M
A
T
S
A
R
E
S
O
U
R
C
E
S
L
I
M
T
E
D
I
A
N
N
U
A
L
R
E
P
O
R
T
2
0
2
1
www.matsa.com.au
ANNUAL
REPORT
2021
Executive Chairman
Director
Director
Director (appointed 17 February 2021)
DIRECTORY
Directors
Paul Poli
Franciscus (Frank) Sibbel
Andrew Chapman
Pascal Blampain
Company Secretary
Andrew Chapman
Registered Office
Suite 11,
139 Newcastle Street
PERTH WA 6000
Tel: (08) 9230 3555
Fax: (08) 9227 0370
Email: reception@matsa.com.au
Postal Address
PO BOX 376
Northbridge W.A. 6865
Website
www.matsa.com.au
Share Registry
Advanced Share Registry Services
110 Stirling Highway
Nedlands WA 6009
Tel: (08) 9389 8033
Fax: (08) 9262 3723
Home Stock Exchange
Australian Securities Exchange Ltd
Level 40, Central Park
152-158 St George’s Terrace
Perth WA 6000
ASX Code: MAT
Auditors
Nexia Perth Audit Services Pty Ltd
Level 3
88 William Street
PERTH WA 6000
MATSA RESOURCES LIMITED - CONTENTS
CORPORATE DIRECTORY
CHAIRMAN’S REPORT
OPERATIONS REVIEW
DIRECTORS’ REPORT
AUDITOR’S INDEPENDENCE DECLARATION
FINANCIAL STATEMENTS
-
-
-
-
-
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 and Forming Part of the Consolidated Financial Statements
DIRECTORS’ DECLARATION
INDEPENDENT AUDIT REPORT
ADDITIONAL ASX INFORMATION
SCHEDULE OF MINING TENEMENTS
1
3
4
44
59
60
61
62
63
64
108
109
112
118
MATSA RESOURCES LIMITED - CHAIRMAN’S REPORT
2021 ANNUAL REPORT · PAGE 3
Dear Shareholder,
The year saw us focused on developing a strategy that would serve the Company’s future and create
value for all shareholders. We substantially increased our gold resource, and produced several feasibility
studies which demonstrates that the Company can develop excellent returns for shareholders by
producing gold at the Lake Carey Gold Project through a Matsa owned and operated gold treatment
plant. The pathway forward is by continuing to increase our gold resources through exploration and
building our own treatment plant.
However, to achieve this strategy, we needed to take a step backwards during this year and temporarily
suspend our operations at the Red October underground gold mine. We were not able to attain
forecasted results at Red October and accordingly, it would be naive of us to not expect that this
would bring disappointment to some shareholders. All indications at the onset were positive and we
maintained good initial progress. It was not to last and whilst we could have, and some may say should
have, ceased operations earlier, we took the decision to continue as the operations kept delivering
important geological and mining information which proved invaluable for our future planning and drill
preparations. Red October, in my opinion, will in the future be an excellent asset and combined with
the open pits that are ready for development at Fortitude and Devon, we do have an excellent ore
source for our own treatment plant. Future new discoveries will make it even better.
The Company will shape up, we are on the precipice of having a great Company, only patience and
hard work is what will deliver the results that we are chasing and I am absolutely positive the team
at Matsa are up for that challenge and will in the near term steer this Company to the success that
we anticipate.
As I have mentioned in previous years, I am in awe with the pool of talent that has come together at
Matsa and I thank them for their dedication and comradeship throughout the year. I thank my fellow
board members, senior management and the whole great team within our exploration, mining and
Thailand office who are always ready to put a dedicated and unwavering effort in the advancement
of Matsa. We remain committed to achieving our goals in a safe, environmentally friendly and
compassionate community minded manner.
The board appreciates the support offered by the many shareholders who communicated with us
during the year.
PAUL POLI
EXECUTIVE CHAIRMAN
MATSA RESOURCES LIMITED CHAIRMAN’S REPORT -3-Dear Shareholder, In writing this year’s report, I thought I would reflect on what I wrote last year, and what really appealed to me was my comment regarding the “The Team”, in that how reliant our whole company is on each individual person that makes up the Matsa team. I, nor anyone, could foresee how important this team attribute, the group made up of individuals working together to achieve a goal, would matter to us as shareholders this year. I proudly observed how our team, the whole Matsa team, took on the Covid-19 planning offensive. How proudly I watched them put their other team members and the company first. How we adhered to our new protection mechanisms and rules which we instigated together to protect all team members and our ambitious plans going forward. For me, this is our greatest achievement this year, we coped with whatever nature threw at us, we in fact excelled at it, and I am sure that we can continue to grow with whatever challenges are thrust upon us. It is important to recognise the twin boom drillers, the underground truck and plant operators, the chargers, the cleaners/caterers, the geologists, engineers and all the admin people and safety officers. Our surface exploration geologists and of course the team in the Perth office, as well the great job the Thailand team have done in managing all the geological data for our operations in Australia. These are the real people that we need to thank this year, and I am sure all shareholders join me in appreciating their efforts. We look forward this year to growing the Red October operations, and developing Devon and also finding a pathway forwards for our valuable Fortitude gold mine. Whilst we work diligently towards our strategy of becoming a mid-tier gold producer, we will also strongly focus on our exploration activities which will grow and build our company. We have an exceptional tenement package. We can and we will achieve all in a safe, environmentally friendly and community minded manner. The board looks forward to the next year and what it will bring. PAUL POLI EXECUTIVE CHAIRMAN
MATSA RESOURCES LIMITED - OPERATIONS REVIEW
2021 ANNUAL REPORT · PAGE 4
SUMMARY – REPOSITIONING TO DELIVER THE STRATEGY
During the year, Matsa Resources Limited (‘Matsa’ or ‘the Company’) has repositioned itself to leverage
off a growing resource base at Lake Carey (refer Figure 1) and has set about focusing activities
with a clear purpose and pathway to establishing a sustainable long term gold inventory, mining and
processing business, centred on Lake Carey.
With the strategy now driving business activities, Matsa has focused its energy into building sufficient
resources and reserves that will support construction of a Matsa owned and operated processing plant
and deliver improved operating costs and higher margins to the Company. Ultimately, this repositioning
of the business is expected to unlock the full potential of the Lake Carey asset.
As a result, a number of important and positive outcomes have been achieved over the past 12
months whose highlights include:
• An 99% increase in Mineral Resource at Lake Carey from 439,000oz @ 2.3 g/t Au to
874,000*oz @ 2.4 g/t Au
• A scoping study into a Matsa owned and operated processing plant at Lake Carey returned a
favourable outcome improving the bottom line at the Fortitude mine by A$33M
• Positive cash flow of A$96M from the Fortitude and Devon pits utilising a proposed Matsa
processing plant
• Adopted a clear strategic pathway to realising vision of transitioning from an explorer with
periodic small scale mining to a long term sustainable miner with processing capacity
• Suspension* of production at the Red October underground mine to enable a full drill out, mine
design and rescheduling of the operation
• Established resource and mine development hubs to provide future operational and scheduling
efficiencies
• Disciplined and diligent execution of a robust exploration and development project pipeline
clearly aimed at delivering on the strategy
* Note these changes are current as of 1st September 2021 but took effect after the June 30 reporting period
FIGURE 1: Lake Carey Mineral Resource growth since 2020 Annual Report (excluding mining
depletion) to 1st September 2021. Refer Resources and Reserves table for actual 30 June
statement.
MATSA RESOURCES LIMITED - OPERATIONS REVIEW
2021 ANNUAL REPORT · PAGE 5
Lake Carey (refer Figure 2) comprises 503km2 of highly prospective landholding within the Laverton
Tectonic Zone (LTZ) of the Kurnalpi Terrane. The Lake Carey project is bookended to the north by
world class mines such as Granny Smith, Sunrise Dam and Wallaby, to the west Butchers Well and
to the south Deep South. The eastern margin of the tenement package is bounded by the regional
Barnicoat East Fault structure that separates the Kurnalpi and Burtville terranes.
The Laverton Tectonic Zone is located in the north-eastern area of the Eastern Goldfields of Western
Australia’s Yilgarn province (refer Figure 3).
Devon Pit RC drilling in October 2020
Matsa has additional gold and copper exploration projects in Western Australia’s Pilbara, nickel
exploration projects in Western Australia’s Fraser Range and copper & iron ore prospects in Thailand
(refer company website https://www.matsa.com.au/projects for further information).
FIGURE 2: Lake Carey Gold Project
Matsa’s Mining and Resource Hubs:
Red October (red)
Devon (blue)
Fortitude (yellow)
Lake Carey South (orange)
Lake Carey North (pink)
Lake Carey Central (green)
MATSA RESOURCES LIMITED - OPERATIONS REVIEW
2021 ANNUAL REPORT · PAGE 6
FIGURE 3: Longitudinal Projection showing ROSZ Central and ROSZ North (Au >1g/t)
In the Fraser Range, IGO Limited (IGO) has completed one diamond drill hole into the Company’s
E39/3070 tenement under an earn-in joint venture agreement.
REVIEW OF OPERATIONS
The Lake Carey project is well serviced by existing transport infrastructure and the regional centres
of Laverton (to the north), Leonora (to the west) and Kalgoorlie (to the south west) who have all
weather airstrips. Importantly much of the key resource projects are located within granted mining
licences and accessible by a network of established haul roads. As such all of the key projects have
a shorter lead time to obtaining final mining approvals than would normally be encountered at the
exploration and assessment phase.
Project status for key resource and mining options are outlined in the following table:
PROJECT
Fortitude Stage 2
Gallant
Bindah
Red October
Devon Pit
Hill East
Olympic
MINING LEASE
HAUL ROADS
MINE PROPOSAL
Granted
Granted
Granted
Granted
Granted
No
Granted
Existing
Existing
Existing
Existing
Existing
Partial
Existing
Current
Required
Required
Current
Required
Required
Required
TABLE 1: Key resources and mining lease status
MATSA RESOURCES LIMITED - OPERATIONS REVIEW
2021 ANNUAL REPORT · PAGE 7
EXPLORATION AND DEVELOPMENT
The bulk of Matsa’s exploration work during this financial year has been focused on the Devon Hub
and Red October with lesser work at the Fortitude Hubs, aiming to support the established resource
base at the Fortitude mine as a key milestone to delivering Matsa’s overall strategy:
•
a concept study into a proposed Matsa processing plant located at Lake Carey has been
completed
• work has commenced on site selection for a proposed Matsa processing plant
•
•
•
•
at Red October, mining, underground exploration drilling and geophysics has been completed
at Devon, drilling, soil sampling, geophysics, resource modelling and mining studies has been
completed
at Fortitude geophysics, mining studies and resource evaluation has been completed
regionally, bottom of hole geochemical sampling and general reconnaissance field work has
been completed.
PROPOSED MATSA PROCESSING PLANT
During the year, Matsa appointed CPC Project Design (CPC) to undertake an Engineering Concept
Study (‘Study’) on a 600,000 tonnes per annum gold-ore treatment plant to be constructed at the
Lake Carey Gold Project.
The Study demonstrates a Matsa owned and operated treatment plant located centrally to the
existing Fortitude mine could significantly and positively impact the financial results of Matsa’s mining
opportunities.
Key results of the Study (accuracy level +/- 40%) show:
• Capital cost of a 600,000tpa gold-ore treatment plant to be A$35.4M, plus a contingency of
A$7.1M
• Additional capital cost of associated Infrastructure to be A$13.6M, plus a contingency of
A$2.7M
• Ore processing costs to be A$32.26/t, plus a contingency of A$5.54/t
• Overall project duration of 18 months from decision to proceed with a construction time of
12 months.
A review of the Fortitude mine study shows a projected positive cashflow from mining operations
substantially increases to A$55.4M compared to A$21.8M (at A$2,500/oz Au) and there is potential
to increase recoverable ounces through re-optimisation of existing pit shells using the CPC Study’s
lower haulage and processing cost profile.
The Study also highlights the potential for a dramatic positive impact on the economics of the Red
October underground gold mine by reducing production costs in the area of haulage and 3rd party
processing costs under the current ore purchase agreement. Operational cost savings could also lead
to a reduction in operating cutoff grade thereby opening up opportunities that are currently being
left behind.
DEVON HUB – LAKE CAREY
Highlights for the year at the Devon Hub include:
• Maiden Mineral Resource Estimate of 115,000oz @ 2.9 g/t Au
MATSA RESOURCES LIMITED - OPERATIONS REVIEW
2021 ANNUAL REPORT · PAGE 8
• Scoping study into open pit mining of Devon Pit demonstrates positive operating cashflow of
A$41M using a Matsa processing plant
• Soil sampling identified a number of large footprint gold in soil anomalies with peak values of
10.9g/t Au
• Sub-Audio magnetic (SAM) survey produced 38 geophysical anomalies
• RC drilling of 10,171m across Devon Pit, Olympic, Hill East and LIN prospects returning
excellent gold intercepts.
RESOURCES
During the financial year the Company released maiden Mineral Resource Estimates for Devon Pit
(65koz @ 4.6 g/t Au), Olympic (15koz @ 2.8 g/t Au) and Hill East (35koz @ 1.7 g/t Au) prospects
(refer Figure 4). This followed completion of 5,695m of RC drilling at Devon Pit, 2,382m of RC at
Olympic during August to October 2020, and 1,416m of RC drilling at Hill East earlier in 2020.
Importantly, all resources start from surface and are characterised by relatively thin 1-3m near vertical
to shallow dipping lode systems containing high grade shoots. These shoots are known to exist
through official records of past mining when a number of shaft and level development mines operated
in the area during the years before 1945.
The Devon Pit was briefly mined in two stages by GME Resources Limited (GME) in 2015 and 2016
producing approximately 61kt @ 5.3g/t for 10.4koz from the shallow oxide ores. The ore was trucked
and processed at Saracen Mineral Holdings Limited’s (Saracen) Carosue Dam operation returning a
reported 93% mill recovery for the ore.
A number of additional prospects within the area are under review for the potential to quickly define
resources with the addition of new drilling.
FIGURE 4: Devon Hub Mineral Resource outlines
MATSA RESOURCES LIMITED - OPERATIONS REVIEW
2021 ANNUAL REPORT · PAGE 9
GEOCHEMISTRY
During the financial year soil surveys were completed which have highlighted a number of large
footprint gold in soil anomalies (refer Figure 5) some of which were drilled during May-June 2021.
Additional surveys are planned to extend coverage to the west, northwest and east of current coverage.
An added benefit in conducting these surveys is that historical shafts that are not on official records
can be picked up and add to a growing understanding of the geological story and prospectivity. In
many cases these shafts are obvious and worthy targets for new drilling.
FIGURE 5: Devon Hub gold in soil anomalism
MATSA RESOURCES LIMITED - OPERATIONS REVIEW
2021 ANNUAL REPORT · PAGE 10
GEOPHYSICS
In October 2020, a geophysical survey (refer Figure 6) using Sub-Audio Magnetics (‘SAM’) was
undertaken aimed at assisting interpretation of this strongly anomalous and complex structural area.
The survey highlighted up to 38 geophysical anomalies, three of which were selected for immediate
follow up drilling due to their proximity to existing resources and coincident gold in soil anomalism
(refer Figure 7) being LIN1, HE1-2 and HE5 prospects.
FIGURE 6: Devon Hub SAM survey coverage
FIGURE 7: 2021 Devon Hub drilling program
MATSA RESOURCES LIMITED - OPERATIONS REVIEW
2021 ANNUAL REPORT · PAGE 11
DRILLING
During October – November 2020, a program of 58 holes comprising 6,494m of RC drilling was
completed across Olympic and Devon Pit prospects. The drilling was aimed at infill and resource
definition of previous drilling completed by Matsa in 2018 and 2019. The results of this, and prior
drilling, led to a maiden resource of 115,000oz @ 2.9g/t Au being established across the Devon Pit,
Olympic and Hill East prospects (refer Figure 8).
FIGURE 8: Devon Hub resource outlines
In May 2021, an exploration program comprising 42 holes for 3,677m of RC drilling was completed
at the Devon Pit, HE1/HE2, HE5 and LIN prospects. The aim of the drilling was designed to test
exploration targets defined from gold in soil and geophysical anomalism as well as test for extensions
to existing resources.
New high grade intercepts (refer Figure 9) at LIN5, HE1, HE2 and HE5 prospects combined with
widespread lower tenor mineralisation reinforces the concept that extensive surface gold anomalism
reflects significant mineralised potential at depth yet to be fully explored.
A selection of significant new intercepts include:
• 4m of 3.23 g/t Au from 69m in hole 21DVRC054
• 3m of 2.52 g/t Au from 99m in hole 21DVRC053
• 1m of 5.95 g/t Au from 83m in hole 21DVRC063
• 1m of 6.77 g/t Au from 10m in hole 21HERC035
• 1m of 5.03 g/t Au from 22m in hole 21HERC039
• 3m of 14.2 g/t Au from 123m in hole 21HERC042
• 3m of 6.64 g/t Au from 84m in hole 21HERC046
• 8m @ 2.66 g/t Au from 63m in hole 21HERC045
• 1m @ 29.2 g/t Au from 17m in hole 21HERC061 (new lode)
MATSA RESOURCES LIMITED - OPERATIONS REVIEW
2021 ANNUAL REPORT · PAGE 12
FIGURE 9: 2021 drilling results
Importantly, the deepest intercept of 3m @ 14.2 g/t Au from 123m in hole 21HERC042 (refer Figure
10) at Hill East, is also the highest grade intersected to date, suggesting grades potentially increase
with depth. Further drilling is planned to test downdip and along strike of 21HERC042.
MATSA RESOURCES LIMITED - OPERATIONS REVIEW
2021 ANNUAL REPORT · PAGE 13
FIGURE 10: 2021 drilling results
Exploration at Devon has identified widespread surface gold anomalism in soil sampling and an
abundance of historical workings. This anomalism covers a broad area in excess of 6km strike by 4km
across strike.
Soil sampling and drilling continues to identify new lode structures (eg LIN5 in Figure 9) previously
not recognised and demonstrates the high prospectivity of the area with potential to define additional
new targets by extending soil survey coverage.
The drilling results demonstrate that the anomalous surface gold extends below surface to depths of
at least 120m, which is the maximum depth of recent drilling. The area hosts well over 30-40 historic
shafts, multiple large footprint gold in soil anomalies and is characterised by multiple structural faults
and splays all focused on a large scale fault structure over a range of at least 6km by 4km. There are
less than 10 drill holes completed to depths beyond 100m depth.
Matsa’s exploration model for this area is a Kanowna Belle analogy (refer Figure 11) with multiple
smoke/outcropping thin shallow quartz lodes, a probable zone of depletion below this (but yet to be
identified in with drilling) and a large mineralised source/body at depth (also yet to be drill tested).
A key requirement for Matsa to advance this model is an improved understanding of the structural
setting and it is hoped a 3D seismic survey will go a long way to providing some clarity. Matsa has
recently participated in new research on 3D seismic experimental surveys at Nautilus and Fortitude
North that if successful could be applied at Devon/Hill East.
Further drilling is planned for the coming year.
DEVON PIT SCOPING STUDY
During the year a maiden Mineral Resource Estimate was produced for the Devon Pit and a scoping
study was undertaken on the resource based on processing the ore through a Matsa owned processing
plant.
MATSA RESOURCES LIMITED - OPERATIONS REVIEW
2021 ANNUAL REPORT · PAGE 14
FIGURE 11: Devon exploration model (KB analogy)
One of the numerous historical shafts at Linden gold camp (Devon Hub)
MATSA RESOURCES LIMITED - OPERATIONS REVIEW
2021 ANNUAL REPORT · PAGE 15
The scoping study delivers an excellent outcome (refer Figures 12 and 13) and indicates immediate
commencement of mining at the Devon Pit is warranted. Summary findings include:
• Total operating cash surplus A$40.75M over 12 months
• Production of ~37,000 oz gold at 4.64g/t from 264,000t with an assumed 93% recovery
based on past GME Resources trial mining experience
• Operating cash cost of A$1,144/oz gold
• Assumed average gold sale price of A$2,250/oz
• Production of ore commences from surface.
The shallow high grade nature of mineralisation at the Devon Pit, lends itself to a potential cutback
mining scenario with minimal pre-strip requirements, early access to ore and mining and approvals
related studies are underway. The grade and mineralisation are expected to be amenable to both open
pit and underground mining methods and should provide a logical add-on to the established mining
plan at the Fortitude mine.
Whilst expansion of the Devon Pit as a cutback looks to be a logical development, Matsa is reviewing
the resource in context of an underground mining option to fully exploit the resource because pit
optimisation reaches a maximum depth due to strip ratios, which leaves ore remaining at the bottom
of the pit. The resource remains open at depth.
FIGURE 12: Devon Pit optimised shell and mineralised lodes
MATSA RESOURCES LIMITED - OPERATIONS REVIEW
2021 ANNUAL REPORT · PAGE 16
FIGURE 13: Devon Pit operation cash flow
The Devon Pit was originally mined in the early 1900s via shaft and level development and later mined
during 2015 and 2016 by GME by open pit mining who reported production of approximately 61kt @
5.3g/t for 10.4koz.
Devon was acquired by Matsa in November 2018 which removed multiple tenement ownership
impediments to exploration and at the time of acquisition, no resource was reported.
Devon Pit Looking north towards Red October
MATSA RESOURCES LIMITED - OPERATIONS REVIEW
2021 ANNUAL REPORT · PAGE 17
UPCOMING ACTIVITES AT DEVON HUB
During the next financial year, the following activities are planned:
• Update Hill East and Devon Pit resource models for new drilling
• Develop preliminary geology/mineralising models for the LIN 5, New Year’s Gift and Democrat
lode structures
• Plan and execute follow up drilling at Hill East and other large footprint gold in soil anomalies
• Complete studies associated with obtaining mining approvals for Devon Pit
• Potential 3D seismic survey to define drill target/structures at depth.
FORTITUDE HUB – LAKE CAREY
Highlights for the year at the Fortitude Hub include:
• A 61% increase in Mineral Resource to 553,000oz @ 1.9 g/t Au, up from 343,000oz @ 2 g/t
Au
• Revised cost input into the Fortitude mine using a Matsa owned and operated processing
plant improving the bottom line at the Fortitude mine by A$33M
• Maiden Mineral Resources of 40,000oz @ 2.4 g/t Au at Bindah and 23,000oz @ 2.1 g/t Au
at Gallant
•
Inclusion of Gallant and Bindah prospects into the Fortitude exploration and development
pipeline
• Reprocessing of Sub-audio magnetic (SAM) survey with target generation yet to be finalised
• Fortitude mine optimisation and mining review based on the upgraded resource model has
commenced.
RESOURCES
During the financial year Matsa delivered maiden Mineral Resource Estimates of 63,000oz @ 2.3g/t
Au for the Bindah and Gallant prospects of the Fortitude Hub. Bindah (refer Figure 14) was last
mined by WMC Nickel in the 1980s exploiting the shallow high grade gold oxide ore. Gallant has not
been mined before and both deposits sit under lake sediment cover.
Both prospects sit along well defined shear zone (Bindah Shear) running along the western/southern
margin of Lake Carey (refer Figure 15) which also includes the Intrepid and Bravado prospects (refer
Figure 16) further to the northwest.
The Bindah resource remains open along strike and at depth with clear exploration potential to extend
the resource to the north west along the Bindah shear where the existing drilling remains shallow and
largely confined to the existing pit shell. Mapping and modelling of the mineralisation suggests the
presence of grade shoots within a single, well constrained lode structure. The geometry of these ore
shoots remains poorly understood and requires further drilling.
Whilst both Bindah and Gallant are largely Inferred Resources, a small vertical zone of 15m of
Indicated Resource exists at Bindah within the 15m immediately below the current base of the pit
where close spaced drilling has previously been completed. Drilling to test for extensions to Bindah, as
well as Gallant, requires a specialised lake capable drill rig. In this regard, a program is being planned
for Bindah, Gallant and the nearby Fortitude North prospect.
MATSA RESOURCES LIMITED - OPERATIONS REVIEW
2021 ANNUAL REPORT · PAGE 18
FIGURE 14: Bindah pit
FIGURE 15: Bindah Shear, Bindah Pit and Gallant resource outlines
MATSA RESOURCES LIMITED - OPERATIONS REVIEW
2021 ANNUAL REPORT · PAGE 19
FIGURE 16: Regional setting of Bindah, Fortitude and Wilga Shear zones and existing prospects
MATSA RESOURCES LIMITED - OPERATIONS REVIEW
2021 ANNUAL REPORT · PAGE 20
In addition to Bindah and Gallant resources, and subsequent to the end of the financial year, Matsa
finalised an update of the Fortitude Mineral Resource Estimate (MRE), which has resulted in a
significant increase (30%) from 343,000oz to 447,000oz at similar grades (refer Figure 17).
Since release of the 2017 version of the Fortitude Mineral Resource Estimate, completion of additional
drilling comprising 942RC holes for a total of 22,582m and trial mining during 2017-2018 totalling
162,003t @ 1.93g/t (9,522oz), has prompted this MRE update.
The upgrade in the estimate represents a significant change to the 2017 model which previously
produced a 22-month open pit mining project, delivering 54,000 ounces of gold (recovered). A mining
review and re-optimisation of the model is being undertaken to determine whether the upgrade in
the model translates to a larger optimised pit shell with results expected in September-October 2021.
FIGURE 17: Fortitude model comparison between 2017 and 2021 versions
GEOPHYSICS
An experimental 3D seismic survey was undertaken by the geophysical department at Curtin University
late in the previous financial year however results were not available at the time of writing the previous
annual report. Whilst results were encouraging technical issues were encountered with equipment
which terminated the study early. It is planned to return and complete the survey in due course. The
study emphasised the applicability of low cost DAS cabling in place of conventional geophones. This
technology will lead to highly effective surveys completed at a fraction of the cost of conventional
seismic surveys.
Preliminary results are highlighted in Figure 18 below, which identify a number of interpreted steep
structures (white arrows) where there are apparent breaks in the bulk package of reflective signals
(yellow arrows) that could provide targets for future exploration drilling.
Further work is required before committing to drill testing these seismic responses.
MATSA RESOURCES LIMITED - OPERATIONS REVIEW
2021 ANNUAL REPORT · PAGE 21
Laying out glass fibre cable at Lake Carey for seismic work
FIGURE 18: Initial stacks over soft part of the lake in depth, but scale 1:1. Residual stack (left)
and CRS stack (right). A number of steeply dipping structures (white arrows) can be seen.
Lithology is mainly dipping in range 30-45 degree (yellow arrows)
MATSA RESOURCES LIMITED - OPERATIONS REVIEW
2021 ANNUAL REPORT · PAGE 22
Spring flowers at Lake Carey region
Shingleback lizard (Tiliqua rugosa) at Red October camp
MATSA RESOURCES LIMITED - OPERATIONS REVIEW
2021 ANNUAL REPORT · PAGE 23
Reprocessing of SAM and magnetic data appears to provide an accurate picture of faults and
stratigraphic units which may lead to a reinterpretation of the geological model and potential to
generate new exploration targets.
Lake drilling along Bindah Shear zone
MATSA RESOURCES LIMITED - OPERATIONS REVIEW
2021 ANNUAL REPORT · PAGE 24
STUDIES
All permits required to recommence Fortitude mining remain in place and an outline of the current
site setup is shown below in Figure 19.
FIGURE 19: Proposed mine layout for Fortitude Stage 2 mining
MATSA RESOURCES LIMITED - OPERATIONS REVIEW
2021 ANNUAL REPORT · PAGE 25
Matsa is currently assessing options for the treatment of ore from Fortitude with the preference being
through a Matsa owned and operated processing plant.
Whilst the updated Fortitude Mineral Resource Estimate re optimisation study is yet to report
final results, the most recent project cashflow based on the 2017 model version updated for cost
assumptions from the CPC study for Fortitude is shown in Figure 20 below. The cost savings using a
Matsa mill as compared to Matsa’s current ore purchase arrangement improves the projects cashflow
from approximately A$23M to A$55M.
FIGURE 20: Fortitude Stage 2 operation cash flow
UPCOMING ACTIVITES AT FORTITUDE HUB
During the next financial year, the following activities are planned:
• Re-optimisation of the updated Mineral Resource Estimate for Fortitude
• Plan and execute follow up drilling at Bindah
• Complete first pass model at Fortitude North to assess mining potential
• Potential 3D seismic survey to define drill target/structures at Fortitude North
• Conduct drilling to advance the exploration and project development pipeline at Fortitude
Hub.
MATSA RESOURCES LIMITED - OPERATIONS REVIEW
2021 ANNUAL REPORT · PAGE 26
RED OCTOBER HUB – LAKE CAREY
During the financial year, mining continued at the 100% Matsa owned and operated Red October
underground gold mine, however subsequent to the end of the reporting period and due to recent
underperformance, production has been suspended to enable a full resource drill out, long term mine
designs and rescheduling of the operation.
Both historical and recent drilling, coupled with grade control data obtained during development has
highlighted the complex nature of the narrow structures at Red October with variable short range
grade continuity, has demonstrated the importance and necessity of ensuring close spaced drilling
is completed at Red October. These learnings as well as the overall advancement of the Lake Carey
exploration and project pipeline has resulted in suspension of production at Red October, under pinning
the Company’s repositioning.
Drone view of Red October mine looking northeast
It is expected a 12 to 18 month period will be required to reset the Red October mine and establish a
robust long term mine plan before production operations resume.
RESOURCES
During the financial year, the Company updated the Lionfish resource with results from recent drilling
(19 diamond drill holes for 1,919m) and the application of improved geological understanding of Red
October’s ore shoots from mining activities in the adjacent Marlin structure. The Lionfish lodes are
located less than 200m west of the main Red October Shear Zone (ROSZ) and Marlin development
which have been the focus of underground production at Red October.
Saracen briefly accessed the Lionfish prospect shortly before divestment, and unfortunately used
the drive for waste stockpiling making access to the Lionfish ore structure inaccessible for mapping
purposes. The updated model was completed and released subsequent to the end of the financial year.
The updated model has resulted in a 159% increase in the Mineral Resource Estimate to 54,000oz @
7.4 g/t Au, up from 21,000oz @ 5.6 g/t Au. Encouragingly, the 32% increase in grade demonstrates
MATSA RESOURCES LIMITED - OPERATIONS REVIEW
2021 ANNUAL REPORT · PAGE 27
the high grade nature of the mine and the value that can be gained from additional drilling. The resource
remains open along strike and at depth with significant exploration potential available, particularly at
depth where the Lionfish lode is postulated to intersect the underexplored western target (refer
Figure 21) recently interpreted from seismic data.
FIGURE 21: Lionfish resource and lode structures, western target and key exploration zones,
Red October mine, oblique view looking grid north (Zone A exploration target, not annotated,
comprises strike extensions of the Lionfish structure)
Whilst further drilling is planned to expand the Lionfish resource, early conceptual mine design work
indicates the Lionfish could provide a valuable additional, fresh, new mining front to the operation and
that further exploratory drilling is warranted.
GEOPHYSICS
During the year, seismic survey work continued at Red October under an R&D research program
“Seismic Surveys in the Drilling Workflow”. Traditional 2D, and more recently 3D, seismic surveys
have been deployed extensively as a near mine exploration tool to map concealed structures however
conventional seismic surveys remain prohibitively expensive.
In the past, processing technology was limited to deeper data ranges and shallow areas of data were
difficult to process. Therefore, typically, seismic worked best at depths of significantly greater than
500 - 800m. New processing technology has allowed geologists to “see” at much shallower depths,
less than 200m from surface, making seismic more attractive to gold explorationists for targets at
relatively shallow depth.
Matsa’s support for this ongoing research project is aimed at developing technologies which have the
potential to be an order of magnitude lower in cost, compared to conventional surveys and therefore
more readily available throughout the drilling phase of exploration.
MATSA RESOURCES LIMITED - OPERATIONS REVIEW
2021 ANNUAL REPORT · PAGE 28
Following completion of a first pass experimental seismic survey (using DAS) in March 2020, interpretive
work continued into this financial year (refer Figure 22). Results were highly encouraging for mapping
the geology of the Archaean basement at Red October where both structural and stratigraphic
elements were interpreted from the single 2D line completed. The innovative use of DAS cabling
achieved very high data densities compared with conventional geophones. Whilst more experimental
surveys are required to produce a larger data set, Matsa remains optimistic that this research project
holds potential to map structurally and stratigraphically favourable targets for gold mineralisation, at
greatly reduced costs, and at much shallower depths compared to conventional seismic surveys.
The results of the initial experimental line show some clear structures in the dataset that have been
interpreted to reflect both known and previously unrecognised structures that may be gold bearing.
Interpretation of the results suggest a number of structures that have been attributed to the Marlin/
ROSZ and two new targets currently labelled as the “eastern” and “western” targets.
Both of these new targets have been modelled in 3D and compared to the existing drilling database.
In both instances, there is support for these structures in existing drilling, albeit thin structures of
moderate grade and strong mineral assemblages. It is postulated that further exploration drilling (refer
Figure 23) could identify higher grade shoots withing these large footprint lode structures.
FIGURE 22: Seismic section to NE of Red October showing interpreted structures
MATSA RESOURCES LIMITED - OPERATIONS REVIEW
2021 ANNUAL REPORT · PAGE 29
FIGURE 23: Interpreted targets from seismic survey, supported by historical drilling (in green),
proposed exploration drilling (in white)
In May 2021, a second experimental DAS line was completed (refer Figure 24) with final results
pending.
FIGURE 24: Plan view Red October showing 2020 and 2021 seismic survey lines
MATSA RESOURCES LIMITED - OPERATIONS REVIEW
2021 ANNUAL REPORT · PAGE 30
NAUTILUS 3D EXPERIMENTAL SURVEY
At Nautilus, an experimental 3D survey (refer Figure 25) was completed in July-August 2020. The
Nautilus prospect is located about 2km north of and parallel with the Red October shear zone. The
area is characterised by complex structures that cannot be properly resolved with two-dimensional
(2D) seismic technology.
FIGURE 25: Location Nautilus
The first phase of the 3D survey included ploughing 24km of “tight buffer” fibre optic (FO) cable in
four segments of 6.2km each. A “snake” pattern is used for cable continuity and also to enable efficient
ploughing and to optimise the recording geometry and reflection fold (refer Figure 26). Unfortunately
results of this experimental survey were inconclusive. Further processing work is yet to be undertaken
to determine if a better imaging outcome can be achieved that can be used to assist exploration
targeting.
FIGURE 26: 3D seismic survey layout at Nautilus
MATSA RESOURCES LIMITED - OPERATIONS REVIEW
2021 ANNUAL REPORT · PAGE 31
Helical cable ploughed with bob cat dedicated attachment into ground for seismic surveys
Underground diamond drilling at the Red October mine
MATSA RESOURCES LIMITED - OPERATIONS REVIEW
2021 ANNUAL REPORT · PAGE 32
DRILLING
During the year Matsa, undertook underground exploration drilling with a strong emphasis on the
Marlin, ROSZ (Red October Shear Zone) and Lionfish lodes (refer Figure 27). The ROSZ and Marlin
lodes have been the subject of underground mining whilst the Lionfish lode structure was briefly
accessed by Saracen just prior to divestment of the Red October underground mine.
Matsa completed 40 underground diamond drill holes during the year, for a total of 4,242m (refer
Figure 27). The drilling produced outstanding gold assays and confirms the high-grade potential of
the Red October gold mine.
FIGURE 27: Red October underground exploration drilling for 2020-2021
A selection of significant new intercepts include:
• 3.8m @ 30.98g/t Au from 97.20m in hole ROGC741
• 1.7m @ 68.3g/t Au from 28.5m in hole ROGC747
• 2.0m @ 16.1g/t Au from 56m in hole ROGC749
• 0.3m @ 161.5g/t Au from 37.5m in hole ROGC751
• 0.75m @ 61.2g/t Au from 73.4m in hole ROGC755
MATSA RESOURCES LIMITED - OPERATIONS REVIEW
2021 ANNUAL REPORT · PAGE 33
• 1.7m @ 51.68g/t Au from 97.0m in hole ROGC758
• 5.5m @ 5.60g/t Au from 70.0m in hole ROGC767
• 5.7m @ 27.94g/t Au from 50.3m in hole ROGC770
• 7.0m @ 5.24g/t Au from 0.0m in hole ROGC738.
Drilling at Lionfish has been included in the resource update, whilst the drilling at Marlin largely
informed a local grade control model update that resulted in extension of the South Decline and
establishment of the 822 ore drive, which has subsequently been mined.
Results of the drilling overall, and the data obtained from level mapping and face sampling of ore drives
has highlighted the need for additional drilling to both extend resources and improve definition within
the existing resource lodes. In the Marlin structure, mapping has demonstrated the variable short
range of the higher grade shoots that can extend between 2-3m up to 15-25m as mapped in the 842,
862 and 882 ore drives of the Marlin lode (refer Figure 28).
FIGURE 28: Marlin grade shoots 842-882 levels
MATSA RESOURCES LIMITED - OPERATIONS REVIEW
2021 ANNUAL REPORT · PAGE 34
New drilling and past historical intercepts (refer Figure 29) demonstrate the exploration strength and
potential of the Red October deposit.
FIGURE 29: Key exploration targets and historical exploration results
Ramp down to the underground operations at Red October
MATSA RESOURCES LIMITED - OPERATIONS REVIEW
2021 ANNUAL REPORT · PAGE 35
PRODUCTION AND DEVELOPMENT
At Marlin, a small grade control model was completed following drilling aimed at the 822 level directly
below the 842 ore drive, which was the lowest ore drive at Red October mined by Saracen prior to
divestment of the mine. The updated model returned a 2% drop in overall grade but a 27% increase
in overall tonnes due to an improved understanding of the pinch and swell nature of the ore shoot
geometry. The 822 level has now been mined out.
Mining and development continued during the financial year with a summary of production shown in
Table 2.
SEPT 2020
QUARTER
ACTUALS
DEC 2020
QUARTER
ACTUALS
MARCH 2021
QUARTER
ACTUALS
JUNE 2021
QUARTER
ACTUALS
TOTAL YTD
12 MONTHS
28,308
2.69
2,444
MINE PRODUCTION
Total Tonnes
Grade (g/t)
Production (oz)
ORE SALES
20,386
Tonnes
3.86
Grade (g/t)
2,532
Ore Sales (oz)
81.40%
Met Recovery (%)
2,061
Recovered (oz)
700
Stockpiled Ore (oz)
2,668
Avg Gold Price (A$/oz)
Cash (C1) Costs (A$/oz) 1,781
1,781
AISC (A$/oz)
13,855
3.39
1,510
23,220
2.63
1,963
85%
1,669
259
2,560
1,259
2,272
21,136
2.59
1,510
21,016
2.63
2,027
85%
1,723
37
2,326
1,382
2,431
9,893
2.77
3,162
9,335
2.72
816
85%
694
47
2,357
2,612
3,583
73,192
2.80
881
73,957
3.09
7,338
83.76%
6,147
47
2,478
1,666
2,693
TABLE 2: Red October Gold Production Summary for 12 Months to June 30, 2021
*Previous published quarter results have been adjusted for subsequent receipt of updated tonnages, grades and/or metallurgical recoveries. Figures
may not be precise due to rounding. Differences between production and sales represents ore mined and on the ROM pad at the end of each quarter.
Gold from Marlin Lode 1220S stope
MATSA RESOURCES LIMITED - OPERATIONS REVIEW
2021 ANNUAL REPORT · PAGE 36
Production was dominated by selective remnant mining within the main upper body of the ROSZ and
Marlin lodes including the minor Smurf and Smurfette structures, as well as development of the South
Decline to the lower part of the Marlin lode structure (refer Figure 30).
FIGURE 30: Red October mine, oblique view from above looking west, FY 2020-2021 mining
with production shown in red and development shown in blue
POTENTIAL FOR MINING TO CONTINUE AT RED OCTOBER
Subsequent to the end of the financial year, Matsa has opted to suspend production at Red October
having recognised that a substantive exploration and resource drill out effort is required to optimise
the future development of the mine. Targets such as the new eastern and western targets generated
from the new recent seismic work, have the capacity to substantially alter the layout of the mine
including future requirements of the major infrastructure setting.
With this in mind, Matsa has reset itself at Red October to undertake exploration that is expected to
take over 12 months in order to define the global resource potential of Red October and enable the
company to establish a scheduled long term development plan that can accommodate future growth
without the potential need to redesign the operation’s long term infrastructure requirements.
With an improved understanding of ore shoot geometry since Matsa first undertook exploration and
development at Red October, together with the existing resource base (refer Figure 31) and known
MATSA RESOURCES LIMITED - OPERATIONS REVIEW
2021 ANNUAL REPORT · PAGE 37
high grade exploration potential, as evidenced by recent drilling results, Matsa is confident that Red
October can be returned to a profitable operational status at some stage.
FIGURE 31: Red October longitudinal Projection with summary of high-grade gold
mineralisation >5g/t Au (RO mine grid co-ordinates) (June 2016 Saracen Resource Model)
One of the clear requirements to successfully return Red October to production is to maximise the
inherent high grades by reducing dilution impacts during the mining cycle. In this regard new mining
fronts designed with a smaller development profile, reduced level separation and alternative drill and
blast designs is expected to lead to successful future mining.
UPCOMING ACTIVITIES AT RED OCTOBER HUB
During the next financial year, the following activities are planned:
• Exploration drilling of unmined and new targets including Lionfish, Costello, eastern and
western targets at Red October
• Complete mine designs using smaller development profiles
• Complete soil, geochemical and geophysical surveys to enhance exploration targeting
• Conduct drilling to advance the exploration and project development pipeline at Red October
Hub.
MATSA RESOURCES LIMITED - OPERATIONS REVIEW
2021 ANNUAL REPORT · PAGE 38
LAKE CAREY REGIONAL EXPLORATION
Bottom of Hole Sampling
A total of 270 bottom of hole (BOH) samples from historic aircore drill holes over a number of
exploration target areas were submitted for multi-element analysis from different targets in the
Lake Carey and Red October project areas (refer Figure 32). These samples were selected as being
representative of the deepest and consequently least weathered part of each drill hole.
Multi-element assays and mineralogical scans of BOH samples are being interrogated to provide
an accurate picture of bedrock geology as well as highlighting areas of hydrothermal alteration and
potentially, associated gold mineralisation. In conjunction with historic gold assays, this is expected to
highlight targets for further drilling.
Soil Sampling
Three campaigns of soil sampling were carried out in the Devon Hub (refer Figure 33) focusing on
the immediate environs of the Devon Mine as discussed above. This technique was used as a very
effective tool to map the distribution in basement rocks where there is little or no transported cover.
As discussed above, soil sample results, magnetics and results from Matsa’s SAM survey were used
to define drill targets at Devon.
MATSA RESOURCES LIMITED - OPERATIONS REVIEW
2021 ANNUAL REPORT · PAGE 39
FIGURE 32: Bottom of hole sampling coverage in Matsa tenements
MATSA RESOURCES LIMITED - OPERATIONS REVIEW
2021 ANNUAL REPORT · PAGE 40
FIGURE 33: Plan of soil sampling coverage in Matsa tenements
MATSA RESOURCES LIMITED - OPERATIONS REVIEW
2021 ANNUAL REPORT · PAGE 41
SYMONS HILL (Nickel Fraser Range)
The Symons Hill project is located approximately 6km south of IGO Limited’s (IGO) NOVA NI-CU-CO
Operation and is being explored by IGO under a $7M earn in agreement.
In June 2020, Matsa executed a $7M agreement with IGO Newsearch Pty Ltd (IGO Newsearch), who
can earn a 70% interest in the Symons Hill nickel project in the Fraser Range (MAT announcement to
ASX 17 June 2020). Matsa received a first payment of $625,000 from IGO Newsearch in June 2020.
MATSA RESOURCES LIMITED - OPERATIONS REVIEW
2021 ANNUAL REPORT · PAGE 42
In June 2021, IGO Newsearch completed a single 843.3m long diamond core drill (DD) hole to test for
nickel sulphides below previous aircore (AC) bottom of hole (BOH) anomalous geochemical results of
1m at 0.10% Ni and 0.11% Cu, and 1m at 0.09% Ni and 0.10% Cu.
IGO Newsearch’s summary report to Matsa indicated “sulphides are present throughout the hole, with
the sulphides dominated by disseminated pyrrhotite. Three-phase blebby to semi-massive sulphides
were present from ~215-625m down hole with sporadic distribution and low visible nickel tenor
Po>>Cp +/- Pn”.
A 410m long interval (215m-625m) of blebby and semi massive sulphides was intersected and
submitted for analysis with results indicating that 95.5m of the 843m long diamond drill hole
(21AFDD105) returned anomalous nickel (Ni) above 100ppm up to 617ppm Ni from 65m.
IGO Newsearch are currently reviewing the assay results to determine the next steps which may
include further drilling.
THAILAND EXPLORATION
As a result of the COVID-19 and the uncertain political and permitting environment in Thailand,
exploration activities remain suspended, albeit low key reconnaissance field trips were completed, and
will resume when more certainty evolves in the country.
The office and staff were retained and were successfully utilised in assisting the Australian geologists
with data entry, data management and research of the Australian projects.
CORPORATE ACTIVITIES
On 10 September 2020, the Company completed a $6.6 million capital raising via the issue of 44
million shares at an issue price of $0.15 per share including a free 1 for 1 unlisted option exercisable at
$0.30 per share within 2 years. The funds raised were used for exploration drilling campaigns at Lake
Carey gold project in search for new gold discoveries to expand the Company’s existing gold resource.
On 28 January 2021, the Company announced a significant change in its strategy whereby it would
focus on exploration in the highly prospective Lake Carey gold project and other quality targets to
drive resource growth. As a result, production of ore at Red October gold project was wound down
with mining focused on development of access drives to support a future major mine drilling campaign.
On 2 February 2021, the Company and Bulletin Resources Limited (Bulletin) have through their 80/20
joint venture sold a 400m wide strip (1.35km2) of the 576km2 Lake Rebecca gold project to Apollo
Consolidated Limited (Apollo) for a total consideration of approximately $5.6 million.
On 17 February 2021, the Company appointed Pascal Blampain as an Executive Director. Mr Blampain
is a highly experienced geologist who will have responsibility for and immediately focus on, leading the
exploration and technical advancement of the Lake Carey gold project.
On 23 April 2021, the Company completed a $1.27 million placement and a $2.17 renounceable rights
issue of 42.6 million shares at $0.08 per share (including a free 1 for 2 listed option exercisable at
$0.17 within 2 years). The capital raising was heavily oversubscribed and highly successful and has
brought a number of new institutional and sophisticated investors to the Company’s share register.
Proceeds from the placement were used to advance the Lake Carey gold project.
MATSA RESOURCES LIMITED - OPERATIONS REVIEW
2021 ANNUAL REPORT · PAGE 43
On 22 July 2021, Matsa raised $3.38 million by way of a placement of 42.2 million ordinary fully paid
shares at $0.08 each with one free attaching option for every two shares issued with an exercise price
of $0.17 each and expiring on 30 April 2023. The funds raised will be used for;
• New underground exploration at the Red October gold mine;
• Drilling program at Fortitude North;
• Further drilling at the Devon Hub;
• Feasibility and mine designs for Devon Pit; and
• Completion of permitting and working drawings for Matsa owned processing facility.
MATSA RESOURCES LIMITED
DIRECTORS’ REPORT
Your directors present their report for the year ended 30 June 2021.
DIRECTORS
The names and details of the Company’s directors in office during the year and until the date of this
report are as follows. Directors were in office for this entire period unless otherwise stated.
Names, qualifications, experience and special responsibilities
Mr Paul Poli Bachelor of Commerce, FCPA DFP (Executive Chairman)
Mr Poli is a fellow of the Australian Society of Certified Practicing Accountants and a former registered
Securities Trader. He was the founder and managing partner of a taxation and business advisory firm
for 19 years prior to founding and heading Matsa Resources Limited from 2009 to date. He is well
versed in all aspects of business, particularly financial management through both his previous
consulting roles and through his personal ownership of private companies in Western Australia, the
Northern Territory and South East Asia. Mr Poli led the negotiations for several significant transactions
for Matsa including the $14M Norseman sale to Panoramic Resources Limited, $6M minority interest
sale to Westgold Resources Limited, and $7M Symons Hill IGO joint venture. Mr Poli, in his capacity
as Chairman of Bulletin Resources also negotiated the sale of Halls Creek for $12M to Pantoro Limited,
and the $5.7M Apollo transaction.
He has been chairman of Matsa Resources Limited for over 10 years and a significant investor in the
mining industry, Mr Poli is particularly well qualified to drive the creation of a significant mining and
exploration company.
During the past three years, Mr Poli has also served as a Director of the following publicly listed
companies:
Bulletin Resources Limited (Appointed 24 June 2014)
Mr Franciscus (Frank) Sibbel B.E.(Hons) Mining, F.Aus.IMM
Mr Sibbel is a mining engineer who has in excess of 40 years operational and managerial experience,
in both small and large scale mining projects from development through to successful production. He
was formerly the Operations Director of Tanami Gold NL and has been the Managing Director of a
mining consultancy firm which was founded by Mr Sibbel in 2008 and where he has successfully
consulted on numerous projects for a diversified range of mining companies throughout Australia and
overseas.
Mr Sibbel’s vast experience in development of gold projects from the grass roots will ensure the
company has the extensive skills to deliver on its strategy.
During the past three years, Mr Sibbel has also served as a Director of the following publicly listed
companies:
Bulletin Resources Limited (Appointed 13 August 2013; resigned 1 September 2021)
Mr Andrew Chapman CA F Fin GAICD
Mr Chapman is a chartered accountant with 25 years’ experience in publicly listed companies in the
mineral resources, oil and gas and technology sectors.
- 44 -
MATSA RESOURCES LIMITED
DIRECTORS’ REPORT
He has held Board positions as well as other senior roles including Director, Company Secretary and
Chief Financial Officer. Mr Chapman has vast experience in the areas of corporate acquisitions,
divestments and capital raisings. He has developed specialist knowledge of dealing with ASX and other
corporate regulatory bodies, financial institutions and other advisory groups.
Mr Chapman is an associate member of the Chartered Accountants Australia and New Zealand
(CAANZ), a Fellow of the Financial Services Institute of Australasia (Finsia) and a graduate of the
Australian Institute of Company Directors (AICD).
Mr Chapman has not served as a Director of any other publicly listed companies during the past three
years.
Mr Pascal Blampain BSc, MAusIMM, MAIG (Appointed 17 February 2021)
Pascal Blampain is a geologist with over 27 years’ experience across Australia and Papua New Guinea
having held senior positions with global miners including Barrick Gold Corporation and Gold Fields
Limited.
Mr Blampain’s roles have spanned regional and near-mine exploration, operational geology, long-
term strategic planning and resource development. He has a strong track record of delivering resource
and reserve growth in gold during his time working at world-class deposits such as Plutonic, Wallaby
(Granny Smith) and Lawlers (now Lawlers-Agnew).
Mr Blampain has also served as Chief Geologist/Geology Manager roles at Plutonic (Superior Gold
Inc.), Mount Monger-Mt Belches (Silver Lake Resources Limited), Darlot (Gold Fields Limited) and
Lawlers (Barrick Gold Corporation).
COMPANY SECRETARY
Mr Chapman is also the Company Secretary of Matsa. Refer to the directors’ particulars as noted
above.
PRINCIPAL ACTIVITIES
During the year the principal activities of entities within the consolidated entity were gold and other
base metal exploration in Australia and Thailand.
There were no significant changes in the nature of these activities during the year.
Operating Results for the Year
The Group’s net loss for the year after income tax is $9,654,713 (2020: $5,235,103).
The Group’s net loss for the year includes the following items:
• Revenue from the sale of gold ore tonnes of $8,055,013 (2020: $10,680,968).
• A gain of $20,004 (2020: loss of $343,906) on the sale of shares held in listed investments.
• A gain of $1,674,472 (2020: nil) on the sale of investment held in an associate, Bulletin
Resources Limited.
• A gain of $1,191,750 (2020: loss of $8,306) on the sale of tenements.
•
• Share based payments expense of $111,956 (2020: $297,042).
Impairment losses of nil (2020: $741,202) attributable to the Group's exploration projects.
- 45 -
MATSA RESOURCES LIMITED
DIRECTORS’ REPORT
•
Income of $204,868 (2020: $137,630) relating to a tax refund for eligible research and
development expenditure and a cash flow boost from the Australian government.
• Share of profit from the investment in associate Bulletin Resources Limited of $1,051,922
(2020: loss $199,882).
Review of Financial Position
The net assets attributable to the shareholders of the parent have decreased by $36,743 from 30 June
2020 to $15,293,764 at 30 June 2021.
During the financial year:
1. $6,611,901 (before costs) was raised via the issue of 44,079,341 fully paid ordinary shares at
an issue price of $0.15 each with one free attaching unlisted option for every share subscribed
for with an exercise price of $0.30 each and expiring 30 November 2022; and
2. $3,409,173 (before costs) was raised via the issue of 42,614,664 fully paid ordinary shares at
an issue price of $0.08 each with one free attaching option for every two shares subscribed
for with an exercise price of $0.17 each and expiring 30 April 2023.
Cash reserves at 30 June 2021 were $3.03 million compared to $1.80 million in the previous financial
year.
DIVIDENDS
No dividend was paid or declared by Matsa in the period since the end of the previous financial year,
and up to the date of this report. The Directors do not recommend that any amount be paid by way
of dividend.
CORPORATE STRUCTURE
Matsa is a company limited by shares, which is incorporated and domiciled in Australia.
EMPLOYEES
The Group had 27 employees of which 21 were full-time as at 30 June 2021 (2020: 27 full-time
equivalent employees).
Review of Operations
A full review of the operations of the Group during the year ended 30 June 2021 is included on pages
4 to 43.
IMPACT OF COVID-19
While the onset of the COVID-19 pandemic was rapid and dramatic, the Company took immediate
action to protect the integrity of the Company’s business interests and the safety and wellbeing of its
employees and stakeholders. Prompt implementation and affirmative compliance with government
and health bodies forced quick change to operating processes.
Matsa operates a remote mining operation and fortunately with the positive protection measures and
support of governments and employees our operation continued to function close to normal levels
though travel restrictions, social distancing and isolation practices had some impacts on the Group.
The closure of borders required immediate action to manage these impacts on our labour force.
Roster changes, changed travel and commuting schedules, changed camp operations including dining
and enhanced hygiene practices created potential social and mental health impacts. The Company
- 46 -
MATSA RESOURCES LIMITED
DIRECTORS’ REPORT
has taken a considerate approach to the hidden consequences of such changes and continues to work
with its employees to lessen the impact. The over-arching objective of the Group has been to keep all
its employees and stakeholders safe and free from infection and/or spread, and importantly to keep
people employed during these uncertain times.
Given the exploration nature of the Company’s operations the net impact of the pandemic was
estimated to be minor on the Group’s operations. The over-arching objective of the Group is to keep
its employees and stakeholders safe and free from infection and/or spread.
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
In the opinion of the Directors, there were no significant changes in the state of affairs of the Group
that occurred during the financial year other than as disclosed in this report or the consolidated
financial statements.
SIGNIFICANT EVENTS AFTER THE REPORTING DATE
On 22 July 2021, Matsa raised $3.38 million by way of a placement of 42.2 million ordinary fully paid
shares at $0.08 each with one free attaching option for every two shares issued with an exercise price
of $0.17 each and expiring on 30 April 2023.
In July 2021, production ceased at the Red October gold mine and the Company will focus on
exploration to expand the current resource of Red October and the greater Lake Carey gold project.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
It is expected that the Group will continue its exploration activities in Australia and Thailand. These
are described in more detail in the Review of Operations on page 4 to 43.
ENVIRONMENTAL REGULATIONS AND PERFORMANCE
The Group’s exploration activities are subject to various environmental laws and regulations under
Australian and Thai Legislation. The Group has adequate systems in place for the management of its
environmental obligations. The directors are not aware of any breaches of the legislation during the
financial year which are material in nature.
DIRECTORS’ MEETINGS
The number of meetings of directors held during the year and the number of meetings attended by
each director were as follows:
Paul Poli
Frank Sibbel
Andrew Chapman
Pascal Blampain
Directors’ Meetings
Number eligible
to attend
7
7
7
3
Number
attended
7
7
7
3
- 47 -
MATSA RESOURCES LIMITED
DIRECTORS’ REPORT
DIRECTORS’ INTERESTS IN THE SHARES AND OPTIONS OF THE COMPANY
As at the date of this report, the interests of the directors in the shares and options of Matsa Resources
Limited were:
Number of
Ordinary Shares
Number of
$0.175 Unlisted
Options
Number of
$0.17 Unlisted
Options
Number of
$0.17 Listed
Options
Paul Poli
Frank Sibbel
Andrew Chapman
Pascal Blampain
13,650,000
700,000
300,000
-
2,750,000
1,500,000
1,500,000
-
2,500,000
1,250,000
1,250,000
-
640,500
52,575
115,500
-
Options granted to directors and officers of the Company
During the financial year, the Company granted 700,000 options over unissued ordinary shares for no
consideration in the Company to directors or officers of the Company as part of their remuneration.
SHARE OPTIONS
As at the date of this report the unissued ordinary shares of Matsa Resources Limited under option
are as follows:
Date of Expiry
Exercise Price
Number under Option
30 November 2021
30 November 2022
30 November 2022
30 November 2022
30 November 2022
30 November 2022
30 April 2023
30 April 2023
31 October 2023
$0.17
$0.175
$0.35
$0.35
$0.25
$0.30
$0.17
$0.17
$0.21
7,300,000
5,750,000
1,000,000
2,000,000
2,000,000
44,079,341
28,124,324
21,095,929
3,250,000
114,599,594
Option holders do not have any right, by virtue of the option, to participate in any share issue of the
Company or any related body corporate.
Shares Issued on Exercise of Options
During the financial year, there was 1,372 unlisted options exercised at an exercise price of $0.17 per
share.
- 48 -
MATSA RESOURCES LIMITED
DIRECTORS’ REPORT
REMUNERATION REPORT - Audited
Principles of Compensation
This remuneration report for the year ended 30 June 2021 outlines the remuneration arrangements
of the Company and the Group in accordance with the requirements of the Corporations Act 2001
(“the Act”) and its regulations. This information has been audited as required by Section 308(3C) of
the Act.
The remuneration report details the remuneration arrangements for Key Management Personnel
(“KMP”) who are defined as those persons having authority and responsibility for planning, directing
and controlling the major activities of the Group, directly or indirectly, including any director (whether
executive or otherwise) of the parent company, and includes the four executives in the parent and
the Group receiving the highest remuneration.
For the purposes of this remuneration report, the term ‘executive’ includes the Executive Directors,
Senior Executives and Secretary of the Company and the Group.
The remuneration report is presented under the following sections:
1. Individual key management personnel disclosures
2. Board oversight of remuneration
3. Non-executive Director remuneration arrangements
4. Executive remuneration arrangements
5. Company performance and the link to remuneration
6. Executive contractual arrangements
7. Equity instruments disclosures.
Individual Key Management Personnel Disclosures
Details of KMP of the Company and Group are set out below:
Key Management Personnel
Name
Directors
P Poli
F Sibbel
A Chapman
P Blampain
Executives
D Fielding
Position
Date of
Appointment
Date of
Resignation
Executive Chairman
Director
23 December 2008
25 October 2010
Director and Company Secretary 17 December 2009*
Executive Director
17 February 2021
Group Exploration Manager
12 April 2010
-
-
-
-
-
*A Chapman was appointed Company Secretary on 6 November 2007.
There were no other changes to key management personnel after reporting date and before the date
the financial report was authorised for issue.
- 49 -
MATSA RESOURCES LIMITED
DIRECTORS’ REPORT
REMUNERATION REPORT (continued)
Board Oversight of Remuneration
Remuneration Committee
In the opinion of the directors, the Company is not of sufficient size to warrant the formation of a
remuneration committee. It is the board of directors’ responsibility for determining and reviewing
compensation arrangements for the directors and the senior executives.
The Board assesses the appropriateness of the nature and amount of remuneration of Non-Executive
Directors and Executives on a periodic basis by reference to relevant employment market conditions
with the overall objective of ensuring maximum stakeholder benefit from the retention of a high
performing Director and executive team.
Remuneration Approval Process
The Board approves the remuneration arrangements of the Executive Directors and Executives and all
awards made under the long-term incentive plan. The Board also sets the aggregate remuneration of
non-executive directors which is then subject to shareholder approval.
Remuneration Strategy
The Company’s remuneration strategy is designed to attract, motivate and retain employees and non-
executive directors by identifying and rewarding high performers and recognising the contribution of
each employee to the continued growth and success of the Group.
To this end, the Company embodies the following principles in its remuneration framework:
• retention and motivation of key executives;
• attraction of quality management to the Company; and
• performance incentives which allow executives to share the rewards of the success of the
Company.
Remuneration Structure
In accordance with best practice corporate governance, the structure of Non-Executive Director and
Senior Management remuneration is separate and distinct.
Non-Executive Director Remuneration
Objective
The Board seeks to set aggregate remuneration at a level which provides the Company with the ability
to attract and retain Directors of the highest calibre, whilst incurring a cost which is acceptable to
shareholders.
Remuneration Policy
The Constitution and the ASX Listing Rules specify that the aggregate remuneration of Non-Executive
Directors shall be determined from time to time by a general meeting. An amount not exceeding the
amount determined is then divided between the Directors as agreed. The current aggregate
remuneration is $250,000 per year.
- 50 -
MATSA RESOURCES LIMITED
DIRECTORS’ REPORT
REMUNERATION REPORT (continued)
The amount of aggregate remuneration sought to be approved by shareholders and the manner in
which it is apportioned amongst Directors is reviewed annually. The Board considers advice from
external consultants as well as the fees paid to non-executive Directors of comparable companies
when undertaking the annual review process. No external advice was received during the year. Each
Director receives a fee for being a Director of the Company.
Non-Executive Directors are encouraged by the Board to hold shares in the Company (purchased by
the Director on market). It is considered good governance for Directors to have a stake in the
Company on whose Board he or she sits.
Structure
The remuneration of Non-Executive Directors consists of directors’ fees. Non-Executives are entitled
to receive retirement benefits and to participate in any incentive programs. There are currently no
specific incentive programs.
The Executive Chairman receives no additional directors’ fee in addition to his executive
remuneration. The other non-executive directors received a base fee of $42,000 per annum during
the financial year for being a director of the Group.
There are no additional fees for serving on any board committees. Non-executive directors can receive
additional fees for work conducted for the Company outside the scope of their normal duties subject
to being authorised by the Board.
The remuneration report for the Non-Executive Directors for the year ended 30 June 2021 and 30 June
2020 is detailed in this report.
Managing Director and Executive Remuneration Structure
Remuneration Policy
The Company aims to reward executives with a level and mix of remuneration commensurate with
their position and responsibilities within the Company. The current remuneration policy adopted is
that no element of any executive package be directly related to the Company’s financial performance.
Indeed there are no elements of any executive remuneration that are dependent upon the satisfaction
of any specific condition. Remuneration is not linked to the performance of the Company but rather
to the ability to attract and retain executives of the highest calibre. The overall remuneration policy
framework however is structured in an endeavour to advance/create shareholder wealth.
Structure
In determining the level and make-up of executive remuneration, the Board engages external
consultants as needed to provide independent advice.
Remuneration consists of the following key elements:
•
Fixed remuneration (base salary and superannuation); and
• Variable remuneration (short and long term incentives).
The proportion of fixed remuneration and variable remuneration for each executive for the period
ended 30 June 2021 and 30 June 2020 is detailed in this report.
- 51 -
MATSA RESOURCES LIMITED
DIRECTORS’ REPORT
REMUNERATION REPORT (continued)
Fixed Remuneration
Executive contracts of employment do not include any guaranteed base pay increase. Fixed
remuneration is reviewed annually by the Board. The process consists of a review of the Company,
business unit and individual performance, relevant comparative remuneration internally and
externally and, where appropriate, external advice independent of management.
Executives are given the opportunity to receive their fixed (primary) remuneration in a variety of forms
including cash and fringe benefits such as motor vehicles. It is intended that the manner of payment
chosen will be optimal for the recipient without creating undue cost for the Company.
The fixed remuneration component for executives for the period ended 30 June 2021 and 30 June
2020 is detailed in this report.
Variable Remuneration – Short Term Incentive (STI)
The objective of the STI is to link the increase in shareholder value over the year with the remuneration
received by the Executives charged with achieving that increase. The total potential STI available is set
at a level so as to provide sufficient incentive to the Executives to achieve the performance goals and
such that the cost to the Group is reasonable in the circumstances.
Annual STI payments granted to each Executive depend on their performance over the preceding year
and are based on recommendations from the Executive Chairman following collaboration with the
Board. Typically included are measures such as contribution to strategic initiatives, risk management
and leadership/team contribution.
The aggregate of annual STI payments available for Executives across the Group is subject to the
approval of the Board. Payments are usually delivered as a cash bonus. During the year there were
no STI payments.
Variable Remuneration – Long Term Incentive (LTI)
The objective of the LTI plan is to reward Executives in a manner which aligns the element of
remuneration with the creation of shareholder wealth. As such LTI’s are made to Executives who are
able to influence the generation of shareholder wealth and thus have an impact on the Group’s
performance.
The level of LTI granted is, in turn, dependent on the Company’s recent share price performance, the
seniority of the Executive and the responsibilities the Executive assumes in the Group.
LTI grants to Executives are delivered in the form of employee share options. These options are issued
at an exercise price determined by the Board at the time of issue. The employee share options are
issued in accordance with the Company’s Share Option Plan.
Typically, the grant of LTIs occurs at the commencement of employment or in the event that the
individual receives a promotion and, as such, is not subsequently affected by the individual’s
performance over time. However, under certain circumstances, including breach of employment
conditions, the Directors may cause the options to expire prior to their vesting date.
- 52 -
MATSA RESOURCES LIMITED
DIRECTORS’ REPORT
REMUNERATION REPORT (continued)
The Group does have a policy to prohibit executives or directors from entering into arrangements to
protect the value of unvested LTI awards.
Other Benefits
Key management personnel can receive additional benefits as non-cash benefits as part of the terms
and conditions of their appointment. Non-cash benefits typically include car parking and expenses
where the Company pays fringe benefits tax on these benefits.
Company Performance and the Link to Remuneration
Remuneration is not linked to the performance of the Company, but based on the ability to attract
and retain executives of the highest calibre. The overall remuneration policy framework however is
structured in an endeavour to advance/create shareholder wealth.
The Matsa Resources Limited Long Term Incentive Plan has no direct performance requirements but
has specified time restrictions on the exercise of options and performance rights. The granting of
options and performance rights is in substance a performance incentive which allows executives to
share the rewards of the success of the Company.
Service Agreements
It is the Board’s policy that service contracts are entered into with all key management personnel and
that these contracts have no termination date.
Mr Paul Poli, Executive Chairman, has a contract of employment with the Company. Mr Poli is entitled
to receive a salary of $375,000 plus statutory superannuation. This contract is for an unlimited term
and is capable of termination by Mr Poli on one month’s notice. The Group has the right to terminate
the employment contract by giving Mr Poli six months’ notice or making payment equal to six months’
pay in lieu of notice.
Mr David Fielding, Group Exploration Manager, has a contract of employment with the Company. Mr
Fielding receives a salary of $241,000 plus statutory superannuation. This contract is for an unlimited
term and is capable of termination on one month’s notice. The Group retains the right to terminate
the contract immediately, by making payment equal to one month’s pay in lieu of notice.
Mr Frank Sibbel, Non-Executive Director, has a consultancy contract with the Company. Mr Sibbel is
paid an hourly rate for the provision of consultancy services outside those provided as a director as
required. This contract is capable of termination on one month’s notice. The Group retains the right
to terminate the contract immediately, by making payment equal to one month’s pay in lieu of notice.
Mr Andrew Chapman, Director and Company Secretary, has a contract of employment with the
Company receives a salary of $200,000 plus statutory superannuation. This contract is for an unlimited
term and is capable of termination on one month’s notice. The Group retains the right to terminate
the contract immediately, by making payment equal to one month’s pay in lieu of notice.
- 53 -
MATSA RESOURCES LIMITED
DIRECTORS’ REPORT
REMUNERATION REPORT (continued)
Mr Pascal Blampain, Executive Director, has a contract of employment with the Company receives a
salary of $275,000 plus statutory superannuation and a one-off retention bonus of $25,000 upon
completion of his probation service period. This contract is for an unlimited term and is capable of
termination on one month’s notice. The Group retains the right to terminate the contract
immediately, by making payment equal to one month’s pay in lieu of notice.
The table below shows the performance of the Group as measured by share price.
As at 30 June
Closing share price
Net comprehensive (loss) per
year ended
2021
$0.072
2020
$0.155
2019
$0.145
2018
$0.155
2017
$0.25
(9,654,713)
(5,235,103)
(4,947,360)
(3,886,427)
2,517,038
2021
Short Term Benefits
Post-
employment
Benefits
Share-
based
payments
Key Management
Person
Salary &
Fees
$
Other
$
Superannuation
$
Options
$
Total
$
%
Performance
Related
% of
Remuneration
that consists
of securities
Directors
Paul Poli1
Frank Sibbel2
Pascal Blampain3
Andrew Chapman4
Total
1 Mr Poli is a director and shareholder of Strategic Siam Co Ltd which received payments totalling $45,025 during the year. Strategic Siam
provides administration services to Thai entities. Mr Poli receives an internet and travel allowance as part of his terms of employment.
351,036
58,895
129,592
219,083
758,606
328,226
58,895
96,429
200,000
683,550
960
-
25,000
-
25,960
21,850
-
8,163
19,083
49,096
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2 Mr Sibbel provided consultancy services to the Company totalling $16,895 during the year.
3 Mr Blampain was appointed as Executive Director on 17 February 2021. Mr Blampain is due a retention bonus of $25,000 under the
terms of his contract of employment.
4 Mr Chapman provided company secretarial services to the Company totalling $200,000 during the year.
Executives
David Fielding
Total
236,000
236,000
-
-
21,775
21,775
24,114
24,114
281,889
281,889
8.55
-
8.55
-
- 54 -
MATSA RESOURCES LIMITED
DIRECTORS’ REPORT
REMUNERATION REPORT (continued)
2020
Short Term Benefits
Post-
employment
Benefits
Share-
based
payments
Key Management
Person
Salary &
Fees
$
Other
$
Superannuation
$
Options
$
Total
$
%
Performance
Related
% of
Remuneration
that consists
of securities
Directors
Paul Poli1
Frank Sibbel2
Andrew Chapman3
Total
1 Mr Poli is a director and shareholder of Strategic Siam Co Ltd which received payments totalling $45,035 during the year. Strategic Siam
142,064
77,489
77,489
297,042
494,611
157,247
286,382
938,240
331,045
79,758
190,770
601,573
21,002
-
18,123
39,125
28.72
49.28
27.06
-
28.72
49.28
27.06
-
500
-
-
500
provides administration services to Thai entities. Mr Poli receives an internet allowance as part of his terms of employment.
2 Mr Sibbel provided consultancy services to the Company totalling $37,758 during the year.
3 Mr Chapman provided company secretarial services to the Company totalling $190,770 during the year.
Executives
David Fielding
Total
221,000
221,000
-
-
20,995
20,995
-
-
241,995
241,995
-
-
-
-
Compensation Options Granted and Vested during the year
The table below sets out options granted during the year to Directors and Executives. There were
700,000 options issued to Executives during the year. There were no options that were granted in
previous years that vested during the year. The options were issued free of charge and entitle the
holder to subscribe for one fully paid ordinary share in the Company. Due to the nature of the
Company’s activities it does not believe it is appropriate to set vesting conditions at this time.
2021
Vested
Granted Grant Date
Value per
Security
at Grant
Date
Exercise
Price
First
Exercise
Date
Expiry
Date
No.
No.
Cents
Cents
P Poli
F Sibbel
P Blampain
A Chapman
D Fielding
-
-
-
-
700,000
-
-
-
-
700,000
-
-
-
-
27.11.20
-
-
-
-
0.03
-
-
-
-
0.21
-
-
-
-
-
-
-
-
27.11.20 31.10.23
For details on the valuation of the options, including models and assumptions used, please refer to
Note 28.
There were no alterations to the terms and conditions of options granted as remuneration since their
grant date.
The maximum value of the award is equal to the number of options granted multiplied by the fair
value at the grant date. The minimum value of the award in the event of forfeiture is zero.
There were no shares issued on exercise of compensation options during the year.
- 55 -
MATSA RESOURCES LIMITED
DIRECTORS’ REPORT
REMUNERATION REPORT (continued)
Value of Options granted as part of remuneration
2021
Value of options
granted during
the year
Value of options
exercised during
the year
Value of options
lapsed during the
year
Remuneration
consisting of
options during
the year
Paul Poli
Frank Sibbel
Pascal Blampain
Andrew Chapman
David Fielding
$
-
-
-
-
24,114
$
-
-
-
-
-
$
-
-
-
-
-
%
-
-
-
-
8.55
Option holdings of key management personnel
2021
Balance 1
July
No.
Granted as
remune-
ration
No.
P Poli
A Chapman
F Sibbel
P Blampain
D Fielding
5,250,000
2,750,000
2,750,000
-
750,000
11,500,000
-
-
-
-
700,000
700,000
Exercised Net change
other*
Balance on
Resignation
Balance 30
June
Vested &
Exercisable
Not
Exercisable
No.
No.
No.
No.
No.
No.
-
-
-
-
-
-
640,500
115,500
52,575
-
42,797
851,372
-
-
-
-
-
-
5,890,500
2,865,500
2,802,575
-
1,492,797
5,890,500
2,865,500
2,802,575
-
1,492,797
13,051,372 13,051,372
-
-
-
-
-
-
2020
Balance 1
July
No.
Granted as
remune-
ration
No.
Exercised Net change
other**
Balance on
Resignation
Balance 30
June
Vested &
Exercisable
Not
Exercisable
No.
No.
No.
No.
No.
No.
P Poli
A Chapman
F Sibbel
D Fielding
5,250,000
2,750,000
2,750,000
1,250,000
12,000,000
2,750,000
1,500,000
1,500,000
-
5,750,000
-
-
-
-
-
(2,750,000)
(1,500,000)
(1,500,000)
(500,000)
(6,250,000)
-
-
-
-
-
5,250,000
2,750,000
2,750,000
750,000
5,250,000
2,750,000
2,750,000
750,000
11,500,000 11,500,000
-
-
-
-
-
*Net change other refers to free attaching options acquired from the participation of share placements during the year.
**Net change other refers to expiry of options during the year.
- 56 -
MATSA RESOURCES LIMITED
DIRECTORS’ REPORT
REMUNERATION REPORT (continued)
Shareholdings of key management personnel
2021
Balance 1 July
P Poli
A Chapman
F Sibbel
P Blampain
D Fielding
No.
11,955,000
69,000
594,852
-
755,929
13,374,781
2020
Balance 1 July
P Poli
A Chapman
F Sibbel
D Fielding
No.
11,855,000
69,000
494,852
755,929
13,174,781
Granted as
remuneration
No.
Options
exercised
No.
Net change
other**
No.
Balance on
resignation
No.
Balance
30 June
No.
-
-
-
-
-
-
Granted as
remuneration
No.
Options
exercised
No.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,695,000
231,000
105,148
-
185,593
2,216,741
Net change
other**
No.
Balance on
resignation
No.
100,000
-
100,000
-
200,000
-
-
-
-
-
-
-
-
-
-
-
13,650,000
300,000
700,000
-
941,522
15,591,522
Balance
30 June
No.
11,955,000
69,000
594,852
755,929
13,374,781
**Net change other refers to on market purchases and sale and any other corporate action taken by the Company during
the year.
End of Audited Remuneration Report
- 57 -
MATSA RESOURCES LIMITED
DIRECTORS’ REPORT
INDEMNIFYING OFFICERS
The Company’s Constitution provides that, subject to and so far as permitted by the Corporations Act
2001, the Company must, to the extent the person is not otherwise indemnified, indemnify every
officer of the Company out of the assets of the Company to the relevant extent against any liability
incurred by the officer in or arising out of the conduct of the business of the Company or in or arising
out of the discharge of the duties of the officer.
Since the end of the previous financial year, the Company has paid insurance premiums in respect of
Directors’ and Officers’ liability. The policy indemnifies all Directors and Officers of the Company and
its controlled entities against certain liabilities. In accordance with common commercial practice, the
insurance policy prohibits disclosure of the nature of the liability insured against and the amount of
the premium. The Directors have not included details of the nature of the premium paid in respect of
Directors’ and Officers’ liability as such disclosure is prohibited under the terms of the contract.
PROCEEDINGS ON BEHALF OF COMPANY
No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene
in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf
of the Company for all or any part of those proceedings.
The Company was not a party to any such proceedings during the year.
CORPORATE GOVERNANCE
In recognising the needs for the highest standards of corporate behaviour and accountability, the
Directors of the Company support and have adhered to the principles of Corporate Governance. The
Company’s corporate governance statement is available on the Company’s website at:
http://www.matsa.com.au/company/corporate-governance/
NON-AUDIT SERVICES
The board of directors is satisfied that the provision of non-audit services during the year is compatible
with the general standard of independence for auditors imposed by the Corporations Act 2001. The
directors are satisfied that the services disclosed below did not compromise the external auditor’s
independence as the nature of the services provided did not compromise the general principles
relating to auditor independence.
The following fees for non-audit services were paid/payable to the external auditors, or by related
practices of the external auditors, during the year ended 30 June 2021:
Taxation services
$10,400
AUDITOR’S INDEPENDENCE DECLARATION
The lead auditor’s independence declaration for the year ended 30 June 2021 has been received and
can be found on page 59.
Signed in accordance with a resolution of the Board of Directors.
Paul Poli
Executive Chairman
Dated this 30th day of September 2021
- 58 -
Auditor’s independence declaration under section 307C of the Corporations Act
2001
To the Directors of Matsa Resources Limited,
I declare that, to the best of my knowledge and belief, in relation to the audit for the financial
year ended 30 June 2021 there have been:
(i)
(ii)
no contraventions of the auditor’s independence requirements as set out in the
Corporations Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the
audit.
Nexia Perth Audit Services Pty Ltd
PTC Klopper
Director
Perth
30 September 2021
- 59 -
MATSA RESOURCES LIMITED
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME FOR THE YEAR ENDED 30 JUNE 2021
Revenue
Mining operations
Amortisation and depreciation
Loss from mining operations
Other income
Depreciation expense
Other expenses
Gain on sale of investment in associates
Gain/(loss) on sale of financial assets
Gain/(loss) on sale of tenements
Exploration and evaluation expenditure written
off/provided for
Results from operating activities
Finance income
Finance costs
Net finance costs
Share of profit/(loss) of equity-accounted investee, net of
tax
Loss before income tax expense
Income tax expense
Net loss for the year attributable to equity holders of
the company
Other comprehensive income to be reclassified
subsequently through profit or loss
Other comprehensive income/(loss) for the year, net of
tax
Total comprehensive loss for the year attributable to
equity holders of the company
Loss for the year is attributable to:
Owners of the parent
Non-controlling interest
Total comprehensive loss for the year is attributable to:
Owners of the parent
Non-controlling interest
Basic loss per share attributable to ordinary equity
holders of the parent
Diluted loss per share attributable to ordinary equity
holders of the parent
22
22
Note
5(c)
5(a)
5(c)
5(d)
11
10
12
12
5(b)
11
6
2021
$
8,055,013
(12,640,909)
(5,673,440)
(10,259,336)
332,136
(146,480)
(2,756,125)
1,674,472
20,004
1,191,750
-
(9,943,579)
347
(763,403)
(763,056)
1,051,922
(9,654,713)
-
2020
$
10,680,968
(8,874,916)
(2,692,144)
(886,092)
619,220
(202,009)
(2,933,163)
-
(343,906)
(8,306)
(741,202)
(4,495,458)
18,888
(558,651)
(539,763)
(199,882)
(5,235,103)
-
(9,654,713)
(5,235,103)
-
-
(9,654,713)
(5,235,103)
(9,655,204)
491
(9,654,713)
(9,654,713)
491
(9,654,713)
(3.58)
(3.58)
(5,235,383)
280
(5,235,103)
(5,235,383)
280
(5,235,103)
(2.49)
(2.49)
The accompanying notes form part of these financial statements.
- 60 -
MATSA RESOURCES LIMITED
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2021
Note
2021
$
2020
$
Current assets
Cash and cash equivalents
Trade and other receivables
Other assets
Inventories
Total current assets
Non-current assets
Other assets
Other receivables
Financial assets
Investments in associates
Exploration and evaluation assets
Property, plant and equipment
Mine properties and development
Right-of-use assets
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Borrowings
Lease liabilities
Provisions
Total current liabilities
Non-current liabilities
Borrowings
Lease liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity attributable to equity
holders of the Company
Non-controlling interests
Total equity
25
7
8
9
8
7
10
11
12
14
13
15
16
17
15
18
17
15
18
19
20
21
3,029,326
237,596
253,900
79,981
3,600,803
287,363
200,000
-
-
21,437,966
1,917,968
192,694
195,831
24,231,822
27,832,625
4,807,829
224,732
98,986
376,222
5,507,769
3,984,116
87,434
2,881,324
6,952,874
12,460,643
15,371,982
1,797,098
1,532,009
82,084
573,871
3,985,062
324,895
-
351,600
155,735
18,537,147
1,901,017
1,669,003
186,813
23,126,210
27,111,272
4,621,880
-
92,009
304,552
5,018,441
3,973,264
60,514
2,650,819
6,684,597
11,703,038
15,408,234
60,696,604
10,023,186
(55,426,026)
15,293,764
78,218
15,371,982
51,348,741
9,752,588
(45,770,822)
15,330,507
77,727
15,408,234
The accompanying notes form part of these financial statements.
- 61 -
MATSA RESOURCES LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2021
Issued
Capital
Ordinary
$
Accumulated
Losses
$
Other
Reserves
$
Equity
Settled
Benefits
Reserve
$
Total
$
Non-
controlling
interest
$
Total
$
44,292,467
(40,521,595)
(13,844) 9,410,806
13,167,834
77,447 13,245,281
-
(5,235,383)
-
(5,235,383)
7,569,050
(512,776)
-
-
-
-
-
-
-
(5,235,383)
280
(5,235,103)
-
(5,235,383)
280
(5,235,103)
(13,844)
13,844
-
-
-
-
341,782
341,782
-
-
-
7,569,050
(512,776)
-
-
-
-
-
7,569,050
(512,776)
-
341,782
Balance at 1 July
2019
Comprehensive
gain/(loss) for the
year
Total comprehensive
gain/(loss) for the
year
Transactions with
owners recorded
directly in equity
Issue of share capital
Share issue costs
Reserve transferred
to accumulated
losses
Share based
payment
Balance at 30 June
2020
51,348,741
(45,770,822)
- 9,752,588
15,330,507
77,727 15,408,234
-
51,348,741
Balance at 1 July
2020
Comprehensive
gain/(loss) for the
year
Total comprehensive
gain/(loss) for the
year
Transactions with
owners recorded
directly in equity
Issue of share capital 10,197,307
Share issue costs
(849,444)
Reserve transferred
to accumulated
losses
Share based
payment
-
-
-
(45,770,822)
- 9,752,588
15,330,507
77,727 15,408,234
(9,655,204)
(9,655,204)
-
-
-
-
-
-
-
-
-
-
-
(9,655,204)
491
(9,654,713)
-
(9,655,204)
491
(9,654,713)
10,197,307
(849,444)
- 10,197,307
(849,444)
-
-
-
-
270,598
270,598
-
-
-
-
270,598
Balance at 30 June
2021
60,696,604
(55,426,026)
- 10,023,186
15,293,764
78,218 15,371,982
The accompanying notes form part of these financial statements.
- 62 -
MATSA RESOURCES LIMITED
CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 30 JUNE 2021
Note
2021
$
2020
$
Cash flows from operating activities
Receipts from customers
Other income
Payments to suppliers and employees
Interest received
Interest paid
Net cash (used)/provided in operating activities
Cash flows from investing activities
Payments for financial assets
Proceeds from sale of financial assets
Proceeds from sale of investment in associates
Purchase of plant and equipment
Exploration and evaluation expenditure
(capitalised)
Payments for acquisition of mining tenements
Proceeds on sale of plant and equipment
Proceeds on sale of tenements
Payments for mine properties and development
Refund of security deposits
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Costs of issue
Repayment of lease liabilities
Interest paid
Net cash provided by financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of financial
year
Cash and cash equivalents at end of financial year
25
25
25
11,032,184
349,166
(16,150,368)
347
(35,002)
(4,803,673)
-
1,113,354
2,882,129
(777,055)
(3,851,538)
-
-
250,000
(2,333,421)
32,876
(2,683,655)
10,022,423
(691,919)
(114,972)
(495,976)
8,719,556
9,270,824
507,460
(8,321,338)
18,888
(53,815)
1,422,019
(185,400)
600,100
-
(860,990)
(3,967,159)
(177,166)
5,859
750,000
(3,235,276)
105,930
(6,964,102)
7,569,050
(468,036)
(170,563)
(492,418)
6,438,033
1,232,228
895,950
1,797,098
3,029,326
901,148
1,797,098
The accompanying notes form part of these financial statements.
- 63 -
MATSA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30
JUNE 2021
1.
CORPORATE INFORMATION
The consolidated financial statements of Matsa Resources Limited for the year ended 30 June 2021
were authorised for issue in accordance with a resolution of the Board of Directors on 30 September
2021.
Matsa Resources Limited (the “Company”) is a for profit company limited by shares incorporated and
domiciled in Australia whose shares are publicly traded on the Australian Securities Exchange.
The nature of the operations and principal activities of the Group are described in the Directors’
Report.
The consolidated financial statements of the Company as at and for the year ended 30 June 2021
comprise the Company, its subsidiaries (together referred to as the “Group” or “Consolidated Entity”)
and the Group’s interest in associates.
2.
SIGNIFICANT ACCOUNTING POLICIES
(a)
Basis of Preparation
The financial report is a general purpose financial report which has been prepared in accordance with
the requirements of the Corporations Act 2001, Australian Accounting Standards and other
authoritative pronouncements of the Australian Accounting Standards Board.
The consolidated financial statements have been prepared on the historical cost basis except for the
financial assets which have been measured at fair value.
The financial report is presented in Australian dollars.
(b)
Compliance with IFRS
The financial report complies with Australian Accounting Standards as issued by the Australian
Accounting Standards Board and also International Financial Reporting Standards (IFRS) as issued by
the International Accounting Standards Board.
(c)
Changes in Accounting Policies and Disclosures
Since 1 July 2020 the Group has adopted all the Standards and Interpretations mandatory for annual
reporting periods beginning on or after 1 July 2020. The adoption of any new and revised standards
and interpretations effective from 1 July 2020 has not resulted in any changes to the Group’s
accounting policies and has had no material effect on the amounts reported to the current or prior
period. The Group has not elected to early adopt any new standards or interpretations that are not
mandatory effective.
Standards and Interpretations in issue not yet adopted for the year ended 30 June 2021
The directors have also reviewed all Standards and Interpretations in issue not yet adopted for the
year ended 30 June 2021. As a result of this review the Directors have determined that there is no
material impact of the Standards and Interpretations in issue not yet adopted on the Group and,
therefore, no change is necessary to Group accounting policies.
- 64 -
MATSA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30
JUNE 2021
2.
SIGNIFICANT ACCOUNTING POLICIES (Continued)
(d)
Basis of consolidation
The consolidated financial statements comprise the financial statements of the parent entity and its
subsidiaries (‘the Group’) as at 30 June each year.
Control is achieved where the Company has exposure to variable returns from the entity and the
power to affect those returns. The existence and effect of potential voting rights that are currently
exercisable or convertible are considered when assessing whether a consolidated entity controls
another entity.
The financial statements of the subsidiaries are prepared for the same reporting period as the parent
company, using consistent accounting policies. In preparing consolidated financial statements, all
intercompany balances and transactions, income and expenses and profit and losses resulting from
intra-group transactions, have been eliminated in full.
Subsidiaries are fully consolidated from the date on which control is obtained by the Consolidated
Entity and cease to be consolidated from the date on which control is transferred out of the
Consolidated Entity.
Where there is loss of control of a controlled entity, the consolidated financial statements include the
results for the part of the reporting period during which the Company has control.
Changes in ownership interest of a subsidiary (without a change in control) are accounted for as a
transaction with owners in their capacity as owners.
(e) Going Concern
The financial report has been prepared on the going concern basis, which contemplates continuity of
normal business activities and the realisation of assets and settlements of liabilities in the ordinary
course of business.
The Group has reported a working capital deficiency of $1,906,966 (2020: $1,033,379), a loss for the
year of $9,654,713 (2020: $5,235,103) and a cash outflow from operating activities of $4,803,673
(2020: inflow $1,422,019).
At the reporting date, the Group had $3,029,326 in cash and term deposit balances. The Group also
had borrowings of $4,000,000 due and payable on 31 July 2022. The Directors also manage
discretionary expenditure in line with the Group’s cash flow and are confident that there are sufficient
funds to meet the Group’s working capital and funding requirements for a minimum of 12 months
from the date of this report.
The Directors consider the going concern basis of preparation to be appropriate based on forecast
cash flows and confidence in raising additional funds and extension of borrowings. In the event that
the Group is not successful in raising funds from the issue of new equity or extension of borrowings,
there exists material uncertainty that may cast significant doubt on the Group's ability to continue as
a going concern and realise its assets and extinguish its liabilities in the normal course of business and
at the amounts stated in the financial report.
- 65 -
MATSA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30
JUNE 2021
2.
SIGNIFICANT ACCOUNTING POLICIES (Continued)
Segment Reporting
(f)
Determination and presentation of operating segments
An operating segment is a component of the Group that engages in business activities from which it
may earn revenues and incur expenses, including revenues and expenses that relate to transactions
with any of the Group’s other components. All operating segments’ operating results are regularly
reviewed by the Group’s chief operating decision maker to make decisions about resources to be
allocated to the segment and assess its performance, and for which discrete financial information is
available.
Segment results that are reported to 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.
Segment capital expenditure is the total cost incurred during the year to acquire property, plant and
equipment, and intangible assets other than goodwill.
Business combinations
(g)
Business combinations are accounted for using the acquisition method. The cost of an acquisition is
measured as the aggregate of the consideration transferred, measured at acquisition date fair value
and the amount of any non-controlling interest in the acquiree. For each business combination, the
Group elects whether it measures the non-controlling interest in the acquiree either at fair value or
at the proportionate share of the acquiree’s identifiable net assets. Acquisition costs incurred are
expensed and included in administrative expenses.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for
appropriate classification and designation in accordance with the contractual terms, economic
circumstances and pertinent conditions as at the acquisition date. This includes the separation of
embedded derivatives in host contracts by the acquiree.
If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s
previously held equity interest in the acquiree is remeasured to fair value at the acquisition date
through profit or loss.
Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the
acquisition date. Subsequent changes to the fair value of the contingent consideration that is deemed
to be an asset or liability will be recognised in accordance with AASB 9 Financial Instruments (‘AASB
9’) either in profit or loss or as a change to other comprehensive income. If the contingent
consideration is classified as equity, it will not be remeasured. Subsequent settlement is accounted
for within equity. In instances where the contingent consideration does not fall within the scope of
AASB 9, it is measured in accordance with the appropriate Australian accounting standard.
- 66 -
MATSA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30
JUNE 2021
2.
SIGNIFICANT ACCOUNTING POLICIES (Continued)
(h)
Foreign currency transactions and balances
(i) Functional and presentation currency
The functional currency of each entity within the Consolidated Entity is 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.
(ii) Transactions and balances
Transactions in foreign currencies are initially recorded in the functional currency at the exchange
rates ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign
currencies are retranslated at the rate of exchange ruling at the reporting date.
Non monetary items are measured in terms of historical cost in a foreign currency are translated using
the exchange rate as at the date of the initial transaction. All exchange differences in the consolidated
financial report are recorded in profit and loss.
(iii) Transactions of subsidiary Companies’ functional currency to presentation currency
The results of the subsidiaries are translated into Australian Dollars (presentation currency). Income
and expenses are translated at the exchange rates at the date of the transactions. Assets and liabilities
are translated at the closing exchange rate for each reporting date. Share capital, reserves and
accumulated losses are converted at applicable historical rates.
Exchange variations resulting from the translation are recognised in the foreign currency translation
reserve in equity. On consolidation, exchange differences arising from the translation of the net
investment in subsidiaries are taken to the foreign currency translation reserve. If a subsidiary were
sold, the proportionate share of exchange differences would be transferred out of equity and
recognised in the statement of comprehensive income.
(i)
Financial instruments
Non derivative financial instruments
Non derivative financial instruments comprise investments in equity securities, other receivables, cash
and cash equivalents and trade and other payables.
Trade and other 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.
Trade and other receivables are recognised at amortised cost using the effective interest rate method,
less any allowance for expected credit losses.
The Group assesses at each reporting date whether there is objective evidence that a financial asset
or group of financial assets is impaired. For trade and other receivables, the Group applies the
simplified approach permitted by AASB 9 to determine any allowances for expected credit losses,
which requires expected lifetime losses to be recognised from initial recognition of the receivables.
The expected credit losses on these financial assets are estimated using a provision matrix based on
the Group’s historical credit loss experience. The amounts held in trade and other receivables do not
contain impaired assets and are not past due. Based on the credit history of these trade and other
receivables, it is expected that the amounts will be received when due.
- 67 -
MATSA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30
JUNE 2021
2.
(i)
SIGNIFICANT ACCOUNTING POLICIES (Continued)
Financial instruments (continued)
The Group’s financial risk management objectives and policies are set out in Note 27.
Due to the short-term nature of these receivables their carrying value is assumed to approximate their
fair value.
Financial assets are recognised and derecognised on settlement date where the purchase or sale of
an investment is under a contract whose terms require delivery of the investment within the time-
frame established by the market concerned. They are initially measured at fair value, net of
transaction costs, except for those financial assets classified as fair value through profit or loss, which
are initially measured at fair value. Transaction costs of financial assets carried at fair value through
profit or loss are expensed in profit or loss.
The Group classifies its financial assets as either financial assets at fair value though profit or loss
(“FVPL”), fair value though other comprehensive income (“FVOCI”) or at amortised cost. The
classification depends on the entity’s business model for managing the financial assets and the
contractual terms of the cash flows.
For investments in equity instruments, the classification depends on whether the Group has made an
irrevocable election at the time of initial recognition to account for the equity investment at FVPL or
FVOCI.
Financial assets at FVPL
For assets measured at FVPL, gains and losses will be recorded in profit or loss. The Group’s derivative
financial instruments are recognised at FVPL. Assets in this category are subsequently measured at
fair value. The fair values of financial assets in this category are determined by reference to active
market transactions or using a valuation technique where no active market exists. Refer to Note 27
for additional details. The Group has elected to measure its listed equities at FVPL.
Financial assets at OCI
For assets measured at FVOCI, gains and losses will be recorded in other comprehensive income. There
is no subsequent reclassification of fair value gains and losses to profit or loss following the
derecognition of the investment. Dividends from such investments continue to be recognised in profit
or loss as other income when the Group’s right to receive payments is established. Impairment losses
(and reversal of impairment losses) on equity investments measured at FVOCI are not reported
separately from other changes in fair value.
Assets in this category are subsequently measured at fair value. The fair values of quoted investments
are based on current bid prices in an active market.
Other
Other non-derivative financial instruments are measured at amortised cost using the effective interest
method.
- 68 -
MATSA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30
JUNE 2021
2.
SIGNIFICANT ACCOUNTING POLICIES (Continued)
(j)
Investments in associates
The Consolidated Entity's investment in its associates is accounted for using the equity method of
accounting in the consolidated financial statements. The associates are entities over which the
Consolidated Entity has significant influence and that are neither subsidiaries nor joint ventures.
The Consolidated Entity generally deems it has significant influence if it has over 20% of the voting
rights.
Under the equity method, investments in the associates are carried in the consolidated statement of
financial position at cost plus post-acquisition changes in the Consolidated Entity's share of net assets
of the associates.
Goodwill relating to an associate is included in the carrying amount of the investment and is not
amortised. After application of the equity method, the Consolidated Entity determines whether it is
necessary to recognise any impairment loss with respect to the Consolidated Entity's net investment
in associates. Goodwill included in the carrying amount of the investment in associate is not tested
separately, rather the entire carrying amount of the investment is tested for impairment as a single
asset. If an impairment is recognised, the amount is not allocated to the goodwill of the associate. The
Consolidated Entity's share of its associates' post-acquisition profits or losses is recognised in the
profit and loss, and its share of post-acquisition movements in reserves is recognised in reserves. The
cumulative post-acquisition movements are adjusted against the carrying amount of the investment.
Dividends receivable from associates reduce the carrying amount of the investment.
When the Consolidated Entity's share of losses in an associate equals or exceeds its interest in the
associate, including any unsecured long-term receivables and loans, the Consolidated Entity does not
recognise further losses, unless it has incurred obligations or made payments on behalf of the
associate.
The financial statements of the associate are prepared for the same reporting period as the
Consolidated Entity. When necessary, adjustments are made to bring the accounting policies in line
with those of the Consolidated Entity.
(k)
Leases
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract
is considered to contain a lease if it allows the Group the right to control the use of an identified asset
over a period of time in return for consideration. Where a contract or arrangement contains a lease,
the Group recognises a right-of-use asset and a lease liability at the commencement date of the lease.
A right-of-use asset is initially measured at cost, which is the present value of future lease payments
adjusted for any lease payments made at or before the commencement date, plus any make-good
obligations and initial direct costs incurred. Lease assets are depreciated using the straight-line
method over the shorter of their useful life and the lease term. Periodic adjustments are made for any
re-measurements of the lease liabilities and for impairment losses.
Lease liabilities are initially measured at the present value of future minimum lease payments,
discounted using the Group’s incremental borrowing rate if the rate implicit in the lease cannot be
readily determined, and are subsequently measured at amortised cost using the effective interest
rate. Minimum lease payments include fixed payments, amounts expected to be paid under a residual
- 69 -
MATSA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30
JUNE 2021
2.
SIGNIFICANT ACCOUNTING POLICIES (Continued)
(k)
Leases (continued)
value guarantee, the exercise price of purchase options for which the Group is reasonably certain to
exercise and incorporate the Group’s expectations of lease extension options.
The lease liability is remeasured when there are changes in future lease payments arising from a
change in rates, index or lease terms from exercising an extension or termination option. A
corresponding adjustment is made to the carrying amount of the lease assets.
Short term leases (lease term of 12 months or less) and leases of low value assets ($5,000 or less) are
recognised as incurred as an expense in the consolidated income statement. Low value assets
comprise computers and items of IT equipment.
Impairment of non-financial assets
(l)
The Group assesses, at each reporting date, whether there is any objective evidence that a financial
asset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed
to be impaired if, and only if, there is objective evidence of impairment as a result of one or more
events that has occurred after the initial recognition of the asset (an incurred ”loss event”) and that
loss event has an impact on the estimated future cash flows of the financial asset or the group of
financial assets that can be reliably estimated. Evidence of impairment may include indications that
the debtors or a group of debtors is experiencing significant financial difficulty, default or delinquency
in interest or principal payments, the probability that they will enter bankruptcy or other financial
reorganisation and when observable data indicate that there is a measurable decrease in the
estimated future cash flows, such as changes in arrears or economic conditions that correlate with
defaults.
(m) Cash and cash equivalents
Cash and cash equivalents in the statement of financial position comprise cash at bank and in hand
and short-term deposits that are readily convertible to known amounts of cash and which are subject
to an insignificant risk of changes in value.
For the purposes of the statement of cash flows, cash and cash equivalents consist of cash and cash
equivalents as defined above, net of outstanding bank overdrafts. Bank overdrafts are included within
interest bearing loans and borrowings in the current liabilities on the statement of financial position.
Trade and other receivables
(n)
Trade and other receivables, which generally have 30-60 day terms, are recognised initially at fair
value and subsequently measured at amortised cost using the effective interest rate method, less an
allowance for impairment.
Collectability of trade and other receivables is reviewed on an ongoing basis. Individual debts that are
known to be uncollectible are written off when identified. An impairment allowance is recognised
when there is objective evidence that the Consolidated Entity will not be able to collect the receivable.
Financial difficulties of the debtor, default payments or debts more than 60 days overdue are
considered objective evidence of impairment. The amount of the impairment loss is the receivable
carrying amount compared to the present value of estimated future cash flows, discounted at the
original effective interest rate.
- 70 -
MATSA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30
JUNE 2021
2.
SIGNIFICANT ACCOUNTING POLICIES (Continued)
Inventories
(o)
Inventories are valued at the lower of cost and net realisable value. Cost includes expenditure incurred
in acquiring and bringing the inventories to their existing condition and location and is determined
using the weighted average cost method.
Interests in Joint Ventures
(p)
The Group’s share of the assets, liabilities, revenue and expenses of joint venture operations are
included in the appropriate items of the consolidated financial statements.
(q)
Property, plant and equipment
Plant and equipment is stated at historical cost less accumulated depreciation and impairment.
Capital work-in-progress is stated at cost and comprises all costs directly attributable to bringing the
assets under construction ready to their intended use. Capital work-in-progress is transferred to
property, plant and equipment at cost on completion.
Depreciation is calculated on a straight-line basis over the estimated useful life of the asset which
ranges between 3 and 5 years except for buildings which are depreciated over 20 years.
Derecognition
An item of property, plant and equipment is derecognised upon disposal or when no future economic
benefits are expected to arise from the continued use of the asset.
Any gain or loss arising on derecognition of the asset (calculated as the difference between the net
disposal proceeds and the carrying amount of the item) is included in the statement of comprehensive
income in the period the item is derecognised.
(r)
Exploration, evaluation and development expenditure
Expenditure on acquisition, exploration and evaluation relating to an area of interest is capitalised and
carried forward at cost where rights to tenure of the area of interest are current and:
i) it is expected that expenditure will be recouped through successful development and
exploitation of the area of interest or alternatively by its sale; or
ii) exploration and evaluation activities are continuing in an area of interest, but at reporting
date have not yet reached a stage which permits a reasonable assessment of the existence
or otherwise of economically recoverable reserves.
A regular review is undertaken of each area of interest to determine the appropriateness of continuing
to carry forward costs in relation to that area of interest. Where uncertainty exists as to the future
viability of certain areas, the value of the area of interest is written off to the statement of
comprehensive income or provided against.
Impairment
The carrying value of capitalised exploration and evaluation expenditure is assessed for impairment
at the cash generating unit level whenever facts and circumstances suggest that the carrying amount
of the asset may exceed its recoverable amount.
- 71 -
MATSA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30
JUNE 2021
2.
(r)
SIGNIFICANT ACCOUNTING POLICIES (Continued)
Exploration, evaluation and development expenditure (continued)
An impairment exists when the carrying amount of an asset or cash generating unit exceeds its
recoverable amount. The asset or cash generating unit is then written down to its recoverable amount.
Any impairment losses are recognised in the statement of comprehensive income.
(s) Mine properties and development
Expenditure on the acquisition and development of mine properties within an area of interest are
carried forward at cost separately for each area of interest. Accumulated expenditure is amortised
over the life of the area of interest to which such costs relate on a production output basis.
A regular review is undertaken of each area of interest to determine the appropriateness of continuing
to carry forward costs in relation to that area of interest.
Impairment
The carrying value of capitalised mine properties and development expenditure is assessed for
impairment whenever facts and circumstances suggest that the carrying amount of the asset may
exceed its recoverable amount.
Recoverable amount is determined for an individual asset, unless the asset does not generate cash
inflows that are largely independent of those from other assets or groups of assets. When the carrying
amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is
written down to its recoverable amount.
(t)
Trade and other payables
Trade and other payables are carried at amortised cost. They represent liabilities for goods and
services provided to the Group prior to the end of the financial year that are unpaid and arise when
the Group becomes obligated to make future payments in respect of the purchase of these goods and
services. The amounts are unsecured and are usually paid within 30 days of recognition.
(u)
Rehabilitation costs
The Consolidated Entity is required to decommission and rehabilitate mines and processing sites at
the end of their producing lives to a condition acceptable to the relevant authorities.
The expected cost of any approved decommissioning or rehabilitation programme, discounted to its
net present value, is provided when the related environmental disturbance occurs. The cost is
capitalised when it gives rise to future benefits, whether the rehabilitation activity is expected to occur
over the life of the operation or at the time of closure. The capitalised cost is amortised over the life
of the operation and the increase in the net present value of the provision for the expected cost is
included in financing expenses. Expected decommissioning and rehabilitation costs are based on the
discounted value of the estimated future cost of detailed plans prepared for each site. Where there is
a change in the expected decommissioning and restoration costs, the value of the provision and any
related asset are adjusted and the effect is recognised in profit or loss on a prospective basis over the
remaining life of the operation.
The estimated costs of rehabilitation are reviewed annually and adjusted as appropriate for changes
in legislation, technology or other circumstances. Cost estimates are not reduced by potential
proceeds from the sale of assets or from plant clean up at closure.
- 72 -
MATSA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30
JUNE 2021
2.
(v)
SIGNIFICANT ACCOUNTING POLICIES (Continued)
Interest-bearing loans and borrowings
All loans and borrowings are initially recognised at the fair value of the consideration received, less
directly attributable transaction costs.
After initial recognition, interest-bearing loans and borrowings are subsequently measured at
amortised cost using the effective interest method. Fees paid on the establishment of loan facilities
that are yield related are included as part of the carrying amount of the loans and borrowings.
Borrowings are classified as current liabilities unless the group has an unconditional right to defer
settlement of the liability for at least 12 months after the balance date.
(w) Borrowing costs
Borrowing costs are recognised as an expense when incurred unless they relate to qualifying assets in
which case they are capitalised.
(x)
Employee benefits
Provision is made for the Company’s liability for employee benefits arising from services rendered by
employees to reporting date. Employee benefits expected to be settled within one year have been
measured at the amounts expected to be paid when the liability is settled, plus related on-costs.
Employee benefits payable later than one year have been measured at the present value of the
estimated future cash outflows to be made for those benefits.
(y)
Provisions
Provisions are recognised when the Consolidated Entity has a present obligation (legal or constructive)
as a result of a past event, it is probable that an outflow of resources embodying economic benefits
will be required to settle the obligation and a reliable estimate can be made of the amount of the
obligation.
Provisions are measured at the present value of management’s best estimate of the expenditure
required to settle the present obligation at the reporting date. The discount rate used to determine
the present value reflects current market assessments of the time value of money and the risks
specific to the liability. The increase in the provision resulting from the passage of time is recognised
in finance costs.
(z)
Share-based payment transactions
The Consolidated Entity provides benefits to employees (including Directors) in the form of share-
based payment transactions, whereby employees render services in exchange for shares or rights over
shares (equity-settled transactions).
The Consolidated Entity has one plan in place that provides these benefits. It is the Employee Share
Option Plan (“ESOP”) which provides benefits to all employees including Directors. The scheme has
no direct performance requirements. The terms of the share options are as determined by the Board.
Where a participant ceases employment prior to the vesting of their share options, the share options
are forfeited. Where a participant ceases employment after the vesting of their share options, the
share options automatically lapse after one month of ceasing employment unless the Board decides
otherwise at its discretion.
- 73 -
MATSA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30
JUNE 2021
2.
SIGNIFICANT ACCOUNTING POLICIES (Continued)
(z)
Share-based payment transactions (continued)
The cost of these equity-settled transactions with employees is measured by reference to the fair
value at the date at which they are granted. The fair value is determined by using a Black Scholes
model. Further details of which are given in Note 28.
In valuing equity-settled transactions, no account is taken of any vesting conditions, other than
conditions linked to the price of the shares of the Company (market conditions) if applicable.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity,
over the period in which the performance and/or service conditions are fulfilled (the vesting period),
ending on the date on which the relevant employees become fully entitled to the award (the vesting
date).
At each subsequent reporting date until vesting, the cumulative charge to the statement of profit or
loss and other comprehensive income is the product of (i) the grant date fair value of the award; (ii)
the current best estimate of the number of awards that will vest, taking into account such factors as
the likelihood of employee turnover during the vesting period and the likelihood of non-market
performance conditions being met; and (iii) the expired portion of the vesting period. The charge to
the statement of profit or loss and other comprehensive income for the year is the cumulative amount
as calculated above less the amounts already charged in previous years. There is a corresponding
credit to equity.
Until an award has vested, any amounts recorded are contingent and will be adjusted if more or fewer
awards vest than were originally anticipated to do so. Any award subject to a market condition is
considered to vest irrespective of whether or not the market condition is fulfilled, provided that all
other conditions are satisfied.
If a non-vesting condition is within the control of the Consolidated Entity, Company or the employee,
the failure to satisfy the condition is treated as a cancellation. If a non-vesting condition within the
control of neither the Consolidated Entity, Company nor employee is not satisfied during the vesting
period, any expense for the award not previously recognised is recognised over the remaining vesting
period, unless the award is forfeited.
If the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the
terms had not been modified. An additional expense is recognised for any modification that increases
the total fair value of the share-based payment arrangement, or is otherwise beneficial to the
employee, as measured at the date of modification. If an equity-settled award is cancelled, it is treated
as if it had vested on the date of cancellation, and any expense not yet recognised for the award is
recognised immediately. However, if a new award is substituted for the cancelled award, and
designated as a replacement award on the date that it is granted, the cancelled and new award are
treated as if they were a modification of the original award, as described in the previous paragraph.
The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the
computation of earnings per share.
- 74 -
MATSA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30
JUNE 2021
2.
SIGNIFICANT ACCOUNTING POLICIES (Continued)
(aa) Revenue
Revenue is recognised when or as the Group transfers control of goods or services to a customer at
the amount to which the Group expected to be entitled. If the consideration promised includes a
variable amount, the Group estimates the amount of consideration to which it will be entitled. The
following specific recognition criteria must be met before revenue is recognised:
Sale of goods
The Group recognises revenue when it satisfies a performance obligation by transferring a promised
good or service to a customer which occurs when control of goods or services have been transferred
to the buyer and the associated costs can be estimated reliably, there is no continuing management
involvement with the goods, and the amount of revenue can be measured reliably. Revenue from ore
sales is brought to account when the control of goods or services is transferred have transferred to
the buyer and selling prices are known or can be reasonably estimated.
R&D Refund
Revenue is recognised on receipt of refunds from the Australian Taxation Office for research and
development expenditure incurred during the previous financial year.
Dividend Income
Revenue is recognised on receipt of dividends from listed investments.
Finance income
Income is recognised as interest accrues using the effective interest method. This is a method of
calculating the amortised cost of a financial asset and allocating the interest income over the relevant
period using the effective interest rate, which is the rate that exactly discounts estimated future cash
receipts through the expected life of the financial asset to the net carrying amount of the financial
asset.
COVID-19 Government Grant
Cash flow boost incentive from the government is recognised when it is received or when the right to
receive payment is established.
(ab)
Income tax
Deferred income tax is provided on all temporary differences at the reporting date between the tax
bases of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences:
• when the deferred income tax liability arises from the initial recognition of an asset or liability in
a transaction that is not a business combination and, at the time of the transaction, affects
neither the accounting profit nor taxable profit or loss; and
• when the taxable temporary differences associated with investments in subsidiaries, associates
and interests in joint ventures, except where the timing of the reversal of the temporary
differences can be controlled and it is probable that the temporary differences will not reverse
in the foreseeable future.
- 75 -
MATSA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30
JUNE 2021
2.
SIGNIFICANT ACCOUNTING POLICIES (Continued)
(ab)
Income tax (continued)
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of
unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be
available against which the deductible temporary differences, and the carry-forward of unused tax
assets and unused tax losses can be utilised:
• when the deferred income tax asset relating to the deductible temporary difference arises from
the initial recognition of an asset or liability in a transaction that is not a business combination
and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss;
and
• when the deductible temporary differences associated with investments in subsidiaries,
associates and interests in joint ventures, deferred tax assets are only recognised to the extent
that it is probable that the temporary differences will reverse in the foreseeable future and
taxable profit will be available against which the temporary differences can be utilised.
The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to
the extent that it is no longer probable that sufficient taxable profit will be available to allow all or
part of the deferred income tax asset to be utilised.
Unrecognised income taxes are reassessed at each reporting date and are recognised to the extent
that it has become probable that future taxable profit will allow the deferred tax asset to be
recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to
the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have
been enacted or substantively enacted at the reporting date.
Income taxes relating to items recognised directly in equity are recognised in equity and not in the
statement of comprehensive income.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set
off current tax assets against current tax liabilities and the deferred tax assets and liabilities relate to
the same taxable entity and the same taxation authority.
(ac) Contributed equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new
shares or options are shown in equity as a deduction, net of tax, from the proceeds.
The amount of benefits brought to account or which may be realised in the future is based on the
assumption that no adverse change will occur in income taxation legislation and the anticipation that
the economic entity will derive sufficient future assessable income to enable the benefit to be realised
and comply with the conditions of deductibility imposed by the law.
(ad) Other taxes
Revenues, expenses and assets are recognised net of the amount of GST except:
• when the GST incurred on a purchase of goods and services is not recoverable from the
taxation authority, in which case the GST is recognised as part of the cost of acquisition of the
asset or as part of the expense item as applicable; and
receivables and payables, which are stated with the amount of GST included.
•
- 76 -
MATSA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30
JUNE 2021
2.
SIGNIFICANT ACCOUNTING POLICIES (Continued)
(ad) Other taxes (continued)
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of
receivables or payables in the statement of financial position.
Cash flows are included in the statement of cash flows on a gross basis and the GST component of
cash flows arising from investing and financing activities, which is recoverable from, or payable to, the
taxation authority are classified as operating cash flows.
Commitments and contingencies are disclosed net of amounts of GST recoverable from, or payable
to, the taxation authority.
(ae) Earnings per share
Basic earnings per share is calculated as net profit attributable to members of the parent, adjusted to
exclude any costs of servicing equity (other than dividends) and preference share dividends, divided
by the weighted average number of ordinary shares, adjusted for any bonus element.
Diluted earnings per share is calculated as net profit attributable to members of the parent, adjusted
for:
•
•
costs of servicing equity (other than dividends) and preference share dividends;
the after tax effect of dividends and interest associated with dilutive potential ordinary
shares that have been recognised as expenses; and
• other non-discretionary changes in revenue or expenses during the period that would result
from the dilution of potential ordinary shares.
Divided by the weighted average number of ordinary shares and dilutive potential ordinary shares,
adjusted for any bonus element.
- 77 -
MATSA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30
JUNE 2021
3.
SIGNIFICANT 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 and estimates on historical
experience and on other various factors it believes to be reasonable under the circumstances, the
result of which form the basis of the carrying values of assets and liabilities that are not readily
apparent from other sources.
Management has identified the following critical accounting policies for which significant judgements,
estimates and assumptions are made. Actual results may differ from these estimates under different
assumptions and conditions and may materially affect financial results or the financial position
reported in future periods.
Further details of the nature of these assumptions and conditions may be found in the relevant notes
to the financial statements.
Significant accounting estimates and assumptions
Share-based payment transactions
The Consolidated Entity 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 a Black Scholes model, using the assumptions as discussed in Note 28. The
accounting estimates and assumptions relating to equity-settled share-based payments would have
no impact on the carrying amounts of assets and liabilities in the next annual reporting period but may
impact expenses and equity.
Impairment of capitalised exploration and evaluation expenditure
The future recoverability of capitalised exploration and evaluation expenditure is dependent on a
number of factors, including whether the Consolidated Entity decides to exploit the related lease itself
or, if not, whether it successfully recovers the related exploration and evaluation asset through sale.
Factors that could impact the future recoverability include the level of reserves and resources, future
technological changes, which could impact the cost of mining, future legal changes (including changes
to environmental restoration obligations) and changes to commodity prices.
To the extent that capitalised exploration and evaluation expenditure is determined not to be
recoverable in the future, profits and net assets will be reduced in the period in which this
determination is made.
In addition, exploration and evaluation expenditure is capitalised if activities in the area of interest have
not yet reached a stage that permits a reasonable assessment of the existence or otherwise of
economically recoverable reserves. To the extent it is determined in the future that this capitalised
expenditure should be written off, profits and net assets will be reduced in the period in which this
determination is made.
- 78 -
MATSA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30
JUNE 2021
3.
SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS (Continued)
Impairment of property, plant and equipment
Property, plant and equipment is reviewed for impairment if there is any indication that the carrying
amount may not be recoverable. Where a review for impairment is conducted, the recoverable amount
is assessed by reference to the higher of “value in use” (being net present value of expected future cash
flows of the relevant cash generating unit) and “fair value less costs to sell.”
In determining the value in use, future cash flows are based on:
• estimates of the quantities of ore reserves and mineral resources for which there is a high
degree of confidence of economic extraction;
future production levels;
future commodity prices; and
future cash costs of production and capital expenditure.
•
•
•
Variations to the expected cash flows, and the timing thereof, could result in significant changes to any
impairment losses recognised, if any, which in turn could impact future financial results.
Mine rehabilitation provision
The Consolidated Entity assesses its mine rehabilitation provision on an annual basis in accordance with
the accounting policy stated in Note 2(u). In determining an appropriate level of provision,
consideration is given to the expected future costs to be incurred, the timing of those future costs
(largely dependent on the life of mine) and the estimated level of inflation. The ultimate rehabilitation
costs are uncertain, and cost estimates can vary in response to many factors, including estimates of the
extent and costs of rehabilitation activities, technological changes, regulatory changes, cost increases
as compared to the inflation rates, and changes in discount rates. The expected timing of expenditure
can also change, for example in response to changes in reserves or to production rates. These
uncertainties may result in future actual expenditure differing from the amounts currently provided.
Therefore, significant estimates and assumptions are made in determining the provision for mine
rehabilitation. As a result, there could be significant adjustments to the provisions established which
would affect future financial result. The provision at reporting date represents management’s best
estimate of the present value of the future rehabilitation costs required.
- 79 -
MATSA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30
JUNE 2021
4. SEGMENT REPORTING
Identification of reportable segment
The Group identifies its operating segments based on the internal reports that are reviewed and used
by the Board of Directors (chief operating decision maker) in assessing performance and determining
the allocation of resources.
The Group operates primarily in mineral exploration in Western Australia and Thailand. The Group
was awarded Special Prospecting Licences (SPL’s) in Thailand in March 2015 for the first time.
Accordingly the Group now considers that it operates in two geographical segments but within the
same operating segment, mineral exploration. The decision to allocate resources to individual projects
is predominantly based on available cash reserves, technical data and the expectation of future metal
prices.
Accordingly, the Group effectively operates as one segment, being mineral exploration. The financial
information presented in the statement of comprehensive income and statement of financial position
is the same as that presented to the chief operating decision maker.
Basis of accounting for purposes of reporting by operating segments
Accounting policies adopted
Unless stated otherwise, all amounts reported to the Board of Directors as the chief operating decision
maker is in accordance with accounting policies that are consistent to those adopted in the annual
financial statements of the Group.
- 80 -
MATSA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30
JUNE 2021
4.
SEGMENT REPORTING (Continued)
Information about reportable segments
Information relating to each reportable segment is shown below.
2021
External revenues
Inter-segment revenue
Segment revenue
Segment profit/(loss) before tax
Interest income
Interest expense
Depreciation and amortisation
Share of profit/(loss) of equity accounted
investees
Other material non-cash items
-
Impairment of losses of non-financial
assets
Segment assets
Equity accounted investees
Capital expenditure
Segment liabilities
2020
External revenues
Inter-segment revenue
Segment revenue
Segment profit/(loss) before tax
Interest income
Interest expense
Depreciation and amortisation
Share of profit/(loss) of equity accounted
investees
Other material non-cash items
-
Impairment of losses of non-financial
assets
Segment assets
Equity accounted investees
Capital expenditure
Segment liabilities
Reportable Segments
Australia
$
8,387,149
-
8,387,149
(9,164,778)
223
(763,403)
(5,819,920)
Thailand
$
-
-
-
(489,935)
124
-
-
Total
$
8,387,149
-
8,387,149
(9,654,713)
347
(763,403)
(5,819,920)
1,051,922
-
1,051,922
-
27,349,402
-
777,056
12,458,606
-
483,223
-
-
2,037
-
27,832,625
-
777,056
12,460,643
Reportable Segments
Australia
$
11,179,466
-
11,179,466
(4,410,510)
18,282
(558,651)
(2,894,059)
Thailand
$
120,722
-
120,722
(824,593)
606
-
(94)
Total
$
11,300,188
-
11,300,188
(5,235,103)
18,888
(558,651)
(2,894,153)
(199,882)
-
(199,882)
-
26,458,786
155,735
860,990
11,700,985
-
652,486
-
-
2,053
-
27,111,272
155,735
860,990
11,703,038
- 81 -
MATSA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30
JUNE 2021
5. Income and expenses
The loss before income tax includes the following revenues
whose disclosure is relevant in explaining the performance of
the entity:
(a) Other income
R&D tax incentive refund
Net gain on sale of plant and equipment
Other income
(b) Finance income
Interest earned
(c) Expenses included in the statement of comprehensive
income
Depreciation and amortisation expenses
Mine property depreciation
Mine capital development amortisation
Property plant and equipment depreciation
Right-of-use assets depreciation
Disclosure in Statement of Profit and Loss
Amortisation and depreciation
Depreciation expense
(d) Other expenses
(i) Employee benefits expense
Salaries and wages
Superannuation expenses
Share based payments
Total employee benefits expense
(ii) Administration and other expenses
Operating lease rentals
Administration expenses
2021
$
2020
$
204,868
-
127,268
332,136
137,630
2,141
479,449
619,220
347
18,888
369,695
4,554,753
760,105
135,367
5,819,920
5,673,440
146,480
5,819,920
1,352,460
81,194
111,956
1,545,610
6,371
1,204,144
1,210,515
2,756,125
272,373
1,943,841
542,639
135,300
2,894,153
2,692,144
202,009
2,894,153
1,179,383
65,387
297,042
1,541,812
72,802
1,318,549
1,391,351
2,933,163
- 82 -
MATSA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30
JUNE 2021
2021
$
2020
$
-
-
-
-
-
-
6. Income taxes
Tax expense/(income) comprises:
Current tax expense/(income)
Deferred tax expense/(income)
Income tax recognised in profit or loss
The prima facie income tax expense/(income) on the pre-tax
accounting profit/(loss) from operations reconciles to the
income tax expense/(income) in the financial statements as
follows:
Loss from continuing operations
(9,654,713)
(5,235,103)
Income tax expense calculated at 26% (2020: 27.5%)
(2,510,225)
(1,439,653)
Non-deductible expenses
Non-assessable income
Effect of temporary differences not recognised in current year
Effect of change in income tax rate
Effect of temporary differences that would be recognised
directly in equity
Adjustments recognised in the current year in relation to the
current tax of previous years
Income tax expense
31,145
(53,266)
2,514,240
100,570
177,949
(40,203)
787,072
549,341
(221,145)
(128,194)
138,681
-
93,688
-
The tax rate used in the above reconciliation is the corporate tax rate of 26% (2020: 27.5%) payable
by Australian corporate entities on taxable profits under Australian tax law.
Unrecognised deferred tax assets/(liabilities)
The following deferred tax assets have not been brought to
account:
Tax losses - revenue
Investments
Temporary differences - exploration
Section 40-880 expenses
Other temporary differences
2021
$
2020
$
10,166,353
-
(2,601,206)
155,232
415,477
8,135,856
7,737,412
115,679
(2,148,716)
159,686
(242,445)
5,621,616
The ability of the Group to utilise unrecognised tax losses will depend on whether the Group meets
the statutory requirements for utilising tax losses as and when it generates taxable profit.
- 83 -
MATSA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30
JUNE 2021
7. Trade and other receivables
Current
Trade debtors
Amounts receivable from Australian Taxation Authorities
Other receivables
Non-current
Other receivables (i)
2021
$
2020
$
-
153,281
84,315
237,596
200,000
200,000
1,423,669
9,363
98,977
1,532,009
-
-
(i) On 2 February 2021, the Company and Bulletin Resources Limited (Bulletin) have through their
80/20 joint venture sold a 400m wide strip (1.35km2) of the 576km2 Lake Rebecca gold project to
Apollo Consolidated Limited (Apollo) for a total consideration of approximately $5.6 million. The
Company’s share of the consideration amount to $1.2 million. The remaining receivable of
$200,000 is expected to be settled in 2025.
8. Other assets
Current
Prepayments
Cash backed performance bond (i)
Non-current
Deposits held (ii)
2021
$
2020
$
253,900
-
253,900
287,363
287,363
49,469
32,615
82,084
324,895
324,895
(i) The Company’s bankers have provided performance bonds as security for the due and proper
performance of leases in accordance with the tenement conditions associated with certain Group
tenements. The Company has cash-backed performance bonds with fixed term deposits with the
bank.
(ii) The Company has cash deposits held with the Thailand government with respect to a number of
tenement applications in Thailand. Prior to changes in the Thailand Mineral Act (2017), should the
applications not be successful the deposits will be refunded in full.
- 84 -
MATSA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30
JUNE 2021
9. Inventories
Current
Ore stocks
Stores, spares and fuel at cost
Total inventories at lower of cost and net realisable value
10. Other assets
Other financial assets
Movements in financial assets:
At 1 July
Additions
Proceeds from sale (net of transaction cost)
Gain/(loss) on sale of financial assets
Net change in investments
At 30 June
2021
$
2020
$
2,396
77,585
79,981
354,385
219,486
573,871
2021
$
2020
$
-
-
351,600
351,600
2021
$
351,600
741,750
(1,113,354)
20,004
-
-
2020
$
1,110,206
185,400
(773,732)
(343,906)
173,632
351,600
Other financial assets consist of investments in ordinary shares, and therefore have no fixed maturity
date or coupon rate.
Listed shares
(i) The Company held shares in Panoramic Resources Limited (ASX: PAN), which is involved in the
mining and exploration of base metals in Australia and Canada. Panoramic is listed on the
Australian Securities Exchange. During the year, the Company sold all shares held in Panoramic
Resources Limited. At 30 June 2020, the fair value of the investment was $194,400 which was
based on Panoramic Resources Limited’s quoted share price.
(ii) The Company held shares in Anova Minerals Limited (ASX: AWV), which is involved in
exploration and development of gold in Western. AWV is listed on the Australian Securities
Exchange. During the year, the Company sold all shares held in Anova Minerals Limited. At 30
June 2020, the Company’s investment was $157,200 which was based on AWV’s quoted share
price.
(iii) In February 2021, the Company received 2,150,000 Apollo Consolidated Ltd (ASX: AOP) shares
for the partial sale of Lake Rebecca Project. The total value of consideration for the sale was
$1.192 million, comprising of AOP shares and cash payments. In June 2021, the Company sold
all shares held in Apollo Consolidated Ltd for a total consideration of $612,750 before costs.
- 85 -
MATSA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30
JUNE 2021
11. Equity accounted investments
The Company has a nil (2020: 26.77%) interest in Bulletin Resources Limited (ASX: BNR), which is
involved in the exploration of precious and base metals in Australia. Bulletin is listed on the Australian
Securities Exchange. During the year, the Company has disposed all of its 26.77% shareholding in
Bulletin Resources Ltd for a total consideration of $2.994 million before costs.
2021
$
Movements in carrying value of the Company’s investment in associate:
At 1 July
Share of gain/(loss) after income tax
Share of change in reserves
Gain on disposal of investment in associate
Proceeds from sale (net of transaction cost)
At 30 June
155,735
1,051,922
-
1,674,472
(2,882,129)
-
2020
$
355,617
(199,882)
-
-
155,735
The following table illustrates the summarised financial information of the Company’s investment
in Bulletin:
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Equity
2021
$
-
-
-
-
-
2020
$
1,830,416
239,027
(513,432)
-
1,556,011
Company’s share of profit/(loss) for the year
1,051,922
(199,882)
The associate had no contingent liabilities or capital commitments as at 30 June 2021.
- 86 -
2021
2020
MATSA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30
JUNE 2021
12. Exploration and evaluation assets
Exploration expenditure capitalised at cost
-exploration and evaluation phase
Movements in carrying amounts
Exploration and evaluation phase
Balance at beginning of year
Acquisition of tenements
Disposal of tenements (i)
Exploration and evaluation expenditure incurred
Expenditure written off/impaired
Transferred from/(to) mine property and development
Balance at end of year
$
$
21,437,966
21,437,966
18,537,147
18,537,147
18,537,147
-
(15,757)
4,031,294
-
(1,114,718)
21,437,966
16,355,239
177,166
(758,306)
3,504,250
(741,202)
-
18,537,147
(i) On 2 February 2021, the Company and Bulletin Resources Limited (Bulletin) have through their
80/20 joint venture sold a 400m wide strip (1.35km2) of the 576km2 Lake Rebecca gold project to
Apollo Consolidated Limited (Apollo). Refer to note 7 for further details. A gain on the sale of
$1,191,750 was recognised in the statement of profit or loss and other comprehensive income.
The ultimate recoupment of costs carried forward for exploration and evaluation phase is dependent
on the successful development and commercial exploitation or sale of the respective areas.
- 87 -
MATSA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30
JUNE 2021
13. Mine property and development
Mine properties
Balance at beginning of year
Additions
Depreciation expense for the period
Balance at end of year
Mine capital development
Balance at beginning of year
Transferred from/(to) exploration and evaluation assets
Additions
Amortisation expense for the period
Balance at end of year
2021
$
2020
$
377,568
-
(369,695)
7,873
1,291,435
1,114,718
2,333,421
(4,554,753)
184,821
649,941
-
(272,373)
377,568
-
-
3,235,276
(1,943,841)
1,291,435
Total mine properties and development
192,694
1,669,003
2021
$
2020
$
3,740,265
(1,822,297)
1,917,968
1,917,968
Plant and
Equipment
$
1,785,389
860,990
(3,318)
(199,405)
(542,639)
1,901,017
777,056
(760,105)
1,917,968
3,816,356
(1,915,339)
1,901,017
1,901,017
Total
$
1,785,389
860,990
(3,318)
(199,405)
(542,639)
1,901,017
777,056
(760,105)
1,917,968
14. Property, plant and equipment
Plant and equipment at cost
Accumulated depreciation
Total property, plant and equipment
Movements in carrying amounts
Consolidated
Balance 30 June 2019
Additions
Disposals
Assets transferred to Right of use assets
Depreciation expense
Balance 30 June 2020
Additions
Depreciation expense
Balance 30 June 2021
- 88 -
MATSA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30
JUNE 2021
15. Right-of-use-assets & lease liabilities
The Group has lease contracts for various items of equipment, motor vehicles and office premises
used in its operations. Leases generally have lease terms between two and four years.
Set out below are the carrying amounts of right-of-use assets recognised and the movements during
the period:
Right-of-use-assets
Carrying Amount
Cost
Accumulated depreciation
As at 30 June 2021
Reconciliation
As at 1 July 2020
Additions
Depreciation expense
As at 30 June 2021
Lease liabilities
Equipment
$
81,595
(40,507)
41,088
Equipment
$
1,077
44,823
(4,812)
41,088
Premises
$
222,270
(143,449)
78,821
Premises
$
45,405
99,562
(66,146)
78,821
Motor
Vehicles
$
230,309
(154,387)
75,922
Motor
Vehicles
$
140,331
-
(64,409)
75,922
Total
$
534,174
(338,343)
195,831
Total
$
186,813
144,385
(135,367)
195,831
Set out below are the carrying amounts of lease liabilities.
Carrying Value 2021
Current liabilities
Non-current liabilities
As at 30 June 2021
Carrying Value 2020
Current liabilities
Non-current liabilities
As at 30 June 2020
Equipment
$
15,941
29,478
45,419
Equipment
$
1,902
-
1,902
Premises
$
49,240
31,247
80,487
Premises
$
47,845
-
47,845
Motor
Vehicles
$
33,805
26,709
60,514
Motor
Vehicles
$
42,262
60,514
102,776
Total
$
98,986
87,434
186,420
Total
$
92,009
60,514
152,523
A maturity analysis of future minimum lease payments is presented in Note 27.
- 89 -
499
MATSA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30
JUNE 2021
15. Right-of-use-assets & lease liabilities (continued)
Equipment
$
1,902
49,306
(6,288)
Premises
$
47,845
99,563
(70,800)
3,879
-
80,487
Motor
Vehicles
$
102,776
-
(47,138)
4,876
-
60,514
Total
$
152,523
148,869
(124,226)
9,254
-
186,420
Movement for the period
As at 1 July 2020
New leases entered
Repayments
Interest
Leases terminated
As at 30 June 2021
16. Trade and other payables
Unsecured liabilities
Trade payables
Sundry creditors and accrued expenses
17. Borrowings
Current
Unsecured liabilities
Insurance premium finance
Non Current
Secured liabilities
Loan (i)
(i) Reconciliation of loan
Balance at beginning of year
Amount borrowed
Share based payment
Interest capitalised
Balance at end of year
-
45,419
- 90 -
2021
$
2020
$
3,151,696
1,656,133
4,807,829
2021
$
3,262,672
1,359,208
4,621,880
2020
$
224,732
224,732
-
-
3,984,116
3,984,116
3,973,264
3,973,264
2021
$
3,973,264
-
-
10,852
3,984,116
2020
$
3,960,846
-
-
12,418
3,973,264
MATSA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30
JUNE 2021
17. Borrowings (Continued)
On 8 August 2017 Matsa entered into loan agreements with two separate parties for a $4M facility
with the funds being predominantly used as a working capital facility to ensure smooth operations
of the trial mine at the Fortitude Gold Project and to conduct further exploration at Lake Carey.
The repayment date was initially 31 July 2018 but was extended by mutual consent on 12 April
2018 to 31 July 2019. On 5 May 2019 a further $1M was borrowed and the repayment date
extended to 31 July 2020. On 29 May 2020 the repayment date was extended to 31 July 2022. On
this basis the loan has been disclosed as non-current.
The key terms of the finance facility are as follows:
Principal Amount: $5,000,000 ($4M drawn down)
Interest Rate:
Term:
Security:
12% per annum paid monthly in arrears (penalty rate of 18% if Matsa is in
default)
Repayable by 31 July 2022
The loan facility is secured by a mortgage over the Fortitude gold project and
the mining equipment and motor vehicles of Red October gold project.
At the time of the original loan Matsa agreed to issue a total of 1 million options in the Company,
split equally amongst the parties, with an exercise price of $0.20 each with a two year life from the
date of issue. The principal loan balance of $4M has been offset by the value of the options issued.
At the end of the year the carrying value of the loan was $3,984,116. In return for the loan
extension, Matsa agreed to pay each of the lenders an annual Facility Fee of 150,000 fully paid
ordinary shares for every year or part year that the loans remain outstanding. There is one Facility
Fee of 150,000 shares that was issued on 4 June 2021.
18. Provisions
Current
Provision for annual leave
Non-current
Provision for long service leave
Provision for mine restoration
2021
$
2020
$
376,222
376,222
304,552
304,552
244,706
2,636,618
2,881,324
223,737
2,427,082
2,650,819
- 91 -
MATSA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30
JUNE 2021
18. Provisions (Continued)
Movement in long service leave provision
Opening balance 1 July
Increase in provision
Closing balance 30 June
Movement in provision for mine restoration
Opening balance 1 July
Increase/(decrease) in provision
Closing balance 30 June
2021
$
2020
$
223,737
20,969
244,706
176,136
47,601
223,737
2,427,082
209,536
2,636,618
2,420,976
6,106
2,427,082
19. Issued capital
2021
No.
2020
No.
2021
$
2020
$
Fully paid ordinary shares
315,962,745
227,067,368
60,696,604
51,348,741
Ordinary shares
At the beginning of reporting period
Share placements
Shares issued as a facility fee
Shares issued in lieu of payment
Exercise of options
Transaction costs
At reporting date
227,067,368
86,694,005
150,000
2,050,000
1,372
-
315,962,745
176,917,368
50,000,000
150,000
-
-
-
227,067,368
51,348,741
10,021,074
12,000
164,000
233
(849,444)
60,696,604
44,292,467
7,550,000
19,050
-
-
(512,776)
51,348,741
Ordinary shares participate in dividends and the proceeds on winding up of the parent entity in
proportion to the number of shares held. At shareholders meetings each ordinary share is entitled to
one vote when a poll is called, otherwise each shareholder has one vote on a show of hands.
Options
The movement of the options on issue during the financial year is set out below:
Exercise
Price
$0.17
$0.17
$0.25
$0.35
$0.175
$0.21
$0.35
$0.25
$0.30
$0.17
Expiry Date
30 November 2021
30 November 2021
31 May 2021
30 November 2022
30 November 2022
30 October 2023
30 November 2022
30 November 2022
30 November 2022
30 April 2023
Balance at
beginning
of year
5,000,000
3,600,000
11,000,000
1,000,000
5,750,000
-
-
-
-
-
26,350,000
Issued
-
-
-
-
-
4,100,000
2,000,000
2,000,000
44,079,341
28,125,696
80,305,037
Exercised
-
-
-
-
-
-
-
-
-
(1,372)
(1,372)
Lapsed
Balance at
end of
year
5,000,000
-
2,300,000
(1,300,000)
-
(11,000,000)
1,000,000
-
5,750,000
-
3,250,000
(850,000)
2,000,000
-
-
2,000,000
- 44,079,341
- 28,124,324
(13,150,000) 93,503,665
- 92 -
9,752,588
-
9,752,588
9,410,806
341,782
9,752,588
2020
$
(13,844)
13,844
-
MATSA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30
JUNE 2021
2021
$
2020
$
20. Reserves
Equity settled transaction
Other reserves
Equity settled transaction reserve
Balance at beginning of financial year
Share based payment
Balance at end of financial year
10,023,186
-
10,023,186
9,752,588
270,598
10,023,186
The equity settled transaction reserve records share-based payment transactions.
2021
$
-
-
-
Other reserve
Balance at beginning of financial year
Amount transferred to accumulated losses (i)
Balance at end of financial year
(i)
This amount relates to prior years recognition of share of reserves from its associate Bulletin
Resources Limited reversed to accumulated losses in the current year.
21. Accumulated losses
Accumulated losses at beginning of financial year
Amount transferred from other reserves (note 20)
Loss for the year
Accumulated losses at end of financial year
22. Loss per share
The loss and weighted average number of ordinary shares used
in the calculation of loss per share are as follows:
Loss
Weighted average number of ordinary shares
2021
$
2020
$
45,770,822
-
9,655,204
55,426,026
40,521,595
13,844
5,235,383
45,770,822
2021
$
2020
$
9,655,204
5,235,383
No.
269,926,042
No.
210,042,368
Diluted loss per share
Diluted loss per share has not been calculated as the Company’s potential ordinary shares are not
considered dilutive and do not increase loss per share.
- 93 -
MATSA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30
JUNE 2021
23. Commitments and contingencies
Exploration and expenditure commitments
In order to maintain the mineral tenements in which the Company and other parties are involved, the
consolidated entity is committed to fulfil the minimum annual expenditure conditions under which
the tenements are granted. The minimum estimated expenditure commitment requirement for
granted tenements for the next year is $2,424,824 (2020: $2,128,754). This amount has not been
provided for in the financial report. These obligations are capable of being varied from time to time.
Exploration expenditure commitments beyond twelve months cannot be reliably determined.
Mine development and operating commitments
The mine development and operating costs are determined on a time and cost basis.
Contingencies
There are no contingent assets or contingent liabilities as at 30 June 2021.
24. Subsidiaries
Parent Entity
Matsa Resources Limited
Subsidiary
Matsa Gold Pty Ltd
Killaloe Minerals Pty Ltd
Lennard Shelf Exploration Pty Ltd
Red October Gold Pty Ltd
Australian Strategic and Precious
Metals Investment Pty Ltd
Matsa Resources (Aust) Pty Ltd
Matsa Iron Pty Ltd
Cundeelee Pty Ltd
Matsa (Thailand) Co Ltd
PVK Mining Loei Co Ltd
Khlong Tabaek Co Ltd
Paisali Mining Co Ltd
Wichan Buri Resources Co Ltd
Siam Copper Resources Co Ltd
Loei Mining Co Ltd
Azure Circle Co Ltd
Country of Incorporation
Percentage Owned (%)
2021
2020
100
100
100
100
100
100
100
100
100
100
95
95
-
100
100
100
100
100
100
100
100
100
100
100
100
100
95
95
100
100
100
100
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Thailand
Thailand
Thailand
Thailand
Thailand
Thailand
Thailand
Thailand
- 94 -
MATSA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30
JUNE 2021
25. Cash flow information
Reconciliation of cash and cash equivalents
Cash and cash equivalents at the end of the financial year as shown in the statement of cash flows is
reconciled to the related items in the statement of financial position as follows:
2021
$
2020
$
Cash and cash equivalents
3,029,326
1,797,098
Reconciliation of loss for year to net cash flows from operating activities
Profit/(loss) for year
(9,654,713)
(5,235,103)
2021
$
2020
$
Non-cash flows in loss from ordinary activities:
Share-based payments
Depreciation
Exploration expenditure written off
Share of investee (gain)/loss
Net (gain)/loss on sale of financial assets
Net (gain)/loss on disposal of plant and equipment
Net (gain)/loss on sale of investment in associates
Net (gain)/loss on sale of tenements
Net change in investments
Interest expense classified as financing cash flow
Amortisation
Shares issued as facility fees
Reversal of provision for tenement application money
Changes in assets and liabilities:
Decrease/(increase) in receivables
Decrease/(increase) in inventories
Increase/(decrease) in trade creditors and accruals
Increase/(decrease) in provisions
Cash provided by operating activities
111,956
895,472
-
(1,051,922)
(20,004)
-
(1,674,472)
(1,191,750)
-
506,829
4,924,448
12,000
-
1,438,810
498,371
99,126
302,176
(4,803,673)
297,042
202,009
741,202
199,882
517,538
(2,541)
-
8,306
(173,632)
492,418
2,692,144
-
(111,761)
(1,214,721)
(466,948)
3,375,926
100,258
1,422,019
- 95 -
MATSA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30
JUNE 2021
25. Cash flow information (Continued)
Reconciliation of liabilities arising from financing activities
2021
Opening balance
Cash flows
Non-cash changes
Closing balance
2020
Opening balance
Cash flows
Non-cash changes
Adoption of AASB 16 on lease premises
Closing balance
26. Parent entity disclosures
Lease
Liabilities
$
152,523
(114,972)
148,869
186,420
Lease
Liabilities
$
200,379
(170,563)
-
122,707
152,523
Long Term
Borrowings
$
3,973,264
-
10,852
3,984,116
Long Term
Borrowings
$
3,960,846
-
12,418
-
3,973,264
Total
$
4,125,787
(114,972)
159,721
4,170,536
Total
$
4,161,225
(170,563)
12,418
122,707
4,125,787
As at, and throughout, the financial year ended 30 June 2021, the parent company of the Group was
Matsa Resources Limited.
Result of the parent entity
Loss for the year
Other comprehensive gain/(loss)
Total comprehensive loss for the year
Financial position of parent entity at year end
Current assets
Total assets
Current liabilities
Total liabilities
Total equity of the parent entity comprising of:
Share capital
Reserves
Accumulated losses
Total equity
- 96 -
Company
2021
$
2020
$
(13,028,584)
-
(13,028,584)
(4,360,533)
-
(4,360,533)
2,782,197
12,585,878
975,470
15,938,597
2,054,275
6,424,097
2,169,690
6,366,691
60,696,604
10,023,186
(64,558,009)
51,348,741
9,752,590
(51,529,425)
6,161,781
9,571,906
MATSA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30
JUNE 2021
27. Financial instruments
Financial risk management
Overview
This note presents information about the Group’s exposure to credit, liquidity and market risks, their
objectives, policies and processes for measuring and managing risk, and the management of capital.
The Group does not use any form of derivatives as it is not at a level of exposure that requires the use
of derivatives to hedge its exposure. Exposure limits are reviewed by management on a continuous
basis. The Group does not enter into or trade financial instruments, including derivative financial
instruments, for speculative purposes.
The Board of Directors has overall responsibility for the establishment and oversight of the risk
management framework. Management monitors and manages the financial risks relating to the
operations of the group through regular reviews of the risks.
Credit risk
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 cash
balances at bank, deposits with statutory authorities.
Presently, the Group undertakes exploration and evaluation activities exclusively in Australia and
Thailand. At the reporting date there were no significant concentrations of credit risk with the
exception of its cash balances at bank.
Cash and cash equivalents
The Group limits its exposure to credit risk by only investing in liquid securities and only with
counterparties that have an acceptable credit rating of no less than AA rating.
Trade and other receivables
The Group manages its exposure to credit risk by extensive due diligence on the party processing its
gold sales.
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:
Trade and other receivables
Cash and cash equivalents
Deposits held
Consolidated
Carrying amount
2021
$
84,315
3,029,326
287,363
2020
$
1,522,646
1,797,098
324,895
- 97 -
MATSA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30
JUNE 2021
27. Financial instruments (Continued)
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due.
The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have
sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without
incurring unacceptable losses or risking damage to the Group’s reputation.
The Group manages liquidity risk by maintaining adequate cash reserves from funds raised in the
market and by continuously monitoring forecast and actual cash flows. The Group also has
investments in listed shares that could be sold to raise cash.
The Company has leased assets financed by way of finance leases and has taken out a premium
funding facility over their insurance requirements.
The following are the contractual maturities of financial liabilities, including estimated interest
payments and excluding the impact of netting agreements:
30 June 2021
Trade and
other payables
Lease liabilities
Insurance
premium
finance
Loan
30 June 2020
Weighted
average
interest
rate
%
Carrying
amount
Contractual
cash flows
6 mths or
less
6-12
mths
1-2 years
2-5
years
$
$
$
$
$
$
-
6.78
3,655,941
186,420
3,655,941 3,655,941
48,286
186,420
-
50,700
-
74,547
-
12,887
4.31
12
224,732
3,984,116
8,051,209
-
157,312
224,732
3,984,116
- 3,984,116
-
8,051,209 3,861,539 118,120 4,058,663
67,420
-
-
12,887
Weighted
average
interest
rate
%
Carrying
amount
Contractual
cash flows
6 mths or
less
6-12
mths
1-2
years
2-5 years
$
$
$
$
$
$
Trade and other
payables
Lease liabilities
Loan
6.77
12
3,894,463
152,523
3,973,264
8,020,250
3,894,463 3,894,463
-
65,978 26,031
152,523
3,973,264
-
8,020,250 3,960,441 26,031
-
-
33,806
-
26,708
- 3,973,264
33,806 3,999,972
Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and
equity prices will affect the Group’s income or the value of its holdings of financial instruments. The
objective of market risk management is to manage and control market risk exposures within
acceptable parameters, while optimising the return.
- 98 -
MATSA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30
JUNE 2021
27. Financial instruments (Continued)
Currency risk
The Group is exposed to currency risk on investments and purchases that are denominated in a
currency (Thai baht) other than the respective functional currencies of Group entities, which is
primarily the Australian dollar.
As at the statement of financial position date the Group holds the following financial assets or
liabilities which are exposed to foreign currency risk.
Other current assets
Cash and cash equivalents
Sensitivity analysis
Carrying amount
2021
$
95,767
101,652
2020
$
117,830
202,266
The Group is exposed to fluctuations in foreign currencies arising from the acquisition of services from
time to time in currencies other than the Group’s functional currency. A change of 10% in the foreign
currency exchange rate at 30 June 2021 would have increased equity by $17,947 (2020: $32,009), an
equal change in the opposite direction would have decreased equity by an equal but opposite amount.
Interest rate risk
The Group is exposed to interest rate risk (primarily on its cash and cash equivalents), which is the risk
that a financial instrument’s value will fluctuate as a result of changes in the market interest rates on
interest-bearing financial instruments. The Group does not use derivatives to mitigate these
exposures. The Group is not exposed to cash flow volatility from interest rate changes on borrowings
as the finance leases carry fixed rates of interest.
The Group adopts a policy of ensuring that as far as possible it maintains excess cash and cash
equivalents in short terms deposit at interest rates maturing over 90 day rolling periods or less.
Profile
At the reporting date the interest rate profile of the Group’s and the Company’s interest-bearing
financial instruments was:
Carrying amount
2021
$
2020
$
50,000
186,420
3,984,116
4,220,536
2,979,326
-
2,979,326
50,000
152,523
3,973,264
4,175,787
1,747,098
32,615
1,779,713
Fixed rate instruments
Cash and cash equivalents
Lease liabilities
Loan
Variable rate instruments
Cash and cash equivalents
Cash backed performance bonds
- 99 -
MATSA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30
JUNE 2021
27. Financial instruments (Continued)
Fair value sensitivity analysis for fixed rate instruments
The Group does not account for any fixed rate financial assets and liabilities at fair value through profit
or loss, therefore a change in interest rates at the reporting date would not affect profit or loss.
Cash flow sensitivity analysis for variable rate instruments
A change of 100 basis points in interest rates at the reporting date would have increased (decreased)
equity and profit or loss by the amounts shown below. This analysis assumes that all other variables,
in particular foreign currency rates, remain constant. The analysis is performed on the same basis as
2020.
Profit or loss
100bp
increase
$
100bp
decrease
$
Equity
100bp
increase
$
100bp
decrease
$
29,793
(29,793)
29,793
(29,793)
17,797
(17,797)
17,797
(17,797)
30 June 2021
Variable rate instruments
30 June 2020
Variable rate instruments
Fair values
Fair values versus carrying amounts
The carrying amounts of financial assets and liabilities approximate fair value. The basis for
determining fair values versus carrying value of financial instruments not carried at fair value is
described below.
(i)
Other receivables, trade and other payables:
Other receivables, trade and other payables are short term in nature. As a result, the carrying
amount of these instruments is considered to approximate its fair value.
Deposits held on tenement applications:
The deposits held with Thai authorities are fully recoverable should the applications not be
granted. As a result the carrying amount is considered to approximate its fair value.
(ii)
Equity Price Risk
Other Equity price risk is the risk that the value of the instrument will fluctuate as a result of changes
in market prices (other than those arising from interest rate risk or currency risk), whether caused by
factors specific to an individual investment, its issuer or all factors affecting all instruments traded in
the market.
Investments are managed on an individual basis and material buy and sell decisions are approved by
the Board of Directors. The primary goal of the Group’s investment strategy is to maximise investment
returns.
The Group’s investments are solely in equity instruments. These instruments are classified as financial
investments and carried at fair value with fair value changes recognised directly in the statement of
profit or loss and other comprehensive income.
- 100 -
MATSA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30
JUNE 2021
27. Financial instruments (Continued)
The following table details the breakdown of the investment assets and liabilities held by the Group:
Listed equities (Level 1 fair value
hierarchy)
Note
10
30 June 2021
$
30 June 2020
$
-
351,600
Sensitivity analysis
The Group’s equity investments are listed on the Australian Securities Exchange. A 3% increase in
stock prices at 30 June 2021 would have increased equity by nil (2020: $10,548), an equal change in
the opposite direction would have decreased equity by an equal but opposite amount.
Capital Management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a
going concern, so as to maintain a strong capital base sufficient to maintain future exploration and
development of its projects. In order to maintain or adjust the capital structure, the Group may return
capital to shareholders, issue new shares or sell assets to reduce debt. The Group’s focus has been to
raise sufficient funds through equity to fund exploration and evaluation activities and mine
development. The Group monitors also has a debt facility which is not repayable until 31 July 2022.
The Group encourages employees to be shareholders through the Long Term Incentive Plan and the
Executive Share Option Plan.
There were no changes in the Group’s approach to capital management during the year. Risk
management policies and procedures are established with regular monitoring and reporting.
Neither the Company nor any of its subsidiaries are subject to externally imposed capital
requirements.
28. Share-based payments
Shared based payments expense
Directors and Executives
Employee Share Option Plan
Consultants
2021
$
2020
$
24,114
77,508
10,334
111,956
297,042
-
44,740
341,782
During the year, options were issued to consultants as part of the Company’s capital raising. These
options valued at $158,642 was recognised directly in equity as capital raising transaction costs.
Employee Share Option Plan
The Group has an Employee Share Option Plan (ESOP) for the granting of options to staff members,
directors and consultants. A new ESOP was approved by shareholders on 28 November 2019 and
adopted. Options issued under the ESOP vest on the grant date.
- 101 -
MATSA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30
JUNE 2021
28. Share-based payments (Continued)
Other relevant terms and conditions applicable to options granted under the ESOP include:
(a)
(b)
(c)
(d)
(e)
(f)
Options issued pursuant to the plan will generally be issued free of charge.
The exercise price of the options shall be as the Directors in their absolute discretion
determine, provided the exercise price shall not be less than the weighted average of the last
sale price of the Company’s shares on ASX at the close of business on each of the 5 business
days immediately preceding the date on which the Directors resolve to grant the options.
Subject to the above, the options may be exercised at any time prior to the expiration date
from the issue date.
The Directors may limit the total number of options which may be exercised under the plan in
any year.
Options with a common expiry date may have a different exercise price and exercise date.
Options shall lapse upon the earlier of:
(i)
(ii)
The expiry of the exercise period; and
The expiry of three months after the option holder ceases to be an employee by
reason of dismissal, resignation or termination of employment, office or services for
any reason, except the Directors may resolve that the options shall lapse on other
terms they consider appropriate.
(g)
Upon exercise the options will be settled in ordinary shares of Matsa Resources Limited.
(a)
Summary of options issued under the Employee Share Option Plan
The following table summarises the number (No.) and the weighted average exercise price (WAEP) of,
and movements in, share options issued during the year to employees other than to key management
personnel which have been disclosed in the Remuneration Report.
2021
No.
2021
WAEP
$
Outstanding at the beginning
of the year
Granted
Exercised
Expired
Outstanding at year-end
Exercisable at year-end
2,850,000
3,400,000
-
(2,150,000)
4,100,000
4,100,000
0.17
0.21
-
0.19
0.19
0.19
2020
No.
5,750,000
-
-
(2,900,000)
2,850,000
2,850,000
2020
WAEP
$
0.22
-
-
0.25
0.17
0.17
- 102 -
MATSA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30
JUNE 2021
28. Share-based payments (Continued)
The outstanding balance as at 30 June 2021 is represented by the following options over ordinary
shares, exercisable upon meeting the above terms and conditions:
1,550,000 options with an exercise price of $0.17 each and with an expiry date of 30 November
2021. All have vested and are exercisable at balance date; and
2,550,000 options with an exercise price of $0.21 each and with an expiry date of 30 October 2023.
All have vested and are exercisable at balance date
Directors and Executives Options
In addition to the ESOP, the Company has issued options to Directors and Executives from time to
time. The terms and conditions of those options vary between option holders. There were 700,000
(2020: 5,750,000) options issued to Directors or Executives during the financial year.
Options issued to the Executive Chairman and the Executive Director and Executives vested
immediately.
Other relevant terms and conditions applicable to options granted as above include:
any Directors or Executives vested options that are unexercised by the anniversary of their grant
date will expire or, if they resigned, in accordance with their specific terms and conditions; and
upon exercise, these options will be settled in ordinary shares of Matsa Resources Limited.
(b) Summary of options issued to Directors and Executives
(i)
The following table illustrates the number (No.) and weighted average exercise prices
(WAEP) of share options issued.
Outstanding at 1 July
Granted during the year
Expired during the year
Outstanding at 30 June
Exercisable at 30 June
2021
No.
11,500,000
700,000
-
12,200,000
12,200,000
2021
WAEP
$
0.172
0.21
-
0.174
0.174
2020
No.
12,000,000
5,750,000
(6,250,000)
11,500,000
11,500,000
2020
WAEP
$
0.21
0.175
0.25
0.172
0.172
There were 700,000 (2020: 5,750,000) options issued during the year.
Directors
No options were issued to Directors during the year
- 103 -
MATSA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30
JUNE 2021
28. Share-based payments (Continued)
Executives
700,000 options over ordinary shares with an exercise price of $0.21 each exercisable upon
meeting the relevant conditions and until 30 October 2023.
(c) Valuation models of options and performance rights issued to Directors and Executives
The fair value of the options is estimated at the date of grant using a Black & Scholes model. The
following table gives the assumptions made in determining the fair value of the options granted in the
year.
Dividend yield (%)
Expected volatility (%)
Risk-free interest rate (%)
Expected life of options (years)
Option exercise price ($)
Share price at grant date ($)
Fair value at grant date (c)
2021
2020
Directors
-
-
-
-
-
-
-
Executives
-
67.78
0.13
2.92
0.21
0.12
3.44
Directors
-
72.67
0.62
3.0
0.175
0.13
5.16
Executives
-
-
-
-
-
-
-
The expected life of the options is based on historical data and is not necessarily indicative of exercise
patterns that may occur.
The expected volatility reflects the assumption that the historical volatility is indicative of future
trends, which may also not necessarily be the actual outcome.
Employee Expenses
Share options granted in 2021
- equity settled
Share options granted in 2020
- equity settled
Total expense recognised as employee costs
Consolidated
2021
$
2020
$
111,956
-
111,956
-
297,042
297,042
- 104 -
MATSA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30
JUNE 2021
29. Key management personnel
Details of key management personnel
The directors and other members of key management personnel of the Group during the financial
year were:
Name
Position
Directors
Paul Poli
Frank Sibbel
Pascal Blampain
Andrew Chapman Director and Company Secretary
Executive Chairman
Non-Executive Director
Executive Director
Executives
David Fielding
Group Exploration Manager
Key management personnel remuneration has been included in the Remuneration Report section of
the Directors’ Report on pages 49 to 57. These transferred disclosures have been audited.
Compensation of Key Management Personnel
Short-term employment benefits
Post-employment benefits
Termination benefits
Share-based payments
2021
$
945,510
70,871
-
24,114
2020
$
823,073
60,120
-
297,042
1,040,495
1,180,235
The compensation disclosed above represents an allocation of the key management personnel’s
estimated compensation from the Group in relation to their services rendered to the Company.
Loans to Key Management Personnel
There were no loans to key management personnel during the current or previous financial year.
Other transactions and balances with Key Management Personnel
(a) P Poli and F Sibbel are Directors of Bulletin Resources Limited. The Consolidated Entity has an
agreement with Bulletin to provide accounting, technical and administrative services on an
arms-length basis. In the current year $59,811 has been charged to Bulletin for these services
(2020: $297,612).
At 30 June 2021 there was an outstanding balance of $4,400 (2020: $12,553) for Bulletin.
(b) In July 2019, Matsa announced that it entered into a Sale and Purchase Agreement (SPA) with
its associate Bulletin Resources Limited (“Bulletin”, “BNR”), to dispose of an 80% interest in
the Lake Rebecca gold project, 150km east north-east of Kalgoorlie, Western Australia on the
following basis:
1. A cash payment of $125,000 to Matsa Resources Limited; and
2. A 1% net smelter royalty (NSR) on all minerals.
- 105 -
MATSA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30
JUNE 2021
29. Key management personnel (Continued)
Bulletin and Matsa entered into a joint venture agreement (80% BNR; 20% MAT) whereby
Bulletin will be responsible for all expenditure on the project and Matsa will be free carried
up to a feasibility study. A formal royalty agreement has also been entered into.
(c) P Poli is a director and controlling shareholder of West-Sure Group Pty Ltd which the
Consolidated Entity sub-lets storage space from. In the current year $6,371 has been charged
to the Consolidated Entity for this service (2020: $8,195).
At 30 June 2021, there was an outstanding balance of $1,752 (2020: $2,006) payable to West-
Sure.
(d) P Poli is a director and controlling shareholder of WA Fleet Systems Pty Ltd which provided
the Consolidated Entity with hire car services from time to time. In the current year $23,636
has been charged to the Consolidated Entity for this service (2020: $22,723).
At 30 June 2021 there was an outstanding balance of $8,250 (2020: 5,500) payable to WA
Fleet Systems.
Individual directors and executives compensation disclosure
Information regarding individual directors and executives compensation and some equity instruments
disclosures as permitted by Corporations Regulation 2M.3.03 is provided in the remuneration report
section of the Directors’ report.
No director has entered into a material contract with the Company or the Group since the end of the
previous financial year and there were no material contracts involving directors’ interests existing at
year-end.
30. Related party transactions
Subsidiaries
Interests in subsidiaries are set out in Note 24.
Key management personnel
Disclosures relating to key management personnel are set out in the Remuneration Report and Note
29.
- 106 -
MATSA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30
JUNE 2021
31. Remuneration of auditors
The auditor of Matsa Resources Limited is Nexia Perth Audit Services Pty Ltd (Nexia Perth).
Amounts received or due and receivable by Nexia Perth Audit
Services Pty Ltd for an audit or review of the entity and any other
entity in the consolidated group.
Amounts received or due and receivable by related practices of
Nexia Perth Pty Ltd for:
- tax compliance
Consolidated
2021
$
2020
$
62,500
60,500
10,400
72,900
6,000
66,500
32.
Events Subsequent to Balance Date
On 22 July 2021, Matsa announced that that it had raised $3.38 million by way of a placement of 42.2
million ordinary fully paid shares at $0.08 each with one free attaching option for every two shares
issued with an exercise price of $0.17 each and expiring on 30 April 2023.
In July 2021, production has ceased at the Red October gold mine and the Company will focus on
exploration to expand the current resource of Red October.
- 107 -
MATSA RESOURCES LIMITED
DIRECTORS DECLARATION
In the opinion of the directors of Matsa Resources Limited (the “Company”):
1.
the consolidated financial statements and notes are in accordance with the Corporations Act
2001, including:
(ii) giving a true and fair view of the Consolidated Entity’s financial position as at 30 June
2021 and of its performance, for the financial year ended on that date; and
(a)
(b)
(iii) complying with Australian Accounting Standards and Corporations Regulations 2001;
the financial report also complies with International Financial Reporting Standards as
disclosed in note 2(b);
the remuneration disclosures that are contained in page 49 to 57 of the Remuneration
Report in the Directors’ Report comply with the Corporations Act and Australian
Accounting Standard AASB 124 Related Party Disclosures and
(c)
there are reasonable grounds to believe that the Company will be able to pay its debts as
and when they become due and payable.
2.
The directors have been given the declarations required by Section 295A of the Corporations
Act 2001 from the chief executive officer and chief financial officer for the financial year ended
30 June 2021.
Signed in accordance with a resolution of the directors;
Paul Poli
Executive Chairman
Perth, 30 September 2021
- 108 -
Independent Auditor’s Report to the Members of Matsa Resources Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Matsa Resources Limited (the Company) and its subsidiaries
(the Group), which comprises the consolidated statement of financial position as at 30 June 2021, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement
of changes in equity and the consolidated statement of cash flows for the year then ended, and notes
to the financial statements, including a summary of significant accounting policies, and the directors’
declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
(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 then ended; 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 auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (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.
Material Uncertainty in relation to Going Concern
Without modifying our opinion, we draw attention to Note 2 (e) to the Financial Report, which indicates
that the Group will require further funding in the next twelve months from the date of this report to
fund its planned exploration and administration expenditure. These conditions, along with other matters
as set forth in Note 2 (e), indicate 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.
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 matter described below to the be key audit
matter to be communicated in our report.
- 109 -
Key audit matter
How our audit addressed the key audit
matter
Capitalisation of Exploration and Evaluation
assets
Refer to Note 12 (Exploration and Evaluation
Assets)
focussed on evaluating
Our procedures
management’s assessment of the capitalised
Exploration and Evaluation assets’ carrying
value at the reporting date. These procedures
included, amongst others:
As at 30 June 2021 the carrying value of
Exploration and Evaluation assets was $21,437,966
(2020: $18,537,147). The Group’s accounting
policy in respect of exploration and evaluation
assets is outlined in Note 2 (r).
This is a key audit matter due to the fact that
significant judgement is applied in determining
whether:
▪
▪
the capitalised Exploration and Evaluation
assets meet the recognition criteria in terms
of AASB 6 Exploration for and Evaluation of
Mineral Resources; and
facts and circumstances exist that suggest
that the carrying value of the Exploration and
Evaluation are in accordance with AASB 6.
▪ we confirmed whether the rights of
tenure to the areas of interest remained
current at the reporting date;
▪ obtained evidence of the future intention
for the areas of interest, including
reviewing future budgeted expenditure
and related work programmes;
▪ we obtained an understanding of the
status
exploration
ongoing
programmes for the areas of interest;
and
of
▪ we assessed the appropriateness of the
accounting treatment and disclosure in
terms of AASB 6.
Other information
The directors are responsible for the other information. The other information comprises the information
included in the Group’s annual report for the year ended 30 June 2021, but does not include the financial
report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly 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.
Directors’ responsibility 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 consolidated financial report, the directors are responsible for assessing the Group’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the directors either intend to liquidate the Group or
to cease operations, or has no realistic alternative but to do so.
- 110 -
Auditor’s responsibility 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
Australian
at:
https://www.auasb.gov.au/auditors_responsibilities/ar1.pdf. This description forms part of our auditor’s
report.
Assurance
Standards
Auditing
website
Board
and
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 49 to 57 of the Directors’ Report for the
year ended 30 June 2021.
In our opinion, the Remuneration Report of Matsa Resources Limited, for the year ended 30 June 2021,
complies with Section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with Section 300A of the Corporations Act 2001. Our responsibility is to express
an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian
Auditing Standards.
Nexia Perth Audit Services Pty Ltd
PTC Klopper
Director
Perth
30 September 2021
- 111 -
MATSA RESOURCES LIMITED
ASX ADDITIONAL INFORMATION
The following additional information is required by the Australian Securities Exchange Ltd in respect
of listed public companies only.
SHAREHOLDING
Distribution of Shareholders as at 22 September 2021
Range (size of holding)
Number of Holders Number of Units
%
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 – and over
105
180
261
861
406
1,813
10,169
671,003
1,955,162
31,317,764
324,200,522
358,154,620
0.003
0.19
0.55
8.74
90.52
100.00
The number of shareholdings held in less than marketable parcels is 450.
Twenty Largest Registered Shareholders of Fully Paid Ordinary Shares as at 22 September 2021
Name
No.
%
BNP Paribas Nominees Pty Ltd ACF Clearstream
BNP Paribas Nominees Pty Ltd
Sparta AG
HF Resources Pty Ltd
HSBC Custody Nominees (Australia) Limited
1
2
3
4
5
6 Mr Paul Poli
7
8
9
10 Mr Paul Poli & Mrs Sonya Kathleen Poli
11 Mr Stacey Hubert Carter
12 Mr Barry Phillip Alcock & Mrs Julie Patricia Alcock
RASL AU LLC
Citicorp Nominees Pty Limited
A/C>
13 Highlands Investments Holdings Pty Ltd
14 Mr Oliver Nikolovski & Mrs Suzanne Karine Nikolovski
L & S Davies Pty Ltd
Zetetic Investments Pty Ltd
15
16
17 BNP Paribas Noms Pty Ltd
18
19 Mr Oliver Nikolovski
20 Goldfire Enterprises Pty Ltd
Yucaja Pty Ltd
54,486,836
39,738,692
21,032,722
12,947,000
11,806,075
10,350,000
4,725,657
4,620,000
3,977,264
3,300,000
2,875,061
2,650,000
2,500,000
2,400,000
2,255,887
2,250,000
2,175,000
2,154,780
2,100,000
2,060,337
190,405,311
15.21
11.10
8.28
3.62
3.30
2.89
1.32
1.29
1.11
0.92
0.80
0.74
0.70
0.67
0.63
0.63
0.61
0.60
0.58
0.58
55.58
- 112 -
MATSA RESOURCES LIMITED
ASX ADDITIONAL INFORMATION
Substantial Shareholders
Ordinary shareholder
Sparta AG
Number
23,717,161
Percentage
6.62%
Fully paid
Twenty Largest Registered Holders of Quoted Options Exercisable at $0.17 each expiring 30 April
2023
Name
No.
%
1
Mr Jason Tang
2
Mr Bilal Ahmad
3
Mr Mobeen Iqbal
4
Mr Stacey Hubert Carter
5
BNP Paribas Nominees Pty Ltd ACF Clearstream
6
Gazump Resources Pty Ltd
7
Orca Capital GMBH
8
Zetetic Investments Pty Ltd
9
Mr Joel David Webb
10
Sparta AG
Certane CT Pty Ltd
11
12 Mr Nicholas Dermott McDonald
13
14
15
16
17
18
19 Mr Kevin Daniel Leary & Mrs Helen Patricia Leary
Yucaja Pty Ltd
Jetosea Pty Ltd
Jetosea Pty Ltd
Autumn Origin Capital
Leary S/F A/C>
Threebee Investment Group Pty Ltd
20
2,800,000
2,000,000
1,600,000
1,437,503
1,430,174
1,296,562
1,200,876
1,125,000
1,000,000
956,033
937,500
725,000
687,500
625,000
625,000
520,000
500,000
500,000
5.69
4.06
3.25
2.92
2.91
2.63
2.44
2.28
2.03
1.94
1.90
1.47
1.40
1.27
1.27
1.06
1.01
1.01
500,000
500,000
20,966,148
1.01
1.01
42.56
Distribution of Optionholders as at 22 September 2021
Range (size of holding)
Number of Holders Number of Units
%
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 – and over
83
66
33
114
124
420
37,005
163,520
244,945
5,736,856
43,037,927
49,220,253
0.08
0.33
0.50
11.65
87.44
100.00
- 113 -
MATSA RESOURCES LIMITED
ASX ADDITIONAL INFORMATION
RESTRICTED SECURITIES
The Company has no restricted securities on issue.
STATEMENT OF UNQUOTED SECURITIES
Number of Options
7,300,000
5,750,000
1,000,000
2,000,000
2,000,000
44,079,341
3,250,000
Number of Holders
13
3
1
1
1
141
12
Exercise Price
$0.17
$0.175
$0.35
$0.35
$0.25
$0.30
$0.21
Date of Expiry
30 November 2021
30 November 2022
30 November 2022
30 November 2022
30 November 2022
30 November 2022
30 October 2023
- 114 -
MATSA RESOURCES LIMITED
ASX ADDITIONAL INFORMATION
TABLE OF MINERAL RESOURCES AND MINERAL RESERVES AT 30 JUNE 2021
Mineral Resource Estimates – Consolidated Summary & Annual Comparison
Project
Resource Category
Tonnes (‘000)
Au (g/t)
Metal Oz(‘000)
Fortitude
Red October
Indicated
Inferred
Indicated
Inferred
30 June 2020
2,945
2,503
324
99
5,871
Mining Depletion
Red October
Indicated
Inferred
(37)
(10)
(47)
Resource Adjustments
Fortitude
Devon
Red October
Fortitude
Devon
Red October
Total
Measured
Indicated
Inferred
Indicated
Inferred
Measured
Indicated
Inferred
Measured
Indicated
Inferred
Indicated
Inferred
Measured
Indicated
Inferred
0
43
824
341
906
71
121
317
2,623
30 June 2021
0
2,988
3,328
341
906
71
408
406
8,448
1.8
2.1
4.6
15.3
2.3
4.2
7.0
5.0
0
3.3
2.2
4.8
2.1
8.8
6.1
3.2
3.0
0
1.8
2.1
4.8
2.1
8.8
5.1
6.1
2.5
173
169
48
49
439
(5)
(2)
(7)
0
5
58
53
62
20
24
33
255
0
175
228
53
61
20
67
80
684
Resource Statement Notes
• The geographic region for Gold Mineral Resources is Australia.
• Figures have been rounded in compliance with the JORC Code (2012). Rounding errors may
cause a column to not add up precisely.
• Resources exclude recoveries.
• Resources include reserves
- 115 -
MATSA RESOURCES LIMITED
ASX ADDITIONAL INFORMATION
TABLE OF MINERAL RESOURCES AND MINERAL RESERVES AT 30 JUNE 2021 (continued)
Ore Reserve Estimates – Consolidated Summary & Annual Comparison
(The Ore Reserve estimates are a subset of the Mineral Resource estimates)
Project
Reserve Category
Tonnes (‘000)
Au (g/t)
Metal Oz(‘000)
Fortitude
Probable
30 June 2020
1,029
1,029
1.8
1.8
Nil
Nil
Fortitude
Total
Mining Depletion
Reserve Adjustments
30 June 2021
Probable
1,029
1,029
1.8
1.8
58
58
58
58
Reserve Statement Notes
• Figures are rounded to reflect appropriate levels of confidence. Apparent differences may
occur due to rounding.
• The geographic region for Gold Mineral Resources is Australia.
Summary of Governance Arrangements and Internal Controls
The Mineral Resource and Reserve estimates are reported in accordance with the JORC 2012 Code,
using industry standard techniques and internal guidelines for the estimation and reporting of Ore
Reserves and Mineral Resources. The Mineral Resource and Reserve are estimated by suitably qualified
employees of Matsa Resources Ltd. There is no change to the reserve from the 2020 Annual Report.
Matsa confirms there is no new information pertaining to reserves and no changes to the underlying
reserve calculations/assumptions have been made.
Competent Persons Statement
Resources
The information in this document that relates to exploration targets, exploration results and Mineral
Resources, is based on information compiled by Pascal Blampain, who is a Member of the Australasian
Institute of Mining and Metallurgy and Australian Institute of Geoscientists. Pascal Blampain is a full-
time employee, and serves on the Board, of Matsa Resources Limited and has sufficient experience
which is relevant to the style of mineralisation and the type of ore deposit under consideration and the
activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the
‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr
Blampain consents to the inclusion in the report of the matters based on his information in the form
and context in which it appears.
Reserves
The information in this report that relates to Ore Reserve results is based on information compiled by
Mr Frank Sibbel, who is a Fellow of the Australasian Institute of Mining and Metallurgy. Mr Sibbel is a
non-executive director of Matsa Resources Limited. Mr Sibbel has sufficient experience which is
relevant to the style of mineralisation and the type of ore deposit under consideration and the activity
- 116 -
MATSA RESOURCES LIMITED
ASX ADDITIONAL INFORMATION
which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the
‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr
Sibbel consents to the inclusion in the report of the matters based on his information in the form and
context in which it appears.
- 117 -
MATSA RESOURCES LIMITED
SCHEDULE OF MINING TENEMENTS
Project
Devon
Devon
Devon
Devon
Devon
Devon
Devon
Devon
Devon
Devon
Devon
Devon
Devon
Holder
Matsa Gold Pty Ltd
Matsa Gold Pty Ltd
Matsa Gold Pty Ltd
Matsa Gold Pty Ltd
Matsa Gold Pty Ltd
Matsa Gold Pty Ltd
Matsa Gold Pty Ltd
Matsa Gold Pty Ltd
Matsa Gold Pty Ltd
Matsa Gold Pty Ltd
Matsa Gold Pty Ltd
Matsa Gold Pty Ltd
Matsa Gold Pty Ltd
Fraser Range
Fraser Range
Matsa Resources Limited
Matsa Resources Limited
Glenburg
Lake Carey
Lake Carey
Lake Carey
Lake Carey
Lake Carey
Lake Carey
Lake Carey
Lake Carey
Lake Carey
Lake Carey
Lake Carey
Lake Carey
Lake Carey
Lake Carey
Lake Carey
Lake Carey
Lake Carey
Lake Carey
Lake Carey
Lake Carey
Lake Carey
Lake Carey
Lake Carey
Lake Carey
Lake Carey
Lake Carey
Cundeelee Pty Ltd
Matsa Gold Pty Ltd
Matsa Gold Pty Ltd
Matsa Gold Pty Ltd
Matsa Gold Pty Ltd
Matsa Gold Pty Ltd
Matsa Gold Pty Ltd
Matsa Gold Pty Ltd
Matsa Gold Pty Ltd
Matsa Gold Pty Ltd
Matsa Gold Pty Ltd
Matsa Gold Pty Ltd
Matsa Gold Pty Ltd
Matsa Gold Pty Ltd
Matsa Gold Pty Ltd
Matsa Gold Pty Ltd
Matsa Gold Pty Ltd
Matsa Gold Pty Ltd
Matsa Gold Pty Ltd
Matsa Gold Pty Ltd
Matsa Gold Pty Ltd
Matsa Gold Pty Ltd
Matsa Gold Pty Ltd
Matsa Gold Pty Ltd
Matsa Gold Pty Ltd
Matsa Gold Pty Ltd
Matsa Gold Pty Ltd
- 118 -
Status
Live
Share
Held
100%
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Tenement Type
and No.
P 39/6116
P 39/6117
E 39/1232
M 39/386
M 39/387
M 39/629
M 39/500
E 39/1760
L 39/222
L 39/235
L 39/237
M 39/1077
M 39/1078
E 39/2159
E 39/2162
E 52/3339
E 39/1752
E 39/1803
E 39/1812
E 39/1819
E 39/1834
E 39/1863
E 39/1864
E 39/1957
E 39/1958
E 39/1980
E 39/1981
L 39/247
L 39/260
L 39/267
M 39/1
M 39/1065
M 39/1089
M 39/286
M 39/709
M 39/710
P 39/5652
P 39/5669
P 39/5670
P 39/5694
P 39/5841
E 38/2945
MATSA RESOURCES LIMITED
SCHEDULE OF MINING TENEMENTS
Project
Lake Carey
Lake Carey
Lake Carey
Lake Carey
Lake Carey
Lake Carey
Lake Rebecca
Lake Rebecca
Holder
Matsa Gold Pty Ltd
Matsa Gold Pty Ltd
Matsa Gold Pty Ltd
Matsa Gold Pty Ltd
Matsa Gold Pty Ltd
Matsa Gold Pty Ltd
Matsa Gold Pty Ltd
Matsa Gold Pty Ltd
Paraburdoo
Matsa Resources Limited
Red Dog
Red Dog
Red Dog
Red Dog
Red October
Red October
Red October
Red October
Red October
Red October
Red October
Red October
Red October
Red October
Red October
Symons Hill
Symons Hill
Matsa Gold Pty Ltd
Matsa Gold Pty Ltd
Matsa Gold Pty Ltd
Matsa Gold Pty Ltd
Red October Gold Pty Ltd
Matsa Gold Pty Ltd
Red October Gold Pty Ltd
Red October Gold Pty Ltd
Red October Gold Pty Ltd
Red October Gold Pty Ltd
Red October Gold Pty Ltd
Red October Gold Pty Ltd
Red October Gold Pty Ltd
Red October Gold Pty Ltd
Red October Gold Pty Ltd
Matsa Resources Limited
Matsa Resources Limited
Status
Live
Share
Held
100%
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
90%
100%
90%
100%
100%
20%
20%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Tenement Type
and No.
E 39/1770
E 39/17961
E 39/1840
E 39/18891
E 39/2015
L 39/291
E 28/26002
E 28/26352
E 47/3518
L 39/268
M 39/1099
M 39/1100
M 39/38
L 39/217
L 39/273
M 39/411
M 39/412
M 39/413
M 39/599
M 39/600
M 39/609
M 39/610
M 39/611
M 39/721
E 28/2916
E 69/3070
1= 90% held by Matsa
2= 20% held by Matsa
- 119 -
Executive Chairman
Director
Director
Director (appointed 17 February 2021)
DIRECTORY
Directors
Paul Poli
Franciscus (Frank) Sibbel
Andrew Chapman
Pascal Blampain
Company Secretary
Andrew Chapman
Registered Office
Suite 11,
139 Newcastle Street
PERTH WA 6000
Tel: (08) 9230 3555
Fax: (08) 9227 0370
Email: reception@matsa.com.au
Postal Address
PO BOX 376
Northbridge W.A. 6865
Website
www.matsa.com.au
Share Registry
Advanced Share Registry Services
110 Stirling Highway
Nedlands WA 6009
Tel: (08) 9389 8033
Fax: (08) 9262 3723
Home Stock Exchange
Australian Securities Exchange Ltd
Level 40, Central Park
152-158 St George’s Terrace
Perth WA 6000
ASX Code: MAT
Auditors
Nexia Perth Audit Services Pty Ltd
Level 3
88 William Street
PERTH WA 6000
M
A
T
S
A
R
E
S
O
U
R
C
E
S
L
I
M
T
E
D
I
A
N
N
U
A
L
R
E
P
O
R
T
2
0
2
1
www.matsa.com.au
ANNUAL
REPORT
2021