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Antero ResourcesABN 12 143 890 671
Gound Floor,
5 Ord Street
West Perth WA 6005
Telephone: +61 (8) 9324 1061
Facsimile: +61 (8) 9324 1014
Email:
Web:
info@musgraveminerals.com.au
www.musgraveminerals.com.au
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9
CORPORATE DIRECTORY
DIRECTORS
Graham Ascough
Non-Executive Chairman
Robert Waugh
Managing Director
Kelly Ross
Non-Executive Director
John Percival
Non-Executive Director
COMPANY SECRETARY
Patricia (Trish) Farr
REGISTERED OFFICE & PRINCIPAL PLACE OF BUSINESS
Ground Floor, 5 Ord Street
West Perth, WA 6005
Telephone:
Facsimile:
Email:
Web:
AUDITOR
+61 (8) 9324 1061
+61 (8) 9324 1014
info@musgraveminerals.com.au
www.musgraveminerals.com.au
BDO Audit (WA) Pty Ltd
38 Station Street
Subiaco, WA 6008
LEGAL ADVISORS
O’Loughlins Lawyers
Level 2, 99 Frome Street
Adelaide, SA 5000
SHARE REGISTRY
Computershare Investor Services Pty Ltd
Level 11, 172 St Georges Terrace
Perth, WA 6000
Telephone:
Facsimile:
+61 (8) 9323 2000
+61 (8) 9323 2033
SECURITIES EXCHANGE LISTING
The Company is listed on the Australian Securities Exchange Ltd (“ASX”)
Home Exchange:
Perth, Western Australia
ASX Code:
MGV
Musgrave Minerals Ltd (“Musgrave”
or “the Company”) (ASX: MGV) is
an Australian resources company
focused on gold exploration and
near-term development at the Cue
Project in the Murchison Province of
Western Australia. A description of the
Company’s operations and principal
activities is included in the Review of
Operations and the Directors’ Report.
CONTENTS
CHAIRMAN’S LETTER
REVIEW OF OPERATIONS
TENEMENT SCHEDULE
Cover photo:
DIRECTORS’ REPORT
Drill rig at Starlight with night sky (photo
by Cliff Harris)
AUDITOR’S INDEPENDENCE DECLARATION
FINANCIAL STATEMENTS
DIRECTORS’ DECLARATION
INDEPENDENT AUDITOR’S REPORT
ADDITIONAL INFORMATION
2
3
15
16
25
26
53
54
57
PAGE 1
MUSGRAVE MINERALS LTD ANNUAL REPORT 2020 CHAIRMAN’S LETTER
Mining Limited (“Evolution”). Evolution is currently
sole-funding the joint venture and can earn up to a
75% interest through expenditure of $18M. Musgrave
is managing the initial work programs, with the
Phase 1 drilling program complete (22,879m) and the
follow-up Phase 2 program (~21,900m) underway.
Assays received for the first phase of the program
have identified multiple regolith gold halos that
potential overlie significant accumulations of gold
in the underlying basement. Once the current Phase
2 aircore drilling is complete, the priority basement
targets will be tested with reverse circulation (RC)
and/or diamond drilling.
The Company continually reviews the ongoing
situation relating to COVID-19 and the implications
for the health and wellbeing of our employees,
contractors and stakeholders. We are pro-active
with respect to our response and have operational
procedures and plans in-place in-line with official
health advice and government directives. Musgrave
will continue to operate within these guidelines, and
I’m pleased to say that, to date, we remain incident
free. Logistics and planning are more complex
but there have not been significant delays or cost
impacts on our programs to date related to COVID-19.
I would like to take this opportunity, on behalf of
the Board, to thank all our Shareholders for their
ongoing support.
I would also like to thank the staff, management,
contractors and my fellow Directors for their
ongoing efforts. We are committed to progressing
the Company by identifying and testing new targets,
growing our resources and progressing towards
development, through high-quality exploration and
technical studies for the benefit of all Musgrave
shareholders.
Graham Ascough
Chairman
On behalf of the Board of Directors, it is my pleasure
to present the 2020 Annual Report for Musgrave
Minerals Limited (“Musgrave” or “Company”).
The Company’s Cue Project (“Cue”) in the well-
endowed, gold producing Murchison region of
Western Australia is proving to be a game changer.
The outstanding success of our exploration programs
at Cue have been transformational for Musgrave and
the highlight for 2020 is the discovery of the high-
grade, near surface Starlight gold lode at Break of
Day.
The Starlight discovery was not an overnight
success, although the impacts on the Company were
immediately positive. Musgrave has been exploring
at Cue for the past 4 years and in that time we have
made new discoveries and have grown the resource
base to approximately 613koz gold, a figure that is
expected to grow as it does not yet include the recent
Starlight or White Light high-grade discoveries.
The Starlight discovery resulted from the culmination
of the years of experience at Cue and subsequent
in-depth analysis of results by our highly motivated
and talented team that recognised the potential for
high-grade ‘link lodes’ at Break of Day. This was an
excellent example of true exploration insight and
the first holes into Starlight and then subsequently
White Light, are a testament to the perseverance and
analytical excellence of our team who have identified
a further 18 similar targets along the belt that are
now in the process of being drill tested.
During the year, the Lena resource, located ~150m
west of Break of Day, was updated, adding 172koz
and bringing our total resource base to 6.45Mt @
3.0g/t Au for 613,000 ounces of contained gold.
We look forward to completing the Break of Day
resource update in 2020 that will no doubt add
further high-grade ounces to this already significant
figure. We anticipate the resource update will lead to
the commencement of feasibility studies on Break
of Day and Lena that will investigate the profitable
development of a ‘stand-alone’ operation at Cue.
In parallel with the feasibility work, Musgrave will
continue to capitalise on its exploration strengths
and accelerate drilling programs across a range of
high priority targets at Cue that will include testing
for new high-grade targets regionally, extending
the existing lodes at Break of Day and targeting
discovery opportunities at Mainland.
A substantial drilling program on Lake Austin is
continuing under our Joint Venture with Evolution
PAGE 2
MUSGRAVE MINERALS LTD ANNUAL REPORT 2020 REVIEW OF OPERATIONS
Musgrave Minerals Ltd (“Musgrave” or “the
Company”) (ASX: MGV) is an Australian resources
company focused on gold exploration and
development at the Cue Project in the Murchison
Province of Western Australia.
Exploration activities for the financial year have been
focused on the Cue Project. The Company has had
significant exploration success during the year with
the discovery of the Starlight and White Light high-
grade gold lodes at Break of Day.
Musgrave has an estimated 613koz of gold in
resources on the Cue Project and completed more
than 50,000m of drilling during the year. The total
Indicated and Inferred JORC Mineral Resources
on the project are: 6.45Mt @ 3.0g/t Au for 613,000
ounces of gold (see ASX announcements 14 July
2017, and 17 February 2020). The new Starlight and
White Light discoveries are not included in this
resource estimate.
exploration drilling at Cue and commencing
feasibility studies to de-risk future development.
Exceptional hits such as 14m @ 191.4g/t Au from 4m
and 77m @ 13.3g/t Au from 7m down hole (see ASX
announcement 28 July 2020, “Bonanza gold grades
continue at Starlight with 3m @ 884.7g/t Au”) have
highlighted the near-surface gold potential at the new
Starlight discovery adjacent to the existing Break
of Day lodes. The Break of Day resource, excluding
Starlight, currently stands at 868Kt @ 7.2g/t Au
for 199Koz gold (see ASX announcements 14 July
2017, and 17 February 2020). Musgrave intends to
update the Break of Day resource estimate, including
Starlight and White Light in late 2020.
Musgrave also has tenement applications in the
Musgrave Geological Province of South Australia
(Figure 1).
Musgrave’s intent is to continue
to grow the resource base,
accelerate exploration and
commence feasibility studies
to develop a low-cost operation
capable of returning significant
value to shareholders.
2020 was a very successful year
for Musgrave, with significant
value accretion and share price
growth achieved following
the near surface high-grade
Starlight gold discovery.
The Company’s near-term
priority is expanding our gold
resources through extensional
and accelerated greenfield
Figure 1: Musgrave Minerals’ Project Location Map
Drilling at Starlight - Cue Project
PAGE 3
MUSGRAVE MINERALS LTD ANNUAL REPORT 2020 REVIEW OF OPERATIONS
in Legend currently valued at approximately $2
million.
Musgrave also holds 1,308,750 ordinary shares in
Cyprium Metals Ltd (ASX: CYM) currently valued at
approximately $200,000.
During financial year 2020, Musgrave successfully
secured an Exploration Incentive Scheme (“EIS”)
co-funded drilling grant of $150,000 to drill test for a
deep extension of the Starlight mineralisation.
Inputting geological data into a Toughbook field
computer at Cue
Corporate
During the year, Musgrave spent $2.9 million on
exploration activities.
The Company successfully completed a capital
raising in April 2020 to raise $6.0M (before costs)
through a share placement to institutional and
sophisticated investors.
During the year, 1.9 million unlisted options were
exercised, raising $209,732.
At 30 June 2020 the Company’s capital structure
comprised:
•
•
464,742,285 fully paid ordinary shares; and
21,650,000 unlisted options at various
exercise prices and expiry dates
In September 2019, Musgrave announced that it had
entered into an Earn-In and Joint Venture Exploration
Agreement with Evolution Mining Limited (ASX:
EVN) (“Evolution”) over a select area of Lake Austin
and surrounds (“JV Area”) on the Cue Project. The
JV Area excludes all the known resources including
Lena, Break of Day/Starlight and the Mainland option
area. Evolution can earn a 75% interest in the JV
area by sole funding $18 million on exploration over
a five-year term with a minimum commitment of $4
million in the first two years. Musgrave will manage
the JV during the initial period.
On 1 May 2020, Musgrave entered into a joint
venture with Cyprium Australia Pty Ltd (“Cyprium”)
on the non-gold rights over the northern Cue tenure
including the Hollandaire copper deposit. Cyprium
(ASX: CYM) has earned an 80% interest in the non-
gold rights over the area with Musgrave free carried
to a definitive feasibility study and retaining 100%
of the gold rights. The farm-out of base metals at
Hollandaire has allowed Musgrave to focus on its
priority gold targets, resulting in the discovery of
the Starlight and White Light gold lodes at Break of
Day and delivering significant value accretion to its
shareholders.
Musgrave will continue to maximise its exploration
strengths and accelerate drilling across high priority
targets at Cue with the aim of making further high-
grade gold discoveries that would add value to a
stand-alone operation.
During the year Musgrave sold 7.5 million shares in
Legend Mining Ltd (ASX: LEG)(“Legend”) and used
part of the proceeds to exercise 10 million Legend,
4 cent options which added $634,000 to its cash
position. The Company now holds 12.5 million shares
PAGE 4
5
MUSGRAVE MINERALS LTD ANNUAL REPORT 2020
REVIEW OF OPERATIONS
Response to COVID-19
Musgrave is continuing to review the ongoing
situation relating to the COVID-19 pandemic and
the implications for the health and wellbeing of
our employees, contractors and stakeholders. The
Company has been pro-active with respect to its
response to COVID-19 and has developed operational
procedures and plans in line with official health
advice and government directives. Musgrave will
continue to operate within these guidelines and will
adapt its procedures as required.
The Company remains an active explorer and will
continue to advance the Cue Gold Project.
Exploration Activities
Cue Project
During the year the Company focused on exploration
and resource growth. This culminated in the
discovery of the new Starlight and White Light gold
lodes at Break of Day and a significant upgrade to
the Lena gold resource. High-grade gold was also
intersected in reverse circulation (“RC”) drilling at the
Mainland-Consols prospect at Cue.
On the Evolution Joint Venture on Lake Austin, the
Company completed a Phase 1 regional aircore
drilling program and following an assessment of
the positive results has subsequently commenced a
Phase 2 follow-up program.
“Exploration and discovery success has
been a prime driver for growth of the
Company in 2020”
Break of Day
Starlight
The Company discovered the new Starlight gold lode
at Break of Day in early 2020 and commenced a large
RC and diamond drilling program with the aim of
delivering an updated JORC resource estimate for
Break of Day that will include Starlight. The drilling
has successfully defined the Starlight lode over a
strike length of approximately 115m with the deepest
intersect to date at ~320 vertical metres (Figures 4
and 5).
A maiden resource estimate for Starlight will be
included in a resource update for Break of Day,
scheduled for late 2020.
Significant RC intercepts from the Starlight lode
include:
o
14m @ 191.1g/t Au from 4m (20MORC068)
including;
o
3m @ 884.7g/t Au from 5m including;
1m @ 2,518.8g/t Au from 6m
o
77m @ 13.3g/t Au from 7m (20MORC058)
including;
o
o
o
8m @ 99.0g/t Au from 7m and
4m @ 45.5g/t Au from 38m and
3m @ 11.5g/t Au from 81m
68m @ 5.9g/t Au from 21m (20MORC057)
including;
o
8m @ 48.5g/t Au from 21m
60m @ 13.1g/t Au from 77m (20MORC031)
including;
o
o
3m @ 90.9g/t Au from 77m and
21m @ 23.79g/t Au from 106m
48m @ 4.4g/t Au from 30m (20MORC032)
including;
o
6m @ 29.1g/t Au from 77m
42m @ 6.8g/t Au from 70m (20MORC018)
including;
o
4m @ 65.9g/t Au from 70m
42m @ 5.6g/t Au from 146m (20MORC013)
including;
o
5m @ 32.2g/t Au from 165m
31m @ 44.8g/t Au from 37m (20MORC037)
including;
o
6m @ 228.0g/t Au from 38m
22m @ 5.8g/t Au from 15m (20MORC067)
including;
o
3m @ 26.2g/t Au from 31m
22m @ 21.0g/t Au from 2m (20MORC036)
12m @ 109.4g/t Au from 40m (20MORC033)
including;
o
4m @ 326.8g/t Au from 40m
12m @ 19.5g/t Au from 3m (20mORC085)
12m @ 9.4g/t Au from 129m (20MORC069)
9m @ 16.5g/t Au from 225m (20MORC029)
9m @ 10.7g/t Au from 52m (20MORC055)
o
o
o
o
o
o
o
o
o
o
o
o
o
PAGE 5
MUSGRAVE MINERALS LTD ANNUAL REPORT 2020
REVIEW OF OPERATIONS
o
o
o
o
o
o
o
8m @ 17.0g/t Au from 74m (20MORC071) and
4m @ 16.0g/t Au from 149m
6m @ 55.8g/t Au from 108m (20MORC012)
6m @ 35.8g/t Au from 131m (20MORC040)
6m @ 32.3g/t Au from 61m (20MORC061)
5m @ 14.3g/t Au from 90m (20MORC064)
4m @ 48.2g/t Au from 85m (20MORC038)
Diamond drilling at Starlight has returned the
following significant intercepts:
o
16m @ 13.7g/t Au from 18m (20MODD008)
including;
o
o
4m @ 40.8g/t Au from 18m and
9m @ 6.1g/t Au from 25m
o
o
5.6m @ 12.7g/t Au from 257.6m (20MODD010)
4.7m @ 7.0g/t Au from 132.2m (20MODD009)
(see MGV ASX announcements dated 21 April 2020, 3
June 2020, 9 June 2020, 29 June 2020, 6 July 2020, 28
July 2020, 31 July 2020 and 19 August 2020).
Visible gold in RC quartz chips from the Starlight lode
at Break of Day, 20MORC068, 6-7m, 1m @ 2,518.8g/t
Au within 14m @ 191.1g/t Au from 4m
“Starlight has produced some stunning, high-grade gold results in near surface drilling with a
maiden resource estimate scheduled for later in 2020”
Figure 2: Schematic 3D model showing Starlight and White Light lodes at Break of Day, Cue Project
PAGE 6
MUSGRAVE MINERALS LTD ANNUAL REPORT 2020
REVIEW OF OPERATIONS
Diamond drilling at White Light has returned the
following significant intercept:
o
3.8m @ 40.5g/t Au from 100.2m (20MODD007)
including;
o
0.75m @ 203.3g/t Au from 100.2m
(see MGV ASX announcements dated 28 July 2020).
White Light
At Break of Day, the Company discovered the new
White Light gold lode located parallel to, and 75m
south of Starlight, highlighting the potential for
multiple parallel lodes. This new lode has been
confirmed in RC and diamond drilling with new
intercepts aligning with a number of historical,
isolated gold intersections. RC and diamond drilling
programs focused on delivering a JORC resource
estimate for White Light commenced in July 2020.
The drilling has successfully defined the White Light
lode over a strike length of approximately 100m with
the deepest intersect to date at 187 vertical metres
(Figures 2, 3, 4 and 5). The White Light lode remains
open down plunge.
Significant RC intercepts from the White Light lode
include:
o
o
o
o
o
o
o
6m @ 48.2g/t Au from 211m (20MORC050)
6m @ 5.4g/t Au from 111m (20MORC048)
9m @ 5.1g/t Au from 21m (20MORC004)
3m @ 38.8g/t Au from 72m (20MORC001)
3m @ 13.9g/t Au from 53m (19MORC017)
3m @ 7.2g/t Au from 128m (19MORC031)
11m @ 54.0g/t Au from 217m (17MORC084)
(see MGV ASX announcements dated 5 September
2017, 9 October 2019, 3 December 2019, 22 April 2020
and 29 June 2020).
Figure 3: Plan showing Starlight and White Light
lodes and recent drill collars at Break of Day, Cue
Project
Visible gold in core from the White Light lode at
Break of Day, 20MODD007, 100.2m,
0.75m @ 203.3g/t Au
PAGE 7
MUSGRAVE MINERALS LTD ANNUAL REPORT 2020
REVIEW OF OPERATIONS
Figure 4: Cross sections showing Starlight and White
Light lodes at Break of Day, Cue Project
Figure 6: Cue prospect Location Map
Figure 5: Long section of the Starlight lode, Break of
Day, Cue Project showing select drill hole assays
PAGE 8
MUSGRAVE MINERALS LTD ANNUAL REPORT 2020 REVIEW OF OPERATIONS
A significant exploration program with accelerated
drilling is planned for the coming year. The objective
is to continue to grow the resource base and
progress development studies to define a clear path
to a stand-alone operation which will deliver first
gold production for the Company.
Lena
At Lena, the team undertook two successful
exploration programs and expanded the resource
estimate to 4.3Mt @ 2.3g/t Au for 325Koz gold
(see ASX announcement 17 February 2020, “Lena
Resource Update”) (Table 1).
Since the previous Mineral Resource estimate,
(published in July 2017) the Company has added
172,000 ounces of gold, increasing the Mineral
Resources at Lena by 112% and improving the
overall grade of the deposit by 28% to 2.3g/t gold.
The update increased the resources in the higher
confidence Indicated category by 72%.
The updated total Indicated and Inferred Mineral
Resources for the Cue Project, incorporating
the Lena and Break of Day deposits and several
smaller deposits, now stands at 6.45Mt @ 3.0g/t
Au for 613,000 ounces of contained gold (see MGV
ASX announcements 12 March 2020, “Half Yearly
Accounts”).
Drilling at Lena extends to a maximum depth of
400m below surface where the mineralisation
remains open down plunge. The mineralisation has
been interpreted and estimated to a depth of 430m
and the mineralisation remains open over much of
the 1.5km strike length of the deposit (Figures 7 and
8).
Figure 7: Lena Long section schematic showing current resource boundary of the 16 gold lodes and the
opportunity at depth to extend the resource.
Figure 8: Lena long section block model showing resource classifications (Indicated Resources in green and
Inferred Resources in blue. The black zones are unclassified).
PAGE 9
MUSGRAVE MINERALS LTD ANNUAL REPORT 2020
REVIEW OF OPERATIONS
Table 1: Lena Gold Deposit February 2020 Mineral Resource
(0.5g/t Au cut-off above 1260mRL, 2.0g/t Au cut-off below 1260mRL)
Cut-off Grade
Indicated
Inferred
Surface 1,260mRL 0.5g/t
Au Cut-off
Below 1,260mRL 2.0g/t
Au Cut-off
Total
Tonnes
Mt
2.16
0.09
2.25
Au
g/t
1.6
2.3
1.7
Au
Koz
115
Tonnes
Mt
0.87
7
1.18
121
2.05
Au
g/t
1.7
4.1
3.1
Au
Koz
47
Tonnes
Mt
3.03
158
1.27
204
4.31
Total
Au
g/t
1.7
4.0
2.3
Au
Koz
161
164
325
*Rounding discrepancies may occur
(See MGV ASX announcement 17 February 2020, “Lena Mineral Resource more than doubles and gold grade
increases”).
“There is significant upside potential at Lena with high-grade gold mineralisation
remaining open down plunge below the existing resource.”
Mainland
The Mainland Prospect area covers the northern
extension of the shear corridor that hosts Musgrave’s
Break of Day/Starlight and Lena gold deposits and
the Lake Austin North gold discovery.
An RC drilling program was completed at Mainland
where drilling returned high-grade intercepts at the
Consols Prospect. A high-grade shoot is defined over
a strike extent of approximately 100m (Figure 9) (see
MGV ASX announcements 27 November 2019, 13
January 2020 and 16 March 2020).
A soil geochemical survey has been completed over
areas with no historical drilling on the northern
part of the Mainland project area, where regolith
interpretation suggests cover thickness is minimal.
The area is interpreted to be the continuation of the
Break of Day/Lena shear corridor. A number of new
gold targets have been generated and an aircore
drilling program is scheduled for late 2020 to test
these new targets.
Figure 9: Geological cross section from the Consols
Prospect, Mainland
RC sample piles with view looking south, Consols
prospect, Mainland, Cue Project
PAGE 10
MUSGRAVE MINERALS LTD ANNUAL REPORT 2020
REVIEW OF OPERATIONS
Development Options
On completion of the planned resource update at
Break of Day, which will include the new Starlight
and White Light gold discoveries, the Company will
commence preparation for submittal of a Mining
Proposal for the Cue Gold Project.
Musgrave has commenced environmental baseline
studies, a hydrological assessment and metallurgical
studies in preparation for future development at Cue.
Musgrave will continue to maximise its exploration
strengths and accelerate drilling across high priority
gold targets at Cue with the aim of expanding the
current resources and making further high-grade
gold discoveries that would enhance a stand-alone
operation.
Regional (100% MGV)
Musgrave has identified 18 regional gold targets
derived through a combination of geophysical data,
geochemistry, broad spaced historical regional
drilling, structural analysis and regional geology
that show an analogous setting to Starlight (Figure
10). Systematic first phase, near-surface drill testing
of these new targets has commenced. Anomalous
results will be prioritised and followed up with more
detailed and deeper drilling.
“The identification of the new high-
grade Starlight lode has highlighted
the potential upside of the belt and
the opportunity for Musgrave to make
further near surface discoveries and
grow the existing resource base.”
Evolution JV – Lake Austin
The Lake Austin area, part of the Evolution Earn-in
and Exploration Joint Venture executed in September
2019, is highly prospective for gold and significantly
underexplored.
Evolution has committed to a minimum exploration
spend of $4 million over the first two years and can
earn a 75% interest in the JV area by sole funding $18
million in exploration within five years. If Evolution
does not spend the entire $18 million within five
years, Musgrave will retain 100% ownership (see
MGV ASX announcement dated 17 September 2019).
Musgrave is managing the exploration in the first
two years. The existing gold resources including Lena
and Break of Day/Starlight and the Mainland option
area, are excluded from the Evolution Agreement
(Figures 11).
A large regional aircore Phase 1 drilling program
was completed over Lake Austin in May 2020, with
249 holes drilled for 22,879m. The program was
successful in identifying multiple high-priority
basement gold targets for follow-up drill testing
(Figure 11).
Significant intercepts from the Phase 1 program
include:
o
o
6m @ 4.2g/t Au from 116m (20MOAC031)
9m @ 2.25g/t Au from 136m to EOH
(20MOAC041)
(see MGV ASX announcement dated 5 June 2020,
“Scout drilling defines large gold targets at Cue
Evolution JV”).
The Phase 2, 21,900m, aircore drill program to follow-
up these targets on Lake Austin has commenced.
Figure 10: Regional gravity image showing new
Starlight ‘like’ analogue targets, Cue Project
PAGE 11
MUSGRAVE MINERALS LTD ANNUAL REPORT 2020 REVIEW OF OPERATIONS
Aircore Drilling – Phase 1, Lake Austin
Aircore Drilling – Phase 2, Lake Austin
“Evolution have been a great joint venture partner and we continue to work
together to strive for discovery success beneath the clay cover of Lake Austin”
Aircore Drilling – Lake Austin
Other Projects
Musgrave currently holds tenement applications in the central Musgrave province of South Australia. No field
activity was completed by Musgrave on these projects during the period.
PAGE 12
MUSGRAVE MINERALS LTD ANNUAL REPORT 2020
REVIEW OF OPERATIONS
Table 1: Summary of JORC Resources and Reserves for the Cue Project
Mineral Resources
Gold Mineral Resources as at 30 June 2020
Deposit
Moyagee
Break of Day
Lena
Leviticus
Numbers
SUBTOTAL
Eelya
Hollandaire
Rapier South
SUBTOTAL
Tuckabianna
Jasper Queen
Gilt Edge
SUBTOTAL
TOTAL
Indicated Resources
Inferred Resources
Total Resources
Tonnes
‘000s
Au
g/t
oz. Au
‘000s
Tonnes
‘000s
Au
g/t
oz. Au
‘000s
Tonnes
‘000s
Au
g/t
oz. Au
‘000s
445
2,253
–
–
2,697
473
473
–
–
–
3,170
7.7
1.7
–
–
2.7
1.4
1.4
–
–
–
2.5
111
121
–
–
232
21
171
21
–
–
–
253
423
2,053
42
278
2,796
45
2.2
216
175
96
271
3,282
6.54
3.1
6.0
2.5
3.6
1.1
12
1.9
2.6
3.1
2.8
3.4
89
83
8
22
323
2
171
13
15
9
24
360
868
4,305
42
278
5,493
518
2.15
689
175
96
271
6,453
7.2
2.3
6.00
2.46
3.1
1.35
12
1.55
2.60
3.06
2.8
3.0
199
325
8
22
554
22
12
34
15
9
24
613
Copper Mineral Resources as at 30 June 2020 (1)
Deposit
Hollandaire
Copper
Indicated Resources
Grade
%
Tonnes
‘000s
Tonnes
Cu
‘000s
Inferred Resources
Grade
%
Tonnes
‘000s
Tonnes
Cu
‘000s
Total Resources
Grade
%
Tonnes
‘000s
Tonnes
Cu
‘000s
1,891
2.0
38
122
1.4
2
2,013
2.0
40
Silver Mineral Resources as at 30 June 2020 (1)
Indicated Resources
Grade
g/t
Tonnes
‘000s
Deposit
oz. Au
‘000s
Inferred Resources
Grade
g/t
Tonnes
‘000s
oz. Au
‘000s
Total Resources
Grade
g/t
Tonnes
‘000s
oz. Au
‘000s
Hollandaire
Silver
Ore Reserves
1,925
6.3
390
728
4.7
110
2,653
5.9
500
Copper Ore Reserves as at 30 June 2020 (1)
Deposit
Hollandaire
Copper
Proven Reserves
Grade
%
Tonnes
‘000s
Tonnes
Cu
‘000s
Probable Reserves
Grade
%
Tonnes
‘000s
Tonnes
Cu
‘000s
Total Reserves
Grade
%
Tonnes
‘000s
Tonnes
Cu
‘000s
–
–
–
442
3.3
15
442
3.3
15
Silver Ore Reserves as at 30 June 2020 (1)
Deposit
Hollandaire
Silver
Proven Reserves
Grade
g/t
Tonnes
‘000s
oz. Au
‘000s
Probable Reserves
Grade
g/t
Tonnes
‘000s
oz. Au
‘000s
Total Reserves
Grade
g/t
Tonnes
‘000s
oz. Au
‘000s
–
–
–
574
8.2
151
574
8.2
151
* Due to effects of rounding, the total may not represent the sum of all components. Musgrave holds a 20%
interest in the base metal and silver rights stated above.
(1) On 1 May 2020, Musgrave executed a joint venture agreement with Cyprium Australia Pty Ltd regarding
non-gold rights over the northern Cue tenure including Hollandaire. Musgrave retains a 20% free carried
interest in the non-gold rights and a 100% interest in the gold rights.
PAGE 13
MUSGRAVE MINERALS LTD ANNUAL REPORT 2020 REVIEW OF OPERATIONS
Notes to Table 1
The Break of Day and Lena Mineral Resources at Moyagee are reported in accordance with the 2012 Edition of
the Australian Code of Reporting of Mineral Resources and Ore Reserves (JORC 2012). The remaining Mineral
Resources and Ore Reserve estimates were first prepared and disclosed in accordance with the 2004 Edition
of the Australian Code of Reporting of Mineral Resources and Ore Reserves (JORC 2004) and have not been
updated since to comply with JORC 2012 on the basis that the information has not materially changed since
it was last reported. For further details refer to Musgrave Minerals Ltd (MGV) ASX announcement 14 July
2017, “Resource Estimate Exceeds 350koz Gold”, 17 February 2020, “Lena Resource Update” and Silver Lake
Resources Limited (SLR) ASX Announcement 26 August 2016, “Mineral Resources and Ore Reserves Update”.
Mineral Resources and Ore Reserves
The Information in this report that relates to Mineral Resources at Lena is based on information compiled by
Mr Paul Payne, a Competent Person who is a Fellow of the Australasian Institute of Mining and Metallurgy.
Mr Payne is a full-time employee of Payne Geological Services. Mr Payne has sufficient experience that
is relevant to the style of mineralisation and type of deposit under consideration and to the activity being
undertaken to qualify as a Competent Person as defined in the 2012 Edition of the “Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Payne consents to the inclusion
in the report of the matters based on his information in the form and context in which it appears.
The information in this report that relates to Mineral Resources at Break of Day is based on information
compiled by Mr Aaron Meakin. Mr Meakin is a full-time employee of CSA Global Pty Ltd and is a Member
of the Australasian Institute of Mining and Metallurgy. Mr Meakin has sufficient experience relevant to the
style of mineralisation and type of deposit under consideration and to the activity which he is undertaking
to qualify as Competent Persons as defined in the 2012 edition of the Australasian Code for the Reporting of
Exploration Results, Mineral Resources and Ore Reserves (JORC Code). Mr Meakin consents to the disclosure
of the information in this report in the form and context in which it appears.
The information in this report that relates to the Hollandaire, Rapier South, Jasper Queen, Gilt edge, Leviticus
and Numbers Mineral Resource and Ore Reserve Estimates is extracted from the report created by Silver
Lake Resources Limited entitled “Mineral Resources and Ore Reserves Update”, 26 August 2016 and is
available to view on Silver lake’s website (www.silverlakeresources.com.au) and the ASX (www.asx.com.
au). 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, in the case of estimates of Mineral Resources
and Ore Reserves, 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.
Exploration Results
The information in this presentation that relates to Exploration Results is based on information compiled
and thoroughly reviewed by Mr Robert Waugh. Mr Waugh is a Fellow of the Australasian Institute of Mining
and Metallurgy (FAusIMM) and a Member of the Australian Institute of Geoscientists (MAIG). Mr Waugh
is Managing Director of Musgrave Minerals Ltd. Mr Waugh has sufficient industry experience to qualify as
a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves’. Mr Waugh consents to the inclusion in the report of the
matters based on their information in the form and context in which it appears.
Forward Looking Statements
This document may contain certain forward-looking statements. Forward-looking statements include, but
are not limited to statements concerning Musgrave Minerals Limited’s (Musgrave’s) current expectations,
estimates and projections about the industry in which Musgrave operates, and beliefs and assumptions
regarding Musgrave’s future performance. When used in this document, words such as “anticipate”, “could”,
“plan”, “estimate”, “expects”, “seeks”, “intends”, “may”, “potential”, “should”, and similar expressions are
forward-looking statements. Although Musgrave believes that its expectations reflected in these forward-
looking statements are reasonable, such statements are subject to known and unknown risks, uncertainties
and other factors, some of which are beyond the control of Musgrave and no assurance can be given that
actual results will be consistent with these forward-looking statements.
PAGE 14
MUSGRAVE MINERALS LTD ANNUAL REPORT 2020 TENEMENT SCHEDULE
Tenement Schedule as at 18 September 2020
Project / Tenement
Location
Status
Interest
Cue Project
Western Australia
E20/606
E20/608
E20/616
E20/629
E20/630
E20/659
E20/698
E20/699
E20/700
E20/836
E21/129
E21/144
E21/177
E21/194
E21/200
E21/204
E21/207
E21/208
E58/335
E59/507
M20/225
M20/245
M20/277
M20/526
M21/106
M21/107
M58/224
M58/225
P20/2279
P21/0757
P58/1709
P59/1710
L20/57
P21/731
P21/732
P21/735
P21/736
P21/737
P21/739
P21/741
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
20% non-gold rights, 100% gold rights
20% non-gold rights, 100% gold rights
20% non-gold rights, 100% gold rights
20% non-gold rights, 100% gold rights
20% non-gold rights, 100% gold rights
20% non-gold rights, 100% gold rights
20% non-gold rights, 100% gold rights
20% non-gold rights, 100% gold rights
20% non-gold rights, 100% gold rights
20% non-gold rights, 100% gold rights
MGV 100% (EVN earning 75%)
MGV 100% (EVN earning 75%)
MGV 100% (EVN earning 75%)
MGV 100% (EVN earning 75%)
MGV 100% (EVN earning 75%)
MGV 100% (EVN earning 75%)
MGV 100% (EVN earning 75%)
MGV 100% (EVN earning 75%)
MGV 100%
MGV 100% (EVN earning 75%)
20% non-gold rights, 100% gold rights
20% non-gold rights, 100% gold rights
20% non-gold rights, 100% gold rights
20% non-gold rights, 100% gold rights
Granted
MGV 100% (EVN earning 75% over lake portion)
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
MGV 100% (EVN earning 75%)
MGV 100%
MGV 100%
20% non-gold rights, 100% gold rights
100% gold rights
MGV 100% (EVN earning 75%)
MGV 100%
MGV 100%
MGV Earning 100% (Mainland Option)
MGV Earning 100% (Mainland Option)
MGV Earning 100% (Mainland Option)
MGV Earning 100% (Mainland Option)
MGV Earning 100% (Mainland Option)
MGV Earning 100% (Mainland Option)
MGV Earning 100% (Mainland Option)
PAGE 15
MUSGRAVE MINERALS LTD ANNUAL REPORT 2020 DIRECTORS’ REPORT
Your Directors present their report on the
consolidated entity consisting of Musgrave Minerals
Limited (“the Company”) and its subsidiary (“the
Group” or “the Consolidated Entity”) at the end of
the year ended 30 June 2020.
DIRECTORS
The following persons were Directors of the
Company during the whole of the financial year and
up to the date of this report:
• Mr Graham Ascough, Non-Executive Chairman
• Mr Robert Waugh, Managing Director
• Ms Kelly Ross, Non-Executive Director
• Mr John Percival, Non-Executive Director
PRINCIPAL ACTIVITIES
During the year, the principal continuing activities of
the Group consisted of:
•
•
•
•
exploration of mineral tenements, both on a
joint venture basis and by the Group in its own
right, with the intent to progress to development
in the near to mid-term;
development and production studies on existing
resources;
continuing to seek extensions of areas held and
to seek out new areas with mineral potential;
and
evaluating results received through surface
sampling, geophysical surveys and drilling
activities carried out during the year.
FINANCIAL RESULTS
The consolidated profit of the Group after providing
for income tax for the year ended 30 June 2020 was
$992,169 (2019: loss of $1,329,040).
As at 30 June 2020, the Group had net assets of
$29,108,808 (2019: $20,092,444) including cash and
cash equivalents of $9,122,692 (2019: $3,543,732).
DIVIDENDS
No dividends have been paid or declared since the
start of the financial year. No recommendation for
the payment of a dividend has been made by the
Directors.
OPERATIONS AND FINANCIAL REVIEW
Information on the operations of the Group and its
prospects is set out in the “Review of Operations”
section of this Report.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
Significant changes in the state of affairs of the
PAGE 16
Group during the financial year were as follows:
Exploration continued to be a major focus for the
Company with exceptional drilling results at the Cue
Project as discussed in the Review of Operations
section of this report. Moving forward, the Company
expects to commence feasibility studies and define a
clear path to development.
In September 2019 Musgrave announced that it had
entered into an Earn-In and Joint Venture Exploration
Agreement with Evolution Mining Limited over a
select area of Lake Austin and surrounds (JV Area) on
the Cue Project. The JV Area excludes all the known
resources including Lena and Break of Day, Starlight
and the Mainland option area. Evolution can earn
a 75% interest in the JV Area by sole funding A$18
million on exploration over a five year term with a
minimum commitment of A$4 million in the first two
years. Musgrave will manage the JV during the initial
period.
On 4 May 2020, the Company completed a placement
to corporate, institutional, professional and
sophisticated investors of 57.1 million ordinary shares
at an issue price of 10.5 cents per share raising
$6,000,000 before costs.
0n 1 May 2020, the Company executed a Joint
venture with Cyprium Australia Pty Ltd (“Cyprium”)
regarding the non-gold rights over the northern
tenements at the Cue Project in Western Australia’s
Murchison region. Cyprium has earned an 80%
interest in the non-gold rights. Musgrave retains
a 20% free-carried interest to the completion of a
definitive feasibility study on the non-gold rights and
100% of the gold rights.
There were no other significant changes in the state
of affairs of the Group during the financial year.
EVENTS SINCE THE END OF THE FINANCIAL YEAR
The impact of the Coronavirus (COVID-19) pandemic
is ongoing and while it has not significantly impacted
the entity up to 30 June 2020, it is not practicable to
estimate the potential impact, positive or negative,
after the reporting date. The situation is rapidly
developing and is dependent on measures imposed
by the Australian Government and other countries,
such as maintaining social distancing requirements,
quarantine, travel restrictions and any economic
stimulus that may be provided.
There has not arisen in the interval between the end
of the financial year and the date of this report any
item, transaction or event of a material and unusual
nature likely, in the opinion of the Directors, to affect
MUSGRAVE MINERALS LTD ANNUAL REPORT 2020 DIRECTORS’ REPORT
significantly the operations, the results of those
operations, or the state of affairs of the Group in
future financial years.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
OF OPERATIONS
The Directors are not aware of any developments
that might have a significant effect on the operations
of the Group in subsequent financial years not
already disclosed in this report.
ENVIRONMENTAL REGULATION
The Group is subject to significant environmental
regulation in respect of its exploration activities.
Tenements in Western Australia and South Australia
are granted subject to adherence to environmental
conditions with strict controls on clearing, including
a prohibition on the use of mechanised equipment
or development without the approval of the relevant
Government agencies, and with rehabilitation
required on completion of exploration activities.
These regulations are controlled by the Department
of Mines, Industry Regulation and Safety (Western
Australia) and the Department of State Development
(South Australia).
Musgrave Minerals Limited conducts its exploration
activities in an environmentally sensitive manner
and the Group is not aware of any breach of statutory
conditions or obligations.
GREENHOUSE GAS AND ENERGY DATA REPORTING
REQUIREMENTS
The Directors have considered compliance with
the National Greenhouse and Energy Reporting
Act 2007 which requires entities to report annual
greenhouse gas emissions and energy use. The
Directors have assessed that there are no current
reporting requirements for the year ended 30 June
2020. However, reporting requirements may change
in the future.
Information on Directors
Graham Ascough, BSc, PGeo, MAusIMM
(Non-Executive Chairman),
Director since 26 May 2010
Experience and expertise
Graham Ascough is a senior resources executive
with more than 30 years of industry experience
evaluating mineral projects and resources in
Australia and overseas. He has had broad industry
involvement ranging from playing a leading role
in setting the strategic direction for significant
country-wide exploration programs to working
directly with mining and exploration companies.
Mr Ascough is a geophysicist by training and
was the Managing Director of ASX listed Mithril
Resources Ltd from October 2006 until June 2012.
Prior to joining Mithril in 2006, Mr Ascough was the
Australian Manager of Nickel and PGM Exploration
at the major Canadian resources house,
Falconbridge Ltd (acquired by Xstrata Plc in 2006).
He is a Member of the Australasian Institute of
Mining and Metallurgy
(“AusIMM”) and is a Professional Geoscientist of
Ontario, Canada.
Other current directorships
PNX Metals Ltd (appointed 10 December 2012)
Sunstone Metals Ltd (appointed 29 November
2013)
Former directorships in last three years
Mithril Resources Ltd (appointed 9 October 2006 –
ceased 15 May 2019)
Special responsibilities
Chair of the Board
Member of the Audit Committee
Interests in shares and options
Ordinary shares –
Musgrave Minerals Limited
Unlisted options –
Musgrave Minerals Limited
1,841,172
3,000,000
PAGE 17
MUSGRAVE MINERALS LTD ANNUAL REPORT 2020
DIRECTORS’ REPORT
Mr Robert Waugh MSc, BSc, FAusIMM, MAIG
(Managing Director)
Director since 6 March 2011
Experience and expertise
Robert Waugh has over 30 years of experience in
the resources sector and was a critical member of
the WMC Resources Ltd (“WMC”) exploration team
that discovered the Nebo-Babel nickel/copper/PGM
deposit at West Musgrave in 2000.
He was subsequently Project Manager of the team
that defined the initial resource at Nebo-Babel. Mr
Waugh has held senior exploration management
roles in a number of companies including WMC
and BHP Billiton Exploration Ltd. Mr Waugh has
extensive exploration and mining experience in
a range of commodities including gold, nickel,
copper, uranium and PGMs. Mr Waugh has also
been involved in a number of other mineral
discoveries during his career including the recent
gold discoveries at the Cue Project in Western
Australia.
Mr Waugh holds a Bachelor of Science degree
majoring in geology from the University of Western
Australia and a Master of Science in Mineral
Economics from Curtin University and the Western
Australian School of Mines. Mr Waugh is a Fellow
of the AusIMM and a Member of the Australian
Institute of Geoscientists.
Other current directorships
None
Former directorships in last three years
None
Special responsibilities
Managing Director
Interests in shares and options
Ordinary shares –
Musgrave Minerals Limited
Unlisted options –
Musgrave Minerals Limited
3,300,000
6,500,000
Mrs Kelly Ross BBus, CPA, ACG (CS,CGP)
(Non-Executive Director),
Director since 26 May 2010
Experience and expertise
Mrs Ross is a qualified accountant holding a
Bachelor of Business (Accounting) and has the
designation CPA from the Australian Society of
Certified Practicing Accountants. Mrs Ross is a
Chartered Secretary with over 30 years’ experience
in accounting and administration in the mining
industry.
Mrs Ross was part of the team that floated
Independence Group NL (“IGO”). IGO listed on the
ASX in 2002 and Mrs Ross was Company Secretary
and CFO for 10 years. Mrs Ross was a Director
of IGO for 12 years from 2002 to 2014. Mrs Ross
retired from the Board of IGO on 24 December
2014.
Prior to IGO, Mrs Ross was a senior accountant
at Resolute Ltd from 1987 to 2000 during which
time Resolute became a gold producer in Ghana,
Tanzania and at several mines in Western Australia.
Mrs Ross was appointed a Director of Musgrave
Minerals on 26 May 2010 and is the Chairman of
the Audit Committee.
Other current directorships
Yandal Resources Ltd (appointed 6 April 2018)
Former directorships in last three years
None
Special responsibilities
Chair of the Audit Committee
Interests in shares and options
Ordinary shares –
Musgrave Minerals Limited
Unlisted options –
Musgrave Minerals Limited
581,492
2,000,000
PAGE 18
MUSGRAVE MINERALS LTD ANNUAL REPORT 2020
DIRECTORS’ REPORT
Mr John Percival
(Non-Executive Director)
Director since 26 May 2010
Experience and expertise
John Percival has been involved in investment
and merchant banking for over 25 years including
15 years as Investment Manager of Barclays Bank
New Zealand Ltd. In addition, he has extensive
experience in stockbroking, corporate finance and
investment management. In 1995 Mr Percival was
appointed to the Board of Goldsearch Limited and
was an Executive Director from 2000 to 2014. In
May 2014, Goldsearch changed direction and Mr
Percival resigned his executive position.
Other current directorships
None
Former directorships in last three years
Zoono Group Limited (formerly Goldsearch Ltd)
(resigned 26 April 2017)
Special responsibilities
Member of the Audit Committee
Interests in shares and options
Ordinary shares –
Musgrave Minerals Limited
Unlisted options –
Musgrave Minerals Limited
894,559
2,300,000
COMPANY SECRETARY
Ms Patricia (Trish) Farr, GradCertProfAcc,
GradDipACG, GAICD FGIA FCG (CS, CGP)
appointed 30 June 2015
Trish Farr is an experienced Chartered Secretary
with over 20 years’ experience in the exploration
and mining industry in the areas of corporate
governance, compliance and administration.
Ms Farr provides company secretarial services
to several ASX listed and unlisted companies
predominately in the resources and health sectors.
Ms Farr is also a Director and the Company
Secretary of Jindalee Resources Limited.
Ms Farr is a fellow member of Chartered
Secretaries & Administrators and the Governance
Institute of Australia (formerly Chartered
Secretaries Australia) and a graduate member of
the Australian Institute of Company Directors.
MEETINGS OF DIRECTORS
The numbers of meetings of the Company’s Board of
Directors and of each Board committee held during
the year ended 30 June 2020, and the numbers of
meetings attended by each Director were:
Board of
Directors
Audit
Committee
A
11
11
11
11
B
11
11
11
11
A
2
B
2
n/a
n/a
2
2
2
2
Graham Ascough
Robert Waugh
Kelly Ross
John Percival
A = Number of meetings attended.
B = Number of meetings held during the time the
Director held office or was a member of the
committee during the year.
RETIREMENT, ELECTION AND CONTINUATION IN
OFFICE OF DIRECTORS
Ms Kelly Ross, being the Director retiring by rotation
who, being eligible, will offer herself for re- election
at the 2020 Annual General Meeting.
REMUNERATION REPORT (AUDITED)
The Directors present the Musgrave Minerals Limited
2020 Remuneration Report, outlining key aspects of
the Company’s remuneration policy and framework,
and remuneration awarded this year.
The report contains the following sections:
a) Key management personnel covered in this
report
b) Remuneration governance and the use of
remuneration consultants
c)
Executive remuneration policy and framework
d) Relationship between remuneration and the
Group’s performance
e) Non-executive director remuneration policy
f)
Voting and comments made at the Company’s
2019 Annual General Meeting
g) Details of remuneration
h) Service agreements
i)
j)
Details of share-based compensation and
bonuses
Equity instruments held by key management
personnel
k)
Loans to key management personnel
l) Other transactions with key management
personnel.
PAGE 19
MUSGRAVE MINERALS LTD ANNUAL REPORT 2020 DIRECTORS’ REPORT
a) Key management personnel covered in this
report
Non-Executive and Executive Directors (see
pages 17 to 19 for details about each director)
Name
Position
Graham Ascough
Non-Executive Chairman
Robert Waugh
Managing Director
Kelly Ross
Non-Executive Director
John Percival
Non-Executive Director
b) Remuneration governance and the use of
remuneration consultants
The Company does not have a Remuneration
Committee. Remuneration matters are handled
by the full Board of the Company. In this respect
the Board is responsible for:
•
•
•
•
the over-arching executive remuneration
framework;
the operation of the incentive plans
which apply to executive directors and
senior executives (the executive team),
including key performance indicators and
performance hurdles;
remuneration levels of executives; and
non-executive director fees.
The objective of the Board is to ensure that
remuneration policies and structures are fair
and competitive and aligned with the long-term
interests of the Company.
In addition, all matters of remuneration are
handled in accordance with the Corporations
Act 2001 requirements, especially with regard
to related party transactions. That is, none of
the Directors participate in any deliberations
regarding their own remuneration or related
issues.
Independent external advice is sought from
remuneration consultants when required,
however no advice was sought during the year
ended 30 June 2020.
•
•
transparent and easily understood; and
acceptable to shareholders.
All executives receive consulting fees or
a salary, part of which may be taken as
superannuation, and from time to time, options.
The Board reviews executive packages annually
by reference to the executive’s performance and
comparable information from industry sectors
and other listed companies in similar industries.
All remuneration paid to specified executives is
valued at the cost to the Group and expensed.
Options are valued using a Black-Scholes option
pricing model.
d) Relationship between remuneration and the
Group’s performance
Emoluments of Directors are set by reference
to payments made by other companies of
similar size and industry, and by reference to
the skills and experience of Directors. Fees paid
to Non- Executive Directors are not linked to
the performance of the Group. This policy may
change once the exploration phase is complete
and the Group is generating revenue. At present
the existing remuneration policy is not impacted
by the Group’s performance including earnings
and changes in shareholder wealth (e.g. changes
in share price).
The Board has not set short term performance
indicators, such as movements in the
Company’s share price, for the determination
of Non-Executive Director emoluments as the
Board believes this may encourage performance
which is not in the long-term interests of the
Company and its shareholders. The Board has
structured its remuneration arrangements in
such a way it believes is in the best interests of
building shareholder wealth. The Board believes
participation in the Company’s Employee
Share Option Plan motivates and aligns key
management and executives with the long-term
interests of shareholders.
c)
Executive remuneration policy and framework
In determining executive remuneration, the
Board aims to ensure that remuneration
practices are:
•
•
competitive and reasonable, enabling the
Company to attract and retain key talent;
aligned to the Company’s strategic and
business objectives and the creation of
shareholder value;
e) Non-executive director remuneration policy
On appointment to the Board, all Non-Executive
Directors enter into a service agreement
with the Company in the form of a letter of
appointment. The letter summarises the Board
policies and terms, including remuneration
relevant to the office of Director.
The Board policy is to remunerate Non-
Executive Directors at commercial market
rates for comparable companies for their time,
PAGE 20
MUSGRAVE MINERALS LTD ANNUAL REPORT 2020
DIRECTORS’ REPORT
commitment and responsibilities. Non-Executive Directors receive a Board fee but do not receive fees for
chairing or participating on Board committees. Board members are allocated superannuation guarantee
contributions as required by law, and do not receive any other retirement benefits. From time to time,
some individuals may choose to sacrifice their salary or consulting fees to increase payments towards
superannuation.
The maximum annual aggregate Non-Executive Directors’ fee pool limit is $250,000 as disclosed in the
Company’s Replacement Prospectus dated 8 March 2011.
Fees for Non-Executive Directors are not linked to the performance of the Group. Non-Executive Directors’
remuneration may also include an incentive portion consisting of options, subject to approval by
shareholders.
f) Voting and comments made at the Company’s 2019 Annual General Meeting
Musgrave Minerals Limited received more than 98% of “yes” votes on its remuneration report for the
2019 financial year. The Company did not receive any specific feedback at the Annual General Meeting or
throughout the year on its remuneration practices.
g) Details of remuneration
The following table shows details of the remuneration received by the Group’s key management personnel
for the current and previous financial year.
Short-term employment benefits
Post-
employment
benefits
Share-
based
payments
Salary &
fees
$
Bonus
$
Non-
monetary
Benefit
$
Super-
annuation
$
Options
$
Total
$
Options
%
Perf
Related
%
2020
Directors
G Ascough
R Waugh
K Ross
J Percival
TOTALS
2019
Directors
G Ascough
R Waugh
K Ross
J Percival
TOTALS
65,000
275,433
45,000
45,000
430,433
–
–
–
–
–
65,000
275,433
45,000
45,000
430,433
–
54,415
–
–
54,415
h) Service agreements
–
–
–
–
–
–
–
–
–
–
–
26,166
4,275
4,275
34,716
–
31,336
4,275
4,275
39,886
–
65,000
61,110 362,709
49,275
49,275
61,110 526,259
–
–
–
16.8
–
–
–
–
–
–
75,878 140,878
512,939
99,860
99,860
328,803 853,537
151,755
50,585
50,585
53.9
29.6
50.7
50.7
–
10.6
–
–
On appointment to the Board, all Non-Executive Directors enter into a service agreement with the
Company in the form of a letter of appointment. The letter summarises the Board policies and terms of
appointment, including compensation relevant to the office of Director. Remuneration and other terms of
employment for other members of key management personnel are formalised in service agreements as
summarised below.
R Waugh, Managing Director
Mr Waugh is remunerated pursuant to an Executive Services Agreement. Under the agreement the
Company agrees to employ Mr Waugh as Managing Director of the Company with a base salary of
$275,433 plus statutory superannuation. Either party may terminate the employment contract without
cause by providing six months written notice or by making payment in lieu of notice (in the case of the
Company), based on the annual salary component. Termination payments are generally not payable on
PAGE 21
MUSGRAVE MINERALS LTD ANNUAL REPORT 2020
DIRECTORS’ REPORT
resignation or dismissal for serious misconduct. In the instance of serious misconduct, the Company can
terminate employment at any time.
i)
Details of share-based compensation and bonuses
Options
Options over ordinary shares in Musgrave Minerals Limited are granted under the Employee Share Option
Plan (“ESOP”). Participation in the ESOP and any vesting criteria are at the Board’s discretion and no
individual has a contractual right to participate in the scheme or to receive any guaranteed benefits. Any
options issued to Directors of the Company are subject to shareholder approval. The 3,000,000 options
issued to Mr Waugh in the 2020 financial year were approved by shareholders at the 2019 Annual General
Meeting.
The terms and conditions of each grant of options during the period affecting remuneration in the current
or future reporting periods are set out below.
Option series
Issue date
Vesting and
exercise date
Expiry date
Exercise
price
% Vested
Value per
option at
grant date
U
21 Nov 2019
21 Nov 2019
21 Nov 2022
$0.1045
$0.0204
100%
The fair value of options at grant date are independently determined using a Black-Scholes option pricing
model that takes into account the exercise price, the term of the option, the share price at grant date and
expected price volatility of the underlying share, the expected dividend yield and the risk-free interest rate
for the term of the option.
Further information on the fair value of share options and assumptions is set out in Note 23 to the financial
statements.
j)
Equity instruments held by key management personnel
The following tables detail the number of fully paid ordinary shares and options over ordinary shares in the
Company that were held during the financial year by key management personnel of the Group, including
their close family members and entities related to them.
Options
2020
Directors
Opening
balance at
1 July
Granted
as remun-
eration
Options
exercised
Net change
(other)
Balance at
30 June
Vested
but not
exercisable
Vested and
exercisable
Vested
during the
year
G Ascough 3,000,000
–
R Waugh
6,100,000
3,000,000
K Ross
2,000,000
J Percival
2,000,000
–
–
–
–
–
–
(750,000) 2,250,000
(800,000) 8,300,000
(500,000) 1,500,000
(500,000) 1,500,000
TOTAL
13,100,000
3,000,000
– (2,550,000) 13,550,000
–
2,250,000
– 8,300,000
– 1,500,000
– 1,500,000
– 13,550,000
–
–
–
–
–
During the year, no ordinary shares in the Company were provided to key management personnel as a
result of the exercise of remuneration options.
PAGE 22
MUSGRAVE MINERALS LTD ANNUAL REPORT 2020
DIRECTORS’ REPORT
Shareholdings
Opening balance at
1 July
Granted as remun-
eration
Options exercised Net change (other) Balance at 30 June
2020
Directors
G Ascough
R Waugh
K Ross
J Percival
TOTAL
1,091,172
1,717,172
181,492
694,559
3,684,395
–
–
–
–
–
–
–
–
–
–
–
–
–
200,000
200,000
1,091,172
1,717,172
181,492
894,559
3,884,395
k)
Loans to key management personnel
There were no loans to individuals or any key management personnel during the financial year or the
previous financial year.
l) Other transactions with key management personnel
There were no other transactions with key management personnel during the financial year or the previous
financial year.
END OF REMUNERATION REPORT (AUDITED)
SHARES UNDER OPTION
Unissued ordinary shares of the Company under option at the date of this report are as follows:
Date options issued
Expiry date
Issue price of shares
Number under option
29 November 2017
29 November 2020
21 November 2018
16 November 2021
30 November 2018
16 November 2021
21 November 2019
21 November 2022
20 August 2020
20 August 2020
20 August 2023
20 August 2023
$0.0974
$0.1275
$0.1275
$0.1045
$0.932
$0.932
500,000
5,700,000
2,450,000
3,650,000
5,900,000
1,980,000
TOTAL
20,180,000
No option holder has any right under the options to participate in any other share issue of the Company or any
other entity.
SHARES ISSUED ON THE EXERCISE OF OPTIONS
There were no other shares issued on the exercise of options during the year and up to the date of this report.
CORPORATE GOVERNANCE STATEMENT
The Company’s 2020 Corporate Governance Statement has been released as a separate document and is
located on the Company’s website at http://www.musgraveminerals.com.au/corporate- governance.
PROCEEDINGS ON BEHALF OF THE GROUP
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.
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
During the financial year, the Company paid a premium to insure the Directors and Officers of the consolidated
entity against any liability incurred as a Director or Officer to the extent permitted by the Corporations Act 2001.
The contract of insurance prohibits the disclosure of the nature of the liabilities covered or the amount of the
premium paid.
PAGE 23
MUSGRAVE MINERALS LTD ANNUAL REPORT 2020
DIRECTORS’ REPORT
The Group has not entered into any agreement with its current auditors indemnifying them against claims by a
third party arising from their position as auditor.
NON-AUDIT SERVICES
The Company may decide to employ the auditor on assignments additional to their statutory audit duties where
the auditor’s expertise and experience with the Company and/or the Group are important.
Details of the amounts paid or payable to the auditors BDO Audit (WA) Pty Ltd for audit and non- audit services
provided during the year are set out in Note 18. During the year ended 30 June 2020 no fees were paid or were
payable for non-audit services provided by the auditors of the consolidated entity (2019: $Nil).
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 on the following page.
Signed in accordance with a resolution of the Directors.
Graham Ascough
Chairman
Perth, 24 September 2020
PAGE 24
MUSGRAVE MINERALS LTD ANNUAL REPORT 2020
AUDITOR’S INDEPENDENCE DECLARATION
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
38 Station Street
Australia
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
DECLARATION OF INDEPENDENCE BY GLYN O'BRIEN TO THE DIRECTORS OF MUSGRAVE MINERALS LIMITED
As lead auditor of Musgrave Minerals Limited for the year ended 30 June 2020, I declare that, to the
DECLARATION OF INDEPENDENCE BY GLYN O'BRIEN TO THE DIRECTORS OF MUSGRAVE MINERALS LIMITED
best of my knowledge and belief, there have been:
As lead auditor of Musgrave Minerals Limited for the year ended 30 June 2020, I declare that, to the
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
best of my knowledge and belief, there have been:
relation to the audit; and
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
2. No contraventions of any applicable code of professional conduct in relation to the audit.
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Musgrave Minerals Limited and the entity it controlled during the
period.
This declaration is in respect of Musgrave Minerals Limited and the entity it controlled during the
period.
Glyn O'Brien
Director
Glyn O'Brien
Director
BDO Audit (WA) Pty Ltd
Perth, 24 September 2020
BDO Audit (WA) Pty Ltd
Perth, 24 September 2020
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent a firms. Liability limited by a scheme approved under Professional Standards Legislation.
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent a firms. Liability limited by a scheme approved under Professional Standards Legislation.
PAGE 25
MUSGRAVE MINERALS LTD ANNUAL REPORT 2020 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2020
Revenue from continuing operations
Other income
Employee benefits expense
Depreciation expense
Impairment expense
Finance costs
Other expenses
Change in fair value of derivate financial instruments
Notes
3(a)
3(a)
3(b)
10
2
3(c)
9(a)
CONSOLIDATED
2020
$
52,911
320,674
(411,248)
(118,465)
(3,434)
(30,378)
2019
$
108,996
260,000
(676,034)
(25,747)
(336,589)
–
(205,891)
(335,666)
1,388,000
(324,000)
Profit / (loss) from continuing operations before income tax
992,169
(1,329,040)
Income tax benefit
5
–
–
Profit / (loss) after income tax for the year attributable to the
owners of Musgrave Minerals Limited
992,169
(1,329,040)
Other comprehensive income / (loss)
Items that will not be reclassified to profit or loss
Change in fair value of financial assets at fair value through OCI
9(b)
561,352
(354,425)
Other comprehensive income / (loss) for the year (net of tax)
Total comprehensive profit / (loss) for the year attributable to
the owners of Musgrave Minerals Limited
561,352
(354,425)
1,553,521
(1,683,465)
Cents
per share
Cents
per share
Profit / (loss) per share attributable to the owners of Musgrave
Minerals Limited
Basic profit / (loss) per share
Diluted profit / (loss) per share
17
17
0.24
0.23
(0.37)
(0.37)
The Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction
with the accompanying notes.
PAGE 26
MUSGRAVE MINERALS LTD ANNUAL REPORT 2020 CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2020
ASSETS
Current Assets
Cash and cash equivalents
Trade and other receivables
Other current assets
Derivate financial instruments
Total Current Assets
Non–Current Assets
CONSOLIDATED
Notes
2020
$
2019
$
6
7
8
9(a)
9,122,692
3,543,732
273,652
10,475
–
133,758
21,211
131,000
9,406,819
3,829,701
Financial assets at fair value through other comprehensive
income
9(b)
1,946,313
505,575
Property, plant and equipment
Right of use assets
Exploration and evaluation
Total Non–Current Assets
TOTAL ASSETS
LIABILITIES
Current Liabilities
Trade and other payables
Provisions
Lease liabilities
Total Current Liabilities
Non–Current Liabilities
Lease liabilities
Total Non–Current Liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Reserves
Accumulated losses
TOTAL EQUITY
2
10
11
12
13
13
14
15
16
56,031
266,745
18,966,123
21,235,212
30,642,031
74,948
–
15,976,794
16,557,317
20,387,018
1,116,981
135,580
94,782
1,347,343
185,880
185,880
177,614
116,960
–
294,574
–
–
1,533,223
294,574
29,108,808
20,092,444
52,004,639
44,592,770
1,570,637
1,128,652
(24,466,468)
(25,628,978)
29,108,808
20,092,444
The Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
PAGE 27
PAGE 27
MUSGRAVE MINERALS LTD ANNUAL REPORT 2020 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2020
ATTRIBUTABLE TO EQUITY HOLDERS OF THE ENTITY
Financial
Asset Reserve
$
Accumulated
Losses
$
Options
Reserve
$
Issued Capital
$
Total
Equity
$
At 1 July 2018
39,436,729
484,487
486,789
(24,321,810)
16,086,195
Total comprehensive loss for the
year
Other comprehensive loss
Total comprehensive loss for the
year (net of tax)
Transactions with owners in
their capacity as owners:
–
–
–
Issue of shares
5,500,000
Transaction costs of issuing
shares
Issue of options
Transfer from share option
reserve:
– Due to expiry of options
(343,959)
–
–
533,673
(21,872)
–
–
–
–
–
–
(1,329,040)
(1,329,040)
(354,425)
–
(354,425)
(354,425)
(1,329,040)
(1,683,465)
–
–
–
–
–
–
–
5,500,000
(343,959)
533,673
21,872
–
At 30 June 2019
44,592,770
996,288
132,364
(25,628,978)
20,092,444
At 1 July 2019
44,592,770
996,288
132,364
(25,628,978)
20,092,444
Total comprehensive profit for
the year
Other comprehensive income
Total comprehensive profit for
the year (net of tax)
Transactions with owners in
their capacity as owners:
Issue of shares
Transaction costs of issuing
shares
–
–
–
7,723,232
(396,461)
–
–
–
–
–
Issue of options (Note 23)
–
136,072
Transfer from share option
reserve:
– Due to exercise of options
85,098
(85,098)
– Due to expiry of options
–
(170,341)
–
992,169
561,352
–
992,169
561,352
561,352
992,169
1,553,521
–
–
–
–
–
–
–
–
–
170,341
7,723,232
(396,461)
136,072
–
–
At 30 June 2020
52,004,639
876,921
693,716
(24,466,468)
29,108,808
The Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
PAGE 28
MUSGRAVE MINERALS LTD ANNUAL REPORT 2020 CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2020
CASH FLOWS FROM OPERATING ACTIVITIES
Joint venture management fees
Payments to suppliers and employees
Interest received
Interest paid
Government grant received
Net advances from joint venture partner
CONSOLIDATED
Notes
2020
$
2019
$
191,632
–
(644,868)
(743,881)
63,647
(30,378)
50,000
165,535
102,396
–
–
–
NET CASH FLOWS USED IN OPERATING ACTIVITIES
24
(204,432)
(641,485)
NET CASH FLOWS USED IN INVESTING ACTIVITIES
Payments for property, plant and equipment
(7,689)
(55,202)
Payments for tenements
Proceeds from sale of non–gold rights
Payments for exploration activities
Payments to acquire investments
Proceeds from disposal of investments
10
3(a)
9
9
–
–
(125,000)
10,000
(2,097,362)
(6,030,744)
(400,000)
1,039,614
–
–
NET CASH FLOWS USED IN INVESTING ACTIVITIES
(1,465,437)
(6,200,946)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares
Proceeds from exercise of options
Share issue costs
Lease principal repayments
14(b)
14(b)
14(b)
7,500,000
5,500,000
223,232
–
(396,461)
(343,959)
(77,942)
–
NET CASH FLOWS FROM FINANCING ACTIVITIES
7,248,829
5,156,041
Net increase / (decrease) in cash and cash equivalents
5,578,960
(1,686,390)
Cash and cash equivalents at beginning of the year
3,543,732
5,230,122
CASH AND CASH EQUIVALENTS AT END OF THE YEAR
6
9,122,692
3,543,732
The Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
PAGE 29
MUSGRAVE MINERALS LTD ANNUAL REPORT 2020 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
1
CORPORATE INFORMATION
The consolidated financial report of Musgrave Minerals Limited for the year ended 30 June 2020 was
authorised for issue in accordance with a resolution of the Directors on 24 September 2020.
Musgrave Minerals Limited is a for profit company incorporated in Australia and limited by shares which
are publicly traded on the Australian Securities Exchange. The nature of the operation and principal
activities of the consolidated entity are described in the attached Directors’ Report.
The principal accounting policies adopted in the preparation of these consolidated financial statements
are set out below and have been applied consistently to all periods presented in the consolidated financial
statements and by all entities in the consolidated entity.
2
STATEMENT OF COMPLIANCE
These general purpose financial statements have been prepared in accordance with Australian Accounting
Standards, other authoritative pronouncements of the Australian Accounting Standards Board, Urgent
Issues Group Interpretations and the Corporations Act 2001.
Compliance with IFRS
The consolidated financial statements of Musgrave Minerals Limited also comply with International
Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board
(“IASB”).
New and amended accounting standards and interpretations adopted by the Group
The following standard and interpretation relevant to the operations of the Group and effective from 1 July
2019 have been adopted.
•
•
AASB 16 Leases; and
AASB Interpretation 23 Uncertainty over Income Tax Treatments.
The impact of the adoption of this standard and interpretation are as outlined below.
AASB 16 Leases
AASB 16 Leases requires lessees to account for all leases under a single on-balance sheet model in a
similar way to finance leases under AASB 117 Leases. The standard includes two recognition exemptions
for lessees i.e. leases of ’low-value’ assets and short-term leases (i.e. leases with a lease term of 12 months
or less). At the commencement date of a lease, a lessee will recognise a liability to make lease payments
(i.e. the lease liability) and an asset representing the right to use the underlying asset during the lease term
(i.e. the right-of-use asset or ROU asset).
Lessees will separately recognise the interest expense on the lease liability and the depreciation expense
on the right-of-use asset.
Lessees remeasure the lease liability upon the occurrence of certain events (e.g. a change in the lease term,
a change in future lease payments resulting from a change in an index or rate used to determine those
payments). The lessee will generally recognise the amount of the remeasurement of the lease liability as an
adjustment to the right-of-use asset.
AASB 16 became effective for the Company for the accounting period beginning 1 July 2019. The Company
has chosen the modified retrospective approach to the application of AASB 16 and has consequently not
restated the comparative information.
The Company leases its corporate office, its core yard and IT equipment and these have been recognised
as right-of-use-assets with a corresponding lease liability. For leases of ‘low-value’ assets and short-term
leases the Company has opted to recognise the lease expense on a straight-line basis as incurred.
Impact of adoption of AASB 16 Leases
As at 1 July 2019 the Company recognised right-of-use assets with a net book value of $198,620 and
corresponding lease liabilities of $198,620. After accounting for new leases taken out during the reporting
period, depreciation and lease principal payments the balances as at 30 June 2020 were right-of-use assets
with a net book value of $266,745 and lease liabilities of $280,622.
PAGE 30
MUSGRAVE MINERALS LTD ANNUAL REPORT 2020 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
2
STATEMENT OF COMPLIANCE CONTINUED
The impact on the statement of profit or loss (increase / (decrease)) for the year is:
Expense
Tenancy and operating
Depreciation expense
Finance costs
Net impact on profit for the period
$
Notes
108,320
(91,859)
(30,378)
(13,914)
Rent expense on previously recognised
operating lease
Depreciation of lease asset recognised under
AASB 16
Interest on lease recognised under AASB 16
There is no material impact on other comprehensive income and the basic and diluted earnings per share.
The following is a reconciliation of total operating lease commitments at 30 June 2019 to the lease
liabilities recognised at 1 July 2019:
Total operating lease commitments disclosed at 30 June 2019
Minor adjustments
Operating lease liabilities before discounting
Discounted using incremental borrowing rate
Reasonably certain extension options
Total lease liabilities recognised under AASB16 at 1 July 2019
$
103,259
375
103,634
(8,225)
103,211
198,620
AASB Interpretation 23 Uncertainty over Income Tax Treatments
This Interpretation clarifies the application of the recognition and measurement criteria in AASB 112
Income Taxes when there is uncertainty over income tax treatments. The Interpretation addresses (a)
whether an entity considers uncertain tax treatments separately; (b) the assumptions an entity makes
about the examination of tax treatments by taxation authorities; (c) how an entity determines taxable profit
(tax loss), tax bases, unused tax losses, unused tax credits and tax rates; and (d) how an entity considers
changes in facts and circumstances.
The adoption of this Interpretation has had no impact on the current or previous year and as such there
have been no adjustments to the opening balance of accumulated losses.
New accounting standards and interpretations
The following new and amended accounting standards and interpretations relevant to the operations of the
Group have been published but are not mandatory for the current financial year. The Group has decided
against early adoption of these standards and has not yet determined the potential impact on the financial
statements from the adoption of these standards and interpretations.
PAGE 31
MUSGRAVE MINERALS LTD ANNUAL REPORT 2020 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2020
2
STATEMENT OF COMPLIANCE CONTINUED
The key new standards which may impact the Group in future years are detailed below:
New or revised requirement
AASB 2018-6: Amendments to Australian Accounting Standards – Definition
of a Business
The Standard amends the definition of a business in AASB 3 Business
Combinations. The amendments clarify the minimum requirements for a
business, remove the assessment of whether market participants are capable
of replacing missing elements, add guidance to help entities assess whether
an acquired process is substantive, narrow the definitions of a business and
of outputs, and introduce an optional fair value concentration test.
Application
date of
standard
Application
date for
Group
1 Jan 2020
1 Jul 2020
AASB 1018-7: Amendments to Australian Accounting Standards – Definition
of Material
1 Jan 2020
1 Jul 2020
This Standard amends AASB 101 Presentation of Financial Statements
and AAS 108 Accounting Policies, Changes in Accounting Estimates and
Errors to align the definition of ‘material’ across the standards and to clarify
certain aspects of the definition. The amendments clarify that materiality will
depend on the nature or magnitude of information. An entity will need to
assess whether the information, either individually or in combination with
other information, is material in the context of the financial statements. A
misstatement of information is material if it could reasonably be expected to
influence decisions made by the primary users.
a) Basis of measurement
Historical cost convention
These consolidated financial statements have been prepared under the historical cost convention,
except where stated.
Critical accounting estimates
The preparation of financial statements requires the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the process of applying the Group’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 where
appropriate.
b) Going concern
These consolidated financial statements have been prepared on the going concern basis, which
contemplates continuity of normal business activities and the realisation of assets and the settlement
of liabilities in the ordinary course of business.
c)
Principles of consolidation
Subsidiaries
The consolidated financial statements incorporate the assets and liabilities of the Company’s
subsidiary at 30 June 2020 and the results of its subsidiary for the year then ended. The Company and
its subsidiary together are referred to in this financial report as the Group or the consolidated entity.
Subsidiaries are all entities (including structured entities) over which the Group has control. The Group
controls an entity when the Group is exposed to, or has rights to, variable returns from its investment
with the entity and has the ability to affect those returns through its power to direct the activities of
the entity.
The acquisition method of accounting is used to account for business combinations by the Group.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They
are de-consolidated from the date that control ceases.
PAGE 32
MUSGRAVE MINERALS LTD ANNUAL REPORT 2020 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2020
2
STATEMENT OF COMPLIANCE CONTINUED
Intercompany transactions, balances and unrealised gains on transactions between Group companies
are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an
impairment of the transferred asset. Accounting policies of subsidiaries have been changed where
necessary to ensure consistency with the policies adopted by the Group.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the
consolidated Statement of Profit or Loss and Other Comprehensive Income, consolidated statement of
financial position and the consolidated statement of changes in equity respectively.
d) Critical accounting judgements and key sources of estimation uncertainty
The application of accounting policies requires the use of judgments, estimates and assumptions
about carrying values of assets and liabilities that are not readily apparent from other sources. The
estimates and associated assumptions are based on historical experience and other factors that are
considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions are
recognised in the period in which the estimate is revised if it affects only that period, or in the period
of the revision and future periods if the revision affects both current and future periods.
e)
Functional and presentation currency
The consolidated financial statements are presented in Australian dollars, which is the Group’s
functional and presentational currency.
f)
Leases
Leases in which a significant portion of the risks and rewards of ownership are not transferred to the
Group as lessee are classified as operating leases. Payments made under operating leases (net of any
incentives received from the lessor) are charged to profit or loss as incurred over the period of the
lease.
Leases in which a significant portion of the risks and rewards of ownership are transferred to the
Group as lessee are classified as finance leases. At the commencement date of a lease, the Group
recognises a liability to make lease payments (i.e. the lease liability) and an asset representing
the right to use the underlying asset during the lease term (i.e. the right-of-use asset). The Group
separately recognises the interest expense on the lease liability and the depreciation expense on the
right-of-use asset.
g) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST
incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost
of acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The
net amount of GST recoverable from, or payable to, the taxation authority is included with other
receivables or 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 taxation authority, are presented
as operating cash flows.
PAGE 33
MUSGRAVE MINERALS LTD ANNUAL REPORT 2020 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2020
3
REVENUE AND EXPENSES
a) Revenue and other income
Revenue from continuing operations
Interest revenue
Other Income
Joint venture management fees
Government grants
Option fee and shares - Cyprium Metals Limited (i)
Other income
Total other income
Total revenue and other income
CONSOLIDATED
2020
$
2019
$
52,911
108,996
191,632
117,500
–
11,542
320,674
373,585
–
–
260,000
–
200,000
368,996
(i)
In February 2019, the Company executed a Binding Term Sheet with Cyprium Australia Pty Ltd
(“Cyprium”) regarding an option, earn-in and joint venture on the non-gold rights over the northern
tenements at the Cue Project in Western Australia’s Murchison region. Cyprium made an initial
payment of $10,000 for an exclusive 90-day option period and on 31 May 2019 exercised the option to
earn an 80% interest by the payment to the Company of $250,000 worth of shares in ARC Exploration
Limited (subsequently renamed Cyprium Metals Limited ASX:CYM).
Revenue is recognised at an amount that reflects the consideration to which the Group expects to be
entitled to in exchange for transferring services to a customer. Revenue and expenses are recognised on an
accruals basis.
Interest income is recognised on a time proportion basis using the effective interest method.
b) Employee benefits expense
Wages, salaries, directors’ fees and other remuneration expenses
Superannuation contributions
Transfer to / (from) annual leave provision
Transfer to / (from) long service leave provision
Share-based payments expense (Note 23)
Transfer to capitalised exploration expenditure
Total employee benefits expense
CONSOLIDATED
2020
$
1,204,600
102,640
(2,350)
20,970
136,072
2019
$
1,382,360
125,149
(10,290)
18,300
533,673
(1,050,684)
(1,373,158)
411,248
676,034
PAGE 34
MUSGRAVE MINERALS LTD ANNUAL REPORT 2020 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2020
3
REVENUE AND EXPENSES CONTINUED
c) Other expenses
Secretarial, professional and consultancy costs
Occupancy costs
Share register maintenance
ASX / ASIC
Promotion, advertising and sponsorship
Employer related on-costs
Other expenses
Transfer to capitalised exploration expenditure
Total other expenses
CONSOLIDATED
2020
$
109,655
4,980
15,079
61,249
88,749
15,487
123,423
(212,731)
205,891
2019
$
113,335
97,831
18,030
50,789
56,843
53,748
177,356
(232,266)
335,666
4
SEGMENT INFORMATION
The Group operates in one geographical segment, being Australia and in one operating category, being
mineral exploration. Therefore, information reported to the chief operating decision maker (the Board
of Musgrave Minerals Limited) for the purposes of resource allocation and performance assessment is
focused on mineral exploration within Australia. The Board has considered the requirements of AASB 8:
Operating Segments and the internal reports that are reviewed by the chief operation decision maker in
allocating resources and have concluded at this time that there are no separately identifiable segments.
5
INCOME TAX
CONSOLIDATED
2020
$
2019
$
Statement of Profit or Loss and Other Comprehensive Income
Current income tax:
– Current income tax benefit at a rate of 27.5% (2019: 27.5%)
–
–
Deferred income tax:
– Relating to origination and reversal of temporary differences
(1,070,889)
(1,336,722)
– Deferred tax liability offset by deferred tax asset losses
– Temporary difference not recognised in the current period
768,825
302,064
1,746,832
(410,110)
Income tax expense / (benefit) reported in the
Consolidated Statement of Profit or Loss and Other Comprehensive
Income
A reconciliation of income tax expense / (benefit) applicable to
accounting profit / (loss) before income tax at the statutory income
tax rate to income tax expense / (benefit) at the Company’s effective
income tax is as follows:
Accounting profit / (loss) from continuing operations before income
tax
At the statutory income tax rate of 27.5% (2019: 27.5%)
Add:
– Immediate write–off of capital expenditure
– Expenditures not allowable / income assessable
– Other deductible items
– Tax losses not recognised due to not meeting recognition criteria
–
–
992,169
272,846
(1,329,040)
(365,486)
(823,009)
414,809
(633,471)
768,825
–
(1,631,367)
390,477
(140,456)
1,746,832
–
PAGE 35
MUSGRAVE MINERALS LTD ANNUAL REPORT 2020 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2020
5
INCOME TAX CONTINUED
The income tax expense or benefit for the period is the tax payable on the current period’s taxable
income based on the applicable income tax rate, adjusted by changes in deferred tax assets and liabilities
attributable to temporary differences and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted
at the end of the reporting period. Management periodically evaluates positions taken in tax returns with
respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions
where appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred income tax
Recognised on the Statement of Financial Position, deferred income
tax at the end of the reporting period relates to the following: (2020:
27.5%, 2019: 27.5%)
Deferred income tax liabilities:
– Capitalised expenditure deductible for tax purposes
– Trade and other receivables
– Derivative financial instruments
– Financial assets at fair value through other comprehensive
income
Deferred income tax assets:
– Trade and other payables
– Employee benefits
– Capital raising costs
– Net lease liability
CONSOLIDATED
2020
$
2019
$
4,851,925
11,949
–
336,740
4,001,553
13,750
24,750
36,400
5,200,614
4,076,453
(21,883)
(37,284)
(181,295)
(3,828)
(4,895)
(32,164)
(155,445)
–
– Tax losses available to offset deferred tax liability
(4,956,324)
(3,883,949)
Net deferred tax asset / (liability)
–
–
The Company and its 100% owned controlled entity have formed a tax consolidated group. The head entity
of the tax consolidated group is Musgrave Minerals Limited. The tax consolidated group has potential
revenue tax losses of $33,571,476 (2019: $30,775,748).
Musgrave Minerals Limited is considered a base rate entity for income tax purposes and is therefore
subject to income tax at a rate of 27.5% (2019: 27.5%).
The deductible temporary differences and tax losses do not expire under current tax legislation. Deferred
tax assets have not been recognised in respect of these items because it is not probable that future taxable
profit will be available against which the Group can utilise benefits.
The utilisation of tax losses is dependent on the Group satisfying the continuity of ownership test or the
same business test at the time the tax losses are applied against taxable income.
PAGE 36
MUSGRAVE MINERALS LTD ANNUAL REPORT 2020 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2020
6
CASH AND CASH EQUIVALENTS
Cash at bank and on hand
Short–term deposits
CONSOLIDATED
2020
$
1,896,367
7,226,325
9,122,692
2019
$
417,407
3,126,325
3,543,732
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, and other
short–term, highly liquid investments with maturities of three months or less.
The weighted average interest rate for the year was 1.21% (2019: 2.18%).
The Group’s exposure to interest rate risk is set out in Note 22. The maximum exposure to credit risk at the
end of the reporting period is the carrying amount of each class of cash and cash equivalents mentioned
above.
7
TRADE AND OTHER RECEIVABLES
Current
GST receivable
Other
CONSOLIDATED
2020
$
174,722
98,930
273,652
2019
$
65,989
67,769
133,758
Trade and other receivables are generally due for settlement within 30 days. They are presented as current
assets unless collection is not expected for more than 12 months after the reporting date.
Trade and other receivables are recognised at amortised cost using the effective interest rate method, less
any allowance for expected credit losses.
The Group assesses at each balance date whether there is objective evidence that a financial asset or group
of financial assets is impaired. For trade and other receivables, the Group applies the simplified approach
permitted by AASB 9 to determine any allowances for expected credit losses, which requires expected
lifetime losses to be recognised from initial recognition of the receivables. The expected credit losses on
these financial assets are estimated using a provision matrix based on the Group’s historical credit loss
experience. The amounts held in trade and other receivables do not contain impaired assets and are not
past due. Based on the credit history of these trade and other receivables, it is expected that the amounts
will be received when due.
The Group’s financial risk management objectives and policies are set out in Note 22.
Due to the short–term nature of these receivables their carrying value is assumed to approximate their fair
value.
8 OTHER CURRENT ASSETS
Accrued interest
CONSOLIDATED
2020
$
10,475
10,475
2019
$
21,211
21,211
PAGE 37
MUSGRAVE MINERALS LTD ANNUAL REPORT 2020 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2020
9
FINANCIAL ASSETS
a) Derivative financial instruments
Current
Opening balance
Change in fair value
Disposal
Closing balance
b)
Financial assets at fair value through other comprehensive income
Non–Current
Opening balance
Acquisition
Change in fair value
Disposal
Closing balance
CONSOLIDATED
2020
$
131,000
1,388,000
(1,519,000)
–
2019
$
455,000
(324,000)
–
131,000
CONSOLIDATED
2020
$
505,575
1,919,000
561,352
(1,039,614)
1,946,313
2019
$
610,000
250,000
(354,425)
–
505,575
In February 2017, the Company entered into a Tenement Sale Agreement with Legend Mining Limited
(Legend) in respect of the Group’s non–core tenements in the Fraser Range area of Western Australia.
Under the terms of the Agreement, the Company transferred to Legend 100% of its interests in tenements
E28/2404 and E28/2405 and as consideration for the sale received 10,000,000 fully paid ordinary shares in
Legend and 10,000,000 unlisted options exercisable at $0.04 exercisable by 30 March 2021.
In April 2020, the Company sold 7,500,000 of the shares it held in Legend and exercised all of the
10,000,000 unlisted options in Legend at $0.04 per share.
Financial assets are recognised and derecognised on settlement date where the purchase or sale of an
investment is under a contract whose terms require delivery of the investment within the time–frame
established by the market concerned. They are initially measured at fair value, net of transaction costs,
except for those financial assets classified as fair value through profit or loss, which are initially measured
at fair value. Transaction costs of financial assets carried at fair value through profit or loss are expensed in
profit or loss.
The Group classifies its financial assets as either financial assets at fair value though profit or loss (“FVPL”),
fair value though other comprehensive income (“FVOCI”) or at amortised cost. The classification depends
on the entity’s business model for managing the financial assets and the contractual terms of the cash
flows.
For investments in equity instruments, the classification depends on whether the Group has made an
irrevocable election at the time of initial recognition to account for the equity investment at FVPL or FVOCI.
Financial assets at FVPL
For assets measured at FVPL, gains and losses will be recorded in profit or loss. The Group’s derivative
financial instruments are recognised at FVPL. Assets in this category are subsequently measured at fair
value. The fair values of financial assets in this category are determined by reference to active market
transactions or using a valuation technique where no active market exists. Refer to Note 22 for additional
details.
Financial assets at OCI
For assets measured at FVOCI, gains and losses will be recorded in other comprehensive income. There is
no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition
of the investment. Dividends from such investments continue to be recognised in profit or loss as other
income when the Group’s right to receive payments is established. Impairment losses (and reversal of
impairment losses) on equity investments measured at FVOCI are not reported separately from other
changes in fair value. The Group has elected to measure its listed equities at FVOCI.
Assets in this category are subsequently measured at fair value. The fair values of quoted investments are
based on current bid prices in an active market. Refer to Note 22 for additional details.
PAGE 38
MUSGRAVE MINERALS LTD ANNUAL REPORT 2020 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2020
10 EXPLORATION AND EVALUATION
Opening balance
Exploration expenditure incurred during the year
Mainland option fee (i)
Impairment expense
Closing balance
CONSOLIDATED
2020
$
2019
$
15,976,794
2,992,763
–
(3,434)
10,256,138
5,932,245
125,000
(336,589)
18,966,123
15,976,794
(i)
In March 2019 the Company entered into an Option Agreement (“Agreement”) to acquire the non–
alluvial gold rights to the Mainland Project for an initial payment of $125,000.
Exploration and evaluation expenditure, including the costs of acquiring licences and permits, are
capitalised as exploration and evaluation assets on an area of interest basis. Costs incurred before the
Company has obtained the legal rights to explore an area are recognised in the Statement of Profit or Loss
and Other Comprehensive Income.
Exploration and evaluation assets are only recognised if the rights to the area of interest are current and
either:
a)
b)
the expenditures are expected to be recouped through successful development and exploitation or
from sale of the area of interest; or
activities in the area of interest have not at the reporting date reached a stage which permits a
reasonable assessment of the existence or otherwise of economically recoverable reserves, and active
and significant operations in, or in relation to, the area of interest are continuing.
Exploration and evaluation assets are assessed for impairment if sufficient data exists to determine
technical feasibility and commercial viability, and facts and circumstances suggest that the carrying amount
exceeds the recoverable amount. For the purposes of impairment testing, exploration and evaluation
assets are allocated to cash–generating units to which the exploration activity relates. The cash generating
unit shall not be larger than the area of interest.
Once the technical feasibility and commercial viability of the extraction of minerals in an area of interest
are demonstrable, exploration and evaluation assets attributable to that area of interest are first tested for
impairment and then reclassified to mineral property and development assets within property, plant and
equipment.
When an area of interest is abandoned or the Directors decide that it is not commercial, any accumulated
costs in respect of that area are written off in the financial period the decision is made.
Significant estimate and judgement
There is some subjectivity involved in the carry forward of capitalised exploration and evaluation
expenditure or, where appropriate, the write off to the Statement of Profit or Loss and Other
Comprehensive Income, however management give due consideration to areas of interest on a regular
basis and are confident that decisions to either write off or carry forward such expenditure fairly reflect the
prevailing situation.
PAGE 39
MUSGRAVE MINERALS LTD ANNUAL REPORT 2020 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2020
11
TRADE AND OTHER PAYABLES
Trade creditors and accruals
Amounts due to joint venture partner
Other payables
CONSOLIDATED
2020
$
965,975
151,006
–
1,116,981
2019
$
63,508
–
114,106
177,614
These amounts represent liabilities for goods and services provided to the Group prior to the end of the
financial year and which are unpaid. Trade creditors are unsecured, non–interest bearing and are normally
settled on 30–day terms. The Group’s financial risk management objectives and policies are set out in Note
22. Due to the short–term nature of these payables their carrying value is assumed to approximate their fair
value.
12 PROVISIONS
Short–term
Short–term
Annual leave
Long service leave
Short–term obligations
CONSOLIDATED
2020
$
33,890
101,690
135,580
2019
$
36,240
80,720
116,960
Liabilities for wages and salaries, including non–monetary benefits and annual leave expected to be settled
within 12 months, are recognised in respect of employees’ services up to the end of the reporting period
and are measured at the amounts expected to be paid when the liabilities are settled. The liability for
annual leave is recognised in the provision for employee benefits. All other short–term employee benefit
obligations are presented as payables.
The obligations are presented as current liabilities in the Statement of Financial Position of the Group.
Long–term obligations
The liability for long service leave and annual leave which is not expected to be settled within 12 months
after the end of the period in which the employees render the related service is recognised as a non–
current provision for employee benefits and measured as the present value of expected future payments to
be made in respect of services provided by employees up to the end of the reporting period.
13 LEASE LIABILITIES
Current
Lease liabilities
Non–current
Lease liabilities
PAGE 40
CONSOLIDATED
2020
$
94,782
94,782
185,880
185,880
280,662
2019
$
–
–
–
–
–
MUSGRAVE MINERALS LTD ANNUAL REPORT 2020 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2020
13 LEASE LIABILITIES CONTINUED
The Company has leases for its corporate office, its core yard and IT equipment. The Company has elected
not to recognize a lease liability for ‘low-value’ and short-term leases. Refer also to Note 2 AASB 16 Leases.
Future minimum lease payments as at 30 June 2020 were as follows:
Within one year
One to two years
Two to five years
$
$
$
118,615
(23,833)
94,782
121,363
(13,778)
107,585
–
–
–
–
–
–
81,727
(3,432)
78,295
–
–
–
Total
$
321,705
(41,043)
280,662
–
–
–
30 June 2020
Lease payments
Finance charges
Net present values
30 June 2019
Lease payments
Finance charges
Net present values
14 CONTRIBUTED EQUITY
a) Share capital
Ordinary shares fully paid
b) Movements in ordinary shares on issue
Balance at 1 July 2018
Placement – 19 December 2018
Share issue costs
Balance at 30 June 2019
Placement – 9 October 2019
Placement – 4 May 2020
Options exercised – various
Share issue costs
Balance at 30 June 2020
CONSOLIDATED
2020
$
2019
$
52,004,639
44,592,770
CONSOLIDATED
Number
326,999,457
59,782,609
–
386,782,066
18,587,361
57,142,858
2,230,000
–
$
39,436,729
5,500,000
(343,959)
44,592,770
1,500,000
6,000,000
308,330
(396,461)
464,742,285
52,004,639
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. Ordinary shares have the
right to receive dividends as declared, and in the event of winding up the Company, to participate in the
proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on shares
held. Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the
Company.
PAGE 41
MUSGRAVE MINERALS LTD ANNUAL REPORT 2020 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2020
14 CONTRIBUTED EQUITY CONTINUED
c) Movements in options on issue
Opening balance
Options granted
Options exercised
Options expired / lapsed
Balance at the end of the financial year
15 RESERVES
Share option reserve
Opening balance
Issue of director and employee options (Note 23)
Exercise of director and employee options
Expiry of options
Balance at the end of the financial year
CONSOLIDATED
2020
Number
19,800,000
6,680,000
(2,230,000)
(2,600,000)
21,650,000
2019
Number
9,900,000
10,550,000
–
(650,000)
19,800,000
CONSOLIDATED
2020
$
996,288
136,072
(85,098)
(170,341)
876,921
2019
$
484,487
533,673
–
(21,872)
996,288
The option reserve is used to recognise the fair value of options issued to Directors, employees and
contractors.
Financial asset reserve
Opening balance
Financial assets at fair value through other comprehensive income
(Note 9(b))
Balance at the end of the financial year
Total Reserves
CONSOLIDATED
2020
$
2019
$
132,364
486,789
561,352
693,716
1,570,637
(354,425)
132,364
1,128,652
The financial asset reserve is used to recognise the fair value movement on financial assets at fair value
through other comprehensive income.
16 ACCUMULATED LOSSES
Opening balance
Net profit / (loss) attributable to members
Transfer from share option reserve
Balance at the end of the financial year
CONSOLIDATED
2020
$
2019
$
(25,628,978)
(24,321,810)
992,169
170,341
(1,329,040)
21,872
(24,466,468)
(25,628,978)
PAGE 42
MUSGRAVE MINERALS LTD ANNUAL REPORT 2020 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2020
17 EARNINGS PER SHARE
Basic profit / (loss) loss per share
Diluted profit / (loss) loss per share
The following reflects the income and share data used in the
calculations of basic and diluted loss per share:
Profit / (loss) used in calculating basic and diluted earnings per
share
2020
Cents
0.24
0.23
2019
Cents
(0.37)
(0.37)
2020
$
2019
$
992,169
(1,329,040)
2020
Number
2019
Number
Weighted average number of ordinary shares used in calculating
basic and diluted profit / (loss) per share
Weighted average number of ordinary shares used in calculating
basic and diluted profit / (loss) per share
409,344,645
358,610,535
430,994,645
n/a
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to owners of the Group, excluding
any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary
shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during
the year and excluding treasury shares.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to
take into account the after income tax effect of interest and other financing costs associated with dilutive
potential ordinary shares and the weighted average number of additional ordinary shares that would have
been outstanding assuming the conversion of all dilutive potential ordinary shares.
18 AUDITOR’S REMUNERATION
Audit services
BDO Audit (WA) Pty Ltd
CONSOLIDATED
2020
$
2019
$
– Audit and review of the financial reports
30,000
15,000
Grant Thornton Audit Pty Ltd
– Audit and review of the financial reports
Total remuneration
–
30,000
11,670
26,670
PAGE 43
MUSGRAVE MINERALS LTD ANNUAL REPORT 2020 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2020
19
CONTINGENT ASSETS AND LIABILITIES
Contingent liabilities
The Group had contingent liabilities in respect of:
Future royalty payments
Musgrave holds a 100% interest in the key tenure hosting gold resources at Cue including the Break of
Day/Starlight and Lena deposits and other prospects. Some of the Cue tenements are subject to third party
royalty payments on future gold production including the mining licence hosting the Break of Day/Starlight
and Lena gold deposits.
Future consideration and royalty payments
In March 2019, the Company entered into an Option Agreement (“Agreement”) to acquire the non–alluvial
gold rights to the Mainland Project which is located within the boundaries of the Company’s Cue Gold
Project. Musgrave paid $125,000 to execute the option to acquire 100% interest in the tenements (excluding
the vendors’ interest in alluvial gold). A further $100,000 was paid in August 2020 and an additional
$300,000 is to be paid as milestone payments in Musgrave shares or cash (at the Company’s discretion)
before the fourth anniversary of the Agreement. The vendor will be entitled to a 1% gross royalty on any
non–alluvial gold produced by the Company from the tenements.
Contingent assets
The Group had contingent assets in respect of:
Future royalty payments
In January 2014, the Group entered into a Mining Farm–in and Joint Venture Agreement (“Agreement”)
with Menninnie Metals Pty Ltd. In August 2015, the parties agreed to terminate the Agreement
(“Termination Agreement”). As part of the Termination Agreement the Group retains a 1% Net Smelter
Return Royalty on all ores, concentrates or other primary, intermediate or final product of any minerals
produced from two of the tenements.
Deferred consideration
Cyprium Australia Pty Ltd (“Cyprium”) has earned an 80% interest in the non–gold rights over the northern
tenements (“Tenements”) of the Company’s Cue Project. Musgrave retains 20% of the non–gold rights
and is free carried to the completion of a definitive feasibility study and retains 100% of the gold rights.
Should Cyprium delineate 80,000 tonnes of contained copper over the Tenements, $200,000 in cash or the
equivalent value of Cyprium shares (at Cyprium’s election) will be due to the Company. Upon a Decision to
Mine, $300,000 in cash or the equivalent value of Cyprium shares (at Cyprium’s election) will be due to the
Company.
There are no other material contingent assets or liabilities as at 30 June 2020.
20 EVENTS OCCURRING AFTER THE REPORTING PERIOD
The impact of the Coronavirus (COVID–19) pandemic is ongoing and while it has not significantly impacted
the entity up to 30 June 2020, it is not practicable to estimate the potential impact, positive or negative,
after the reporting date. The situation is rapidly developing and is dependent on measures imposed by
the Australian Government and other countries, such as maintaining social distancing requirements,
quarantine, travel restrictions and any economic stimulus that may be provided.
There have been no other events subsequent to reporting date which are sufficiently material to warrant
disclosure.
21 COMMITMENTS
In order to maintain an interest in the exploration tenements in which the Group is involved, the Group is
committed to meeting the conditions under which the tenements were granted. The timing and amount
of exploration expenditure commitments and obligations of the Group are subject to the minimum
expenditure commitments required as per the Mining Act 1978 (Western Australia) and the Mining Act
1971 (South Australia), and may vary significantly from the forecast based upon the results of the work
performed which will determine the prospectivity of the relevant area of interest. Currently, the minimum
expenditure commitments for the granted tenements is $1,009,380 (2019: $992,300) per annum. Of this
amount $829,680 will be met by the Group’s joint venture partners as part of their earn–in obligations.
PAGE 44
MUSGRAVE MINERALS LTD ANNUAL REPORT 2020 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2020
22 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
Financial risk management
Overview
The Group has exposure to the following risks from their use of financial instruments:
•
•
•
•
•
Interest rate risk
Credit risk
Foreign currency risk
Commodity risk
Liquidity risk
• Market risk
This note presents information about the Group’s exposure to each of the above risks, their objectives,
policies and processes for measuring and managing risk, and the management of capital. The Board of
Directors has overall responsibility for the establishment and oversight of the risk management framework.
Risk management policies are established to identify and analyse the risks faced by the Group, to set
appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management
policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s
activities.
The Audit Committee oversees how management monitors compliance with the Group’s risk management
policies and procedures and reviews the adequacy of the risk management framework in relation to the
risks faced by the Group.
The Group’s principal financial instruments are tabled below.
Financial assets
Current
Cash and cash equivalents
Trade and other receivables
Derivative financial instruments
Non–Current
CONSOLIDATED
2020
$
2019
$
9,122,692
273,652
–
9,396,344
3,543,732
133,758
131,000
3,808,490
Financial assets at fair value through other comprehensive income
(“FVOCI”)
1,946,313
505,575
Financial liabilities
Current
Trade and other payables
Lease liabilities
Non–Current
Lease liabilities
Interest rate risk
1,946,313
505,575
1,116,981
94,782
1,211,763
185,880
185,880
177,614
–
177,614
–
–
Interest rate risk is the risk that the value of a financial instrument or cash flows associated with the
instrument will fluctuate due to changes in market interest rates. Interest rate risk arises from fluctuations
in interest bearing financial assets and liabilities that the Group uses.
Interest bearing assets comprise cash and cash equivalents which are considered to be short–term liquid
assets. It is the Group’s policy to settle trade payables within the credit terms allowed and therefore not
incur interest on overdue balances.
PAGE 45
MUSGRAVE MINERALS LTD ANNUAL REPORT 2020 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2020
22 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES CONTINUED
The following table set out the carrying amount, by maturity, of the financial instruments that are exposed
to interest rate risk:
Floating
interest
rate
$
Fixed interest rate maturing in
1 year or
less
$
Over 1 to 5
years
$
More than
5 years
$
Non-
interest
bearing
$
Total
$
Consolidated – 2020
Financial assets
Cash and cash equivalents
1,896,067
7,226,325
Trade and other receivables
–
–
Weighted average interest rate
0.57%
1.43%
1,896,067
7,226,325
Financial liabilities
Trade and other payables
Lease liabilities
Weighted average interest rate
Consolidated – 2019
Financial assets
–
–
–
–
–
–
–
–
Cash and cash equivalents
417,107
3,126,325
Trade and other receivables
–
–
Weighted average interest rate
1.25%
2.32%
417,107
3,126,325
Financial liabilities
Trade and other payables
Weighted average interest rate
–
–
–
–
–
–
Sensitivity analysis for interest rate exposure
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
300
9,122,692
273,652
273,652
273,952
9,396,344
–
–
1,116,981
1,116,981
280,662
280,662
1,397,643
1,397,643
–
–
300
3,543,732
133,758
133,758
134,058
3,677,490
–
–
177,614
177,614
–
177,614
177,614
–
A change of 100 basis points in interest rates at the reporting date would have increased / (decreased)
equity and profit or loss by the amounts shown below:
Impact on profit / (loss) and equity
Increase of 100 basis points
Decrease of 100 basis points
Credit risk
2020
$
43,629
(43,629)
2019
$
50,055
(50,055)
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument
fails to meet its contractual obligations, and arises principally from the Group’s receivables from customers
and investment securities. The Group trades only with recognised, creditworthy third parties. It is the Group
policy that all customers who wish to trade on credit terms are subject to credit verification procedures. In
addition, receivable balances are monitored on an ongoing basis with the result that the Group’s exposure
to bad debts is not significant. The maximum exposure to credit risk is the carrying value of the receivable,
net of any provision for expected credit loss.
With respect to credit risk arising from the other financial assets of the Group, which comprise cash
and cash equivalents, the Group’s exposure to credit risk arises from default of the counter party, with a
maximum exposure equal to the carrying amount of these instruments. This risk is minimised by reviewing
term deposit accounts from time to time with approved banks of a sufficient credit rating which is –AA and
above.
PAGE 46
MUSGRAVE MINERALS LTD ANNUAL REPORT 2020 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2020
22 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES CONTINUED
Exposure to credit risk
The carrying amount of the Group’s financial assets represents the maximum credit exposure. The Group’s
maximum exposure to credit risk is tabled below.
Cash and cash equivalents
Trade and other receivables
Foreign currency risk
CONSOLIDATED
2020
$
9,122,692
273,652
9,396,344
2019
$
3,543,732
133,758
3,677,490
The Group’s exposure to foreign currency risk is minimal at this stage of its operations.
Commodity price risk
The Group’s exposure to commodity price risk is minimal at this stage of its operations.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The
Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient
liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring
unacceptable losses or risking damage to the Group’s reputation.
The Group’s objective is to maintain a balance between continuity of funding and flexibility. The following
are the contractual maturities of financial liabilities:
Consolidated – 2020
Trade and other payables
Lease liabilities
Consolidated – 2019
Trade and other payables
Market risk
Price risk
Less than 6
months
$
Total Contractual
cash flows
$
Carrying
amount
$
1,116,981
45,620
1,162,601
177,614
177,614
1,116,981
280,662
1,397,643
177,614
177,614
1,116,981
280,662
1,397,643
177,614
177,614
The Group’s exposure to equity securities price risk arises from investments held by the Group and
classified in the Statement of Financial Position as either derivative financial instruments, or financial
assets at FVOCI.
Sensitivity analysis for price risk
A change of 10% in the price of securities held at reporting date on the Group’s equity and/or profit or loss
by is shown below:
Impact on profit / (loss) and equity
Increase of 10%
Decrease of 10%
Fair value of financial assets and liabilities
2020
$
194,631
(194,631)
2019
$
63,657
(63,657)
The fair value of cash and cash equivalents and non–interest bearing financial assets and financial
liabilities of the Group is equal to their carrying value.
PAGE 47
MUSGRAVE MINERALS LTD ANNUAL REPORT 2020 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2020
22 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES CONTINUED
Fair value measurement of financial instruments
Financial assets and financial liabilities measured at fair value in the Consolidated Statement of Financial
Position are grouped into three levels of a fair value hierarchy. The three levels are defined based on the
observability of significant inputs to the measurement, as follows:
•
•
•
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or
liability, either directly or indirectly; and
Level 3: unobservable inputs for the asset or liability.
The following table shows the levels within the hierarchy of financial assets and liabilities measured at fair
value on a recurring basis at 30 June 2020 and 30 June 2019:
Level 2
$
Level 3
$
Level 1
$
–
1,946,313
1,946,313
–
–
–
–
131,000
505,575
505,575
–
131,000
Total
$
–
1,946,313
1,946,313
131,000
505,575
636,575
–
–
–
–
–
–
30 June 2020
Derivative financial
instruments
Financial assets at FVOCI
30 June 2019
Derivative financial
instruments
Financial assets at FVOCI
Capital risk management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going
concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an
optimal capital structure to reduce the cost of capital. The management of the Group’s capital is performed
by the Board.
The capital structure of the Group consists of net debt (trade and other payables, provisions and lease
liabilities detailed in Notes 11, 12 and 13 offset by cash and bank balances) and equity of the Group
(comprising contributed equity and reserves, offset by accumulated losses detailed in Notes 14, 15 and 16).
The Group is not subject to any externally imposed capital requirements. None of the Group’s entities are
subject to externally imposed capital requirements.
PAGE 48
MUSGRAVE MINERALS LTD ANNUAL REPORT 2020 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2020
23 SHARE–BASED PAYMENTS
Employee Share Option Plan
The Group has an Employee Share Option Plan (“ESOP”) for executives and employees of the Group. In
accordance with the provisions of the ESOP, as approved by shareholders at a previous Annual General
Meeting, executives and employees may be granted options at the discretion of the Directors.
Each share option converts into one ordinary share of Musgrave Minerals Limited on exercise. No amounts
are paid or are payable by the recipient on receipt of the option. The options carry neither rights of
dividends nor voting rights. Options may be exercised at any time from the date of vesting to the date of
their expiry.
Options issued to Directors are subject to approval by shareholders.
The following share–based payment arrangements were in existence during the reporting period:
Option
series
Number
Issue
date
Expiry
date
Vesting
date
Exercise
price
Fair value at
grant date
M (1)
O (2)
P
Q
R (3)
S (4)
T (5)
U (6)
500,000
22 Apr 2016
22 Apr 2021
Immediate
2,550,000
4 Nov 2016
3 Nov 2019
Immediate
800,000
4 Nov 2016
3 Nov 2021
Immediate
3,250,000
29 Nov 2017
29 Nov 2020
Immediate
2,250,000
29 Nov 2017
29 Nov 2020
Immediate
7,500,000
21 Nov 2018
16 Nov 2021
Immediate
3,050,000
30 Nov 2018
16 Nov 2021
Immediate
6,680,000
21 Nov 2019
21 Nov 2022
Immediate
$0.045
$0.167
$0.195
$0.097
$0.097
$0.1275
$0.1275
$0.1045
$0.0194
$0.0659
$0.0628
$0.0436
$0.0436
$0.0506
$0.0506
$0.0203
(1) These options were exercised during the financial year.
(2) These options expired during the financial year.
(3) 430,000 of these options were exercised and 50,000 of these options lapsed during the financial year.
(4) 600,000 of these options were exercised during the financial year.
(5) 400,000 of these options were exercised during the financial year.
(6) 300,000 of these options were exercised during the financial year.
Fair value of share options granted during the year
The fair value of share options at grant date is determined using a Black–Scholes option pricing model that
takes into account the exercise price, the term of the option, the share price at grant date, the expected
price volatility of the underlying share and the risk–free rate for the term of the option. The fair value of
share options issued during the year was $136,072 of which $61,110 relate to key management personnel
(2019: $533,673 and $328,803 respectively).
The model inputs for options granted during the year ended 30 June 2020 are as follows:
Inputs
Number
Exercise price
Issue date
Expiry date
Share price at grant date
Expected price volatility
Risk–free interest rate
Expected dividend yield
Issue U
6,680,000
$0.1045
21 Nov 2019
21 Nov 2022
$0.07
61%
0.72%
0%
PAGE 49
MUSGRAVE MINERALS LTD ANNUAL REPORT 2020 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2020
23 SHARE–BASED PAYMENTS CONTINUED
Movements in share options during the year
Movement in the number of share options held by Directors, employees and consultants:
2020
Number of
options
Weighted
average
exercise
price
$
2019
Number of
options
Outstanding at the beginning of the
year
Granted and vested during the year
Exercised during the year
Expired / lapsed during the year
Outstanding at the end of the year
Exercisable at the end of the year
19,800,000
0.125
9,900,000
6,680,000
(2,230,000)
(2,600,000)
21,650,000
21,650,000
0.105
0.100
0.166
0.116
0.116
10,550,000
–
(650,000)
19,800,000
19,800,000
Weighted
average
exercise
price
$
0.122
0.128
–
0.121
0.125
0.125
The weighted average remaining contractual life of share options outstanding at the end of the year was
1.45 years (2019: 1.84 years).
Share options outstanding at the end of the year
Share options issued and outstanding at the end of the year have the following exercise prices:
Expiry
date
3 November 2019
29 November 2020
22 April 2021
3 November 2021
16 November 2021
21 November 2022
Totals
Exercise price $
0.1671
0.0974
0.045
0.195
0.1275
0.1045
2020
Number
–
5,020,000
–
800,000
9,450,000
6,380,000
21,650,000
2019
Number
2,550,000
5,500,000
500,000
800,000
10,450,000
–
19,800,000
Significant estimates and judgement
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 using a Black–
Scholes option pricing model.
PAGE 50
MUSGRAVE MINERALS LTD ANNUAL REPORT 2020 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2020
24 RECONCILIATION OF CASH FLOWS FROM OPERATING ACTIVITIES
Cash flows from operating activities
Profit / (loss) for the year
Non–cash flows in profit / (loss):
– Other income
– Depreciation
– Impairment expense
– Share based remuneration
– Change in fair value of derivative financial instruments
(1,388,000)
Changes in assets and liabilities
– Decrease / (Increase) in trade and other receivables
– Decrease / (Increase) in other current assets
– Increase / (Decrease) in trade and other payables
– Increase / (Decrease) in employee entitlements
Net cash used in operating activities
Non–cash investing and financing activities
Additions to the right of use assets (Note 2)
Exercise of Legend options (Note 9)
CONSOLIDATED
2020
$
2019
$
992,169
(1,329,040)
50,000
118,465
3,434
136,072
(120,140)
10,736
(25,788)
18,620
(204,432)
(250,000)
25,747
336,589
533,673
324,000
(7,251)
(6,600)
(276,613)
8,010
(641,485)
CONSOLIDATED
2020
$
198,620
1,519,000
1,717,620
2019
$
–
–
–
25 RELATED PARTY DISCLOSURE
a) Parent entity
Class
Country of
incorporation
Investment at cost
Musgrave Minerals Limited
Ordinary
Australia
b) Subsidiaries
2020
$
–
2019
$
–
Class
Country of
incorporation
Investment at cost
Musgrave Exploration Pty Ltd Ordinary
Australia
2020
$
100
2019
$
100
PAGE 51
MUSGRAVE MINERALS LTD ANNUAL REPORT 2020 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2020
25 RELATED PARTY DISCLOSURE CONTINUED
c) Key management personnel compensation
Short–term employee benefits
Post–employment benefits
Bonus payments
Share–based payments
2020
$
430,433
34,716
–
61,110
526,259
2019
$
430,433
39,886
54,415
328,803
853,537
Detailed remuneration disclosures are provided in the Remuneration Report.
26 SUBSIDIARIES
Details of the Company’s subsidiary are as follows:
Subsidiary
Principal activity
Country of
incorporation
Proportion of ownership
Musgrave Exploration Pty Ltd
Exploration
Australia
27 PARENT ENTITY DISCLOSURE
Financial Performance
Profit / (loss) for the year
Other comprehensive income
Total comprehensive profit / (loss)
Financial Position
ASSETS
Current assets
Non–Current assets
TOTAL ASSETS
LIABILITIES
Current liabilities
Non–Current liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Reserves
Accumulated losses
TOTAL EQUITY
2020
100%
2020
$
2019
100%
2019
$
992,169
561,352
1,553,521
(1,329,040)
(354,425)
(1,683,465)
9,406,819
21,235,212
30,642,031
1,347,343
185,880
1,533,223
3,829,701
16,557,317
20,387,018
294,574
–
294,574
29,108,808
20,092,444
52,004,639
1,570,637
44,592,770
1,128,652
(24,466,468)
(25,628,978)
29,108,808
20,092,444
No guarantees have been entered into by Musgrave Minerals Limited in relation to the debts of its
subsidiary.
Musgrave Minerals Limited had no expenditure commitments as at 30 June 2020 other than the
commitments as disclosed in Note 21.
PAGE 52
MUSGRAVE MINERALS LTD ANNUAL REPORT 2020 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2020
DIRECTORS’ DECLARATION
The Directors of Musgrave Minerals Limited declare that:
1)
in the Directors’ opinion, the financial statements and notes set out on pages 26 to 52 and the
Remuneration Report in the Director’s Report are in accordance with the Corporations Act 2001, including:
a) giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its performance,
for the financial year ended on that date; and
b)
complying with Australian Accounting Standards (including the Australian Accounting Interpretations),
Corporations Regulations 2001 and mandatory professional reporting requirements.
the financial statements also comply with International Financial Reporting Standards as disclosed in Note
2; and
there are reasonable grounds to believe that the consolidated entity will be able to pay its debts as and
when they become due and payable.
2)
3)
The Directors have been given the declarations required by Section 295A of the Corporations Act 2001 by the
Managing Director and Chief Financial Officer for the financial year ended 30 June 2020.
Signed in accordance with a resolution of the Directors.
Mr Graham Ascough
Chairman
Perth, Western Australia
24 September 2020
PAGE 53
MUSGRAVE MINERALS LTD ANNUAL REPORT 2020
INDEPENDENT AUDITOR’S REPORT
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
INDEPENDENT AUDITOR'S REPORT
To the members of Musgrave Minerals Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Musgrave Minerals Limited (the Company) and its subsidiaries
(the Group), which comprises the consolidated statement of financial position as at 30 June 2020, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement
of changes in equity and the consolidated statement of cash flows for the year then ended, and notes
to the financial report, including a summary of significant accounting policies and the directors’
declaration.
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
Act 2001, including:
(i)
Giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its
financial performance for the year ended on that date; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
Report section of our report. We are independent of the Group in accordance with the Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code)
that are relevant to our audit of the financial report in Australia. We have also fulfilled our other
ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
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.
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent a firms. Liability limited by a scheme approved under Professional Standards Legislation.
PAGE 54
MUSGRAVE MINERALS LTD ANNUAL REPORT 2020 INDEPENDENT AUDITOR’S REPORT
Recoverability of exploration and evaluation expenditure
Key audit matter
How the matter was addressed in our audit
As disclosed in Note 10 to the Financial
Report, the carrying value of capitalised
exploration and evaluation expenditure
represents a significant asset of the Group.
Refer to Note 10 of the Financial Report for a
description of the accounting policy and
significant judgements applied to capitalised
exploration and evaluation expenditure.
In accordance with AASB 6 Exploration for and
Evaluation of Mineral Resources (AASB 6), the
recoverability of exploration and evaluation
expenditure requires significant judgment by
management in determining whether there
are any facts or circumstances that exist to
suggest that the carrying amount of this asset
may exceed its recoverable amount. As a
result, this is considered a key audit matter.
Our procedures included, but were not limited to:
•
•
•
•
•
Obtaining a schedule of the areas of
interest held by the Group and assessing
whether the rights to tenure of those areas
of interest remained current at balance
date;
Considering the status of the ongoing
exploration programmes in the respective
areas of interest by holding discussions with
management, and reviewing the Group’s
exploration budgets, ASX announcements
and directors’ minutes;
Considering whether any such areas of
interest had reached a stage where a
reasonable assessment of economically
recoverable reserves existed;
Considering whether any facts or
circumstances existed to suggest
impairment testing was required; and
Assessing the adequacy of the related
disclosures in Note 10 to the Financial
Report.
Other information
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 30 June 2020, but does not include the
financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
PAGE 55
MUSGRAVE MINERALS LTD ANNUAL REPORT 2020 INDEPENDENT AUDITOR’S REPORT
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf
This description forms part of our auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 14 to 18 of the directors’ report for the
year ended 30 June 2020.
In our opinion, the Remuneration Report of Musgrave Minerals Limited, for the year ended 30 June
2020, complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
BDO Audit (WA) Pty Ltd
Glyn O'Brien
Director
Perth, 24 September 2020
PAGE 56
MUSGRAVE MINERALS LTD ANNUAL REPORT 2020 ADDITIONAL INFORMATION
The following additional information not shown elsewhere in this report is required by the ASX Listing Rules
and is current as at 18 September 2020.
Securities
Quotation has been granted for 474,092,285 ordinary shares of the Company on the Australian Securities
Exchange.
Quoted Securities
ASX Code
MGV
Unquoted Securities
ASX Code
MGVAB
MGVAB
MGVAB
MGVAB
MGVAB
Number of
Holders
4,571
Number of
Holders
1
8
4
18
11
Security
Description
Ordinary Fully Paid
Security
Description
Options expiring 29/11/2020
Exercisable at $0.0974
Total
Securities
474,092,285
Total
Securities
500,000
Options expiring 16/11/2021
8,150,000
Exercisable at $0.1275
Options expiring 21/11/2022
3,650,000
Exercisable at $0.1045
Options expiring 20/08/2023
7,880,000
Exercisable at $0.932
Options expiring 16/11/2021
10,450,000
Exercisable at $0.1275
One holder Mr Robert Waugh and Mrs Sara Waugh
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