of significant accounting policies
Marvel Gold
Limited
30 June 2021
This note provides a list of the significant accounting policies adopted in the preparation of these consolidated
extent they have not already been disclosed in the other notes above. The financial
its subsidiaries disclosed in
statements are for the
note
19.
financial statements to the
and
of
Marvel
Group consisting
(a) Basis of preparation
purpose financial statements have been prepared in accordance with Australian Accounting Standards and Interpretations
These general
issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as appropriate for for-profit oriented entities.
These financial statements also comply with International Financial Reporting Standards as issued by the International Accounting Standards
Board ('IASB').
(i)
Historical cost convention
The financial statements have been prepared under the historical
assets
properties, certain classes of property,
through
plant and equipment and derivative financial instruments.
cost convention, except for, where applicable, the revaluation of financial
investment
comprehensive
liabilities
financial
income,
through
assets
profit
other
value
value
loss,
and
fair
fair
or
at
at
Critical accounting estimates
(ii)
The preparation of financial statements requires the use of certain critical accounting estimates. It also requires management to exercise
its judgment in the process of applying the company’s accounting policies. The areas involving a higher degree of judgment or complexity,
or areas where assumptions and estimates are significant to the financial statements, are disclosed
note 29.
in
(iii)
New or amended
Accounting Standards and Interpretations adopted
The accounting standards and interpretations relevant to the operations of the Group are consistent with those of the previous financial
year. There are some amendments and interpretations effective for the
first time from 1 July 2020, though they did not have any impact on
the current period or any prior period and is not likely to affect future periods.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been
early adopted.
(iv) Going concern
These financial statements have been prepared on the going concern basis, which contemplates the continuity of normal business activities
and the realisation of assets and settlement of liabilities in the normal course of business.
for the year ended 30 June 2021. As at that date, the Group had current
and had net cash outflows from operating activities of
As disclosed in the financial statements, the Group incurred a loss of $8,997,070
$7,384,006
the
novated
primary current
the repayment date to 29 October 2022. It is also likely that the
to a subsidiary
will
Chilalo Graphite Project including the
The ability of the
Group to continue as a going concern is principally dependent upon the ability of the Group to secure funds by raising capital from equity
markets and managing cash flows in line with available funds.
liability, being loans and borrowings
(i.e. no security recourse to the Company) and extended
secured by the project
Loan Notes
liabilities
directly associated with assets held for sale)
be spun out via IPO subsequent to year end.
during the year
was
of $10,792,678
of $9,380,475
Liabilities
although
(now
These factors indicate a material uncertainty which may cast significant doubt as to whether the Group will continue as a going concern and
therefore whether it will realise its assets and extinguish its liabilities in the normal course of business and at amounts stated in the financial
report.
The financial statements have been prepared on the basis that the Group is a going
business activity, realisation of assets and settlement of liabilities in the normal course of business for the following reasons:
concern, which contemplates the continuity of normal
•
•
•
•
•
8
in
note
note
11, the company amended the terms of the Loan Note
As disclosed in
and limit the security over the Company’s asset to that of its holding company and subsidiary.
As disclosed
it is likely the Company will spin out the Chialalo Graphite project and
result in the Company receiving $10 million of shares in Evolution, the spin out company, and
As disclosed in
note 22
proceeds before costs of $4.2 million.
The Group has the ability to issue additional equity securities under the Corporations Act 2001 to raise further
The Group has the ability to curtail administrative, discretionary exploration and overhead cash outflows as and when required.
70 million shares at a price of $0.06 per share to raise gross
to year end the Company issued
to extend the repayment date
Subscription Agreement
the Loan Notes via IPO
working capital; and
$2 million in cash.
subsequent
which will
ability of the Group to continue as a going concern and to fund its operational
The
Should the Group not be able to continue as a going concern, it may be required to realise its assets and discharge its liabilities other than
in the ordinary course of business, and at amounts that differ from those stated in the financial statements. The financial statements do not
is dependent on the above assumptions.
activities
50
Marvel Gold Limited
30 June 2021
Notes to the financial statements
include any adjustments relating to the recoverability and classification of recorded asset amounts or liabilities that might be necessary
should the Group not continue as a going concern.
(b) Principles of consolidation and equity accounting
(i) Subsidiaries
Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group is
exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power
to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are
deconsolidated from the date that control ceases.
The acquisition method of accounting is used to account for business combinations by the Group.
Investments in subsidiaries are accounted for at cost in the parent entity information disclosures of Marvel.
Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are
also eliminated unless the transaction provides evidence of an impairment of the transferred asset. Accounting policies of subsidiaries have
been changed where necessary to ensure consistency with the policies adopted by the Group.
(c) Property, plant and equipment
(i) Recognition and measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses. Cost
includes expenditure that is directly attributable to the acquisition of the asset and costs directly attributable to bringing the asset to a
working condition for their intended use.
Any gain or loss on disposal of an item of property, plant and equipment (calculated as the difference between the net proceeds from
disposal and the carrying amount of the item) is recognised in profit or loss.
(ii) Subsequent costs
Subsequent expenditure is capitalised only when it is probable that the future economic benefits associated with the expenditure will flow
to the Group. Ongoing repairs and maintenance are expensed as incurred.
(iii) Depreciation
Depreciation of plant and equipment is calculated on a straight-line basis so as to write off the net costs of each asset over the expected
useful life. The rates vary between 2% and 50% per annum.
The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date. An asset's carrying amount is
written down immediately to its recoverable amount if its carrying amount is greater than its estimated recoverable amount.
(d) Impairment
At each reporting date, the Group reviews the carrying values of its tangible and intangible assets to determine whether there is any
indication that those assets have been impaired. If such an indication exists, the recoverable amount of the asset, being the higher of the
asset's fair value less costs of disposal and value in use, is compared to the asset's carrying value. Any excess of the asset's carrying value
over its recoverable amount is expensed to the consolidated statement of profit or loss and other comprehensive income.
Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-
generating unit to which the asset belongs.
(e) Exploration and evaluation costs
Costs arising from the acquisition of exploration and evaluation activities are carried forward where these activities have not, at reporting
date, reached a stage to allow a reasonable assessment regarding the existence of economically recoverable reserves. The ultimate
recoupment of costs carried forward for exploration and evaluation phases is dependent on the successful development and commercial
exploitation or sale of the respective areas of interest. Ongoing exploration activities are expensed as incurred.
The Directors believe that this policy results in the carrying value of exploration expenditure more appropriately reflecting the definition of
an asset, being future benefits controlled by the Group. All costs carried forward are in respect of areas of interest in the exploration and
evaluation phases and accordingly, production has not commenced.
Exploration and evaluation assets shall be assessed for impairment when facts and circumstances suggest that the carrying amount of an
exploration and evaluation asset may exceed its recoverable amount, in particular when exploration for and evaluation of mineral resources
in the specific area have not led to the discovery of commercially viable quantities of mineral resources and the Company has decided to
discontinue such activities in the specific area.
51
Marvel Gold Limited
30 June 2021
Notes to the financial statements
Where tenements or part of an area of interest are disposed of, the proceeds of this partial disposal will reduce the value of the asset by the
fair value of those proceeds. This recognises that part of the future economic benefit of the asset has effectively been disposed.
(f) Income tax
Tax expense comprises current and deferred tax. Current tax and deferred tax is recognised in profit or loss except to the extent that it
relates to a business combination, or items recognised directly in equity or in other comprehensive income.
Current tax
Current tax is the expected tax payable of the taxable income or loss for the period, using tax rates enacted or substantively enacted at the
reporting date, and any adjustment to tax payable in respect of previous periods.
Deferred tax
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for taxation purposes.
The measurement of deferred tax reflects the tax consequences that would follow the manner in which the Group expects, at the end of the
reporting period, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted
or substantively enacted at the reporting date.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to
taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities
and assets on a net basis or their tax assets and liabilities will be realised simultaneously.
A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable
that future taxable profits will be available against which they can be utilised. Deferred tax assets are reviewed at each reporting date and
are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
Tax exposures
In determining the amount of current and deferred tax the Group takes into account the impact of uncertain tax positions and whether
additional taxes and interest may be due. This assessment relies on estimates and assumptions and may involve a series of judgements about
future events. New information may become available that causes the Group to change its judgement regarding the adequacy of existing
tax liabilities; such changes to tax liabilities will impact tax expense in the period that such a determination is made. The Company and its
wholly owned Australian tax resident entities (Graphex UK No. 1 Limited) are part of a tax consolidated group.
(g) Other taxes
Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST) or value added tax (VAT), unless the GST /
VAT incurred is not recoverable from taxation authorities. In this case it is recognised as part of the cost of acquisition of the asset or as part
of an item of the expense.
Receivables and payables are stated inclusive of the amount of GST / VAT receivable or payable. The net amount of GST / VAT recoverable
from, or payable to, taxation authorities is included with other receivables or payables in the Consolidated Statement of Financial Position.
Cash flows are included in the Consolidated Statement of Cash Flows inclusive of GST / VAT. The GST / VAT components of cash flows arising
from investing and financing activities which are recoverable from, or payable to, taxation authorities are classified as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST / VAT recoverable from, or payable to taxation authorities. The net
of GST / VAT payable and receivable is remitted to the appropriate tax body in accordance with legislative requirements.
(h) Foreign currency translation
Functional and presentation currency
The functional currency of each of the Group's entities is measured using the currency of the primary economic environment in which that
entity operates. The consolidated financial statements are presented in Australian dollars which is the parent entity's functional and
presentation currency.
Foreign currency transactions
Transactions in foreign currencies are translated to the respective financial currencies of Group entities at exchange rates at the dates of the
transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional
currency at the exchange rate at that date. The foreign currency gain or loss on monetary items is the difference between amortised cost in
the functional currency at the beginning of the period, adjusted for effective interest and payments during the period, and the amortised
cost in foreign currency translated at the exchange rate at the end of the period.
52
Marvel Gold Limited
30 June 2021
Notes to the financial statements
Non-monetary assets and liabilities that are measured in a foreign currency are retranslated to the functional currency at the exchange rate
at the date that the fair value was determined. Non-monetary items that are measured based on historical cost in a foreign currency are
translated using the exchange rate at the date of the transaction.
Foreign currency differences arising on retranslation are recognised in profit or loss, However, foreign currency differences arising on the
retranslation of available-for-sale equity instruments, a financial liability designated as a hedge of the net investment in a foreign operation,
or qualifying cash flow hedges are recognised in other comprehensive income.
Foreign operations
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated to the
presentation currency at exchange rates at the reporting date. The income and expenses of foreign operations are translated to Australian
dollars at exchange rates at the dates of the transactions.
Foreign currency differences are recognised in other comprehensive income and presented in the foreign currency translation reserve
(translation reserve) in equity. However, if the operation is a non-wholly-owned subsidiary, then the relevant proportion of the translation
difference is allocated to the non-controlling interests. When a foreign operation is disposed of, such that control, significant influence or
joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part
of the gain or loss on disposal. When the Group disposes of only part of its interest in a subsidiary that includes a foreign operation while
retaining control, the relevant proportion of the cumulative amount is reattributed to non-controlling interests. When the Group disposes
of only part of its investment in an associate or joint venture that includes a foreign operation while retaining significant influence or joint
control, the relevant proportion of the cumulative amount is reclassified to profit or loss.
(i) Accounts payable
Trade and other payables are initially recognised at fair value and subsequently measured at amortised cost when the Group becomes
obliged to make payments resulting from the purchase of goods and services. The amounts are non-interest-bearing, unsecured and are
usually paid within 30 days of recognition.
(j) Provisions
A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably,
and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting
the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific
to the liability. The unwinding of the discount is recognised as a finance cost.
(k) Employee benefits
(i) Wages, salaries and annual leave
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 the provision for employee benefits in respect of employees’ services up to the reporting date and are measured at
the amounts expected to be paid, inclusive of on costs, when the liabilities are settled. The expense for non-accumulating sick leave is
recognised when the leave is taken and measured at the rates paid or payable.
(ii) Long-term employee benefits
The liability for long service leave is recognised in the provision for employee benefits and measured as the present value of expected future
payments to be made in respect of services provided by employees up to the reporting date 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 reporting date on corporate bonds with terms to maturity and currency that match, as
closely as possible, the estimated future cash outflows.
(iii) Share-based payment transactions
The fair value of options previously granted under the Plan is recognised as an employee benefit expense with a corresponding increase in
equity. The fair value is measured at grant date and recognised over the period during which the Directors, employees or contractors become
unconditionally entitled to the options.
The fair value of the options at grant date is independently determined using the Black-Scholes option pricing model that takes into account
the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying
share, the expected dividend yield and the risk-free interest rate for the term of the option.
The fair value of the options granted is adjusted to reflect market vesting conditions but excludes the impact of any non-market vesting
conditions (for example, profitability and sales growth targets). Non-market vesting conditions are included in assumptions about the
number of options that are expected to become exercisable. At each reporting date, the entity revises its estimate of the number of options
that are expected to become exercisable. The expense recognised each period takes into account the most recent estimate. The impact of
53
Marvel Gold Limited
30 June 2021
Notes to the financial statements
the revision to original estimates, if any, is recognised in the consolidated statement of comprehensive income with a corresponding
adjustment to equity.
The fair value of these equity instruments does not necessarily relate to the actual value that may be received in future by the recipients.
The Company accounts for share based payments issued to non-employees in accordance with the share based payments standard.
(l) Revenue recognition
Interest revenue is recognised as it accrues in profit or loss, using the effective interest method.
(m) Trade and other receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less
provision for impairment. Trade receivables are generally due for settlement within 30 days. They are presented as current assets unless
collection is not expected for more than 12 months after the reporting date.
Collectability of trade receivables is reviewed on an ongoing basis. The Company uses an 'expected credit loss' (ECL) model to recognise an
allowance if not collectable.
Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or
delinquency in payments (more than 30 days overdue) are considered indicators that the trade receivable is impaired. The amount of the
impairment allowance is the difference between the asset’s carrying amount and the present value of estimated future cash flows,
discounted at the original effective interest rate. Cash flows relating to short-term receivables are not discounted if the effect of discounting
is immaterial.
The amount of the impairment loss is recognised in profit or loss within other expenses. When a trade receivable for which an impairment
allowance had been recognised becomes uncollectible in a subsequent period, it is written off against the allowance account. Subsequent
recoveries of amounts previously written off are credited against other expenses in profit or loss.
(n) Earnings per share (EPS)
Basic earnings per share
Basic EPS is calculated as the profit / (loss) attributable to equity holders of the Company, excluding any costs of servicing equity other than
ordinary shares, divided by the weighted average number of ordinary shares outstanding during the financial period, adjusted for any bonus
elements in ordinary shares issued during the period.
Diluted earnings per share
Diluted EPS adjusts the figures used in the determination of basic EPS to take into account the after income tax effect of interest and other
financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued
for no consideration in relation to dilutive potential ordinary shares.
(o) Cash and cash equivalents
For Consolidated Statement of Cash Flow presentation purposes, cash and cash equivalents includes cash on hand, deposits held at call with
financial institutions, other short-term highly liquid investments with original maturities of three months or less that are readily convertible
to known amounts of cash and which are subject to insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown
within borrowings in current liabilities on the Consolidated Statement of financial position.
(p) Financial instruments
(i) Non-derivative financial assets
The Group initially recognises loans and receivables and deposits on the date that they originated. All other financial assets (including assets
designated at fair value through profit or loss) are recognised initially on the trade date at which the Group becomes a party to the
contractual provisions of the instrument.
The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to
receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the
financial asset are transferred. Any interest in transferred financial assets that is created or retained by the Group is recognised as a separate
asset or liability.
Financial assets and liabilities are offset and the net amount presented in the consolidated statement of financial position when, and only
when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the
liability simultaneously.
54
Marvel Gold Limited
30 June 2021
Notes to the financial statements
The classification depends on the purpose for which the investments were acquired. Management determines the classification of its
investments at initial recognition and in the case of assets classified as held-to-maturity investments, re-evaluates this designation at each
reporting date.
Loans and receivables
Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are
recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition loans and receivables are
measured at amortised cost using the effective interest method, less any impairment losses.
Loans and receivables comprise cash and cash equivalents and trade and other receivables (see notes 4 and 5).
When an investment is derecognised, the cumulative gain or loss in equity is transferred to the consolidated statement of comprehensive
income. Fair value is determined by reference to the quoted price at the reporting date.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and at call deposits with original maturities of three months or less.
(ii) Non-derivative financial liabilities
All financial liabilities (including liabilities designated at fair value through profit or loss) are recognised initially on the trade date at which
the Group becomes a party to the contractual provisions of the instrument.
The Group derecognises a financial liability when its contractual obligations are discharged, cancelled or have expired.
The Group classified non-derivative financial liabilities into the other financial liabilities category. Such financial liabilities are recognised
initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, these financial liabilities are measured
at amortised cost using the effective interest rate method.
Other financial liabilities comprise loans from related parties and trade and other payables.
(iii) Loans and Borrowings
The Company entered into a Loan Note Subscription Agreement with funds managed by Castlelake L.P. to raise US$5 million from the issue
of secured Interim Loan Notes. At the end of the period, the Company has drawn the US$5 million Interim Loan Notes available. Full details
of the Interim Loan Notes are outlined in note 11.
The Loan Notes are valued at amortised cost using the effective interest method over the life of the loan. During the year the primary liability,
being loans and borrowings of $8,748,377 was novated to a subsidiary (i.e. no security recourse to the Company) and extended the
repayment date to 29 October 2022.
(q) Share capital
Ordinary shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and share options are
recognised as a deduction from equity, net of any tax effects.
(r) Segment reporting
Segment results that are reported to the Group’s Managing Director (the chief operating decision maker) include items directly attributable
to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly corporate assets (primarily the
Company’s headquarters), head office expenses, and income tax assets and liabilities.
(s) Parent entity information
The financial information for the parent entity, Marvel Gold Limited, disclosed in note 27 has been prepared on the same basis as the
consolidated financial statements.
(t) Rounding
The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191, issued by the
Australian Securities and Investments Commission, relating to the “rounding off” of amounts in the financial statements. Amounts in the
financial statements have been rounded off in accordance with the instrument.
(u) Comparatives and restatements of prior year balances
Comparatives have been reclassified where appropriate to enhance comparability.
55
Marvel Gold Limited
30 June 2021
Notes to the financial statements
29. Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported
amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to assets, liabilities,
contingent liabilities, revenue and expenses. Management bases its judgements, estimates and assumptions on historical experience and on
other various factors, including expectations of future events, management believes to be reasonable under the circumstances. The resulting
accounting judgements and estimates will seldom equal the related actual results. The judgements, estimates and assumptions that have a
significant risk of causing a material adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within the
next financial year are discussed below.
Asset acquisition
The Group has determined that the acquisition of the Oklo Projects is deemed to be an asset acquisition not a business combination. In
assessing the requirements of AASB 3 Business Combinations, the Group has determined that the assets acquired do not constitute a
business. The assets acquired consists of mineral exploration tenements. When an asset acquisition does not constitute a business
combination, the assets and liabilities are assigned a carrying amount based on their relative fair values in the purchase transaction and no
deferred tax will arise in relation to the acquired asset as the initial recognition exemption for deferred tax under AASB 112 applies. No
goodwill will arise on the acquisition.
Borrowings
As disclosed in note 11, the terms of the Interim Loan Notes previously issued by the Company were materially changed during the year
including but not limited to extending the term of the Interim Loan Notes by two years and accruing a 7.5% restructuring fee. Under the
requirements of AASB 9 - Financial Instruments the accounting for modification of a financial liability depends on whether the modification
is a substantial or a non-substantial modification. The modification is substantial where the present value of the restructured cash flows
differ from the carrying value of the debt by more than 10%. The Company has accounted for the modification as substantial. In making this
assessment, the Company applied a discount rate of 30% to the present value of restructured cashflow. The Company is the only ASX listed
graphite company that has secured debt and therefore the discount rate used to assess fair value was the effective interest rate at the date
of amendment being the only reference to the fair value of the cost of debt.
Exploration and evaluation
Exploration and evaluation acquisition costs have been capitalised on the basis that 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
recoverability of the value of the asset. The Company assesses whether any impairment indicators may exist over the area of interest to
assess recoverability each year.
Share-based payment transactions
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the
date at which they are granted. The fair value is determined by using either the Binomial or Black-Scholes model taking into account the
terms and conditions upon which the instruments were granted. The accounting estimates and assumptions relating to equity-settled share-
based payments would have no impact on the carrying amounts of assets and liabilities within the next annual reporting period but may
impact profit or loss and equity.
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.
As outlined in the events since the end of the financial year note in the Directors Report and note 10, as a result of the economic uncertainty
caused by COVID-19, the Company’s financier decided not to proceed with the previously announced financing of the development of the
Company’s Chilalo Graphite Project. The economic impact of COVID-19 and the subsequent market fallout resulted in a sharp decline in
the Company’s market capitalisation, and as such any project finance solution under terms previously agreed was likely to result in
unacceptable dilution for the Company’s shareholders. Subsequent to year end, the Company formalised revision of the terms of the terms
LNSA to defer repayment to 29 October 2022 and confining the Financier’s security to Chilalo Project related assets and removing the
Financier’s legal recourse to the Company.
Other than as addressed in specific notes, there does not currently appear to be any other significant impact upon the financial statements
or any significant uncertainties with respect to events or conditions which may impact the unfavourably as at the reporting date or
subsequently as a result of the COVID-19 pandemic.
56
Marvel Gold Limited 30 June 2021 Directors declaration 57 In the opinion of the Directors: (a) the consolidated financial statements and notes set out on pages 27 to 56 are in accordance with the Corporations Act 2001, including: (i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements, and (ii) giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its performance for the financial year ended on that date, and (b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable; and The Directors have been given the declarations by the Managing Director and Chief Financial Officer required by section 295A of the Corporations Act 2001. This declaration is made in accordance with a resolution of the Directors. Stephen Dennis Chairman PERTH On this 30th day of September 2021
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
INDEPENDENT AUDITOR'S REPORT
To the members of Marvel Gold Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Marvel Gold Limited (the Company) and its subsidiaries (the
Group), which comprises the consolidated statement of financial position as at 30 June 2021, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement
of changes in equity and the consolidated statement of cash flows for the year then ended, and notes
to the financial report, including a summary of significant accounting policies and the directors’
declaration.
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
Act 2001, including:
(i)
Giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its
financial performance for the year ended on that date; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
Report section of our report. We are independent of the Group in accordance with the Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code)
that are relevant to our audit of the financial report in Australia. We have also fulfilled our other
ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an
Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form
part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.
Material uncertainty related to going concern
We draw attention to Note 28(iv) in the financial report which describes the events and/or conditions
which give rise to the existence of a material uncertainty that may cast significant doubt about the
group’s ability to continue as a going concern and therefore the group may be unable to realise its
assets and discharge its liabilities in the normal course of business. 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.
Carrying value and classification of assets held for sale
Key audit matter
How the matter was addressed in our audit
As disclosed in Note 8, included in the Group’s
Our procedures included, but were not limited to:
consolidated statement of financial position at 30 June
2021 are non-current assets associated with the Chilalo
Project classified as assets held for sale.
·
Evaluating management’s conclusion to ensure the
assets and associated liabilities meet the
definition of held for sale in accordance with AASB
The assessment of the recoverable amount of the
5 Non-current Assets Held for Sale and
assets held for sale requires management to exercise
Discontinued Operations;
judgement and has been based on a Fair Value Less
Cost of Disposal approach. A market based approach
has been used by the Directors, reflecting the value
which is expected to be realised through the spin-out
·
·
and subsequent Initial Public Offering (‘IPO’) of
Evolution Energy Minerals Limited.
Evaluating management’s assessment of the
recoverable value;
Evaluating the appropriateness of classification
and presentation of these assets and associated
liabilities in the Financial Report; and
·
Assessing the appropriateness of the related
disclosures in Note 8 and 12 to the Financial
Report.
Loan Note restructure
Key audit matter
How the matter was addressed in our audit
As disclosed in Note 11 the Group restructured its Loan
Our procedures included, but were not limited to:
Notes associated with the Castlelake Loan Note
Subscription Agreement on 20 July 2020.
As part of the restructure, the new terms of the Loan
Notes have extended the facility to October 2022 and
included an amendment fee. In addition, the Loan
Notes were confined to the Chilalo Project related
assets, removing legal recourse to the Company.
The modification of the loan agreement has been
accounted for by management as an extinguishment of
the original financial liability and the recognition of a
new financial liability due to the substantially different
terms of the revised agreement.
·
·
Assessing the terms and conditions under the new
Loan Note Agreement;
Evaluating management’s treatment of the
restructure including recognition of a new
financial instrument against the requirements of
the relevant accounting standards; and
·
Assessing the appropriateness of the disclosures
included in Note 11 to the Financial Report.
Other information
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 30 June 2021, but does not include the
financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Other matter
The financial report of Marvel Gold Limited, for the year ended 30 June 2020 was audited by another
auditor who expressed an unmodified opinion on that report on 28 September 2020.
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf
This description forms part of our auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 12 to 20 of the directors’ report for the
year ended 30 June 2021.
In our opinion, the Remuneration Report of Marvel Gold Limited, for the year ended 30 June 2021,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
BDO Audit (WA) Pty Ltd
Dean Just
Director
Perth, 30 September 2021
ASX Additional Information
Marvel Gold Limited
30 June 2021
Additional information required by the Australian Securities Exchange Ltd and not shown elsewhere in this report is as follows. The
information is current as at 29 September 2021.
(a) DISTRIBUTION OF EQUITY SECURITIES
Ordinary Shares
1
5,001
10,001
100,001
-
-
-
5,000
10,000
100,000
and over
Number of holders holding less than a
marketable parcel of shares
Number of
holders
226
141
608
342
1,317
252
Number of
shares
185,097
1,227,152
23,398,719
554,121,840
578,932,8081
350,520
1.
7,500,000 shares are subject to voluntary escrow to 15 June 2023.
Unlisted Options
1
10,001
100,001
-
-
10,000
100,000
and over
Number of
holders
-
1
13
8
Number of Unlisted
Options
-
75,000
44,820,386
44,895,386
(b) TWENTY LARGEST SHAREHOLDERS
The names of the twenty largest holders of quoted shares as at 29 September 2021 are:
Rank Name
Number of shares
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
CAPITAL DI LIMITED
DEUTSCHE BALATON AKTIENGESELLSCHAFT
CITICORP NOMINEES PTY LIMITED
DELPHI UNTERNEHMENSBERATUNG AKTIENGESELLSCHAFT
BPM CAPITAL LIMITED
HSBC CUSODY NOMINEES LIMITED
QUINTERO GROUP LTD
MR MARTYN ROGER BROWN
MONTANA REALTY PTY LTD
BNP PARIBAS NOMINEES PTY LTD SIX SIS LTD
BNP PARIBAS NOMINEES PTY LTD
CLARKSON'S BOATHOUSE PTY LTD
2INVEST AG
MR PHILIP HOSKINS
LONE JET PTY LTD
MR ANDREW CLAYTON
MR BRIAN MCCUBBING
EQUITY TRUSTEES LIMITED
ONE MANAGED INVESTMENT FUNDS
MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED
Total Top 20 holders of ORDINARY FULLY PAID SHARES
Total Remaining Holders Balance
63
80,000,000
41,666,667
30,730,668
25,679,488
25,000,000
18,389,723
16,083,333
15,250,000
13,500,000
11,338,686
10,984,777
8,079,330
7,945,492
7,461,328
7,000,000
6,000,000
5,556,840
5,266,667
5,259,664
5,006,079
346,198,742
232,734,066
% of
shares
13.82
7.20
5.31
4.44
4.32
3.18
2.78
2.63
2.33
1.96
1.90
1.40
1.37
1.29
1.21
1.04
0.96
0.91
0.91
0.86
59.80
40.20
ASX Additional Information
(c) TWENTY LARGEST HOLDERS OF UNLISTED OPTIONS
Rank
Name
1.
2.
3.
4.
5.
6.
7.
8.
9.
MR PHILIP HOSKINS
MR CHRISTOPHER PHILIP VAN WIJK
MR RICHARD HENRY TOMLINSON
MR ANDREW PARDEY
MR CHRISTOPHER BRUCE KNEE
MRS RUTH MARY MCKENZIE + MR STUART ANDREW MCKENZIE
MR ILIAS KEITA
MR STEPHEN BRUCE DENNIS + MRS ALISON JILL DENNIS
MR SIDI HAIDARA
10.
MR KAREL DONDERS
Marvel Gold Limited
30 June 2021
Number of unlisted
options
% of
unlisted
options
10,250,000
8,750,000
6,261,538
4,500,000
4,266,924
4,266,924
2,700,000
2,300,000
1,200,000
200,000
22.83
19.49
13.95
10.02
9.50
9.50
6.01
5.12
2.67
0.45
The options listed in the table above excludes all options issued to KMP under the employee share scheme up to 30 June 2020. These
options will or have lapsed unexercised owing to a failure to meet applicable vesting criteria.
(d) SUBSTANTIAL SHAREHOLDERS
Capital DI Limited: 13.82%
Deutsche Baloton Aktiengesellschaft: 7.20%
(e) VOTING RIGHTS
Each ordinary share is entitled to one vote when a poll is called, otherwise each member present at a meeting or by proxy has one
vote on a show of hands. Options have no voting tights until such time as they are exercised and shares have been issued.
(f) UNQUOTED SECURITIES >20% HOLDERS
Class
Options exercisable @ $0.035, expiring 29/07/24
Options exercisable @ $0.06, expiring 29/07/24
Options exercisable @ $0.10, expiring 29/07/24
Options exercisable at $0.06, expiring 27/08/2024
Options exercisable at $0.00, expiring 27/08/2024
Options exercisable at $0.00, expiring 27/08/2026
Holder
Phil Hoskins
Chris van Wijk
Phil Hoskins
Chris van Wijk
Phil Hoskins
Chris van Wijk
Richard Tomlinson
Sidi Haidara
Richard Tomlinson
Richard Tomlinson
Christopher Knee
Stuart McKenzie
64
Number
5,125,000
4,375,000
2,562,500
2,187,500
2,562,500
2,187,500
2,000,000
1,000,000
1,130,769
1,130,769
558,462
558,462
Marvel Gold Limited
30 June 2021
ASX Additional Information
(g) UNQUOTED SECURITIES
Class
Number of Holders
Number of Securities
Unlisted options, exercisable at $0.00, expiring 27/08/2024
Unlisted options, exercisable at $0.00, expiring 27/08/2026
Unlisted options, exercisable at $0.06, expiring 27/08/2024
Unlisted options, exercisable at $0.035, expiring 29/07/2024
Unlisted options, exercisable at $0.060, expiring 29/07/2024
Unlisted options, exercisable at $0.100, expiring 29/07/2024
8
3
3
8
8
8
3,047,693
2,247,693
3,500,000
18,050,000
9,025,000
9,025,000
Project
Chilalo
Chilalo
Chilalo
Chilalo
Chilalo
Tabakorole
Lakanfla
Tabakorole
Tabakorole
Kolondieba
Kolondieba North
Yanfolila
Yanfolila East
Tabakorole
Tabakorole
Tabakorole
Tabakorole
Tabakorole
Tabakorole
Tabakorole
Location
Tanzania
Tanzania
Tanzania
Tanzania
Tanzania
Mali
Mali
Mali
Mali
Mali
Mali
Mali
Mali
Mali
Mali
Mali
Mali
Mali
Mali
Mali
(h) TENEMENT SCHEDULE
Tenement
Ownership
ML 569/2017 - Chilalo
PL 11050/2017 - Chilalo West
PL 11034/2017 - Chilalo
PL 9929/2014 - Chikwale
PL 9946/2014 - Machangaja
PR 15/758 - Tabakorole
PR 18/950 - Lakanfla
PR 16/387 - Sirakourou
PR 19/1057 - Solabougouda
PR 17/879
PR 16/803
PR 17/875
PR 16/802
Npanyala
Sirakoroble South
Foulalaba
Sirakourou South
Ngolobala
Tanhala
Naniola
100%
100%
100%
100%
100%
51%
33%
80%
80%
80%
80%
80%
80%
51%
51%
100%
100%
100%
100%
100%
65