Montem Resources Limited
ABN 87 623 236 831
Annual Report - 31 December 2020
Montem Resources Limited
Contents
31 December 2020
Corporate directory
Chairman'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 Montem Resources Limited
Shareholder information
Tenement list
2
3
4
24
25
26
27
28
29
57
58
63
66
1
Montem Resources Limited
Corporate directory
31 December 2020
Directors
Mark Lochtenberg, Non-executive Director and Chairman (Appointed as Chairman on
13 February 2020)
Peter Doyle, Managing Director and CEO
Robert Tindall, Non-executive Director
Susie Henderson, Non-executive Director
William Souter, Non-executive Director
Company Secretary
Melanie Leydin
Registered office
Principal place of business
Auditor
Solicitors
Bankers
Level 4, 100 Albert Road
South Melbourne VIC 3205
Level 4, 100 Albert Road
South Melbourne VIC 3205
William Buck
Level 20, 181 William Street
Melbourne VIC 3000
Dentons Australia Pty Ltd
567 Collins Street
Melbourne VIC 3000
McLennan Ross
600 McLennan Ross Building
12220 Stony Plain Road
Edmonton, AB, Canada T5N 3Y4
National Australia Bank
800 Bourke Street
Docklands VIC 3008
Royal Bank of Canada
1025 West Georgia Street
Vancouver BC Canada V6E 3N9
Stock exchange listing
Montem Resources Limited shares are listed on the Australian Securities Exchange
(ASX code: MR1)
Website
www.montem-resources.com
2
Montem Resources Limited
Chairman's Letter
31 December 2020
Dear Fellow Shareholders,
I am pleased to present the 2020 Annual Report for Montem Resources Limited (ASX:MR1) (“Montem” or the “Company”).
This past year was outstanding for Montem, where we completed two significant project milestones, and in September
successfully listed on the Australian Securities Exchange (ASX).
We are focussed on our strategy to bring historical mines, which previously sold steelmaking coal to the Japanese steel
industry, back into production. With the backdrop of strong steelmaking coal prices, particularly for exports of steelmaking
coal from western Canada, we are pleased with our results at both of our primary projects, the Tent Mountain Mine Re-start
Project, and the Chinook Project (Chinook).
In 2020 we completed a Definitive Feasibility Study (DFS) for the Tent Mountain Mine Re-start Project. The DFS showed
strong technical and financial results, leaving Montem well placed to produce first coal sales in 2023. We also completed an
exploration program and subsequently a Scoping Study at the Chinook Project. The exploration program and Scoping Study
confirmed Chinook as a large, Tier 1 Hard Coking Coal project. We are planning further exploration at Chinook in 2021 to
delineate the Scoping Study main mining area to sustain a 20+ year mine-life for the Project.
We are pleased to report we operated safely without a Lost Time Injury or Environmental Incident throughout the year.
COVID-19 has been troubling for all of us, and we adjusted our activities to keep our employees and contractors safe, whilst
remaining active as we develop our assets.
In February 2020, my colleague and friend Dr. Rob Yeates retired from his position as Chairman and Non-Executive
Director of Montem, and I was elected Chairman. I thank Rob for his guidance and expertise in setting the strategy for
Montem’s development. Rob has had a distinguished career in the global mining industry, and we wish him well in his future
endeavours.
In September 2020, we undertook an Initial Public Offering (IPO) and listed on the ASX, raising $8,000,000 and issuing 32
million shares. Our IPO was well supported by both existing and new shareholders.
We look forward to the year ahead with great anticipation. We are working hard with the Alberta Energy Regulator to
prepare the Tent Mountain Mine for its restart. We anticipate completing the relevant applications to amend the permits to
operational status later this year.
Importantly, both of our primary projects sit on Category 4 lands as defined by the Alberta 1976 Coal Development Policy
(Coal Policy). Category 4 lands of the Coal Policy allow for exploration and surface mining subject to the normal approvals
and permitting process. It is worth noting, in the Crowsnest Pass region, only Montem and Hancock Prospecting hold
properties on Category 4 lands.
We are greatly appreciative of your support throughout 2020 and believe that the Company will increase value for
shareholders over the coming year. We thank our fellow board members and management as well as our staff for all their
efforts and success during the past year.
We also thank the communities we operate in. By employing locally, and engaging with Indigenous Peoples, Montem has
become a sustainable member of the Crowsnest Pass community. We look forward to building our team in Alberta.
We will continue to operate safely as we develop our asset base, and we look forward to bringing you news of our progress.
Sincerely,
Mark Lochtenberg
Chairman and Non-Executive Director
3
Montem Resources Limited
Directors' report
31 December 2020
The Directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter
as the 'Consolidated Entity') consisting of Montem Resources Limited (referred to hereafter as the 'Company' or 'Parent
Entity') and the entities it controlled at the end of, or during, year ended 31 December 2020.
Directors
The following persons were Directors of Montem Resources Limited during the whole of the financial year and up to the
date of this report, unless otherwise stated:
Mark Lochtenberg, Chairman and Non-executive Director (appointed as Chairman on 13 February 2020)
Peter Doyle, Managing Director and CEO
Robert Tindall, Non-executive Director
Susie Henderson, Non-executive Director
William Souter, Non-executive Director
Rob Yeates, Non-executive Chairman (resigned 13 February 2020)
Company overview and principal activities
Montem Resources (ASX: MR1) is a steelmaking coal development company that owns and leases coal tenements in the
Canadian provinces of Alberta and British Columbia. The Company’s objective is to become the operator of steelmaking
coal mines in Canada by developing its properties in the Crowsnest Pass. The Company is planning an integrated mining
complex in the Crowsnest Pass, focusing on low-cost development of open-cut operations that leverage central
infrastructure.
Montem Resources’ objective is to re-establish mining at the Tent Mountain Mine, whilst exploring and evaluating the
development potential of the Chinook Project. During the year ended 31 December 2020 the principal continuing activities
of the Company were the exploration and development of coal tenements.
The Company is focussed on re-establishing mining at the Tent Mountain Mine to produce steelmaking coal. Over the past
three years the Company has completed extensive exploration and engineering studies, including a Definitive Feasibility
Study on the Tent Mountain Mine Re-start Project. The Company requires additional licences to re-start open-cut mining at
Tent Mountain, and applications for these licences are being prepared by the Company. The current schedule is for the
Tent Mountain Mine to begin construction in late 2022, with first coal sales in 2023.
Montem is also progressing the Chinook Project which covers areas containing historical mines that previously exported
steelmaking coal to Japanese steel mills. The Company completed a Scoping Study on the Chinook Project which
identified the potential for a large open-cut Tier 1 hard coking coal mine. The Company plans to explore, and further define
and develop this potential mine.
Dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
Review of operations
The loss for the Consolidated Entity after providing for income tax amounted to $3,411,080 (31 December 2019:
$3,305,949).
The loss for the current period is consistent with the principal activities of the Company with no revenue-generating
activities.
Exploration and mine development
Tent Mountain Mine
During 2020 the Company concentrated efforts planning the re-start of the Tent Mountain Mine.
Exploration was conducted in 2019 to supplement historical data. The geology, geotech and geochem data provided the
requisite information to complete an updated JORC resource assessment for the Mine, and to support mine planning for
the Definitive Feasibility Study.
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Montem Resources Limited
Directors' report
31 December 2020
Independent consultants including Dahrouge (geology), SRK (mine planning and project management), Sedgman (coal
preparation plant and surface infrastructure), Matrix (environment) and Lifeways (Indigenous engagement) delivered the
Definitive Feasibility Study in May 2020. The study shows strong positive economic results, with the mine expected to
operate for 14 years producing 1.8Mtpa run of mine coal for 1.1Mtpa of product to be marketed as a high-quality Tier 2
hard coking coal (HCC).
The Company has also secured the land required for a rail siding adjacent to the Tent Mountain Mine on the CP rail line,
negating the need to use provincial roads to transport coal, as well as the power and water supply to support the rapid re-
start of the mine. Additionally, the Company negotiated a port services agreement with Westshore Terminals in the Port of
Vancouver for up to 1.25Mtpa, executing the contract in July 2020.
The Company has been undertaking environmental testing and monitoring since early-2018 to facilitate the environmental
permit amendment applications the Company will submit to the AER. This environmental analysis includes surface water
quality and groundwater monitoring, flora and fauna surveys, fisheries and aquatics surveys as well as cultural and
archaeology studies. These surveys and studies, along with the significant environmental data collected by the mine
operator form a key component in the Company’s environmental assessment process which underpins the permit
amendment process. The studies have enabled impact assessment reports to be completed, which are being compiled to
support the Environmental Impact Assessment to accompany the permit amendment applications.
The mine operating plans and the applications to amend the Company's existing environmental permits and gain additional
operating permits and licenses are expected to be presented to the AER in the second half of 2021.
Chinook Project
In 2019 the Company completed its initial concept study or “Preliminary Economic Assessment” of a large open-cut hard
coking coal project in the Crowsnest Pass. The results from that study were encouraging, depicting a large open-cut mine
potentially capable of producing 5Mtpa of hard coking coal.
In H1 2020 an updated JORC resource estimate was made for the Chinook Project. Th JORC resource estimate of 149.1
million tonnes, had an accompanying Exploration Target of 125Mt - 450Mt for the Chinook Project. To align engineering
and geology, the Company commissioned independent consultant RPM Global to conduct a new scoping study based on
the updated resource estimate (Scoping Study). Results from the Scoping Study indicate and economically and technically
viable project with upside justifying progressing to a Pre-Feasibility Study. The Chinook Project is located wholly within
Category 4 lands, which contemplates open cut mine development.
Montem undertook an exploration drilling program at Chinook Vicary in September-November 2020. The exploration
confirmed the Chinook Vicary product coal quality as Tier 1 hard coking coal, and identified areas of structurally thickened
coal seams ideal for open-cut mining. The 2021 Scoping Study expanded on earlier conceptual mine planning work
completed and identified multiple new zones of low stripping ratio mineable hard coking coal.
Corporate activity
Montem Resource’s Independent Chairman and Non-Executive Director, Robert Yeates, announced his retirement in
February 2020. Mr. Yeates was integral to the development and implementation of Montem’s strategy. The Board
acknowledged his guidance and focus on governance and is thankful for his service.
Mr Mark Lochtenberg was elected Chairman following Mr Yeates’ retirement. Mr Lochtenberg joined the Montem
Resources Board in H1 2019 and brings a range of skills and experience to the role. Mr Lochtenberg has worked in the
resource sector for more than 30 years. He was formerly the co-head of Glencore International AG’s worldwide coal
division, where he spent 13 years overseeing a range of trading activities and coal asset purchase and delivered significant
growth for their portfolio of coal assets.
In addition, on 2 November 2020, Ms Melanie Leydin replaced Mr Alan Ahlgren as Chief Financial Officer and continue in
her role as Company Secretary.
Significant changes in the state of affairs
On 12 May 2020, the Company undertook a private placement to sophisticated investors issuing 12,791,419 shares with
an issue price of $0.15 per share, raising funds of $1,918,713.
5
Montem Resources Limited
Directors' report
31 December 2020
During the financial year, 2,696,631 Options with varying exercise prices lapsed due to not meeting relevant milestones
under the Option plan terms and conditions. In addition, 455,387 Performance Rights were lapsed upon resignation of a
Director.
In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID-19) as a pandemic,
which continues to spread throughout North America and globally. The spread of COVID-19 has caused significant
volatility in North America and international markets. There is significant uncertainty around the breadth and duration of
business disruptions related to COVID-19 and therefore the Company has taken precautionary measures by temporarily
closing the Company’s office and having arranged the employees work remotely, as well as curtailing travel. Management
believes that this will allow efforts to continue the operations and permitting activities. At the date of this report, the impact
of these measures are not expected to significantly impact the operations. However, as the circumstances continue to
evolve, there may be disruptions to the operations if employees, consultants or their respective families are personally
impacted by the COVID-19.
Between February to May 2020, the Company issued 860,000 convertible notes at an annual simple interest rate of 10%,
raising $860,000, net of financing fees. In addition, on 8 April 2020 and 13 May 2020, the Company also issued convertible
notes amounting to $150,000 to discharge a trade payable. The face value of each note is $1.00 with a maturity date
(Maturity Date) of 31 December 2020. These convertible notes, along with the 4,335,000 notes issued in 2019 financial
year, were converted to 32,931,608 ordinary shares at the completion of Initial Public Offering (IPO) during September
2020.
In June 2020, the Company issued 3,000,000 performance rights under the terms of the Company’s Employee Incentive
Plan to the Managing Director and senior executives for no consideration with fair values $0.15 each, all with an expiry
date of 23 September 2022.
The Company commenced trading on the Australian Securities Exchange (ASX) on 15 September 2020 under the ASX
code MR1 after completing an IPO, raising $8 million. The Company issued 32 million shares at $0.25 per share under the
IPO with an implied market capitalisation of $50.7 million upon listing.
There were no other significant changes in the state of affairs of the Consolidated Entity during the financial year.
Matters subsequent to the end of the financial year
On 31 October 2019, the Company agreed to purchase a parcel of land which is planned to be used for a rail loading
facility for the Tent Mountain Mine. Under the original agreement, a final payment of CAD 2,535,400 was to be made on 4
January 2021.
Subsequent the years end, on 4 January 2021, the Company and landlord agreed to extend this option over the planned
rail loadout land for a further 12 months. The Land Vendors are not Related Parties.
The parties agreed to an extension of this agreement under the following terms:
- Extension of agreement to 4 January 2022
- Total purchase price CAD 3,000,000
- Montem forfeit the existing CAD 184,000 deposit on 4 January 2021
- Montem, posted a new, non-refundable deposit CAD 275,000.
On 26 February 2021, the Company issued 30,394,021 ordinary shares at $0.17 per share, raising $5,166,984 (before
transaction costs) by way of share placement to sophisticated and professional investors. The Company intends to use
funds from the Placement to advance the Chinook scoping study and complete the permitting for the re-start of the Tent
Mountain Mine.
On 24 February 2021, the Company initiated a Share Purchase Plan (SPP) to raise $500,000. Shares under the SPP will
be offered at a fixed issue price of $0.17 per new fully paid ordinary share in the Company.
On 4 March 2021, the Company announced the results of the coal quality test work performed on drilling samples from the
Chinook Vicary area.
No other matter or circumstance has arisen since 31 December 2020 that has significantly affected, or may significantly
affect the Consolidated Entity's operations, the results of those operations, or the Consolidated Entity's state of affairs in
future financial years.
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Montem Resources Limited
Directors' report
31 December 2020
Likely developments and expected results of operations
The Company intends to complete applications to the provincial regulator for the re-start of the Tent Mountain Mine, as well
as undertake exploration and advance the Chinook scoping study in 2021. Both these assets are located within Category 4
of the 1976 Coal Development Policy for Alberta (Coal Policy) which allows for surface mining subject to the normal
permitting process. This status is unaffected by the Alberta Government’s 8th February 2021 decision to reinstate the 1976
Coal Policy.
The Company is finalising the operating licence application and permit amendments for the Tent Mountain Mine, with
restart of production targeted for early 2023. The Company is also planning new exploration at the Chinook Project, which
the recent Scoping Study indicated as an economic and technically viable Project with upside, justifying progression to the
Pre-Feasibility stage.
Competent persons statement
Scoping Study
The information contained in this report relates to information compiled or reviewed by Mr Gregory Eisenmenger who is a
Member of the Australasian Institute of Mining and Metallurgy (304702). Gregory is Executive Consultant at RPMGlobal.
He has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the
activity he is undertaking to qualify as a Competent Person, as defined in the 2012 Edition of the Australasian Code for
Reporting of Exploration Results, Mineral Results, Mineral Resources and Ore Reserves. Mr Eisenmenger consents to the
inclusion of the information disclosed by the Company in the form in which it appears. Neither Mr Eisenmenger nor
RPMGlobal have a direct or indirect financial interest in, or association with Montem Resources Limited, the properties and
tenements reviewed in this statement, apart from standard contractual arrangements for the preparation of this report and
other previous independent consulting work. In preparing this Scoping Study RPMGlobal has been paid a fee for time
expended on this report. The present and past arrangements for services rendered to Montem Resources do not in any
way compromise the independence of RPMGlobal.
Exploration Results
The information in this release that relates to Coal Quality, Mineral Resource Estimates and Exploration Target Estimates
at the Chinook Project are extracted from the report; “Coal Resources for the Chinook Project Alberta, Canada, April 9,
2020”. This document was prepared by Dahrouge Geological Consulting Ltd. and lodged with the ASX on 31 July 2020
and is available to view on the Company’s website www.montem-resources.com. The Company confirms that it is not
aware of any new information or data that materially affects the information included in the original market announcement
and that all material assumptions and technical parameters underpinning the estimates in the relevant market
announcement continue to apply and have not materially changed. The company confirms that the form and context in
which the Competent Person’s findings are presented have not been materially modified from the original market
announcement.
Forward looking statements
This Financial Report includes certain forward-looking statements that have been based on current expectations about
future acts, events and circumstances. These forward-looking statements are, however, subject to risks, uncertainties and
assumptions that could cause those acts, events and circumstances to differ materially from the expectations described in
such forward-looking statements.
These factors include, among other things, commercial and other risks associated with the meeting of objectives and other
investment considerations, as well as other matters not yet known to the Company or not currently considered material by
the Company.
Environmental regulation
Safety
The Company’s Board believes that all workplace injuries are avoidable. To that end, Montem Resources has adopted an
overall environmental, health and safety policy. The detailed policies and procedures were written with the assistance of
third-party expertise in the development of such policies for coal mining in Alberta and British Columbia. These tailored
policies and procedures were in place for all 2020 operations.
During the 2020 field program, the Company conducted its operations in compliance with the relevant Albertan regulations
for occupational health and safety for coal mining. The Company recorded no Loss Time Injuries and continues to operate
without a Loss Time Injury since inception.
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Montem Resources Limited
Directors' report
31 December 2020
Directors specifically address Health, Safety and Environment issues at each Board meeting and are satisfied that there
were no reported Lost Time Injuries or environmental incidents during the period.
Permitting
Exploration and development activities require a variety of regulatory approvals as detailed in the applicable regulatory
regime, including environment plans, safety procedures and the preparation of plans to manage the undertaking of the
activities and the contractors engaged in undertaking such activities.
Alberta Legislation
In Alberta, coal projects are regulated by the Alberta Energy Regulator (AER) under the Environmental Protection and
Enhancement Act (EPEA) and the Coal Conservation Act (CCA). The following Albertan environmental legislation apply to
Montem Resources properties (excluding the Tent Mountain Mine which retains an EPEA approval):
●
●
●
●
Environmental Protection and Enhancement Act (EPEA)
Coal Conservation Act
Water Act
Public Lands Act
Canadian Federal Legislation
Coal mining is typically an activity that requires the preparation and submission of an Impact Assessment report as per the
Canadian federal Impact Assessment Act of 2019 and as established on a project by project basis by the Physical
Activities Regulation of that Act. Greenfield coal mine projects, including the Chinook Project, are generally subject to an
Impact Assessment according to the Physical Activities Regulations.
For the Tent Mountain Mine Re-start Project, however, the Company received written notice from the Federal regulator
(Impact Assessment Agency of Canada), that the project does not meet the thresholds for coal production capacity as
described in the Physical Activities Regulations.
8
Montem Resources Limited
Directors' report
31 December 2020
Information on Directors
Name:
Title:
Qualifications:
Experience and expertise:
Mark Lochtenberg
Chairman and Non-executive Director (appointed as Chairman on 13 February 2020)
LLB (Hons)
Mr Lochtenberg graduated with a Bachelor of Law (Hons) degree from Liverpool
University, U.K. and has been actively involved in the coal industry for more than 30
years.
Mr Lochtenberg is the former Executive Chairman and founding Managing Director of
ASX-listed Baralaba Coal Company Limited (formerly Cockatoo Coal Limited). He
was a principal architect of Cockatoo’s inception and growth from an early-stage
grassroots explorer through to an emerging mainstream coal producer.
Mr Lochtenberg was also formerly the co-head of Glencore International AG’s
worldwide coal division, where he spent 13 years overseeing a range of trading
activities including the identification, due diligence, negotiation, acquisition and
aggregation of the coal project portfolio that would become Xstrata Coal.
Prior to this Mr Lochtenberg established a coal “swaps” market for Bain Refco,
(Deutsche Bank) after having served as a senior coal trader for Hansen Neuerburg
AG and as coal marketing manager for Peko Wallsend Limited.
Mr Lochtenberg has previously been a Director of ASX-listed Pacific American Coal
Limited and Cumnock Coal Limited and of privately held United Collieries Pty Limited
and is currently a Director of Australian Transport and Energy Corridor Pty Limited,
(ATEC) and ASX-listed Nickel Mines Limited.
Director, Equus Mining Limited and Nickel Mines Limited
Other current directorships:
Former directorships (last 3 years): Nil
Special responsibilities:
Interests in shares:
Interests in options:
Interests in rights:
Contractual rights to shares:
Member of Audit and Risk Committee
8,782,154 ordinary shares
175,097
525,097
Nil
9
Montem Resources Limited
Directors' report
31 December 2020
Name:
Title:
Qualifications:
Experience and expertise:
Peter Doyle
Managing Director and Chief Executive Officer
BSc (Geol), MBA
Mr Doyle is a geologist with 25 years coal industry experience. Mr Doyle has worked
in roles in exploration, planning, development, production, and management.
Previous positions include VP Marketing and Business Development at Atrum Coal
Ltd, Chief Operating Officer at Cockatoo Coal Ltd, VP Coal at Wood Mackenzie and
Project Manager at Glencore (Xstrata Coal).
As well as having spent the first decade of his career working at coal mines in the
Hunter Valley, Mr Doyle has worked in project development, marketing and
management in the coal industries of China, USA, Mongolia, Russia and Europe. Mr
Doyle has been involved in successful greenfield and brownfield coal mine
developments, and managed coal mines selling to export metallurgical markets.
Mr Doyle was previously a Director at Wiggins Island Coal Terminal, and at ATEC
Rail Group.
Mr Doyle has been based in Canada since 2014. Mr Doyle joined Montem Canada in
2017 and became Managing Director of the Company in January 2018.
Mr Doyle holds a Bachelor of Science (Geology), and MBA from Newcastle
University.
Other current directorships:
Nil
Former directorships (last 3 years): Nil
Nil
Special responsibilities:
3,569,728 ordinary shares
Interests in shares:
1,762,889
Interests in options:
3,200,389
Interests in rights:
Nil
Contractual rights to shares:
Name:
Title:
Qualifications:
Experience and expertise:
Mr Robert Tindall
Non-executive Director
BA, M.Tax
Mr Tindall has over 25 years of resources and finance experience and is the founder
of Montem Resources.
Mr Tindall has been the founder of several resource companies including being the
Co-Founder and Chairman of Origins, a bulk soft commodities business. Mr Tindall
was previously the CEO of Transatlantic Mining Corporation. He is the principal of
GTG Corporate and has extensive experience in funding a number of resource
projects globally including coal projects in Australia.
Mr Tindall holds a Bachelor of Arts and a Master of Taxation Degree and is a Fellow
of the Australian Institute of Company Directors.
Mr Tindall holds a Bachelor of Arts and Master of Taxation.
Kootenay Zinc Corporation, Director and Chief Executive Officer
Other current directorships:
Former directorships (last 3 years): Nil
Special responsibilities:
Interests in shares:
Interests in options:
Interests in rights:
Contractual rights to shares:
Member of Remuneration and Nomination Committee
13,936,864 ordinary shares
466,926
716,926
Nil
10
Montem Resources Limited
Directors' report
31 December 2020
Name:
Title:
Qualifications:
Experience and expertise:
Other current directorships:
Ms Susie Henderson
Non-executive Director
BBus (Acct), CPA, GAICD.
Ms Henderson is a management consultant with focus on infrastructure and mining.
Ms Henderson is currently President North America for GHD Advisory, a global
consulting firm.
Ms Henderson has over 20 years global experience in the field and is highly
respected for her strong strategic positioning skills and has a background in
operational and financial audit. Ms Henderson is also currently a committee member
on the Global GHD Board finance committee Previous roles include GM – Strategic
Infrastructure and Government Relations at Macarthur Coal Ltd, Executive
Management with Aurizon (Coal) and Project Development Manager with London
Underground.
Ms Henderson has worked across a wide range of industries and across a variety of
jurisdictions in Canada, the United States, Latin America, South East Asia, England
and Australia. Ms Henderson's areas of focus include government, mining/ resources,
infrastructure/ logistics and energy. In addition to her degree in Accounting, Ms
Henderson has completed the globally recognized and rigorous CPA® and AICD®
Programs as well as being nominated for the EY Entrepreneur of the Year.
Ms Henderson is a Graduate of Australian Institute of Company Directors, a Certified
Practicing Accountant and holds a Bachelor of Business.
Director, Waterfront Toronto
Director, Women in Mining (Canada)
Former directorships (last 3 years): Balance Advisory Pty Ltd
Special responsibilities:
Interests in shares:
Interests in options:
Interests in rights:
Contractual rights to shares:
Name:
Title:
Qualifications:
Experience and expertise:
Balance Infrastructure and Investments Inc
Chair of Audit and Risk Committee and Member of Remuneration and Nomination
Committee
368,431 fully paid ordinary shares
175,097
425,097
Nil
Mr Will Souter
Non-executive Director
BCom, LLB (Adel), IPAA, Admitted to the Supreme Court of NSW,GAICD
Mr Souter is a lawyer and investment banker with extensive global transaction and
fundraising experience, particularly in the resource sector.
Mr Souter was previously Executive Director at RFC Ambrian and currently CFO at
Atomo Diagnostics.
Prior roles of Mr Souter include as a Director at PricewaterhouseCoopers, and at
Minter Ellison Lawyers.
Other current directorships:
Nil
Former directorships (last 3 years): Nil
Special responsibilities:
Interests in shares:
Interests in options:
Interests in rights:
Contractual rights to shares:
Chair of Remuneration and Nomination Committee and member of Audit and Risk
Committee
341,763 ordinary shares
175,097
425,097
Nil
'Other current directorships' quoted above are current directorships for listed entities only and excludes directorships of all
other types of entities, unless otherwise stated.
'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.
11
Montem Resources Limited
Directors' report
31 December 2020
Company Secretary and Chief Financial Officer
Melanie Leydin – BBus (Acc. Corp Law) CA FGIA
Melanie Leydin holds a Bachelor of Business majoring in Accounting and Corporate Law. Ms Leydin is a member of the
Institute of Chartered Accountants, Fellow of the Governance Institute of Australia and is a Registered Company Auditor.
Ms Leydin graduated from Swinburne University in 1997, became a Chartered Accountant in 1999 and since February
2000 has been the principal of Leydin Freyer. The practice provides outsourced company secretarial and accounting
services to public and private companies across a host of industries including but not limited to the resources, technology,
bioscience, biotechnology, and health sectors.
Ms Leydin has over 25 years’ experience in the accounting profession and over 15 years as a Company Secretary. Ms
Leydin has extensive experience in relation to public company responsibilities, including ASX and ASIC compliance,
control and implementation of corporate governance, statutory financial reporting, reorganisation of Companies and
shareholder relations.
Meetings of directors
The number of meetings of the Company's Board of Directors ('the Board') and of each Board committee held during the
year ended 31 December 2020, and the number of meetings attended by each Director were:
Full Board
Attended
Held
Audit and Risk
Held
Attended
Remuneration and
nomination
Attended
Held
Rob Yeates
Peter Doyle
Rob Tindall
William Souter
Susie Henderson
Mark Lochtenberg
2
15
15
15
15
15
2
15
15
15
15
15
-
-
-
1
1
1
-
-
-
1
1
1
-
-
1
1
1
-
-
-
1
1
1
-
Held: represents the number of meetings held during the time the Director held office or was a member of the relevant
committee.
Shares under option
Unissued ordinary shares of Montem Resources Limited under option at the date of this report are as follows:
Grant date
12/01/2018
12/01/2018
12/01/2018
12/01/2018
31/01/2018
31/01/2018
31/01/2018
06/04/2018
06/04/2018
06/04/2018
08/07/2019
08/07/2019
08/07/2019
24/09/2019
24/09/2019
24/09/2019
Expiry date
12/01/2023
12/01/2023
31/12/2023
31/12/2024
12/01/2023
12/01/2023
12/01/2023
12/01/2023
31/12/2023
31/12/2024
12/01/2023
31/12/2023
31/12/2024
23/09/2022
23/09/2022
23/09/2022
Exercise
price
Number
under option
$0.6300
$0.6300
$0.7500
$1.0000
$0.6300
$0.7500
$1.0000
$0.6300
$0.7500
$1.0000
$0.6300
$0.7500
$1.0000
$0.2500
$0.2500
$0.5000
1,086,667
649,805
649,806
649,806
233,463
233,463
161,832
116,732
116,732
116,730
58,366
58,366
58,365
1,000,000
375,000
750,000
6,315,133
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.
12
Montem Resources Limited
Directors' report
31 December 2020
Shares under performance rights
Unissued ordinary shares of Montem Resources Limited under performance rights at the date of this report are as follows:
Grant date
01/06/2018
08/07/2019
24/09/2019
30/06/2020
30/06/2020
Expiry date
01/06/2023
01/06/2023
30/06/2023
01/06/2023
30/06/2023
Exercise
price
Number
under rights
$0.0000
$0.0000
$0.0000
$0.0000
$0.0000
2,544,613
175,097
3,000,000
1,500,000
1,500,000
8,719,710
No person entitled to exercise the performance rights had or has any right by virtue of the performance right to participate
in any share issue of the Company or of any other body corporate.
Shares issued on the exercise of options
There were no ordinary shares of Montem Resources Limited issued on the exercise of options during the year ended 31
December 2020 and up to the date of this report.
Shares issued on the exercise of performance rights
There were no ordinary shares of Montem Resources Limited issued on the exercise of performance rights during the year
ended 31 December 2020 and up to the date of this report.
Indemnity and insurance of officers
The Company has indemnified the Directors and executives of the Company for costs incurred, in their capacity as a
Director or executive, for which they may be held personally liable, except where there is a lack of good faith.
During the financial year, the Company paid a premium in respect of a contract to insure the Directors and executives of
the Company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits
disclosure of the nature of the liability and the amount of the premium.
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.
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.
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
William Buck continues in office in accordance with section 327 of the Corporations Act 2001.
13
Montem Resources Limited
Directors' report
31 December 2020
This report is made in accordance with a resolution of the Board of Directors.
On behalf of the Directors
___________________________
Mark Lochtenberg
Chairman
9 March 2021
Remuneration report (audited)
The remuneration report details the Key Management Personnel remuneration arrangements for the Consolidated Entity,
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.
The remuneration report is set out under the following main headings:
●
●
●
●
●
Principles used to determine the nature and amount of remuneration
Details of remuneration
Service agreements
Share-based compensation
Additional disclosures relating to Key Management Personnel
Principles used to determine the nature and amount of remuneration
The objective of the Consolidated Entity's executive reward framework is to ensure reward for performance is competitive
and appropriate for the results delivered. The framework aligns executive reward with the achievement of strategic
objectives and the creation of value for shareholders, and it is considered to conform to the market best practice for the
delivery of reward. The Board of Directors ('the Board') ensures that executive reward satisfies the following key criteria for
good reward governance practices:
●
●
●
●
competitiveness and reasonableness
acceptability to shareholders
performance linkage / alignment of executive compensation
transparency
The Board is responsible for determining and reviewing remuneration arrangements for its directors and executives. The
performance of the Consolidated Entity depends on the quality of its directors and executives. The remuneration
philosophy is to attract, motivate and retain high performance and high quality personnel.
In consultation with external remuneration consultants (where appropriate), the Board has structured an executive
remuneration framework that is market competitive and complementary to the reward strategy of the Consolidated Entity.
The reward framework is designed to align executive reward to shareholders' interests. The Board have considered that it
should seek to enhance shareholders' interests by:
●
●
achieving project milestones, funding requirements and operational excellence as a core component of plan design
focusing on sustained growth in shareholder wealth, consisting of growth in share price (and potential future
dividends), and delivering constant or increasing return on assets as well as focusing the executive on key non-
financial drivers of value
attracting and retaining high calibre executives
●
Additionally, the reward framework should seek to enhance executives' interests by:
●
●
●
rewarding capability and experience
reflecting competitive reward for contribution to growth in shareholder wealth
providing a clear structure for earning rewards
14
Montem Resources Limited
Directors' report
31 December 2020
In accordance with best practice corporate governance, the structure of Non-executive Director and Executive Director
remuneration is separate.
Non-executive Directors remuneration
Fees and payments to Non-executive Directors reflect the demands and responsibilities of their role. Non-executive
Directors' fees and payments are reviewed periodically by the Board. The Board may, from time to time, receive advice
from independent remuneration consultants to ensure Non-executive Directors' fees and payments are appropriate and in
line with the market. The Chairman's fees are determined independently to the fees of other Non-executive Directors based
on comparative roles in the external market. The Chairman is not present at any discussions relating to the determination
of his own remuneration.
ASX listing rules require the aggregate Non-executive Directors' remuneration be determined periodically by a general
meeting. The Non-executive Directors annual aggregate remuneration will be put forward for Shareholder approval at the
2021 Annual General Meeting following the Company's listing on the ASX on 15 September 2020.
Executive remuneration
The Consolidated Entity aims to reward executives based on their position and responsibility, with a level and mix of
remuneration which has both fixed and variable components.
The executive remuneration and reward framework has four components:
●
●
●
●
base pay and non-monetary benefits
short-term performance incentives
share-based payments
other remuneration such as superannuation and long service leave
The combination of these comprises the Executive's total remuneration.
Fixed remuneration, consisting of base salary, superannuation and non-monetary benefits, are reviewed annually by the
Board based on individual and business unit performance, the overall performance of the Consolidated Entity and
comparable market remunerations.
Executives may receive their fixed remuneration in the form of cash or other fringe benefits (for example motor vehicle
benefits) where it does not create any additional costs to the Consolidated Entity and provides additional value to the
executive.
The short-term incentives ('STI') are payable to Executives based upon the attainment of agreed corporate and individual
milestones and are reviewed and approved by the Board of Directors.
The long-term incentives ('LTI') include long service leave and share-based payments. Shares are awarded to executives
over a period of three years based on long-term incentive measures. These include increase in shareholders value relative
to the entire market and the increase compared to the Consolidated Entity's direct competitors. The Board reviewed the
long-term equity-linked performance incentives specifically for executives during the year ended 2020.
Consolidated Entity performance and link to remuneration
Remuneration for certain individuals is directly linked to the performance of the Consolidated Entity. A portion of cash
bonus and incentive payments are dependent on achieving defined project related milestones, funding targets and other
targets deemed appropriate by the Board. The remaining portion of the cash bonus and incentive payments may be at the
discretion of the Board.
The Board is of the opinion that the continued success of the Consolidated Entity over the last few years can be attributed
in part to the adoption of performance based compensation and is satisfied that this improvement will continue to increase
shareholder wealth if maintained over the coming years.
Use of remuneration consultants
The Remuneration and Nomination Committee may, from time to time, receive advice from independent remuneration
consultants to ensure Non-executive Directors' fees and payments are appropriate and in line with the market. An agreed
set of protocols were put in place to ensure that the remuneration recommendations would be free from undue influence
from key management personnel. The Remuneration and Nomination Committee did not use the services of a
remuneration consultant during the year.
15
Montem Resources Limited
Directors' report
31 December 2020
Details of remuneration
Amounts of remuneration
Details of the remuneration of Key Management Personnel of the Consolidated Entity are set out in the following tables.
The Key Management Personnel of the Consolidated Entity consisted of the following Directors of Montem Resources
Limited:
●
●
●
●
●
●
Mark Lochtenberg, Chairman and Non-executive Director (appointed as Chairman on 13 February 2020)
Peter Doyle, Managing Director and CEO
Robert Tindall, Non-executive Director
Susie Henderson, Non-executive Director
William Souter, Non-executive Director
Robert Yeates (Non-executive Chairman, resigned 13 February 2020)
And the following persons:
●
●
●
Robert Bell, Chief Commercial Officer
Alan Ahlgren, Chief Financial Officer (Resigned on 2 November 2020)
Melanie Leydin, Chief Financial Officer and Company Secretary (Appointed on 2 November 2020)
Short-term
benefits
Post-
employment
benefits
Long-term
benefits
Share-
based
payments
Cash
salary
and fees
$
Annual
leave
$
Super-
Bonus annuation
$
$
Long
service
leave
$
Equity-
settled
$
Total
$
46,285
60,000
34,375
34,375
14,743
-
-
-
-
-
-
-
-
-
-
4,397
-
-
-
-
-
-
-
-
-
41,866
90,761
44,130
44,130
(125,215)
92,548
150,761
78,505
78,505
(110,472)
501,430
27,481
48,297
3,043
-
337,027
917,278
282,559
106,968
13,350
1,094,085
22,973
-
-
50,454
-
-
-
48,297
3,043
-
-
10,483
-
-
-
-
164,128
-
-
472,703
106,968
13,350
596,827 1,800,146
2020
Non-Executive Directors:
Mark Lochtenberg
Robert Tindall
Susie Henderson
William Souter
Robert Yeates (i)
Executive Directors:
Peter Doyle
Other Key Management
Personnel:
Robert Bell (ii)
Alan Ahlgren (iii)
Melanie Leydin (iv)
(i)
Mr Yeates ceased employment with the Company during February 2020. His equity settled remuneration amounts for
the current financial year were in credit due to canceled / forfeited options and performance rights.
(ii) Mr Robert Bell became a part time employee during the year.
(iii) Mr Alan Ahlgren resigned on 2 November 2020
(iv) The Company paid $13,350 for accounting and corporate secretarial services from an entity controlled by Ms Melanie
Leydin, during her term as Chief Financial Officer. All transactions were made on normal commercial terms and
conditions and at market rates.
Bonus awarded for 2020 were in relation to the capital raising and ASX listing as approved by the Board. Entire bonus
amount is withheld until a capital raise is undertaken.
16
Montem Resources Limited
Directors' report
31 December 2020
2019
Non-Executive Directors:
Mark Lochtenberg
Robert Tindall
Susie Henderson
William Souter
Robert Yeates
Executive Directors:
Peter Doyle
Other Key Management
Personnel:
Robert Bell
Alan Ahlgren
Short-term
benefits
Cash
salary
and fees
$
22,831
60,000
30,000
30,000
125,000
-
-
-
-
-
528,085
11,122
389,504
104,764
1,290,184
9,479
-
20,601
Post-
employment
benefits
Long-term
benefits
Share-
based
payments
Annual
leave
$
Bonus
$
Super-
annuation
$
Long
service
leave
$
Equity-
settled
$
Total
$
-
-
-
-
-
-
-
-
-
2,169
-
-
-
-
-
-
-
-
-
15,918
138,568
58,468
58,468
238,875
40,918
198,568
88,468
88,468
363,875
3,048
-
315,759
858,014
3,048
-
8,265
607,861
205,830
-
-
104,764
-
- 1,031,886 2,350,936
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Name
Non-Executive Directors:
Mark Lochtenberg
Robert Tindall
Susie Henderson
William Souter
Robert Yeates
Executive Directors:
Peter Doyle
Other Key Management
Personnel:
Robert Bell
Alan Ahlgren
Fixed remuneration
2019
2020
At risk - STI
At risk - LTI
2020
2019
2020
2019
77%
49%
58%
50%
13%
61%
27%
34%
44%
34%
-
-
-
-
-
63%
65%
6%
67%
100%
68%
100%
-
-
-
-
-
-
-
-
-
-
23%
51%
42%
50%
(113%)
39%
73%
66%
56%
66%
31%
35%
33%
-
32%
-
17
Montem Resources Limited
Directors' report
31 December 2020
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:
Peter Doyle
Managing Director and Chief Executive Officer
1 June 2018
Ongoing
Annual salary of CAD 475,000 excluding statutory and other required deductions.
Mr Doyle’s employment agreement is for an indefinite term, continuing until
terminated by either the Company or Mr Doyle. Mr Doyle may terminate his
employment agreement by giving at least 3 months’ notice in writing.
The Company may terminate the agreement at any time for cause (with no payment
of any additional remuneration save for any accrued and owing entitlements) or
without cause at any time upon the Company providing Mr Doyle with payment of 12
months of Mr Doyle’s then total fixed remuneration.
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Robert Bell
Chief Commercial Officer
17 May 2018
Ongoing
Annual salary of CAD 350,000 less statutory and other required deductions.
Name:
Title:
Agreement commenced:
Details:
Name:
Title:
Agreement commenced:
Term of agreement:
Mr Bell may terminate his employment agreement by giving at least 3 months’ notice
in writing. The Company may terminate the agreement at any time for cause (with no
payment of any additional remuneration save for any accrued and owing entitlements)
or without cause at any time upon by providing Mr Bell with payment of 12 months of
his then total fixed remuneration.
Alan Ahlgren
Chief Financial Officer (Resigned on 2 November 2020)
13 March 2018
Mr Ahlgren’s services as the Chief Financial Officer for the Company Corp were
provided under a consulting services agreement between Seatrend Strategy Group
(Seatrend) and Montem Resources Corp dated 13 March 2018. In consideration for
performing the services, the Company paid Seatrend a fixed retainer of CAD 5,000
per month for a commitment of 32 hours, with any hours in excess of this amount
being payable at CAD 195 per hour.
Melanie Leydin
Company Secretary and Chief Financial Officer
2 November 2020
Ms Leydin’s services as the Chief Financial Officer for the Company are provided
under a consulting services agreement between the Company and Leydin Freyer
Corp Pty Ltd. In consideration for performing the services, the Company pays an
hourly rate of $300 per hour.
Key Management Personnel have no entitlement to termination payments in the event of removal for misconduct.
Share-based compensation
Issue of shares
There were no shares issued to Directors and other Key Management Personnel as part of compensation during the year
ended 31 December 2020.
18
Montem Resources Limited
Directors' report
31 December 2020
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:
Name
Number of
options
granted
Grant date
Vesting date and
exercisable date
Expiry date
Exercise
price
Fair value
per option at
grant date
Peter Doyle
Peter Doyle
Peter Doyle
Robert Tindall
Robert Tindall
Robert Tindall
Robert Bell
Robert Bell
Robert Bell
Robert Yeates*
Robert Yeates*
Robert Yeates*
William Souter
William Souter
William Souter
Susie Henderson
Susie Henderson
Susie Henderson
Mark Lochtenberg
Mark Lochtenberg
Mark Lochtenberg
Peter Doyle
Peter Doyle
Peter Doyle
Peter Doyle
Robert Bell
Robert Bell
Robert Bell
Robert Bell
233,463
233,463
233,463
155,642
155,642
155,642
175,097
175,097
175,097
233,463
233,463
161,832
58,366
58,366
58,365
58,366
58,366
58,365
58,366
58,366
58,365
375,000
125,000
187,500
375,000
150,000
75,000
87,500
200,000
12-Jan-18
12-Jan-18
12-Jan-18
12-Jan-18
12-Jan-18
12-Jan-18
12-Jan-18
12-Jan-18
12-Jan-18
31-Jan-18
31-Jan-18
31-Jan-18
06-Apr-18
06-Apr-18
06-Apr-18
06-Apr-18
06-Apr-18
06-Apr-18
08-Jul-19
08-Jul-19
08-Jul-19
24-Sep-19
24-Sep-19
24-Sep-19
24-Sep-19
24-Sep-19
24-Sep-19
24-Sep-19
24-Sep-19
12-Jan-18
01-Jan-19
01-Jan-20
12-Jan-18
01-Jan-19
01-Jan-20
12-Jan-18
01-Jan-19
01-Jan-20
01-Feb-19
01-Feb-20
01-Feb-21
06-Apr-18
01-Jan-19
01-Jan-20
06-Apr-18
01-Jan-19
01-Jan-20
08-Jul-19
01-Jan-20
01-Jan-21
01-Apr-20
01-Apr-20
30-Jun-20
01-Apr-21
01-Apr-20
01-Apr-20
30-Jun-20
01-Apr-21
12-Jan-23
31-Dec-23
31-Dec-24
12-Jan-23
31-Dec-23
31-Dec-24
12-Jan-23
31-Dec-23
31-Dec-24
12-Jan-23
12-Jan-23
12-Jan-23
12-Jan-23
31-Dec-23
31-Dec-24
12-Jan-23
31-Dec-23
31-Dec-24
12-Jan-23
31-Dec-23
31-Dec-24
23-Sep-22
23-Sep-22
23-Sep-22
23-Sep-22
23-Sep-22
23-Sep-22
23-Sep-22
23-Sep-22
*
Mr Yeates ceased employment with the Company during February 2020.
Options granted carry no dividend or voting rights.
$0.6300
$0.7500
$1.0000
$0.6300
$0.7500
$1.0000
$0.6300
$0.7500
$1.0000
$0.6300
$0.7500
$1.0000
$0.6300
$0.7500
$1.0000
$0.6300
$0.7500
$1.0000
$0.6300
$0.7500
$1.0000
$0.2500
$0.2500
$0.2500
$0.5000
$0.2500
$0.2500
$0.2500
$0.5000
$0.361
$0.374
$0.381
$0.361
$0.374
$0.381
$0.361
$0.374
$0.381
$0.359
$0.347
$0.325
$0.355
$0.368
$0.374
$0.355
$0.368
$0.374
$0.099
$0.106
$0.111
$0.129
$0.129
$0.133
$0.106
$0.129
$0.129
$0.133
$0.106
The number of options over ordinary shares granted to and vested by Directors and other Key Management Personnel as
part of compensation during the year ended 31 December 2020 are set out below:
Name
Mark Lochtenberg
Peter Doyle
Robert Bell
Robert Tindall
Susie Henderson
Robert Yeates*
William Souter
Number of Number of Number of Number of
options
granted
options
granted
options
vested
options
vested
during the during the during the during the
year
2020
year
2019
year
2020
year
2019
-
-
-
-
-
-
-
350,097
2,000,000
1,000,000
175,000
175,000
300,000
175,000
58,365
920,963
487,597
155,642
58,365
233,463
58,365
58,366
233,463
175,097
155,642
58,366
233,463
58,366
19
Montem Resources Limited
Directors' report
31 December 2020
*
Mr Yeates ceased employment with the Company during February 2020.
Values of options over ordinary shares granted, exercised and lapsed for Directors and other Key Management Personnel
as part of compensation during the year ended 31 December 2020 are set out below:
Name
Peter Doyle
Robert Tindall
Robert Bell
Susie Henderson
William Souter
Mark Lochtenberg
Robert Yeates*
Value of
options
granted
Value of
options
Value of
options
lapsed
exercised
during the during the during the
year
$
year
$
year
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(107,319)
(17,413)
(54,534)
(17,413)
(17,413)
(17,413)
(46,328)
*
Mr Yeates ceased employment with the Company during February 2020.
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:
Name
Mark Lochtenberg
Mark Lochtenberg
Mark Lochtenberg
Peter Doyle
Peter Doyle
Peter Doyle
Peter Doyle
Robert Bell
Robert Bell
Robert Bell
Robert Bell
Robert Tindall
Robert Tindall
Robert Tindall
Robert Yeates*
Susie Henderson
Susie Henderson
Susie Henderson
William Souter
William Souter
William Souter
Number of
rights
granted
175,097
175,000
175,000
700,389
1,500,000
500,000
500,000
525,292
750,000
100,000
100,000
466,926
125,000
125,000
245,002
175,097
125,000
125,000
175,097
125,000
125,000
Grant date
Vesting date and
exercisable date
Expiry date
08-Jul-19
30-Jun-20
30-Jun-20
01-Jun-18
24-Sep-19
30-Jun-20
30-Jun-20
01-Jun-18
24-Sep-19
30-Jun-20
30-Jun-20
01-Jun-18
30-Jun-20
30-Jun-20
01-Jun-18
01-Jun-18
30-Jun-20
30-Jun-20
01-Jun-18
30-Jun-20
30-Jun-20
01-Jun-23
30-Jun-23
01-Jun-23
30-Sep-20
30-Jun-23
30-Jun-23
01-Jun-23
30-Sep-20
30-Jun-23
30-Jun-23
01-Jun-23
30-Sep-20
30-Jun-23
01-Jun-23
30-Sep-20
30-Sep-20
30-Jun-23
01-Jun-23
30-Sep-20
30-Jun-23
01-Jun-23
01-Jun-23
30-Jun-23
01-Jun-23
01-Jun-23
30-Jun-23
30-Jun-23
01-Jun-23
01-Jun-23
30-Jun-23
30-Jun-23
01-Jun-23
01-Jun-23
30-Jun-23
01-Jun-23
01-Jun-23
01-Jun-23
30-Jun-23
01-Jun-23
01-Jun-23
30-Jun-23
01-Jun-23
*
Mr Yeates ceased employment with the Company during February 2020.
Performance rights granted carry no dividend or voting rights.
Fair value
per right
at grant
date
$0.250
$0.150
$0.150
$0.500
$0.250
$0.150
$0.150
$0.500
$0.250
$0.150
$0.150
$0.500
$0.150
$0.150
$0.500
$0.500
$0.150
$0.150
$0.500
$0.150
$0.150
20
Montem Resources Limited
Directors' report
31 December 2020
The number of performance rights over ordinary shares granted to and vested by Directors and other Key Management
Personnel as part of compensation during the year ended 31 December 2020 are set out below:
Name
Mark Lochtenberg
Peter Doyle
Robert Bell
Robert Tindall
Susie Henderson
William Souter
Robert Yeates*
Number of Number of Number of Number of
rights
granted
rights
granted
rights
vested
rights
vested
during the during the during the during the
year
2020
year
2019
year
2020
year
2019
350,000
1,000,000
200,000
250,000
250,000
250,000
-
175,097
1,500,000
750,000
-
-
-
-
-
700,389
525,292
466,926
175,097
175,097
245,002
-
-
-
-
-
-
-
*
Mr Yeates ceased employment with the Company during February 2020.
Values of performance rights over ordinary shares granted, vested and lapsed for Directors and other Key Management
Personnel as part of compensation during the year ended 31 December 2020 are set out below:
Value of
Value of
Value of
Name
Mark Lochtenberg
Peter Doyle
Robert Bell
Robert Tindall
Susie Henderson
William Souter
Robert Yeates*
rights
granted
rights
vested
during the during the during the
year
$
rights
lapsed
year
$
year
$
52,500
150,000
30,000
37,500
37,500
37,500
-
-
350,195
262,646
233,463
87,549
87,549
122,501
-
-
-
-
-
-
227,694
*
Mr Yeates ceased employment with the Company during February 2020.
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 Consolidated Entity, including their personally related parties, is set out below:
Ordinary shares
Mark Lochtenberg
Peter Doyle
Robert Tindall
Susie Henderson
William Souter
Robert Yeates*
Balance at
the start of
the year
Additions
Disposals
other
Balance at
the end of
the year
3,400,000
3,569,728
14,598,530
368,431
341,763
1,200,389
23,478,841
5,382,154
-
-
-
-
-
5,382,154
-
-
(661,666)
-
-
-
(661,666)
-
8,782,154
3,569,728
-
- 13,936,864
368,431
-
341,763
-
-
(1,200,389)
(1,200,389) 26,998,940
*
Mr Yeates ceased employment with the Company during February 2020.
21
Montem Resources Limited
Directors' report
31 December 2020
Option holding
The number of options over ordinary shares in the Company held during the financial year by each Director and other
members of Key Management Personnel of the Consolidated Entity, including their personally related parties, is set out
below:
Options over ordinary shares
Peter Doyle
Robert Tindall
Robert Bell
Susie Henderson
William Souter
Mark Lochtenberg
Robert Yeates*
Balance at
the start of
the year
Granted
Exercised
Forfeited
Balance at
the end of
the year
2,700,389
641,926
1,525,291
350,097
350,097
350,097
1,000,389
6,918,286
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(937,500)
(175,000)
(487,500)
(175,000)
(175,000)
(175,000)
(371,631)
(2,496,631)
1,762,889
466,926
1,037,791
175,097
175,097
175,097
628,758
4,421,655
*
Mr Yeates ceased employment with the Company during February 2020.
Options over ordinary shares
Peter Doyle
Robert Tindall
Robert Bell
William Souter
Susie Henderson
Mark Lochtenberg
Robert Yeates*
Vested and Vested and
exercisable unexercisable
Balance at
the end of
the year
920,963
155,642
487,597
58,365
58,365
58,366
233,463
1,972,761
-
-
-
-
-
-
-
-
920,963
155,642
487,597
58,365
58,365
58,366
233,463
1,972,761
*
Mr Yeates ceased employment with the Company during February 2020.
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 Consolidated Entity, including their personally related parties, is set
out below:
Performance rights over ordinary shares
Peter Doyle
Robert Tindall
Robert Bell
William Souter
Susie Henderson
Mark Lochtenberg
Robert Yeates*
Balance at
the start of
the year
Granted
Vested
Forfeited
Balance at
the end of
the year
2,200,389
466,926
1,275,292
175,097
175,097
175,097
700,389
5,168,287
1,000,000
250,000
200,000
250,000
250,000
350,000
-
2,300,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(455,387)
(455,387)
3,200,389
716,926
1,475,292
425,097
425,097
525,097
245,002
7,012,900
*
Mr Yeates ceased employment with the Company during February 2020.
22
Montem Resources Limited
Directors' report
31 December 2020
Performance rights over ordinary shares
Peter Doyle
Robert Tindall
Robert Bell
William Souter
Susie Henderson
Robert Yeates*
Vested and Vested and
exercisable unexercisable
Balance at
the end of
the year
700,389
466,926
525,292
175,097
175,097
245,002
2,287,803
-
-
-
-
-
-
-
700,389
466,926
525,292
175,097
175,097
245,002
2,287,803
*
Mr Yeates ceased employment with the Company during February 2020.
This concludes the remuneration report, which has been audited.
Non-audit services
Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year by the auditor
are outlined in Note 19 to the financial statements.
The Directors are satisfied that the provision of non-audit services during the financial year, by the auditor (or by another
person or firm on the auditor's behalf), is compatible with the general standard of independence for auditors imposed by
the Corporations Act 2001.
The Directors are of the opinion that the services as disclosed in Note 19 to the financial statements do not compromise
the external auditor's independence requirements of the Corporations Act 2001 for the following reasons:
●
all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity
of the auditor; and
none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code
of Ethics for Professional Accountants (including Independence Standards) issued by the Accounting Professional
and Ethical Standards Board, including reviewing or auditing the auditor's own work, acting in a management or
decision-making capacity for the Company, acting as advocate for the Company or jointly sharing economic risks and
rewards.
●
Officers of the Company who are former partners of William Buck
There are no officers of the Company who are former partners of William Buck.
23
AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE
CORPORATIONS ACT 2001 TO THE MEMBERS OF MONTEM RESOURCES LIMITED
I declare that, to the best of my knowledge and belief during the year ended 31 December
2020 there have been:
— no contraventions of the auditor independence requirements as set out in the
Corporations Act 2001 in relation to the audit; and
— no contraventions of any applicable code of professional conduct in relation to the
audit.
William Buck Audit (Vic) Pty Ltd
ABN 59 116 151 136
J. C. Luckins
Director
Dated this 9th March 2021
Montem Resources Limited
Statement of profit or loss and other comprehensive income
For the year ended 31 December 2020
Other income
Other income
Interest income
Expenses
Employee benefits expense
Professional fees
Marketing and business development
Corporate expenses
Depreciation charges
Financing costs
Loss before income tax expense
Income tax expense
Note
Consolidated
2020
$
2019
$
-
-
118,167
2,059
5
5
5
5
5
6
(1,633,181)
(203,598)
(114,493)
(1,044,682)
(37,796)
(377,330)
(1,840,007)
(317,422)
(71,742)
(934,369)
(38,662)
(223,973)
(3,411,080)
(3,305,949)
-
-
Loss after income tax expense for the year attributable to the owners of
Montem Resources Limited
(3,411,080)
(3,305,949)
Other comprehensive (loss) / income
Items that may be reclassified subsequently to profit or loss net of tax
Foreign currency translation
(1,294,358)
359,283
Other comprehensive (loss) / income for the year, net of tax
(1,294,358)
359,283
Total comprehensive loss for the year attributable to the owners of Montem
Resources Limited
Basic earnings per share
Diluted earnings per share
(4,705,438)
(2,946,666)
Cents
Cents
26
26
(2.2411)
(2.2411)
(2.9196)
(2.9196)
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
25
Montem Resources Limited
Statement of financial position
As at 31 December 2020
Assets
Current assets
Cash and cash equivalents
Accounts receivable
Deposits and advances
Prepayments
Total current assets
Non-current assets
Receivables
Plant and equipment
Right-of-use assets
Exploration and evaluation
Non-current deposits
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Borrowings
Lease liability
Employee benefits
Total current liabilities
Non-current liabilities
Borrowings
Lease liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Note
Consolidated
2020
$
2019
$
7
8
3,434,480
104,946
33,117
32,059
3,604,602
1,430,751
333,115
17,119
25,858
1,806,843
9
10
11
5,103
707,730
208,576
-
752,805
239,645
19,561,890 14,556,002
675,610
20,834,130 16,224,062
350,831
24,438,732 18,030,905
12
13
14
845,348
-
116,144
191,192
1,152,684
1,086,365
4,401,842
85,909
129,962
5,704,078
40,671
109,017
149,688
-
162,581
162,581
1,302,372
5,866,659
23,136,360 12,164,246
15
16
37,313,701 22,430,473
3,685,834
(13,952,061)
2,748,777
(16,926,118)
23,136,360 12,164,246
The above statement of financial position should be read in conjunction with the accompanying notes
26
Montem Resources Limited
Statement of changes in equity
For the year ended 31 December 2020
Consolidated
Foreign
currency
translation
reserve
$
Share based
payments
reserve
$
Issued
capital
$
Accumulated
losses
$
Total equity
$
Balance at 1 January 2019
14,560,004
113,102
2,042,481
(10,646,112)
6,069,475
Loss after income tax expense for the year
Other comprehensive income for the year, net
of tax
Total comprehensive (loss) / income for the
year
Transactions with owners in their capacity as
owners:
Contributions of equity, net of transaction costs
(Note 15)
Share-based payments (Note 27)
-
-
-
-
-
(3,305,949)
(3,305,949)
359,283
359,283
-
-
-
359,283
(3,305,949)
(2,946,666)
7,870,469
-
-
-
-
1,170,968
-
-
7,870,469
1,170,968
Balance at 31 December 2019
22,430,473
472,385
3,213,449
(13,952,061) 12,164,246
Consolidated
Foreign
currency
translation
reserve
$
Share based
payments
reserve
$
Issued
capital
$
Accumulated
losses
$
Total equity
$
Balance at 1 January 2020
22,430,473
472,385
3,213,449
(13,952,061) 12,164,246
Loss after income tax expense for the year
Other comprehensive loss for the year, net of
tax
-
-
-
-
(3,411,080)
(3,411,080)
(1,294,358)
-
-
(1,294,358)
Total comprehensive loss for the year
-
(1,294,358)
-
(3,411,080)
(4,705,438)
Transactions with owners in their capacity as
owners:
Contributions of equity, net of transaction costs
(Note 15)
Share-based payments (Note 27)
Share options and rights lapsed
14,883,228
-
-
-
-
-
-
794,324
(437,023)
-
-
437,023
14,883,228
794,324
-
Balance at 31 December 2020
37,313,701
(821,973)
3,570,750
(16,926,118) 23,136,360
The above statement of changes in equity should be read in conjunction with the accompanying notes
27
Montem Resources Limited
Statement of cash flows
For the year ended 31 December 2020
Cash flows from operating activities
Payments to suppliers and employees
Interest and other finance costs paid
Note
Consolidated
2020
$
2019
$
(1,709,927)
(13,861)
(2,088,958)
(42,149)
Net cash used in operating activities
25
(1,723,788)
(2,131,107)
Cash flows from investing activities
Payments for property, plant and equipment
Payments for exploration and evaluation
Payments for security deposits
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Share issue transaction costs
Proceeds from borrowings
Repayment of borrowings
Repayment of lease liabilities
Net cash from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effects of exchange rate changes on cash and cash equivalents
(41,701)
(6,004,568)
30,757
(706,947)
(8,188,443)
(490,199)
(6,015,512)
(9,385,589)
15
9,918,713
(689,581)
901,907
-
(101,300)
8,149,332
(278,863)
4,401,842
(987,814)
(46,962)
10,029,739 11,237,535
2,290,439
1,430,751
(286,710)
(279,161)
1,601,349
108,563
Cash and cash equivalents at the end of the financial year
7
3,434,480
1,430,751
The above statement of cash flows should be read in conjunction with the accompanying notes
28
Montem Resources Limited
Notes to the financial statements
31 December 2020
1. General information
The financial statements cover Montem Resources Limited as a Consolidated Entity consisting of Montem 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 Montem Resources Limited's functional and presentation currency.
A description of the nature of the Consolidated Entity's operations and its principal activities are included in the Directors'
report, which is not part of the financial statements.
The financial statements were authorised for issue, in accordance with a resolution of Directors, on 9 March 2021. The
Directors have the power to amend and reissue the financial statements.
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 Consolidated Entity 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.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
The adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial
performance or position of the Consolidated Entity.
Conceptual Framework for Financial Reporting (Conceptual Framework)
The Consolidated Entity has adopted the revised Conceptual Framework from 1 January 2020. The Conceptual
Framework contains new definition and recognition criteria as well as new guidance on measurement that affects several
Accounting Standards, but it has not had a material impact on the Consolidated Entity's financial statements.
Going concern
The financial report has been prepared on the going concern basis, which assumes continuity of normal business activities
and the realisation of assets and the settlement of liabilities in the ordinary course of business.
The Consolidated Entity made a loss after tax of $3,411,080 during the year ended 31 December 2020 (31 December
2019: $3,305,949) and had net operating cash outflows of $1,723,788 (31 December 2019: $2,131,107). As at 31
December 2020, the cash balance was $3,434,480 (31 December 2019: $1,430,751) and net working capital surplus was
$2,451,917 (31 December 2019: Deficit of $3,897,235).
On 26 February 2021, the Company issued 30,394,021 ordinary shares at $0.17 per share, raising $5,166,984 (before
transaction costs) by way of share placement to sophisticated and professional investors. The Company intends to use
funds from the Placement to advance the Chinook scoping study and complete the permitting for the re-start of the Tent
Mountain Mine. In addition, on 24 February 2021, the Company initiated a Share Purchase Plan (SPP) to raise $500,000.
Shares under the SPP will be offered at a fixed issue price of $0.17 per new fully paid ordinary share in the Company.
In considering the ability of the Consolidated Entity to continue as a going concern the Directors considered the following
matters:
● The Consolidated Entity has the ability to raise additional working capital through the issue of equity, as needed;
● The Consolidated Entity has a successful history in raising funds and is well supported by its major shareholders;
● If required, the Consolidated Entity has the ability to undertake either the full or partial sale of its existing tenement
portfolio, enter into joint venture arrangements of its existing tenement portfolio or obtain approval for the deferral of the
current work programs.
The Directors will continue to monitor the ongoing funding requirements of the Consolidated Entity. As a consequence of
the above, the directors believe that, notwithstanding the Consolidated Entity's operating results for the year, the
Consolidated Entity will be able to continue as a going concern and therefore, these financial statements do not include
any adjustments relating to the recoverability and classification of recorded asset amounts, or to the amounts and
classification of liabilities that might be necessary should the Consolidated Entity not continue as a going concern.
29
Montem Resources Limited
Notes to the financial statements
31 December 2020
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.
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 applying the Consolidated Entity's accounting policies. The areas
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 Consolidated Entity
only. Supplementary information about the parent entity is disclosed in Note 22.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Montem Resources Limited
('Company' or 'parent entity') as at 31 December 2020 and the results of all subsidiaries for the year then ended. The
Company and its subsidiaries together are referred to in these financial statements as the 'Consolidated Entity'.
Subsidiaries are all those entities over which the Consolidated Entity has control. The Consolidated Entity controls an entity
when the Consolidated Entity 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 Consolidated Entity. They are de-consolidated from the date that control
ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the Consolidated Entity 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 Consolidated Entity.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest,
without the loss of control, is accounted for as an equity transaction, where the difference between the consideration
transferred and the book value of the share of the non-controlling interest acquired is recognised directly in equity
attributable to the parent.
Where the Consolidated Entity loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and
non-controlling interest in the subsidiary together with any cumulative translation differences recognised in equity. The
Consolidated Entity recognises the fair value of the consideration received and the fair value of any investment retained
together with any gain or loss in profit or loss.
Foreign currency translation
The financial statements are presented in Australian dollars, which is Montem Resources Limited's presentation currency.
Foreign currency transactions
Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the
translation at financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are
recognised in profit or loss.
30
Montem Resources Limited
Notes to the financial statements
31 December 2020
2. Significant accounting policies (continued)
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 exchange
differences are recognised in other comprehensive income through the foreign currency reserve in equity.
The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is disposed of.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
Interest
Interest revenue 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.
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.
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
Consolidated Entity'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.
A liability is classified as current when: it is either expected to be settled in the Consolidated Entity'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.
Investments and other financial assets
Investments and other financial assets are initially measured at fair value. Transaction costs are included as part of the
initial measurement, except for financial assets at fair value through profit or loss. Such assets are subsequently measured
at either amortised cost or fair value depending on their classification. Classification is determined based on both the
business model within which such assets are held and the contractual cash flow characteristics of the financial asset
unless an accounting mismatch is being avoided.
Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred and the
Consolidated Entity has transferred substantially all the risks and rewards of ownership. When there is no reasonable
expectation of recovering part or all of a financial asset, it's carrying value is written off.
Financial assets at amortised cost
A financial asset is measured at amortised cost only if both of the following conditions are met: (i) it is held within a
business model whose objective is to hold assets in order to collect contractual cash flows; and (ii) the contractual terms of
the financial asset represent contractual cash flows that are solely payments of principal and interest.
31
Montem Resources Limited
Notes to the financial statements
31 December 2020
2. Significant accounting policies (continued)
Impairment of financial assets
The Consolidated Entity recognises a loss allowance for expected credit losses on financial assets which are either
measured at amortised cost or fair value through other comprehensive income. The measurement of the loss allowance
depends upon the Consolidated Entity's assessment at the end of each reporting period as to whether the financial
instrument's credit risk has increased significantly since initial recognition, based on reasonable and supportable
information that is available, without undue cost or effort to obtain.
Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-month expected
credit loss allowance is estimated. This represents a portion of the asset's lifetime expected credit losses that is attributable
to a default event that is possible within the next 12 months. Where a financial asset has become credit impaired or where
it is determined that credit risk has increased significantly, the loss allowance is based on the asset's lifetime expected
credit losses. The amount of expected credit loss recognised is measured on the basis of the probability weighted present
value of anticipated cash shortfalls over the life of the instrument discounted at the original effective interest rate.
For financial assets mandatorily measured at fair value through other comprehensive income, the loss allowance is
recognised in other comprehensive income with a corresponding expense through profit or loss. In all other cases, the loss
allowance reduces the asset's carrying value with a corresponding expense through profit or loss.
Finance costs
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are expensed in
the period in which they are incurred.
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 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.
Operating segments
The sole segment of the Consolidated Entity is coal mining in Canada.
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of the consolidated entity, excluding
any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding
during the financial year.
Diluted earnings per share
Issued options and performance rights have not been included in the weighted average number of ordinary shares for the
purposes of calculating diluted earnings per share as they do not meet the requirements for inclusion in AASB 133
“Earnings per Share”. The options and performance rights are non-dilutive as the Consolidated Entity has generated a loss
for the year.
32
Montem Resources Limited
Notes to the financial statements
31 December 2020
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.
Coronavirus (COVID-19) pandemic
Judgement has been exercised in considering the impacts that the Coronavirus (COVID-19) pandemic has had, or may
have, on the Consolidated Entity based on known information. This consideration extends to the nature of the services
received, supply chain, staffing and geographic regions in which the Consolidated Entity operates. There does not currently
appear to be either any significant impact upon the financial statements or any significant uncertainties with respect to
events or conditions which may impact the Consolidated Entity unfavourably as at the reporting date or subsequently as a
result of the Coronavirus (COVID-19) pandemic.
Share-based payment transactions
The Consolidated Entity measures the cost of equity-settled transactions with employees by reference to the fair value of
the equity instruments at the date at which they are granted. The fair value is determined by using either the Binomial or
Black-Scholes model taking into account the terms and conditions upon which the instruments were granted. The
accounting estimates and assumptions relating to equity-settled share-based payments would have no impact on the
carrying amounts of assets and liabilities within the next annual reporting period but may impact profit or loss and equity.
Any service or non-market performance condition is not reflected in the grant-date fair value of the share based payment.
Instead, an estimate is made of the number of equity instruments for which the service and non-market performance
conditions are expected to be satisfied. Subsequent to initial recognition and measurement, the estimate of the number of
equity instruments for which the service and non-market performance conditions are expected to be satisfied is revised
during the vesting period.
Estimation of useful lives of assets
The Consolidated Entity determines the estimated useful lives and related depreciation and amortisation charges for its
property, plant and equipment and finite life intangible assets. The useful lives could change significantly as a result of
technical innovations or some other event. The depreciation and amortisation charge will increase where the useful lives
are less than previously estimated lives, or technically obsolete or non-strategic assets that have been abandoned or sold
will be written off or written down.
Impairment of non-financial assets
The Consolidated Entity assesses impairment of non-financial assets other than goodwill and other indefinite life intangible
assets at each reporting date by evaluating conditions specific to the Consolidated Entity and to the particular asset that
may lead to impairment. If an impairment trigger exists, the recoverable amount of the asset is determined. This involves
fair value less costs of disposal or value-in-use calculations, which incorporate a number of key estimates and
assumptions.
Lease term
The lease term is a significant component in the measurement of both the right-of-use asset and lease liability. Judgement
is exercised in determining whether there is reasonable certainty that an option to extend the lease or purchase the
underlying asset will be exercised, or an option to terminate the lease will not be exercised, when ascertaining the periods
to be included in the lease term. In determining the lease term, all facts and circumstances that create an economical
incentive to exercise an extension option, or not to exercise a termination option, are considered at the lease
commencement date. Factors considered may include the importance of the asset to the Consolidated Entity's operations;
comparison of terms and conditions to prevailing market rates; incurrence of significant penalties; existence of significant
leasehold improvements; and the costs and disruption to replace the asset. The Consolidated Entity reassesses whether it
is reasonably certain to exercise an extension option, or not exercise a termination option, if there is a significant event or
significant change in circumstances.
33
Montem Resources Limited
Notes to the financial statements
31 December 2020
3. Critical accounting judgements, estimates and assumptions (continued)
Incremental borrowing rate
Where the interest rate implicit in a lease cannot be readily determined, an incremental borrowing rate is estimated to
discount future lease payments to measure the present value of the lease liability at the lease commencement date. Such
a rate is based on what the Consolidated Entity estimates it would have to pay a third party to borrow the funds necessary
to obtain an asset of a similar value to the right-of-use asset, with similar terms, security and economic environment.
Exploration and evaluation costs
Exploration and evaluation costs have been capitalised on the basis that the Consolidated Entity will commence
commercial production in the future, from which time the costs will be amortised in proportion to the depletion of the
mineral resources. Key judgements are applied in considering costs to be capitalised which includes determining
expenditures directly related to these activities and allocating overheads between those that are expensed and capitalised.
In addition, costs are only capitalised that are expected to be recovered either through successful development or sale of
the relevant mining interest. Factors that could impact the future commercial production at the mine include the level of
reserves and resources, future technology changes, which could impact the cost of mining, future legal changes and
changes in commodity prices. To the extent that capitalised costs are determined not to be recoverable in the future, they
will be written off in the period in which this determination is made. Significant judgement is required by management when
assessing each of area of interest and therefore management's judgement carries the risk of been misstated.
4. Operating segments
Identification of reportable operating segments
AASB 8 Operating Segments requires operating segments to be identified on the basis of internal reports about the
components of the Consolidated Entity that are regularly reviewed by the chief decision maker in order to allocate
resources to the segment and to assess its performance.
The Consolidated Entity is a steelmaking coal development company that owns and leases coal tenements in the
Canadian provinces of Alberta and British Columbia. The Consolidated Entity's activities are therefore classified as one
operating segment.
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 Chief Operating Decision Makers ('CODM'). The CODM is responsible for the
allocation of resources to operating segments and assessing their performance.
34
Montem Resources Limited
Notes to the financial statements
31 December 2020
5. Expenses
Loss before income tax includes the following specific expenses:
Depreciation
Plant and equipment
Office lease right-of-use assets
Total depreciation
Finance costs
Interest and finance charges paid/payable on borrowings
Interest and finance charges paid/payable on lease liabilities
Finance costs expensed
Leases
Short-term lease payments
Superannuation expense
Defined contribution superannuation expense
Share-based payments expense
Share-based payments expense
6. Income tax benefit
Tax losses not recognised
Unused tax losses for which no deferred tax asset has been recognised
Potential tax benefit @ 27.5%
Consolidated
2020
$
2019
$
2,994
34,803
1,916
36,745
37,797
38,661
367,456
9,874
213,511
10,462
377,330
223,973
15,070
31,877
2,169
4,397
621,897
787,604
Consolidated
2020
$
2019
$
2,861,818
3,305,949
787,000
909,136
The above potential tax benefit for tax losses has not been recognised in the statement of financial position. 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.
7. Current assets - cash and cash equivalents
Cash at bank
Consolidated
2020
$
2019
$
3,434,480
1,430,751
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.
35
Montem Resources Limited
Notes to the financial statements
31 December 2020
8. Current assets - accounts receivable
Interest receivable
BAS receivable
Consolidated
2020
$
2019
$
2,136
102,810
3,786
329,329
104,946
333,115
Accounting policy for trade and other receivables
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
9. Non-current assets - plant and equipment
Buildings - at cost
Less: Accumulated depreciation
Motor vehicles
Less: Accumulated depreciation
Computer equipment
Less: Accumulated depreciation
Roads and bridges
Less: Accumulated depreciation
Furniture and fixtures
Less: Accumulated depreciation
Consolidated
2020
$
2019
$
485,842
(11,967)
473,875
21,124
(11,149)
9,975
27,660
(4,956)
22,704
152,021
(3,801)
148,220
60,035
(7,079)
52,956
492,428
-
492,428
22,775
(5,061)
17,714
17,109
(2,218)
14,891
163,903
-
163,903
63,869
-
63,869
707,730
752,805
36
Montem Resources Limited
Notes to the financial statements
31 December 2020
9. Non-current assets - plant and equipment (continued)
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Consolidated
Balance at 1 January 2019
Additions
Exchange differences
Depreciation expense
Balance at 31 December 2019
Additions
Exchange differences
Depreciation expense
Building
$
Motor
vehicles
$
Computer
equipment
$
Roads and
bridges
$
Furniture
and fixtures
$
Total
$
-
492,428
-
-
492,428
29,114
(35,701)
(11,967)
-
22,775
-
(5,061)
17,714
-
(1,284)
(6,454)
2,878
13,770
448
(2,205)
14,891
11,791
(1,350)
(2,628)
49,969
111,228
2,706
-
163,903
-
(11,882)
(3,801)
-
63,869
-
-
63,869
-
(3,834)
(7,079)
52,847
704,070
3,154
(7,266)
752,805
40,905
(54,051)
(31,929)
Balance at 31 December 2020
473,874
9,976
22,704
148,220
52,956
707,730
Accounting policy for property, plant and equipment
Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes
expenditure that is directly attributable to the acquisition of the items.
Depreciation is calculated on a straight-line or declining balance basis to write off the net cost of each item of property,
plant and equipment (excluding land) over their expected useful lives as follows:
Plant and equipment
Office furniture and fixtures
Buildings
Roads and bridges
3-7 years (Straight line basis)
20% (Declining balance basis)
40 years (Straight line basis)
10 years (Straight line basis)
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting
date.
An item of plant and equipment is derecognised upon disposal or when there is no future economic benefit to the
Consolidated Entity. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss.
10. Non-current assets - right-of-use assets
Buildings - right-of-use
Less: Accumulated depreciation
Motor vehicles - right-of-use
Less: Accumulated depreciation
Office equipment - right-of-use
Less: Accumulated depreciation
37
Consolidated
2020
$
2019
$
168,503
(103,910)
64,593
227,892
(101,780)
126,112
21,997
(4,126)
17,871
181,673
(75,697)
105,976
165,934
(32,265)
133,669
-
-
-
208,576
239,645
Montem Resources Limited
Notes to the financial statements
31 December 2020
10. Non-current assets - right-of-use assets (continued)
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Consolidated
Balance at 1 January 2019
Additions
Depreciation expense
Balance at 31 December 2019
Additions
Exchange differences
Depreciation expense
Buildings
$
Motor
vehicles
$
Office
equipment
$
-
181,673
(75,697)
105,976
-
(7,682)
(33,701)
-
165,934
(32,265)
133,669
73,988
(9,691)
(71,854)
-
-
-
-
21,997
-
(4,126)
Total
$
-
347,607
(107,962)
239,645
95,985
(17,373)
(109,681)
Balance at 31 December 2020
64,593
126,112
17,871
208,576
Accounting policy for right-of-use assets
A right-of-use asset is a leased asset that is recognised at the commencement date of a lease and is initially measured at
the present value of the unavoidable future lease payments to be made over the lease term, less any lease incentives
receivable.
Lease payments to be made under reasonably certain extension options are also included in the measurement of the right-
of-use asset and lease liability.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined,
which is generally the case for leases in the group, the lessee’s incremental borrowing rate is used, being the rate that the
individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use
asset in a similar economic environment with similar terms, security and conditions.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful
life of the asset, whichever is the shorter. Where the Consolidated Entity expects to obtain ownership of the leased asset at
the end of the lease term, the depreciation is over its estimated useful life. Right-of use assets are subject to impairment or
adjusted for any remeasurement of lease liabilities.
The Consolidated Entity has elected not to recognise a right-of-use asset and corresponding lease liability for short-term
leases with terms of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to
profit or loss as incurred.
11. Non-current assets - exploration and evaluation
Exploration and evaluation Chinook - at cost
Exploration and evaluation Tent Mountain - at cost
Consolidated
2020
$
2019
$
1,016,777
1,096,250
18,545,113 13,459,752
19,561,890 14,556,002
38
Montem Resources Limited
Notes to the financial statements
31 December 2020
11. Non-current assets - exploration and evaluation (continued)
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Consolidated
Balance at 1 January 2019
Additions during the year
Exchange differences
Balance at 31 December 2019
Additions during the year
Exchange differences
Balance at 31 December 2020
Chinook
$
Tent
Mountain
$
Total
$
1,039,930
-
56,320
4,677,931
8,624,921
156,900
5,717,861
8,624,921
213,220
1,096,250 13,459,752 14,556,002
6,061,132
6,061,132
(1,055,244)
(975,771)
-
(79,473)
1,016,777 18,545,113 19,561,890
Accounting policy for exploration and evaluation assets
Exploration and evaluation expenditures in relation to separate areas of interest for which rights of tenure are current is
carried forward as an asset in the statement of financial position where it is expected that the expenditure will be recovered
through the successful development and exploitation of an area of interest, or by its sale; or exploration activities are
continuing in an area and activities have not reached a stage which permits a reasonable estimate of the existence or
otherwise of economically recoverable reserves. Where a project or an area of interest has been abandoned, the
expenditure incurred thereon is written off in the year in which the decision is made.
12. Current liabilities - trade and other payables
Trade payables
Accrued expenses
Other payables
Consolidated
2020
$
2019
$
739,962
75,758
29,628
1,057,866
21,000
7,499
845,348
1,086,365
Refer to Note 17 for further information on financial instruments.
Accounting policy for trade and other payables
These amounts represent liabilities for goods and services provided to the Consolidated Entity 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.
13. Current liabilities - borrowings
Convertible notes payable
Refer to Note 17 for further information on financial instruments.
39
Consolidated
2020
$
2019
$
-
4,401,842
Montem Resources Limited
Notes to the financial statements
31 December 2020
13. Current liabilities - borrowings (continued)
Convertible notes payable
During the year ended 31 December 2019, the Company issued 4,335,000 convertible notes at an annual simple interest
rate of 10%, raising $4,164,500, net of financing fees. The face value of each note is $1.00 with a maturity date (Maturity
Date) of 31 December 2020. The convertible notes are convertible at the following prices:
- If there is an initial public offering event (IPO Conversion Event):
- on or before 31 March 2020, the price is at a 20% discount to the issue price of shares to investors under the initial public
offering (IPO).
- between 1 April 2020 and 30 September 2020, the price is at a 30% discount to the issue price of shares to investors
under the IPO.
- after 30 September 2020 but before the Maturity Date, the price is at a 40% discount to the issue price of shares to
investors under the IPO.
- If there is a change of control event other than through an IPO or the completion of a fundraising event (other than an
IPO) which raises $10 million or more (Qualifying Financing Event), at a price pre-share as determined by the Company’s
auditors.
If on Maturity Date, at a price per share to be determined based on the value of the Company as determined by one of
several professional accountants as selected by the Company, divided by the number of shares on issue immediately
before the relevant event.
In addition, between February to May 2020, the Company issued 860,000 convertible notes at an annual simple interest
rate of 10%, raising $860,000, net of financing fees. Further, on 8 April 2020 and 13 May 2020, the Company also issued
convertible notes amounting to $150,000 to discharge a trade payable. The face value of each note was $1.00 with a
maturity date (Maturity Date) of 31 December 2020. These convertible notes were issued at similar terms to that of above.
All these convertible notes, along with the notes issued in early 2020 financial year, were converted to 32,931,608 ordinary
shares at the completion of Initial Public Offering (IPO) during September 2020.
14. Current liabilities - Lease liability
The Consolidated Entity entered into leases arrangements for office space, motor vehicles and office equipment. Rental
contracts are typically made for fixed periods of 12 to 36 months, but may have an extension option. This note provides
information for leases where the Consolidated Entity is a lessee.
Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease
agreements do not impose any covenants other than the security interests in the leased assets that are held by the lessor.
Leased assets may not be used as security for borrowing purposes.
The statement of financial position shows the following amounts relating to leases:
Lease liabilities
Current
Non-current
The statement of profit or loss shows the following amounts relating to leases;
Consolidated
2020
$
2019
$
116,144
109,167
85,909
162,581
225,311
248,490
40
Montem Resources Limited
Notes to the financial statements
31 December 2020
14. Current liabilities - Lease liability (continued)
Incremental borrowing rates
Right-of-use assets and lease liabilities are determined based on an incremental borrowing rate. To determine the
incremental borrowing rate, the Consolidated Entity:
- where possible, uses recent third-party financing received by the individual lessee as a starting point, adjusted to reflect
changes in financing conditions since third party financing was received
- uses a build-up approach that starts with a risk-free interest rate adjusted for credit risk for the Consolidated Group, which
does not have recent third party financing, and
- makes adjustments specific to the lease, eg term, country, currency and security.
15. Equity - issued capital
Ordinary shares - fully paid
202,626,811 124,903,784 37,313,701 22,430,473
Movements in ordinary share capital
Consolidated
2020
Shares
2019
Shares
2020
$
2019
$
Details
Balance
Share issue
Share issue
Share issue
Share issue
Share issue
Share issue
Share issue
Share issue
Share issue
Share issue
Share issue
Share issue
Share issue
Share issue
Share issue costs
Balance
Share issue
Conversion shares
Share issue
Share issue costs
Balance
Date
Shares
Issue price
$
1 January 2019
4 February 2019
19 March 2019
10 April 2019
11 April 2019
30 April 2019
9 May 2019
27 May 2019
30 May 2019
28 June 2019
4 July 2019
12 July 2019
12 July 2019
22 August 2019
20 December 2019
31 December 2019
12 May 2020
14 September 2020
14 September 2020
92,306,458
2,000,000
5,410,000
9,800,000
100,000
1,000,000
1,000,000
30,000
1,000,000
4,100,000
4,000,000
4,000,000
100,000
30,000
27,326
-
124,903,784
12,791,419
32,931,608
32,000,000
-
$0.2500
$0.2500
$0.2500
$0.2500
$0.2500
$0.2500
$0.2500
$0.2500
$0.2500
$0.2500
$0.2500
$0.2500
$0.2500
$0.2500
$0.0000
14,560,004
500,000
1,352,500
2,450,000
25,000
250,000
250,000
7,500
250,000
1,025,000
1,000,000
1,000,000
25,000
7,500
6,832
(278,863)
$0.1500
$0.1750
$0.2500
$0.0000
22,430,473
1,918,713
5,773,560
8,000,000
(809,045)
31 December 2020
202,626,811
37,313,701
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.
41
Montem Resources Limited
Notes to the financial statements
31 December 2020
15. Equity - issued capital (continued)
Capital risk management
The Consolidated Entity'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.
In order to maintain or adjust the capital structure, the Consolidated Entity may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
The consolidated entity is subject to certain financing arrangements covenants and meeting these covenants is given
priority in all capital risk management decisions. There have been no events of default on the financing arrangements
during the financial year.
Share buy-back
There is no current on-market share buy-back.
Capital risk management
The Consolidated Entity'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.
In order to maintain or adjust the capital structure, the Consolidated Entity may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
The Consolidated Entity would look to raise capital when an opportunity to invest in a business or company was seen as
value adding relative to the current company's share price at the time of the investment. The Consolidated Entity is not
actively pursuing additional investments in the short term as it continues to integrate and grow its existing businesses in
order to maximise synergies.
The Consolidated Entity is subject to certain financing arrangements covenants and meeting these is given priority in all
capital risk management decisions. There have been no events of default on the financing arrangements during the
financial year.
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.
16. Equity - reserves
Foreign currency translation reserve
Share-based payments reserve
Consolidated
2020
$
2019
$
(821,973)
3,570,750
472,385
3,213,449
2,748,777
3,685,834
Foreign currency reserve
The reserve is used to recognise exchange differences arising from the translation of the financial statements of foreign
operations to Australian dollars.
42
Montem Resources Limited
Notes to the financial statements
31 December 2020
16. Equity - reserves (continued)
Share-based payments reserve
The reserve is 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 January 2019
Foreign currency translation
Share based payments
Balance at 31 December 2019
Foreign currency translation
Share based payments
Transfer to accumulated losses on lapse of options
Foreign
currency
translation
reserve
$
Share based
payments
reserve
$
Total
$
113,102
359,283
-
2,042,481
-
1,170,968
2,155,583
359,283
1,170,968
472,385
(1,294,358)
-
-
3,213,449
-
794,324
(437,023)
3,685,834
(1,294,358)
794,324
(437,023)
Balance at 31 December 2020
(821,973)
3,570,750
2,748,777
17. Financial instruments
Financial risk management objectives
The Consolidated Entity's activities expose it to a variety of financial risks: market risk (including foreign currency risk, price
risk and interest rate risk), credit risk and liquidity risk. The Consolidated Entity's overall financial risk management program
focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial
performance of the Consolidated Entity. The Consolidated Entity uses different methods to measure different types of
financial risk to which it is exposed. These methods include sensitivity analysis in the case of interest rate, foreign
exchange and other price risks, ageing analysis for credit risk.
Financial risk management is carried out by senior finance executives ('finance') under policies approved by the Board of
Directors ('the Board'). These policies include identification and analysis of the financial risk exposure of the Consolidated
Entity and appropriate procedures, controls and risk limits. Finance identifies, evaluates and hedges financial risks within
the Consolidated Entity's operating units. Finance reports to the Board on a monthly basis.
Market risk
Foreign currency risk
The Consolidated Entity undertakes certain transactions denominated in foreign currency and is exposed to foreign
currency risk through foreign exchange rate fluctuations.
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 risk is measured using sensitivity analysis and
managed through cash flow forecasting.
The average exchange rates and reporting date exchange rates applied were as follows:
Australian dollars
Canadian dollars
Average exchange rate
2020
2019
Reporting date exchange
rate
2020
2019
0.9524
0.9020
0.9835
0.9122
43
Montem Resources Limited
Notes to the financial statements
31 December 2020
17. Financial instruments (continued)
The carrying amount of the Consolidated Entity's foreign currency denominated financial assets and financial liabilities at
the reporting date were as follows:
Consolidated
Canadian dollars - Cash at bank
Canadian dollars - receivables
Canadian dollars - trade & other payables
Canadian dollars - borrowings
Assets
Liabilities
2020
$
2019
$
2020
$
2019
$
933,586
-
-
-
1,145,098
-
-
-
-
84,427
843,743
40,671
-
270,314
1,044,933
-
933,586
1,145,098
968,841
1,315,247
Consolidated - 2020
% change
profit before
tax
Effect on
equity
% change
profit before
tax
Effect on
equity
AUD strengthened
Effect on
AUD weakened
Effect on
Trade payable net of cash at
bank
10%
(5,917)
(5,917)
-
5,917
5,917
Consolidated - 2019
% change
profit before
tax
Effect on
equity
% change
profit before
tax
Effect on
equity
AUD strengthened
Effect on
AUD weakened
Effect on
Trade payable net of cash at
bank
10%
45,951
45,951
10%
(45,951)
(45,951)
Price risk
The Consolidated Entity is not exposed to any significant price risk.
Interest rate risk
The Consolidated Entity has limited interest rate risk and there are no significant interest-bearing assets or liabilities at the
reporting date. As of the reporting date there are no significant interest-bearing assets. At 31 December 2019, there were
$4.3 million in convertible notes payable at a fixed interest rate of 10% per annum. The convertible notes payable was
converted to share capital during the 2020 financial year.
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
Consolidated Entity. The Consolidated Entity has a strict code of credit, including obtaining agency credit information,
confirming references and setting appropriate credit limits. The Consolidated Entity obtains guarantees where appropriate
to mitigate credit risk. The maximum exposure to credit risk at the reporting date to recognised financial assets is the
carrying amount, net of any provisions for impairment of those assets, as disclosed in the statement of financial position
and notes to the financial statements. The Consolidated Entity does not hold any collateral.
Liquidity risk
Vigilant liquidity risk management requires the Consolidated Entity to maintain sufficient liquid assets (mainly cash and
cash equivalents) and available borrowing facilities to be able to pay debts as and when they become due and payable.
The Consolidated Entity manages liquidity risk by maintaining adequate cash reserves and available borrowing facilities by
continuously monitoring actual and forecast cash flows and matching the maturity profiles of financial assets and liabilities.
44
Montem Resources Limited
Notes to the financial statements
31 December 2020
17. Financial instruments (continued)
Remaining contractual maturities
The following tables detail the Consolidated Entity's remaining contractual maturity for its financial instrument liabilities. The
tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which
the financial liabilities are required to be paid. The tables include both interest and principal cash flows disclosed as
remaining contractual maturities and therefore these totals may differ from their carrying amount in the statement of
financial position.
Consolidated - 2020
Non-derivatives
Non-interest bearing
Trade and other payables
Accrued expenses
Other payables
Other loans
Interest-bearing - fixed rate
Lease liability
Total non-derivatives
Consolidated - 2019
Non-derivatives
Non-interest bearing
Trade and other payables
Interest-bearing - variable
Lease liabilities
Interest-bearing - fixed rate
Convertible notes payable
Total non-derivatives
Weighted
average
interest rate
%
1 year or
less
$
Between 1
and 2 years
$
Between 2
and 5 years
$
Over
5 years
$
-
-
-
-
739,962
75,758
29,629
40,671
-
-
-
-
-
-
-
-
5.32%
125,451
1,011,471
91,843
91,843
14,307
14,307
Weighted
average
interest rate
%
1 year or
less
$
Between 1
and 2 years
$
Between 2
and 5 years
$
Over
5 years
$
Remaining
contractual
maturities
$
-
-
-
-
-
-
739,962
75,758
29,629
40,671
231,601
1,117,621
Remaining
contractual
maturities
$
-
1,086,365
-
-
-
1,086,365
5.38%
117,809
128,947
96,977
10.00%
4,401,842
5,606,016
-
128,947
-
96,977
-
-
-
343,733
4,401,842
5,831,940
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed
above.
45
Montem Resources Limited
Notes to the financial statements
31 December 2020
17. Financial instruments (continued)
Fair value of financial instruments
The fair values of financial assets and liabilities, together with their carrying amounts in the statement of financial position,
for the Consolidated Entity are as follows:
Consolidated
Assets
Cash at bank
Other receivables
Deposits - current
Deposits - non-current
Liabilities
Trade payables
Borrowings
2020
2019
Carrying
amount
$
Fair value
$
Carrying
amount
$
Fair value
$
3,434,480
102,810
33,117
350,831
3,921,238
3,434,480
102,810
33,117
350,831
3,921,238
1,430,752
329,329
17,119
675,610
2,452,810
1,430,752
329,329
17,119
675,610
2,452,810
845,348
40,671
886,019
845,348
40,671
886,019
1,086,365
-
1,086,365
1,086,365
-
1,086,365
18. Key management personnel disclosures
Directors
The following persons were Directors of Montem Resources Limited during the financial year:
Mark Lochtenberg
Peter Doyle
Rob Tindall
Susie Henderson
William Souter
Robert Yeates
Chairman and Non-executive Director
Managing Director and CEO
Non-executive Director
Non-executive Director
Non-executive Director
Non-executive Chairman, resigned 13 February 2020
Other key management personnel
The following persons also had the authority and responsibility for planning, directing and controlling the major activities of
the Consolidated Entity, directly or indirectly, during the financial year:
Robert Bell
Alan Ahlgren
Melanie Leydin
Chief Commercial Officer
Chief Financial Officer (Resigned on 2 November 2020)
Company Secretary and Chief Financial Officer
Compensation
The aggregate compensation made to Directors and other members of key management personnel of the Consolidated
Entity is set out below:
Short-term employee benefits
Post-employment benefits
Share-based payments
46
Consolidated
2020
$
2019
$
1,192,836
10,483
596,827
1,310,785
8,265
1,031,886
1,800,146
2,350,936
Montem Resources Limited
Notes to the financial statements
31 December 2020
19. Remuneration of auditors
During the financial year the following fees were paid or payable for services provided by William Buck, the auditor of the
Company:
Audit services - William Buck
Audit or review of the financial statements
Other services - William Buck
Preparation of the tax return
20. Contingent liabilities / assets
Consolidated
2020
$
2019
$
28,450
40,000
7,500
7,500
35,950
47,500
The Consolidated Entity had no contingent liabilities / assets as at 31 December 2020 and 2019.
21. Related party transactions
Parent entity
Montem Resources Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in Note 23.
Key management personnel
Disclosures relating to key management personnel are set out in Note 18 and the remuneration report included in the
Directors' report.
Transactions with related parties
The Company paid $13,350 for accounting and corporate secretarial services from an entity controlled by Ms Melanie
Leydin, during her term as Chief Financial Officer. All transactions were made on normal commercial terms and conditions
and at market rates.
There were no transactions with related parties during the current and previous financial year.
Other than the key management personnel transactions are set out in Note 14, the Consolidated Entity had no transactions
with other related parties during the year ended 31 December 2020.
Receivable from and payable to related parties
The following balances are outstanding at the reporting date in relation to transactions with related parties:
Consolidated
2020
$
2019
$
Current payables:
Trade payables to key management personnel in relation to short-term employee benefits
89,054
55,167
Loans to/from related parties
There were no loans to or from related parties at the current and previous reporting date.
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
47
Montem Resources Limited
Notes to the financial statements
31 December 2020
22. 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
Total comprehensive loss
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Equity
Issued capital
Share-based payments reserve
Accumulated losses
Total equity
Parent
2020
$
2019
$
(2,017,955)
(1,917,790)
(2,017,955)
(1,917,790)
Parent
2020
$
2019
$
2,524,282
380,908
34,421,139 24,813,058
184,414
4,514,591
184,414
4,514,591
37,336,860 22,430,473
3,213,449
(5,345,455)
3,570,750
(6,670,885)
34,236,725 20,298,467
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 31 December 2020 and 2019.
Contingent liabilities
The parent entity had no contingent liabilities as at 31 December 2020 and 2019.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 31 December 2020 and 2019.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the Consolidated Entity, 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.
48
Montem Resources Limited
Notes to the financial statements
31 December 2020
23. Interests in subsidiaries
The Montem Resources Group includes the following entities:
Name
Montem Resources Limited
Montem Resources Corp.
Montem Resources Alberta Operations Ltd
24. Events after the reporting period
Principal place of business /
Country of incorporation
Melbourne, Victoria, Australia
Vancouver, British Columbia,
Canada
Edmonton, Alberta, Canada
Ownership interest
2019
2020
%
%
-
-
100.00%
100.00%
100.00%
100.00%
On 31 October 2019, the Company agreed to purchase a parcel of land which is planned to be used for a rail loading
facility for the Tent Mountain Mine. Under the original agreement, a final payment of CAD 2,535,400 was to be made on 4
January 2021.
Subsequent the years end, on 4 January 2021, the Company and landlord agreed to extend this option over the planned
rail loadout land for a further 12 months. The Land Vendors are not Related Parties.
The parties agreed to an extension of this agreement under the following terms:
- Extension of agreement to 4 January 2022
- Total purchase price CAD 3,000,000
- Montem forfeit the existing CAD 184,000 deposit on 4 January 2021
- Montem, posted a new, non-refundable deposit CAD 275,000
On 26 February 2021, the Company issued 30,394,021 ordinary shares at $0.17 per share, raising $5,166,984 (before
transaction costs) by way of share placement to sophisticated and professional investors. The Company intends to use
funds from the Placement to advance the Chinook scoping study and complete the permitting for the re-start of the Tent
Mountain Mine.
On 24 February 2021, the Company initiated a Share Purchase Plan (SPP) to raise $500,000. Shares under the SPP will
be offered at a fixed issue price of $0.17 per new fully paid ordinary share in the Company.
On 4 March 2021, the Company announced the results of the coal quality test work performed on drilling samples from the
Chinook Vicary area.
No other matter or circumstance has arisen since 31 December 2020 that has significantly affected, or may significantly
affect the Consolidated Entity's operations, the results of those operations, or the Consolidated Entity's state of affairs in
future financial years.
49
Montem Resources Limited
Notes to the financial statements
31 December 2020
25. Reconciliation of loss after income tax to net cash used in operating activities
Loss after income tax expense for the year
(3,411,080)
(3,305,949)
Consolidated
2020
$
2019
$
Adjustments for:
Share-based payments
Depreciation
Finance charges
Non-cash deposits written-off
Change in operating assets and liabilities:
Decrease/(increase) in prepayments
Increase in accounts receivable
Increase in deposits
Increase in trade and other payables
Increase in employee benefits
621,897
37,796
510,988
245,043
(6,201)
1,650
(15,998)
221,465
70,652
787,604
38,662
-
-
21,636
(249,468)
165,509
347,314
63,585
Net cash used in operating activities
(1,723,788)
(2,131,107)
26. Earnings per share
Loss after income tax attributable to the owners of Montem Resources Limited
(3,411,080)
(3,305,949)
Weighted average number of ordinary shares used in calculating basic earnings per share
152,207,102 113,232,577
Weighted average number of ordinary shares used in calculating diluted earnings per share 152,207,102 113,232,577
Number
Number
Consolidated
2020
$
2019
$
Basic earnings per share
Diluted earnings per share
27. Share-based payments
(a) Equity issues to settle supplier liabilities
Cents
Cents
(2.2411)
(2.2411)
(2.9196)
(2.9196)
From time to time the Company may settle liabilities payable to external suppliers by way of an issue of ordinary shares in
the Company, or by the issue of options over ordinary shares in the Company.
Issues of options to settle supplier liabilities
On 12 January 2018, the Company issued 1,086,667 options over ordinary shares to suppliers as settlement of liabilities.
These options, which vested immediately, have an exercise price of 62.5 cents and an expiry date of 12 January 2023.
(b) Share issues to employees
From time to time the Company may issue of ordinary shares in the Company to directors or employees of the Company
as remuneration in recognition of past performance or other services provided to the Consolidated Entity.
50
Montem Resources Limited
Notes to the financial statements
31 December 2020
27. Share-based payments (continued)
(c) Employee incentive plan - options and performance rights
The Company has established an Employee Incentive Plan, whereby the Company may, at the discretion of the Plan
Committee, grant options over ordinary shares in the Company or performance rights over ordinary shares in the Company
to eligible employees and any director of the Company.
In June 2020, the Company issued 3,000,000 performance rights under the terms of the Company’s Employee Incentive
Plan to the Managing Director and senior executives for no consideration with fair values $0.15 each, all with an expiry
date of 23 September 2022.The vesting condition is when the Company successfully mines and sells 100,000 tonnes of
coal from the Tent Mountain mine or any other Company project. The performance rights will expire on 1 June 2023.
In September 2019, the Company issued 3,000,000 performance rights under the terms of the Company’s Employee
Incentive Plan to the Managing Director and senior executives for no consideration with fair values from $0.11 to $0.13
each, all with an expiry date of 23 September 2022. The vesting condition is when the Company successfully mines and
sells 100,000 tonnes of coal from the Tent Mountain mine or any other Company project. The performance rights will
expire on 1 June 2023.
In September 2019, the Company issued 5,000,000 options to Directors and employees as remuneration under the terms
of the Company’s Employee Incentive Plan. These options were issued with key milestones to align shareholder’s interests
with varying vesting dates. Exercise prices for these options range from $0.25 to $0.50, all with an expiry date of 23
September 2022.
In July 2019, the Company issued 175,097 options to a Director for no consideration with fair values of $0.10 to $0.11, and
each with expiry dates from 12 January 2023 to 31 December 2024. In addition, the Company also issued 175,097
performance rights with fair value of $0.25.
During the year ended 31 December 2018, the Company issued 3,000,000 options to Directors and employees under the
terms of the Montem Employee Incentive Plan. These options, which were issued in three tranches on 12 January 2018
(1,949,417 options), 31 January 2018 (700,389 options) and 6 April 2018 (350,194 options). These options were issued
with various service-based vesting dates and various expiry dates. Exercise prices for these options range from 63 cents to
$1.00. The vesting condition is when the Company successfully mines and sells 100,000 tonnes of coal from the Tent
Mountain mine or any other Company project. The performance rights will expire on 1 June 2023.
On 1 June 2018, the Company issued 3,000,000 performance rights under the terms of the Company’s Employee
Incentive Plan to the Managing Director and senior executives. Each performance right will vest and convert to a fully paid
ordinary share in the Company, at no cost to the recipient, when the vesting condition is met. The vesting condition is when
the Company successfully mines and sells 100,000 tonnes of coal from the Tent Mountain mine or any other Company
project. The performance rights will expire on 1 June 2023.
51
Montem Resources Limited
Notes to the financial statements
31 December 2020
27. Share-based payments (continued)
(d) Details of options and performance rights
Set out below are details of options granted as share-based payments:
2020
Grant date
Expiry date
price
Exercise
Balance at
the start of
the year
Granted
Expired/
forfeited/
other
Exercised
Balance at
the end of
the year
12/01/2018
12/01/2018
12/01/2018
12/01/2018
31/01/2018
31/01/2018
31/01/2018
06/04/2018
06/04/2018
06/04/2018
08/07/2019
08/07/2019
08/07/2019
24/09/2019
24/09/2019
24/09/2019
24/09/2019
12/01/2023
12/01/2023
31/12/2023
31/12/2024
12/01/2023
12/01/2023
12/01/2023
12/01/2023
31/12/2023
31/12/2024
12/01/2023
31/12/2023
31/12/2024
23/09/2022
23/09/2022
23/09/2022
23/09/2022
$0.6300
$0.6300
$0.7500
$1.0000
$0.6300
$0.7500
$1.0000
$0.6300
$0.7500
$1.0000
$0.6300
$0.7500
$1.0000
$0.2500
$0.2500
$0.5000
$0.5000
1,086,667
649,805
649,806
649,806
233,463
233,463
233,463
116,732
116,732
116,730
58,366
58,366
58,365
1,250,000
750,000
750,000
2,000,000
9,011,764
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(71,631)
-
-
-
-
-
-
(250,000)
(375,000)
-
(2,000,000)
(2,696,631)
1,086,667
649,805
649,806
649,806
233,463
233,463
161,832
116,732
116,732
116,730
58,366
58,366
58,365
1,000,000
375,000
750,000
-
6,315,133
Weighted average exercise price
$0.5635
$0.0000
$0.0000
$0.4553
$0.6997
2019
Grant date
Expiry date
price
Exercise
Balance at
the start of
the year
Granted
Expired/
forfeited/
other
Exercised
Balance at
the end of
the year
12/01/2018
12/01/2018
12/01/2018
12/01/2018
31/01/2018
31/01/2018
31/01/2018
06/04/2018
06/04/2018
06/04/2018
26/11/2018
28/11/2018
08/07/2019
08/07/2019
08/07/2019
24/09/2019
24/09/2019
24/09/2019
24/09/2019
12/01/2023
12/01/2023
31/12/2023
31/12/2024
12/01/2023
12/01/2023
12/01/2023
12/01/2023
31/12/2023
31/12/2024
31/03/2019
01/05/2019
12/01/2023
31/12/2023
31/12/2024
23/09/2022
23/09/2022
23/09/2022
23/09/2022
$0.6300
$0.6300
$0.7500
$1.0000
$0.6300
$0.7500
$1.0000
$0.6300
$0.7500
$1.0000
$0.2500
$0.2500
$0.6300
$0.7500
$1.0000
$0.2500
$0.2500
$0.5000
$0.5000
1,086,667
649,805
649,806
649,806
233,463
233,463
233,463
116,732
116,732
116,730
2,000,000
4,000,000
-
-
-
-
-
-
-
10,086,667
-
-
-
-
-
-
-
-
-
-
-
-
58,366
58,366
58,365
1,250,000
1,000,000
750,000
2,000,000
5,175,097
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(2,000,000)
(4,000,000)
-
-
-
-
(250,000)
-
-
(6,250,000)
1,086,667
649,805
649,806
649,806
233,463
233,463
233,463
116,732
116,732
116,730
-
-
58,366
58,366
58,365
1,250,000
750,000
750,000
2,000,000
9,011,764
Weighted average exercise price
$0.4525
$0.4012
$0.0000
$0.2500
$0.5635
52
Montem Resources Limited
Notes to the financial statements
31 December 2020
27. Share-based payments (continued)
Set out below are the options exercisable at the end of the financial year:
Grant date
Expiry date
12/01/2018
12/01/2018
12/01/2018
31/01/2018
31/01/2018
06/04/2018
06/04/2018
06/04/2018
08/07/2019
08/07/2019
24/09/2019
12/01/2023
31/12/2023
31/12/2024
12/01/2023
12/01/2023
12/01/2023
31/12/2023
31/12/2024
12/01/2023
31/12/2023
23/09/2022
2020
2019
Number
Number
1,736,472
649,806
649,806
233,463
233,463
116,732
116,732
116,730
58,366
58,366
1,375,000
1,736,472
649,806
-
233,463
-
116,732
116,732
-
58,366
-
-
5,344,936
2,911,571
The weighted average remaining contractual life of options outstanding at 31 December 2020 was 2.31 (31 December
2019: 3.14 years)
Set out below are summaries of performance rights granted as share-based payments:
2020
Grant date
Expiry date
price
Exercise
Balance at
the start of
the year
Granted
Expired/
forfeited/
other
Exercised
Balance at
the end of
the year
01/06/2018
08/07/2019
24/09/2019
30/06/2020
30/06/2020
01/06/2023
01/06/2023
30/06/2023
01/06/2023
30/06/2023
2019
$0.0000
$0.0000
$0.0000
$0.0000
$0.0000
3,000,000
175,097
3,000,000
-
-
6,175,097
-
-
-
1,500,000
1,500,000
3,000,000
-
-
-
-
-
-
(455,387)
-
-
-
-
(455,387)
2,544,613
175,097
3,000,000
1,500,000
1,500,000
8,719,710
Grant date
Expiry date
price
Exercise
Balance at
the start of
the year
Granted
Expired/
forfeited/
other
Exercised
01/06/2018
08/07/2019
24/09/2019
01/06/2023
01/06/2023
30/06/2023
$0.0000
$0.0000
$0.0000
3,000,000
-
-
3,000,000
-
175,097
3,000,000
3,175,097
-
-
-
-
Balance at
the end of
the year
-
-
-
-
3,000,000
175,097
3,000,000
6,175,097
The weighted average remaining contractual life of performance rights outstanding at 31 December 2019 was 2.41 years
(31 December 2018: 4.42 years).
53
Montem Resources Limited
Notes to the financial statements
31 December 2020
27. Share-based payments (continued)
For the performance rights granted during the current were determined using a variation of the binomial option pricing
model and Black Scholes option pricing model that takes into account factors specific to the share incentive plans, such as
the vesting period. The valuation model inputs used to determine the fair value at the grant date, are as follows:
Grant date
30/06/2020
Expiry date
30/06/2023
(e) Share-based payments expense - equity-settled
Estimated
share price
upon
vesting
Probability
of achieving
vesting
condition
Fair value
at grant date
$0.1500
67.00%
$0.250
Total expense recognised for the period arising from share-based payment
transactions
Employee incentive plan - options and performance rights expense recognised during
vesting period
(f) Accounting policy for share-based payments
Equity-settled share-based compensation benefits are provided to employees.
Consolidated
2020
2019
621,897
787,604
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 costs of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined
using either the Binomial 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 shares, 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 Consolidated Entity receives the services that entitle the employees to receive payment. No
account is taken of any other vesting conditions.
The costs 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 fair value of the award on the grant date,
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.
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.
Non-market vesting conditions are included in assumptions about the number of options that are expected to become
exercisable. Estimates are subsequently revised if there is any indication that the number of share options expected to vest
differs from previous estimates. Any adjustment to cumulative share-based compensation resulting from a revision is
recognised in the current period. The number of vested options ultimately exercised by holders does not impact the
expense recorded in any period.
Upon exercise of share options, the proceeds received, net of any directly attributable transaction costs, are allocated to
share capital up to the nominal (or par) value of the shares issued with any excess being recorded as share premium.
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.
54
Montem Resources Limited
Notes to the financial statements
31 December 2020
27. Share-based payments (continued)
If the non-vesting condition is within the control of the Consolidated Entity or employee, the failure to satisfy the condition is
treated as a cancellation. If the condition is not within the control of the Consolidated Entity 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 an equity-settled award is 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.
28. Material Contracts
Rail Loadout Property Purchase
The Company has entered into an agreement (“Original Agreement”) to purchase property near the rail line to be utilized
as the rail loadout facility (the “Rail Land”). Subject to acceptance of an offer to purchase land adjacent to the Rail Land
(“Adjacent Land”), the Consolidated Entity has agreed to purchase the Rail Land and the Adjacent Land for a total of CAD
2,719,000. A non-refundable deposit amounting to CAD175,000 has been paid to the vendor of the Rail Land. As the
transaction did not close on 31 October 2019 pursuant to the Original Agreement, the Original Agreement was replaced
with a new agreement to extend the offer to purchase the property until 1 July 2020 (the “Replacement Agreement”). In
consideration of entering into the Amended Agreement, the Company has provided the vendor with a new refundable
deposit amounting to CAD 225,000 that will be forfeited to the vendor in the event that that purchase is not completed.
Subsequent to the year end, on 4 January 2021, the Consolidated Entity and the landlord agreed to extend this option over
the planned rail loadout land for a further 12 months. The Land Vendors are not Related Parties. The parties agreed to an
extension of this agreement under the following terms:
●
●
●
●
Extension of agreement to 4 January 2022;
Total purchase price CAD 3,000,000;
The Consolidated Entity agreeing to forgo the existing CAD 184,000 deposit on 4 January 2021; and
The Consolidated Entity agreeing for a new, non-refundable deposit CAD 275,000 on 4 January 2021.
Chinook Properties Purchase
Montem Alberta completed the purchase of the Chinook Properties from PMRU, a subsidiary of Westmoreland Coal
Company. Total consideration for the Chinook Properties is CAD 12,000,000, of which CAD 1,000,000 was paid in
September 2016. Payment of the balance owing is as described below:
Tranche 1: Licensing Payments
Total of CAD 5,000,000 is payable as follows:
●
●
●
●
CAD 5,000,000 – within thirty days of receipt by Montem of a mining licence for any of the Chinook Properties not
including Tent Mountain or
CAD1,500,000 – within ninety days of receipt of the Tent Mountain renewed or amended coal mining licence;
CAD 1,500,000 – within ninety days of receipt of an amended Alberta Environmental Protection and Enhancement Act
(EPEA) for Tent Mountain;
CAD 2,000,000 on or before the earlier of thirty days of receipt of any coal mining licence related to the Chinook
Properties other than Tent Mountain and 31 January 2027.
Provided that:
●
●
If none of these payments have been triggered by 31 December 2021 and the purchaser has not submitted relevant
mining licence applications then the amounts will be payable on the earlier of the above triggers or in five equal
payments of CAD 1,000,000 payable annually before 31 January between 2022 and 2026; or
If none of these payments have been triggered by 31 December 2021 and the purchaser has submitted relevant
mining licence applications then the amounts will be payable on the earlier of the above milestones or in five equal
payments of CAD 1,000,000 payable annually before 31 January between 2024 and 2028. If the Company has
submitted the relevant mining licence applications but they are rejected by the authorities, the licence-related
payments will be payable in accordance with this provision.
55
Montem Resources Limited
Notes to the financial statements
31 December 2020
28. Material Contracts (continued)
As described above, the CAD 5,000,000 licensing payment is payable even if no licences are received for the Chinook
Properties.
Tranche 2: Production Payments
Total of CAD 6,000,000 is payable as follows:
●
CAD 6,000,000 within thirty days of the first 1,000,000 tonnes of coal from any of Chinook Properties not including
Tent Mountain.
Unless production of the first 1,000,000 tonnes of coal comes from Tent Mountain, then
●
●
●
●
●
CAD 500,000 within thirty days of production of the first 500,000 tonnes of Tent Mountain coal;
CAD 500,000 within thirty days of the production of the second 500,000 tonnes of Tent Mountain coal;
CAD 500,000 within thirty days of the first anniversary of such 1,000,000 tonnes production;
CAD 500,000 within thirty days of the second anniversary of such 1,000,000 tonnes production; and
CAD 4,000,000 within thirty days of production of 1,000,000 tonnes of production from the Chinook Properties other
than Tent Mountain.
56
Montem Resources Limited
Directors' declaration
31 December 2020
The Directors have determined that the Company is a reporting entity, and determined that this financial report should be
prepared in accordance with the accounting policies outlined in Note 1 to the financial statements. The Directors of the
Company declare that:
●
●
●
●
the attached financial statements and notes give a true and fair view of the consolidated entity's financial position as
at 31 December 2020 and of its performance for the financial year ended on that date; and
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;
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
___________________________
Mark Lochtenberg
Chairman
9 March 2021
57
Montem Resources Limited
Independent auditor’s report to members
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Montem Resources Limited (the Company and its
subsidiaries (the Group)), which comprises the consolidated statement of financial position
as at 31 December 2020, 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 other explanatory information, 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 31 December 2020
and of its financial performance for the year ended on that date; and
complying with Australian Accounting Standards and the Corporations Regulations
2001.
(ii)
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our
responsibilities under those standards are further described in the Auditor’s
Responsibilities for the Audit of the Financial Report section of our report. We are
independent of the Group in accordance with the auditor independence requirements of
the Corporations Act 2001 and the ethical requirements of the Accounting Professional and
Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants
(including Independence Standards) (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in
accordance with the Code.
We 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.
58
CAPITALISATION OF EXPLORATION AND EVALUATION COSTS
Area of focus
Refer also to notes 2 and 11
The Group has incurred exploration and
evaluation costs for exploration projects
in Australia over a number of years.
There is a risk that the Group may lose
or relinquish its rights to explore and
evaluate those areas of interest and
therefore amounts capitalised to the
statement of financial position from the
current and historical periods be no
longer recoverable.
During the year no impairment charge
was recognised in relation to exploration
expenditure.
INITIAL PUBLIC OFFERING
Area of focus
Refer also to notes 13 and 15
During the year ended 31 December
2020 the Company undertook their Initial
Public Offering [IPO] where they raised
$8 million through the issue of ordinary
shares enabling them to publicly list their
shares on the Australian Securities
Exchange. This event triggered the
conversion of outstanding convertible
notes valued at $5.7 million into ordinary
shares of the company.
Now the Company is a listed public
company it necessarily is subject to
enhanced disclosure requirements of
the Corporations Act 2001 and ASX
Listing Rules which require for instance
a Remuneration Report in respect of key
management personnel and disclosure
on operations in the Director’s Report.
How our audit addressed it
Our audit procedures included the following:
— Understanding and vouching the underlying contractual
entitlement to explore and evaluate each area of interest,
including an evaluation of the Group’s renewal in that area
of interest at its expiry;
— Examining project spend per each area of interest and
comparing this spend to the minimum expenditure
requirements set out in the underlying exploration
expenditure plan;
— Examining project spend to each area of interest to ensure
that it is directly attributable to that area of interest; and
— From an overall perspective, comparing the market
capitalisation of the Group to the net carrying value of its
assets on the statement of financial position to identify any
other additional indicators of impairment.
We also assessed the adequacy of the Group’s disclosures in
the financial report.
How our audit addressed it
Our audit procedures included the following:
— For new shares issued, cash was vouched to the bank
statement, as well as testing costs that were associated
with the capital raising and ensuring they were correctly
netted against the capital raised.
— Reviewed convertible note agreements and that it was
transferred with the appropriate number of shares and
correct price.
— Vouching remuneration of key management personnel to
payroll records, bank statements, minutes of Director’s
Meetings and share based payment information.
— Determining whether disclosures made in the Director’s
Report were accurate and consistent with the financial
performance and financial position of the Group as
disclosed in the financial statements and notes to the
accounts.
— Apportionment of costs from IPO between capitalisation for
new shares and those expensed through profit and loss for
existing shares.
— We also assessed the adequacy of the Group’s
disclosures in the financial report.
59
EQUITY BASED PAYMENT TRANSACTIONS
Area of focus
Refer also to notes 5 and 16
The Group measures the cost of equity-
settled transactions with employees by
reference to the fair value of the equity
instruments at the date at which they are
granted.
The fair value is determined by using
either the Binomial or Black-Scholes
model taking into account the terms and
conditions upon which the instruments
were granted. The accounting estimates
and assumptions relating to equity-
settled share-based payments would
have no impact on the carrying amounts
of assets and liabilities within the next
annual reporting period but may impact
profit or loss and equity.
How our audit addressed it
Our audit procedures included:
— A review of the internal control procedures and systems
implemented by the Group to account for and issue equity
based instruments;
— Obtaining formal agreements supporting the transactions;
— Sought evidence supporting the achievement of
milestones necessary to trigger payment of the equity
instruments
— Reviewed the significant assumptions and evidence
supporting the calculations of the payments for accuracy
and appropriateness
— Checking disclosures in the financial report for accuracy of
measurement and information about the payments.
For the year ended 31 December 2020,
the Group issued share based payments
of $928,641 (2019: $787,604).
MANAGEMENT OF AVAILABLE WORKING CAPITAL
Area of focus
Refer also to note 2
How our audit addressed it
As the Group is in an exploration,
evaluation and development stage prior
to mining operations and revenue
generation, management of working
capital to fund operations is a key focus
of management and a risk of the
business which has been largely
managed through capital raisings in the
recent IPO of the Group and
subsequent, to adequately fund their
ongoing activities.
— Examining the latest cashflow forecasts of the Group to
determine whether assumptions are supportable and cash
funding is sufficient to support the net cash outflows,
including committed costs and capital purchases for the
period of 12 months from the date of this report.
— Enquiry and representations from management and
Directors to support the cash flow assumptions of the
Group.
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 31 December 2020, but does not include the financial report
and the auditor’s report thereon.
60
Our opinion on the financial report does not cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial report or our
knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for
such internal control as the directors determine is necessary to enable the preparation of the financial
report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted
in accordance with the Australian Auditing Standards will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of this financial report.
A further description of our responsibilities for the audit of these financial statements is located at the
Auditing and Assurance Standards Board website at:
http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf
This description forms part of our independent auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 12 to 21 of the directors’ report for the year
ended 31 December 2020.
In our opinion, the Remuneration Report of Montem Resources Limited, for the year ended 31 December
2020, complies with section 300A of the Corporations Act 2001.
61
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.
William Buck Audit (Vic) Pty Ltd
ABN 59 116 151 136
J. C. Luckins
Director
Melbourne, 9th of March 2021
62
Montem Resources Limited
Shareholder information
31 December 2020
The shareholder information set out below was applicable as at 1 March 2021.
Distribution of equitable securities
Analysis of number of equitable security holders by size of holding:
Holding Ranges
Total holders Total units
% units
above 0 up to and including 1,000
above 1,000 up to and including 5,000
above 5,000 up to and including 10,000
above 10,000 up to and including 100,000
above 100,000
2,736
8
201,399
62
797,001
101
209
9,043,166
151 222,976,530
531 233,020,832
-
0.09%
0.34%
3.88%
95.69%
Analysis of number of equitable security holders by size of holding for holders of unlisted options:
above 10,000 up to and including 100,000
above 100,000
Total holders Total units
% units
2
11
13
100,000
6,215,133
6,315,133
1.58%
98.42%
Analysis of number of equitable security holders by size of holding for holders of unlisted performance rights:
Holding ranges
above 100,000
Total holders Total units
% units
16
8,719,710
100.00%
63
Montem Resources Limited
Shareholder information
31 December 2020
Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
Merrill Lynch (Australia) Nominees Pty Limited
HSBC Custody Nominees (Australia) Limited
BNP Paribas Noms Pty Ltd (DRP)
National Nominees Limited
JLNEC3 Pty Ltd (Tindall Family No 3 A/C)
Evernal Energy Pte Ltd
M & A (Cs) Pty Ltd (M & A Cleaning Serv S/F A/C)
Aliro Olave
Mark Lochtenberg & Michael Lochtenberg (Rigi Super Fund A/C)
Mr Robert James Tindall
Citicorp Nominees Pty Limited
Merrill Lynch (Australia) Nominees Pty Ltd (Regal Emerg Comp Fund Ii A/C)
CS Third Nominees Pty Ltd (Hsbc Cust Nomau Ltd 13 A/C)
Latimore Family Pty Ltd (Latimore Family A/C)
Cairnglen Investments Pty Ltd
Brispot Nominees Pty Ltd (House Head Nominee A/C)
Twynam Investments Pty Ltd
UBS Nominees Pty Ltd
Anthony Jackson
Ilwella Pty Ltd
Unquoted equity securities
There are no unquoted equity securities.
Substantial holders
Substantial holders in the Company are set out below:
Regal Funds Management Pty Ltd
Ilwella Pty Ltd
Robert Tindall and Associates
M&A Cleaning Services Pty Ltd
Voting rights
The voting rights attached to ordinary shares are set out below:
At meeting of members or classes of members:
(a) each member entitled to vote may vote in person or by proxy, attorney or respective;
Ordinary shares
Number held
% of total
shares
issued
29,928,336
21,823,530
7,588,236
7,544,003
7,511,604
7,317,079
7,169,951
6,663,383
5,982,154
5,958,334
5,732,151
5,727,238
5,000,000
4,666,666
4,312,399
4,123,794
4,000,000
3,990,000
3,960,000
3,767,490
152,766,348
12.84
9.37
3.26
3.24
3.22
3.14
3.08
2.86
2.57
2.56
2.46
2.46
2.15
2.00
1.85
1.77
1.72
1.71
1.70
1.62
65.58
Ordinary shares
Number held
44,527,235
21,767,490
14,436,864
13,833,334
% of total
shares
issued
19.11
9.34
6.20
5.94
(b) on a show of hands, every person present who is a member or a proxy, attorney or representative of a member has one
vote; and
(c) on a poll, every person present who is a member or a proxy, attorney or representative of a member has:
64
Montem Resources Limited
Shareholder information
31 December 2020
(i) for each fully paid share held by person, or in respect of which he/she is appointed a proxy, attorney or representative,
one vote for the share;
(ii) for each partly paid share, only the fraction of one vote which the amount paid (not credited) on the share bears to the
total amounts paid and payable on the share (excluding amounts credited). Amounts paid or credited as paid in advance of
a call are ignored when calculating the fraction
Subject to any rights or restrictions attached to any shares or class of shares. The unlisted options and unlisted
performance rights do not carry any voting rights.
There are no other classes of equity securities.
Annual general meeting and director nominations closing date
Montem Resources Limited advises that its Annual General Meeting will be held on Friday, 30 April 2021. The details
relating to the meeting will be advised in the Notice of Meeting to be sent to all Shareholders and released to ASX
immediately upon dispatch.
The closing date for receipt of nomination for the position of Director is Wednesday, 17 March 2021. Any nominations must
be received in writing no later than 5.00pm (Melbourne time) on Wednesday, 17 March 2021 at the Company’s Registered
Office.
The Company notes that the deadline for nominations for the position of director is separate to voting on director elections.
Details of the director’s to be elected will be provided in the Company’s Notice of Annual General Meeting in due course.
Consistency with business objectives - ASX Listing Rule 4.10.19
In accordance with Listing Rule 4.10.19, the Consolidated Entity states that it has used the cash and assets in a form
readily convertible to cash that it had at the time of admission in a way consistent with its business objectives. The
business objectives are development of Tent Mountain Mine and completion of Chinook Project feasibility studies.
Consistent with the use of funds which were disclosed under the Prospectus dated 31 July 2020, the Consolidated Entity
believes it has used its cash in a consistent manner for the following purposes:
●
●
●
●
●
●
●
Tent Mtn: strategic land purchase (Tent Mtn rail)
Tent Mtn: Port reservation fee
Tent Mtn: permitting (enviro monitoring and liaison)
Tent Mtn: pre-production drilling (pit definition & bulk sample)
Chinook: exploration, PEA study and environmental work
General and administrative expenses (18 months)
Offer costs (broker fees; IPO preparation)
65
Montem Resources Limited
Tenement List
31 December 2020
Tenement List
PART I - Alberta Freehold Tenements
Prospect Area
Land Title Certificate Number
Hectares
TENT MOUNTAIN MINE
TENT MOUNTAIN MINE
TENT MOUNTAIN MINE
TENT MOUNTAIN MINE
TENT MOUNTAIN MINE
TENT MOUNTAIN MINE
TENT MOUNTAIN MINE
TENT MOUNTAIN MINE
TENT MOUNTAIN MINE
TENT MOUNTAIN MINE
TENT MOUNTAIN MINE
TENT MOUNTAIN MINE
TENT MOUNTAIN MINE
TENT MOUNTAIN MINE
TENT MOUNTAIN MINE
TENT MOUNTAIN MINE
TENT MOUNTAIN MINE
TENT MOUNTAIN MINE
TENT MOUNTAIN MINE
TENT MOUNTAIN MINE
TENT MOUNTAIN MINE
TENT MOUNTAIN MINE
TENT MOUNTAIN MINE
TENT MOUNTAIN MINE
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
8.1
32.6
16.3
32.6
8.1
48.9
8.1
24.3
64.7
16.2
24.3
2.3
8.0
12.2
56.7
16.2
32.6
8.1
64.7
16.3
32.6
8.1
48.9
8.1
36.4
129.5
28.3
12.1
16.2
165.9
131.5
129.5
181 088 180
181 088 180 +13
181 088 180 +14
181 088 180 +15
181 088 180 +16
181 088 180 +17
181 088 180 +18
181 088 180 +19
181 088 180 +20
181 088 180 +21
181 090 692
181 090 692 +1
181 090 692 +2
181 090 692 +3
181 090 692 +4
181 090 692 +5
181 090 692 +6
181 090 692 +7
181 090 692 +8
181 090 692 +9
181 090 692 +10
181 090 692 +11
181 090 692 +12
181 090 692 +13
181 088 180 +1
181 088 180 +2
181 088 180 +3
181 088 180 +4
181 088 180 +5
181 088 180 +6
181 088 180 +7
181 088 180 +8
66
Montem Resources Limited
Tenement List
31 December 2020
PART I - Alberta Freehold Tenements (continued)
Prospect Area
Land Title Certificate
Number
Hectares
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
181 088 180 +9
181 088 180 +10
181 088 180 +11
181 088 180 +12
181 088 180 +22
181 088 180 +23
181 088 180 +24
181 088 180 +25
181 088 180 +26
181 088 180 +27
181 088 180 +28
181 088 180 +29
181 088 180 +30
181 088 180 +31
181 088 180 +32
181 088 180 +33
181 088 180 +34
129.5
248.3
259.0
12.1
129.5
129.5
129.5
129.5
52.6
259.0
259.0
259.0
129.5
257.0
129.5
129.5
129.5
PART II - BC Leasehold Tenements
Prospect Area
Document Name
Hectares
TENT MOUNTAIN MINE
Coal Lease 389283
153.0
PART III - Alberta Leasehold Tenements
Prospect Area
Coal Lease No.
Hectares
TENT MOUNTAIN MINE
TENT MOUNTAIN MINE
TENT MOUNTAIN MINE
TENT MOUNTAIN MINE
TENT MOUNTAIN MINE
TENT MOUNTAIN MINE
TENT MOUNTAIN MINE
TENT MOUNTAIN MINE
92.6
48.0
56.6
149.2
38.5
102.2
310.5
120.0
1305090663
1305090664
1305090665
1305090666
1305090667
1305090668
1305100739
1306080819
67
Montem Resources Limited
Tenement List
31 December 2020
PART III - Alberta Leasehold Tenements (continued)
Prospect Area
Coal Lease No.
Hectares
TENT MOUNTAIN MINE
TENT MOUNTAIN MINE
TENT MOUNTAIN MINE
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
64.0
64.0
210.4
128.0
80.0
160.0
128.0
128.0
176.0
128.0
256.0
224.0
64.0
16.0
48.0
64.0
64.0
64.0
64.0
64.0
64.0
32.0
64.0
16.0
160.0
128.0
32.0
32.0
48.0
256.0
90.7
51.2
48.0
64.0
1306080820
1306080821
1306080822
1305121390
1306020552
1306020553
1306020554
1306020555
1306020556
1306050823
1306050824
1306050826
1306050827
1306080813
1306080814
1306080815
1306080816
1306080817
1306080818
1306120432
1306120433
1306120434
1307040479
1307040480
1307060454
1307100753
1307110904
1307110905
1307110906
1307110907
1308050910
1308090609
1311010588
1311010589
68
Montem Resources Limited
Tenement List
31 December 2020
PART III - Alberta Leasehold Tenements (continued)
Prospect Area
Coal Lease No.
Hectares
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
CHINOOK PROJECT
4-STACK / CHINOOK PROJECT (see Note below)
4-STACK / CHINOOK PROJECT (see Note below)
4-STACK
4-STACK
4-STACK
4-STACK
4-STACK
4-STACK
4-STACK
4-STACK
4-STACK
4-STACK
4-STACK
1311010590
1311080653
1311080654
1311080655
1311120668
1311120669
1312040484
1312100464
1312100465
1314030394
1316020095
1316020154
1316050179
1316120147
1316120148
1316120149
1316120150
1316120151
1316120152
1316120155
1317080314
1320050132
1320120074
1320120075
1320120076
1320120077
1320120078
1320120079
1320120080
1306050828
1306050830
1306050825
1306050829
1316120153
1316120154
1316120156
1316120157
1317090268
1317090269
1317090279
1317090280
1320120081
69
64.0
128.0
32.0
64.0
112.0
65.7
64.0
880.0
384.0
48.0
96.0
144.0
128.0
32.0
128.0
128.0
64.0
192.0
64.0
128.0
128.0
140.0
288.0
64.0
224.0
84.0
128.0
192.0
96.0
128.0
256.0
128.0
256.0
64.0
69.2
128.0
128.0
128.0
352.0
351.0
150.0
110.3
Montem Resources Limited
Tenement List
31 December 2020
PART III - Alberta Leasehold Tenements (continued)
Prospect Area
Coal Lease No.
Hectares
ISOLA
ISOLA
ISOLA
ISOLA
ISOLA
ISOLA
ISOLA
ISOLA
ISOLA
ISOLA
ISOLA
OLDMAN
OLDMAN
OLDMAN
OLDMAN
OLDMAN
OLDMAN
Note
1307070578
1307070579
1307070580
1319090188
1319090191
1319090192
1319090193
1319090194
1319090195
1320120082
1320120083
1317090270
1317090271
1317090272
1317090273
1317090274
1317090275
128.0
240.0
128.0
656.0
608.0
1,024.0
893.8
796.8
357.6
122.38
352.0
96.0
192.0
192.0
32.0
256.0
256.0
Leases 1306050828 and 1306050830 are located partially within Chinook Project and partially within 4-Stack.
The total area of Lease 1306050828 is approximately 128 hectares with approximately 65 hectares lying within
Chinook Project and the remainder in 4-Stack.
The total area of Lease 1306050830 is approximately 256 hectares with approximately 128 hectares lying within
Chinook Project and the remainder in 4-Stack.
70