Wandean Section (looking West) – showing WTD002 and the strong sulphide-gold target 300m north of the oxide gold
2019 Annual Report
CORPORATE DIRECTORY
NAGAMBIE RESOURCES LIMITED ABN 42 111 587 163
CLONBINANE GOLDFIELD PTY LTD ACN 160 928 932
NAGAMBIE DEVELOPMENTS PTY LTD ABN 37 130 706 311
NAGAMBIE LANDFILL PTY LTD ABN 90 100 048 075
REGISTERED OFFICE & PRINCIPAL PLACE OF BUSINESS
533 Zanelli Road
Nagambie Vic 3608
PO Box 339
Telephone: (03) 5794 1750
Website: www.nagambieresources.com.au
Email: info@nagambieresources.com.au
DIRECTORS
Michael W Trumbull (Executive Chairman)
Alfonso M G Grillo (Non-Executive Director)
Gary R Davison (Non-Executive Director)
CHIEF EXECUTIVE OFFICER
James C Earle
COMPANY SECRETARY
Alfonso M G Grillo
PRINCIPAL LEGAL ADVISER
GrilloHiggins Lawyers
Level 4, 114 William Street
Melbourne Vic 3000
Telephone: (03) 8621 8881
Website: www.grillohiggins.com.au
AUDITOR
William Buck
Level 20, 181 William Street
Melbourne Vic 3000
SHARE REGISTRY
Automic Pty Ltd
Level 3, 50 Holt Street
Surry Hills NSW 2010
Telephone: 1300 288 664
Website: www.automic.com.au
SECURITIES EXCHANGE LISTING
Nagambie Resources Limited shares are
listed on the Australian Securities Exchange
ASX Code: NAG
TABLE OF CONTENTS
Corporate Directory
Chairman’s Letter
IFC
1
CEO’s Operations & Exploration Review
2
Directors' Report
Remuneration Report
Auditor's Independence Declaration
Statement of Profit and Loss
Statement of Financial Position
Statement of Changes In Equity
Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Independent Auditor's Report
Additional ASX Information
8
14
18
19
20
21
22
23
39
40
46
Note: Corporate Governance Statement
The Corporate Governance Statement was
approved by the Board at the same time as
this Annual Report and can be found at:
www.nagambieresources.com.au under
Investor Information / Corporate Governance
Statement.
Chairman’s Letter
CHAIRMAN’S LETTER
Dear Shareholder
Important developments have significantly advanced the Company’s two most valuable assets – the Nagambie Gold Project
and the PASS “Underwater Storage” Project.
Nagambie Gold Project
A ground-based Induced Polarisation (IP) geophysics survey at Wandean came up with surprising but exciting results.
It had been expected that the IP would delineate a sulphide-gold target beneath the east-west-striking oxide-gold
mineralisation discovered by Nagambie Resources at Wandean in 2014. No target appeared below the oxide gold but a
strong target, starting 300m vertically below surface and striking east-west, was outlined 300m to the north of the oxide
gold. This target is supported by a gold-arsenic-antimony soil anomaly above it and a coincident thrust fault.
Drilling of WTD002 (see section on the Front Cover) is well underway, with the primary target being an IP chargeability high
of 26 mV/m approximately 770m down hole. By comparison, the highest IP chargeability high under the East Pit at the
Nagambie Mine was 6.5 mV/m, only one-quarter of the Wandean target figure.
The north-west-striking Wandean Crustal Fault was almost certainly the mineralising pathway for the oxide-gold
mineralisation at Wandean, which it intersects, and, 7 km to the south east, it lies around 1.7 km to the west of the Nagambie
Mine. Another IP survey is planned to commence shortly in this area and strong IP chargeability highs where the east-
west-striking Nagambie Mine Thrust Fault intersects the Wandean Crustal Fault would generate another exciting drill target.
It would also strongly validate the Company’s “intersecting-faults” geological model for its 2,000 sq km of gold tenements
in the Waranga Domain.
PASS “Underwater Storage” Project
The Environment Protection Authority of Victoria (EPA) recently gave Nagambie Resources written confirmation that the
Landfill Levy is being charged on the disposal of waste acid sulfate soil and rock (WASS, including PASS) to all licensed
landfills in Victoria. Further, it confirmed that this WASS is often contaminated by other pollutants, requiring it to be
deposited in a landfill cell.
A logical conclusion of the EPA confirmation is that landfills, while the only possible sites for contaminated WASS, are not
cost competitive in regards to the management of clean, uncontaminated WASS / PASS. This is because the Landfill Levy,
currently $65.90 per tonne, greatly exceeds the trucking costs to the alternative “lime treatment” and “underwater storage”
sites which have EPA-approved Environment Management Plans (EMPs) and are not subject to the Landfill Levy.
Nagambie Resources therefore concludes that the lime treatment sites are the only real competitors to the best practice
PASS underwater storage sites, of which the Nagambie Mine has the biggest capacity at around 5.0 million tonnes.
The lime treatment sites in Melbourne have two significant drawbacks however. Firstly, while lime mixing with WASS soil
is proven and common practice in Australia, lime mixing with WASS rock is not proven and common practice, certainly not
at rates around 1.0 million tonnes per year. Secondly, Nagambie Resources has calculated that the lime treatment sites
in Melbourne would produce more than four times the total equivalent carbon emissions per tonne of PASS than an
underwater storage site such as the Nagambie Mine.
Total WASS rock (PASS) to be generated from North East Link will be approximately 5.4 million tonnes, all of it from 24/7
tunnelling by tunnel boring machines (TBMs). In September 2019, the Victorian Government announced the three
consortiums that will be bidding for the construction of North East Link, with tenders to close in mid 2020.
Funding
Nagambie Resources’ gold exploration expenditure for the 2018/19 year was a record for the Company of $2,092,107. The
great majority of this was validly claimable as R&D expenditure and $727,995 has now been received as an R&D cash
rebate from the ATO.
The 2019 Shareholder Share Purchase Plan (SPP) at 5.3 cents per share is underway and closes on 13 November. All
the directors intend to take up their maximum entitlement of $30,000.
As usual I would again like to thank the Company’s very supportive and patient shareholders - also my fellow directors, the
CEO and his team, and our various excellent consultants for another productive year.
I would particularly like to take this opportunity to thank Kevin Perrin who retired as our long-serving Finance Director at 30
June this year.
Mike Trumbull
Executive Chairman
28 October 2019
Nagambie Resources Limited | 2019 Annual Report | Page 1
CEO’s Operations & Exploration Review
CEO’s OPERATIONS & EXPLORATION REVIEW
GOLD EXPLORATION – NAGAMBIE GOLD PROJECT
Gold exploration for Fosterville-style high-grade underground sulphide-gold deposits in Nagambie Resources’ Waranga
Domain tenements was greatly advanced during the year. The main driver was the delineation of a large, strong sulphide-
gold target 300m north of the surface oxide-gold mineralisation at Wandean.
WTD002 Diamond Hole
Wandean hole WTD002 (refer Figure 1) is well underway. It is designed to intersect the centre of an Induced Polarisation
(IP) chargeability anomaly four times stronger than the one intersected under the Nagambie Mine East Pit in 2018 (26 mV/m
versus 6.5 mV/m).
Figure 1 Wandean Section (looking west) – Sulphide-Gold Target of 26 mV/m 300m north of Surface Oxide Gold
The WTD002 sulphide-gold target is supported by the strong IP anomaly, lies beneath a gold-in-soil anomaly, is coincident
with a projected thrust fault, and significant hydrothermal alteration of the sediments was established in WTD001.
Another ground IP survey is to be carried out, as soon as cropping allows, over the section of the Wandean Crustal Fault to
the west of the Nagambie Mine, 7km south east of Wandean (refer Figure 3). A strong IP sulphide-gold response in this
location would highlight the prospectivity of Nagambie Resources’ 2,000 sq km of tenements in the Waranga Domain.
Waranga Domain Geological Model (WaGM)
The strong IP anomaly being drilled at Wandean occurs only 600m east of the Wandean Crustal Fault (refer Figure 2). This
supports Nagambie Resources’ geological model for the Waranga Domain (WaGM) which currently includes:
The host rocks are extensive marine siltstone and sandstone sediments (turbidites) with a total current-day thickness
of at least 6 km.
Significant erosion of the turbidites since formation has occurred to expose the Strathbogie granites to the south.
The turbidites rarely outcrop in the region, the East Pit at the Nagambie Mine being an exception, being mostly
covered by recent Murray Basin unconsolidated clays and sands;
Regional northeast-southwest compression followed by later north-south compression (refer Figure 4) caused
progressive folding of these originally-horizontal sedimentary rocks, resulting in numerous east-west-striking and
near-vertical north-dipping thrust faults. Adjacent to these thrust faults, folding and fracturing of the rocks was
pronounced;
Nagambie Resources Limited | 2019 Annual Report | Page 2
CEO’s Operations & Exploration Review
Crustal hydrothermal fluids rose up deep crustal faults, predominantly north-west striking, under pressure around 370
million years ago;
Where the deep crustal faults intersected the nearer-surface east-west-striking thrust faults, the hydrothermal fluids
moved both eastwards and westwards along and up the thrust faults under pressure, filling all the available fracture
openings in the adjacent sedimentary rocks and occasionally flooding coarse sandstone units. When the temperature
and pressure conditions at formation fell to conducive levels, precipitation of quartz, various carbonates, pyrite (iron
sulphide), arsenopyrite (arsenic-iron sulphide), stibnite (antimony sulphide) and gold from the hydrothermal fluids
took place.
Maximum precipitation of gold could occur immediately adjacent to the crustal faults or various distances east or west
of the crustal faults, wherever the temperature and pressure conditions were optimum for precipitation;
Gold grade correlates well with both % pyrite and % arsenopyrite at the Nagambie Mine and Wandean. The gold
grade correlation with % stibnite is generally very poor to date;
Sulphide-gold mineralisation will occur in folded and fractured siltstone-rich zones, but more intense mineralisation
will occur in the more brittle and more fractured sandstone-rich zones; and
Discrete IP chargeability highs in the Waranga Domain will most likely represent anomalous concentrations of
disseminated hydrothermal pyrite and arsenopyrite within folded and fractured sandstone-rich zones adjacent to the
east-west-striking thrust faults.
Figure 2 WTD002 Plan – Wandean Sulphide-Gold Target, Thrust Faults and Wandean Crustal Fault
Key Waranga Domain Structures
The gravity structures shown in Figure 4 represent deep crustal faults, predominately north-west striking.
The magnetic structures represent the principal nearer-surface thrust faults, predominantly east-west striking. Each principal
thrust fault will usually have one or more secondary, adjacent thrust faults. The principal thrust faults shown in the Wandean
– Nagambie Mine area were determined from aeromagnetic surveys. Several of these have been confirmed by mapping in
road cuttings, as have the ones outside of that area. Nagambie Resources plans to ultimately conduct aeromagnetic surveys
over all its Waranga Domain tenements and expects that the density of thrust faults in the Wandean – Nagambie Mine area
will be replicated elsewhere in its 2,000 sq km of tenements.
The number of crustal fault – thrust fault intersections in the 2,000 sq km of tenements is expected to be a very large number.
Mineralised intersections will be only a proportion of the total intersections, but still a large number.
Nagambie Resources Limited | 2019 Annual Report | Page 3
Figure 3 Nagambie Area – Wandean Crustal Fault, Wandean & Nagambie Mine West Targets
CEO’s Operations & Exploration Review
Figure 4 Waranga Domain – Key Structures, Surface Gold at Wandean, Nagambie Mine & Tubbs Rd
Nagambie Resources Limited | 2019 Annual Report | Page 4
CEO’s Operations & Exploration Review
However, the chances of the mineralised intersections outcropping at the current-day surface is extremely low given that the
great majority of the tenements are covered by Murray Basin sediments varying in thickness from a few metres to over 100
metres. Additionally, the mineralised intersections will predominately only occur in brittle sandstone-rich rocks which
alternate irregularly with more-ductile, less-fractured siltstone-rich rocks.
For the above reasons, there are, unsurprisingly, only three currently known surface oxide-gold occurrences in Nagambie
Resources’ tenements (shown in yellow in Figure 4). All three fit the Company’s crustal fault – thrust fault intersection model.
The Nagambie Mine East Pit was mined between 1989 and 1992. Wandean was a virgin gold discovery by Nagambie
Resources in 2014. Tubbs Road would have been worked in the late 1800s but has never been drilled or tested
geophysically.
WASS / PASS PROJECT
Waste acid sulfate soil and rock (WASS) can be either potential acid sulfate soil (PASS) or actual acid sulphate soil and rock
(AASS). PASS exists below the water table and, if it is excavated and then stored above ground, it naturally oxidises into
AASS with attendant acid drainage environmental issues. Best practice management of PASS is to store it under water,
preventing oxidation and acid formation.
Nagambie Resources has an Environment Protection Authority of Victoria (EPA)-approved Environment Management Plan
(EMP) to store PASS in the legacy water-filled pits at the Nagambie Mine as part of the proposed rehabilitation of those pits.
PASS capacity of the pits is around 5.0 million tonnes. The water in the Nagambie Mine open pits is naturally saline and
alkaline, making it ideal tor PASS management.
Total WASS in the Metro Rail, West Gate Tunnel and North East Link projects that will require management is approximately
8.2 million tonnes.
EPA Confirms Landfill Levy Applies to all WASS / PASS Disposed to Melbourne Landfills
Nagambie Resources had become concerned that the Landfill Levy was not being consistently applied to WASS taken to
Melbourne landfills and a detailed enquiry was sent to the EPA seeking clarification.
A written response was received from the EPA in October 2019 and the Company is greatly encouraged as it supports
Nagambie Resources’ reasoning in establishing the infrastructure to store PASS underwater in the legacy pits at the
Nagambie Mine.
The EPA confirmed that the Landfill Levy is being charged on the disposal of all WASS to all licensed landfills in Victoria.
Further, it noted that this WASS is often contaminated by other pollutants, requiring it to be deposited in a landfill cell.
A logical conclusion is that landfills, while the only possible sites for contaminated WASS, are not cost competitive in regards
to the management of clean, uncontaminated WASS. This is because the Landfill Levy, currently $65.90 per tonne, greatly
exceeds the trucking costs to the alternative “lime treatment” and “underwater storage” sites which have EPA-approved
EMPs and are not subject to the Landfill Levy.
Nagambie Resources therefore concludes that the only real competitors to the best practice PASS underwater storage sites
such as the Nagambie Mine are the lime treatment sites.
WASS Categories and Management Options
The approximate WASS soil and rock figures for the major committed infrastructure projects in Melbourne are shown in
Table 1 and total 8.3 million tonnes. With future projects under consideration such as the very large Suburban Rail Loop,
Metro Rail 2 and a variation on the original East-West Link, total WASS requiring management over the next 10 to 15 years
may exceed 20.0 million tonnes.
Table 1 WASS Summary for Major Melbourne Infrastructure Projects Committed to Date
In and around Melbourne, WASS rock typically doesn’t occur less than 25m below the surface and is unlikely to have suffered
from anthropological (human) contamination. All WASS within around 25m of surface will therefore most likely be WASS
soil and could be contaminated or uncontaminated.
The West Gate Tunnel and the two large road/rail crossing projects will only generate WASS soil (refer Table 1). WASS soil
generated from Metro Rail and North East Link will represent approximately 5% and 18% respectively of total WASS for
those projects. All contaminated WASS soil will require disposal to Melbourne landfills (refer Figure 1).
Nagambie Resources Limited | 2019 Annual Report | Page 5
Nagambie Resources expects that all the clean, uncontaminated WASS soil will continue to go to lime-treatment sites in
Melbourne (refer Figure 1) and be managed in accordance with their EPA-approved EMPs. Liming of WASS soil is proven
and common practice in Australia.
Figure 1 Principal Management Site Type for Each WASS Category
CEO’s Operations & Exploration Review
Total WASS rock (PASS) to be generated from Metro Rail will be approximately 1.4 million tonnes, the majority of it from
tunnelling to be carried out by four Tunnel Boring Machines (TBMs). The balance will be generated from additional
excavation of the underground stations using roadheaders. “Early Works” WASS rock generated intermittently, and in
relatively small quantities, by roadheaders has probably been taken to lime-treatment sites in Melbourne if it was
uncontaminated. Nagambie Resources expects that this may continue to be the case for the roadheader-generated WASS
rock from Metro Rail (refer Figure 1) despite there being operational issues with liming rock. Liming of rock piles is not
proven and common practice in Australia. A significant operational issue is that the blended lime can be washed through
the rock pile in heavy rainfall events.
Total WASS rock to be generated from North East Link will be approximately 5.4 million tonnes, all of it from tunnelling by
TBMs. In September 2019, the Victorian Government announced the three consortiums that will be bidding for the
construction of North East Link, with tenders to close in mid 2020.
Total TBM-generated WASS rock (PASS) from the Metro Rail and North East Link tunnels will therefore be over 6.0 million
tonnes or, on average, around 1.0 million tonnes per year. It is envisaged that all the TBMs on these two projects will be
operating continuously 24/7 as the tunnelling is the major critical path activity.
At any particular time, all the TBMs could be tunnelling through PASS rock which would create significant operational issues
in terms of PASS management.
When all the TBMs are simultaneously excavating PASS 24/7, the PASS rock will need to be trucked away continuously and
managed 24/7 in accordance with the EMP procedures that apply at the receiving sites.
Nagambie Resources considers that only underwater storage sites can accommodate such a large-scale 24/7 requirement
by the project managers.
Lime treatment of PASS rock on a continuous 24/7 basis would have to cope with issues such as heavy rainfall, rainfall
runoff, consistent lime blending / retention in rock piles, and effective pH testing of all the product heaps as they progress
through treatment.
Another significant issue is the carbon emissions produced by the lime treatment sites in Melbourne. Nagambie Resources
has calculated that they produce more than four times the total equivalent carbon emissions than an underwater storage site
such as the Nagambie Mine. The equivalent carbon emissions from the production of lime needed to treat the PASS, and
the lime blending process itself, are more than five times greater than the additional equivalent emissions resulting from the
longer trucking distance to Nagambie.
QUARRY PRODUCTS
Nagambie Resources is currently negotiating a commercial arrangement with a large producer and supplier of concrete
aggregates and gravel products in Victoria.
James Earle
Chief Executive Officer
Nagambie Resources Limited | 2019 Annual Report | Page 6
CEO’s Operations & Exploration Review
STATEMENT AS TO COMPETENCY
The Exploration Results in this report have been compiled by Dr Rod Boucher and Mr Geoff Turner. Rod Boucher has a PhD in
Geology, is a Member and RPGeo of the Australian Institute of Geoscientists and is a Member of the Australian Institute of Mining
and Metallurgy. Geoff Turner is a Fellow of the Australian Institute of Geoscientists. Both Rod Boucher and Geoff Turner have
sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration, and to the activity which
they are undertaking, to qualify as Competent Persons as defined in the 2012 edition of the “Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves”. Both consent to the inclusion in this report of these matters based on
the information in the form and context in which it appears.
FORWARD-LOOKING STATEMENTS
This report contains “forward-looking statements” within the meaning of securities laws of applicable jurisdictions. Forward-looking
statements can generally be identified by the use of forward-looking words such as “may”, “will”, “expect”, “target”, “intend”, “plan”,
“estimate”, “anticipate”, “believe”, “continue”, “objectives”, “outlook”, “guidance” or other similar words, and include statements
regarding certain plans, strategies and objectives of management and expected financial performance. These forward-looking
statements involve known and unknown risks, uncertainties and other factors, many of which are outside the control of Nagambie
Mining and any of its officers, employees, agents or associates. Actual results, performance or achievements may vary materially
from any projections and forward-looking statements and the assumptions on which those statements are based. Exploration
potential is conceptual in nature, there has been insufficient exploration to define a Mineral Resource and it is uncertain if further
exploration will result in the determination of a Mineral Resource. Readers are cautioned not to place undue reliance on forward-
looking statements and Nagambie Resources assumes no obligation to update such information.
Nagambie Resources Limited | 2019 Annual Report | Page 7
Directors’ Report
The directors of Nagambie Resources Limited submit herewith the annual financial report of the company and its
controlled entities (the group) for the financial year ended 30 June 2019.
Directors’ Report
Directors
The names and particulars of the company directors in office during the financial year and until the date of this report
are as follows. The directors were in office for the entire period unless stated otherwise.
Name
Particulars
MICHAEL W TRUMBULL
Non-Executive Director
Appointed 28 July 2005
Non-Executive Chairman
Appointed 20 December 2007
Executive Chairman
Appointed 13 September 2013
KEVIN J PERRIN
Non-Executive Director
Finance
Non-independent
Appointed 17 September 2010
Deputy Chairman
Appointed 20 December 2010
Retired 30 June 2019
Michael Trumbull has a degree in mining engineering (first class honours) from
the University of Queensland and an MBA from Macquarie University. A Fellow
of the Australian Institute of Mining and Metallurgy, he has over 40 years of broad
mining industry experience with mines / subsidiaries of MIM, Renison, WMC,
CRA, AMAX, Nicron, ACM and BCD Resources.
From 1983 to 1991, he played a senior executive role in expanding the Australian
gold production assets of ACM Gold. From 1985 to 1987, he was Project
Manager and then Resident Manager of the Westonia open pit gold mine and
treatment plant in Western Australia. From 1987 to 1991, he was General
Manager – Investments for the ACM Group.
From 1993 to 2011, he was a Director of the BCD Resources Group and was
involved in the exploration, subsequent mine development and operation of the
Beaconsfield underground gold mine in Tasmania. From 1993 to 2003, he was
the sole Executive Director of BCD and, from 2003 to 2004, was the Managing
Director.
Other current Directorships of Listed Companies
None
Former Directorships of Listed Companies in last three years
None
Kevin Perrin is a Certified Practising Accountant (CPA). Since 1 July 2012, he
has been a consultant to PPT Accounting after having been a partner in that
business for 37 years. PPT Accounting is a firm of CPA’s located in Ballarat which
conducts an accounting, taxation, audit and financial advisory practice.
He is also a consultant to PPT Financial Pty Ltd, having been a director and
shareholder of that company for 22 years. PPT Financial Pty Ltd is an
independent investment advisory firm holding an Australian Financial Services
Licence. Prior to that time, he held a personal Securities Dealers Licence and
was a member of the Stock Exchange of Ballarat Limited.
Kevin was Chairman of the Audit and Compliance Committee until he retired.
Other Current Directorships of Listed Companies
None
Former Directorships of Listed Companies in last three years
None
Nagambie Resources Limited | 2019 Annual Report | Page 8
ALFONSO M GRILLO
Non-Executive Director and
Company Secretary
Independent
Appointed 24 November 2017
Alfonso Grillo is a founding Partner at GrilloHiggins Lawyers. He holds a
Bachelor of Arts and Bachelor of Law degree. Alfonso has 19 years experience
as a corporate lawyer, including company meeting practice and corporate
governance procedures, fundraising and fundraising documentation, ASX Listing
Rules and mergers and acquisitions.
Alfonso advises resource industry companies in relation to mining and
exploration projects, acquisition and divestment of assets, joint ventures and due
diligence assessments.
Directors’ Report
GARY R DAVISON
Non-Executive Director
Independent
Appointed 15 May 2019
Alfonso has been a member of the Audit and Compliance Committee since his
appointment.
Other Current Directorships of Listed Companies
None
Former Directorships of Listed Companies in last three years
None
Gary Davison is a mining engineer. He is Managing Director and principal Mining
Engineer of Mining One Pty Ltd which he helped establish in August 2005, an
employee-owned independent group which has over 60 technical consultants.
Mining One provides expertise in Australia and internationally in resource
geology, mine planning, geotechnical engineering, conceptual studies, feasibility
studies and corporate strategic advice.
Gary has over 41 years’ experience in the mining industry in Australia and
overseas. His career began at Renison, Tasmania in 1978 and he has worked at
senior mine management levels in Tasmania, Western Australia, Victoria and
New South Wales – covering principally underground, but also surface mines. In
the early 1990’s, Gary managed the Nagambie Mine open pit and heap leach
treatment operations for Perseverance.
Gary has been a member of the Audit and Compliance Committee since his
appointment.
Other Current Directorships of Listed Companies
None.
Former Directorships of Listed Companies in last three years
None.
Chief Executive Officer
JAMES C EARLE BE (Geological) MEM MBA
James Earle was appointed as Chief Executive Officer on 4 July 2016. He is a Geological Engineer with over 15 years
broad experience with environmental impact assessments and approvals, waste management, environmental
management plans, soil and water assessments and strategic advice. The majority of his experience has been in public
infrastructure development and site-based environmental management.
He has held positions with consulting organisations and government departments in Australia and the UK. The most
recent positions held by James were Manager of the Victorian practice of Ramboll Environ and prior to that he was a
Senior Consultant, Service Group Manager and Principal Consultant at GHD. Both of these groups are global
engineering and environmental consultancies. James has also lectured at the Australian National University.
Nagambie Resources Limited | 2019 Annual Report | Page 9
Operating and Financial Review
Principal Activities
The principal activities of the group during the financial period were the exploration for, and development of, gold,
associated minerals, and construction materials in Australia, and the investigation and development of waste handling
assets.
Directors’ Report
Review of Operations
Gold exploration for Fosterville-style, high-grade underground sulphide-gold deposits in the Waranga Domain was
strongly advanced during the 2019 financial year. Nagambie Resources’ concept that hydrothermal fluids rising up the
Wandean Crustal Fault under pressure resulted in the gold deposits at both the Nagambie Mine and Wandean, 9 km
apart, is approaching final validation in the 2020 financial year.
“Prevent Oxidation” underwater WASS/PASS management, as approved for the Nagambie Mine legacy pits, is best
practice for Melbourne’s major tunnel infrastructure projects under Victorian environmental legislation and associated
regulations. The Environment Effects Statement for the North East Link Project was released during the year and
highlighted that around 6.6 million tonnes of WASS/PASS generated during tunnelling will require management and
that disposal to Melbourne’s remaining precious landfill space would be worst practice.
Gold Exploration Licences
The total area of ELs granted and applied for in the Waranga Domain at 30 June 2019 was 2,004 sq km.
Induced Polarisation (IP) Geophysical Surveys
A Ground IP survey was carried out over the Wandean Prospect area during the year and delineated a very
encouraging east-west-striking sulphide-gold target 300m to the north of the oxide-gold mineralisation discovered in
2014 at Wandean. Six north-south lines, 100m apart, were surveyed and significant adjoining IP chargeability
anomalies were outlined on each section. The highest reading recorded was 26 mV/m, four times stronger than the
best anomaly beneath the Nagambie Mine East Pit. WTD002, a diamond drill hole designed to intersect the 26 mV/m
maximum chargeability, commenced in September 2019.
A trial Radial-Down-The-Hole (Radial-DTH) IP survey was also carried out on diamond hole NND002, a north-south
hole drilled west of the West Pit at The Nagambie Mine. 12 radial surface survey lines, up to 1,000m in length, were
established with the down-hole probe set at 400m depth in temporary PVC casing in NND002. The results achieved
were very encouraging, delineating more specific chargeability anomalies than the broad Ground IP survey previously
carried out over the area.
Lithogeochemical Analysis for Hydrothermal Alteration in Drill Holes
Diamond-core geochemical and hyperspectral data was generated, at least every 50m down hole, for seven of the
nine deep diamond holes drilled to date. The results obtained were compared to known hydrothermal alteration of
siltstone and sandstone host rocks at the Fosterville gold mine and other mines using published data. The working
hypothesis is that the hydrothermal alteration in the Waranga Domain is similar to that observed at Fosterville and that
it can be used to vector towards and/or prioritise structures.
WTD001, the first deep diamond hole drilled at Wandean, and all the Nagambie Mine and Nagambie Mine West holes
exhibited significant Fosterville-style hydrothermal alteration of the sediments. The results have proved to be very
useful and lithogeochemical analysis of selected diamond holes will be carried out in the future.
WASS/PASS Management Project
WASS is waste acid sulfate soil and rock. PASS is potential acid sulfate soil and rock.
Total WASS/PASS in the Metro Rail, West Gate and North East Link projects that will require management is around
8.2 million tonnes. With future projects under consideration such as the very large Suburban Rail Loop, Metro Rail 2
and a variation on the original East-West Link, total WASS requiring management over the next 10 to 15 years may
exceed 20.0 million tonnes.
Nagambie Resources has an EPA-approved Environment Management Plan (EMP) to store PASS in the legacy water-
filled pits at the Nagambie Mine as part of the rehabilitation of those pits. PASS management capacity of the pits is
around 5.0 million tonnes.
EPA WASS policy discourages disposal to landfill and encourages its management at facilities with an approved EMP,
with a preference for those facilities that implement a management approach higher up the management hierarchy. In
practical terms, underwater storage (prevent oxidation) ranks ahead of “liming” (reduce or neutralise acidity) while
landfilling is worst practice in terms of the environment and sustainability.
Quarry Products
Nagambie Resources has commenced discussions with a large well-established company regarding commercial
production of crushed rock from the overburden dumps at the Nagambie Mine and concrete aggregates from the
tailings on the old heap leach pad.
Nagambie Resources Limited | 2019 Annual Report | Page 10
Directors’ Report
Likely Developments
During the 2020 financial year, Nagambie Resources is planning to:
1. Drill WTD002 and follow up holes as required into the underground sulphide-gold target at Wandean. Possibly
carry out lithogeochemical sampling of selected holes to assist in vectoring towards and/or prioritising
structures;
2. Carry out a Ground IP geophysical survey over the Wandean Crustal Fault to the west of the Nagambie Mine
and commence diamond drilling in the area if justified. Possibly carry out a Radial-DTH IP survey on the first
hole drilled and lithogeochemical sampling of selected holes. Possibly carry out Ground IP surveys where
the Wandean Crustal Fault intersects the Grimwade and Racecourse Thrust Faults between Wandean and
the Nagambie Mine;
3. Secure a PASS Management contract for some of the estimated 8.2 million tonnes to be excavated from the
tunnels for West Gate, Metro Rail and North East Link; and
4. Secure a commercial arrangement with a large well-established company for the production of crushed rock
and concrete aggregates at the Nagambie Mine.
Financial Matters
The consolidated loss for the group for the year amounted to $1,485,048 after tax. This compared to a loss after tax
for the year ended 30 June 2018 of $1,187,261. The increase of $297,787 in the loss for the year relates to a decrease
in revenue of $433,259 an increase in expenditures of $143,914 and receipt of an R&D tax incentive of $279,386. The
lower revenue all related to sales of various crushed rock products. The largest expenditure increases related to share
based payments expense of $249,018 (a non-cash item) and $94,669 in finance costs. There was a reduction in the
cost of sales and rehabilitation of $245,928.
A total of $2,025,500 before costs was raised in share capital by the company during the 2019 financial year. This
included $1,042,500 from issue of 16,814,473 shares at 6.2 cents from a share purchase plan, $600,000 from issue of
9,677,417 shares at 6.2 cents in a placement and $383,000 from the exercise of 3,830,000 incentive options at 10.0
cents. There was also $700,000 raised from the issue of 7,000,000 convertible notes at 10 cents.
Changes in state of affairs
There was no significant change in the state of affairs of the Group during the financial year other than already
disclosed.
Subsequent events
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 of the Company, to affect
significantly the operations of the Group, the results of those operations, or state of affairs of the Group, in future
financial years.
Environmental regulations
The company’s exploration and mining tenements are located in Victoria. The operation of these tenements is subject
to compliance with the Victorian and Commonwealth mining and environmental regulations and legislation.
Licence requirements relating to ground disturbance, rehabilitation and waste disposal exist for all tenements held.
The directors are not aware of any ongoing breaches of mining and environmental regulations and legislation during
the year and up to the date of this report.
Dividends
No dividends in respect of the current financial period have been paid, declared or recommended for payment (2018:
Nil).
Nagambie Resources Limited | 2019 Annual Report | Page 11
Share options
Share options granted to directors and executives
The following options were granted to directors and executives during the year: Refer to page 10 of the remuneration
report for full details.
Directors’ Report
Michael Trumbull (director)
Kevin Perrin (director) retired 30/6/2019
Alfonso Grillo (director)
James Earle (chief executive officer)
4,000,000
2,000,000
2,000,000
4,000,000
Shares under option or issued on exercise of options
There were 3,830,000 options exercised during the year at a price of 10 cents per share.
Options on issue as at reporting date
Number of options
10,100,000
11,300,000
2,000,000
12,500,000
13,750,000
1,000,000
4,500,000
10,500,000
2,000,000
67,650,000
Grant date
28/11/2014
16/11/2015
4/7/2016
30/11/2016
24/11/2017
20/12/2017
22/8/2018
23/11/2018
27/2/2019
Vesting date
28/11/2014
16/11/2015
4/7/2016
30/11/2016
24/11/2017
20/12/2017
22/8/2018
23/11/2018
27/2/2019
Expiry date
28/11/2019
28/11/2020
4/7/2021
30/11/2021
24/11/2022
20/12/2022
22/8/2023
23/11/2023
27/2/2024
Exercise price
10 cents
10 cents
25.5 cents
25.0 cents
10 cents
14.1 cents
12.6 cents
10.8 cents
12.0 cents
Indemnification of officers and auditors
During the financial year, the company paid a premium in respect of a contract insuring the directors of the company
(as named above), the company secretary, executive officers and any related body corporate against a liability incurred
by a director, secretary or executive officer to the extent permitted by the Corporations Act 2001. The contract of
insurance prohibits disclosure of the nature of the liability and the amount of the premium. The company has not
otherwise, during or since the end of the financial year, except to the extent permitted by law, indemnified or agreed to
indemnify an officer or auditor of the company or of any related body corporate against a liability incurred as such by
an officer or auditor.
Directors’ meetings
The following table sets out the number of directors’ meetings (including meetings of committees of directors) held
during the financial year and the number of meetings attended by each director (while they were a director or committee
member).
During the financial year 7 board meetings and 4 audit and compliance committee meetings were held.
Directors
Michael Trumbull
Kevin Perrin (retired 30/6/2019)
Alfonso Grillo
Gary Davison (appointed 15/5/2019)
Board of directors
Audit and compliance committee
Held
Attended
Held
Attended
7
7
7
1
7
7
7
1
-
4
4
1
-
4
4
1
Nagambie Resources Limited | 2019 Annual Report | Page 12
Directors’ Report
Directors’ shareholdings and options
The following table sets out each director’s relevant interest in shares, debentures, and rights or options on shares of
the company or a related body corporate as at the date of this report.
Directors
Michael Trumbull
Alfonso Grillo
Gary Davison
Fully paid ordinary shares
Number
20,602,454
1,371,935
20,000
Share options
Number
20,000,000
7,000,000
2,000,000
Nagambie Resources Limited | 2019 Annual Report | Page 13
Remuneration report (Audited)
Remuneration policy for directors and executives
Details of key management personnel
The directors and key management personnel of Nagambie Resources Limited during the financial year were:
Directors’ Report
Michael Trumbull
Kevin Perrin (retired 30/6/2019)
Alfonso Grillo
Gary Davison (appointed 15/5/2019)
James Earle
Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Chief Executive Officer
Remuneration Policy
The Board is responsible for determining and reviewing the compensation of the directors, the chief executive officer,
the executive officers and senior managers of the company and reviewing the operation of the company’s Employee
Option Plan. This process requires consideration of the levels and form of remuneration appropriate to securing,
motivating and retaining executives with the skills to manage the company’s operations. The board of directors also
recommends levels and form of remuneration for non-executive directors with reference to performance and when
required, sought independent expert advice. The total sum of remuneration payable to non-executive directors shall
not exceed the sum fixed by members of the company in general meeting.
In accordance with ASX Listing Rule 10.17, the current maximum aggregate compensation payable out of the funds of
the company to non-executive directors for their services as directors is $250,000 per annum. For the year ending 30
June 2019, the board resolved that the executive chairman’s remuneration be set at $150,000 (2018: $150,000) per
annum excluding superannuation and share based payments. For non-executive directors, remuneration was set at
$42,000 (2018: $42,000) per annum excluding superannuation and share based payments. Where a director performs
special duties or otherwise performs consulting services outside of the scope of the ordinary duties of a director, then
additional amounts will be payable.
There is no direct relationship between the company’s remuneration policy and the company’s performance. That is,
no portion of the remuneration of directors, secretary or senior managers is ‘at risk’. However, in determining the
remuneration to be paid in each subsequent financial year, the board will have regard to the company’s performance.
Therefore, the relationship between the remuneration policy and the company’s performance is indirect.
Options are issued to employees under the company’s Employee Option Plan at the discretion of the board. Options
issued to directors require the approval of shareholders at a general meeting. The purpose of the issue of options is to
remunerate employees and directors as an incentive for future services. The directors consider it important that the
company is able to attract and retain people of the highest calibre and believe that the most appropriate means of
achieving this is to provide an opportunity to participate in the company’s future growth and give them an incentive to
contribute to that growth.
Relationship between the remuneration policy and company performance
The tables below set out summary information about the consolidated entity’s earnings and movements in
shareholder wealth for the five years to June 2019.
Revenue
Net loss before tax
Net loss after tax
30 June
2019
$328,904
$1,764,434
$1,485,048
30 June
2018
$762,163
$1,187,261
$1,187,261
30 June
2017
$669,836
$1,621,972
$1,621,972
30 June
2016
$453,058
$619,449
$619,449
30 June
2015
$192,102
$634,351
$634,351
Share price at start of year (cents)
Share price at end of year (cents)
Dividends paid
Basic earnings per share (cents)
Diluted earnings per share (cents)
16.0
4.4
Nil
(0.35)
(0.35)
4.7
16.0
Nil
(0.29)
(0.29)
16.5
4.7
Nil
(0.43)
(0.43)
3.4
16.5
Nil
(0.21)
(0.21)
3.2
3.4
Nil
(0.28)
(0.28)
Nagambie Resources Limited | 2019 Annual Report | Page 14
Director and executive remuneration
The directors, executives and consultants detailed below received the following amounts as compensation for their
services during the year:
Directors’ Report
Short
Term
Benefits
Salary
and fees
$
Post
Employment
Benefits
Superannuation
$
Share
Based
Payment
Options
(non cash)
$
Kevin Perrin (2)
Directors
Michael Trumbull (1) 2019
2018
2019
2018
2019
2018
2019
2018
Gary Davison (4)
Alfonso Grillo (3)
Chief Executive Officer
James Earle (5)
2019
2018
164,250
164,250
45,990
45,990
45,990
27,468
5,749
-
172,000
150,000
Total for Year
Total for Year
2019
2018
433,979
387,708
-
-
-
-
-
-
-
-
14,250
14,250
14,250
14,250
155,928
112,183
77,964
56,092
77,964
56,092
-
-
155,928
56,092
467,784
280,459
Performance
Related
Benefits
Other
LongTerm
Benefits
Total
$
-
-
-
-
-
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
-
-
-
-
-
$
320,178
276,433
123,954
102,082
123,954
83,560
5,749
-
342,178
220,342
916,013
682,417
Apart from the contracts disclosed at (1) and (5) below there were no other contracts with management or directors
in place during the 2019 and the 2018 financial years.
(1)
(2)
(3)
(4)
(5)
Michael Trumbull is employed as Executive Chairman under a consultancy agreement which commenced
on 1 July 2013 and is ongoing. The fixed annual remuneration level was set at $150,000 plus
superannuation of $14,250 (2018: $150,000 plus superannuation of $14,250) plus provision of a motor
vehicle and reimbursement of out of pocket expenses. The contract may be terminated upon giving 6
months notice by the company or 3 months by the Consultant. Apart from accrued entitlements there are
no other termination benefits.
During the 2019 financial year, fees of $164,250 (2018: $164,250) were paid to Cypron Pty Ltd, an entity
controlled by Michael Trumbull, for his services as a director of the company.
Kevin Perrin retired as a director on 30 June 2019. During the 2019 financial year, fees of $45,990 (2018:
$45,990) were paid to Vinda Pty Ltd, an entity controlled by Kevin Perrin, for his services as a director of
the company. The amount of $45,990 is comprised of $42,000 director’s fee plus an allowance of $3,990
for superannuation. At 30 June 2019, there was an amount of $22,995 (2018: Nil) owing to Vinda Pty Ltd.
During the 2019 financial year, fees of $45,990 (2018: $27,468) were paid to GrilloHiggins Lawyers, an
entity in which Alfonso Grillo is a partner, for his services as a director of the company. The amount of
$45,990 is comprised of $42,000 director’s fee plus an allowance of $3,990 for superannuation. During the
2019 financial year the company also paid fees of $44,438 (2018: $28,008) to GrilloHiggins Lawyers for
secretarial and legal services provided by Alfonso Grillo and other GrilloHiggins personnel.
At 30 June 2019, there was an amount of $3,770 (2018: $3,300) owing to GrilloHiggins.
Gary Davison was appointed a director on 15 May 2019. From that date until 30 June 2019 he earned
director’s fees of $5,749 (2018: Nil) for his services as a director of the company. The amount of $5,749 is
comprised of $5,250 director’s fee plus an allowance of $499 for superannuation.
At 30 June 2019, there was an amount of $5,749 (2018: Nil) owing to Gary Davison.
James Earle is employed as the Chief Executive Officer under an employment agreement which
commenced on 8 August 2016 and is ongoing. The fixed remuneration is $150,000 per annum plus
superannuation. He is also entitled to a cash incentive bonus subject to performance hurdles. For the 2019
financial year a cash bonus of $22,000 (2018: Nil) was paid following a performance review. The bonus
was fully paid and no amount was forfeited. The agreement may be terminated by either party upon giving
3 months notice. Apart from accrued entitlements, there are no other termination benefits.
Nagambie Resources Limited | 2019 Annual Report | Page 15
Directors’ Report
Shareholdings of key management personnel
Balance
1 July 2018
Granted as
remuneration
On exercise
of options
Net change
(1)
Balance
30 June 2019
Michael Trumbull
Kevin Perrin (2)
Alfonso Grillo
Gary Davison
James Earle
Total
20,869,610
28,241,549
900,000
-
733,333
50,744,492
-
-
-
-
-
-
2,400,000
1,000,000
230,000
-
-
3,630,000
(2,667,156)
241,935
241,935
-
241,935
(1,941,351)
20,602,454
29,483,484
1,371,935
-
975,268
52,433,141
(1) Net change refers to on and off market acquisitions/disposals.
(2) Closing balance is at retirement date.
Executive Options
The consolidated entity has an ownership-based remuneration scheme for staff and executives (including executive
and non-executive directors) of the company. In accordance with the provisions of the scheme, as approved by
shareholders at a previous annual general meeting, staff and executives of the company may be granted options to
purchase parcels of ordinary shares at an exercise price determined at the discretion of the board of directors.
Each share option converts into one ordinary share of Nagambie Resources Limited on exercise by the payment of the
exercise price. No amounts are paid or payable by the recipient on receipt of the options. The options carry neither right
to dividends nor voting rights. Options may be exercised at any time from the date of vesting to the date of their expiry.
The number of options granted is at the discretion of the board of directors of the company.
The options granted expire five years after their issue or one month after the resignation of the staff member or
executive, whichever is the earlier, or as otherwise determined by the board of directors. There are 67,650,000 share
options on issue under this plan, of which 48,000,000 are held by directors and key management personnel and
19,650,000 are held by other current and former executives and employees.
Options on issue at the end of the financial year
Number of options
Grant date
Vesting date
Expiry date
Exercise price
10,100,000
11,300,000
2,000,000
12,500,000
13,750,000
1,000,000
4,500,000
10,500,000
2,000,000
67,650,000
28/11/2014
16/11/2015
4/7/2016
30/11/2016
24/11/2017
20/12/2017
22/8/2018
23/11/2018
27/2/2019
28/11/2014
16/11/2015
4/7/2016
30/11/2016
24/11/2017
20/12/2017
22/8/2018
23/11/2018
27/2/2019
28/11/2019
16/11/2020
4/7/2021
30/11/2021
24/11/2022
20/12/2022
22/8/2023
23/11/2023
27/2/2024
10 cents
10 cents
25.5 cents
25 cents
10 cents
14.1 cents
12.6 cents
10.8 cents
12.0 cents
Value of options issued to directors and executives
The following grants of share-based payment compensation to directors and executives relate to the 2019 financial
year:
Name
Michael Trumbull
Kevin Perrin
Alfonso Grillo
James Earle
James Earle
Option series
issued 23/11/2018
issued 23/11/2018
issued 23/11/2018
issued 22/8/2018
issued 23/11/2018
Number
granted
4,000,000
2,000,000
2,000,000
2,000,000
2,000,000
% of
Number
grant
vested
vested
4,000,000 100%
2,000,000 100%
2,000,000 100%
2,000,000 100%
2,000,000 100%
% of
grant
forfeited
0%
0%
0%
0%
0%
% of compensation
for year consisting
of options
48.7%
62.9%
62.9%
45.6%
45.6%
Nagambie Resources Limited | 2019 Annual Report | Page 16
Directors’ Report
The following table summarises the value of options granted, exercised or lapsed during the 2019 financial year to
directors and executives:
Name
Michael Trumbull
Kevin Perrin
Alfonso Grillo
James Earle
Value of options granted
at the grant date (i)
$
155,928
77,964
77,964
155,928
Value of options exercised
at the exercise date (ii)
$
$240,000
$100,000
$23,000
Nil
Value of options lapsed
at the date of lapse
$
Nil
Nil
$62,000
Nil
(i)
(ii)
The value of options granted during the period is recognised in compensation at the grant date which is also the
vesting date. The assessed value was 3.90 cents per option.
3,630,000 directors options and 200,000 executives options were exercised during the reporting period.
620,000 directors options and 2,500,000 executives options lapsed during the reporting period.
Option holdings of key management personnel
Balance
1 July
2018
Granted as
remuneration
Options
Exercised
Options
Lapsed
Balance
30 June
2019
Vested and
exercisable at
30 June 2019
Michael Trumbull 18,400,000
9,000,000
Kevin Perrin (2)
5,850,000
Alfonso Grillo
2,000,000
Gary Davison (1)
5,000,000
James Earle
40,250,000
Total
4,000,000
2,000,000
2,000,000
-
4,000,000
12,000,000
(2,400,000)
(1,000,000)
(230,000)
-
-
(3,630,000)
- 20,000,000
- 10,000,000
7,000,000
2,000,000
9,000,000
(620,000) 48,000,000
(620,000)
-
-
20,000,000
10,000,000
7,000,000
2,000,000
9,000,000
48,000,000
(1) Balance held at date of appointment
(2) Balance held at date of retirement
This concludes the Remuneration report which has been audited.
Corporate Governance
The Company’s Corporate Governance Statement and other corporate governance related documents may be
accessed
the Company’s website at https://www.nagambieresources.com.au/investor-information/corporate-
governance-statement.
from
Non-audit services
As detailed in note 25 to the financial statements, no amount has been paid to the auditor during the financial year for
non-audit services.
Auditor’s independence declaration
The auditor’s independence declaration is attached to this directors’ report.
Proceedings on behalf of the company
No person has applied for leave of court to bring proceedings on behalf of the company or intervene in any proceedings
to which the company is a party for the purpose of taking responsibility on behalf of the company for all or any part of
these proceedings.
Signed in accordance with a resolution of directors made pursuant to s.298(2) of the Corporations Act 2001.
On behalf of the directors
Michael W Trumbull
Executive Chairman
Melbourne
26 September 2019
Nagambie Resources Limited | 2019 Annual Report | Page 17
Auditor’s Independence Declaration
Nagambie Resources Limited | 2019 Annual Report | Page 18
Statement of Profit and Loss and Other Comprehensive Income
Statement of Profit and Loss and Other Comprehensive Income
for the financial year ended 30 June 2019
Revenue
Corporate expenses
Cost of sales and rehabilitation
Depreciation
Consolidated
2019
$
2018
$
328,904
762,163
Note
4
(628,971)
(602,056)
(199,923)
(404,423)
(122,195)
(141,293)
Employee benefits expense
4
(755,448)
(509,520)
Interest expense
Loss before income tax
Income tax benefit
Loss for the year
Other comprehensive income
(386,801)
(292,132)
(1,764,434)
(1,187,261)
5
279,386
-
(1,485,048)
(1,187,261)
-
-
Total comprehensive loss for the year
(1,485,048)
(1,187,261)
Loss per share
Basic and diluted loss per share in cents
6
(0.35)
(0.29)
The accompanying notes form part of these financial statements
Nagambie Resources Limited | 2019 Annual Report | Page 19
Statement of Financial Position
as at 30 June 2019
Current assets
Cash and cash equivalents
Trade and other receivables
Total current assets
Non-current assets
Security deposits
Property, plant and equipment
Exploration and evaluation assets
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Borrowings
Provisions
Revenue in advance
Total current liabilities
Non-current liabilities
Borrowings
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
The accompanying notes form part of these financial statements
Statement of Financial Position
Consolidated
Note
2019
$
2018
$
14(b)
7
224,988
68,477
293,465
352,070
164,702
516,772
8
10
9
11
15
16
15
16
12
13
635,479
817,051
11,768,062
13,220,592
635,000
925,436
9,675,955
11,236,391
13,514,057
11,753,163
341,553
1,060,622
15,523
-
1,417,698
301,077
126,622
26,218
39,306
493,223
3,330,489
10,845
3,341,334
3,675,535
11,777
3,687,312
4,759,032
4,180,535
8,755,025
7,572,628
24,123,551
1,828,340
(17,196,866)
8,755,025
22,091,390
1,214,896
(15,733,658)
7,572,628
Nagambie Resources Limited | 2019 Annual Report | Page 20
Statement of Changes In Equity
Statement of Changes in Equity
for the financial year ended 30 June 2019
Balance at 30 June 2017
21,751,540
846,495
(14,566,822)
8,031,213
Consolidated
Issued
capital
$
Options
reserve
$
Accumulated
losses
$
Total
$
Shares issued during the year
315,000
-
Recognition of share based payments
Transfer on lapse of options
-
-
413,676
(20,425)
20,425
Transfer on exercise of options
24,850
(24,850)
-
-
-
315,000
413,676
Total comprehensive loss
-
-
(1,187,261)
(1,187,261)
Balance at 30 June 2018
22,091,390
1,214,896
(15,733,658)
7,572,628
Shares issued during the year
Share issue expenses
Recognition of share based payments
Transfer on lapse of options
2,025,500
(20,749)
-
-
-
-
662,694
-
-
-
2,025,500
(20,749)
662,694
(21,840)
21,840
Transfer on exercise of options
27,410
(27,410)
-
Total comprehensive loss
-
-
(1,485,048)
(1,485,048)
Balance at 30 June 2019
24,123,551
1,828,340
(17,196,866)
8,755,025
The accompanying notes form part of these financial statements
Nagambie Resources Limited | 2019 Annual Report | Page 21
-
-
-
-
Statement of Cash Flows
for the financial year ended 30 June 2019
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Interest paid
R&D tax incentive
Statement of Cash Flows
Consolidated
Note
2019
$
2018
$
408,149
650,393
(955,694)
(963,032)
16,980
17,280
(340,506)
(249,805)
279,386
-
Net cash inflows used in operating activities
14(a)
(591,685)
(545,164)
Cash flows from investing activities
Purchase of property, plant and equipment
Payments for exploration expenditure
Payments for security bonds
Proceeds from security bonds
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Payment of share issue costs
Proceeds from issue of convertible notes
Net repayment of borrowings
Net cash provided by financing activities
(13,810)
(40,118)
(2,092,107)
(1,046,390)
(479)
-
-
520
(2,106,396)
(1,085,988)
2,025,500
315,000
(20,749)
-
700,000
1,800,000
(133,752)
(255,962)
2,570,999
1,859,038
Net increase (decrease) in cash and cash equivalents
(127,082)
227,886
Cash and cash equivalents at the beginning of the financial period
Cash and cash equivalents at the end of the financial period
14(b)
352,070
224,988
124,184
352,070
The accompanying notes form part of these financial statements
Nagambie Resources Limited | 2019 Annual Report | Page 22
Notes to the Financial Statements
Notes to the Financial Statements
for the financial year ended 30 June 2019
1. General information
Nagambie Resources Limited (the Company) is a listed for-profit public company, incorporated in Australia and
operating in Victoria. The registered office and principal place of business for the Company are located at 533 Zanelli
Road, Nagambie Vic 3608. These financial statements were authorised for issue on the date of the signing of the
attached Directors’ Declaration.
2. Significant accounting policies
Statement of compliance
The financial statements are general purpose financial statements which have been prepared in accordance with the
Corporations Act 2001 and the Corporations Regulations 2001, Australian Accounting Standards and Interpretations.
The financial statements include the consolidated financial statements of the group.
Compliance with Australian Accounting Standards (AASBs) ensures that the financial statements and notes of the
group comply with International Financial Reporting Standards (‘IFRS’).
Basis of preparation
The financial statements have been prepared on an accruals basis using historical cost and the going concern basis
of accounting. Cost is based on the fair values of the consideration given in exchange for assets. All amounts are
presented in Australian dollars, which is the functional and presentation currency of the Company and its controlled
entities. Comparative information where necessary has been reclassified in order to achieve consistency in
presentation with amounts disclosed in the current year.
The following significant accounting policies have been adopted in the preparation and presentation of the financial
statements:
(a) Going concern
For the year ended 30 June 2019, the consolidated net loss was $1,485,048 (2018: $1,187,261). The net cash
outflows used in operations for the year were $591,685 (2018: $545,164). The Group had a net working capital
deficiency of $1,124,233 (2018: surplus $23,549) at year end.
The Group has cancellable planned exploration expenditure under its leased tenements extending to 30 June
2020 of $1,122,657 (2019: $1,009,500).
The Group has received written representations from the directors that they will not call on the payment of
directors fees until cash reserves reach appropriate levels.
The directors have assessed the current cash balances available to the entity, along with the operating and
capital expenditure plans and expected obligations over the next 12 months. They are mindful of their obligations
to ensure that there is adequate working capital available for operations and in this regard the following initiatives
are being planned to improve group income in the future:
• Drill WTD002 and follow up holes as required into the underground sulphide-gold target at Wandean.
Possibly carry out lithogeochemical sampling of selected holes to assist in vectoring towards and/or
prioritising structures;
• Carry out a Ground IP geophysical surveys over the Wandean Crustal Fault to the west of the Nagambie
Mine and commence diamond drilling in the area if justified. Possibly carry a Radial-DTH IP survey on
the first hole drilled and lithogeochemical sampling of selected holes. Possibly carry out Ground IP
surveys where the Wandean Crustal Fault intersects the Grimwade and Racecourse Thrust Faults
between Wandean and the Nagambie Mine;
• Secure a PASS Management contract for some of the estimated 8.2 million tonnes to be excavated from
the tunnels for Westgate, Metro Rail and North East Link; and
• Secure a commercial agreement with a large well-established company for the production of crushed rock
and concrete aggregates at the Nagambie Mine.
If necessary, the group has additional capacity to meet its financial commitments through the following:
Issue of additional shares and/or convertible notes:
•
• Reclaiming cash backed environmental bonds for mineral tenements with the Department of
Environmental Development Jobs Transport and Resources Victoria and therefore foregoing any
capital commitments on those tenements surrendered: and
• Scaling back its administrative and corporate costs, including a reduction in fees payable to directors.
This financial report does not include any adjustments relating to the recoverability and classification of recorded
asset amounts or to amounts and classification of liabilities that may be necessary should the group be unable
to continue as a going concern.
Nagambie Resources Limited | 2019 Annual Report | Page 23
Notes to the Financial Statements
2. Significant accounting policies (continued)
(b) Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities
controlled by the Company (referred to as ‘the group’ in these financial statements). The consolidated entity
controls an entity when the consolidated entity is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect those returns through its power to direct the activities of
the entity.
The results of subsidiaries acquired or disposed of during the year are included in the consolidated statement of
profit or loss and other comprehensive income from the effective date of acquisition or up to the effective date
of disposal, as appropriate.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting
policies into line with those used by other members of the group. All intra-group transactions, balances, income
and expenses are eliminated in full on consolidation.
(c) Cash and cash equivalents
Cash comprises cash on hand and demand deposits. Cash equivalents are short-term, highly liquid investments
that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes
in value.
(d) Employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected
to be wholly settled within 12 months of the reporting date are recognised in current liabilities in respect of
employees' services up to the reporting date and are measured at the amounts expected to be paid when the
liabilities are settled.
Other long-term employee benefits
The liability for annual leave and long service leave not expected to be wholly settled within 12 months of the
reporting date are recognised in non-current liabilities, provided there is an unconditional right to defer settlement
of the liability. The liability is measured as the present value of expected future payments to be made in respect
of services provided by employees up to the reporting date using the projected unit credit method. Consideration
is given to expected future wage and salary levels, experience of employee departures and periods of service.
Expected future payments are discounted using market yields at the reporting date on government bonds with
terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.
(e) Exploration and evaluation assets
Exploration and evaluation expenditures in relation to each separate area of interest are recognised as an
exploration and evaluation asset in the year in which they are incurred where the following conditions are
satisfied:
(i) the rights to tenure of the area of interest are current; and
(ii) at least one of the following conditions is also met:
(a) the exploration and evaluation expenditures are expected to be recouped through successful
development and exploration of the area of interest, or alternatively, by its sale; or
(b) exploration and evaluation activities in the area of interest have not at the end of the reporting period
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 initially measured at cost and include acquisition of rights to explore,
studies, exploratory drilling, trenching and sampling and associated activities and an allocation of depreciation
and amortisation of assets used in exploration and evaluation activities. General and administrative costs are
only included in the measure of exploration and evaluation costs where they are related directly to operational
activities in a particular area of interest.
Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the
carrying amount of an exploration and evaluation asset may exceed its recoverable amount. The recoverable
amount of the exploration and evaluation asset (or the cash-generating unit(s) to which it has been allocated,
being no larger than the relevant area of interest) is estimated to determine the extent of the impairment loss (if
any). Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the
revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not
Nagambie Resources Limited | 2019 Annual Report | Page 24
Notes to the Financial Statements
2. Significant accounting policies (continued)
exceed the carrying amount that would have been determined had no impairment loss been recognised for the
asset in previous years.
Where a decision is made to proceed with the development in respect of a particular area of interest, the relevant
exploration and evaluation asset is tested for impairment and the balance will then be reclassified to capitalised
development costs.
(f)
Impairment of tangible assets
At the end of each reporting period, the group reviews the carrying amounts of its tangible assets to determine
whether there is any indication that those assets have suffered an impairment loss. If any such indication exists,
the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
Where the asset does not generate cash flows that are independent from other assets, the group estimates the
recoverable amount of the cash-generating unit to which the asset belongs. Where a reasonable and consistent
basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or
otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent
allocation basis can be identified.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the
estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset for which the estimates
of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount,
the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment
loss is recognised in profit or loss immediately.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is
increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying
amount does not exceed the carrying amount that would have been determined had no impairment loss been
recognised for the asset (or cash-generating unit) in prior years.
(g)
Income tax
Current tax
Current tax is calculated by reference to the amount of income taxes payable or recoverable in respect of the
taxable profit or tax loss for the period. It is calculated using tax rates and tax laws that have been enacted or
substantively enacted at the end of the reporting period. Current tax for current and prior periods is recognised
as a liability (or asset) to the extent that it is unpaid (or refundable).
Deferred tax
Deferred tax is accounted for using the liability method. Temporary differences are differences between the tax
base of an asset or liability and its carrying amount in the statement of financial position. The tax base of an
asset or liability is the amount attributed to that asset or liability for tax purposes.
In principle, deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are
recognised to the extent that it is probable that sufficient taxable amounts will be available against which
deductible temporary differences or unused tax losses and tax offsets can be utilised. However, deferred tax
assets and liabilities are not recognised if the temporary differences giving rise to them arise from the initial
recognition of assets and liabilities (other than as a result of a business combination) which affects neither
taxable income nor accounting profit.
A deferred tax liability is not recognised in relation to taxable temporary differences arising from the initial
recognition of goodwill.
Deferred tax liabilities are recognised for taxable temporary differences associated with investments in
subsidiaries, branches and associates, and interests in joint ventures except where the group is able to control
the reversal of the temporary differences and it is probable that the temporary differences will not reverse in the
foreseeable future.
Deferred tax assets arising from deductible temporary differences associated with these investments and
interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against
which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable
future.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period(s) when
the asset and liability giving rise to them are realised or settled, based on tax rates (and tax laws) that have been
enacted or substantively enacted at the end of the reporting period. The measurement of deferred tax liabilities
Nagambie Resources Limited | 2019 Annual Report | Page 25
2. Significant accounting policies (continued)
Notes to the Financial Statements
and assets reflects the tax consequences that would follow from the manner in which the group expects, at the
end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation
authority and the group intends to settle its current tax assets and liabilities on a net basis.
Current and deferred tax for the period
Current and deferred tax is recognised as an expense or income in the statement of profit or loss and other
comprehensive income, except when it relates to items credited or debited directly to equity, in which case the
deferred tax is also recognised directly in equity, or where it arises from the initial accounting for a business
combination, in which case it is taken into account in the determination of goodwill or excess.
.(h) Research & development tax incentive
The Research & development (R&D) tax incentive refund relates to eligible R&D activities undertaken by the group.
The tax credit is recognised when the money is received from the Australian Taxation Office. This credit is recognised
in current tax (refer note 2(h) above).
(i)
Leased assets
Leases are classified as finance leases when the terms of the lease transfer substantially all the risks and
rewards incidental to ownership of the leased asset to the lessee. All other leases are classified as operating
leases.
Operating lease payments are recognised as an expense on a straight-line basis over the lease term, except
where another systematic basis is more representative of the time pattern in which economic benefits from the
leased asset are consumed. Contingent rentals arising under operating leases are recognised as an expense in
the period in which they are incurred.
(j)
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and impairment. Cost includes
expenditure that is directly attributable to the acquisition of the item.
Depreciation is provided on property, plant and equipment except for freehold land.
Depreciation is calculated on a straight line basis so as to write off the net cost amount of each asset over its
expected useful life to its estimated residual value. The estimated useful lives, residual values and depreciation
method are reviewed at the end of each reporting period, with the effect of any changes recognised on a
prospective basis.
The range of useful lives for each class of plant equipment for the year were:
Plant and equipment:
Computer equipment:
Motor vehicles:
4-10 years
3-5 years
3-5 years
The gain or loss arising on disposal or retirement of an item of property, plant or equipment is determined as the
difference between the sales proceeds and the carrying amount of the asset and is recognised in profit and loss.
(k) Provisions
Provisions are recognised when the group has a present obligation (legal or constructive) as a result of a past
event, it is probable that the group will be required to settle the obligation, and a reliable estimate can be made
of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present
obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the
obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its
carrying amount is the present value of those cash flows.
(l) Revenue
Revenue is measured at the fair value of the consideration received or receivable.
Sale of rock revenue
Revenue from the sale of rock is measured at the fair value for the consideration received or receivable. The
performance obligation is satisfied at a point in time when the rock is removed from the company premises.
There are no cartage expenses as the customer utilises their own assets to source and remove the rock.
Nagambie Resources Limited | 2019 Annual Report | Page 26
Notes to the Financial Statements
2. Significant accounting policies (continued)
Interest revenue
Interest revenue is accrued on a time basis, by reference to the principal outstanding and at the effective interest
rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life
of the financial asset to that asset’s net carrying amount.
Rental revenue
Property rental income is recognised on a straight-line basis over the period of the lease term. The performance
obligation is recognised over time.
(m) Share-based payments
Equity-settled share-based payments with employees and others providing similar services are measured at the
fair value of the equity instrument at the grant date. Fair value is measured by use of a Binomial option pricing
model. The expected life used in the model has been adjusted, based on management’s best estimate, for the
effects of non-transferability, exercise restrictions, and behavioural considerations.
The fair value determined at the grant date of the equity-settled share-based payments is expensed when
options are granted since in all cases there is no delay until options are vested.
Equity-settled share-based payment transactions with other parties are measured at the fair value of the goods
and services received, except where the fair value cannot be estimated reliably, in which case they are measured
at the fair value of the equity instruments granted, measured at the date the entity obtains the goods or the
counterparty renders the service.
(n) Goods and services tax
Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except:
i.
where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as part
of the cost of acquisition of an asset or as part of an item of expense; or
for receivables and payables which are recognised inclusive of GST.
ii.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables
or payables. Cash flows are presented on a net basis. The GST components of cash flows arising from investing
or financial activities which are recoverable from a payable to the taxation authority are presented as operating
cash flows.
(o) Trade and other payables
Accounts payable and other payables represent the liability outstanding at the end of the reporting period for
goods and services received by the company during the reporting period which remain unpaid. The balance is
recognised as a current liability with the amounts normally paid within 30 days of recognition of the liability.
(p) Trade and other receivables
Trade and other receivables include amounts due from customers for goods sold and services performed in the
ordinary course of business. Receivables expected to be collected within 12 months of the end of the reporting
period are classified as current assets. All other receivables are classified as non-current assets.
(q) Borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction
costs. They are subsequently measured at amortised cost using the effective interest method.
Where there is an unconditional right to defer settlement of the liability for at least 12 months after the reporting
date, the loans or borrowings are classified as non-current.
The component of the convertible notes that exhibits characteristics of a liability is recognised as a liability in the
statement of financial position, net of transaction costs.
Convertible notes are initially classified as a financial liability until extinguished on conversion or redemption.
The corresponding interest on convertible notes is expensed to profit or loss.
(r)
Finance costs
Finance costs are expensed in the period in which they are incurred, including interest on bank accounts and
interest on short-term and long-term borrowings.
Nagambie Resources Limited | 2019 Annual Report | Page 27
Notes to the Financial Statements
2. Significant accounting policies (continued)
(s) Critical accounting estimates and judgements
Exploration and evaluation costs
Exploration and evaluation costs have been capitalised on the basis that the group may commence commercial
production in the future, from which time the costs will be amortised in proportion to the depletion of the mineral
resources. Key judgements are applied in considering costs to be capitalised which includes determining
expenditures directly related to these activities and directly allocating overheads between those that are
expensed and capitalised.
In addition, costs are only capitalised that are expected to be recovered either through successful development
or sale of the relevant mining interest or activities that are not at a stage that permits a reasonable estimate of
the existence of economically recoverable reserves. Factors that could impact the future commercial production
at the mine include the level of reserves and resources, future technology changes, which could impact the cost
of mining, future legal changes and changes in commodity prices. To the extent that capitalised costs are
determined not to be recoverable in the future, they will be written off in the period in which this determination is
made.
Management have assessed the balance of capitalised exploration costs in line with future planned exploration
activities and the group’s accounting policy and have determined that no impairment was necessary. If a
tenement has been relinquished or reduced, then an impairment charge is taken. This charge is generally based
on the pro-rata area reduced, however there can be other reasons for not using such an approach. When a
tenement is not relinquished or reduced but is thought to be of reduced carrying value then an impairment based
on management’s estimate of fair value has been applied. Any charge for impairment is recognised in profit or
loss immediately and also shown at Note 9.
Rehabilitation of tenements
The group has considered whether a provision for rehabilitation of any tenement is required. The directors do
not consider that such a provision is necessary due to the fact that rehabilitation is being undertaken on a
progressive basis. Whilst the company is in exploration phase it cannot reliably estimate the scope and costs of
rehabilitation work that will need to be undertaken.
Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary differences only if the group considers it is probable
that future taxable amounts will be available to utilise those temporary differences and losses.
Share based payments
The group measures the cost of equity-settled transactions with employees by reference to the fair value of the
equity instruments at the date at which they are granted. The fair value is determined by using a Binomial
valuation method of taking into account the terms and conditions upon which the instruments were granted. The
company employs an external consultant to complete the valuation and this takes into account the expected
volatility of the share price as one of the key components of the valuation. The accounting estimates and
assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts of
assets and liabilities within the next annual reporting period but may impact profit or loss and equity.
Fair value of convertible notes
Under the group’s accounting policy for convertible notes with cash redemption features, at initial recognition an
amount equal to the fair value of the convertible notes issued is recognised as a financial liability (“debt”), and
the residual value, being the proceeds of consideration less the debt component recognised at fair value, is
recognised in equity.
On initial recognition, the directors have assessed the terms of the convertible notes and determined that in their
view the fair value of the debt component is equal to the proceeds such that there is no residual amount to be
allocated to an equity component. In making this determination, the directors are of the view that the value of
the consideration received, net of costs, provided reliable evidence of the fair value of the debt component of
the convertible note.
(t) Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the group only.
Supplementary information about the parent entity is disclosed in note 27.
Nagambie Resources Limited | 2019 Annual Report | Page 28
Notes to the Financial Statements
3. New Accounting Standards for Application in Current and Future Periods
The AASB has issued new and amended accounting standards and interpretations that have mandatory application
dates for future reporting periods and which the Company has decided not to early adopt. In the directors’ view none
of these standards and interpretations will have a material effect on these financial statements, with the exception of
the following. Upon the adoption of AASB 16 Leases the group anticipates recognizing the present value of its operating
lease commitments together with a right of use asset for the same amount in the statement of financial position. The
right of use asset is expected to have a value of $0.5 million.
Standard
AASB 9 Financial Instruments
AASB 15 Revenue from Contracts
with Customers
4. Revenue and expenses
Summary
replaces
IAS 39 Financial
AASB 9 sets out requirements for recognising and measuring financial assets,
financial liabilities and some contracts to buy or sell non-financial items. This
Instruments: Recognition and
standard
Measurement.
AASB 15 establishes a comprehensive framework for determining whether,
how much and when revenue is recognised. It replaces AASB 118 Revenue
and related interpretations. Under AASB 15, revenue is recognised when a
customer obtains control of the goods or services.
The loss before income tax includes the following items of revenue and expenses.
(a) Revenue
Revenue from contracts with customers
Rental income
Sale of rock and quarry products
Other revenue
Interest
Sundry income
Total revenue
(b) Expenses
Employee benefits expense
Employee benefits
Share based payments expense
Superannuation expense
5. Income tax
(a)
Income tax expense
Loss from operations
Consolidated
2019
$
2018
$
194,695
102,601
16,980
14,628
328,904
60,595
662,694
32,159
755,448
190,574
537,490
17,280
16,819
762,163
65,099
413,676
30,745
509,520
(1,764,434)
(1,187,261)
Prima facie tax benefit calculated at 30% (2018: 30%)
529,330
356,178
Add tax effect of:
- Non deductible expenses
- Share based payments
Less tax effect of:
Current year tax loss not recognised
Add R&D tax incentive
Income tax benefit
(b) Deferred tax asset
1,727
(198,808)
(1,415)
(124,103)
(332,249)
(230,660)
279,386
279,836
-
-
A deferred tax asset attributable to tax losses and timing differences
has not been brought to account due to the uncertainty of recoverability
in future periods.
4,892,103
4,572,031
Nagambie Resources Limited | 2019 Annual Report | Page 29
6. Loss per share
Notes to the Financial Statements
Consolidated
2019
$
2018
$
Basic and diluted loss per share is calculated as net loss attributable to members
of the parent, adjusted to exclude any costs of servicing equity (other than
dividends) and preference share dividends, divided by the weighted average
number of ordinary shares, adjusted for any bonus element.
Net loss
1,485,048
1,187,261
Weighted average number of ordinary shares used in the calculation of basic and
diluted earnings per share
428,548,060
404,039,474
Basic and diluted loss per share in cents
0.35
0.29
As discussed in Note 20, the company has issued options over its unissued share capital. All these options are anti-
dilutive in nature due to the company incurring losses and the share price being less than the exercise price. They
therefore have not been incorporated into the diluted earnings per share calculation.
7. Receivables
Trade receivables
Other receivables
Total receivables
8. Security deposits
Non-current assets
Security deposits - environmental bonds (i)
Deposit on land
Total other assets
(i) Security deposits – environmental bonds
4,039
64,438
68,477
120,195
44,507
164,702
585,479
50,000
635,479
585,000
50,000
635,000
The company holds security deposits, in the form of term deposits with its banker. These are guarantees for
performance conditions set by the Department of Economic Development, Jobs, Transport and Resources Victoria
on mining tenements held by the company. Those guarantees are held to cover any future rehabilitation obligations
the company may have on the mining tenements. When all obligations in relation to a mining tenement are finalised,
the relevant guarantee will be released and associated environmental bond will be redeemed. The deposits are shown
as non-current assets since it is not expected that they will be repaid during the coming 12 months. These cash
deposits earn interest for the company.
9. Exploration and evaluation assets
Balance at beginning of the year
Exploration costs capitalised for the year
Impairment charge for the year
Balance at end of the year
Consolidated
2019
$
9,675,955
2,092,107
-
11,768,062
2018
$
8,629,565
1,046,390
-
9,675,955
During the financial year the group reassessed the recoverable value of all tenement areas of interest to which
exploration costs have been capitalised and no impairment charge was deemed applicable. This matter is discussed
further in ‘Critical accounting estimates and judgements’ at Note 2(s).
Nagambie Resources Limited | 2019 Annual Report | Page 30
10. Property, plant and equipment
Gross carrying amount
Balance at 1 July 2017
Additions
Disposals
Notes to the Financial Statements
Consolidated
Land
$
Plant and
equipment
$
Computer
equipment
$
Motor
vehicles
$
Total
$
45,063
465,594
94,138
195,143
799,938
-
-
521,735
10,731
(592)
(78,918)
-
-
532,466
(79,510)
Balance at 1 July 2018
45,063
986,737
25,951
195,143
1,252,894
Additions
Disposals
-
-
13,810
-
-
-
-
-
13,810
-
Balance at 30 June 2019
45,063
1,000,547
25,951
195,143
1,266,704
Accumulated depreciation
Balance at 1 July 2017
Depreciation expense
Disposals
Balance at 1 July 2018
Depreciation expense
Disposals
Balance at 30 June 2019
Net book value
As at 30 June 2018
As at 30 June 2019
11. Trade and other payables
Trade payables
Other payables
-
-
-
-
-
-
-
(71,411)
(86,072)
(107,155)
(264,638)
(118,121)
(9,025)
(15,184)
(142,330)
592
78,918
-
79,510
(188,940)
(16,179)
(122,339)
(327,458)
(103,688)
(4,233)
(14,274)
(122,195)
-
-
-
-
(292,628)
(20,412)
(136,613)
(449,653)
45,063
797,797
45,063
707,919
9,772
5,539
72,804
925,436
58,530
817,051
Consolidated
2019
$
196,157
145,396
341,553
2018
$
200,990
100,087
301,077
Nagambie Resources Limited | 2019 Annual Report | Page 31
12. Issued capital
(a) Issued and paid capital
Ordinary shares fully paid
(b) Movements in shares on issue
Balance at beginning of the year
Movements during the year
Placement of shares
October 2018 issue price 6.2 cents
Share purchase plan
October 2018 issue price 6.2 cents
Exercise of options at 10.0 cents
Options reserve transfers
Share issue expenses
Balance at end of the year
Notes to the Financial Statements
2019
$
24,123,551
2018
$
22,091,390
Year ended
30 June 2019
Year ended
30 June 2018
Number of
shares issued
Issued
capital
$
Number of
shares issued
Issued
capital
$
407,085,912
22,091,390
403,935,912
21,751,540
9,677,417
600,000
-
-
16,814,473
3,830,000
-
-
437,407,802
1,042,500
383,000
27,410
(20,749)
24,123,551
-
3,150,000
-
-
407,085,912
-
315,000
24,850
-
22,091,390
(c) Terms and conditions of issued capital
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 the shares held.
Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the company.
The fully paid ordinary shares have no par value and the company does not have a limited amount of authorised
capital.
Share options granted under the employee share option plan
As at 30 June 2019 there were 19,650,000 (2018 24,350,000) options over ordinary shares in respect of the
employee share option plan. These options were issued in accordance with the provisions of the employee share
option plan to executives and senior employees. Of these options 19,650,000 were vested by 30 June 2019 (2018:
24,350,000).
Share options granted under the employee share option plan carry no rights to dividends and have no voting
rights. Further details of the employee share option plan are contained in note 20 to the financial statements.
Other share options on issue.
As at 30 June 2019 there were 48,000,000 options over ordinary shares issued to directors (2018:33,250,000).
Of these options 48,000,000 were vested by 30 June 2019 (2018: 33,250,000).
The options carry no rights to dividends and have no voting rights. Further details of these options are shown in
note 20 to the financial statements.
(d) Capital management
The group's objectives when managing capital is to safeguard its ability to continue as a going concern, so that it
can provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital
structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the group may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
The group would look to raise capital when an opportunity to invest in a business or company was seen as value
adding relative to the current company's share price at the time of the investment. The group is not actively
pursuing additional investments in the short term as it continues to integrate and grow its existing businesses in
order to maximise synergies.
The group is subject to equipment financing arrangements and meeting these is given priority in all capital risk
management decisions. There have been no events of default on the financing arrangements during the financial
year.
The capital risk management policy remains unchanged from the 30 June 2018 Financial Statements.
Nagambie Resources Limited | 2019 Annual Report | Page 32
Notes to the Financial Statements
Nagambie Resources Limited | 2019 Annual Report | Page 33
Notes to the Financial Statements
Nagambie Resources Limited | 2019 Annual Report | Page 34
Notes to the Financial Statements
19. Financial instruments
The board of directors is responsible for m
onitoring and managing the financial risk exposures of the group, to which end it monitors the financial risk management
policies and exposures and approves financial transactions and reviews related internal controls within the scope of its
authority. The board has determined that the only significant financial risk exposure of the group is liquidity risk. Other
financial risks are not significant to the group due to the following:
−
−
−
−
−
−
It has no foreign exchange risk as all of its account balances and transactions are in Australian Dollars;
It has no significant outstanding receivable balances that have a credit risk;
Its mining operations are in the exploration phase and therefore have no direct exposure to movements in
commodity prices;
All of the interest bearing instruments are held at amortised cost which have fair values that approximate their
carrying values since all cash and payables (except for convertible notes refer note 15) have maturity dates within
one financial year. Term deposits on environmental bonds and convertible notes have interest rate yields
consistent with current market rates;
All of the financing for the group is from equity and convertible note instruments, and
The group has no externally imposed capital requirements with the exception of an ASX requirement to not issue
more than 25% of its share capital through a placement in a 12-month period.
(a) Categories of financial instruments
Financial assets
Security deposits and receivables
Cash and cash equivalents
Financial liabilities
Trade and other payables
Borrowings
Consolidated
2019
$
2018
$
653,956
224,988
749,702
352,070
341,553
4,391,111
301,077
3,802,157
(b) Liquidity risk management
Ultimate responsibility for liquidity risk management rests with the board of directors, who have built an appropriate
liquidity risk management framework for the management of the group’s funding and liquidity management
requirements. The group manages liquidity risk by maintaining sufficient cash balances to meet obligations as and
when they fall due.
The following tables detail the company’s and the group’s remaining contractual maturity for its financial liabilities. The
tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on
which the group can be required to pay. The table includes both interest and principal cash flows.
Consolidated liabilities
2019
Trade and other payables
Borrowings
2018
Trade and other payables
Borrowings
Interest
rate
%
Less than 1
month
$
1-3
months
$
3+
months to
1 year
$
-
10.0
-
10.0
202,436
11,283
213,719
209,231
11,283
220,514
72,565
87,565
160,130
66,552
1,373,943
1,440,495
50,700
52,565
103,265
41,146
404,943
446,089
1-5 years
$
-
4,157,512
4,157,512
-
4,490,303
4,490,303
5+
years
$
-
-
-
-
Nagambie Resources Limited | 2019 Annual Report | Page 35
Notes to the Financial Statements
20. Share-based payments
The group has an ownership-based remuneration scheme for executives (including executive directors) of the group.
In accordance with the provisions of the scheme, as approved by shareholders at a previous annual general meeting,
executives with the company may be granted options to purchase parcels of ordinary shares at an exercise price
determined at the discretion of the board of directors. Each executive share option converts into one ordinary share
of Nagambie Resources Limited on exercise. No amounts are paid or payable by the recipient on receipt of the option.
The options carry neither right to dividends nor voting rights. Options may be exercised at any time from the date of
vesting to the date of their expiry. The number of options granted is at the discretion of the board of directors. The
options granted expire five years after their issue, or one month after the resignation of the executive, whichever is
the earlier. The total of options on issue is 67,650,000 (2018: 57,600,000). Of these 28,650,000 (2018: 24,350,000)
have been issued to executives and employees and the balance of 39,000,000 (2018: 33,250,000) have been issued
to directors as approved by shareholders.
Information with respect to the number of all options granted including executive options is as follows.
Balance at beginning of period
granted
exercised *
lapsed
Balance at end of period
30 June 2019
30 June 2018
Number of
options
57,600,000
17,000,000
(3,830,000)
(3,120,000)
67,650,000
Exercise price
10.8 - 12.6 cents
10 cents
10 cents
Number of
options
50,750,000
14,750,000
(3,150,000)
(4,750,000)
57,600,000
Exercise price
10 - 14.1 cents
10 cents
10 cents
* 3,830,000 options were exercised on 14/8/2018 and 30/11/2018 at 10 cents
Options on issue at the end of the reporting period
Number of
options
10,100,000
11,300,000
2,000,000
12,500,000
13,750,000
1,000,000
4,500,000
10,500,000
2,000,000
67,650,000
Grant date
Vesting date
Expiry date
Exercise price
28/11/2014
16/11/2015
4/7/2016
30/11/2016
24/11/2017
20/12/2017
22/8/2018
23/11/2018
27/2/2019
28/11/2014
16/11/2015
4/7/2016
30/11/2016
24/11/2017
20/12/2017
22/8/2018
23/11/2018
27/2/2019
28/11/2019
16/11/2020
4/7/2021
30/11/2021
24/11/2022
20/12/2022
22/8/2023
23/11/2023
27/2/2024
10 cents
10 cents
25.5 cents
25 cents
10 cents
14.1 cents
12.6 cents
10.8 cents
12.0 cents
Fair value at
grant date
1.40 cents
1.00 cents
3.40 cents
3.44 cents
2.80 cents
2.80 cents
3.90 cents
3.90 cents
3.90 cents
(i)
(ii)
Exercised during the financial year
There were 3,830,000 options exercised during the financial year
Equity-settled employee benefits reserve
The equity-settled employee benefits reserve arises on the grant of share options to executives and
senior employees under the employee share option plan. Amounts are transferred out of the reserve and
into issued capital when the options are exercised.
(iii)
There are no vesting conditions for the above options
The weighted average fair value of the share options granted during the financial year is 3.90 cents (2018: 2.80 cents).
Options were priced using a Binomial option valuation model. Where relevant, the expected life used in the model has
been adjusted based on management’s best estimate for the effects of non-transferability, exercise restrictions
(including the probability of meeting market conditions attached to the option), and behavioural considerations.
Expected volatility is based on the historical share price volatility over the past 3 years. The options may be exercised
early, but not before vesting date.
Inputs into the valuation model
Grant date
Options Issued
Share price at grant date
Exercise price
Expected volatility
Option life
Dividend yield
Risk free interest rate
Vesting date
Tranche 1
22/8/2018
4,500,000
8.4 cents
12.6 cents
56.6%
5 years
Nil
2.25%
22/8/2018
Tranche 2
23/11/2018
10,500,000
7.2 cents
10.8 cents
56.6%
5 years
Nil
2.25%
23/11/2018
Tranche 3
27/2/2019
2,000,000
8.0 cents
12.0 cents
56.6%
5 years
Nil
2.25%
27/2/2019
Nagambie Resources Limited | 2019 Annual Report | Page 36
Notes to the Financial Statements
Consolidated
2019
$
433,979
14,250
-
-
467,784
916,013
2018
$
387,708
14,250
-
-
280,459
682,417
Country of incorporation
Ownership interest
2018
2019
%
%
Australia
-
-
Australia
Australia
Australia
100
100
100
100
100
100
21. Key Management personnel compensation
Short-term employee benefits
Post-employment benefits
Other long-term benefits
Termination benefits
Share-based payment
22. Subsidiaries
Name of entity
Parent entity
Nagambie Resources Limited
Subsidiaries
Nagambie Landfill Pty Ltd
no business activity conducted during the year
Nagambie Developments Pty Ltd
property owning entity
Clonbinane Goldfield Pty Ltd
development of gold and associated minerals
23. Related party transactions
Transactions with key management personnel and related parties
There were no related party transactions undertaken during the year other than disclosures already identified
elsewhere in this report.
24. Segment information
The group operates in one principal geographical area – in Australia. The group carries out exploration for, and
development of gold associated minerals and construction materials in the area. During the year the group earned
$166,345 (2018 $156,374) of its rental income described in note 4 from the Department of Defence. There was no
other major reliance on any other customer.
25. Remuneration of auditors
Auditor of the parent entity
Audit or review of the financial report
Other non-audit services
The auditor of Nagambie Resources Limited is William Buck
Consolidated
2019
$
2018
$
25,962
-
25,962
23,384
-
23,384
Nagambie Resources Limited | 2019 Annual Report | Page 37
Notes to the Financial Statements
26. Subsequent events
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 of the Company, to
affect significantly the operations of the Group, the results of those operations, or state of affairs of the Group, in
future financial years.
27. Parent entity disclosures
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Issued capital
Options reserve
Accumulated losses
Total equity
Loss
Total comprehensive income
Parent
2019
2018
$
$
292,068
546,282
13,289,365
11,321,782
13,581,433
11,868,064
328,615
493,223
4,391,111
3,687,312
4,719,726
4,180,535
24,123,551
22,091,390
1,828,340
1,214,896
(17,090,184)
(15,618,757)
8,861,707
7,687,529
(1,486,574)
(1,196,694)
(1,486,574)
(1,196,694)
There were no contingent liabilities and commitments of the parent entity not otherwise disclosed in the consolidated
financial statements.
Nagambie Resources Limited | 2019 Annual Report | Page 38
Directors’ Declaration
Directors’ Declaration
The directors declare that:
(a)
(b)
in the directors’ opinion, there are reasonable grounds to believe that the company will be able to pay its debts
as and when they become due and payable;
in the directors’ opinion, the attached financial statements and notes thereto are in accordance with the
Corporations Act 2001, including compliance with accounting standards which, as stated in accounting policy
note 2 to the financial statements, constitutes explicit and unreserved compliance with International Financial
Reporting Standards and giving a true and fair view of the financial position and performance of the company
and the consolidated entity; and
(c)
the directors have been given the declarations required by s.295A of the Corporations Act 2001.
Signed in accordance with a resolution of the directors made pursuant to s.295(5) of the Corporations Act 2001.
On behalf of the directors
Michael W Trumbull
Executive Chairman
Melbourne
26 September 2019
Nagambie Resources Limited | 2019 Annual Report | Page 39
Independent Auditor’s Report
Nagambie Resources Limited | 2019 Annual Report | Page 40
Independent Auditor’s Report
Nagambie Resources Limited | 2019 Annual Report | Page 41
Independent Auditor’s Report
Nagambie Resources Limited | 2019 Annual Report | Page 42
Independent Auditor’s Report
Nagambie Resources Limited | 2019 Annual Report | Page 43
Independent Auditor’s Report
Nagambie Resources Limited | 2019 Annual Report | Page 44
Independent Auditor’s Report
Nagambie Resources Limited | 2019 Annual Report | Page 45
Additional ASX Information
Additional ASX Information
Additional information required by the ASX Ltd and not shown elsewhere in this report is as follows.
The information is current as at 24 October 2019.
Number of holders of equity securities
Ordinary share capital
437,407,802 fully paid ordinary shares are held by 990 individual shareholders. All the shares carry one
vote per share.
Options
67,650,000 options are held by 19 individual optionholders. Options do not carry a right to vote.
Unsecured convertible notes
47,013,333 unsecured convertible notes are held by 9 individual noteholders. The notes do not carry a
right to vote.
Buy-Back
The company does not have a current on-market buy-back.
Distribution of holders of ordinary shares
Holding Ranges
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
Totals
Holders
52
92
108
453
285
990
Total Units
3,563
346,383
913,779
20,080,383
416,063,694
437,407,802
% Issued Share Capital
0.00%
0.08%
0.21%
4.59%
95.12%
100.00%
The number of holders with an unmarketable parcel was 197, holding a total of 715,410, amounting to
0.16% of the Issued Share Capital.
Substantial Shareholders
Fully Paid Ordinary Shareholders
Shares
MR RALPH DOUGLAS RUSSELL & MS ANNE-MAREE HYNES
39,120,320
MR KEVIN J PERRIN
29,483,484
MR GEOFFREY MICHAEL WALCOTT & MRS JULIE ANN WALCOTT 26,407,008
%
8.94%
6.74%
6.04%
Total 95,010,812
21.72%
Distribution of holders of unquoted options
Number of holders
Number of options
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,000 and over
-
-
-
-
19
-
-
-
-
67,650,000
Distribution of holders of unquoted convertible notes
Number of holders
Number of convertible
notes
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
-
-
-
-
-
-
-
-
100,000 and over
9
47,013,333
Nagambie Resources Limited | 2019 Annual Report | Page 46
Additional ASX Information
Optionholders holding greater than 20% of the unquoted options
Optionholder
Mr Michael W Trumbull
Options held
20,000,000
% held
29.56%
Convertible Noteholders holding more than 20% of the unquoted convertible notes
Noteholder
PPT Nominees Pty Ltd
Notes held
34,163,333
% held
72.67%
Unquoted options over unissued shares
Exercise price
Grant Date
Vesting Date
Expiry Date
Number
$0.10
$0.10
$0.10
$0.255
$0.25
$0.10
$0.141
$0.126
$0.108
$0.120
28 November 2014
28 November 2014
28 November 2019
10,100,000
29 October 2015
29 October 2015
16 November 2020
16 November 2015
16 November 2015
16 November 2020
4 July 2016
4 July 2016
4 July 2021
30 November 2016
30 November 2016
30 November 2021
24 November 2017
24 November 2017
24 November 2022
20 December 2017
20 December 2017
20 December 2022
22 August 2018
22 August 2018
22 August 2023
23 November 2018
23 November 2018
23 November 2023
27 February 2019
27 February 2019
27 February 2024
Total
3,300,000
8,000,000
2,000,000
12,500,000
13,750,000
1,000,000
4,500,000
10,500,000
2,000,000
67,650,000
Twenty largest holders of quoted equity securities
The names of the twenty largest holders and their shareholding in the quoted shares are as follows:
Rank Holder Name
PPT NOMINEES PTY LTD
ADARE MANOR PTY LTD
PRECISION SUPER PTY LTD
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
1
2
3
4
5 MR GEOFFREY MICHAEL WALCOTT & MRS JULIE ANN WALCOTT
6 CYPRON PTY LTD
7
ADMIC SUPER PTY LTD
8 MR RALPH DOUGLAS RUSSELL & MS ANN MAREE HYNES
9
LINCONRIDGE PTY LTD
10 HEPSBOURNE PTY LTD
11 NORMET INDUSTRIES NOMINEE PTY LTD
12 MCCARTHY CATTLE COMPANY PTY LTD
13 MR ROBERT CARL GUERNIER & MRS JEAN GUERNIER
14 MR GEOFFREY TURNER
15 RELUM PTY LTD
16 MR RICHARD MOGOROVICH & MRS GIULIANA MOGOROVICH
17 CYPRON PTY LTD
18 EGAN SUPERCO PTY LTD
19 MR SVEN BRENN
20 R & N KUNG PTY LTD
Total
Total issued shares
%
Shares
18.32%
80,114,129
6.74%
29,483,484
6.43%
28,124,467
6.42%
28,091,476
5.50%
24,052,314
3.15%
13,780,000
2.41%
10,546,481
2.25%
9,852,472
2.14%
9,369,229
2.01%
8,791,935
1.91%
8,333,333
1.26%
5,500,000
1.04%
4,547,963
0.87%
3,807,325
0.81%
3,546,481
0.80%
3,516,016
0.76%
3,342,390
0.67%
2,950,000
0.67%
2,939,191
0.64%
2,806,474
64.81%
283,495,160
437,407,802 100.00%
Nagambie Resources Limited | 2019 Annual Report | Page 47