ABN 30 099 883 922
Annual Report - 30 June 2021
Mithril Resources Limited
Contents
30 June 2021
Corporate directory
Managing Director's letter
Directors' report
Auditor's independence declaration
Statement of profit or loss and other comprehensive income
Statement of financial position
Statement of changes in equity
Statement of cash flows
Notes to the financial statements
Directors' declaration
Independent auditor's report to the members of Mithril Resources Limited
Shareholder information
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Mithril Resources Limited
Corporate directory
30 June 2021
Directors
Mr Garry Thomas (Non-Executive Director)
Mr John Skeet (Managing Director)
Mr Stephen Layton (Non-Executive Director)
Company secretary
Mr Adrien Wing
Registered office
Principal place of business
Level 2
480 Collins Street
MELBOURNE VIC 3000
Level 2
480 Collins Street
MELBOURNE VIC 3000
Share register
Auditor
Solicitors
Bankers
Computershare Investor Services Pty Ltd
Level 5, 115 Grenfell Street
ADELAIDE SA 5000
Nexia Melbourne Audit Pty Ltd
Level 12, 31 Queen Street
MELBOURNE VIC 3000
Quinert Rodda & Associates
Level 6, 400 Collins Street
MELBOURNE VIC 3000
National Australia Bank
800 Bourke Street
MELBOURNE VIC 3008
Stock exchange listing
Mithril Resources Limited shares are listed on the Australian Securities Exchange
(ASX code: MTH)
Website
www.mithrilresources.com.au
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Mithril Resources Limited
Managing Director’s Letter
Dear Fellow Shareholders,
This year Mithril progressed its transformation to an explorer of gold and silver following the previous year’s board
changes and acquisition of Sun Minerals Pty Ltd. The acquisition and subsequent capital raisings positioned the
Company well to embark upon its maiden drill program in the Sierra Madre mountains of Mexico at it Copalquin Mining
District project. Mithril’s new management rapidly mobilised and commenced the drill program in late July 2020, within
two months of completing the transaction, during the wet season and Covid-19 global pandemic. Despite the challenges,
the Company committed to successfully executing the drill program, confirming historic drill results and most importantly,
confirming the Copalquin District as prospective for high-grade gold and silver resources.
The discovery of the large hydrothermal system at El Refugio has continued to deliver with continuing reportable gold-
silver intercepts. High-grade ‘ore shoots’ or ‘clavos’ have been discovered, which are typical for these types of epithermal
precious metal deposits. The success of 2020’s maiden drill program allowed the Company to commit to a maiden JORC
resource estimate with the drilling throughout 2021 designed to contribute to its completion in the last quarter of 2021.
Mithril set its goal to prove the Copalquin District and has achieved this with great success in its first year of exploration
and I am extremely grateful to our shareholders for their support and we look forward to delivering news of our
developments in Mexico over the coming year.
Sincerely,
John Skeet
Managing Director and CEO
jskeet@mithrilresources.com.au
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Mithril Resources Limited
Directors’ report
30 June 2021
The Directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter
as the 'Group') consisting of Mithril Resources Limited (referred to hereafter as the 'Company' or 'Parent Entity') and the
entities it controlled at the end of, or during, the year ended 30 June 2021.
Information on Directors
The following persons were Directors of Mithril Resources Limited during the whole of the financial year and up to the date
of this report, unless otherwise stated:
Name:
Title:
Qualifications:
Experience and expertise:
John Skeet (Appointed 8 September 2020)
Chief Executive Officer / Managing Director
B.App.Sc
Mr. Skeet has over 30 years experience in gold-silver mining, both in management at
operations and developing projects in Australia, Republic of Georgia and Mexico. He
successfully developed Ballarat East, Quartzite Gold in Georgia, and Palmarejo Silver
Gold Mine in Mexico, prior to the Coeur Mining takeover and was COO of Cerro
Resources prior to its takeover by Primero Mining. He has 16 years experience in
Mexico. He founded Sun Minerals in 2017 and acquired the option to purchase the
Copalquin Project in Mexico.
Other current directorships:
N/A
Former directorships (last 3 years): N/A
Interests in shares:
221,663,615 ordinary shares
Name:
Title:
Qualifications:
Experience and expertise:
Mr Stephen Layton
Non-Executive Director
MSAFAA
Mr Layton has over 35 years' experience in equity capital markets in the UK and
Australia. Mr Layton has worked with various stockbroking firms and/or AFSL
regulated corporate advisory firms. Mr Layton specialised in capital raising services
and opportunities, corporate advisory, facilitation of ASX listings and assisting
companies grow.
Other current directorships:
EQ Resources Ltd
Former directorships (last 3 years): New Age Exploration Ltd (resigned 26 September 2020)
Interests in shares:
115,500,000 ordinary shares
Name:
Title:
Qualifications:
Experience and expertise:
Mr Garry Thomas (Appointed as Alternate-Director 15 June 2020) (Appointed Non-
Executive Director 17 August 2020)
Non-Executive Director
Assoc. CE
Mr Thomas is a civil engineer with over 35 years’ experience in civil construction,
mine development and operations. He has been involved in the implementation of
mining operations in Australia, Indonesia, Laos, Russia, Zimbabwe, Ghana, Zambia,
South Africa, Algeria, Mexico and Mali. He has managed the construction and
commissioning of over 20 CIL/CIP, flotation and heap leach plants in Australasia,
Russia and Africa as well as many plant upgrades including construction of at
Palmarejo, Mexico prior to the Coeur Mining take over. Mr Thomas founded Intermet
Engineering which he sold to Sedgman Metals.
Oakajee Corporation Ltd
Other current directorships:
Former directorships (last 3 years): N/A
Interests in shares:
292,685,273 ordinary shares
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Mithril Resources Limited
Directors' report
30 June 2021
Name:
Title:
Qualifications:
Experience and expertise:
Name:
Title:
Qualifications:
Experience and expertise:
Mr Adrien Wing (Resigned 15 February 2021)
Non-Executive Director
BA(Acc), CPA
Mr Wing is a certified practicing accountant. He previously practiced in the audit and
corporate advisory divisions of a chartered accounting firm before working with a
number of public companies listed on the ASX as a corporate and accounting
consultant and company secretary.
Mr Dudley Leitch (Resigned 7 July 2021)
Non-Executive Director
BSc
Mr Leitch is a geologist and mining entrepreneur with over 40 years developing
mining projects and running ASX mining/exploration companies with projects in
Australia, Mexico, USA. He has previously held directorships in a number of
Australian and international mining companies.
'Former directorships (last 3 years)' quoted above are directorships held in the last 3 years for listed entities only and
excludes directorships of all other types of entities, unless otherwise stated.
Principal activities
During the financial year the principal continuing activities of the Group consisted of:
●
●
●
to carry out exploration of mineral tenements, both on a joint venture basis and by the Group in its own right;
to continue to seek extensions of areas held and to seek out new areas with mineral potential; and
to evaluate results achieved through surface sampling, drilling and geophysical surveys carried out during the year.
There have been no significant changes in the nature of those activities during the year.
Dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
Review of operations
The loss for the Group after providing for income tax amounted to $1,688,618 (30 June 2020: $3,300,596).
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30 June 2021
REVIEW OF OPERATIONS
Exploration Highlights
• Commenced and completed the expanded maiden drill program in
the Copalquin District, Mexico confirmed historic drill results and
located high-grade gold and silver in the district
• Discovery of a major gold-silver mineralised structure at El Refugio
• Commenced second program of drilling at Copalquin with primary
focus the El Refugio structure expanding this area sufficiently for a
maiden JORC resource estimate (for Q4 2021)
•
•
•
Extended known high-grade gold and silver mineralisation at La
Soledad
Intercepted high-grade gold and silver structure two kilometres
east of El Refugio, at Los Reyes
Soil sampling and mapping programs, extending the drill target for
El Refugio further to the west by 1.3 kilometre
Corporate Highlights
• Mithril raised $3.5 million in July 2020 to supplement the $2.46 million raised as part of the Sun Minerals Pty
Ltd acquisition in May 2020, being fully funded to execute an expanded maiden drill program at its
Copalquin District, Mexico
•
•
In February 2021, Mithril raised $5 million for its second phase of drilling at Copalquin, Mexico
The company successfully executed its drilling programs in Mexico during the Covid-19 pandemic
• Board appointments were Garry Thomas as non-executive director and John Skeet as managing director
• Adrien Wing resigned as non-executive director, remaining as company secretary and Dudley Leitch retired
from the board as a non-executive director (July 2021)
•
Subsequent to the year end, Mithril raised $3.3 million with funds to be used to continue drilling while
completing the maiden JORC resource estimate and progressing study work
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Social Responsibility
Mithril’s Copalquin District, located in the Sierra Madre mountains in the western most area of Durango State, Mexico is an
isolated site currently with mule road and light aircraft access only. There are small settlements throughout the district, with
El Limon just outside the south-west corner of the concession area, the largest with about 20 dwellings. In the second half
of the nineteenth century, it is reported that the Copalquin settlement was home to over 2,000 inhabitants with is
cobblestone street, church and mine buildings. Now there is just one family residing in the Copalquin settlement. Many of
the families have been in the district for generations. While there are no records of ejidos (land grants given after the
Mexican revolution) or registered communities, the inhabitants have legal possession of the land if fenced and occupied for
longer than 10 years. Mithril’s (and previously Sun Minerals’) approach is to proceed as if the community is registered, with
all members having legal possessions of land as we progress future applications for development with the Mexican
authorities.
Mithril is the only employer in the Copalquin district and all of our non-professional staff are from within the district. Our
people are skilled and hard-working, developed from living in an isolated location. Skills possessed include carpentry,
dwelling and road construction, mule handling, farming and mining. Mithril has implemented job specific training and
encourages online learning.
During the last quarter of 2021, Mithril is progressing study work on infrastructure enhancements that will be of benefit to
both our exploration developments and the local community. Specific future community focused developments are for
education, medical, environmental management and communications.
Photo 1: Children from San Antonio, Los Reyes, Copalquin and La Maquina settlements at El Cometa exploration camp,
Mexican Independence Day, 16th September 2021. Adults from back left, Project Geologist - Guadalupe Garcia, John Skeet -
CEO and Managing Director and front right, Darcy Garcia - Senior Geologist.
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Exploration Project – Copalquin Gold-Silver District, Durango State, Mexico
Figure 1 Copalquin District location map with locations of mining and exploration activity within the state of Durango.
Following on from the successful acquisition of Sun Minerals Pty Ltd in May 2020 for its option to acquire 100% of the
Copalquin gold-silver district concessions in Mexico, Mithril commenced its maiden drill program at Copalquin in late July
2020. The maiden drill program and the continued drilling throughout 2021, confirmed the previous historic drill results
and, most importantly, have led to a significant discovery at El Refugio. El Refugio has been the focus of drilling throughout
2021 with high-grade gold and silver mineralisation consistently intercepted as we have sought to test the mineralised
extents in this part of the district.
With the success at El Refugio, work on a maiden JORC resource estimate is in progress and on schedule for completion
during the final quarter of 2021.
Mapping and soil sampling in the district has continued to expand the potential for gold and silver mineralisation in addition
to the dozens of historic mines and workings throughout the Copalquin District.
Drilling Highlights in the Copalquin District
El Refugio
• Drilling in the Copalquin gold-silver district has expanded known mineralisation at El Refugio to 700m long x
350m deep
• Discovery of the ‘77 clavo’ at El Refugio with bonanza grade intercept:
o 8.26m @ 80.3 g/t gold, 705 g/t silver from 468.34m (CDH-077), including
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6.26m @ 106 g/t gold, 913 g/t silver from 468.34m, including
0.77m @ 837 g/t gold, 6,680 g/t silver from 471.63m
• High-grade gold-silver confirmed deep in the El Refugio structure proximal to the bonanza intercept of CDH-
077 (8.26m @ 80.3g/t gold, 705g/t silver from 468.34m) with:
o 8.85m @ 7.2 g/t gold, 335 g/t silver from 312.15m (CDH-084), including
2.50m @ 18.22 g/t gold, 583 g/t silver from 317.0m, plus
2.10m @ 2.05 g/t gold, 73.6 g/t silver from 324.9m, plus
1.00m @ 1.16 g/t gold, 36.0 g/t silver from 394.0m
• Continued expansion of the El Refugio ‘clavo’ (4.17m @ 62.0 g/t gold and 445 g/t silver from 233.43m CDH-050)
with multiple high-grade intercepts including:
o 2.70m @ 13.8 g/t gold, 82.9 g/t silver from 300.3m (CDH-075), plus
4.25m @ 10.9 g/t gold, 364 g/t silver from 307.05m,
o 8.00m @ 5.32 g/t gold, 104.63 g/t silver from 289.3m (CDH-063)
o 4.82m @ 4.12 g/t gold, 107.13 g/t silver from 259.7m (CDH-062)
o 7.60m @ 2.34 g/t gold, 143.6 g/t silver from 253.25m (CDH-069)
• High-grade intercepts in CDH-079 and CDH-080 extending the El Refugio high-grade gold-silver ‘clavo’ 80m
further east:
o 12.2m @ 7.6 g/t gold, 332 g/t silver from 86.6m (CDH-079), including
4.00m @ 18.3 g/t gold, 829 g/t silver from 89.8m
o 6.11m @ 5.08 g/t gold, 197 g/t silver from 112.19m (CDH-080), including
2.00m @ 9.39 g/t gold, 716 g/t silver from 116.19m
• Westerly expansion at El Refugio with:
o 26.78m @ 2.26 g/t gold, 25.1 g/t silver from 143.22m (CDH-066)
o 4.61m @ 1.87 g/t gold, 89.3 g/t silver from 155.84m (CDH-068), plus
0.77m @ 4.00 g/t gold, 37.0 g/t silver from 176.41m, plus
0.90m @ 0.59 g/t gold, 38.0 g/t silver from 193.38m
El Cometa
Located along strike to the east of El Refugio, El Cometa consists of parallel veins with instances of tensional
dilation structures that host very high-grade gold and silver mineralisation.
• Confirmatory El Cometa bonanza grades with twin of historic drill hole:
o 6.8m @ 74 g/t gold, 841 g/t silver from 35.2m, including (CDH-072),
2.1m @ 235 g/t gold, 2,554 g/t silver from 37.9m
•
Shallow drill holes at the El Cometa target towards the El Refugio target
o 14.85m @ 0.85 g/t gold and 47.9 g/t silver from 82.10m (CDH-034), including
1.3m @ 5.07 g/t gold and 308.9 g/t silver from 82.85m
o 9.78m @ 0.85 g/t gold and 13.3 g/t silver) from 78.75m (CDH-032)
•
Shallow drilling perpendicular to the historic drilling at the El Cometa target has intercepted the structure
near surface with continuity along strike for almost 300m;
o 11.7m @ 1.16 g/t gold and 70.0 g/t silver from 10.9m (CDH-027), including
1.0m @ 7.17 g/t gold and 236.0 g/t silver from 15.0m
o 2.9m @ 1.93 g/t gold and 215.7 g/t silver from 29.6m (CDH-029)
o 5.28m @ 0.39 g/t gold and 25.56 g/t silver from 35.72m (CDH-031)
o 10.15m @ 0.55 g/t gold and 15.47 g/t silver from 42.0m (CDH-035), including
1.0m @ 3.75 g/t gold and 69.6 g/t silver from 42.0m
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La Soledad
• Drilling at La Soledad 600 metres north east of El Refugio commenced in July 2020 with a follow up hole in
February 2021. A very high-grade vein system for further drilling:
o 3m @34.72 g/t gold and 3,129.0 g/t silver from 112.0m (CDH-001), including
1m @ 88.4 g/t gold and 6,750.0 g/t silver from 114.0m
o 4.55m @ 5.64 g/t gold and 325.0 g/t silver from 91.95m (CDH-002), including
1.5m @ 9.82 g/t gold and 574.0 g/t silver from 95.0m, plus
0.5m @ 9.27 g/t gold and 825.0 g/t silver from 141.2m
o 7.50m @ 6.74 g/t gold and 158.1 g/t silver from 253.8m (CDH-014), Including
3.45m @ 11.52 g/t gold and 244.1 g/t silver from 253.8m
o 4.88m @ 10.36 g/t gold and 80.9 g/t silver from 288.25m (CDH-054)
Los Reyes
• High-grade gold and silver results received in first drill holes at Los Reyes target. The intercepts are in the
same low-angle structural zone that extends 1.5 km west to El Cometa. The structural zone with mineralised
veins occurs up to 20m wide at Los Reyes:
o 2.22m @ 32.35 g/t gold and 184.8 g/t silver from 91.55m (CDH-040), including
o 1.22m @ 58.6 g/t gold and 203 g/t silver from 92.55m, plus
0.70m @ 9.3 g/t gold and 125 g/t silver from 75.9m, plus
1.20m @ 2.05 g/t gold and 85 g/t silver from 84.82m
o 3.0m @ 2.86 g/t gold and 83.8 g/t silver from 103m (CDH-041), including
o 0.6m @ 9.79 g/t gold and 165.0 g/t silver from 103.7m
•
Soil sampling and mapping, expanding the El Refugio structure a further 1.3 km west
• Maiden JORC gold and silver resource estimate for El Refugio on track for Q4 2021
• Drill core samples selected for metallurgical test work
EL REFUGIO, COPALQUIN DISTRICT, MEXICO
Post the end of the reporting year, Mithril released assay results in July 2021 for three drill holes CDH-075, CDH-076 and
CDH-077 drilled during the June quarter, continuing to expand the El Refugio structure down dip with high-grade and
bonanza grade gold-silver intercepts. Hole CDH-077 was designed to test the depth extents of the high-grade clavo and, in
particular to test the zone predicted by the geologic model to be a bonanza zone at El Refugio. Drill hole CDH-077
successfully intercepted extremely high-grade gold and silver within a broad intercept of 8.26 metres at 80.3 g/t gold and
705 g/t silver from 468.34 metres down hole. Further drilling commencing in July 2021 is designed to expand and further
test the CDH-077 intercept.
Further assay results for two drill holes received in August 2021 expanded the El Refugio structure to the east with high-
grade gold-silver intercepts. Holes CDH-079 and CDH-080 were designed to test the eastern extents of the high-grade ‘clavo’
with the aim of providing infill data in this area for the maiden resource estimate work. Drill hole CDH-079 intercepted high-
grade gold and silver with 12.4 metres at 7.60 g/t gold and 332 g/t silver from 86.6 metres down hole. Drill hole CDH-080
was drilled further down dip and intercepted 6.11 metres at 5.08 g/t gold and 197 g/t silver from 112.19 metres down
hole.
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In September 2021 it was reported that deep drilling at El Refugio has again returned an excellent gold-silver intercept with
8.85m @ 7.2 g/t gold, 335 g/t silver from 312.15m (CDH-084), including 2.50m @ 18.22 g/t gold, 583 g/t silver from
317.0m, plus 2.10m @ 2.05 g/t gold, 73.6 g/t silver from 324.9m, plus 1.00m @ 1.16 g/t gold, 36.0 g/t silver from 394.0m
the
confirmin
g
high-
grade
mineralisa
tion over
100m
down dip
in
the
structure.
The
intercept
is
proximal
to
bonanza
grade
intercept
of
077,
which
currently
interprete
d as being
CDH-
the
is
outside of the main El Refugio structure (Figure 8).
Figure 2: Long section for the El Refugio target in the Copalquin district showing drill hole pierce points. Grade thickness as shown is the sum of all intercepts
shown for each hole, pierce points are the midpoint of the main intercept. Metal equivalent grades calculated using 70 g/t Ag = 1 g/t Au, based on gold price
of USD1,610 per ounce and silver price of USD23 per ounce.
HISTORIC BONANZA GRADES CONFIRMED AT EL COMETA
In mid-June 2021, the Company reported bonanza grades at El Cometa and the continued expansion of the El Refugio
structure.
Hole CDH-072 is Mithril’s follow up test of the Cometa portion of the Refugio to Los Reyes structural zone. The first pass
drilling (CDH-026 – CDH-031) was oriented perpendicular to the main structural zone and did not intercept the historically
reported high grade gold mineralisation found in UC Resources hole UC-003. After further detailed geologic mapping, it is
postulated that there are a series of N – S tension gashes or dilatant fractures that were favourable for the deposition of
bonanza grade gold. Drill hole CDH-072 intercepted 6.8m @ 74 g/t gold, 841 g/t silver from 35.2m (twin of historic UC-03),
including 2.1m @ 235 g/t gold, 2,554 g/t silver from 37.9m. Follow up drilling in this area will include (20m) step out drilling
to locate the fractures.
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EXTENSIVE GOLD-SILVER CONFIRMED AT EL REFUGIO WEST
In mid-May 2021, the Company announced drill results, testing the westerly extensions of El Refugio.
The first holes drilled west along the main El Refugio discovery intercepted multiple gold-silver veins within the broad El
Refugio structure. These first holes reported confirmed the structure to continue 180 metres further west. Further drilling
in this area will target the structure deeper and continue to test for continuation along strike.
Hole CDH-064 intercepted multiple veins down dip of holes CDH-024 and 025 within a broadening mineralised structure.
This will continue to be developed at depth.
CDH-064 – 4.30m @ 0.60 g/t gold, 24 g/t silver from 165m, plus 5.85m @ 0.84 g/t gold, 32.8 g/t silver from 175.2m, plus
3.00m @ 0.71 g/t gold, 34 g/t silver from 201m, plus 2.5m @ 0.58 g/t gold, 38.2 g/t silver from 226.5m.
Holes CDH-065 and CDH-066 have stepped out along strike 100m to the west and have successfully intercepted the top of
the El Refugio structure. Future drilling in this area will target and develop the structure deeper.
CDH-065 – 1.37m @ 8.73 g/t gold, 397 g/t silver from 186.3m, plus 1.00m @ 0.48 g/t gold, 42 g/t silver from 119.8m, plus
1.02m @ 0.90 g/t gold, 15 g/t silver from 111.68m.
CDH-066 – 26.78m @ 2.26 g/t gold, 25.1 g/t silver from 143.22m, including 1.71m @ 5.23 g/t gold, 160 g/t silver from
145.44m, and 2.00m @ 15.6 g/t gold, 35 g/t silver from 159.0m, and 1.22m @ 5.87 g/t gold, 5.5 g/t silver from 164.58m.
CDH-067 – drilled down dip of hole CDH-066, stopped in stockwork zone before reaching the target due to swelling clay.
1.00m @ 1.17 g/t gold, 41 g/t silver from 189.9m, and 0.71m @ 0.77 g/t gold, 23 g/t silver from 195.95m. To be re-entered
and completed later in program.
CDH-068 was drilled a further 80m to the west of hole CDH-066 and intercepted the Refugio structure with 4.61m @ 1.87 g/t
gold, 89.3 g/t silver from 155.84m, plus 0.77m @ 4.00 g/t gold, 37.0 g/t silver from 176.41m, plus 0.90m @ 0.59 g/t gold,
38.0 g/t silver from 193.38m
CONTINUED EXPANSION OF EL REFUGIO DOWN DIP
CDH-069 is a deeper hole on the same section as CDH-062 (Figure 5) intercepting the veins 70 metres down dip in central
part of the current El Refugio drill area with the assays showing the continued width and depth progression of this high-
grade mineralised zone within the structure. 7.60m @ 2.34 g/t gold, 143.6 g/t silver from 253.25m, plus 1.00m @ 2.64 g/t
gold, 167.0 g/t silver from 266.35m.
Drill holes aggressively stepped down dip of hole CDH-053 on the eastern side of the El Refugio clavo have extended the
veins deeper by 50 metres (CDH-070) and 100 metres (CDH-071) as shown in Figure 4 with 6.00m @ 1.41 g/t gold, 66 g/t
silver from 240m (CDH-070), including 0.50m @ 9.53 g/t gold, 613 g/t silver from 240m, plus 1.00m @ 4.94 g/t gold, 96.0
g/t silver from 235.87m, plus 1.80m @ 2.38 g/t gold, 53.1 g/t silver from 157.55m. CDH-071 intercepted 5.00m @ 2.36 g/t
gold, 95.3 g/t silver from 186m (CDH-071), plus 0.50m @ 28.9 g/t gold, 471 g/t silver from 222.77m, plus 1.66m @ 2.41 g/t
gold, 152.8 g/t silver from 235.87m.
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Figure 3: Map view of the El Cometa/El Refugio drilling showing the drill traces and the drill intercepts covered in this release. Long
section indicated by orange dotted line shown in Figure 2
Figure 4: El Refugio cross section 400 showing the down dip extension holes CDH-070 and CDH-071.
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Figure 5: El Refugio cross section 440 showing the down dip extension of hole CDH-069.
Figure 6: El Refugio cross section 480 showing intercepts for drill holes CDH-075 & 076. Note: CDH-076 collared on this section
480, intercept is behind (further away).
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Figure 7: El Refugio cross section 520 showing the down dip extension holes CDH-063.
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Figure 8: El Refugio cross section 600 showing drill hole CDH-077 intercept reaching the bonanza zone as per the geologic
model shown in Figure 26.
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Figure 9: El Refugio cross section 680 showing the first western strike extension holes CDH-065, CDH-066 and CDH-067.
Figure 10: El Refugio cross section 760 showing the most westerly intercept to date with hole CDH-068 with future down dip holes planned.
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Drill Core Photos from holes CDH-072, 075, 076 and 077 with Visible Gold, Copalquin District
Figure 11: Two halves of cut NQ size core from hole CDH-077 472.1-472.3 metres with abundant visible gold
Figure 12a and b: mm wide rims of free gold surrounding fine aggregates of pyrite plus gold, plus silver sulphides 472.2 m CDH-077
Figure 13: Glint of gold in CDH-076 at 376.2m
Figure 14: Glint of gold in CDH-072 at 38.0m (ASX Release 15/6/2021)
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Figure 15: CDH-075 at 301.5m @ 150 X gold w/ginguro. Figure 16: CDH-075 at 301.5m @ 100 X. gold w/ginguro
Figure 17: CDH-075 at 301.90m @ 100 X gold w/ginguro. Figure 18: CDH-075 at 301.95m @ 150 X gold w/ginguro.
Figure 19: CDH-075 at 307.6m @ 100 X free gold. Figure 20: CDH-075 @ 310.15m @ 150 X gold w/ginguro.
Preliminary Concept for Mine Access – El Refugio
Deep high-grade intercepts such as in holes CDH-061, CDH-071 and CDH-077 bring mineralisation closer to potential access
from a site with favourable logistics, taking advantage of the local topography. The CDH-077 ‘bonanza zone’ can be reached
by an exploration drift (adit) of approximately 750 metres long. Such a drift would allow access for the close-spaced
sampling that will be necessary to bring the bonanza grade zone into higher confidence resource categories.
19
Mithril Resources Limited
Directors' report
30 June 2021
Figure 21: Schematic showing an underground mine access concept for the El Refugio gold-silver deposit, Copalquin District, Mexico.
Soils Sampling Program – El Refugio West
A sampling program over the Refugio West target was completed during the dry months of 2021 (Jan-May) with 240 samples
collected from five sample grids of 48 samples each. This sampling program tests the hypothesis that the mapped
structures to the west of Refugio are likely to be gold-bearing veins. Results from this program have extended the target
zone for drilling a full 1,300 meters west from the currently westernmost drill holes.
Observations in the field include zones of quartz stockwork, large areas of clay alteration and the presence of rhyolite dikes
and domes which are associated with mineralisation in the main Refugio target-area.
A map of the soil grids is shown below in Figure 22 with quartz-bearing structures shown in red.
20
Mithril Resources Limited
Directors' report
30 June 2021
Figure 22: Soil sampling program results and planned sampling grids. Geochemical gold levels in soils determined by fire assay.
Figure 23: Western part of the Copalquin District with the schematic long section in Figure 24 below, shown by the orange dashed line and the schematic
long section in Figure 25 by the red dashed line.
21
Mithril Resources Limited
Directors' report
30 June 2021
Figure 24: Schematic Long section Refugio West-Los Reyes with drill hole pierce point for holes completed to date plus conceptual planned resource
development holes in turquoise and exploration holes shown in grey. Metal equivalent grades calculated using 70 g/t Ag = 1 g/t Au, based on gold price of
USD1,610 per ounce and silver price of USD23 per ounce.
Figure 25: Schematic Long section La Soledad-El Indio with drill hole pierce point for holes completed to date plus conceptual planned resource development
holes in turquoise and exploration holes shown in grey. CDH-011 shown in red as a reminder that the void (historic mine workings) Metal equivalent grades
calculated using 70 g/t Ag = 1 g/t Au, based on gold price of USD1,610 per ounce and silver price of USD23 per ounce.
22
Mithril Resources Limited
Directors' report
30 June 2021
Figure 26 - Copalquin District Geologic Model for epithermal gold/silver - geologic model (author: Hall Stewart PG, Chief Geologist)
Corporate Activities
With the Company’s focus set on the Copalquin Mining District since its acquisition of Sun Minerals Pty Ltd in 2020, funding
activities have centred on progressing exploration in Mexico to define high-grade gold and silver resources for future
exploitation. Capital raisings during the reporting year consisted of:
•
•
July 2020 - $3 million via issue of 194,444,444 share at $0.018 (1.8c) per share
January 2021 - $5 million via issue of 263,157,895 shares at $0.019 (1.9c) per share
And subsequent to the year-end of 30 June 2021, $3.3 million raised in September 2021 via issue of 220,000,000 shares at
$0.015 (1.5c) per share keeping Mithril well-funded to continue drilling the El Refugio deposit in the Copalquin District whilst
completing the maiden JORC resource estimate.
The Mithril Board make-up and has changed over the year as the company has evolved into an active explorer of gold and
silver in Mexico to maintain an appropriate skill and experience mix and will continue to evolve throughout the company’s
growth.
During 2020, Garry Thomas joined the Board as a non-executive director and John Skeet, after his initial appointment as
CEO, was appointed to the Board as Managing Director. Both Garry and John were directors of Sun Minerals Pty Ltd and
between them have considerable global mining project development experience including successful developments in
Mexico.
Following the successful acquisition, funding and transformation of Mithril, Adrien Wing resigned from the Board as a non-
executive director early 2021 and Dudley Leitch retired from the Board as a non-executive director in July 2021. Adrien
remains as Mithril’s Company Secretary.
23
Mithril Resources Limited
Directors' report
30 June 2021
Competent Person Statement – Exploration Results, Copalquin District
The information in this report that relates to sampling techniques and data, exploration results and geological interpretation
has been compiled by Mr Hall Stewart who is Mithril’s Chief Geologist. Mr Stewart is a certified professional geologist of the
American Institute of Professional Geologists. This is a Recognised Professional Organisation (RPO) under the Joint Ore
Reserves Committee (JORC) Code.
Mr Stewart has sufficient experience of relevance to the styles of mineralisation and the types of deposits under
consideration, and to the activities undertaken, to qualify as a Competent Person as defined in the 2012 Edition of the Joint
Ore Reserves Committee (JORC) Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore
Reserves. Mr Stewart consents to the inclusion in this report of the matters based on information in the form and context in
which it appears. The Australian Securities Exchange has not reviewed and does not accept responsibility for the accuracy or
adequacy of this release.
Further details and JORC tables for exploration results in this Annual Report are in ASX Releases listed below.
08/09/2021
11/08/2021
28/07/2021
12/07/2021
15/06/2021
24/05/2021
19/05/2021
04/05/2021
22/04/2021
08/04/2021
24/03/2021
18/03/2021
29/01/2021
21/12/2020
07/12/2020
30/11/2020
03/11/2020
21/10/2020
29/09/2020
26/08/2020
DRILLING INTERCEPTS 18.2 g/t GOLD & 583 g/t SILVER
Mithril Extends High-Grade Gold Silver
Quarterly activities and cashflow report
MITHRIL DRILLS 80.3 G/T GOLD, 705 G/T SILVER OVER 8.26Mv
MITHRIL DRILLS 74 G/T GOLD, 841 G/T SILVER OVER 6.8 METRES
Drilling Plan Progress - Copalquin District Mexico
Extensive Gold-Silver Confirmed El Refugio West
High-Grades continue at El Refugio - Copalquin District
March 2021 Quarterly Activities and Cash Flow Report
Investor Update - April 2021
High Grade at La Soledad
Exceptional Gold Silver Intercept – Copalquin
December 2020 Quarterly Activities and Cash Flow Report
High-Grade Gold and Silver at Los Reyes Targetv
MTH Expands Large Epithermal Gold-Silver System
Large Hydrothermal Gold Silver System at El Refugio Target
High-Grade Gold Silver - El Refugio Target, Copalquin Mexico
September 2020 Quarterly Activities and Cash Flow Report
Mithril Extends Gold & Silver Vein System at La Soledad
MTH Hits Bonanza Gold & Silver Grades at Copalquin Project
Australian Projects
To ensure the Company maintains its focus on the Copalquin Gold Silver Project, Mithril has exploration partners to farm-in,
sole fund and operate exploration activities on its Australian assets. These include:
• Great Boulder Resources (GBR.ASX) at the Lignum Dam Project;
• Auteco Minerals (AUT.ASX) at the Limestone Well Project;
• Carnavale Resources (CAV.ASX) at the Kurnalpi Project; and
• CBH Resources Limited (“CBH”) at the Billy Hills Zinc Project.
Having farm-in exploration partners solely fund all exploration costs, ensures that the Mithril tenements are kept in good
standing for the duration of the respective partnership agreements with the potential to benefit from prospectivity and
exploration upside.
24
Mithril Resources Limited
Directors' report
30 June 2021
Billy Hills Zinc (Billy Hills)
• Mithril 100%; and
• CBH Resources Limited earning up to 80% interest by completing expenditure of A$4M over 5 years.
• A desktop study of the local groundwater was completed as a step to securing native title clearance for drilling.
Kurnalpi Project (Kurnalpi)
• Mithril 100%; and
• Carnavale Resources earning an initial 80% interest by keeping the tenements in good standing over three years
and paying Mithril A$250,000 cash.
• No work was undertaken during the quarter.
Lignum Dam Project (Lignum)
• Mithril 100%; and
• Great Boulder Resources earning up to 80% by completing expenditure of A$1M over four years.
• Great Boulder carried out a program of auger geochemical sampling over nickel and gold prospective rock types
and assays are awaited.
Limestone Well Project (Limestone)
• Mithril 100%;
• Auteco Minerals can earn up to an 80% interest in the project by completing exploration expenditure of A$2.5
million over five years; and
•
Following drilling (see Auteco’s ASX Announcement 14th October 2019), Auteco elected to continue sole funding the
exploration work at Limestone Well by completing exploration expenditure of $1.5M by August 2021 to earn an
initial 60% interest.
25
Mithril Resources Limited
Directors' report
30 June 2021
Significant changes in the state of affairs
There were no significant changes in the state of affairs of the Group during the financial year.
Matters subsequent to the end of the financial year
On 7 July 2021, Mr Dudley Leitch retired as a Director.
On 1 September 2021, the company announced a capital raising of $3.3m before costs from a share placement of
220,000,000 new fully paid ordinary shares at a price of $0.015 per share. The capital raising completed and fully paid
ordinary shares issued on 8 September 2021.
No other matters or circumstances have arisen since 30 June 2021 that has significantly affected, or may significantly
affect the Group's operations, the results of those operations, or the Group's state of affairs in future financial years.
Environmental regulation
The Group is aware of its responsibility to impact as little as possible on the environment, and where there is any
disturbance, to rehabilitate sites. During the year under review the majority of work carried out was in the Northern
Territory, Western Australia and Durango (Mexico) and the Group followed procedures and pursued objectives in line with
guidelines published by the Australian and Mexican Governments. These guidelines are quite detailed and encompass the
impact on owners and land users, heritage, health and safety and proper restoration practices. The Group supports this
approach and is confident that it properly monitors and adheres to these objectives, and any local conditions applicable
wherever it explores.
The Group is committed to minimising environmental impacts during all phases of exploration, development and production
through a best practice environmental approach. The Group shares responsibility for protecting the environment for the
present and the future. It believes that carefully managed exploration programs should have little or no long-lasting impact
on the environment and the company has formed a best practice policy for the management of its exploration programs.
The Group properly monitors and adheres to this approach and there were no environmental incidents to report for the
year under review. Furthermore, the Group is in compliance with the state and/or commonwealth environmental laws for
the jurisdictions in which it operates.
Occupational Health, Safety and Welfare
In running its business, Mithril aims to protect the health, safety and welfare of employees, contractors and guests. The
Group reviews its OHS&W policy at regular intervals to ensure a high standard of OHS&W, and to reflect best practice in
injury and accident prevention.
Company Secretary
Adrien Wing is the Company Secretary.
Corporate Governance
In recognising the need for the highest standards of corporate behaviour and accountability, the Directors of Mithril
Resources Limited support and have adhered to the principles of sound corporate governance. The Board recognises the
recommendations of the Australian Securities Exchange Corporate Governance Council and considers that Mithril
Resources is in compliance to the extent possible with those guidelines, which are of importance to the commercial
operation of a junior listed resources company. During the financial year, shareholders continued to receive the benefit of
an efficient and cost-effective corporate governance policy for the Company.
The Company has established a set of corporate governance policies and procedures and these can be found within the
Company’s Corporate Governance Statement located on the Company’s website:
www.mithrilresources.com.au/corporate-governance
26
Mithril Resources Limited
Directors' report
30 June 2021
Shares under option
At the date of this report, the following options to acquire ordinary shares in the Company were on issue:
Grant date
22/06/2017
10/10/2018
Expiry date
22/06/2022
10/10/2021
Exercise
price
Number
under option
$0.100
$0.010
300,000
4,000,000
4,300,000
No person entitled to exercise the options had or has any right by virtue of the option to participate in any share issue of
the Company or of any other body corporate.
Shares issued on the exercise of options
The following ordinary shares of Mithril Resources Limited were issued during the year ended 30 June 2021 and up to the
date of this report on the exercise of options granted:
Date options granted
10 October 2018
Exercise
price
Number of
shares issued
$0.01
3,000,000
Shares issued on the exercise of performance rights
The following ordinary shares of Mithril Resources Limited were issued during the year ended 30 June 2021 and up to the
date of this report on the exercise of performance rights granted:
Date performance rights granted
13 May 2020
Exercise
price
Number of
shares issued
$0.000
224,999,999
Remuneration report (audited)
The remuneration report details the key management personnel remuneration arrangements for the Group, in accordance
with the requirements of the Corporations Act 2001 and its Regulations.
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the
activities of the entity, directly or indirectly, including all directors. These are as follows:
Dudley Leitch
Stephen Layton
Adrien Wing
Garry Thomas
John Skeet
Non-Executive Director (Resigned 7 July 2021)
Non-Executive Director
Non-Executive Director (Resigned 15 February 2021) and Company Secretary
Alternate-Director / Non-Executive Director (Appointed Alternate-Director 15 June 2020)
(Appointed Non-Executive Director 17 August 2020)
Chief Executive Officer / Managing Director (Appointed Managing Director 8 September 2020)
Principles used to determine the nature and amount of remuneration
The Board is responsible for determining remuneration policies applicable to directors and senior executives of the Group.
The Board policy is to ensure that remuneration properly reflects the individuals' duties and responsibilities and that
remuneration is competitive in attracting, retaining and motivating people with appropriate skills and experience. At the time
of determining remuneration consideration is given by the Board to the Group's financial performance.
The Board currently determines the nature and amount of remuneration for board members and senior executives of the
Group. The policy is to align Director and executive objectives with shareholder and business objectives by providing a
fixed remuneration component and offering specific long‑term incentives.
27
Mithril Resources Limited
Directors' report
30 June 2021
The Non‑Executive Directors and other executives receive a superannuation guarantee contribution required by the
government, which was 9.5%, and do not receive any other retirement benefits. Some individuals, however, may choose to
sacrifice part of their salary to increase payments towards superannuation. All remuneration paid to directors and
executives is expensed as incurred. Executives are also entitled to participate in the Company share option scheme.
Options are valued using the Black‑Scholes methodology.
The Board policy is to remunerate Non‑Executive Directors at market rates based on comparable companies for time,
commitment and responsibilities. The board determines payments to non‑executive Directors and reviews their
remuneration annually, based on market practice, duties and accountability. Independent external advice is sought when
required.
There is no direct relationship between the remuneration policy and the Entity’s performance.
Voting and comments made at the Company's 2020 Annual General Meeting ('AGM')
At the 2020 AGM, more than 95% of the votes received supported the adoption of the remuneration report for the year
ended 30 June 2020. The Company did not receive any specific feedback at the AGM regarding its remuneration practices.
Details of remuneration
Amounts of remuneration
Details of the remuneration of key management personnel of the Group are set out in the following tables.
Short-term
benefits
Post-
employment
benefits
Share-based
payments
2021
Non-Executive Directors:
Stephen Layton
Adrien Wing*
Dudley Leitch
Garry Thomas**
Executive Director:
John Skeet***
2020
Non-Executive Directors:
Stephen Layton
Adrien Wing
Dudley Leitch (Appointed 27 May 2020)
Garry Thomas**
Executive Directors:
David Hutton (Resigned 29 May 2020)
John Skeet***
Cash salary
and fees
$
Super-
annuation
$
Performance
Rights
$
Total
$
48,000
80,000
43,836
38,297
-
-
4,164
3,639
-
-
-
643,333
48,000
80,000
48,000
685,269
180,000
390,133
-
7,803
-
643,333
180,000
1,041,269
48,000
96,000
4,000
-
-
-
-
-
355,000
355,000
236,667
-
403,000
451,000
240,667
-
260,996
15,000
423,996
24,795
-
24,795
-
236,667
1,183,334
285,791
251,667
1,632,125
*
**
Mr Wing resigned as a Director on 15 February 2021.
Mr Thomas was appointed as an Alternate-Director on 15 June 2020 and appointed as a Non-Executive Director on
17 August 2020.
*** Mr Skeet was appointed as CEO on 9 June 2020 and appointed Managing Director on 8 September 2020.
28
Mithril Resources Limited
Directors' report
30 June 2021
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Name
Non-Executive Directors:
Stephen Layton
Adrien Wing
Dudley Leitch
Garry Thomas
Executive Directors:
David Hutton
John Skeet
Fixed remuneration
2020
2021
At risk - STI
2021
2020
100%
100%
100%
6.1%
12%
21%
2%
-
-
-
-
93.9%
88%
79%
98%
-
n/a
100%
100%
6%
n/a
-
-
94%
Service agreements
Remuneration and other terms of employment for key management personnel are formalised in service agreements.
Details of these agreements are as follows:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Share-based compensation
John Skeet
Chief Executive Officer (Appointed Managing Director 8 September 2020)
9 June 2020
Reviewed every two years
Mr Skeet's gross salary, is $180,000. The Company or the employee may terminate
the employment contract without cause by providing 3 months written notice or
making payment in lieu of notice, based on the annual salary component. Termination
payments are generally not payable on resignation or dismissal for serious
misconduct. In the instance of serious misconduct the Company can terminate
employment at any time.
Issue of shares
There were no shares issued to Directors and other key management personnel as part of compensation during the year
ended 30 June 2021.
Options
The terms and conditions of each grant of options over ordinary shares affecting remuneration of Directors and other key
management personnel in this financial year or future reporting years are as follows:
Grant date
22/06/2017
22/06/2017
17/11/2017
10/10/2018
Vesting date and
exercisable date
10/10/2018
22/06/2017
17/11/2017
10/10/2018
Expiry date
31/12/2020
22/06/2022
17/11/2020
10/10/2021
Options granted carry no dividend or voting rights.
Fair value
per option
Exercise price at grant date
$0.100
$0.100
$0.100
$0.010
$0.017
$0.021
$0.016
$0.006
29
Mithril Resources Limited
Directors' report
30 June 2021
Performance rights
The terms and conditions of each grant of performance rights over ordinary shares affecting remuneration of Directors and
other key management personnel in this financial year or future reporting years are as follows:
Grant date
Expiry date
Performance rights
Performance rights
13 May 2020
24 November 2020
13 May 2024
23 November 2024
Performance rights granted carry no dividend or voting rights.
Fair value
per right
at grant date
$0.007
$0.019
Details of performance rights over ordinary shares granted, vested and lapsed for Directors and other key management
personnel as part of compensation during the years ended 30 June 2020 and 2021 are set out below:
Name
Grant date
granted
vested
granted
$
Number of
rights
rights
rights
Number of Value of
Value of
Number of Value of
rights
expensed in
the period
$
rights
rights
lapsed
lapsed
$
Stephen Layton
Adrien Wing
Dudley Leitch
John Skeet
Garry Thomas
13 May 2020
13 May 2020
13 May 2020
13 May 2020
24 Nov 2020
50,000,000
50,000,000
33,333,333
33,333,333
33,333,333
50,000,000
50,000,000
33,333,333
33,333,333
-
355,000
355,000
236,667
236,667
643,333
355,000
355,000
236,667
236,667
643,333
-
-
-
-
-
-
-
-
-
-
Further information regarding the performance rights can be found in note 27.
Additional disclosures relating to key management personnel
Shareholding
The number of shares in the Company held during the financial year by each Director and other members of key
management personnel of the Group, including their personally related parties, is set out below:
Balance at Received
as part of
the start of
the year
remuneration Acquired
Disposals/
other
Balance at
the end of
the year
Ordinary shares
Stephen Layton
Adrien Wing
Dudley Leitch
Garry Thomas
John Skeet
52,500,000 50,000,000 13,000,000
8,000,000
52,500,000 50,000,000
-
90,717,862 33,333,333
- 14,000,000
278,685,273
188,330,282 33,333,333
-
662,733,417 166,666,666 35,000,000
- 115,500,000
- 110,500,000
- 124,051,195
- 292,685,273
- 221,663,615
- 864,400,083
30
Mithril Resources Limited
Directors' report
30 June 2021
Performance rights holding
The number of performance rights over ordinary shares in the Company held during the financial year by each Director and
other members of key management personnel of the Group, including their personally related parties, is set out below:
Balance at
the start of
the year
Granted
Vested
during the year during the year
Balance at
the end of
the year
Performance rights over ordinary shares
Stephen Layton
Adrien Wing
Dudley Leitch
John Skeet
Garry Thomas
50,000,000
50,000,000
33,333,333
33,333,333
-
166,666,666
-
-
-
-
33,333,333
33,333,333
(50,000,000)
(50,000,000)
(33,333,333)
(33,333,333)
-
-
-
-
- 33,333,333
(166,666,666) 33,333,333
Other transactions with key management personnel and their related parties
Mr J Skeet is a director of Trimin Pty Ltd (Trimin). During the financial year the Company incurred costs of $45,360 (2020:
$3,960) relating to consultancy services provided by Trimin.
This concludes the remuneration report, which has been audited.
Meetings of Directors
The number of meetings of the Company's Board of Directors ('the Board') held during the year ended 30 June 2021, and
the number of meetings attended by each Director were:
John Skeet*
Adrien Wing**
Stephen Layton
Dudley Leitch
Garry Thomas
Directors Meetings
Held
Attended
6
10
12
9
11
6
10
12
12
12
Held: represents the number of meetings held during the time the Director held office.
* Appointed 8 September 2020
** Resigned 15 February 2021
Indemnity and insurance of officers
The Group has made and agreement indemnifying all the Directors and Officers of the Company against all losses or
liabilities by each Director or Officer in their capacity as Directors or Officers of the Company to the extent permitted by the
Corporations Act 2001, the indemnification specifically excludes wilful acts of negligence.
The Company paid insurance premiums in respect of Directors’ and Officers’ Liability Insurance contracts for current
officers of the Company, including officers of the Company’s controlled entities. The liabilities insured are damages and
legal costs that may be incurred in defending civil or criminal proceeding that may be brought against the officers in their
capacity as officers of entities of the Group. The total amount of insurance premiums paid for the financial year was $5,954
(2020: $11,850).
Indemnity and insurance of auditor
The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the
Company or any related entity against a liability incurred by the auditor.
During the financial year, the Company has not paid a premium in respect of a contract to insure the auditor of the
Company or any related entity.
31
Mithril Resources Limited
Directors' report
30 June 2021
Proceedings on behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on
behalf of the Company, or to intervene in any proceedings to which the Company is a party for the purpose of taking
responsibility on behalf of the Company for all or part of those proceedings.
Non-audit services
There were no non-audit services provided during the financial year by the auditor.
Auditor's independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out
immediately after this Directors' report.
Auditor
Nexia Melbourne Audit Pty Ltd continues in office in accordance with section 327 of the Corporations Act 2001.
This report is made in accordance with a resolution of Directors, pursuant to section 298(2)(a) of the Corporations Act
2001.
On behalf of the Directors
___________________________
John Skeet
Managing Director
29 September 2021
32
Auditor’s Independence Declaration under Section 307C of
Corporations Act 2001 to the Directors of Mithril Resources Limited
the
I declare that, to the best of my knowledge and belief, during the year ended 30 June 2021, there
have been:
(i) no contraventions of the auditor independence requirements as set out in the Corporations
Act 2001 in relation to the audit; and
(ii) no contraventions of any applicable code of professional conduct in relation to the audit.
Nexia Melbourne Audit Pty Ltd
Melbourne
Geoff S. Parker
Director
Dated this 29th day of September 2021
33
Nexia Melbourne Audit Registered Audit Company 291969 Level 12 31 Queen Street Melbourne Victoria 3000 T: +61 3 8613 8888 F: +61 3 8613 8800 nexia.com.au Nexia Melbourne Audit Pty Ltd (ABN 86 005 105 975) is a firm of Chartered Accountants. It is affiliated with, but independent from Nexia Australia Pty Ltd. Nexia Australia Pty Ltd is a member of Nexia International, a leading, global network of independent accounting and consulting firms. For more information please see www.nexia.com.au/legal. Neither Nexia International nor Nexia Australia Pty Ltd provide services to clients. Liability limited by a scheme approved under Professional Standards Legislation
Mithril Resources Limited
Statement of profit or loss and other comprehensive income
For the year ended 30 June 2021
Income
Other income
Interest received
Profit on sale of tenement
Expenses
Administration expenses
ASIC and ASX listing fees
Share-based payments
Employee benefits expense
Occupancy expense
Travel expenses
Depreciation and amortisation expense
Impairment of exploration assets
Finance costs
Loss before income tax expense
Income tax expense
Consolidated
Note
2021
$
2020
$
5
53,166
4,285
-
72,311
566
20,137
27
6
11
(472,506)
(127,112)
(643,333)
(396,566)
(7,440)
(65,293)
(21,238)
(12,581)
-
(376,600)
(29,634)
(1,597,500)
(164,552)
(64,896)
(967)
(3,162)
(1,155,948)
(351)
(1,688,618)
(3,300,596)
7
-
-
Loss after income tax expense for the year
(1,688,618)
(3,300,596)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
265,480
(65,233)
265,480
(65,233)
(1,423,138)
(3,365,829)
Cents
Cents
Basic earnings per share
Diluted earnings per share
25
25
(0.08)
(0.08)
(0.55)
(0.55)
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
34
Mithril Resources Limited
Statement of financial position
As at 30 June 2021
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Other assets
Total current assets
Non-current assets
Trade and other receivables
Exploration and evaluation
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Employee benefits
Total current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Consolidated
Note
2021
$
2020
$
8
9
10
2,920,481
767,371
21,065
3,708,917
1,187,589
84,604
-
1,272,193
11
1,005
-
18,074,143 12,675,125
18,075,148 12,675,125
21,784,065 13,947,318
12
13
804,474
17,562
822,036
170,450
58,306
228,756
822,036
228,756
20,962,029 13,718,562
14
15
58,287,739 50,264,467
1,656,763
(38,202,668)
2,565,576
(39,891,286)
20,962,029 13,718,562
The above statement of financial position should be read in conjunction with the accompanying notes
35
Mithril Resources Limited
Statement of changes in equity
For the year ended 30 June 2021
Consolidated
Issued
capital
$
Reserves
$
Accumulated
losses
$
Total equity
$
Balance at 1 July 2020
50,264,467
1,656,763
(38,202,668) 13,718,562
Loss after income tax expense for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Transactions with Owners in their capacity as Owners:
Share-based payments (note 27)
Shares issued during the period (note 14)
Transactions costs
-
-
-
-
265,480
(1,688,618)
-
(1,688,618)
265,480
265,480
(1,688,618)
(1,423,138)
-
8,530,000
(506,728)
643,333
-
-
-
-
-
643,333
8,530,000
(506,728)
Balance at 30 June 2021
58,287,739
2,565,576
(39,891,286) 20,962,029
Consolidated
Issued
capital
$
Reserves
$
Accumulated
losses
$
Total equity
$
Balance at 1 July 2019
37,303,102
124,496
(34,902,072)
2,525,526
Loss after income tax expense for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Transactions with Owners in their capacity as Owners:
Share-based payments (note 27)
Shares issued during the period (note 14)
Transactions costs
-
-
-
-
(65,233)
(3,300,596)
-
(3,300,596)
(65,233)
(65,233)
(3,300,596)
(3,365,829)
-
13,049,730
(88,365)
1,597,500
-
-
-
1,597,500
- 13,049,730
(88,365)
-
Balance at 30 June 2020
50,264,467
1,656,763
(38,202,668) 13,718,562
The above statement of changes in equity should be read in conjunction with the accompanying notes
36
Mithril Resources Limited
Statement of cash flows
For the year ended 30 June 2021
Cash flows from operating activities
Receipts from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Interest received
Government grants received
Interest and other finance costs paid
Consolidated
Note
2021
$
2020
$
1,440
(1,515,495)
580
(628,245)
(1,514,055)
3,982
63,542
-
(627,665)
566
27,496
(286)
Net cash (used in) operating activities
24
(1,446,531)
(599,889)
Cash flows from investing activities
Payments to acquire exploration assets
Payments for exploration activities
Payments for security deposits
Cash on hand arising from Sun Minerals Pty Ltd acquisition
Proceeds from disposal of exploration assets
Net cash (used in) investing activities
Cash flows from financing activities
Proceeds from issue of shares
Proceeds from borrowings
Share issue transaction costs
Repayment of borrowings
Net cash provided by financing activities
-
(4,854,757)
(1,005)
-
-
(763,720)
(730,028)
-
2,299
70,137
(4,855,762)
(1,421,312)
8,530,000
-
(499,228)
-
2,791,946
50,000
(88,365)
(176,006)
8,030,772
2,577,575
14
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Foreign exchange movements
1,728,479
1,187,589
4,413
556,374
631,215
-
(232,555)
863,770
Cash and cash equivalents at the end of the financial year
8
2,920,481
1,187,589
631,215
The above statement of cash flows should be read in conjunction with the accompanying notes
37
Mithril Resources Limited
Notes to the financial statements
30 June 2021
Note 1. General information
The financial statements cover Mithril Resources Limited ('the Company') as a Group consisting of Mithril Resources
Limited and the entities it controlled at the end of, or during, the year. The financial statements are presented in Australian
dollars, which is Mithril Resources Limited's functional and presentation currency.
Mithril Resources Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its
registered office and principal place of business is:
Level 2
480 Collins Street
Melbourne VIC 3000
The financial statements were authorised for issue, in accordance with a resolution of Directors, on 29 September 2021.
Note 2. Significant accounting policies
The principal accounting policies adopted in the preparation
of the financial statements are set out either in the respective
notes or below. These policies have been consistently
applied to all the years presented, unless otherwise stated.
New or amended Accounting Standards and
Interpretations adopted
The Group has adopted all of the new or amended
Accounting Standards and Interpretations issued by the
Australian Accounting Standards Board ('AASB') that are
mandatory for the current reporting period.
these Accounting Standards and
The adoption of
Interpretations did not have any significant impact on the
financial performance or position of the Group.
Going concern
The financial report has been prepared on the basis of a
going concern. The financial report shows the Group
incurred a net loss of $1,688,618 (2020: $3,300,596) and a
net cash outflow from operating and investing activities of
$6,302,293 (2020: $2,021,201) during the year ended 30
June 2021.
The Group continues to be economically dependent on the
generation of cashflow from the raising of additional capital
as and when required for the continued operations including
the exploration program and the provision of working capital.
Notwithstanding this, the Directors are satisfied that the
Group will have sufficient cash resources to meet its working
capital requirements in the future. The Directors have
reviewed the cashflow forecasts and believe that for a period
in excess of 12 months from the date of signature of the
financial report, the Group has the ability to meet its debts as
and when they fall due. On 8 September 2021, a capital
raising of $3.3m before costs from a share placement of
220,000,000 new fully paid ordinary shares at a price of
$0.015 per share was completed.
The Group’s ability to continue as a going concern is
contingent upon generation of cashflow from successfully
raising additional capital. If sufficient additional funds are not
raised, the going concern basis may not be appropriate, with
the result that the Group may have to realise its assets and
extinguish its liabilities, other than in the ordinary course of
business and at amounts different from those stated in the
financial report. The Group continues to receive strong
interest and support from professional investors in its capital
raisings.
No allowance for such circumstances has been made in the
financial report.
38
Mithril Resources Limited
Notes to the financial statements
30 June 2021
Note 2. Significant accounting policies (continued)
Basis of preparation
These general purpose financial statements have been
prepared
in accordance with Australian Accounting
Standards and Interpretations issued by the Australian
Accounting Standards Board ('AASB') and the Corporations
Act 2001, as appropriate for for-profit oriented entities.
These financial statements also comply with International
Financial Reporting Standards as issued by the International
Accounting Standards Board ('IASB').
Historical cost convention
The financial statements have been prepared under the
historical cost convention, except for, where applicable, the
revaluation of financial assets and liabilities at fair value
through profit or loss, financial assets at fair value through
other comprehensive income, investment properties, certain
classes of property, plant and equipment and derivative
financial instruments.
Critical accounting estimates
The preparation of the financial statements requires the use
of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of
the Group's accounting policies. The areas
applying
involving a higher degree of judgement or complexity, or
areas where assumptions and estimates are significant to
the financial statements, are disclosed in note 3.
Parent entity information
In accordance with the Corporations Act 2001, these
financial statements present the results of the Group only.
Supplementary
is
disclosed in note 21.
the parent entity
information about
Principles of consolidation
The consolidated financial statements incorporate the assets
and liabilities of all subsidiaries of Mithril Resources Limited
('Company' or 'parent entity') as at 30 June 2021 and the
results of all subsidiaries for the year then ended. Mithril
Resources Limited and its subsidiaries together are referred
to in these financial statements as the 'Group'.
Subsidiaries are all those entities over which the Group has
control. The Group controls an entity when the Group is
exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect those
returns through its power to direct the activities of the entity.
Subsidiaries are fully consolidated from the date on which
control is transferred to the Group. They are de-consolidated
from the date that control ceases.
Intercompany transactions, balances and unrealised gains
on transactions between entities in the Group are eliminated.
Unrealised losses are also eliminated unless the transaction
provides evidence of the impairment of the asset transferred.
Accounting policies of subsidiaries have been changed
where necessary to ensure consistency with the policies
adopted by the Group.
39
Foreign currency translation
The financial statements are presented in Australian dollars,
which
functional and
presentation currency.
is Mithril Resources Limited's
transactions. Foreign exchange gains and
Foreign currency transactions
Foreign currency transactions are translated into Australian
dollars using the exchange rates prevailing at the dates of
the
losses
resulting from the settlement of such transactions and from
the translation at financial year-end exchange rates of
monetary assets and liabilities denominated in foreign
currencies are recognised in profit or loss.
Foreign operations
The assets and liabilities of foreign operations are translated
into Australian dollars using the exchange rates at the
reporting date. The revenues and expenses of foreign
operations are translated into Australian dollars using the
average exchange rates, which approximate the rates at the
dates of the transactions, for the period. All resulting foreign
are
exchange
other
in
comprehensive
foreign exchange
through
reserve in equity.
differences
income
recognised
the
The foreign exchange reserve is recognised in profit or loss
when the foreign operation or net investment is disposed of.
Income
Interest
Interest 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.
Current and non-current classification
Assets and liabilities are presented in the statement of
financial position based on current and non-current
classification.
An asset is classified as current when: it is either expected to
be realised or intended to be sold or consumed in the
Group's normal operating cycle; it is held primarily for the
purpose of trading; it is expected to be realised within 12
months after the reporting period; or the asset is cash or
cash equivalent unless restricted from being exchanged or
used to settle a liability for at least 12 months after the
reporting period. All other assets are classified as non-
current.
Goods and Services Tax ('GST') and other similar taxes
Revenues, expenses and assets are recognised net of the
amount of associated GST, unless the GST incurred is not
recoverable from the tax authority. In this case it is
recognised as part of the cost of the acquisition of the asset
or as part of the expense.
Receivables and payables are stated inclusive of the amount
of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the tax authority is included
in other receivables or other payables in the statement of
financial position.
Cash flows are presented on a gross basis. The GST
components of cash flows arising from investing or financing
activities which are recoverable from, or payable to the tax
authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the
amount of GST recoverable from, or payable to, the tax
authority.
New Accounting Standards and Interpretations not yet
mandatory or early adopted
Australian Accounting Standards and Interpretations that
have recently been issued or amended but are not yet
mandatory, have not been early adopted by the Group for
the annual reporting period ended 30 June 2021. The Group
has not yet assessed the impact of these new or amended
Accounting Standards and Interpretations.
Mithril Resources Limited
Notes to the financial statements
30 June 2021
Note 2. Significant accounting policies (continued)
A liability is classified as current when: it is either expected
to be settled in the Group's normal operating cycle; it is held
primarily for the purpose of trading; it is due to be settled
within 12 months after the reporting period; or there is no
unconditional right to defer the settlement of the liability for at
least 12 months after the reporting period. All other liabilities
are classified as non-current.
Deferred tax assets and liabilities are always classified as
non-current.
Joint Arrangement
AASB 11 Joint Arrangements defines a joint arrangement as
an arrangement of which two or more parties have joint
control and classifies these arrangements as either joint
ventures or joint operations.
Mithril Resources Ltd has determined that it has both joint
ventures and joint operations.
In relation to its joint venture operations, where the venturer
has the rights to the individual assets and obligations arising
from the arrangement, Mithril Resources Ltd has recognised:
● Its assets, including its share of any assets held jointly;
● Its liabilities, including its share of any liabilities incurred
jointly;
● Its revenue from the sale of its share of the output arising
from the joint operation;
● Its share of the revenue from the sale of the output by the
joint operation;
● Its expenses, including its share of any expenses
incurred jointly.
These figures are incorporated into the relevant line item in
the primary statements.
Impairment of non-financial assets
Goodwill and other intangible assets that have an indefinite
useful life are not subject to amortisation and are tested
annually for impairment, or more frequently if events or
changes in circumstances indicate that they might be
impaired. Other non-financial assets are reviewed
for
impairment whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable.
An impairment loss is recognised for the amount by which
the asset's carrying amount exceeds its recoverable amount.
Recoverable amount is the higher of an asset's fair value
less costs of disposal and value-in-use. The value-in-use is
the present value of the estimated future cash flows relating
to the asset using a pre-tax discount rate specific to the
asset or cash-generating unit to which the asset belongs.
Assets that do not have independent cash flows are grouped
together to form a cash-generating unit.
40
Mithril Resources Limited
Notes to the financial statements
30 June 2021
Note 3. Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions that
affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in
relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates
and assumptions on historical experience and on other various factors, including expectations of future events,
management believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will
seldom equal the related actual results. The judgements, estimates and assumptions that have a significant risk of causing
a material adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within the next
financial year are discussed below.
Capitalisation of exploration and evaluation expenditure
The Group's policy for exploration and evaluation is discussed in Note 11. The application of this policy requires
management to make certain assumptions as to future events and circumstances. Any such estimates and assumptions
may change as new information becomes available. If, after having capitalised exploration and evaluation expenditure,
management concludes that the capitalised expenditure is unlikely to be recovered by future sale or exploration, then the
relevant capitalised amount will be written off through the consolidated statement of profit or loss and other comprehensive
income.
Share-based payment transactions
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value is determined by using either the Monte Carlo or Black-
Scholes model taking into account the terms and conditions upon which the instruments were granted. The accounting
estimates and assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts
of assets and liabilities within the next annual reporting period but may impact profit or loss and equity.
Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary differences only if the Group considers it is probable that
future taxable amounts will be available to utilise those temporary differences and losses.
Note 4. Operating segments
Identification of reportable operating segments
The Board has considered the requirements of AASB 8 Operating Segments and has determined that the Group has two
operating segments: Mexican operations and Australian operations.
In determining these operating segments, the Board has considered the location of the Group's exploration activities which
represent its principal operations. The results of these operating segments are monitored by the Board and form the basis
for which strategic decisions are made.
The acquisition of the Copalquin Gold Silver Project in Durango, Mexico during the prior year constitutes a separately
identifiable operating segment to the Group's Australian operations given the Board's intention to regularly review the
financial information from its Mexican operations to determine the future allocation of resources.
Intersegment receivables, payables and loans
Intersegment loans are initially recognised at the consideration received. Intersegment loans receivable and loans payable
that earn or incur non-market interest are not adjusted to fair value based on market interest rates. Intersegment loans are
eliminated on consolidation.
41
Mithril Resources Limited
Notes to the financial statements
30 June 2021
Note 4. Operating segments (continued)
Operating segment information
Consolidated - 2021
Revenue
Other revenue
Interest revenue
Total revenue
Operating expenses
Share-based payments
Employee benefits expense
Depreciation and amortisation
Impairment of assets
Loss before income tax expense
Income tax expense
Loss after income tax expense
Other comprehensive income
Items that may be reclassified subsequently to
profit or loss
Foreign currency translation
Other comprehensive income for the year, net
of tax
Total comprehensive income for the year
Assets
Cash and cash equivalents
Trade and other receivables
Other assets
Exploration and evaluation
Total assets
Liabilities
Trade and other payables
Employee benefits
Total liabilities
Mexican
operations
Australian
operations
$
$
Total
$
1,108
-
1,108
52,058
4,285
56,343
53,166
4,285
57,451
(39,388)
-
-
(21,238)
-
(59,518)
(632,963)
(643,333)
(396,566)
-
(12,581)
(1,629,100)
(672,351)
(643,333)
(396,566)
(21,238)
(12,581)
(1,688,618)
-
(1,688,618)
265,480
-
265,480
265,480
205,962
-
(1,629,100)
265,480
(1,423,138)
79,803
751,736
3
16,841,879
17,673,421
2,840,678
16,640
21,062
2,920,481
768,376
21,065
1,232,264 18,074,143
4,110,644 21,784,065
727,926
17,562
745,488
76,548
-
76,548
804,474
17,562
822,036
42
Mithril Resources Limited
Notes to the financial statements
30 June 2021
Note 4. Operating segments (continued)
Consolidated - 2020
Revenue
Profit on sale of tenement
Other income
Interest revenue
Total revenue
Operating expenses
Share-based payments
Employee benefits expense
Depreciation and amortisation
Impairment of assets
Finance costs
Loss before income tax expense
Income tax expense
Loss after income tax expense
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Assets
Cash and cash equivalents
Trade and other receivables
Exploration and evaluation
Total assets
Liabilities
Trade and other payables
Employee benefits
Total liabilities
Mexican
operations
Australian
operations
$
$
Total
$
-
-
-
20,137
72,311
566
93,014
20,137
72,311
566
93,014
(35,135)
(65)
(35,200)
(436,962)
(1,597,500)
(164,552)
(3,162)
(1,155,948)
(286)
(3,265,396)
(472,097)
(1,597,500)
(164,552)
(3,162)
(1,155,948)
(351)
(3,300,596)
-
(3,300,596)
(65,233)
(65,233)
(100,433)
-
-
(3,265,396)
(65,233)
(65,233)
(3,365,829)
73,175
48,473
11,506,008
11,627,656
1,114,414
36,131
1,187,589
84,604
1,169,117 12,675,125
2,319,662 13,947,318
64,906
-
64,906
105,544
58,306
163,850
170,450
58,306
228,756
Accounting policy for operating segments
Operating segments are presented using the 'management approach', where the information presented is on the same
basis as the internal reports provided to the Board. The Board is responsible for the allocation of resources to operating
segments and assessing their performance.
43
Mithril Resources Limited
Notes to the financial statements
30 June 2021
Note 5. Other income
Government Boosting Cashflow Payment
Other income
Other income
Consolidated
2021
$
2020
$
49,817
3,349
41,220
31,091
53,166
72,311
Government Boosting Cashflow Payment
Boosting Cashflow income is recognised when there is reasonable assurance that the Company will comply with the
conditions attached to it, and the grant will be received. The nature of the grant is unconditional and has been presented on
a gross basis.
Other income
Other income is recognised when it is received or when the right to receive payment is established.
Note 6. Employee benefits expense
Salaries and wages
Superannuation
Transfer (to) exploration assets
Note 7. Income tax
Numerical reconciliation of income tax expense and tax at the statutory rate
Loss before income tax expense
Tax at the statutory tax rate of 26% (2020: 27.5%)
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Unrealised foreign exchange losses
Expenses not allowable for income tax purposes
Other deductible items
Current year tax losses not recognised
Income tax expense
Consolidated
2021
$
2020
$
388,763
7,803
-
367,392
28,537
(231,377)
396,566
164,552
Consolidated
2021
$
2020
$
(1,688,618)
(3,300,596)
(439,041)
(907,664)
-
255,264
-
1,057
766,023
(417,549)
(183,777)
183,777
(558,133)
558,133
-
-
The Group has tax losses arising in Australia of $38,720,887 (2020: $38,711,565) that may be available and may be offset
against future taxable profits. In addition, these tax losses can only be utilised in the future if the continuity of ownership
test is passed, or failing that, the same business test is passed.
No deferred tax asset has been recognised because it is not likely future assessable income is derived of a nature and of
an amount sufficient to enable the benefit to be realised.
44
Mithril Resources Limited
Notes to the financial statements
30 June 2021
Note 7. Income tax (continued)
Accounting policy for income tax
The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the
applicable income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable to
temporary differences, unused tax losses and the adjustment recognised for prior periods, where applicable.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied when
the assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted,
except for:
●
When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or liability in a
transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting
nor taxable profits; or
When the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures, and
the timing of the reversal can be controlled and it is probable that the temporary difference will not reverse in the
foreseeable future.
●
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilise those temporary differences and losses.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred
tax assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be available for
the carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent that it is
probable that there are future taxable profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets
against current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable
authority on either the same taxable entity or different taxable entities which intend to settle simultaneously.
Mithril Resources Ltd and its wholly owned Australian resident entities are part of a tax consolidated group.
The head entity within the tax‑consolidated group is Mithril Resources Ltd. Mithril Resources Ltd and each of its
wholly‑owned controlled entities recognise the current and deferred tax assets and deferred tax liabilities applicable to the
transactions undertaken by it, after elimination of intra‑group transactions. Mithril Resources Ltd recognises the entire
tax‑consolidated group's retained tax losses.
Note 8. Cash and cash equivalents
Cash at bank
Short-term deposits
Consolidated
2021
$
2020
$
1,919,164
1,001,317
1,187,589
-
2,920,481
1,187,589
Cash at bank earns interest at floating rates based on daily bank deposit rates.
Short-term deposits are made for varying periods of between one day and three months, depending on the immediate cash
requirements of the Company, and earn interest at the respective short-term deposit rates.
Accounting policy for cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly
liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes in value.
45
Mithril Resources Limited
Notes to the financial statements
30 June 2021
Note 9. Trade and other receivables
Other receivables
GST and overseas taxes receivable
Consolidated
2021
$
2020
$
2,219
765,152
13,733
70,871
767,371
84,604
Trade receivables are non‑interest bearing and are generally on 30‑90 day terms. An allowance for expected credit loss is
made when there is objective evidence that a trade receivable is impaired. No impairment was recognised in the current
and prior financial year and no receivables are past due at balance date.
Accounting policy for trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective
interest method, less any allowance for expected credit losses. Trade receivables are generally due for settlement within
30 days.
Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectable are written
off by reducing the carrying amount directly. A provision for impairment of trade receivables is raised when there is
objective evidence that the Group will not be able to collect all amounts due according to the original terms of the
receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial
reorganisation and default or delinquency in payments (more than 90 days overdue) are considered indicators that the
trade receivable may be impaired. The amount of the impairment allowance is the difference between the asset's carrying
amount and the present value of estimated future cash flows, discounted at the original effective interest rate. Cash flows
relating to short-term receivables are not discounted if the effect of discounting is immaterial.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
Note 10. Other assets
Prepayments
Note 11. Exploration and evaluation
Tangible exploration assets
Exploration and evaluation - Copalquin Gold Silver Project (Mexico)
Intangible exploration assets
Exploration and evaluation - Australia
Exploration and evaluation - Copalquin Gold Silver Project (Mexico)
46
Consolidated
2021
$
2020
$
21,065
-
Consolidated
2021
$
2020
$
208,952
64,315
1,232,261
1,169,117
16,632,930 11,441,693
17,865,191 12,610,810
18,074,143 12,675,125
Mithril Resources Limited
Notes to the financial statements
30 June 2021
Note 11. Exploration and evaluation (continued)
Movements
Consolidated
Balance at 1 July 2019
Copalquin Gold Silver Project (Mexico)
Additions through expenditures capitalised
Relinquished tenements*
Balance at 30 June 2020
Additions through expenditures capitalised
Foreign exchange translation
Relinquished tenements*
Balance at 30 June 2021
Australian
Projects
$
Copalquin
Gold Silver
Project
$
Total
$
1,910,014
415,051
(1,155,948)
1,910,014
-
- 10,953,771 10,953,771
967,288
(1,155,948)
552,237
-
1,169,117 11,506,008 12,675,125
5,150,532
5,074,807
261,067
261,067
(12,581)
-
75,725
-
(12,581)
1,232,261 16,841,882 18,074,143
*
write-off of capitalised exploration expenditures for the tenements that were relinquished during the year, included in
impairment of exploration assets expense.
The recoverability of the carrying amount of the exploration and evaluation assets is dependent on successful development
and commercial exploitation, or alternatively, sale of the respective areas of interest.
The recoverable amount of development expenditure is determined as the higher of its fair value less costs to sell and its
value in use.
Exploration and Evaluation expenditure has been carried forward to the extent that they are expected to be recouped
through the successful development or sale of the area or where activities in the area have not yet reached a stage that
permits reasonable assessment of the existence of economically recovered reserves.
Acquisition of Copalquin Gold Silver Project (Mexico)
On 27 May 2020 the Company completed the acquisition of Sun Mineral Pty Ltd (Sun Minerals). Sun Minerals holds the
exclusive option to earn up to a 100% interest in the high-grade Copalquin Gold Silver Project in Durango, Mexico as set
out below:
(a) At the completion of the Transaction Sun Minerals will hold a 10% interest in the concessions forming Copalquin.
(b) If, on or before 7 August 2023, Sun Minerals:
(i) incurs expenditure of US $4 million on Copalquin, Sun Minerals will hold a 25% interest in the concessions forming
Copalquin; and
(ii) incurs further expenditure of US $4 million (aggregate expenditure of US $8 million) on Copalquin, Sun Minerals
will hold a 50% interest in the concessions forming Copalquin.
(c) At any time on or before 7 August 2023, Sun Minerals may make a cash payment of US $10 million to CMC (and/or
its nominee) to acquire the remaining interests then held by CMC. CMC may elect to receive the US $10 million
through the issue of fully paid Mithril shares at a deemed issue price per share that is the higher of:
(i) a 10% discount for the 20-day VWAP of fully paid Mithril shares on ASX, ending on the trading day immediately
before any such election; or
(ii) $0.01 (1 cent).
Following payment of the US $10 million (in cash, fully paid Mithril shares or a combination of both) the Group will
hold a 100% interest on the concessions forming Copalquin.
47
Mithril Resources Limited
Notes to the financial statements
30 June 2021
Note 11. Exploration and evaluation (continued)
As consideration for the acquisition of Sun Minerals:
●
●
●
●
●
The Company made an Exclusivity Payment of $150,000 AUD to Sun Minerals Pty Ltd to be used solely for, and form
part of expenditure on Copalquin.
The Company issued an aggregate of 673,852,281 fully paid ordinary shares to the shareholders of Sun Minerals for
the acquisition of all the issued capital of Sun Minerals.
The Company issued 10,000,000 fully paid ordinary shares to Compania Minera Copalquin S.A de S.V. (CMC) and
paid $200,000 USD ($303,674 AUD) in accordance with the Company's completion requirements.
The fair value of the shares issued is $0.015 per share, being the market value of the equity instruments on the
measurement date of 27 May 2020.
The total consideration paid to acquire Sun Minerals Pty Ltd was $10,711,458.
The acquisition of Sun Minerals falls outside of the scope of AASB3 Business Combinations. It is the acquisition of a group
of assets that do not constitute a business.
A reconciliation to the fair value of the Copalquin Gold Silver Project as at 30 June 2020 is set out below:
Fair value of asset acquired:
673,852,281 shares issued to Sun Minerals shareholders at $0.015 per share
10,000,000 shares issued to Compania Minera Copalquin (CMC) at $0.015 per share
$200,000 USD ($303,674 AUD) paid to Compania Minera Copalquin (CMC)
Exclusivity Payment of $150,000 AUD paid to Sun Minerals Pty Ltd
Capitalised transaction costs
Less: identifiable assets/(liabilities) acquired:
Cash
Trade and other receivables
Trade and other payables
Additions through expenditures capitalised
Copalquin
Gold Silver
Project
10,107,784
150,000
303,674
150,000
108,143
10,819,601
(2,299)
(3,189)
139,658
134,170
552,237
11,506,008
Accounting policy for exploration and evaluation assets
Exploration and evaluation expenditures in relation to each separate area of interest are recognised as an exploration and
evaluation asset in the year in which they are incurred where the following conditions are satisfied:
(a) the rights to tenure of the area of interest are current; and
(b) at least one of the following conditions is also met:
(i) the exploration and evaluation expenditures are expected to be recouped through successful development and
exploration of the area of interest, or alternatively, by its sale; or
(ii) exploration and evaluation activities in the area of interest have not at the balance date reached a stage which
permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and
significant operations in, or in relation to, the area of interest are continuing.
48
Mithril Resources Limited
Notes to the financial statements
30 June 2021
Note 11. Exploration and evaluation (continued)
Exploration and evaluation assets are initially measured at cost and include acquisition of rights to explore, studies,
exploratory drilling, trenching and sampling and associated activities and an allocation of depreciation and amortisation of
assets used in exploration and evaluation activities.
General and administrative costs are only included in the measurement of exploration and evaluation costs where they are
related directly to operational activities in a particular area of interest.
Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the carrying
amount of an exploration and evaluation asset may exceed its recoverable amount. The recoverable amount of the
exploration and evaluation asset (for the cash generating unit(s) to which it has been allocated being no larger than the
relevant area of interest) is estimated to determine the extent of the impairment loss (if any).
Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of
its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that
would have been determined had no impairment loss been recognised for the asset in previous years.
Where a decision has been made to proceed with development in respect of a particular area of interest, the relevant
exploration and evaluation asset is tested for impairment and the balance is then reclassified to development. Where an
area of interest is abandoned, any expenditure carried forward in respect of that area is written off as an impairment loss.
Note 12. Trade and other payables
Trade payables
Other payables
Consolidated
2021
$
2020
$
687,041
117,433
88,815
81,635
804,474
170,450
Refer to note 16 for further information on financial instruments.
Accounting policy for trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year and
which are unpaid. Due to their short-term nature they are measured at amortised cost and are not discounted. The
amounts are unsecured and are usually paid within 30 days of recognition.
Note 13. Employee benefits
Annual leave
Long service leave
Consolidated
2021
$
2020
$
17,562
-
2,415
55,891
17,562
58,306
Accounting policy for employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be
settled wholly within 12 months of the reporting date are measured at the amounts expected to be paid when the liabilities
are settled.
49
Mithril Resources Limited
Notes to the financial statements
30 June 2021
Note 14. Issued capital
Consolidated
2021
Shares
2020
Shares
2021
$
2020
$
Ordinary shares - fully paid
2,350,233,041 1,664,630,703 58,287,739 50,264,467
Movements in ordinary share capital
Details
Date
Shares
Issue price
$
Balance
Shares issued via private placement
Shares issued via rights issue
Shares issued to shareholders of Sun Minerals Pty
Ltd (note 11)
Shares issued to Compania Minera Copalquin S.A de
C.V. (note 11)
Transaction costs (net of tax)
Balance
Shares issued via private placement
Exercise of Options
Conversion of performance rights
Shares issued via private placement
Transaction costs (net of tax)
Balance
1 July 2019
18 September 2019
21 May 2020
422,389,211
68,000,000
490,389,211
37,303,102
340,000
2,451,946
$0.005
$0.005
27 May 2020
673,852,281
$0.015
10,107,784
27 May 2020
30 June 2020
16 July 2020
10 July 2020
14 August 2020
5 February 2021
10,000,000
-
1,664,630,703
194,444,444
3,000,000
224,999,999
263,157,895
30 June 2021
2,350,233,041
$0.015
$0.000
150,000
(88,365)
50,264,467
$0.018
$0.01
-
$0.019
3,500,000
30,000
-
5,000,000
(506,728)
58,287,739
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the Company in
proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the
Company does not have a limited amount of authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each
share shall have one vote.
Share buy-back
There is no current on-market share buy-back.
Capital risk management
The Group's objectives when managing capital is to safeguard its ability to continue as a going concern, so that it can
provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to reduce
the cost of capital.
Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is calculated
as total borrowings less cash and cash equivalents.
Proceeds from share issues are used to maintain and expand the Company’s exploration activities and fund operating
costs.
Accounting policy for issued capital
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.
50
Mithril Resources Limited
Notes to the financial statements
30 June 2021
Note 15. Reserves
Foreign exchange reserve
Share options reserve
Performance rights reserve
Consolidated
2021
$
2020
$
200,247
124,496
2,240,833
(65,233)
124,496
1,597,500
2,565,576
1,656,763
Foreign exchange reserve
The reserve is used to recognise exchange differences arising from the translation of the financial statements of foreign
operations to Australian dollars.
Share-based payments reserves
The share options reserve and the performance rights reserve are used to recognise the value of equity benefits provided
to employees and Directors as part of their remuneration, and other parties as part of their compensation for services.
Movements in reserves
Movements in each class of reserve during the current and previous financial year are set out below:
Consolidated
Balance at 1 July 2019
Issue of performance rights
Movement in foreign exchange reserve
Balance at 30 June 2020
Issue of performance rights
Movement in foreign exchange reserve
Share options
reserve
$
Performance
rights reserve
$
Foreign
exchange
reserve
$
Total
$
124,496
-
-
124,496
-
1,597,500
-
1,597,500
-
-
(65,233)
(65,233)
124,496
1,597,500
(65,233)
1,656,763
-
-
643,333
-
-
265,480
643,333
265,480
Balance at 30 June 2021
124,496
2,240,833
200,247
2,565,576
Note 16. Financial instruments
Financial risk management objectives
The Group's activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Group's overall
risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse
effects on the financial performance of the Group. The Group uses different methods to measure different types of risk to
which it is exposed. These methods include sensitivity analysis in the case of interest rate and ageing analysis for credit
risk.
Risk management is carried out by the Board of Directors ('the Board'). These policies include identification and analysis of
the risk exposure of the Group and appropriate procedures, controls and risk limits. The Board identifies, evaluates and
hedges financial risks within the Group's operating units.
Market risk
Foreign currency risk
The Group undertakes certain transactions denominated in foreign currency and is exposed to foreign currency risk
through foreign exchange rate fluctuations.
51
Mithril Resources Limited
Notes to the financial statements
30 June 2021
Note 16. Financial instruments (continued)
Foreign exchange risk arises from future commercial transactions and recognised financial assets and financial liabilities
denominated in a currency that is not the entity's functional currency. The Board has determined that the current level of
foreign currency risk resulting from its operations in Mexico is not significant to the Group.
Price risk
The Group is not exposed to any significant price risk.
Interest rate risk
The Group is not exposed to any significant interest rate risk.
The following table illustrates the sensitivity of the net result for the year and equity to a reasonably possible change in
interest rates with effect from the beginning of the year. These changes are considered to be reasonably possible based on
observation of current market conditions but are not expected to have a significant impact on the Group's operating result.
Consolidated - 2020
Basis points
change
profit before
tax
Effect on
equity
Basis points
change
profit before
tax
Effect on
equity
Basis points increase
Effect on
Basis points decrease
Effect on
Cash and cash equivalents
50
5,734
5,734
50
(5,734)
(5,734)
Consolidated - 2021
Basis points
change
profit before
tax
Effect on
equity
Basis points
change
profit before
tax
Effect on
equity
Basis points increase
Effect on
Basis points decrease
Effect on
Cash and cash equivalents
50
14,602
14,602
50
(14,602)
(14,602)
Credit risk
Credit risk represents the risk that the counterparty to the financial instrument will fail to discharge an obligation and cause
the Group to incur a financial loss. The Group's maximum credit exposure is the carrying amounts on the statement of
financial position. The Group holds financial instruments with credit worthy third parties. The credit risk for liquid funds and
other short‑term financial assets is considered negligible, since the counterparties are reputable banks and institutions with
high quality external credit ratings. The Group has no past due or impaired debtors as at 30 June 2021.
Liquidity risk
Liquidity risk arises from the Company’s management of working capital and the finance charges and principal repayments
on its debt instruments. It is the risk that the Company will encounter difficulty in meeting its financial obligations as they fall
due.
Ultimate responsibility for liquidity risk management rests with the Board of Directors, whom have built an appropriate
liquidity risk management framework for the management of the Company’s short, medium and long‑term funding and
liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves.
Fair value of financial instruments
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.
52
Mithril Resources Limited
Notes to the financial statements
30 June 2021
Note 17. Key management personnel disclosures
Compensation
The aggregate compensation made to Directors and other members of key management personnel of the Group is set out
below:
Short-term employee benefits
Post-employment benefits
Share-based payments
Consolidated
2021
$
2020
$
390,133
7,803
643,333
423,996
24,795
1,183,334
1,041,269
1,632,125
Full details of the remuneration of each director of the Company and each of the other key management personnel are
disclosed in the Remuneration Report contained within the Directors' Report.
Loans from key management personnel and their related parties
During the prior year the following loans from key management personnel were made to the Company:
Key management
personnel:
Date loan granted
Date loan repaid
Adrien Wing
Garry Thomas*
Garry Thomas*
John Skeet*
01/01/2015
27/05/2020
27/05/2020
27/05/2020
27/05/2020
11/06/2020
17/06/2020
17/06/2020
Total loans
made to the
company
during the
19/20 year
Total loans
Total loans
payable as at
payable as at
30 June 2021
30 June 2020
50,000
70,000
50,000
6,006
176,006
-
-
-
-
-
-
-
-
-
-
*
Garry Thomas and John Skeet granted loans to Sun Minerals Pty Ltd prior to its acquisition by the Group.
Loans from key management personnel were interest-free and were fully repaid as at 30 June 2020.
Other transactions with key management personnel
Mr J Skeet is a director of Trimin Pty Ltd (Trimin). During the financial year the Company incurred costs of $45,360 (2020:
$3,960) relating to consultancy services provided by Trimin.
Note 18. Remuneration of auditors
During the financial year the following fees were paid or payable for services provided:
Audit or review of the financial statements
Consolidated
2021
$
2020
$
47,164
38,124
53
Mithril Resources Limited
Notes to the financial statements
30 June 2021
Note 19. Capital and leasing commitments
In order to maintain current rights of tenure to exploration tenements, the Company is required to meet minimum
expenditure requirements in respect of tenement lease rentals. There are also Mexican government mining concession
rents and purchase option payments to the concession owner each six month period.
These are not considered commitments as the Company can walk away from the projects and not continue payments at
any time.
Note 20. Related party transactions
Parent entity
Mithril Resources Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 22.
Transactions between Mithril Resources Ltd and its wholly owned entities during the year consisted of loans advanced by
Mithril Resources Ltd to fund exploration and investment activities.
Key management personnel
Disclosures relating to key management personnel are set out in note 17 and the remuneration report included in the
Directors' report.
Transactions with related parties
There were no transactions with related parties during the current and previous financial year other than those disclosed in
note 17.
Payable to related parties
The following balances are outstanding at the reporting date in relation to transactions with related parties:
Current payables:
Director's fees payable
Consulting fees payable
Consolidated
2021
$
2020
$
16,500
3,960
4,000
-
Loans to/from related parties
There were no loans to or from related parties at the current and previous reporting date other than those disclosed in note
17.
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
54
Mithril Resources Limited
Notes to the financial statements
30 June 2021
Note 21. Parent entity information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Loss after income tax
Other comprehensive income for the year, net of tax
Total comprehensive income
Statement of financial position
Total current assets
Total non-current assets
Total assets
Total current liabilities
Total liabilities
Net assets
Equity
Issued capital
Share options reserve
Performance rights reserve
Accumulated losses
Total equity
Parent
2021
$
2020
$
(1,488,371)
(3,264,905)
-
-
(1,488,371)
(3,264,905)
Parent
2021
$
2020
$
2,874,901
1,150,536
18,163,677 12,797,108
21,038,578 13,947,644
76,549
163,849
76,549
163,849
20,962,029 13,783,795
58,287,739 50,264,467
124,496
1,597,500
(38,202,668)
124,496
2,240,833
(39,691,039)
20,962,029 13,783,795
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity had no guarantees in relation to the debts of its subsidiaries as at 30 June 2021 and 30 June 2020.
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2021 and 30 June 2020.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the Group, as disclosed in note 2, except for the
following:
●
●
●
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
Investments in associates are accounted for at cost, less any impairment, in the parent entity.
Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt may be an
indicator of an impairment of the investment.
55
Mithril Resources Limited
Notes to the financial statements
30 June 2021
Note 22. Interests in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in
accordance with the accounting policy described in note 2:
Name
Minex (Aust) Pty Ltd
Minex (West) Pty Ltd
Mithril Resources Investments Pty Ltd
Sun Minerals Pty Ltd
Drummond Gold S.A. de C.V.
Carlton Gold S.A. de C.V.
Principal place of business /
Country of incorporation
Australia
Australia
Australia
Australia
Mexico
Mexico
Ownership interest
2020
2021
%
%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
*
The percentage of ownership interest held is equivalent to the percentage voting rights for all subsidiaries.
Note 23. Events after the reporting period
On 7 July 2021, Mr Dudley Leitch retired as a Director.
On 1 September 2021, the company announced a capital raising of $3.3m before costs from a share placement of
220,000,000 new fully paid ordinary shares at a price of $0.015 per share. The capital raising completed and fully paid
ordinary shares issued on 8 September 2021.
No other matters or circumstances have arisen since 30 June 2021 that has significantly affected, or may significantly
affect the Group's operations, the results of those operations, or the Group's state of affairs in future financial years.
Note 24. Cash flow information
Reconciliation of loss after income tax to net cash used in operating activities
Loss after income tax expense for the year
(1,688,618)
(3,300,596)
Consolidated
2021
$
2020
$
Adjustments for:
Depreciation and amortisation
Impairment of non-current assets
Net gain on disposal of non-current assets
Net loss on disposal of property, plant and equipment
Share-based payments
Foreign exchange differences
Transfers to exploration assets
Change in operating assets and liabilities:
Increase in trade and other receivables
Decrease in accrued revenue
Decrease/(increase) in prepayments
Increase/(decrease) in trade and other payables
Increase/(decrease) in employee benefits
Net cash used in operating activities
56
21,238
12,581
-
-
643,333
-
-
3,162
1,155,948
(20,137)
11,179
1,597,500
3,844
(43,060)
(690,267)
-
(21,065)
317,011
(40,744)
(83,955)
32
27,114
64,551
(15,471)
(1,446,531)
(599,889)
Mithril Resources Limited
Notes to the financial statements
30 June 2021
Note 25. Earnings per share
Loss after income tax
Consolidated
2021
$
2020
$
(1,688,618)
(3,300,596)
Number
Number
Weighted average number of ordinary shares used in calculating basic earnings per share
2,152,958,395 596,041,636
Weighted average number of ordinary shares used in calculating diluted earnings per share 2,152,958,395 596,041,636
Basic earnings per share
Diluted earnings per share
Accounting policy for earnings per share
Cents
Cents
(0.08)
(0.08)
(0.55)
(0.55)
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the Owners of Mithril Resources Limited,
excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares
outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account
the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the
weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential
ordinary shares.
Note 26. Contingent liabilities
Contingent liabilities
The Group had no contingent liabilities as at 30 June 2021 and 30 June 2020.
57
Mithril Resources Limited
Notes to the financial statements
30 June 2021
Note 27. Share-based payments
The Group established the Mithril Resources Ltd Employee Share Option Plan and a summary of the Rules of the Plan are
set out below:
●
All employees (full and part time) will be eligible to participate in the Plan after a qualifying period of 12 months
employment, although the Board may waive this requirement.
●
●
●
Options are granted under the Plan at the discretion of the Board and if permitted by the Board, may be issued to an
employee's nominee.
Each option is to subscribe for one fully paid ordinary share in the Company and will expire 5 years from its date of
issue. An option is exercisable at any time from its date of issue. Options will be issued free. The exercise price of
options will be determined by the Board, subject to a minimum price equal to the market value of the Company's
shares at the time the Board resolves to offer those options. The total number of shares, the subject of options issued
under the Plan, when aggregated with issues during the previous 5 years pursuant to the Plan and any other
employee share plan, must not exceed 5% of the Company's issued share capital.
If, prior to the expiry date of options, a person ceases to be an employee of the Company for any reason other than
retirement at age 60 or more (or such earlier age as the board permits), permanent disability, redundancy or death,
the options held by that person (or that person's nominee) automatically lapse on the first to occur of a) the expiry of
the period of 6 months from the date of such occurrence, and b) the expiry date. If a person dies, the options held by
that person will be exercisable by that person's legal personal representative.
●
Options can’t be transferred other than to the legal personal representative of a deceased option holder.
●
The Company will not apply for official quotation of any options issued under the plan.
●
Shares issued as a result of the exercise of options will rank equally with the Company's previously issued shares.
●
Option holders may only participate in new issues of securities by first exercising their options.
The Board may amend the Plan Rules subject to the requirements of the Listing Rules.
Set out below are summaries of options granted under the plan:
2021
Grant date
Expiry date
price
Exercise
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
10/03/2017
22/06/2017
22/06/2017
17/11/2017
17/11/2017
10/10/2018
31/12/2020
31/12/2020
22/06/2022
17/11/2020
31/12/2020
10/10/2021
$0.100
$0.100
$0.100
$0.100
$0.100
$0.010
1,000,000
300,000
300,000
500,000
1,000,000
7,000,000
10,100,000
-
-
-
-
-
-
-
-
-
-
-
-
(3,000,000)
(3,000,000)
(1,000,000)
(300,000)
-
(500,000)
(1,000,000)
-
(2,800,000)
-
-
300,000
-
-
4,000,000
4,300,000
The weighted average remaining contractual life of options outstanding at the end of the financial year was 0.33 years
(2020: 1.80 years).
58
Mithril Resources Limited
Notes to the financial statements
30 June 2021
Note 27. Share-based payments (continued)
Performance rights granted to directors and key management personnel
At the Annual General Meeting held on 24 November 2020 the shareholders of the Company granted approval for the
issue of 33,333,333 performance rights to Mr Garry Thomas. Details of the performance rights issued can be found in the
Notice of General Meeting announcement dated 19 October 2020.
The conversion of the issued performance rights to fully paid ordinary shares of the Company is subject to the satisfaction
of either of the following applicable milestones:
●
Determination by a geological consultant of an Inferred JORC Resource of 5.443Mt at a combined AuEq grade of not
less than 4g/t for 700koz Au (or AuEq) on the Copalquin Project; or
Mithril achieving a market capitalisation equal to or greater than A$150,000,000 for a period of 20 consecutive trading
days on which the securities of the Company traded.
●
At the General Meeting held on 13 May 2020 the shareholders of the Company granted approval for the issue of
166,666,666 performance rights to directors and members of key management personnel. Details of the performance
rights issued can be found in the Notice of General Meeting announcement dated 9 April 2020. The Company also issued
58,333,333 performance rights to corporate advisors and consultants as part of their compensation for services rendered.
The vesting condition for the issue of these performance rights was the completion of Sun Minerals transaction. Details on
the acquisition of Sun Minerals Pty Ltd are disclosed in note 11.
The conversion of the issued performance rights to fully paid ordinary shares of the Company is subject to the satisfaction
of either of the following applicable milestones:
●
Determination by a geological consultant of an Inferred JORC Resource of 5.443Mt at a combined AuEq grade of not
less than 4g/t for 700koz Au (or AuEq) on the Copalquin Project; or
Mithril achieving a market capitalisation equal to or greater than A$40,000,000 for a period of 20 consecutive trading
days on which the securities of the Company traded. This milestone was achieved post year-end and shares issued
on 14 August 2020.
●
Fair value of performance rights granted:
The fair value of performance rights granted was independently determined using a Monte Carlo pricing model. This model
simulates share price movements using assumptions of lognormally distributed prices, averages the payoff values over the
range of resultant outcomes, and then discounts the expected payoff at the risk-free rate to get an estimate of the value of
the option or performance right.
For the performance rights granted, the valuation model inputs used to determine the fair value at the grant date, are as
follows:
Grant date
Expiry date
Share price Exercise
at grant date
price
Expected
volatility
Dividend
Risk-free
Fair value
yield
interest rate at grant date
24/11/2020
13/05/2020
24/11/2024
13/05/2024
$0.026
$0.010
$0.000
$0.000
95.000%
95.000%
-
-
0.37%
0.24%
$0.0193
$0.007
Share-based payments during the year are:
Performance rights issued to Directors and key management personnel
Performance rights issued to consultants
Consolidated
2021
$
2020
$
643,333
-
1,420,000
177,500
643,333
1,597,500
59
Mithril Resources Limited
Notes to the financial statements
30 June 2021
Note 27. Share-based payments (continued)
Exploration and evaluation share based payments
During the 2020 financial year the Company made the following share-based payments in accordance with the terms sheet
to acquire 100% of the shares of Sun Minerals Pty Ltd:
●
●
Issued 673,852,281 fully paid ordinary shares to the shareholders of Sun Minerals Pty Ltd
Issued 10,000,000 fully paid ordinary shares to Compania Minera Copalquin S.A de C.V
The fair value of the shares issued was $0.015 per share. The amount of the equity settled share-based payment
recognised in the current period in respect of the ordinary shares issued is $10,257,784.
Accounting policy for share-based payments
Equity-settled and cash-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in exchange for
the rendering of services. Cash-settled transactions are awards of cash for the exchange of services, where the amount of
cash is determined by reference to the share price.
The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined
using either the Monte Carlo or Black-Scholes option pricing model that takes into account the exercise price, the term of
the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the
expected dividend yield and the risk free interest rate for the term of the option, together with non-vesting conditions that do
not determine whether the Group receives the services that entitle the employees to receive payment. No account is taken
of any other vesting conditions.
The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over the
vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the
best estimate of the number of awards that are likely to vest and the expired portion of the vesting period. The amount
recognised in profit or loss for the period is the cumulative amount calculated at each reporting date less amounts already
recognised in previous periods.
The cost of cash-settled transactions is initially, and at each reporting date until vested, determined by applying either the
Monte Carlo or Black-Scholes option pricing model, taking into consideration the terms and conditions on which the award
was granted. The cumulative charge to profit or loss until settlement of the liability is calculated as follows:
●
during the vesting period, the liability at each reporting date is the fair value of the award at that date multiplied by the
expired portion of the vesting period.
from the end of the vesting period until settlement of the award, the liability is the full fair value of the liability at the
reporting date.
●
All changes in the liability are recognised in profit or loss. The ultimate cost of cash-settled transactions is the cash paid to
settle the liability.
Market conditions are taken into consideration in determining fair value. Therefore any awards subject to market conditions
are considered to vest irrespective of whether or not that market condition has been met, provided all other conditions are
satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made.
An additional expense is recognised, over the remaining vesting period, for any modification that increases the total fair
value of the share-based compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the Group or employee, the failure to satisfy the condition is treated as a
cancellation. If the condition is not within the control of the Group or employee and is not satisfied during the vesting
period, any remaining expense for the award is recognised over the remaining vesting period, unless the award is forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining
expense is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled and
new award is treated as if they were a modification.
60
Mithril Resources Limited
Directors' declaration
30 June 2021
In the Directors' opinion:
●
●
●
●
the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the
Corporations Regulations 2001 and other mandatory professional reporting requirements;
the attached financial statements and notes comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board as described in note 2 to the financial statements;
the attached financial statements and notes give a true and fair view of the Group's financial position as at 30 June
2021 and of its performance for the financial year ended on that date; and
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due
and payable.
The Directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of Directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the Directors
___________________________
John Skeet
Managing Director
29 September 2021
61
Independent Auditor’s Report to the Members of Mithril Resources Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Mithril 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 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
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 & 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, has been given
to the directors of the Company, as at the date of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context
of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
Nexia Melbourne Audit Registered Audit Company 291969 Level 12 31 Queen Street Melbourne Victoria 3000 T: +61 3 8613 8888 F: +61 3 8613 8800 nexia.com.au Nexia Melbourne Audit Pty Ltd (ABN 86 005 105 975) is a firm of Chartered Accountants. It is affiliated with, but independent from Nexia Australia Pty Ltd. Nexia Australia Pty Ltd is a member of Nexia International, a leading, global network of independent accounting and consulting firms. For more information please see www.nexia.com.au/legal. Neither Nexia International nor Nexia Australia Pty Ltd provide services to clients. Liability limited by a scheme approved under Professional Standards Legislation
Independent Auditor’s Report to the Members of Mithril Resources Limited
Key audit matter
How our audit addressed the key audit matter
Exploration and evaluation assets
Refer to Notes 3 and 11
At 30 June 2021, the carrying value of
exploration and evaluation assets was
$18,074,143.
In accordance with AASB 6 Exploration and
Evaluation of Mineral Resources, the Group is
required to assess at each reporting date if
there are any triggers for impairment which
may suggest the carrying value is in excess of
the recoverable value.
The process undertaken by management to
assess whether there are any impairment
triggers in each area of interest involves an
element of management judgement.
This area is a key audit matter due to the
significant judgement involved in determining
the existence of impairment triggers.
Our procedures included, amongst others:
•
•
• Obtaining schedules of the areas of interest held by
the Group and assessing whether the rights to
tenure remain current at balance date;
Considering whether any such areas of interest had
reached a stage where a reasonable assessment of
economically recoverable reserves existed;
Reviewing the Group’s capitalisation of exploration
expenditure in the current year, ensuring that it is
consistent with the criteria as stated under AASB 6.
This included discussion with management,
reviewing Group exploration budgets, ASX
announcements and directors’ minutes;
Reviewing and considering whether any facts or
circumstances existed that suggested impairment
was required;
Assessing the adequacy of the related disclosures
in Note 11 to the financial report.
•
•
Other Information
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 30 June 2021 but does not include the
financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of the
other information we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
Independent Auditor’s Report to the Members of Mithril Resources Limited
In preparing the financial report, the directors are responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that
an audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at The
Australian Auditing and Assurance Standards Board website at:
http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf. This description forms part of our
auditor’s report.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, actions
taken to eliminate threats or safeguards applied.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 27 to 31 of the Directors’ Report for the
year ended 30 June 2021.
In our opinion, the Remuneration Report of Mithril 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 Melbourne Audit Pty Ltd
Melbourne
Dated this 29th day of September 2021
Geoff S. Parker
Director
Mithril Resources Limited
Shareholder information
30 June 2021
The shareholder information set out below was applicable as at 15 September 2021.
Distribution of equitable securities
Analysis of number of equitable security holders by size of holding:
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Holding less than a marketable parcel
Equity security holders
Number
of holders
of ordinary
shares
% of
total
shares
issued
316
305
166
1,692
1,607
0.01
0.03
0.05
3.06
96.85
4,086
100.00
1,441
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
Ordinary shares
% of total
shares
issued
Number held
221,663,615
181,081,267
110,500,000
107,500,000
104,604,006
100,352,918
90,717,862
81,646,076
60,000,000
40,385,965
33,333,333
32,000,000
22,000,000
18,333,333
18,143,573
14,820,228
14,063,158
13,333,333
12,565,280
12,500,000
8.62
7.05
4.30
4.18
4.07
3.90
3.53
3.18
2.33
1.57
1.30
1.25
0.86
0.73
0.71
0.58
0.55
0.52
0.49
0.49
1,290,043,947
50.19
TRIMIN PTY LTD
GARRY THOMAS & NANCY-LEE THOMAS
NORTHERN STAR NOMINEES PTY LTD
BODIE INVESTMENTS PTY LTD
THOMAS FAMILY SUPERANNUATION FUND PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
MR DUDLEY ROY LEITCH
MR HALL HERBERT STEWART
COVENANT HOLDINGS (WA) PTY LTD
EQUITY TRUSTEES LIMITED
MR DUDLEY ROY LEITCH
MIGUEL ANGEL MATAS MARTINEZ
ALTOR CAPITAL MANAGEMENT PTY LTD
MR HALL HERBERT STEWART
PENAUSE PTY LTD
MR ARTHUR CHARLAFTIS
MR DOMINIC VIRGARA
PIERCE ASIA PTY LTD
MR BILLY-JOE THOMAS
LOCKWOOD SUPERANNUATION FUND PTY LTD
Share buy-back
There is no current on-market share buy-back.
Unquoted equity securities
There are no unquoted equity securities.
65
Mithril Resources Limited
Shareholder information
30 June 2021
Substantial holders
Substantial holders in the Company are set out below:
TRIMIN PTY LTD
GARRY THOMAS & NANCY-LEE THOMAS
Voting rights
The voting rights attached to equity securities are set out below:
Ordinary shares
% of total
Number held
shares
issued
221,663,615
181,081,267
8.62
7.05
Ordinary shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each
share shall have one vote.
Options
No voting rights.
There are no other classes of equity securities.
Securities subject to voluntary escrow
Class
Fully paid ordinary shares
Expiry date
27 May 2022
Number
of shares
657,523,066
The vendors of Sun Minerals Pty Ltd agreed to a voluntary escrow of 657,523,066 fully paid ordinary shares received as
part of the consideration from its acquisition by the Group.
66
Mithril Resources Limited
Shareholder information
30 June 2021
Tenement information
Australian Interests:
Project
Kurnalpi Area
Kurnalpi Area
Kurnalpi Area
Kurnalpi Area
Lignum Dam Area
Lignum Dam Area
Lignum Dam Area
Murchison Area
Murchison Area
West Kimberley Area
West Kimberley Area
West Kimberley Area
Mexican Operations:
Concession
LA SOLEDAD
EL COMETA
SAN MANUEL
COPALQUIN
EL SOL
EL CORRAL
Tenement number
Interest owned %
E28/2506
E28/2567
E28/2682
E28/2760
E27/538
E27/582
E27/584
E20/846
E57/1069
E04/2497
E04/2503
E80/5191
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
Concession title number
Interest owned %
52033
164869
165451
178014
236130
236131
10.00
10.00
10.00
10.00
10.00
10.00
Sun Minerals, a wholly owned subsidiary of Mithril, holds the exclusive option to earn up to a 100% interest in the above
concessions forming the Copalquin Gold Silver Project in Durango, Mexico. Further details are disclosed in note 11.
67